$40,000 CALHFA CALIFORNIA ADU GRANT PROGRAM A COMPREHENSIVE GUIDE

 

Whether it’s a granny flat, in-law suite, or cottage, all are common names for ADUs, all with the advantage of extra living space that’s sure to be the envy of every neighbor. A desirable addition with limitless uses, ADUs have become more popular in recent years. Still, for some people building an ADU can seem out of reach financially.

This is where the CalHFA grant comes in! A grant program creating housing opportunities for families all across the state, it provides funding to mitigate costs, making this project a reality to more and more homeowners. If you’re a California resident looking into building an ADU, or if you want to make an ADU in Culver City, California, for the extra space in your house, stick around and find out how to make the CalHFA California ADU grant program work for you!

 

WHAT IS AN ADU?

An ADU, or accessory dwelling unit, is a second housing structure that’s built on the same lot as a primary living unit. Generally, they act as a fully functional living space to include a bathroom, kitchen, rooms and the like. ADUs come in many shapes and sizes to fit the lifestyle and needs of all homeowners; There’s something to fit every existing structure!

For example, an ADU can be attached to a ground level structure like most envision when they think of a home addition. They can also be attached above a garage or upper floor. Converting a garage or creating a basement are also ADU options. Finally, you can have a completely detached ADU that offers an entirely separate structure from the original. 

WHAT IS CALHFA?

CalHFA, or the California Housing Finance Agency, offers financing to California residents who fall into a lower income category. They also offer programs to the same demographic to aid in renting homes. CalHFA can also help first time home buyers navigate and secure loans and down payments. 

Among their portfolio are certain grant programs, the $40,000 ADU grant program being one of them. 

WHAT IS THE $40K CALHFA’S ADU GRANT AND WHO QUALIFIES?

The CalHFA ADU grant is best described by CalHFA itself stating, “The ADU Grant provides up to $40,000 towards pre-development and non-recurring closing costs associated with the construction of the ADU. Predevelopment costs include site prep, architectural designs, permits, soil tests, impact fees, property survey, and energy reports.”

This grant program prides itself on $100 million in grants with a $40,000 maximum per family creating the potential for 2,500 ADUs to be financed. While the grant money is usually allocated by the end of the year, CalHFA continues to provide important information about the program making it possible for financiers to prepare grants for the following fiscal year. 

As far as who qualifies, the broad answer is California residents who are classified as low to moderate income households; There are income limits for this grant. Those figures in specific are determined county by county though. For examples, see the low income limits for popular counties below:

For specific low income limits and access to the county search tool, check out the CalHFA’s eligible limits website.

HOW DOES THE CALHFA’S ADU GRANT PROGRAM WORK AND HOW DO I APPLY?

In short, there’s 5 steps to the CalFHA ADU grant program process. The entire process has been streamlined making for a seamless process from start to finish. 

1. Application: Homeowners will want to start by identifying approved lenders and then applying for a construction loan through one of those. They’ll then apply for the CalFHA ADU grant program via their application forms.
2. Loan Approval: At this point, the homeowner will have to wait on approval of the construction loan from their lender of choice. After receiving approval the lender can then grant prequalification to the homeowner for the $40,000 ADU grant.  
3. Pre-Development: Any pre-development work needed on the project can start at this point, all paid through the construction loan acquired by the selected lender. The lender will now forward any invoices accrued from pre-development to CalHFA along with the original grant application. 
4. Grant Disbursement: When and if CalHFA approves the homeowners grant, the money will then be dispersed to the construction loan account. The amount dispersed from the CalHFA California ADU grant program will lower the total principal owed. 
5. Construction: Finally, it’s time to start the main construction on the ADU funded by the construction loan; The total cost of which was lowered by the ADU grant. 

As far as how it works with regard to the money disbursement, you won’t just receive the funds outright. If you’re approved for the CalFHA ADU grant program, they’ll combine the money with the loan you took out to cover the remainder of the construction costs. For example, if the total cost of your project is $150,000, your loan will pay $110,000 of the project cost with the CalHFA ADU grant taking care of the remaining $40,000.

CALHFA CALIFORNIA ADU GRANT PROGRAM PROS

There’s plenty of advantages to the CalHFA California ADU grant program. Take a look at some of them below when making the decision to apply. 

1.  No Repayment: Let’s be honest, the fact that the CalHFA ADU grant program requires no repayment is the best advantage of all. Pre-development costs can come at a hefty price depending on the type of project. The fact that you can put $40,000 of free cash toward this bottom line only gives you more to spend elsewhere. 
2. Increase in Property Value: This grant helps to propel your property into a higher value bracket. More space isn’t all the ADU Culver City adds; It offers a unique flex space not found in your average home. Taking advantage of the grant to complete your project means more resale value on the other end. It’s truly a win-win!
3. Reasonable Qualifications: The basic qualifications for this grant are very fair. For instance, you need to be a full time employee and at least 18 years old. You need to be a U.S. citizen and resident in the state of California for at least 3 months prior to submitting an application. 
4. Borrowing Power: You can go into the grant process knowing that you’re going to be on the winning side of borrowing power. Secondary loans typically grant higher borrowing power so long as your credit score and finances are in order. That power combined with the $40,000 ADU grant means more than enough for project completion. 

CALHFA CALIFORNIA ADU GRANT PROGRAM CONS

Before starting the application process for the CalHFA California ADU grant program, it’s important to consider these drawbacks. 

• Grant Cap: This particular grant has a cap of $40,000 per household. While that’s no small number, it might not cover the majority of a larger project. Depending on the home owners finances, it may not be an affordable project even with the granny money in hand. 
• Income Limit: Depending on your financial situation and the county you reside, the CalHFA grant might not be an option for your ADU project. Even the slightest overage on dollar amount can disqualify you from the grant process. 
• Specified Use: The CalHFA grant can only be used for pre-development purposes such as surveys, permits, site prep and similar construction preparation or on non-recurring closing costs. It will not cover anything outside of these parameters. 
• Timeline: Since the ADU grants coincide with a construction loan and these loans have to be repaid short term, the repay timeline can be stressful. Likewise, construction on these loans have to be finished on a short timeline.

ADU GRANT VS ADU LOAN

When it comes to the financial aspect of funding your ADU, many people get lost in the weeds with the terminology. Simply put, an ADU grant is money toward your project that does not need to be paid back. An ADU loan on the other hand, needs to be paid back to the lender within the specified timeframe agreed upon in your loan process. 

This seems easy enough but the CalHFA ADU grant leaves some scratching their heads when it states you need a loan too. The reason for the ADU loan is to cover actual construction costs for your project. Remember, the CalHFA grant only applies to pre-development costs incurred by your build. You’ll need a loan to cover the rest. 

While the CalHFA grant is great, it’s best to get pre-approved from a lender for the estimated construction cost before you do anything else. The amount they are willing to loan hinges on your income, credit, and many other factors. See what you can afford by the lender’s standards prior to moving forward. 

WHAT ARE MY LOAN OPTIONS?

There’s several types of loans you can apply for to build your ADU. Here’s a quick rundown of the top choices:

• Construction Loan: The most common loan surrounding this topic is a construction loan. These loans usually come with a fixed interest rate, total customization in the building process, a lower monthly payment and other notable benefits. Unfortunately, they do require a larger down payment and you will have to refinance once construction is complete. 
• HELOCs: A home equity line of credit is another frequently used loan for ADUs and in short, means you’re using your current home’s equity as collateral for the loan. HELOCs allow you to use what you need rather than being loaned a lump sum and they often come with a low APR given that you qualify. You should consider the risk you take in using your home as collateral though, especially when it reduces the equity you’ve built in your home. 
• Refinancing: Also making use of the home equity you already have, refinancing your current mortgage could help in paying for your ADU. Unlike HELOCs, you’ll acquire a lower rate and have the opportunity for a fixed rate mortgage if you’re coming from an adjusted rate loan. It’s important to remember, monthly payments could be larger depending on what you select. The upfront cost might be too much to handle for some, even though the long term savings are worth considering. 
• Renovation Loan: The option for renovation loans is great for those with a smaller down payment of around 3.5% and a lower credit score (even as low as 600). Oftentimes you’re able to borrow more than other loan programs depending on what the home will appraise for upon completion. These loans can be a pain though, requiring detailed scheduling from the contractor that goes beyond the normal scope of things. 

Keep in mind, this is just a shortlist of the loan options you have for your ADU financing. While less conventional, you could always take on a personal loan or even use credit cards if you have the available limits for such a project. 

WHO WILL FINANCE AN ADU LOAN FOR MY CALHFA GRANT?

Once you decide on which loan type you want to take out, it’s time to find a lender. Not all lenders offer ADU loan programs, especially ones familiar with the CalFHA grant. Even so, there’s enough to give you the choices you need. For an exhaustive list of these lenders by county, you can use CalHFA’s approved lender search tool. Here’s some of the approved lender to get you started:

• Envoy Mortgage
• Supreme Lending
• Platinum Home Mortgage
• New American Funding
• Loandepot.com

Always check with your current lender to determine if they offer ADU loans. While several of the lenders mentioned above are larger companies, it’s worth looking into local lenders and any incentives they may offer within. 

STEPS IN BUILDING YOUR ADU USING CALHFA’S GRANT

Grant process aside, the steps of actually building your ADU has its own procedures. While it’s an intricate project with no lack of moving parts, the steps below give you a birds eye view of the operation.

1. Acquire Contractor: One of the most important decisions you’ll make in the ADU build process is your choice in contractor. It’s important to pick someone who is known for meeting deadlines and who communicates well. Be sure they’re licensed and insured and someone who specializes in or is at least familiar with the ADU building process. Price is always on consideration as well. To ensure you’re not being taken advantage of, try getting multiple bids on the project for comparison purposes. 
2. Financial Review: Explained in detail in the “How Do I Apply” section above, you’ll find the steps you need to take in order to receive the CalHFA funding and how that fits into your loan. That aside, you’ll want to review your contractor’s bid, decide which financing option best fits your needs, and discuss adjusting your design if need be based on your project’s total cost. 
3. Feasibility Study: This study is a crucial part of the build process as it ensures your build is doable given the utilities from the main house, available lot space, local requirements, and the like. Ensuring that your space is viable for the project and meets building code will save you a huge headache in the end, avoiding possible pitfalls that are identified in the study itself. 
4. City Consult & Permitting: If all is well with the feasibility study, your contractor can now submit a complete set of drawings to the city. Alongside these drawings, they’ll begin working on the permitting needed for everything. Pulling these permits allows the work to be done legally and safely for all involved. 
5. Finalize Aesthetics: Probably the most fun step in the process is finalizing the materials used in your ADU build. Most people already have an idea of how they’d like their ADU to look both inside and out. If not, their contractor can supply them with 3D mock ups and material options from siding to flooring. 
6. Construction Begins: Finally, with all the nitty gritty details pegged down, your build out can officially begin! Completion times vary depending upon how big or small your project is and what customizations are being added. You can usually expect a build from beginning to end to take anywhere from 7 to 16 months. 

CONCLUSION

An accessory dwelling unit can serve many purposes that are beneficial for expanding families, guests and the like. Even so, it’s no secret that finances can pose an obstacle in making this dream a reality. That’s why the CalHFA California ADU grant program is worth investigating. This grant program takes the sting off the bottom line, offering a more affordable project with the extra space many families want or even need.

2023 LOS ANGELES HOME REMODELING COSTS GUIDE AND TIPS

Looking to remodel your LA house in 2023? A thrilling prospect and one with plenty of benefits; not one without its fair share of moving parts though. Between considerations on budget, materials, fees, scope and the like, there’s endless decisions to be made. To get the job done right, you’ll need an experienced contractor familiar with the in and outs. What better contractor than Structura Remodeling who already knows the local rules and regulations?

Check out more on Structura Remodeling below, along with everything else you need to plan your Los Angeles home remodeling cost in 2023. Ready to take your outdated builder-grade house to a customized place you can truly call home? Stick around and find out how!

BENEFITS OF REMODELING YOUR HOME IN LOS ANGELES

 

If you’re still deciding whether or not a renovation is right for you, consider the benefits of remodeling your home in Los Angeles below. You’d be hard pressed to find any disadvantages to remodeling! 

·        Custom for Your Lifestyle: If you moved into a home that doesn’t fit your lifestyle, a home renovation can easily remedy that. Changing up the layout or flow can have the home working for you instead of the other way around. For instance, changing a powder room to a full bathroom or converting a garage to a game room.

 

·        Increases Home Value: It’s no secret that remodeling a home will inevitably increase the home’s value. Not only will you get to enjoy the newness and beauty of your home, but you can rest assured it’ll pay off in the long run when the time comes to sell. Which will likely be an easy task given the newness. It’s a win-win!

 

·        Reduces Cost of Utilities: A surprising benefit to remodeling, it can lower your utility bill in a major way. Leaks from old fixtures, faulty or worn appliances, old insulation and the like are common culprits of high utilities. All of these can be remedied with a quality remodel. 

 

·        Make a House a Home: The value of enjoying your own home cannot go forgotten when it comes to the benefits of remodeling! Everyone wants to enjoy their home, making it a reflection of their personal style. A house renovation has the power to produce a comfortable and inviting space you’ll love coming home to. 

 

·        More Space: The option for more space is always a benefit of a solid remodel plan. This can be done by taking a closed off floor plan and opening it up or even putting on an addition to the home. The ladder of which comes with an entirely different benefit: the possibility for more guest room or even a rental space. 

 

 

7 FACTORS TO CONSIDER IN YOUR HOME REMODEL

Though there are plenty of elements to be considered when you take on a home remodel, these 8 factors make up some of the most important! Take a look at these aspects of the project to better plan for your home renovation. 

1.    ROI: The ROI, or return on investment, is how much you stand to gain in profit from your remodel. It should be a major consideration when it comes to remodeling your home. This is of particular importance if you know for a fact the home you’re remodeling isn’t your forever home. For instance, if you live in an area where homes are selling at a cap of $400,000, you paid around that amount and then you spend $100,000 on renovating, you’re unlikely to see any ROI, at least in the short run. 

2.    Materials: Choosing the materials to remodel with is arguably the most fun part of remodeling. Selecting each and every color, texture, and wood grain allows you to create something that’s truly your own. Even so, the most standard materials will add up. Not to mention, some materials come at a much higher cost than others. For example, marble looks great in any kitchen or bathroom but it’s likely to eat up a lot of your material budget. Likewise, upgrades on materials like molding, cabinetry, doors and the like 

3.    Scheduling: Start thinking about a timeframe when a project this size is actually feasible for you and your family. Picking a slower season will make the process a lot less stressful for all involved. Also, have in mind your expectations and timeline for the remodel and bring that to your contractor when you’re interviewing them. This gives them an idea of what you’re looking for and allows them to tell you what’s realistic based upon the scope of the work. 

4.    Scope: Speaking of the scope of the work, you’ll need to think in depth about everything you want to be included in your home renovation. If it’s just a bathroom renovation, contemplate the design and materials. Are you moving any walls? Will you switch out the tub? What fixtures will you install? From top to bottom, make a to-do list. The same goes for a whole house remodel, though with such a large scope for the whole house it’s best to consult your contractor. They will likely have a checklist and 3D software to help you make your final decisions on everything from wall color to flooring. 

5.    Soft Costs: Soft costs are any costs that aren’t a direct result of the construction, whereas hard costs are directly related like labor and materials for example. When you’re doing a remodel, soft costs can often go forgotten and they can end up increasing the total project costs. Don’t let soft costs catch you by surprise! When you’re writing out your remodel plans, examine the type of soft costs your project may require. These can include costs like permits or even costs like insurance. Design and inspection fees are common soft costs as well. 

6.    Fee Structure: Fees pertaining to specific labor needs, the contractor, timeline overages and the like can send any well budgeted remodel into a tailspin. Structura Remodeling takes the guesswork out of the equation up front, utilizing a one lump sum contract price that puts others to shame. Unlike other contractors, they’re not looking to surprise you with fees or nickel and dime you when the moment presents itself. Their lump sum price includes the use of subcontractors, designers, project managers, labor, and rough materials with complete transparency on total costs. 

Other contractors may have fees built into their contractor for project delays as well; Not so with Structura! If a delay causes them to go over the approximate timeline given for the project, there’s no fee. In fact, they pride themselves on being proactive in the pre-construction phase to mitigate this possibility altogether. By prepping material lists, requesting the homeowner’s selections, and pre-purchasing materials they’re able to avoid unnecessary delays that many other contractors would try to turn into a payday. 

7.    Budget: Finally, the budget is a key factor to consider, albeit not the most fun one. Your budget is going to be the driving force behind everything that happens in your remodel. What contractor you can afford, the type of materials, the scope of the project, literally everything! Know how much you can realistically spend on the project and from there, you can create a plan. 

HOW DO YOU MAKE A HOME RENOVATION BUDGET?

First things first, when it comes to creating your renovation budget you have to be honest about your bottom line. What can you spend, what do you have in the bank, and what are you financing, if any? 

From there, you’ll need to decide what the top priorities are for your renovation. Do you care more about the countertop replacement? The finishing materials? Maybe there’s custom woodworking you’d like. In the end, it may even come down to what needs to be done over what you want to be done. 

 

Start hammering down on the details of your renovation. Which materials would you like for each part of the project? Everything from cabinet pulls to paint to flooring. Having these in mind, will help you navigate bids for your project. 

Once you’ve got an idea of what you can spend and how you’d like to spend it, it’s time to research the contractor’s fee by getting bids from multiple entities. You’ll want to compare the line items in each bid to one another to be able to select the most affordable, fair fee. 

At this point, you’ve got all the main figures you’ll need to piece together a ballpark budget for your project. Using the contractor’s bid selected, you can add or takeaway, choose more budget friendly alternatives or choose a different project scope. While those are the main elements of creating your budget, there’s a few separate elements to the renovation process you don’t want to miss either.

The two line items you don’t want to forget: clean up costs and unexpected costs. Your project might be over, but the clock is still running if there’s clean up work to do. While you might be able to do some of it, there’s likely some that will require removal by trucks and special equipment. 

Likewise, unexpected home remodeling costs come as a surprise to some homeowners if they’re not considered from the start. These costs can come in many forms to include unknown damage discovered in a demo, switching to higher cost materials, structural issues and more.  

BATHROOM REMODELING COST IN LOS ANGELES – ($25,000)

Bathroom remodels give homeowners the power to create a relaxing oasis right in their own homes. From powder rooms to full baths, even the simplest remodel can make a world of difference. The main cost considerations while remodeling a bathroom include but aren’t limited to:

·        Demo and cleanup work of old materials.

·        Basic interior finishing materials (drywall, millwork, paint etc).

·        Electrical, plumbing, and mechanical work.

·        New fixtures, faucets, toilet, vanity, cabinetry etc.

·        New tilework and grout in the shower area.

·        New flooring and flooring materials. 

·        Baseboards and trim.

KITCHEN REMODELING COST IN LOS ANGELES – ($50,000)

Likely the most frequent request for remodel is the kitchen. Kitchens are the heart of the home and for those who love entertaining, they’re a hub for guests. It’s for this reason that many people choose to start the remodeling process here. The main cost considerations while remodeling a kitchen include but aren’t limited to:

·        Demo and cleanup work of old materials.

·        Basic interior finishing materials (drywall, millwork,paint etc).

·        Electrical, plumbing, and mechanical work.

·        New flooring and flooring materials.

·        New cabinetry, countertops, and kitchen sink. 

·        Backsplash installation. 

·        Baseboards and trim.

COST TO BUILD A GROUND UP ADU IN LOS ANGELES (OR JADU) – ($250,000)

ADUs and JADUs are on the rise and for a good reason. A full ADU usually includes a kitchen, full bathroom, room(s), and living space. JADUs are smaller, generally connected to the main home, sharing their kitchen and bathroom. 

Offering separate living spaces with room to spread out, it’s easy to see why they’re a coveted addition to any home. The main cost considerations while building an ADU or JADU include but aren’t limited to:

·        Plans

·        Site preparation (clearing, surveys, soil test, etc).

·        Structural and building materials (doors, joists, gutters, etc).

·        Interior materials and fixtures (drywall, faucets, millwork, etc).

·        New flooring and flooring materials.

·        HVAC, electrical, plumbing, and mechanical work.

·        Exterior materials (paving and landscaping).

COST OF REMODELING A GARAGE – GARAGE CONVERSION ($130,000)

Remodeling a garage into a living space is the perfect option for families looking for more space that don’t have the ability to build a ground up ADU. An existing structure with the ability to be transformed into an under air unit, it can be used for an in-law suite, gameroom, man cave and the like. The main cost considerations while remodeling a garage include but aren’t limited to:

·        Basic interior finishing materials (drywall, millwork,paint etc).

·        HVAC or portable AC unit.

·        Electrical, plumbing, and mechanical work.

·        New Kitchen & Bathroom finishing materials  

·        New flooring and flooring materials.

·        Baseboards and trim.

·        Storage, cabinetry, lighting, fixtures etc (depending on use of space).

·        Sealing garage door cracks for airtight finish.

FULL HOME REMODELING COST IN LOS ANGELES – ($360,000)

*Average cost is based upon a 3 bedroom, 1.5 bath home at approximately 1300 square feet.

If you’re taking on a full home remodel, there’s a whole lot to consider. It might seem overwhelming to start, but you’ll have help along the way! Contractors are able to provide hands-on direction in a project of this size, offering options and checklists to guide you along in the process. The main cost considerations while undergoing a full home remodel include but aren’t limited to:

·        Demo and cleanup work of old materials

·        Basic interior finishing materials 

·        Insulation 

·        Installation of drywall 

·        Interior paint 

·        Electrical: Rewire the entire home, add new electrical panel, and other mechanical work.

·        Plumbing: Repipe the entire home for both the incoming and outgoing systems. 

·        New kitchen & Bathrooms 

·        New flooring and flooring materials.

·        New cabinetry and countertops. 

·        New fixtures, faucets, toilet, vanity, cabinetry etc.

·        New tilework and grout in the shower area.

·        New flooring and flooring materials.

·        Backsplash installation.

·        Interior doors 

·        Baseboards and trim.

·        Exterior paint 

·        Windows (double pan white vinyl) 

·        New roof (composition shingles) 

WHY CHOOSE STRUCTURA REMODELING FOR YOUR HOME REMODELING PROJECT IN LOS ANGELES?

You may be asking yourself why you should choose Structura Remodeling for your project. There’s no shortage of contractors to choose from, so what sets Structura apart? Here’s more than enough reasons to make Structura your number one choice:

·        They have over 16 years of experience in the construction industry with the owner being a third generation contractor. 

 

·        Their team is made up of the most qualified individuals in the field, between designers and craftsmen, you’re working with the best in the business. 

 

·        They operate each project via a comprehensive process, starting with your vision, to full estimates, home design and the like. 

 

·        The company is extremely detail oriented, making your dreams come to life down to every cabinet pull and color. With the help of 3D renderings and project planning, you can be sure your vision will come to fruition. 

 

·        The level of professionalism on site is unparalleled. The team works to keep their work space clean while taking care of surrounding job site elements like pets, family schedules, and your possessions. 

 

·        Structura Remodeling truly cares about the customer’s experience and end result so much so that they always aim for 100% satisfaction with each customer. 

 

·        If all of these combined haven’t convinced you, let the reviews speak for themselves! Countless happy customers have rave reviews for Structura Remodeling Los Angeles!

 

CONCLUSION

Remodeling your home is an exciting time. It can also be a stressful process without the right contractor and a true understanding of the home remodeling cost. Don’t make the mistake of turning this fun process into an absolute headache. Consider the cost factors, create a budget, and review the prices room by room and item by item. 

Choose Structura Remodeling Company for all your home addition needs in Los Angeles. With our unrivaled expertise and commitment to excellence, we will elevate your living space to new heights. From concept to completion, our skilled team will deliver stunning results that exceed your expectations. Trust Structura Remodeling Company to create the perfect home additions that enhance both your lifestyle and property value.