To qualify, applicants must own and occupy the main property for at least five years, maintain a credit score above 650 and have a debt return rate of less than 40%.
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The city of Pasadena, California has introduced a second round in its Pasadena Second Unit ADU program. This round offers financial incentives for homeowners to build affordable rental units on their assets.
Through the Pasadena Second Unit ADU program, homeowners will be able to fund the design, permit and overall construction of a new Accessory Residential Unit (ADU), or “Granny Flat.” You can receive up to $225,000 at.
The funds can also be used to rehabilitate and bring unenrolled “granny flats” or illegal ADU conversions (garage or backhouses) up to the code.
“Granny Flats” is a self-contained residential unit that shares the same lot as the main residence. The unit has long been offering affordable housing options for large families and adult children. Additionally, people who rent space have extra revenue streams.
But their popularity grew in the wake of the recent Los Angeles wildfire crisis, leaving many residents across Pasadena and close to Thier Eaton Canyon in the San Gabriel Mountains without homes.
Legal changes implemented within the last year have made ADU easier to use.
The construction loan program includes:
3-year term loan with simple interest of 1% with deferred payments
Loans protected by trust deeds on homeowner’s property
5-year affordable housing contract required for ADU
•Parcels of 1 unit or less present in the property
Main house occupied by the owner
•Construction cost coverage
• We have been renting ADUs only for rental support households in Pasadena for seven consecutive years.
To qualify, applicants must own and occupy the main property for at least five years, maintain a credit score above 650 and have a debt return rate of less than 40%. Their loan-value ratio must be less than 80% of the home’s value and cannot have an existing city loan.
All household members must be US citizens or permanent residents.
Applicants selected for the program will take 20 days to submit the necessary loan documents to verify the lender and prepare the loan package. The application window will close on February 28th at 10pm
Email Richelle Hammiel
