Long Beach's Initiative for Lower-Income Homeowners: Financing ADUs

The second phase of Long Beach’s Backyard Builders loan initiative is set to launch, offering financial support to lower-income homeowners for constructing Accessory Dwelling Units (ADUs). This program features a comprehensive package including finance, design, permitting, and construction support. Eligible homeowners can access a 30-year loan of up to $250,000 at a 2% interest rate, with repayments deferred until the property is sold or ownership is transferred.

Mayor Rex Richardson emphasized the program's impact, noting it will provide more housing flexibility for families and renters. The second funding round aims to support the development of at least 16 ADUs, improved from 10 previously, while also offering complimentary project management services throughout planning and construction phases.

Eligibility requires applicants to own and reside in a single-family home within the designated area, meeting the state's lower-income criteria. Detailed income limits for 2026 are pending. Other considerations include financial liabilities, mortgage, property tax status, and possession of homeowners insurance.

This new funding round is a result of a $4.8 million grant by the California Department of Housing and Community Development, awarded through the CalHome Program. The Long Beach Community Investment Company (LBCIC) will manage the loans, reinforcing the city's commitment to meeting housing needs.

Christopher Koontz of the City’s Community Development Department remarked on Long Beach's proactive stance in ADU development, viewing this initiative as a key element in expanding housing opportunities. In cases of oversubscription, loan recipients will be chosen through a lottery system. This phase builds on the initial pilot launched in September 2024, with a focus on lower-income homeowners. Renting to voucher-using tenants is encouraged but not mandatory. ADUs must be rented for at least 30 days, and loans cannot be refinanced for cash.

Homeowners who have initiated ADU projects can enter the program before receiving a Certificate of Occupancy, though prior expenses are not covered. The Community Development Department plans to hold informational sessions with details forthcoming. Additional information and updates can be found at longbeach.gov/aduloan, where stakeholders can sign up for notifications about the application process and informational events. Full guidelines and requirements will be available when applications open in Summer 2026.