Five Things You Should Know About the Orange County Affordable ADU Loan Program
Rost Architects Villa R - Pre-Designed Accessory Dwelling Unit
Affordable ADU Loan Program
If you are an Orange County property owner, you may be interested in the new loan program aimed at helping homeowners build an ADU on their property. Orange County Housing Finance Trust has developed a program to encourage property owners to invest in an ADU by providing access to low-interest, deferred, partially forgivable loans for qualified owners.
Here’s what you need to know:
1. Qualifying for the Program
Orange County property owners interested in applying for the program must be building the new ADU at their primary residence in an Orange County Trust Member City. (Excluded cities: Brea, Cypress, La Palma, Laguna Woods, Rancho Santa Margarita, Villa Park) The new ADU must conform to local zoning and building requirements. Property owners are only eligible for one Affordable ADU Loan per property. They must have secured funding for construction not exceeding two additional loans, including any original mortgage and with a loan-to-value no higher than 90% of all loans. Lastly, property owners must work with an experienced ADU professional licensed in California, like Rost Architects. To set up a consultation with Rost Architects, click the get started button below.
Rost Architects Villa T - Pre-Designed Accessory Dwelling Unit
2. Application Process
The OCHFT Affordable ADU Loan Program selects applicants from the Interest List using a weighted lottery which is designed to evenly distribute Affordable ADU Loans between North, Central, and South Orange County. Property owners can increase their chances of being selected by committing to building a mobility-accessible ADU or getting a jumpstart on their ADU project as ADU’s under construction will be considered first.
Once selected in the Interest List lottery, participants will have 60 days to complete an application online and submit the following:
· Feasibility Assessment of the ADU & Site
· Most Recent Loan Statement on any Debt on the Property
· Cost Estimate for the ADU
· Proof of Additional Funding
· Contractor or Project Manager Contact Information
If your application is approved and funds are available, you will be notified by mail of the OCHFT’s commitment to your loan. Funds will be disbursed once all other funding for your ADU has been spent. Rost Architects can provide design plans for your project. To obtain design plans, click the get started link below to speak with our team.
3. Benefits for Property Owners
Recipients of the Affordable ADU Loan from OCHFT will receive up to $100,000 low-interest loan, with daily forgiveness of the loan principal when rented to an eligible tenant and loan payments deferred up to 20 years. An additional $5,000 loan forgiveness is available for mobility-accessible ADUs and $4,500 in leasing assistance with a trained property manager is also forgivable.
The program provides flexibility for property owners in allowing recipients to choose a voucher holder or eligible very low-income tenant in order to benefit the most from the loan or rent unrestricted if they find that the program restrictions are not the right fit for their property. Should a property owner choose to opt out of the tenant requirements, the loan will incur higher interest rates set in the loan agreement.
Rost Architects Villa S - Pre-Designed Accessory Dwelling Unit
4. Renting your ADU
The Affordable ADU Loan program is designed to help solve the housing crisis in California and specifically in Orange County. The ADU’s built using the program funds should be accessible to anyone whose adjusted household income is less than 50% of the Area Median Income ($50,250 - $77,500); Monthly rent for a qualified tenant at this time would be between $1,256 and $1,865. Ideally, participants will take advantage of the program’s loan for the ten-year affordability period by renting to an eligible tenant. After the ten-year affordability period, you may continue to hold the loan at a higher interest rate for the remainder of the 20-year term.
5. Consulting with a Licensed Architect
A Licensed Architect with experience in ADU design can help you navigate the local ADU construction guidelines while customizing a design that works for your property and budget. Rost Architects has been working in the ADU space since 2018 and has a variety of pre-designed floorplans for prospective clients to choose from. To view our floor plan options, visit Rost Architects ADUs. Once you have selected a plan, we offer customization of the plan, engineering coordination, and permitting services to help you navigate the approval and construction process. Get started with Rost Architects today and get one step closer to building your own Luxury Accessory Dwelling Unit from Rost Architects. Below are a few images of our ADUs. We are here to help guide you through the process and answer any questions you may have.
