City To Accept Applications for Pasadena’s New ‘Granny Flat’ Loan Program Starting Thursday

The application period opens Thursday for a new city program aimed at increasing affordable housing in Pasadena by helping homeowners create secondary homes, or “accessory dwelling units” — also known as granny flats or converted garages — on their properties.

The Second Unit Accessory Dwelling Unit (ADU) program provides low-cost loans to Pasadena property owners interested in building a new ADU or upgrading an existing structure to bring it in line with city codes, according to the Pasadena Department of Housing.

Applications are being accepted by the department Thursday through Oct. 30, according to city officials.

“The Pasadena Second Unit ADU Program is a new affordable housing initiative that incentivizes homeowners to create an affordable rental unit on their property,” city housing officials said in a written statement. “The program offers homeowners ‘Comprehensive Assistance’ for financing, designing, permitting, and constructing a new Accessory Dwelling Unit (ADU) in the City of Pasadena.

“Specifically, the program provides homeowners financial assistance to build an ADU through new construction or garage conversion,” the statement said. “Assistance is also available to rehabilitate and bring up to code an existing unpermitted ‘granny flat’ or illegal garage conversion.”

The program has two separate offerings, depending on whether a property owner is building a new ADU or renovating one.

Those building a new structure may be eligible to receive a loan of up $150,000 for three years with 1 percent interest and deferred payments for three years, city officials said in a written statement. The loan must be refinanced prior to the end of the deferred payment period.

Those renovating an existing ADU may qualify for 20-year loans up to $75,000 with 1 percent simple interest and deferred payments for the first five years, officials said. Participants’ household income must be under 80 percent of the area median income, amounting to $63,100 for a single person, $72,100 for a household of two, $81,100 for a household of three, and $90,100 for a household of four.

More information, including applications and a video presentation about the program, is available online at cityofpasadena.net/housing/second-unit-adu-program. Applications must be submitted to the Pasadena Department of Housing by 1 p.m. Oct. 30 to be considered.

See also:

City’s Housing Department Pushing New ADU Pilot Program