Long Beach, CA ~ Long Beach will open applications Nov. 1 for the second round of its Backyard Builders loan program, offering income-qualified homeowners up to $250,000 to design and build an accessory dwelling unit on their property.

The application period runs through Nov. 30. The city expects to finance at least 16 ADUs, up from 10 in the program's first round, launched in fall 2024. Eligible applicants will be entered into a randomized lottery to select loan recipients, according to the city.

The loans have a 30-year term and a 2% interest rate, below market rates, with payments deferred for the life of the loan. Borrowers generally will not have to make payments until the term ends or the property is sold or transferred, the city said.

Applicants must own and live in a single-family home in the designated program area and meet California's lower-income definition. Other eligibility factors include debt, mortgage and property-tax payments, and homeowners insurance. The ADUs must be single-story, at ground level and smaller than 500 square feet.

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The program is aimed at lower-income homeowners, who may use the units for extended family or to generate income. Owners will be encouraged, but not required, to rent to tenants using city housing vouchers. If rented, an ADU must be leased for at least 30 days; short-term rentals are prohibited. Homeowners who have started designing or building an ADU may apply before a certificate of occupancy is issued, but the city will not reimburse costs incurred before the loan is executed.

Mayor Rex Richardson said the expanded program could help address overcrowding, provide rental income or give older relatives a place to live near family. Christopher Koontz, director of the city's Community Development Department, described the program as one of several approaches to expanding housing options.

The round is funded by a $4.8 million award from the California Department of Housing and Community Development's CalHome Program, with an additional $315,000 from the Los Angeles County Affordable Housing Solutions Agency for design and project-management assistance. The Long Beach Community Investment Company, the city's nonprofit housing arm, will administer the loans.

The city has scheduled information sessions Oct. 27 and Nov. 14 in person, and Nov. 5 online. Details on eligibility, loan terms and applications are available at longbeach.gov/aduloan.

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