Get the $40k ADU Grant WITHOUT a Loan or Refi
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- Опубліковано 2 жов 2024
- Breaking news last week - this completely fixed the $40,000 ADU grant from @calhfa with their newly approved partner @hppcares3161
[Update 9/8/2022: "HPP CARES has temporarily closed the application portal on their site for the month of September." ]
Subscribe to this channel and watch this playlist for the most up to date news: • ADU Loans that Use the...
In the past, CalHFA had a short list of approved lenders who could qualify California homeowners for the grant - and those lenders all required a construction style loan so there would be some type of fund management and inspection process. Most of those lenders also required a refi and since we're coming off record low interest rates, this wasn't a good option for most homeowners.
Starting last week, CalHFA has approved a number of different non-profits and government entities (mostly cities) that can qualify homeowners for the grant too.
In this interview, we talk with Katherine Peoples from HPP CARES about what the process looks like and how a homeowner can now qualify for the grant even if they are working with cash or a non-construction style loan.
To be clear, HPP CARES is saying that you can work with any lender (not just the pre-approved list from CalHFA) or no lender, and you can still qualify through their application process.
LINK TO HPP CARES: www.hppcares.o...
TO CONTACT HPP CARES: adu@hppcares.org
We also answer the most common questions:
Can you get the grant if you've already started your ADU?
Can you get the grant if you already finished your ADU? (probably not as of filming, but fill out this form: intakeq.com/ne... and HPP CARES will work with the state to see what's possible)
Is the income eligibility limit for everybody on the title or just the individual applicant?
This video was recorded on August 15 and we expect a lot to change in the coming months, so subscribe and stay tuned.
MORE RESOURCES:
🏠 Subscribe to this channel: www.youtube.co...
🏠 Redwood Credit Union Loan Mollie mentions: • Why your ADU is worthless
🏠 Cal Con Mortgage Loan that doesn't affect your primary mortgage: • Get $40k ADU grant wit...
🏠 CalHFA ADU Grant Website: www.calhfa.ca....
🏠 CalHFA ADU Income Requirements: www.calhfa.ca..... (I expect these to go up in June)
🏠 CalHFA ADU Applicant Affidavit: www.calhfa.ca....
🏠 CalHFA ADU Participant Affidavit: www.calhfa.ca....
🏠 CalHFA ADU Term Sheet: www.calhfa.ca....
🏠 CalHFA ADU Process/Flow Chart: www.calhfa.ca....
🏠 INCOME LIMIT BY COUNTY: www.calhfa.ca....
🏠 OTHER RULES: www.calhfa.ca....
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CORRECTION: 0:40 HPP CARES has temporarily closed the application portal on their site for the month of September. Subscribe to this channel and watch this playlist for the most up to date news: • ADU Loans that Use the...
I applied on 8/15/22 and signed my Docu-sign this evening. I submitted a complete application with all financial figures, invoices and our ADU architectural renderings/plans. Thus far, we have paid for the Planning & Building Permits out of pocket, however we do not have a contractor at this time. The grant amount listed is $40,000, there is a $2K fee for the company that will manage my account throughout the process. There will need to be inspections, accounting services, appraisals etc. through the project and I do not mind the $2k administration fee that will keep my accounting in order with the State of California. I appreciate that the grant covers the service fee. In the end, the total grant will be for $38,000. If we do not utilize all the funds by the end of the project, the remainder will be returned to the state. You will receive a tally of the amount of funds utilized for your ADU throughout the process and when the project is completed. Hope this provides some answers for you, we are just beginning our project.😄 Thank you for all of your videos, we watched every single one!
This is very helpful - thank you for sharing!
@@HowToADU Agreed! Thanks Ryan. So, 17 days to process. I'm 9 days into that waiting period and was wondering why I forgot to ask when the next contact would be.
Thanks for the information on your experience this is awesome
What city are u in and how many sq ft is ur adu? I’m starting to do my research.
@@novelera80s91 Who are you asking? :)
anyone from San Diego and got the 40k
HPP cares is terrible!!!!! They charge almost $8000 to manage the grant. You can’t get a person that knows anything about the process unless it’s the supervisor or manager. The professionalism is also questionable. They can’t answer some of the most basic questions. I wish you would do an episode that addresses this. I went this route based on one of your UA-cams. It’s not nearly as easy as it seems, it’s been a roller coaster. Yes getting the grant through them is easy but by the time you pay them and the taxes on the grant. It’s almost half.
I’m sorry about the frustration but it sounds like you netted over $20,000 after watching one of these free videos ;) I don’t want to be too glib but maybe “you’re welcome” is in order
More seriously though, you should definitely send your feedback to CalHFA along with documentation about that $8k in management costs which is very unusual. If you copy me with documentation about that fee I’ll definitely do a video. Most of the fee breakdowns I’ve seen have about 2500 to HPPCares with the rest going to the escrow company and the inspectors. (as shown in this video about all the fees and the process reported by real applicants who have gone through the process: ua-cam.com/video/NxH9WOGzpDw/v-deo.html )
Submitted my application two weeks ago and am looking forward to hearing back soon from Katherine :) Thanks for all that you do!
Love to hear it - thanks for watching!
I too applied for grant weeks ago, still waiting for any updates. I plan to use Equity loan to fund project been following info on FB page, and have yet to hear of anyone actually receiving any funds, or the process for getting qualifying expenses paid. We are ready to start our project and feeling like this is just too good to be true. Has anyone actually received the funds and/or successfully paid any of their vendors? Vendors won't wait around for months to get paid, and CALHFA won't reimburse you, if you pay out of pocket for qualifying expenses. seems backwards.
A lot of people have gotten "award letters" but that's not quite the funds in the account step. Stay tuned and I'll post when I hear about people getting it. Having said that, CalHFA is a very reliable state institution.
I'm really curious about the tax implications of getting this grant. Is there any information out there how this affects the borrower? How does this actually play out if it is treated as income? Would I get a huge tax bill and be catapulted into a higher income tax bracket? Details needed please :)
does it increase property tax
Could you please post a link for application? Thank you
Hi! You can get a link to all THREE versions of the application at: www.hppcares.org/adu/adu-grant.php
Katherine asked me not to link specifically to one application because there are 3 different applications and you need to choose the right one after reading that whole page. (You can also translate the page to Vietnamese and other languages using the three bars in the top site navigation and choosing "Translate")
I’d like to learn more about how much money people are ACTUALLY receiving through this program. Sounds like there are many hoops to jump through. If a homeowner only ends up getting a few thousand and on top of that they have to pay tax on the money it may not be worth the efforts. The “up to $40,000” sounds a bit too good to be true.
From September 2021 to April 2022, CalHFA reported only 19 grant reservations.
Since this change went into place last week, Katherine is reporting hundreds of applications to reserve funds through her service in that one week alone.
CalHFA has quarterly reports they do to the public (I watch them and include the info on this channel when it's relevant). I imagine we'll have the official numbers sometime near the end of this year. But by my rough math, by then, the money will have run out.
There aren't THAT many hoops now that there's an alternative to the lending requirement. It's an application that takes about 30 minutes to fill out. Up to you and your CPA to figure out what the best path is!
If you don't want to get several thousand dollars from the state of California, share this video with a friend ;D
This is huge! Love her energy! Thanks Ryan.
She is like that 100% of the time too 😂
We were ready to fund the construction loan (with one of CalHFA’s approved lenders) , however the appraiser who came to value the property only added $15,000 for the value of the ADU! This has basically thrown a wrench in the process.
FannieMac even published guidelines on how to value the ADU using income approach, but the appraisers also need to be brought up to speed on this.
Only $15k? WTF!?
Oh dear. You know more than your appraiser and the lender that hired them :(
There’s a guy who does appraiser training in Oregon. Abdur Abdul-Malik maybe you can recommend him to the lender?
@@HowToADU
Thank you. I’ll ping if we end up need help.
For our valuation, we appealed as the first step (with market comps and another appraisal I had done for a diff loan program but for the same house that valued ADU appropriately) . Our Appraiser didn’t budge.
So we ordered a new appraisal asking my lender to specifically look for an appraiser with ADU experience. It seems they can’t ask one specific company that I tell them (which I have actually ) . Lender told me the appraisal needs to done at random.
Anyway, waiting for the latest appraisal report
Fingers crossed
@@MrShutterButter Okay, please email me at ryan@how-to-adu.com when you get that result. I spoke to somebody knowledgeable and they gave some advice that I can pass along to you.
What mortgage company ?
Is the income limit household income? Or just my income when applying?
In August HPPCares said they could use individual income of the applicant, but they may update/change that rule later this month. We are supposed to do a video about it together so stay tuned
Just finished filling out the application! Thank you both for all the info. I am soooo excited. I was not onboard for the way the grant was structured before. I am glad I waited . I was hoping the structure would change . Now I wait for a response!
This is stupid. Homeowners with equity getting money to build an ADU to make more money off of renters.
You should see how much money goes into creating housing through alternative programs! That will make you a billion times more frustrated. ;)
Only for California? so not worth watching the whole vid if not a CA resident? and thus need to use time to watch other vids.
Yeah, most of this channel is California specific. This grant is specific to California. If you sign up here with your state, I'll let you know when we do things specific to your region or state! www.how-to-adu.com/sub
Do I need money all at once?
On the HPP CARES website, there's a question about this:
"Can I get started with HPP CARES, lock the CALHFA 40K ADU GRANT reservation without knowing how I plan to fund my ADU project?
To ensure best use of everyones time. We recommend that you have a pretty good ideal [sic] how you plan to fund your project."
Can you qualify for the grant if you are a owner/builder acting as your own General Contractor?
After listening to the video, yes
Interestingly, CalHFA is saying that this was never a requirement for the grant (it was a requirement of the lenders). I'm asking Katherine to clarify if she requires a GC license or is open to owner-builder situations. Subscribe and find out as soon as I find out :)
@@HowToADU Thank you, just subscribed. Looking forward to see what you find out.
HPPCares says it still has to be a GC :(
do I have to to have the formal pre construction plans when I complete the application? I have a Heloc and waiting for the application to open.
I believe that people are qualifying for the grant without plans/drawings. Plans and drawings are one of the things that you can use the grant to pay for, so I hope that's how it's working!!!
@@HowToADU me too, otherwise that would kind of defeat the purpose… esp as most plans / running down permits are quoted at $10k+…
To be notified when the HPP CARES grant portal reopens, you can subscribe to notifications on the HPP CARES form here: intakeq.com/new/plmcpi/2hka9z
Where do you apply for this grant
You can apply through any of the entities listed on CalHFA's website, but the entity I talk about in this video is HPP CARES and their application portal will reopen here hppcares.org/adu/adu-grant.php
Does the grant require you to have a GC or can I be my own GC?
I was just reading in the comments and yes GC is required. You cannot be your own GC
CalHFA doesn’t require this but every approved lender / entity I’ve spoken to does. That means this could change.
Looks like the funds are exhausted as of 1/1/23. Do you think they will replenish the funds and restart the program? Thanks
Did a video about this: ua-cam.com/video/R9DCGuxuBco/v-deo.html The state has approved funding but is now considering withdrawing it. need your help to lobby.
Thank you for all the great updates
Thanks for being honest, upfront, and asking all the pertinent questions!! Absolutely outstanding information!!
Glad you benefit from the info. That's the goal!
If the house was paid off can you still qualify for ADU?
Sure.
@@HowToADU Thank you .
Does anyone know if HPP will open back up and continue accepting applications in October?
Yes, she came on the channel and explained the timing for reopening. ua-cam.com/video/biVUzabW0UI/v-deo.html But you should signup for her updates because she may reopen at the end of September.
Any update on this? Is “end of October” still expected as the reopening date?
@@lisademarco2232 The latest I heard was next Saturday (but that target reopen date has changed twice in the past month so I'm not promising anything!)
We’re in San Diego and in the permitting process for two ADUs on our property (through Bonus ADU Program). Would building two ADUs on our property make us ineligible for the grant?
Good question to ask HPP CARES. I'm pretty sure that the CalHFA grant can only apply to one of the ADU's predevelopment costs and it has to be itemized separately from the 2nd ADU. Having said that, the city of San Diego is also listed as an entity that can qualify you for the loan so maybe ask:
Sujata Raman
phone: 619.578.7309
email: sujatar@sdhc.org
For more information visit the San Diego Housing Commission ADU Financing Program website
I’m in San Diego also are you able to get the grant? I’m planning to do 2 ADU also do you have a company that’s helping you right now?
IDAHO???
Not yet! This one is California-specific.
I’m curious about the tax part of this. At what point do we receive the 1099 for the grant funds? Because if we get a 1099 for the full $40k and have to pay tax on it, what happens when we don’t use the full $40k? Obviously we have to give back any unused funds but will we receive a refund on the tax we paid? Giving a 1099 at the beginning seems premature IMO.
Perhaps amended return?
I'm checking with Katherine and Molly.
I have a guess but there's no sense in sharing my random guess when they can pop in answer for real ;)
Thanks for this post! Grateful for UA-cam!
" Predevelopment costs include site prep"... Curious if grading would be site prep? My ideal location would require quite a bit of soil removal prior to any construction.
I'm curious about that too. I honestly find the definition of site prep to be a bit squiffy for my liking. For a lot of the projects I work on, there are more reliable ways to know I'm going to use all $40k, in my opinion. But this isn't the kind of advice I can give in the public free videos.
Members of my paid community (currently $99/month) get tips and advice like this. You can email me about it at ryan@how-to-adu.com if you're interested
Outstanding news! I just contacted my ADU developer so we are going to apply for this!
This was scam. Entered all my info in the linked poorly written website with grammatical errors. Did not get any notification at all even of submission of application.
There are lots of typos, but it’s CalHFA approved for what it’s worth. That said they closed the application portal so no new applicants at this time. If you already submitted and don’t hear back within 48 hours you should email adu@hppcares.org for a status update.
I started building my ADU June 2022 but it's not completed yet. Can I still qualify? I took a HELOC to fund it.
HPPCares has suggested that people apply if they have started and haven’t finished yet. But reimbursement may be very complicated or impractical so talk to them about the details.
What happens if you have c o and there is money left over in account?
Let’s say person input his money plus the grants. Do they receive a check for left over money?
My understanding is that you never get leftover grant money in your pocket. I’m not sure what would happen if you have leftover from a construction loan or cash in escrow - speak to the entity you’re trying to work with
In development costs can drilling a well be included?
Hello, my property is zoned R2 I have a single-family home Can I use the SB-9, or add 2 ADUs? ore can I build a second unit as it's zoned for and add 2 ADUs can you help here I'm just trying to figure out my options here Thank you so much.
It depends on the definition of r2 in your city and the types of structures you currently have on the property.
If you are zoned single family (r2 sometimes is and sometimes isn’t) the. You may be sb9 eligible.
If you have a multifamily dwelling (two or more units with a shared wall) then you can generally build multiple ADUs.
If you need clearer help than that you may want to book a call so we can look at your specific property. www.how-to-adu.com/get-started-booking
Hello and hello, for everybody to know Is there any hard inquiry on the credit? Or it’s soft pull or just for identification? …
The lenders will check your credit as part of the loan qualification process. Some of the cities and nonprofit entities presumably have ways to qualify without needing the credit check. So it depends. Speak to the entity you’re considering.
Am I able to apply for grant funds to help with preconstruction costs if I already have a loan in place? The project but is now permitted, but is stalled. There are multiple costs that were not budgeted into the loan, including Water and Sewer fees, Moving / Removing utility lines, etc, etc. I have spent a lot out of pocket already, but there will more costs that were not in the original estimate. Are there rules that apply for this situation? If not, are there other courses of action you would recommend?
It's really tough to give specific advice in the comments. Broadly speaking, there are still lots of ways to use the grant money once HPP CARES reopens its portal. It's hard to imagine going through one of the conventional lenders, but HPPCARES still makes sense in a lot of cases.
We'll be doing a Grant-specific webinar on the November 1st: community.how-to-adu.com/da521f25-fac6-4680-bcf9-eec570e14a77
And you can get a free ticket included as part of our private membership here: community.how-to-adu.com/how-to-adu
There are a few reasons you might want to check it out:
1. We can share more details about your project in private and give more specific, catered advice
2. We can share some interpretations of the rules that are currently working without the whole world finding out. I avoid sharing these publicly because I don't want those opportunities to be changed or those rules to be re-written differently
3. The community is wiser than me - I'm just one guy. And the community has loads of people who are actively going through the process. So sometimes their real world experience is MUCH more valuable than what I can teach top-down on UA-cam
You don't need to join either of those to apply to HPP CARES or contact them. But if you want our best advice, joining up is the path I'd recommend.
Hi My name is Nohemi Sanchez.
Do I qualify if I have a 599 credit score?
Thanks for watching but you have to contact the lenders that are participating with CalHFA for specific offers. Having said that, there are now ways to qualify for the grant without getting a loan, so you really want to do lots of research.
The grant itself has no credit score requirements, but you will need to finance the construction of the ADU (which is more than $40k!)
I really wanted to do an ADU because of this 40k but we really wanted a 4 BR home and 1200sf is to small. So i have to go the SB9 or SB10 route and wont be eligible for this Grant.
That makes sense - if you need something bigger than an ADU, don't worry about shoe-horning the ADU grant in. Having said that, it might be worth considering a combo move where you propose a second unit with an attached ADU and getting the grant for just the ADU portion. Not a given, but might be worth asking around.
Separately, SB10 is not related to the type of project you're describing. Did a video about that here: ua-cam.com/video/mtlJPWen3lI/v-deo.html
@@HowToADU Thx for people that get this grant do you have to get a licensed contractor?? Can we do owner builder??
Hello does katherine have a email to contact her , very interested on a adu project .
I strongly recommend that you watch the video, and carefully read the HPP CARES landing page, before emailing Katherine. As mentioned in the video and on that page, her email is adu@hppcares.org - Good luck with your project!
I'm no longer waiting for the EDIL GRANT LOAN because I earn $26,700 every 10 days recently
That is not what this video is about?
Do you have any recommendations on setting up the escrow account? Who do you contact to help with setting up the escrow account?
Only the entities on CalHFAs page can help you with that. I’m this case, you’d work with HPP CARES and they set up your account with a third party.
Can you still apply if you are half way through the construction process already? Thanks
If you already got finaled and have a certificate of occupancy, I don't know of a way to get the grant at this time. There is a form on the HPP CARES site where you can share that feedback (without applying) and they use it to collect data and advocate for change when the state asks them questions about how it's going.
If you are mid-project, there are more options but it's complicated. You should really reach out to the entity you want to qualify you and get details from them.
This is also a moving target as things keep changing with the program. Good luck!
How much I should put in escrow if I have cash?
You should speak with the specific entities that you're working with. Generally, for most of the folks I've talked to, it's been based on the fixed rate contract with a GC that they got for the build
Oh my gosh. This is amazing!
Doesn't seem the forms from HPPCares work anymore. Do you know if they stop applications?
If they’re not working, that’s the likely cause. Check CCEDA
Yes it is, I was assisted
Good news. Does it mean I can get 40k grant with my 2nd mortgage equity loan now. I wasn't a fan of refi pr construction loan type before the new change.
That's correct. Katherine explains in the video and you can bring the cash from that 2nd mortgage equity loan to her controlled account and get the grant that way (as long as you qualify).
@@HowToADU thank you. I'll do more research for the new change
Is the 40k grant has to be paid back in anyway?
The grant is taxable, but there is no requirement to payback the grant money.
Thank you for these informative videos. Does anyone have an architect they can recommend for LA?
It's my pleasure - thanks for watching :)
How do I find an ADU grant in louisiana
Some cities are looking to make ADUs easier. Start by going to your city or parish (that's what counties are called, for all the normal people reading this) and see if there are any programs for ADUs or other small housing units.
I'm wondering if I can use the grant to pay soft costs and build an attached room with a bathroom, so not exactly an ADU.
I'm planning to use this room us a rental space and provide housing to someone who needs it.
My understanding is that this specific grant needs to be for an ADU. The attached room can be an ADU if you want to take on the extra requirements like kitchen, firewall, etc
You make me wish I lived in California! :)
They get the $40k back from you pretty quickly out here ;D
Thank You,
Can JADUs qualify?
I wrote to CalHFA and they say "Either JADU’s or ADU’s are eligible"
Does a jadu qualify as a ADU?
I wrote to CalHFA and they say "Either JADU’s or ADU’s are eligible"
I just signed for the escrow account. The only concern I have is that they state that if there are no draws in a 90 day period they will return the funds to the lender. In your videos with Katherine, she made it seem like there weren't any time restraints on the project as long as you were progressing. The only reason I'm concerned is that I am paying cash and financing. I am at the very beginning of the process. I don't know if I should getting a heloc from my bank or use an hpp recommended bank. Do you have a video " I got the Grant now what?" yet? or can you point me in the right direction for the info? Thanks
A very popular request - but no I don't know what happens next sorry. From my perspective, to set up the escrow, you have to spend several thousand dollars, which draws from the CalHFA grant. So it's hard to imagine not drawing that fee as soon as it's set up, if you follow. Now, at some point over the next 90 days, if you have to submit another to refresh it, that seems a bit surprising, but even if it were a requirement, you could submit any city fee, architect/design down payment, or dare I say a consulting call with yours truly. But I don't know the rules so I don't know if that will do the trick or not. You should get this information from HPP CARES. I'm trying to get Katherine back on - still scheduling.
they said that the 90 day does not apply to grants. however, if they dont receive any invoices/distribution within 360 days, the remaining balance goes to the lender and they can keep your money.
@@specialguy18 Wow, do you mind sharing the agreement with me? ryan@how-to-adu.com and are you working with one of the HPP CARES lenders or bringing your own cash to the escrow?
I don’t understand, you mentioned there can be cash participants and others can borrow. But if you have $40 k cash , why would you be approved for the grant?
Or how does that work? You put up the cost and then get reimbursed?
$40k grant goes to pre construction costs. You need to use other money for construction (material and labor). One way to do that is to get a construction loan with a CalHFA approved lender. Another way to do it is to get financing on your own and bring cash to HPPCARES. Another way to do it is to just have cash that you bring to HPPCares. All valid. Do your research with the approved entities!
What happens to the remaining balance of the 40k if it is not all use in utility's and plans ect..
Not sure, but I think everybody finds a way to spend it. For example you can buy down the interest rate and pay other non-recurring closing costs.
Hey Ryan. Great video. Can this grant be used to turn an unpermitted unit into a legal ADU? Thanks much!!
More specifically an attached unpermitted unit, not freestanding. Thank you.
I've heard people go both ways on this question so I'm asking CalHFA for details.
Does the grant only for pre construction? I’m doing my own as im a general contractor and would only cost me 35k to convert my attached garage . So would the grant cover material and labor ?
Grant covers preconstruction only. Get somebody working on your project to break out itemized billing for development costs like permit processing. That said I’m still waiting for HPP CARES to answer about owner builder
15:34
Does this company or the Escrow company put a lien on your property to secure the debt for their fees, or is the debt secured by the Grant?
What debt are you referring to?
@@HowToADU $2500 for HPP, $2500 for HUD, $2000 for Escrow company
@@GUNNERBASS My understanding is that those are invoices that you can use the grant for.
@@HowToADU so the Grant isn’t $40k it’s $33k with the other $7k going to HPP, Escrow and HUD. And also taxes covered by the Grantee. So take out another $5k-? based on your tax bracket. Also it puts you in a higher tax bracket so you’re paying more for all your taxes overall
@@GUNNERBASS You've got to work with a licensed tax advisor to figure out how the 1099 will affect you, but yes there will be a lot of costs! However the grant is literally up to $40k. They're sure gonna 1099 you for $40k ;D
is this available in arizona?
This one is California only. Maybe AZ does it too but I don’t know!
I've reached out to HPP Cares several times by phone and email. I managed renovation loans since 2009 as a HUD 203K Consultant. Fund control on escrow construction provides a lot of key benefits for the borrower. It financially protects the borrower. It also delivers accountability as it requires the borrower, contractor, and inspector to sign every fund release. It puts everyone on the same page. Also, very important, is that generally speaking no funds are released until work is completed. Contractors will realize that they need working capital to manage upfront costs and in-between draws. It's not clear how this process will work. I'm happy to help.
Thanks for sharing, Will. Which part isn't clear? I'd be happy to dig in more.
Have you shared your question with Molly at CalHFA? I assume she'd be happy to help since you're on of the CalHFA-approved lenders!
@@HowToADU Yes I spoke with Molly. As anticipated, this is for HPP Cares to manage. Deferred to Katherine. Frankly, I believe HPP Cares will get slammed and bottlenecked. I've been talking to numerous clients up and down the state. Everyone wants the grant, no one wants to refi. period.
I do know renovation loans, escrow accounts, and fund control. Here are my questions. #1 What is there source/reference for a HUD inspector? There use to be FHA inspectors(inactive) and then there are HUD 203K Consultants. HUD 203K consultants review and approve construction bids, and then release funds from the escrow account. Question #2. Will escrow release any funds for materials? This traditionally has been discouraged by HUD & Fannie Mae. Unfortunately, bad apples take off with the money. A well-thought-out fund control program will protect the borrower and the integrity of the build.
Are there extra inspection costs with the grant in place?
@@sandiegocityliving7872 The HPP CARES site lists "HUD Inspectors" as one of the costs covered by the grant so I assume that the answer is yes there are inspector costs, and they seem to be covered by the grant.
We have our own funding but don’t want to wire it out into escrow until the project actually starts because of the interest we have to pay while getting permits. Is this possible?
Good question! You’ll have to ask Hpp cares about the specific timing. I suspect it’s possible but I don’t know.
It says members only how can we sign up
Hi Candace, if you're trying to apply, the portal is supposed to reopen on Saturday Oct 29th at 7 AM: www.hppcares.org/adu/adu-grant.php
If you're trying to find my free PDF about the requirements, it should be here: community.how-to-adu.com/hpp-cares-requirements
If you're trying to become a member of this UA-cam channel to see members-only videos (which you do NOT need to do to apply for the grant), you can do that here: ua-cam.com/users/howtoadujoin BUT THIS IS NOT REQUIRED IN ANY WAY. It's just if you want to be nice and give me a few bucks a month. You can get all the info you need with the freeeee links above.
How do we apply for the $40k grant, without having a loan?
How can I apply the grant and how to apply ,what’s the web site ,my name is Delia Calon
Please watch the whole video and then read this page carefully for instructions: www.hppcares.org/adu/adu-grant.php
@@deliacalon7877 Please watch the whole video and then read this page carefully for instructions: www.hppcares.org/adu/adu-grant.php
I finished my ADU and got my final approval from the city two months ago. Can I still qualify for the 40k grant? I used HELOC to get the job done. Thx
I haven’t heard of anybody getting the grant after getting their final approval. But keep an eye on the CalHFA page for your specific situation.
i am in the middle of construction do i qualify ?
Answered at 29:30 I know it's a long video but you should watch it!! :)
Has anyone successfully got the ADU grant paid ?
Yes I’ve seen people get draws from the grant money in their escrow.
Hi , my brother qualified for this grant they did not receive money because they said they going to give the money after finish But now he finished the ADU, and they want my brother sent $40 thousand to them. I don’t understand.
Hello there, we have initiated the pre planning for our detach ADU. We don’t have plans, permits or a GC yet. I was wondering, since we don’t know how much our project will come in at, how much money do we need to put into this escrow account? Is there a minimum %/$ that we need to have in the account? how soon will we need to deposit the money? I have many more questions brewing, this was the initial one.
This is one of the big head scratchers about the grant process. You need a fixed rate contract with a GC (which determines how much you put in escrow) but most GCs are not going to give you fixed pricing without detailed plans and finishing schedules. And if the permit process requires a substantial change to the plans, that could effect cost too. Alas, that’s how the grant is set up so you have to do your best. Working with design builders, using modular/prefab, or working with architects and builders with a lot of joint experience together are ways to mitigate these challenges.
Hello there. Can the grant be used for labor and materials??
According to the folks who have been on the show, the grant money cannot be used for construction labor or materials at this time. It's designed for pre-construction costs. Read the webpage for all details!
@@HowToADU boooo :/ 90% of my garage conversion ADU is labor and materials. Seems like this is intended for larger or detached ADU’s built from the ground up where predevelopment costs are higher. Where’s the help for the little guys??
@@montoya11333 You sure your GC doesn't have some itemized charges like permit processing that may qualify? :)
I mean even if they don't, you can get a grant for less than $40k too. So the help is there for the little guys too. But it does have limits.
@@HowToADU Maybe my situation is a little different because I’m a GC. I’m just looking at $2,200 for plans, $3,100 for permit, $300 for title certificatetion. So $5,600 total. In my case it doesn’t seem to make sense to move $100k into an escrow account with the $40k grant money then make draws for just the $5,600. See my point? Or am I missing something?
I should clarify that I’d be using funds from a Heloc that I recently got approved for. So as soon as I move the $100k to the escrow account, I would be required to make monthly interest payments of $500. If the project takes 12 months to build from plans to occupancy certificate, I would have already spent a $6,000 on the interest payments.
I was told by a lender that you must stay in the home for 5 years in order to get the grant forgiven is that still the case
I do not know where that lender got that information. There is no "forgiveness" on the grant to my knowledge, and there is no 5 year occupancy requirement.
There is an affidavit that says you are an owner occupant. Find more information at the CalHFA website linked in the video description.
If the lender you were talking to is one of the CalHFA approved lenders, please let me know which one it is.
@@HowToADU it was thru New World Mortgage, they are on the approved list that's where I found them. I was told it needed to be either a new mortgage refinance or a construction loan. They sent me an email that states "At this time the Grant is applied when you participate in a renovation loan, which means you would need to refinance your first mortgage to current market rates". and was told I would have to live in the home for a minimum of 5 years to have it forgiven... it seemed odd
@@alantijerina859 Thanks for sharing! I don't see New World on the approved list at this moment. www.calhfa.ca.gov/adu/index.htm I wonder if they have another name they're doing business as or if one of the approved lenders handed you off... Please let me know if you figure it out because we should report this to CalHFA. Feel free to forward the communications to me at hello@how-to-adu.com
@@HowToADU They are listed on the site as American Pacific mortgage. The person listed name is Luz And that is also the person who emailed me but through a different Company name after I spoke to them on the phone
@@alantijerina859 yes please forward that correspondence to me. I’ll speak with the agency
ADU
This sounds great for people who took out alternative financing. Is anyone actually getting close to 40k? I'm thinking of how much money smaller projects (sub 100k) end up getting
My understanding is that once you qualify, your lender/CalHFA partner can send any amount of itemized costs over to CalHFA and they will approve up to $40k. And sadly, it's really easy to get there for a lot of projects. I've had lots of clients pay 6k-16k in fees to different city agencies like planning department and water/sewer/etc. You can easily have a few thousand in closing costs. There's also plans/designs which can easily stack up to the high thousands or go north of $10k, even if you're just documenting existing conditions and getting structural engineer, title 24, etc.
And if you think you'll have grant money left over at the end, you can use it to pay non-recurring closing costs (like buying down points on your loan). So lots of ways to use all $40k.
Having said that, if you're doing a really simple conversion, you already have existing conditions from the builder, your city will let you draw things yourself, and you're paying cash... that could be a situation where you can't use the whole grant. What's more, the grant is taxable as income, so it will affect your tax situation and it can be quite significant.
Share the video with your CPA/tax person!
@@HowToADU awesome thanks for all your help with your channel.
The buying down the loan part interests me but if I already closed on a loan I'm not sure that could work. And if i only use some of the grant, I'm assuming only the part I use will be taxable.
Thanks a lot you have a great channel!
@@HowToADU Ah that’s interesting. Definitely wouldn’t have guessed this grant would cover closing costs
This is great! I wish they would remove the 250k max income requirement. Just because my hubs and I make money from our day job, doesn't mean I can afford to build an ADU. I am a small mom-pop landlord, the 40k would be so helpful! Any way for us to influence this?
Okay, I listened a bit more and you have some GREAT ideas Katherine on how to qualify! Look for my application today! :-)
Good 👍 ;)
Arquitect is already working on my Owner builder plans, Do I qualify for the grant???
Architect already working doesn't impact your qualifications. Owner builder, at this time, will prevent you from working with most of the entities that I've seen so far. But the only way to know for sure is to work with the entities on the CalHFA list. And this stuff keeps changing so subscribe to the channel to get updates when things change.