Affordable ADU Program: Forgivable Loan Opportunities

Overview

To better address the housing affordability crisis facing Napa County and the State of California, the County seeks to encourage the production of housing that is affordable throughout the County by incentivizing the creation of accessory dwelling units (“ADUs”) through the Napa County Affordable ADU Forgivable Loan Program.

Forgivable loan program guidelines are available in English (PDF) and Spanish (PDF).

Watch a Webinar: Explaining Napa County's Affordable ADU Loan Program Webinar

Contact Information

Homeowner(s) and/or potential borrowers under the Program are encouraged to consult with County staff in the process via the neighborly portal to start the interest form. To learn more about the program, visit Napa Sonoma ADU.

How to Apply

The application process starts with the information interest form, apply now.

Frequently Asked Questions (FAQs)

1.  I want to build an ADU, do I have to live on the property where I want to build? Yes, to qualify for our AADU Forgivable Loan Program, the property address where you want to build must belong to you (you must be the owner) and be your primary address at the time of application. 

2. Can I rent out my ADU to a relative? Yes, provided your relative and/or their household income does not exceed 80% of Area Median Income (AMI). The chart below shows income limits for 80% AMI.  These limits are set by the California Department of Housing & Community Development (HCD) and are updated annually in April.  The rates below are the income limits for April 2022-2023.

  • Household Size 1, Income Limit $70,550
  • Household Size 2, Income Limit $80,600
  • Household Size 3, Income Limit $90,700
  • Household Size 4, Income Limit $100,750

3.  Is there a timeframe in which construction would need to start or be completed for the AADU Forgivable Loan Program? Yes, the ADU must be completed within 24 months of loan approval. 

4.  Can the homeowner build the ADU? Projects funded by this loan program must have work completed by a construction contractor licensed by the California Contractors State License Board. In order to build their own ADU, the homeowner must be a Licensed Contractor in the State of California. 

5.  Can we build on a garage? Garage conversions are eligible with our AADU Forgivable Loan Program. 

6.  If I live in the City of Napa, do I qualify for the Fee Waivers for the Unincorporated County Incentive? The Unincorporated County Incentive is for applicants who reside within the Unincorporated County. The County of Napa is unable to waive fees assessed by the City of Napa, or any other incorporated City or Town in the County. 

7.  I have already started to build my ADU, can I still apply for the AADU Forgivable Loan Program? Yes, you can still apply even if you have started to build your ADU. 

8.  How much can I charge for rent? What is affordable rent? The chart below shows the maximum allowable monthly rent – based on unit size – that can be charged under this program as of March 2023.   Maximum allowable rent is set by occupancy capacity and affordable rent standards as defined in the AADU Forgivable Loan Underwriting Guidelines[PJ1] .  Maximum allowable rents increase annually and are updated by HCD in April. 

Maximum Allowable Rent

  • Studio, $1,670
  • 1-Bedroom $1,910
  • 2-Bedroom $2,150

9. Is the CalHFA ADU Grant still available? At this time, the CalHFA grant is fully committed. Please check the CalHFA website for more information about future rounds of grant funding available 

10. Can I build an ADU on two properties? My Spouse lives in our secondary property. No, a married couple can only have a single primary residence.