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Garage conversions are often touted as one of the most budget-friendly methods to create an Accessory Dwelling Unit (ADU). These conversions involve repurposing an existing garage into a functional living space, offering several advantages, cost savings, and key tips for a successful transformation.
ADU Grant Program Updated Information as of October 2023 The California Housing Finance Agencys (CalHFA) ADU Grant Program continues to support homeowners by providing up to $40,000 towards predevelopment and non-recurring closing costs in the construction of Accessory Dwelling Units (ADUs).
The ADU Grant provides up to $40,000 towards pre-development and non-reoccurring closing costs associated with the construction of the ADU. Predevelopment costs include site prep, architectural designs, permits, soil tests, impact fees, property survey, and energy reports.
Homeowners who qualify as having a low or moderate income were eligible for the CalHFA ADU Grant. The definition was quite generous: in Los Angeles County, a homeowner may earn up to $180,000 per year and be eligible, and in Orange County, a homeowner may earn up to $235,000 per year.
The most obvious downside to building an ADU is that it can seem like youre making your property smaller, whether its by reducing the overall size of your backyard or removing a storage shed. Additionally, you must consider permits, the filing thereof, and their requirements.
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There are several ways to finance an ADU including personal savings, a home equity loan, a HELOC, a construction loan, and a cash-out refinance. I use a home equity loan as an example. Dont forget to add property taxes and insurance into your monthly expenses.

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