Is the California ADU Grant Still Available in 2026?

Short answer: No. As of 2026, the California ADU Grant Program is not accepting new applications. The $40,000 grant administered by CalHFA (the California Housing Finance Agency) ran out of funding and stopped taking applications back in 2023. No new funding round has been opened since.

If you’ve heard about “free money” to build an ADU in Sacramento, this is almost certainly the program people mean — and unfortunately it has been closed for a few years now. Here’s the full picture, plus the options that are available today.

What was the California ADU Grant?

The CalHFA ADU Grant Program offered eligible homeowners up to $40,000 to cover pre-development and non-recurring closing costs — things like site prep, architectural plans, permits, soil tests, and impact fees. It launched in 2021 to encourage more affordable housing across California.

The catch: it was funded by a fixed pool of money. Demand was enormous, the funds were depleted, and CalHFA suspended new applications in 2023. There has been talk of refunding the program, but as of 2026 no new money has been allocated and applications remain closed.

Be careful with anyone still “offering” the grant

Because the program is so well known, it keeps getting used as bait. CalHFA’s own guidance is blunt: if anyone approaches you saying they can help you get an ADU Grant, it is a financial scam — don’t engage with them, and forward any names or phone numbers to CalHFA. The same logic applies to us: no licensed builder in California can hand you grant money the state is not issuing. What a builder can do is show you what the project actually costs and how it gets financed.

What California ADU programs actually help in 2026

There is no state grant to apply for, but several rules and local programs cut the cost of building an ADU this year. None of them need an application to a grant program:

• No impact fees up to 750 sq ft. Since January 1, 2026 (SB 543), state law bars impact fees on an ADU with 750 sq ft of interior livable space or less; larger ADUs pay them in proportion to the main house. Our Sacramento ADU cost and fees guide shows what the City charges at each size.
• No school fees under 500 sq ft. Smaller ADUs are treated as adding no assessable space for school developer fees.
• Free plans. The City of Sacramento offers three free Shelf Ready plan sets (367, 559 and 747 sq ft), and Sacramento County has its own free plans for unincorporated areas.
• Free zoning review. The City’s optional ADU zoning review has had no fee since July 12, 2026.
• A path for older unpermitted units. Under AB 2533 (effective 2025), a city generally cannot deny a permit to legalize an ADU built before January 1, 2020 unless it is unsafe, and cannot charge penalties for it.

Together these can be worth more than many homeowners expect, especially for a garage conversion or an ADU kept at or under 750 sq ft. If you are comparing builders, our checklist for choosing an ADU contractor covers the license, deposit and contract rules California sets.

So how do people pay for an ADU today?

The good news: you don’t need a grant to make an ADU affordable. Most homeowners finance an ADU and pay it back over time — often partly offset by rental income from the finished unit. Common options include:

• ADU construction loans — financing built specifically for accessory dwelling units, with payments starting as low as $1,440/month.
• Home equity (HELOC) or cash-out refinance — tap the equity you already have in your home.
• Renovation loans — some programs require little to no money down.

We break the monthly numbers down by ADU size on our ADU financing page.

The bottom line

The California ADU Grant is not available in 2026, so don’t wait on a grant that isn’t coming back. With the right financing, building an ADU is more accessible than most homeowners expect — and you can start generating rental income while you pay it off.

Want to know what an ADU would actually cost you per month on your property? See the financing options, apply for financing pre-qualification, or send us your details below and we’ll come back with an estimate and the payment options that fit it.

Sources: CalHFA ADU Grant Program page (status checked October 2026); California Government Code 66311.5 as amended by SB 543 (2025); Education Code 17620; HCD ADU Handbook (March 2026); AB 2533 (2024); City of Sacramento ADU Resource Center and form CDD-0009; Sacramento County Shelf Ready ADU plans.