Community Development
The application for the Backyard Builders program has closed.
What is the Backyard Builders Program?
The Backyard Builders Program offers comprehensive assistance for financing, designing, permitting and constructing an ADU to ten eligible Long Beach property owners interested in renting their ADU to income-qualified individuals at an affordable rent for a minimum of five years.
- NO-INTEREST FINANCING
Up to $250,000 loan with 0% interest as long as the unit is rented at an affordable rate to qualified tenants. - FREE PROJECT MANAGEMENT & TECHNICAL ASSISTANCE
A City-appointed project manager will assist the property owners at every stage of the project and provide guidance with choosing the architect, builders, planners, and contractors as well as with permits needed for ADU design and construction. - OTHER BENEFITS
- An additional revenue stream through rental income while increasing the value of your home
- Provides much needed affordable housing in your neighborhood
View the Program Guidelines for full information
Video Presentation
Frequently Asked Questions (FAQs)
For more information, email us at CD-ADULoan@longbeach.gov
Applicant Criteria:
- Must be the owner and full-time occupant of the property.
- Credit score minimum – 650
- Debt-to-Income ratio minimum – 48%
- Includes future ADU loan debt and projected income.
- Property owner must be willing to attend any educational sessions about ADU development and property management and work with an assigned project manager.
- Property owner must demonstrate availability of funds if they intend to exceed the City maximum loan amount of $250,000. All funds must be deposited into an escrow account and used before the City funds.
- Four units or less on the property, before the ADU is constructed.
- Current on mortgage and property tax payments.
- Current homeowner’s insurance policy (required before loan execution)
- Loan-to-Value minimum – 75%
- Total debt on the property must be less than 75% of the current home value.
- Projects may apply for financing at any point up to Certificate of Occupancy. The City will not reimburse property owners for any costs incurred before the City loan is executed.
- The City will not approve more than one program loan per property parcel.
The ADU must be rented to a household that meets program income requirements. The property owner stays in control during the entire rental period by setting their own tenant screening criteria and selecting their new backyard neighbor (following fair housing regulations).
Property owners who agree to rent their ADU to someone with a housing voucher are given first priority. Second priority, should funding be available, will be given to property owners interested in renting their units to low-income individuals, defined as those earning 80% or less of the area median income, in which case the tenant may be a family member, caregiver, or other related person. See table in the question below for estimated maximum rent for the two tenant categories.
Property owners who agree to rent their ADU to someone with a housing voucher are given first priority. Second priority, should funding be available, will be given to property owners interested in renting their units to low-income individuals, defined as those earning 80% or less of the area median income, in which case the tenant may be a family member, caregiver, or other related person. See table in the question below for estimated maximum rent for the two tenant categories.
The Housing Authority of the City Long Beach will determine the approved rent for each ADU that is rented to a tenant with a housing voucher in accordance with federal guidelines. This includes multiple factors, including federal Payment Standards, tenant affordability, utility allowances, and comparisons with similar units' rental rates in the area.
See table for example.
Estimated Rent 2024
| Studio | 1-bedroom | 2-bedroom | |
| Tenant with housing voucher in 90815 zip code* | $2,266 | $2,563 | $3,245 |
| Low-income tenant without voucher | $1,031 | $1,178 | $1,326 |
Please see the example budget and cash flow details below for a one-bedroom ADU in the 90815 zip code.
* These costs vary widely and are listed here for illustrative purposes.
| Tenant with Housing Voucher |
Low-income Tenant without Voucher |
|
| Construction Cost* | $250,000 | $250,000 |
| City Loan | $250,000 | $250,000 |
| Interest Rate during affordability term | 0% | 0% |
| Loan Term | 30 years | 30 years |
| Estimated Rent income | $2,563 | $1,178 |
| Monthly Loan Payment | $747 | $747 |
| Estimated Monthly Operating Costs* (insurance, taxes, maintenance) | $420 | $420 |
| Estimated Monthly Cash Flow After Payments | $1,396 | $11 |
Projects funded by this program must have work completed by a construction contractor licensed by the California Contractors State License Board.
The ADU must be completed within 24 months of loan approval.
Projects may apply for financing at any point up to Certificate of Occupancy. The City will not reimburse property owners for any costs incurred before the City loan is executed.
ADU Resources
City of Long Beach Resources
Other Resources
- Napa Sonoma ADU Workbook – a helpful resource published by Napa Sonoma ADU
Contact
Please direct any questions to the contact below:
