Is there still a $40,000 ADU grant in California?

Not right now. The CalHFA ADU Grant Program, which reimbursed up to $40,000 in pre-development costs, stopped accepting applications after its funding round was fully allocated on December 28, 2023. As of this writing there’s no open application, no waitlist, and no announced date for a new round. If a search brought you here looking for “adu grants california” or “free adu” money, that’s the honest answer before you plan a San Diego garage conversion budget around it.

A lot of pages online still describe the grant like it’s active. Some haven’t been updated since the program closed. That’s a problem if you’re penciling out numbers for a real project, because a $40,000 gap in a budget is not small. Better to know now than after you’ve signed a contract.

What the grant covered while it was open

The CalHFA program never paid for construction. It reimbursed pre-development and closing costs, the expenses that happen before a crew ever breaks ground: architectural plans, permit fees, soil tests, impact fees, and property surveys. Income-qualified homeowners could get up to $40,000 back for those costs specifically, not for framing, plumbing, or finishes.

That distinction matters even if the program reopens someday. A grant like this was never going to cover a full garage-to-ADU conversion on its own. It offset the paperwork and planning phase, which is real money, but it’s a fraction of a typical project budget.

Watch for scams

CalHFA has publicly warned that anyone claiming they can still get you the grant, for a fee or otherwise, is very likely running a scam. If someone tells you they have a way around the closed application or a special allocation, verify it directly with CalHFA before paying anyone anything. The program’s own status page is the only source worth trusting on this.

ADU grants in California: what still exists for financing a garage conversion

With the state grant off the table, San Diego homeowners are financing conversions the same way people financed home renovations before the grant ever existed. None of these are grants. All of them are loans you pay back, so the math is different, but they’re real and available today.

A home equity line of credit, or HELOC, lets you borrow against equity you’ve already built and draw funds as the project moves. A cash-out refinance replaces your existing mortgage with a larger one and hands you the difference in cash upfront. Renovation-specific loan products go a step further and let some lenders count the home’s value after the ADU is finished, not just its value today, which can open up more borrowing room. A small number of lenders will also factor in projected rental income from the finished unit toward your qualifying income, though that policy varies a lot by lender, so it’s worth asking directly rather than assuming.

Rates, terms, and which of these a given lender offers change constantly, so get quotes from more than one before committing to a project timeline. For a fuller breakdown of financing mechanics and what moves the cost, see the financing an ADU garage conversion page.

Local and utility programs are worth checking separately

State-level grant money being closed doesn’t mean every incentive is gone. Some cities and utilities run smaller, narrower programs from time to time, things like energy-efficiency rebates on specific equipment, or a local pilot fee-reduction program tied to affordable-unit deed restrictions. These aren’t uniform across San Diego County and they open and close on their own schedules. If you’re planning a conversion in a specific city, it’s worth a direct call to that city’s planning department to ask what, if anything, is currently running. Don’t build your budget around a program you haven’t personally confirmed is open.

What this means for your project timeline

If you were waiting on the CalHFA grant before starting a garage conversion, waiting indefinitely isn’t really a plan, since there’s no announced relaunch date. The more useful move is to price the project with financing you can actually get approved for today, then treat any future grant reopening as a bonus rather than the reason the project happens.

That starts with an accurate cost picture. A full ADU conversion, a junior ADU, and a partial living-space conversion carry different price ranges depending on scope, and knowing which one fits your garage and your budget comes before financing decisions, not after. The garage conversion cost guide breaks down what moves the number for each conversion type.

Permitting is the other piece that shapes both timeline and budget, since permit and impact fees are exactly the kind of pre-development cost the CalHFA grant used to offset. Understanding what San Diego jurisdictions currently require helps you budget those fees accurately instead of guessing. The garage conversion permits guide covers that process.

For homeowners in specific parts of the county, conversion costs and jurisdiction rules shift depending on whether you’re in the City of San Diego, an unincorporated area, or a neighboring city. If you’re in La Mesa or National City, for example, older housing stock in both cities often means more electrical and framing work gets folded into the conversion, which is worth factoring into financing before you apply for a loan.

None of this changes because a state grant is closed. It just means the financing conversation happens earlier, and it happens with real numbers instead of a placeholder for grant money that isn’t there right now.

Frequently asked questions

Is the CalHFA ADU grant accepting applications in 2026?

No. The program’s funding was fully allocated on December 28, 2023, and there’s no open application, no waitlist, and no announced date for a new round as of this writing. Check calhfa.ca.gov directly before assuming otherwise.

Did the CalHFA grant ever cover construction costs?

No. It reimbursed pre-development and closing costs only, things like architectural design, permits, soil tests, impact fees, and surveys, up to $40,000 for income-qualified homeowners. It never paid for the actual building work.

If the grant reopens, will it be enough to cover my whole garage conversion?

Even when it was open, the grant covered pre-development costs, not construction. A typical San Diego garage conversion runs well beyond what a pre-development reimbursement covers on its own, so most homeowners still need financing for the build itself either way.

Can rental income from the finished ADU help me qualify for a loan?

Some lenders will count projected rental income toward your qualifying income for certain loan products, but this varies significantly by lender. Ask directly whether a specific loan product counts projected ADU rent before assuming it will.

Are there any San Diego-specific grant or fee-reduction programs right now?

Some cities and utilities run smaller, narrower incentive programs on their own schedules, separate from the state CalHFA program. These aren’t consistent across San Diego County, so confirm directly with your city’s planning department rather than assuming a program is open.

What should I do instead of waiting for the grant to reopen?

Price your project with financing options available today, HELOC, cash-out refinance, or a renovation loan, and treat a future grant reopening as a bonus rather than a plan. Getting an accurate cost picture and permit estimate first makes the financing conversation more accurate either way.

Ready to see what a garage conversion actually costs on your property? Call (858) 400-4935 or visit the garage conversion service page for a referral to insured local crews across San Diego County.