$25K grants target low-income homeowners for granny flat construction

California plans to pay low-income homeowners $25,000 toward the construction of granny flats in an effort to boost housing supply statewide.

The grants will go to homeowners earning 80 percent or less of area median income, according to the Los Angeles Daily News.

Granny flats — or accessory dwelling units — are typically one-or two-bedroom homes residences built on an existing residential property.

The grant recipient must live in the primary unit on the property, but otherwise there are no restrictions; the owner is also free to sell the property immediately.

The grants are available through existing cash-out refinance mortgages or construction loans for ADU construction. That means the lender must certify that the granny flat plans comply with Fannie Mae FHA ADU requirements.

ADUs in Southern California cost an average of $300 to $375 a square foot to build and are on average 600 to 800 square feet, according to the report. Building an ADU in the area can cost between $200,000 and $315,000; preconstruction costs can run up to $15,000 per unit.

The City of L.A. earlier this year released 20 pre-approved ADU designs to speed up the process through construction to save money.

The ADU issue has been divisive in Southern California. Pro-housing camps praise the concept, but others have said it is ripe for abuse and could be exploited to build larger homes. [LADN] — Dennis Lynch