OC Homeowners: Get Up to $100,000 in ADU Loans for Renting to Low-Income Tenants
The Trust’s program stands out with its offer of construction loans up to $100,000, and the terms are exceptionally homeowner-friendly. One of the most attractive features is the absence of monthly payments. Homeowners are not required to make any payments during the interim period. Instead, the loan structure involves a balloon payment that comes due 20 years after the loan is taken out.
However, this program does come with specific stipulations. The primary condition is that homeowners must commit to renting their ADU to very low-income tenants for the first decade. This requirement aligns with the Trust’s mission to support vulnerable populations, including the homeless and those with extremely low incomes.
The Trust’s program also offers a significant financial incentive for compliance with its terms. If homeowners adhere to the rules, particularly ensuring that the renters’ income does not exceed 50% of the area’s median income, they stand to benefit greatly. In such cases, nearly half of the loan amount — 48% of the original $100,000 loan — could be forgiven.
Another appealing aspect of this program is the simplified qualification process. Unlike traditional mortgage applications, this program does not require a formal income evaluation. Amanda Grill, the compliance manager at Orange County Housing Trust, emphasizes the absence of an income evaluation, making the program accessible to a broader range of homeowners.
The Orange County Housing Trust, established in 2019 through a collaboration between the county and participating cities, aims to address housing needs for the most vulnerable populations. It’s important to note that not all cities in Orange County participate in this program. Cities like Brea, Cypress, La Palma, Laguna Woods, Los Alamitos, Rancho Santa Margarita, San Clemente, and Villa Park are not part of this initiative.
In summary, the Orange County Housing Finance Trust offers a unique and beneficial program for homeowners in the region looking to finance ADU construction. With no immediate financial burden, the possibility of significant debt forgiveness, and a simplified qualification process, it represents a compelling option for those eligible and willing to contribute to the community by housing very low-income tenants.
