The City of Pasadena is relaunching its Accessory Dwelling Unit (ADU) loan program, providing homeowners with up to $225,000 to develop affordable rental units on their properties. Details of the program will be discussed in a presentation by the Department of Housing at a public meeting on Tuesday, February 11, at 6:30 p.m. at the Jackie Robinson Community Center.
This initiative offers end-to-end support for financing, design, permitting, and construction of ADUs—commonly referred to as “granny flats”—to expand Pasadena’s affordable housing supply. The program applies to both new ADU construction and the legalization of unpermitted units, with assurances that unpermitted units will not be reported to code enforcement unless they pose life safety risks.
To qualify, properties must be owner-occupied single-family residences for at least five years and must remain owner-occupied for the duration of the loan. ADUs are restricted to a maximum size of 750 square feet. Properties such as condominiums, historical structures, and those already containing an ADU or Junior ADU (JADU) do not qualify.
Key program features include:
- A three-year loan with 1% simple interest and deferred payments
- The option to refinance with a silent 0% interest City loan up to $100,000
- A requirement that units be rented exclusively to Pasadena housing choice voucher holders for seven years
- A five-year affordable housing covenant
Eligibility criteria include:
- A minimum credit score of 650
- A debt-to-income ratio below 40%
- A combined mortgage and ADU loan not exceeding 80% of the home’s value
- A home value of no more than $1,158,000 (95% of the area median)
- The applicant must be current on their mortgage
- No existing City loans
- U.S. citizenship or permanent residency
- Property must be located within Pasadena city limits
Applications will be accepted from January 13 to February 28, 2025, through the City’s Housing Department website at www.cityofpasadena.net/housing/second-unit-adu-program. Properties in Census Tracts 4609.00, 4615.01, 4621.00, 4622.02, 4623.01, 4623.02, and 4624.00 face no income restrictions, while properties in other areas are limited to owners earning no more than 80% of the area median income ($70,650). Scoring preferences include 10 points for properties outside restricted zones with income below 80% AMI and 5 points for properties with open citations related to unpermitted ADUs.
Selected applicants must submit required loan documentation within 20 days and will be assigned an ADU Consultant to assist with pre-design, permitting, bidding, and construction.
The public can participate in the upcoming meeting by either submitting a speaker card before public comment at the in-person event at 1020 North Fair Oaks Avenue or emailing comments to jwhitmore@cityofpasadena.net at least 30 minutes before the meeting. Meeting materials are available online at www.cityofpasadena.net/commissions/northwest-commission and at all branch libraries. Language translation and disability accommodations are available with 72-hour advance notice.
The Northwest Commission meets on the second Tuesday of each month. For further details on the ADU program and application process, visit the City’s Housing Department website or contact Program Coordinator Randy Mabson.
