California Homebuilding Grants: Financial Programs Designed to Help Owner-Builders, ADU Builders, and First-Time Buyers

Building in California can feel like a maze—permits, fees, codes, financing, and programs that open and close without much warning. The upside: the state has many funding channels if you know where to look, and a surprising number of them are stackable. This guide walks you through state and federal programs, local grants, property-tax savings, clean-energy rebates, and homeowner protections so you can assemble a realistic funding plan for a new home, an SB 9 duplex or lot split, or an ADU. Wherever possible, links go straight to official program pages so you can verify rules and apply without chasing dead ends.

California policy evolves quickly, so treat this guide as your map and the official links as your compass. When you see a program that fits, click through and review the current rules before you budget around it. If a program looks “closed,” check back—funding windows often reopen on short notice.

How California Funds Single-Family Homebuilding (and Why It Matters)

California’s housing dollars flow in a few distinct streams. At the state level, the Department of Housing and Community Development (HCD) runs competitive programs that send money to local agencies and nonprofits, which then lend or grant to individual households (often as deferred-payment loans). That means you usually don’t apply directly to the state; you apply to a city, county, tribe, or vetted nonprofit that received state awards. Understanding that structure helps you find the actual front door for homeowner assistance near you by tracking HCD awards and your local housing webpages.

One of the biggest state-administered federal streams is HOME Investment Partnerships (HOME). Each year, HCD announces large allocations of HOME funds supporting owner-occupied rehabilitation and reconstruction, first-time buyer down-payment assistance, and new construction—all via cities and counties. Individuals should look for those dollars on their local housing department site after scanning HCD’s announcements and award lists. This is the difference between “there’s a program out there” and “here’s the live application portal my city is running today.”

Core State Programs You Should Know

CalHome: Local Loans for Self-Help, Site Work, and Owner-Occupied Rehab

If you see a city or nonprofit offering down-payment assistance, self-help construction support, site development loans for ownership projects, or owner-occupied rehab, it’s often funded by CalHome. The program overview, eligible activities, and current notices are on HCD’s CalHome page. CalHome funds local public agencies and nonprofits, not individuals directly, but those awardees deliver aid to households—commonly as low- or zero-interest deferred loans payable at sale. For builders working with a nonprofit partner, CalHome can help cover predevelopment, site development, and acquisition for small ownership projects, self-help subdivisions, and much-needed rehab loans for existing structures.

HCD now bundles CalHome into a Homeownership Super NOFA (Notice of Funding Availability). The most recent rounds made hundreds of millions of dollars available for homeownership development, self-help, ADU/JADU support, and more—again, issued to local sponsors that then serve homeowners. To time a 2025–2026 build, track the California Grants Portal entry for the Homeownership Super NOFA and keep an eye on your city/county housing page; windows can open and close quickly.

HOME (federal funds, state-administered): What It Means for an Individual Builder

The federal HOME program, administered in California by HCD, funds first-time buyer assistance, owner-occupied rehabilitation and reconstruction (OOR), and new construction at the local level. When HCD announces annual HOME awards, it signals a wave of local OOR/OOR-Rebuild loans and grants and down-payment aid for newly built homes. For an individual owner-builder, that translates into visiting your city or county housing department and looking for programs labeled “Homeowner Rehabilitation,” “Reconstruction,” “First-Time Homebuyer,” or “Gap Assistance.” The timing and income limits vary by jurisdiction, so follow the local page closely.

CalHFA: First Mortgage + Down-Payment Assistance (and What’s Open)

The California Housing Finance Agency (CalHFA) offers first mortgages (Conventional/FHA/VA/USDA) that pair well with the MyHome Assistance Program—a deferred-payment junior loan for down-payment or closing costs. You apply through CalHFA-approved lenders, and you can often layer MyHome with local assistance or federal benefits for even lower cash to close. Eligibility typically hinges on first-time buyer status, income limits, and standard underwriting.

Many buyers ask about Dream For All (CalHFA’s shared-appreciation loan). As of 2025, CalHFA notes the program is not accepting new applications. If you already hold a voucher, you can check your status through CalHFA’s links on the Dream For All pages; otherwise, plan with MyHome and CalHFA’s first-mortgage products.

Veterans: CalVet Construction Loans and Specialty Products

If you’re a veteran building in California, CalVet is uniquely powerful. CalVet confirms it offers construction loans, including buying a homesite and then building on it, and it services loans directly to veterans. Start at CalVet Home Loans and review the construction guidance in the New Customer and Home Loans sections. CalVet’s flexibility with land + build, plus competitive rates and veteran-focused servicing, can make a multi-phase project far more achievable than a purely private route.

ADUs: Grants, Fee Breaks, and Streamlining That Can Make a Build Pencil

CalHFA ADU Grant (Pre-Development Costs)

If you’re adding an ADU to an existing home, the CalHFA ADU Grant can cover up to $40,000 in pre-development costs such as design, permits, site prep, and utility upgrades—the exact line items that often stall projects. Funds are routed via CalHFA-approved lenders and community partners; this grant has paused and reopened across cycles, so read the current CalHFA ADU page and lender bulletins before you finalize your pro forma and schedule.

Impact Fee Relief and Objective Standards

California state law provides strong fee and process advantages for ADUs. The HCD ADU page links to the ADU Handbook and legal references (Government Code §65852.2). Two crucial points: ADUs under 750 sq ft owe no impact fees, and larger ADUs pay proportional impact fees relative to the primary home. Be aware that utility connection/capacity charges can still apply in some circumstances, especially if the ADU is built concurrently with a new primary residence. The ADU Handbook offers clear, practical examples you can bring to your planning counter.

The 2025 ADU Handbook (and Why to Read It)

The January 2025 ADU Handbook update expands FAQs on parking waivers, nonconforming conditions, setbacks, and multi-agency coordination. It’s the single best plain-English explainer of today’s ADU rules. Skim it early in design so you don’t over-spec your ADU or miss a ministerial path that avoids discretionary review and the delays that come with it.

SB 9: Split Your Lot or Build a Duplex with Ministerial Approval

SB 9 (the “HOME Act”) created a ministerial, objective-standards-only path to build up to two primary units on a single-family lot, split your lot, or do both—allowing some homeowners to create up to four homes across two parcels if all criteria are met. The law is summarized in HCD’s SB 9 Fact Sheet (PDF). Because SB 9 requires no discretionary review or CEQA for compliant projects, a well-designed duplex or lot split can be much faster and cheaper to permit. After reading HCD’s fact sheet, visit your city’s SB 9 page for local standards and submittal forms; for example, see San Francisco’s SB 9 overview for how a major city implements the state law.

Federal Programs That Work in California

USDA Section 502 (Direct & Guaranteed) and Self-Help

If your build site is in a USDA-eligible rural area, USDA Section 502 can finance new construction via the 502 Direct or 502 Guaranteed programs. USDA also funds Mutual Self-Help Housing, where families build together in a supervised cohort to reduce labor costs (ask local nonprofits if they run a self-help program). If you’re outside the major metros, check USDA’s eligibility map and income limits—terms can be very favorable for low- and moderate-income households.

USDA Section 504 (Home Repair) Grants & Loans

For owner-occupants in eligible rural areas who are very-low-income (and elderly for grants), Section 504 provides repair loans (and grants for senior homeowners) to address health and safety hazards. While this isn’t a new-home mortgage, it can be part of a phased approach—for example, resolving code items on an existing structure or site that you plan to rebuild.

Clean-Energy & Resilience Incentives You Can Layer Into a Build

SGIP (Battery + Solar-Paired Storage)

California’s Self-Generation Incentive Program (SGIP) delivers battery storage rebates and includes Equity budgets for income-qualified households. The CPUC hosts program rules at SGIP – CPUC, and reservations are submitted via the statewide SelfGenCA portal. Because SGIP funds are first-come, first-served, plan your storage spec and reserve early in your construction timeline, especially in areas with Public Safety Power Shutoffs (PSPS).

TECH Clean California (Heat Pump HVAC/Water Heaters)

TECH Clean California runs statewide incentives for heat pump HVAC and heat pump water heaters, with funding that opens and pauses based on budget. When the single-family incentives are open, you apply through a TECH-enrolled contractor; program details, current status, and contractor finder are centralized at TECH Clean California. If you’re building all-electric, TECH can significantly reduce your mechanical line items.

HEEHRA / HOMES (IRA Home Electrification & Efficiency Rebates)

California’s Energy Commission (CEC) administers IRA Home Electrification and Appliance Rebates (HEEHRA) and HOMES rebates. Program phases may fill and reopen; the CEC maintains live status and links to utility and implementer portals at CEC Home Energy Rebates. If you can time your panel upgrade, heat pump, induction, or envelope measures with an active phase, you can stack IRA rebates with TECH and local utility incentives.

Electric Homes (All-Electric New Construction)

Designing an all-electric new home or SB 9 duplex? The California Electric Homes program helps reduce up-front construction costs and coordinate statewide and local incentives. Builders and owner-builders can use the site to find offerings that pair with SGIP and TECH, making an all-electric design both simpler and cheaper to operate.

Local Programs Worth Checking (Examples)

Local grants and loans fill crucial gaps—often funded by HOME and CalHome—so pull your city/county housing page and scan “Homeowner Rehabilitation,” “Home Repair,” “Down Payment Assistance,” and “ADU.” A few living examples:

• Los Angeles County Handyworker provides free minor home repairs for eligible seniors and disabled residents to keep homes safe; liberating other dollars for your build or ADU. See LACDA’s Handyworker page for scope and intake.
• County of San Diego runs Home Repair Loans & Grants for owner-occupants across unincorporated areas and partner cities—useful for hazard and code items in a phased build. Details are at San Diego County Home Repair.
• City of Stockton maintains Homeowner Rehabilitation Programs, a template for how cities package HOME/CalHome dollars into practical repair tools. Start on Stockton Housing Programs and search for homeowner rehab offerings.

Even if these don’t directly fund a full new build, they can free cash in your budget to cover materials, utility trenching, or fees.

Property-Tax Savings You Can Bake Into the Pro Forma

A few line-items can quietly improve annual carrying costs on a new build:

• Homeowners’ Exemption: California’s constitutional Homeowners’ Exemption knocks $7,000 off your assessed value on a primary residence—usually about $70–$80 off the annual bill. File BOE-266 with your county assessor once you move in. See BOE: Homeowners’ Exemption and the program FAQ.
• Disabled Veterans’ Exemption: Qualified veterans (or certain surviving spouses) can claim a basic or low-income exemption on a primary residence; amounts adjust annually. Details and forms are on BOE: Disabled Veterans’ Exemption; check with your county assessor on local processing steps.
• Active Solar Energy System—New Construction Exclusion (RTC §73): Through December 31, 2026 (unless extended), adding a qualifying solar energy system does not trigger new-construction reassessment. The Board of Equalization links and letters explain the sunset mechanics and forms; start with BOE: Active Solar Exclusion and confirm with your assessor.

Rebuilding After Disaster: Where to Look First

If you’re rebuilding after wildfires or other declared events, California’s ReCoverCA channels CDBG-DR funds to Owner-Occupied Rehabilitation and Reconstruction (OOR) programs. Award cycles and geography vary, so begin at ReCoverCA (HCD) and drill into the pages for your disaster cohort (for example, 2018–2019 or 2020–2021 wildfire assistance). Disaster dollars can be transformative—covering demolition, rebuilds, and resilience upgrades—if you meet the eligibility criteria.

Building on a Budget: A Practical Stacking Strategy

1) Choose the Backbone Loan

If you’re a veteran, compare a CalVet construction path (land + build) with private construction-to-permanent alternatives; CalVet’s direct servicing and veteran benefits often make the math cleaner. If you’re buying a new build rather than self-building, a CalHFA first mortgage + MyHome can materially reduce cash to close while keeping payments predictable.

2) Cover Site and Pre-Development Gaps

For ADUs, target the CalHFA $40,000 ADU Grant to handle design, permits, utility upgrades, or site prep. If you’re in a self-help model or a small ownership development with a nonprofit partner, ask whether the sponsor is using CalHome for predevelopment or site development assistance you can benefit from.

3) Layer Energy & Resilience Funding

If you’re going all-electric, price heat pump HVAC and HPWH with TECH Clean California incentives when open, and pursue battery storage with SGIP via SelfGenCA. If HEEHRA/HOMES rebates are active, coordinate those with your contractor and utility to avoid double-dipping conflicts and to maximize net savings.

4) Use ADU or SB 9 to Reduce Fees and Time

For ADUs, leverage the < 750 sq ft impact-fee exemption and plan for proportional fees above that threshold. For SB 9, stay inside objective standards to keep your project ministerial—that unlocks a faster, simpler permit path with fewer surprises. Start with HCD’s ADU and SB 9 fact sheet, then plug into your city’s forms.

5) Fill Remaining Gaps with Local Programs

If your budget breaks on health/safety items or Code Compliance, scan local Homeowner Rehabilitation programs (often HOME/CalHome funded) for small loans or grants. The San Diego County Home Repair page is a good example of the kind of program many counties run; LACDA Handyworker is another for minor repairs.

Owner-Builder or Hiring Pros: Protect Yourself (and Your Loan)

Whether you’re building yourself or hiring a GC, verify licensing, insurance, and disciplinary history using CSLB “Check a License”. CSLB’s consumer pages explain contract basics, mechanics’ liens, and owner-builder risks—worth reading before you sign or pull permits. Lenders will often require licensed, bonded contractors for draws, and CSLB’s resources keep you aligned with those requirements.

Frequently Asked Questions

Can I get a state grant to build a standalone single-family home?

Direct checks from the state to individuals are rare. Instead, California funds local agencies and nonprofits via CalHome, HOME, and other programs; those partners then offer loans/grants to households. Look for “owner-occupied rehab,” “self-help,” “first-time buyer,” and “ADU” programs on your city/county housing page, and track open rounds on the California Grants Portal.

I’m doing an ADU—how do I estimate fees?

Start with your city’s ADU handout and the ADU Handbook on HCD’s ADU page. Under state law, ADUs under 750 sq ft pay no impact fees, and larger ADUs pay proportional impact fees. Certain connection/capacity charges may still apply, especially if an ADU and a new primary home are permitted together—confirm with your building department and utility.

Are SGIP and TECH incentives reliable enough to budget around?

They’re real and widely used, but they are first-come, first-served with periodic pauses. For SGIP, monitor the CPUC page and SelfGenCA and reserve early. For TECH, check TECH Clean California frequently; single-family incentives reopen as funding allows. For HEEHRA/HOMES, keep an eye on CEC’s rebate hub.

Will solar raise my property taxes on a new build?

Through December 31, 2026, qualifying active solar energy systems are excluded from new-construction reassessment under RTC §73. The Board of Equalization explains the rules and sunset on BOE’s Active Solar page. Confirm details with your county assessor and plan completion accordingly.

Final Thoughts

California’s web of programs can be intimidating, but it’s precisely that density which lets you stack help: a CalVet construction loan or CalHFA first + MyHome for the backbone, a CalHFA $40k ADU grant for pre-dev on an accessory unit, SGIP and TECH for clean-energy systems, ADU or SB 9 to streamline approvals and slash impact fees, HOME/CalHome-funded local rehab funds for safety items, and property-tax exemptions that keep annual costs down. Click the official pages above, confirm what’s open this quarter, and design your project around the funding calendar—that’s how California’s patchwork becomes a plan.

Note: Program funding windows, amounts, and eligibility change. Always rely on the current official page for the program you plan to use.