Pasadena Launches Second Round of ADU Loan Program

Shed with terrace and wooden garden furniture during spring

Pasadena is expanding its Accessory Dwelling Unit (ADU) loan program, providing homeowners with innovative financial support to create additional housing. The city has initiated the second round of its program, offering construction loans to owner-occupied homeowners.

The program provides up to $225,000 in construction loans with attractive terms, including a three-year loan at 1% simple interest and deferred payments. Participants must lease their new ADU to a Section 8 voucher holder for seven years.

After receiving 88 vendor proposals and reviewing seven submissions, the city selected Child Designs, a local minority-owned business, to manage the program. The contractor will provide comprehensive support, including pre-design, permitting, bid preparation, and construction oversight.

City officials aim to create 20 ADUs over the next three to five years. The program launched on January 1, with three homeowners already prepared to participate. The initiative is fully funded through state awards from Kyle Home and PLHA, ensuring no impact on the city’s general fund.