Applications will soon open for the second round of Long Beach’s Backyard Builders loan program, designed to help lower-income residents build an Accessory Dwelling Unit (ADU) on their property.
Backyard Builders helps with the finance, design, permit and building aspects of creating an ADU, allowing participants to receive a 30-year loan of up to $250,000. These loans come with a below-market interest rate of 2% with deferred payments for those 30 years, or until the property is sold or transferred to another owner.
“Backyard Builders has been a tremendous success since it launched in 2024,” Mayor Rex Richardson said in a public statement. “This second round of the program will transform more lives, whether that’s a homeowner making space for a grandparent or renters simply looking for more options.”
The program will finance the construction of at least 16 ADUs, up from 10 in the first round of funding, and comes with project management assistance at no cost to homeowners, guiding them through the ADU design, permitting, construction and lease-up processes.
To be eligible for the program, applicants must own and occupy a single-family home in the designated program area and meet the State’s definition of lower-income. The 2026 income limits that will apply to the second round of Backyard Builders have not yet been released. Other eligibility factors that will be considered include applicants’ debt, payment of mortgage and property tax, and maintenance of a homeowners insurance policy.
This new round of funding comes from a $4.8 million award from the California Department of Housing and Community Development (HCD) through its CalHome Program. The recipient of the funding is the Long Beach Community Investment Company (LBCIC), the nonprofit arm of the City formed to help address housing availability and affordability in Long Beach. Backyard Builders loans will be administered by the LBCIC.
“Long Beach has been a statewide leader in per-capita development of ADUs,” said Christopher Koontz, director of the City’s Community Development Department, in a public statement. “This new round of Backyard Builders will help ADUs remain a crucial way for Long Beach to expand residents’ housing options.”
If the number of qualified applicants for the second round of Backyard Builders exceeds the number of loans available, the City will conduct a randomized lottery to determine loan recipients.
Round two builds on the success of the City’s Backyard Builders Pilot Program, which launched in September 2024 and was open to homeowners without income restrictions. Homeowners in that first round were required to rent their ADU at an affordable rate to low-income households. The second round is specifically designed to support lower-income homeowners, who will be encouraged, but not required, to rent their ADUs to tenants using housing vouchers from the City’s Housing Authority.
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This flexibility means the ADU can enable multigenerational living, reduce overcrowding or provide an additional income stream. However, if the ADU is rented, it must be leased for a minimum of 30 days; short-term rentals are not allowed. Cash-out refinancing against the loan is prohibited.
Homeowners who have already begun the ADU design/construction process may apply for the program at any point prior to issuance of a Certificate of Occupancy. The City, however, will not reimburse homeowners for costs incurred before the Backyard Builders loan is executed.
Also, the Long Beach Community Development Department will host online and in-person information sessions to provide details about the program and answer questions. The application period and information session dates will be announced in the coming months.
For more information on the second round of Backyard Builders funding, visit longbeach.gov/aduloan. Community members can sign up to receive program updates, including the dates of community information sessions, the application period and the notification period.
When the application period opens in Summer 2026, full program requirements, guidelines and loan details will be available on the program webpage.
