New Incentives for ADUs

The Town of Truckee has implemented many new incentive programs to encourage the development of accessory dwelling units (ADUs.) Additionally, they are making it easier to permit existing units.

Recently, they approved four new incentive programs and updated their ADU program to increase affordable housing in the Truckee area. From technical assistance, educational resources, and financial incentives, the Truckee Town is making it easier for homeowners to create long term rental units.

New ADU Programs include:

$50,000 Forgivable Loan for New ADU Creation: This forgivable loan product provides eligible homeowners in the Town of Truckee with forgivable loan funds of up to $50,000 to develop ADUs and JADUs on their existing property. The Program requires that the Applicant long-term rent the newly constructed ADU or JADU for a period of ten or fifteen years, year-round, to locally employed, income qualified tenants.

PLHA-Funded Loan for New ADU Construction: This low interest loan product provides eligible homeowners in the Town of Truckee with loan funds of up to $50,000 to develop ADUs and JADUs on their existing property. The Program requires that the Applicant long-term rent the newly constructed ADU or JADU for a period of ten or fifteen years, year-round, to income qualified tenants.

ADU Master Plan Reimbursement: This option offers reimbursement for the $1,200 cost to use the Town’s pre-approved ADU construction plans in exchange for leasing the ADU for at least one year to a full-time tenant. The ADU master plans are intended to streamline efforts to achieve affordable and workforce housing development, improving access to a less expensive and more streamlined permitting process and to improve achievability of construction for housing.

The forgivable and low-interest ADU loans and the master plan reimbursement can all be layered up to $101,200 in incentives.

Financial Incentives for Permitting Existing ADUs:

 $25,000 Forgivable Loan for Existing, Unpermitted ADUs: This forgivable loan product provides eligible homeowners in the Town of Truckee with forgivable loan funds of up to $25,000 to permit existing unpermitted ADUs and JADUs. The Program requires that the Applicant long-term rent the newly permitted ADU for a period of ten years, year-round, to locally employed, income qualified tenants.

New or Existing ADUs:

$1,000 Mini-Grant for Existing and New ADUs: This mini-grant product provides eligible homeowners in the Town of Truckee with a $1,000 grant to assist with costs associated with constructing a new ADU or JADU; converting existing living space to an ADU or JADU; or permitting an existing and unpermitted ADU or JADU.

Lease to Locals: Earn up to $18,000 by renting your ADU or JADU to an income qualified local worker. The Town of Truckee Lease to Locals Program aims to unlock existing housing stock for the local workforce. The program includes a set of incentives for homeowners that shift from renting their home short-term — or not renting at all — to 5- to 12-month-plus lease arrangements with locally employed tenants.

In addition to the incentive programs offered by the Town of Truckee, the California Housing Finance Agency (CalHFA) also offers incentives.

CalHFA Incentives:

ADU Grant Program: CalHFA has issued additional funding for their ADU Grant Program starting December 11, 2023. Participants can get up to $40,000 to assist with ADU construction pre-development costs and non-reoccurring closing costs. To qualify, participants must have an income below 80% of the area median income ($90,000 for a household of four in Nevada County) and own and occupy the property as their primary residence. Applicants will need to work with a program-qualified lender, non-profit, or local government agency to access funds. Interested participants can download an information sheet here and find a list of approved lenders here. Funding is limited and past ADU Grants have run out quickly so applicants should act fast to begin the process of receiving funding.

As long as all program guidelines are followed, the CalHFA ADU Grant can be layered with the Town of Truckee new ADU creation loans and master plan reimbursement, for up to $141,200.

For questions about the Town of Truckee ADU Incentive Programs, you can contact Lynn Baumgartner, Housing Program Analyst at [email protected] or call 530-582-2492.

Visit www.townoftruckee.com/ADU to learn more about the Town's ADU Program.