Applying for the Pasadena Second Unit ADU Program (Round 3) is a great way to add value to your property while contributing to affordable housing. As of January 2026, the program has been expanded with increased loan amounts and streamlined project management.
🏗️ Program Highlights (2026 Updates)
The city currently offers “Comprehensive Assistance” that handles the heavy lifting of financing and construction.
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Financing: Up to $225,000 in construction financing.
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Low Interest: 1% simple interest with no payments for the first 3 years (deferred during construction).
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Project Management: The city assigns a dedicated manager to oversee your design, permits, bidding, and construction.
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Zero Out-of-Pocket: Covers initial design and permitting costs that typically stall projects.
✅ Step 1: Check Your Eligibility
Before applying, ensure you meet these primary criteria:
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Property Type: Must be an owner-occupied, single-family home within Pasadena city limits.
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Residency: You must have lived in the home as your primary residence for the past 5 years.
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Credit & Debt: A credit score of 650+ and a debt-to-income (DTI) ratio under 40%.
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Commitment: You must agree to rent the unit to a Pasadena Housing Choice Voucher (Section 8) tenant for 7 continuous years.
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Income Priority: While open to all, priority is given to homeowners earning below 80% of the Area Median Income (AMI).
📝 Step 2: The Application Process
The application window is currently open. Here is how to navigate it:
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Download the Pre-Application:
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Option 1: For New Construction or garage conversions.
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Option 2: To Rehabilitate/Legalize an existing unpermitted “granny flat.”
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Submit Documentation: You will need to provide proof of income (tax returns, W-2s), a preliminary title report, and your most recent mortgage statement.
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Feasibility Inspection: If selected, the city will conduct a site visit to ensure your lot can legally and physically accommodate the unit (checking setbacks, utility lines, and soil).
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Loan Approval: Once the project is deemed feasible, you’ll move into the formal loan package preparation stage.
Note on Standard Plans: The previous “Standard Plans” expired on December 31, 2025, due to 2026 California Building Code updates. If you aren’t using the City’s loan program, you must ensure your architect uses the 2026 codes.
🔗 Official Resources
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Official Portal: Pasadena Second Unit ADU Program
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Contact: Call the Pasadena Housing Department at (626) 744-8300 for direct questions about your specific lot.
Build an ADU for 1% Interest in Pasadena
This video provides an excellent breakdown of how the 1% interest loan works and what it’s like to work with the city’s assigned project managers.
Would you like me to help you draft an email to the Housing Department to request a preliminary site review?
