City Announces Second Round of Backyard Builders Loan Program to Help Lower-Income Homeowners Build ADUs

City of Long Beach
Public Information Office
411 W. Ocean Blvd,
Long Beach, CA 90802
www.longbeach.gov

Above: Long Beach resident MJ Agustin was awarded in the first round of the Backyard Builders Loan Program, paving the way for her to bring a brand-new ADU to life on her property.

Long Beach, CA - The City of Long Beach has announced the second round of the Backyard Builders loan program, which will help lower-income residents finance, design, permit and build an Accessory Dwelling Unit (ADU) on their property. Applications will open in Summer 2026.

"Backyard Builders has been a tremendous success since it launched in 2024," Mayor Rex Richardson said. "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 second round of Backyard Builders will provide income-qualified Long Beach homeowners financing of up to $250,000 to build an ADU. These 30-year loans will be offered with a below-market interest rate of 2%. Payments will be deferred for the life of the loan, meaning most borrowers will not have to make any payments until the 30-year term is over or until the property is sold or transferred to another owner.

The program will finance the construction of at least 16 ADUs, up from 10 in the first round of funding, and provide 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 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.

When the application period opens in Summer 2026, full program requirements, guidelines and loan details will be available on the program webpage. The Long Beach Community Development Department also 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.

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.

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.

"Long Beach has been a statewide leader in per-capita development of ADUs," said Christopher Koontz, director of the City's Community Development Department. "This new round of Backyard Builders will help ADUs remain a crucial way for Long Beach to expand residents' housing options."

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. 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.

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.

About the City of Long Beach

Long Beach is nestled along the Southern California coast and home to approximately 466,000 people. As an award-winning full-service charter city, Long Beach offers the amenities of a metropolitan city while maintaining a strong sense of individual and diverse neighborhoods, culture, and community. With a bustling downtown and over six miles of scenic beaches, Long Beach is a renowned tourist and business destination and home to the iconic Queen Mary, nationally recognized Aquarium of the Pacific and Long Beach Airport, the award-winning Long Beach Convention and Entertainment Center and world-class Port of Long Beach.

For more information about the City of Long Beach, visit longbeach.gov/. Follow us on social to keep up with the latest news: Facebook, X, Instagram and YouTube. For more information about Community Development visit longbeach.gov/lbcd and follow @longbeachbuilds on Facebook, X and Instagram.