Napa County to forgive ADU construction loans if rented at below-market rates

NAPA -- The Napa County Board of Supervisors approved a measure Tuesday that will forgive construction loans for granny units if homeowners rent them at below-market rates to people who earn less than the area's median income.

County officials in a news release Tuesday called the passage a major step forward in the development of additional affordable housing units throughout the county.

The program set to launch in January would provide forgivable construction loans for accessory dwelling units, also known as granny units, in exchange for commitments to rent them for at least five years at below-market rates to households with earnings below the area's median income.

"The Affordable Accessory Dwelling Unit Forgivable Loan Program is a significant public-private partnership that will help homeowners build vital new affordable housing for local families and workers within our community," board chair Ryan Gregory said in the announcement.

To be eligible, a homeowner must occupy the home as his or her primary residence, rent the unit to a household earning at or below 80 percent of the area's median income, and rent for five years at a below-market rate considered affordable for such households.

In exchange for these commitments, the county will offset a portion of the homeowner's cost of constructing the unit with a forgivable loan that ranges in amount based on the number of bedrooms. The forgivable amounts are $45,000 for a studio, $80,000 for a one-bedroom unit and $105,000 for a 2-bedroom unit.

Loans would be fully forgiven at the end of the five-year period.

For more information, see the Napa Sonoma ADU website at napasonomaadu.org.