Accessory Dwelling Unit (ADU) Forgivable Loan Program
Economic & Community Development Department | bakersfieldcity.us | (661) 326-3000 Common Illegal ADU Violations
1. Electrical Code Violations
2. Inadequate Heating
3. Improper Water Installation
4. Window and Egress Issues
5. Missing Smoke/Carbon Monoxide Detectors
Permanent Local Housing Allocation (PLHA) Fund
Forgivable Loans May Cover:
Building Fees
Design, Material, & Construction
Demolition as Necessary
Site Work: Water, Sewer, Septic, etc.
Contractor Fees and Overhead (Max 10%)
Costs for Conventional Loan Financing
Managed Construction Escrow Account
August 7
Committee
Presentation &
Approval August - September
Bidding Process &
Council Approval
October - November
Hire Contractor &
Begin Work October 2026
End of Pilot Program
The City of Bakersfield has identified 30 illegal Accessory Dwelling Unit (ADU) conversions since March of 2025. Eight of these units have been inspected and pose concerning safety risks to renters and homeowners. City staff propose using Permanent Local Housing Allocation dollars and American Rescue Plan Act funds to create a new ADU Forgivable Loan Program. This program will help eligible property owners bring unpermitted ADUs into compliance by guiding them through the permit process and providing funds for fees and repairs. Property owners would be required to sign a five-year covenant to rent to low and very low-income individuals and families. City staff propose this program be carried out by a third-party contractor that specializes in ADU-related improvements with Economic & Community Development staff overseeing the contract and project outcomes.
PLHA provides funding to local governments for housing- related projects and programs that assist in addressing the unmet housing needs of their local communities. The City committed to using $638,960.02 of PLHA funds for
ADUs. 80% of PLHA funds will target the rehabilitation
and permitting of illegal converted ADUs; the other 20% is assist in the development of new ADUs.
Who Qualifies for a Forgivable Loan?
Single-Family Homeowners living on their
property within the City of Bakersfield
Homeowners willing to commit to a 5-year
affordability covenant to rent to households
earning 60% - 120% AMI.
1. Pre-Application Prep
a.Gather Documents
b.Calculate Cost
c.Consult with ECD
d.Feasibility Report
2. Application
a.Submit Application
b.City Review
c.Referral to contractor
3. Follow-Up & Compliance
a.Tenant Eligibility
b.Loan Forgiveness
c.Covenant Removal
How to Apply