The news: The City of Long Beach will take applications for Round 2 of its Backyard Builders ADU loan from November 1 to November 30, 2026. The loan pays up to $250,000 toward designing, permitting and building an ADU, at 2% interest over 30 years, with payments deferred until the home is sold or transferred. At least 16 homeowners will get one, chosen by lottery. The first info session is Tuesday, October 27. The catch is that it’s only for lower-income owner-occupants in state-designated areas, so most investors won’t qualify.
Published October 26, 2026. Dylan Serna, The ADU Realtor.
What Long Beach Announced
The city first announced Round 2 in April. The program page now has the dates. Round 1 funded 10 ADUs. Round 2 funds at least 16, paid for with a $4.8 million CalHome award from the California Department of Housing and Community Development (HCD). The Long Beach Community Investment Company administers the loans.
| Loan term | Round 2 details |
|---|---|
| Loan amount | Up to $250,000 |
| Interest rate | 2% |
| Term | 30 years |
| Payments | Deferred until the term ends or the home is sold or transferred |
| Covers | Design, permits and construction |
| Extras | Free project management from design through lease-up |
| Number of loans | At least 16 |
| Application window | November 1 to 30, 2026 |
| Selection | Lottery within each priority group |
Info Session Dates
The city asks you to attend one of these. All three cover the same material, and you can RSVP on the program page.
- Tuesday, October 27, 5:30 to 6:30 p.m., Michelle Obama Library Community Room, 5870 Atlantic Ave. (in person)
- Thursday, November 5, 6:30 to 7:30 p.m., online via Zoom
- Saturday, November 14, 10 to 11 a.m., Cesar Chavez Park Community Room, 401 Golden Ave. (in person)
Who Qualifies
You have to pass all of these:
- Own and live in a single-family home in Long Beach. Rentals you don’t live in are out.
- Be in a state-designated program area. Priority Group 1 is properties in an Opportunity Zone or Justice40 area. Priority Group 2 is properties in a High or Higher Resource Area. Group 2 only gets loans if money is left after Group 1. The city has an eligibility checker on its Round 2 portal.
- Meet the income limit in the table below.
- Show financial stability: current on your mortgage and property taxes, manageable debt, and homeowners insurance in place.
| Household size | Maximum gross income (2026) |
|---|---|
| 1 | $93,300 |
| 2 | $106,600 |
| 3 | $119,950 |
| 4 | $133,250 |
| 5 | $143,900 |
| 6 | $154,600 |
| 7 | $165,250 |
If you’ve already started planning or building an ADU, you can still apply as long as you don’t have a certificate of occupancy yet. The city won’t pay you back for costs you had before the loan closes.
The Rules Once You Build
- No short-term rentals. Leases have to be at least 30 days.
- No cash-out refinancing against the loan.
- Section 8 tenants are encouraged but not required. The city would like you to rent to Housing Authority voucher holders, but you can pick your own tenant.
What It’s Worth to a Homeowner Who Qualifies
A new 2-bed detached ADU in Long Beach rents for about $2,900 a month (see my Long Beach ADU rent comps). With a conventional construction loan, a $250,000 balance at about 8% costs roughly $1,835 a month. With Backyard Builders, you have no monthly payment while you own the home.
| Backyard Builders loan | Typical private financing | |
|---|---|---|
| Amount | $250,000 | $250,000 |
| Rate | 2% | About 8% (construction or HELOC) |
| Monthly payment | $0 while you own the home | About $1,835 |
| ADU rent | About $2,900 | About $2,900 |
| Rent minus payment | About +$2,900 | About +$1,065 |
Interest still builds up while payments are deferred, and the balance comes due when you sell. Read the loan documents to see exactly how interest accrues before you sign. For how private financing works, see how ADU construction loans work.
What This Means If You’re an Investor
Most of my clients are buying a second property, so this loan won’t fit them. Three things still matter:
- Long Beach keeps paying for ADUs. The city says ADU construction has gone from zero a decade ago to more than 400 a year. A city that funds ADUs with state money usually doesn’t fight them at the permit counter. More on how the city handles permits in my Long Beach ADU page.
- More new ADUs keep coming. Sixteen more subsidized units won’t move rents much, but they add to a steady supply of new 1- and 2-bed rentals in the lower-priced parts of the city where most investors also buy. Price your rent assumptions off current comps, not last year’s. See North Long Beach: the ADU pocket.
- Help a parent who qualifies. If your parents own a Long Beach home, live in it and fall under the income limit, this is one of the cheapest ways to add a unit for them or for rental income. See what makes a lot work for aging parents.
If you’re buying as an investor, your options are cash, a HELOC on your primary home, or a construction loan. I compare them in how to finance an ADU. For the full cash-flow math on a house plus an ADU, see Long Beach ADU investing by neighborhood and how much down you need to cash flow in Long Beach.
How to Apply
- Check your address with the eligibility tool on the Round 2 portal.
- Attend one info session (October 27, November 5 or November 14).
- Gather income documents for everyone in your household, plus mortgage, tax and insurance statements.
- Apply between November 1 and November 30, 2026.
- If more people qualify than there are loans, the city holds a lottery.
Questions go to the city at 562-570-6949 or CD-ADULoan@longbeach.gov. Before you commit, it also helps to check your lot’s ADU rules, which follow California ADU law in Long Beach right now.
Frequently Asked Questions
When does the Long Beach Backyard Builders application open?
Round 2 applications are scheduled for November 1 to November 30, 2026.
How much can I borrow?
Up to $250,000 at 2% over 30 years, with payments deferred until the term ends or the home is sold or transferred.
Can investors use the Backyard Builders loan?
No. You have to own and live in the single-family home, meet the lower-income limit and be in a designated program area.
What is the income limit?
For 2026, it’s $133,250 in gross income for a household of four, ranging from $93,300 for one person to $165,250 for seven.
Can I rent the ADU on Airbnb?
No. Leases must be at least 30 days.
Don’t Qualify? Here’s the Investor Path
If you’re over the income limit or buying a second property, I can show you Long Beach houses with room for a detached ADU and run the payment math on each. Browse ADU homes for sale to see what’s on the market now.
👉 Book a buyer ADU consult call to go through your options with Dylan
Prefer to talk now? Call Dylan Serna, ADU Realtor at 714-860-2868.
Dylan Serna | The ADU Realtor | eXp Realty | DRE #02217359
This post is general information, not legal, tax or financial advice. Program details come from the City of Long Beach as of October 26, 2026 and can change. Confirm eligibility and terms with the city.
