Affordable Housing Takes a Step Forward with ADU Loan Program Paid for by Measure H

The City of Modesto is unlocking the door to expanded housing options in the community. A zoning change, paired with a special revolving loan fund, means constructing an Accessory Dwelling Unit is easier - and more cost-effective - than ever.

Accessory Dwelling Units (ADUs) have become a critical part of the housing stock of a community. ADUs can be detached, such as a small cottage or guest house on the same parcel as a single-family home. They can also be attached, such as an addition on a primary structure. They can be created from the conversion of existing space, such as a garage.

ADUs are one piece of the puzzle to bringing affordable housing options to Modesto residents. Passed by the Modesto City Council in late 2024, the zoning code amendment brings Modesto's Municipal Code in line with recent changes to State law governing ADUs.

At the same time, a partnership with Valley First Credit Union (VFCU) will make financing the construction of an ADU easier for Modesto residents. Administered by VFCU, a $450,000 Revolving Loan Fund will provide loans up to $50,000 at fixed interest rates up to five points below Wall Street Prime Rate and fixed terms up to 120 months.

Applicants will need to meet specific program requirements including be VFCU members, have owned the property for at least six months, be current on all property and supplemental taxes, the property must be located within the City of Modesto, as well as meet other building and insurance requirements.

Thinking of building an ADU on your property? We've got all the resources, including free plans. Stanislaus County, in partnership with the cities of Ceres, Modesto, Oakdale, Riverbank, Turlock, and Waterford have developed seven (7) different ADU plans for detached new construction, each with multiple options for exterior finishes, available for free to property owners.

Check out the steps to planning an ADU from start to finish.

For more information, contact:

Sonya Severo
Public Relations and Legislative Affairs Manager
209-497-0075
Email Sonya Severo