Utah ADU Loans, Grants, and Programs: What Actually Exists

The Utah ADU loans, grants, and programs tracker (verified July 2, 2026)

Here is the whole landscape in one place. We classified each entry by what it actually is — because "program" is doing a lot of work in most articles, and a loan guarantee, a renovation mortgage, and a repair grant are not the same animal.

What this shows — and what it doesn't

This tracker shows the ADU-related funding we could confirm in official or public-agency sources as of July 2, 2026, sorted into honest buckets: dedicated ADU loans, a repealed state guarantee, interlocal financing, an educational toolkit, renovation mortgages, rural programs, homebuyer assistance, and plain market lending. The one clear pattern: direct public help for building an ADU in Utah is rare and local, and most of what gets called a "program" is a loan or a mortgage product, not a grant.

What it does not show: your personal eligibility, whether a given program still has money when you apply, every private bank's lending options, or the fine print of a loan you should read with a lender and, where money and law meet, a professional. Local programs also come and go — a city can launch one next quarter, and a pilot can run out of funds. If you're reading this well after the verification date, treat the amounts as a starting point and check the primary sources we link.

How we built this

We read the issuing source for every entry, not a summary of it. For Backyard Keys, we used the Salt Lake City Community Reinvestment Agency program page and the Community Development Corporation of Utah page that administers it. For the repealed state pilot, we read the text of Utah Code, Olene Walker Housing Loan Fund , and the 2026 legislation that repealed it.

We also did the negative work, because that's where the misconceptions live. We reviewed Utah's statewide, county, and city housing programs looking for an ADU-construction grant or loan, and we could not find an active statewide one. We treated builder blogs, social posts, and forums as tips to chase down, never as proof of a program's terms. When a claim we found elsewhere didn't hold up against a primary source, we left it out.

We classified each entry as a grant (money you don't repay), a forgivable loan (repaid unless you meet conditions over time), a loan (repaid), a loan guarantee (the state backstops a private lender, not money to you), a mortgage product (a loan to buy or renovate), a resource (help that isn't money), or repealed/inactive.

Does Utah have ADU grants in 2026?

In the sources we reviewed, no — there is no active statewide grant that pays a Utah homeowner to build an ADU. The public help that exists is mostly local loans (like Salt Lake City's), interlocal financing (like AHA's), or federal mortgage and repair programs, none of which is a no-strings grant for ADU construction. The closest things to "grants" are federal repair grants for very-low-income rural homeowners and partial loan forgiveness attached to income-restricted local loans.

It helps to keep four words straight, because they get blurred constantly:

What happened to Utah's statewide ADU program?

We read the statute directly. The pilot was created by House Bill 82 in 2021 and lived inside the Olene Walker Housing Loan Fund. To use it, a lender had to offer the homeowner a 15-year, fixed-rate loan; the homeowner had to build the ADU within one year, keep living in the primary residence, and rent the ADU to a household earning under 80% of area median income (AMI) for the life of the loan. The state's role was limited to guaranteeing repayment. The most recent version was amended in the 2025 Special Session, and it was then repealed by Chapter 393 of the 2026 General Session , effective July 1, 2026. (The rest of the Olene Walker Housing Loan Fund was renumbered on the same date; this ADU section was eliminated, not moved.)

The practical takeaway: don't count on a statewide ADU program. If the Legislature revives one in a future session, the code is where it will show up — but as of July 2, 2026, it isn't there.

What does Salt Lake City's Backyard Keys ADU loan offer?

Here's what the Salt Lake City CRA and the Community Development Corporation of Utah , which administers it, publish:

• ▸Amount and rate: up to $200,000 at 3% fixed.
• ▸Structure: a 5-year term with a possible 5-year extension, amortized over 30 years.
• ▸Forgiveness: up to 10% of the loan for ADUs that are rent-restricted to affordable levels.
• ▸Costs: a $2,000 application/origination fee ($200 of it a non-refundable application fee, the rest can be rolled into the loan), a $200/year compliance fee, and a required $1,000 of the homeowner's own liquid funds.
• ▸Who qualifies: owner-occupants whose property is west of I-15 in Salt Lake City, who use the home as their primary residence, complete the city's Good Landlord training, and go through financial counseling. Properties in the 9-Line reinvestment area (along 900 South between I-15 and the Jordan River) get priority.
• ▸The income rule that trips people up: if you earn more than 80% of AMI, you must rent either the ADU or your main house at an affordable rate to a household at or below 80% of AMI. If you earn 80% of AMI or below, there's no rent restriction — you can live in the ADU, house a relative, or rent it to anyone at any price.

What not to misread: this is not statewide, it is not a grant, and its geography is narrow. If your home is east of I-15 or outside Salt Lake City, this program is not available to you.

What about Bluffdale — is there a Bluffdale ADU loan?

Bluffdale offers an official ADU Toolkit — a genuinely useful homeowner resource — but it's an educational guide, not a city-run ADU loan fund. The city built it with the Salt Lake County Housing Trust Fund to walk residents through the whole process: costs, permits, where ADUs are allowed, landlord basics, and financing options. The financing it points to is the same menu on this page — renovation mortgages, home equity, and the like — not a Bluffdale loan with its own terms.

We checked this carefully, because a specific "Bluffdale ADU loan" with dollar amounts and forgiveness tiers circulates online and doesn't match Bluffdale's own materials. The toolkit's scope of work describes a homeowner tool kit meant to "educate, incentivize, and support" ADU construction. If Bluffdale launches an actual ADU loan product, its ADU page is where to confirm it; we won't publish loan terms we can't source.

Is the "$70,000 Utah ADU grant" real?

Here's what we could verify. AHA describes itself, on its own site , as looking for homeowners who want to build an ADU. In Utah County Council of Governments records , AHA is described as an interlocal agency whose purpose is to help fund housing through tax-exempt financing, and cities that want to participate must sign an interlocal agreement to join. In other words, AHA is a financing vehicle that operates city by city — its availability to you depends on whether your municipality has joined and what that agreement allows.

If you've seen a specific number like "$70,000," understand where it comes from: it appears in homebuilder promotion and in municipal discussions of AHA arrangements, not in a statewide grant program. Because the terms vary by agreement and can change, we're not publishing a fixed figure as a program fact. If AHA is relevant to you, confirm current terms, income limits, restrictions, and availability directly with AHA and with your city — and go in understanding it's income-restricted financing with strings, not a check.

Which federal renovation mortgages can build an ADU?

Three renovation mortgages can finance ADU construction anywhere in Utah: the FHA Standard 203(k), Fannie Mae's HomeStyle Renovation, and Freddie Mac's CHOICERenovation. They're not grants and not Utah-specific — they're loan products, offered through lenders, that let you finance a home and the ADU work in a single loan based on the property's as-completed value. They differ on down payment, eligible property types, and one thing that matters enormously: whether the future rent from the ADU can help you qualify.

Can the ADU's future rent help you qualify for the loan?

This is the detail most guides skip, and the answer is different for each product. Only the FHA Standard 203(k) clearly lets you count projected rent from an ADU you're building (up to 50% for a new attached unit). Freddie Mac's CHOICERenovation generally won't, because the rent won't have started by your first payment. Fannie Mae's rule covers rental income from an existing ADU, not clearly a not-yet-built one.

We built this comparison from the agencies' own underwriting guidance, because it changes what you can actually afford — and because we couldn't find it assembled anywhere else.

If you have limited income and you're counting on the ADU to help you carry the payment, this table is the difference between a "yes" and a "no" from a lender — and the FHA 203(k) is often the only product that lets the unbuilt unit pull its weight.

Can USDA finance an ADU in rural Utah?

In USDA-eligible rural Utah, the Guaranteed Loan Program currently can't finance an income-producing ADU, though an ADU used as living space for a household member can qualify — and that restriction may soon loosen. A proposed USDA rule published March 31, 2026 would let the program finance homes with income-producing ADUs; its public comment period closed June 1, 2026, and as of our verification date it is not yet final.

Separately, USDA's Section 504 program offers very-low-income rural homeowners repair loans up to $40,000 and health-and-safety grants up to $10,000 (grants are for homeowners age 62 and older). It's worth knowing about, but it funds repairs and hazard removal — not new ADU construction. Don't file it under "ADU grant."

Can Utah homebuyer assistance pay for an ADU?

Utah Housing Corporation's homebuyer assistance can help you buy a home — not build an ADU on a home you already own. UHC, the state housing finance agency, offers down payment assistance (a subordinate loan) of up to 6% of the first mortgage loan amount when paired with a Utah Housing loan program, and, separately, assistance of up to $20,000 for newly built homes. These are purchase tools. UHC's list of eligible property types can include a home that has an ADU, which is where the confusion starts — but the money is for the purchase transaction, not for adding a unit later.

If you're an existing homeowner who wants to build an ADU, homebuyer programs are the wrong door. The right doors are the ones above: a renovation mortgage, home equity, cash, Salt Lake City's program if you're eligible, or income-restricted local financing.

How do most Utah homeowners actually pay for an ADU?

Outside the narrow public programs, most Utah ADUs get built with home equity, a cash-out refinance, a construction loan, or a renovation mortgage — plus cash. A home equity loan or HELOC borrows against the equity you already have; a cash-out refinance replaces your mortgage and hands you the difference; a construction or construction-to-permanent loan funds the build in draws and then becomes your mortgage. None of these require the ADU to exist yet.

See also: How to Finance an ADU in Utah — HELOC, cash-out refinance, construction loans, FHA 203(k), and combining strategies in one guide.

Why this matters now

Two things converged right around our verification date. Utah's statewide ADU loan-guarantee pilot came off the books on July 1, 2026, and at the federal level USDA is weighing whether to open rural lending to income-producing ADUs. At the same time, the mortgage side has been moving in homeowners' favor — Fannie Mae started counting rental income from existing ADUs within limits, and FHA's 203(k) already lets some borrowers count a new attached ADU's projected rent. So the public program picture in Utah got thinner even as the lending picture got a little friendlier. If you're planning a build, the near-term reality is that your financing will most likely come from a renovation mortgage or your own equity, and the rules that decide whether you qualify are the ones in Table 2.

Zoning is a separate question from money, and it's also in motion. Utah's 2026 legislation — including SB 284 — expanded where detached ADUs must be allowed; SB 284 sets an 11,000-square-foot lot threshold for specified municipalities, effective October 1, 2026, though related 2026 bills adjusted detached-ADU rules further during the session. Because those thresholds moved, check the current statute and your city's ordinance before you design anything (our SB284 detached-ADU tracker follows where things landed). That affects whether you can build, not how you pay for it.

How to cite this page

Utah ADU Builders Research. "Utah ADU Loans, Grants, and Programs: What Actually Exists (Verified July 2026)." Utah ADU Builders. Last verified July 2, 2026. https://utahadubuilders.com/research/utah-adu-loans-grants-programs

Frequently asked questions

Related research

• Utah ADU permit data: official sources and verified city counts
• Utah ADU rules by city: what's legal, sourced to each city code
• Utah SB284 detached-ADU tracker: the 2026 law and city data
• How to Finance an ADU in Utah (full guide — HELOC, 203k, cash-out, combining strategies)
• How to Legalize an Unpermitted Basement Apartment in Utah