Possibly. In March 2025, the City of Modesto announced a $450,000 ADU revolving loan fund run by Valley First Credit Union, with loans of up to $50,000 at fixed rates up to five points below the Wall Street prime rate. We could not confirm on a city page whether funds remain as of October 2026, so ask before you plan around it.
Who qualifies for the Modesto ADU loan?
According to the city's March 2025 announcement, borrowers must be Valley First members, have owned the property for at least six months, be current on property and supplemental taxes, and own property inside Modesto city limits.
Other building and insurance requirements also apply.
What are the loan terms?
The announcement describes fixed interest rates of up to five percentage points below the Wall Street Prime Rate and terms of up to 120 months, with a maximum of $50,000 per loan.
The city says the fund is paid for by Measure H.
Will $50,000 cover an ADU?
Usually not on its own. Published 2026 ranges for the nearest Central Valley market start around $50,000 for a junior ADU and $80,000 for a garage conversion.
The loan can still close a gap. See the Modesto cost guide.
What about properties outside Modesto?
The program, as announced, is limited to property in Modesto city limits, so owners in Ceres, Turlock, Riverbank or Oakdale would need other financing.
Do free plans help the budget?
Yes. Using a free regional pre-drawn plan, where one fits, removes most design drawing costs from the total you need to finance.
See our free plans guide.
When does the loan make sense?
It depends on the rest of your budget and on the fund's status. If you have most of the money and need to close a gap, a fixed-rate loan below prime can help. Contact Valley First and the city first to confirm availability. We give you a written, itemized quote you can take to a lender.
Related
Sources, as of October 2026: City of Modesto news release (March 7, 2025); California Construction News, "Modesto changes zoning to reduce restrictions on building ADUs" (March 15, 2025); Block Renovation, Sacramento ADU Costs 2026. Not financial advice.
Updated October 2026