Financing Options

Finance Your ADU The Smart Way

Explore financing options, grants, and incentives to make your ADU project affordable and maximize your return on investment.

Popular Financing Options

Choose the financing solution that best fits your financial situation and project goals.

Cash-Out Refinance

Refinance your existing mortgage for more than you owe and use the cash for ADU construction.

Pros:

  • Access large amounts of capital
  • Potentially lower interest rates
  • Tax-deductible interest
  • No separate loan payments

Considerations:

  • Resets your mortgage term
  • Closing costs and fees
  • Risk losing home if unable to pay
  • Requires sufficient home equity

Best For:

Homeowners with significant equity and favorable refinance rates

Home Equity Line of Credit (HELOC)

Revolving credit line secured by your home's equity, draw funds as needed during construction.

Pros:

  • Pay interest only on funds used
  • Flexible draw schedule
  • Lower initial costs
  • Reusable credit line

Considerations:

  • Variable interest rates
  • Risk of rate increases
  • Home serves as collateral
  • Credit line may be frozen

Best For:

Homeowners who want flexibility and have stable income

All Financing Options

Compare all available financing methods to find the perfect fit for your ADU project.

Cash-Out Refinance

Refinance your existing mortgage for more than you owe and use the cash for ADU construction.

Best For:

Homeowners with significant equity and favorable refinance rates

Home Equity Line of Credit (HELOC)

Revolving credit line secured by your home's equity, draw funds as needed during construction.

Best For:

Homeowners who want flexibility and have stable income

Financing Process

Follow these steps to secure the best financing for your ADU project.

1

Assess Your Financial Situation

Review your credit score, income, debt-to-income ratio, and available equity.

2

Determine Your Budget

Calculate total project costs including construction, permits, and contingencies.

3

Compare Financing Options

Evaluate different loan types based on your situation and project needs.

4

Get Pre-Approved

Obtain pre-approval letters to strengthen your position with contractors.

5

Finalize Financing

Complete the loan application process and secure funding before construction begins.

Calculate Your ADU Investment Return

Use our ROI calculator to see how quickly your ADU will pay for itself with rental income.

Need Help Choosing the Right Financing?

Our financing experts can help you navigate your options and find the best solution for your situation.