Financing for an ADU House Hack?

Question

What’s Up BP! Me and my mother were looking for a duplex to house hack, we got approved for up to 500k but my question is I know with slim inventory and more of a selection on Single family homes I wanted to know if we are able to purchase with a standard FHA loan on a  Single Family with a good size lot and and say couple months down the road turn around get a Renovation loan on the ARV with an ADU on the property to rent out due to the New laws for ADU have taken place I figured this will be another avenue to explore than just a duplex to house hack? Has anyone heard of this? Thank you all in advance!

Jonathon Nila · Answer

@Dan Heuschele good points you made about the non qualifying rent for ADU as opposed to a Duplex. I’m going to do some more homework on this thanks again!

Jonathon Nila · Answer

@Brad Hammond thank you Brad for the advice back to the post i will check into Dweller for locations thanks again and take care!

Dan H. · Answer

In most areas ADUs appraise far below the hand off ADU addition costs.  You typically would be better off purchasing a property with an ADU than building an ADU.

Financing for ADU properties do not use the rent from a unit for qualifying, but rent from a duplex can help with the financing.

Good luck

Brad Hammond · Answer

Hey @Jonathon Nila, that could be a solid plan but I want to try and poke some holes in it.  Usually, ADUs don't have a 1:1 return based on the investment (ROI) so I don't think you can count on getting all your money back.

Another thing you can look into is a company like Dweller.  I'm not sure if they are in your area but they will put a pre-fab ADU in the back of your yard for you.  They have different payment options as well.  Something to look into but props for getting creative.