There are multiple financing options available to help you build your ADU

[Felicia Nitu]

Building an Accessory Dwelling Unit (ADU) can be a smart way to add value and create income, but covering the upfront costs often holds people back. Fortunately, there are several financing options available to make ADU construction more accessible.

Home Equity Lines of Credit (HELOCs)
A HELOC works like a credit card backed by your home's value. You borrow as needed and only pay interest on the amount used. This flexibility makes it a top choice for ADU builds that may have fluctuating costs over time.

Home Equity Loans
This is a lump-sum loan based on your home's equity, with fixed interest and predictable payments. It's a simple option for homeowners who want a set budget for their ADU from the start.

Cash-Out Refinancing
This allows refinancing the mortgage for a larger amount and taking the extra cash. It's an easy way to get funds for an ADU without securing a separate loan.

Renovation Loans
Intended for home upgrades, these loans can cover design, permitting, and construction costs for an ADU, making them an all-in-one solution.

Private Lender Loans
Some private lenders offer financing specifically for ADUs, with faster approvals and more flexible terms compared to traditional banks.

Why it matters for agents and investors:
Real estate agents can guide clients toward these financing tools to make ADU conversations easier and more practical. For investors, these options mean less capital upfront and quicker access to income-generating units. Whether the goal is resale, rental income, or increasing long-term value, accessible financing helps bring ADU projects to life faster.