Financing Shouldn’t Be the Hardest Part of Building an ADU … RenoFi Can Help.High-Interest Rate, Unsecured Personal Loans or Credit Card.Traditional HELOC (Home Equity Line of Credit) & Home Equity Loan.Understanding Your ADU Financing Options.In this guide, we’ll walk you through each of your options and help you to understand the pros and cons of each one. Having access to the right type of financing could mean that you are able to design and build with a higher budget, especially when you consider the rental income it could bring in. Los Angeles’ Mayor Eric Garcetti has even claimed that ADUs are a “way for homeowners to play a big part in expanding our city’s housing stock and make some extra money while they’re at it.”īut one of the most common obstacles that people face when planning this addition to their homes is financing the construction, especially given that the average cost of an ADU can come in anywhere between $100,000 and $300,000.Īlongside this is the fact that there is often a gap between the cost of the construction and a homeowner’s borrowing power when using traditional mortgage products, adding further complexities.įinding the right way to finance a dwelling unit can be confusing, but it doesn’t need to be that way. In fact, municipalities across the US have relaxed previous restrictions on ADUs, and a number of states are now actively encouraging their development. There has been a significant increase in demand for ways to finance their construction in recent years, especially since changes to California law mean that it is now easier than ever to build one in a single-family zone. Also known as an in-law or mother-in-law unit, secondary dwelling unit, granny flat or backyard apartment, ADU’s are on the rise.

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