ADU Financing Made Simple
Financing is often the biggest obstacle for ADU projects, even for homeowners with space and need. Few lenders specialize in ADU loans because they don't fit traditional models—falling between new construction and second mortgages.
Ready to Finance Your ADU?
Six Loan Options
The best type of loan for building an Accessory Dwelling Unit (ADU) depends on your financial situation, home equity, and long-term plans. Here are six options:
HELOC (Home Equity Line of Credit)
Best for flexibility
Best for flexibility. Borrow as needed during construction. Pay interest only on what you use. Ideal with significant home equity.
- Borrow as needed during construction.
- Pay interest only on what you use.
- Works well if you have significant home equity.
HELOAN (Home Equity Loan)
Best for a fixed budget
Best for a fixed budget. Lump sum funding with fixed monthly payments. Good for homeowners who know the full cost of the ADU upfront. Fixed interest rates provide predictable payments.
- Lump sum funding with fixed monthly payments.
- Good for homeowners who know the full cost of the ADU upfront.
- Fixed interest rates provide predictable payments.
Cash-Out Refinance
Best for a fixed budget
Best for a fixed budget. You pay off your old mortgage and replace it with a new one. Lump sum funding with fixed monthly payments. Fixed interest rates provide predictable payments.
- You pay off your old mortgage and replace it with a new one.
- Lump sum funding with fixed monthly payments.
- Fixed interest rates provide predictable payments.
Renovation Loan
Best for including ADU costs in a mortgage
Best for including ADU costs in a mortgage. Options like FHA 203(k) loan or Fannie Mae Homestyle Loan allow financing ADU construction as part of a home purchase or refinance. Great for adding an ADU to a newly purchased home.
- Options like FHA 203(k) loan or Fannie Mae Homestyle Loan allow financing ADU construction as part of a home purchase or refinance.
- Great for adding an ADU to a newly purchased home.
Private Lending
Best for fast funding & investors
Best for fast funding & investors. Faster approval than traditional loans. Higher interest rates. Easier qualifications.
- Faster approval than traditional loans.
- Higher interest rates.
- Easier qualifications.
Construction Loan
Best for ground-up Home & ADU builds
Best for ground-up Home & ADU builds. Good for building a new house and a detached ADU from ground up. Short-term loan that converts into a mortgage after construction. Strict guidelines.
- Good for building a new house and a detached ADU from ground up.
- Short-term loan that converts into a mortgage after construction.
- Strict guidelines.
Experienced ADU Lenders
Below is a list of lenders experienced in ADU financing. They understand both the local market and the unique challenges of ADU projects. Before reaching out, ensure you understand their loan offerings.
Comparison Chart
Tap to Expand Each Lender
Lender Here
- Location: Multiple in the Central Valley
- Feature: HELOC (Home Equity Line of Credit)
- Loan Type: Revolving credit line for a period of time
- How You Receive Funds: Withdraw as needed (like a credit card)
- Repayment: Interest-only payments during draw period, then full repayment
- Interest Rate: Variable (can change over time)
- Collateral Required: Yes (your home)
- Loan Term: Typically 10–30 years
- Credit Score Range: 620+
- Approval Process: Moderate (credit and home equity required)
- Risk Factor: Home is collateral; variable rates may increase payments
Lender Here
Lender Here
- Location: Multiple in the Central Valley
- Feature: HELOAN (Home Equity Loan)
- Loan Type: Lump-sum loan
- How You Receive Funds: One-time lump sum
- Repayment: Fixed monthly payments (P&I)
- Interest Rate: Fixed
- Collateral Required: Yes (your home)
- Loan Term: 5–30 years
- Credit Score Range: 620+
- Approval Process: Moderate (credit and home equity required)
- Risk Factor: Missed payments could lead to foreclosure
Lender Here
Lender Here
- Location: Pleasanton
Focus Central Valley - Feature: Cash-out Refinance
- Loan Type: One Time Lump Sum
- How You Receive Funds: Through Escrow Company
- Repayment: Fixed monthly payments (P&I)
- Interest Rate: Fixed
- Collateral Required: Yes (your home)
- Loan Term: 5–30 years
- Credit Score Range: 620+
- Approval Process: Moderate (credit and home equity required)
- Risk Factor: Home is at risk if you default
Lender Here
Lender Here
- Location: Central Valley / Tri Valley / East Bay
- Feature: Renovation Loan
- Loan Type: Loan for home improvements, fixer upper, purchase or refinance
- How You Receive Funds: Lump sum or Draw Schedule
- Repayment: Varies by loan type
- Interest Rate: Fixed or variable
- Collateral Required: Depends on loan type
- Loan Term: Varies
- Credit Score Range: -
- Approval Process: Varies by lender
- Risk Factor: May require good credit or existing home
Lender Here
Lender Here
- Location: Pleasanton
Focus Central Valley - Feature: Private Lending
- Loan Type: Direct loan from a private lender
- How You Receive Funds: Lump sum
- Repayment: Interest-only
- Interest Rate: Fixed, higher than banks
- Collateral Required: Home or real estate
- Loan Term: 1 year, refinance
- Credit Score Range: -
- Approval Process: Fast, easier, higher rates
- Risk Factor: Higher rates, flexible terms, fewer protections
Lender Here
Lender Here
- Location: Central Valley / Tri Valley / East Bay
- Feature: Construction Loan
- Loan Type: Construction to permanent mortgage, VA/Conventional
- How You Receive Funds: Draw Schedule
- Repayment: Interest-only
- Interest Rate: Fixed, usually higher
- Collateral Required: Land and cash
- Loan Term: 1 year, refinance or convert
- Credit Score Range: -
- Approval Process: Strict, requires plans & permits
- Risk Factor: Requires licensed contractor and inspections
Lender Here
Important Disclaimer
MyADUEXPERT is not a lender; information provided is for reference only. Contact lenders directly via our form for details on actual loans.
Risk Factors: All secured loans use your home as collateral. HELOC rates can change, private lending has higher costs, and construction loans have strict guidelines.