An Accessory Dwelling Unit (ADU) offers a compelling opportunity to enhance your property. Whether you envision a dedicated workspace, a comfortable guest retreat, or a potential rental unit for supplemental income, an ADU adds value and versatility to your home. However, financing an ADU requires careful consideration. Let’s explore the various loan options available to make your ADU dream a reality.

Financing Solutions for Your ADU Project

1. Fannie Mae Homestyle Renovation Loan:

This comprehensive loan provides the funds necessary to construct your ideal ADU and make any other desired improvements to your primary residence.

• Suitable for both attached and detached ADUs, offering flexibility in design and construction.
• Features competitive interest rates and various repayment options to align with your financial goals.

2. Freddie Mac ChoiceRenovation Loan:

If you’re planning a larger-scale renovation that includes an ADU, this loan offers a streamlined approach.

• Encompasses a wide array of renovation projects, including ADU construction.
• Can significantly enhance your property value, making it a strategic investment.

3. Second Mortgages:

This option provides a lump sum payment, allowing you to access funds quickly for your ADU project.

• Offers immediate capital for construction costs.
• Requires managing two separate mortgage loans, your first mortgage remains the same

4. FHA 203(k) Loan:

Ideal for those purchasing a property that requires renovations or repairs, this loan combines the purchase and renovation financing into a single, convenient solution.

• Specifically designed for home rehabilitation and ADU additions.
• Well-suited for fixer-uppers or properties requiring extensive updates.

The Advantages of Home Renovation

Investing in home renovations, including ADU construction, yields numerous benefits:

• Increased Living Space: Expand your living area to accommodate a growing family, hobbies, or a home office.
• Enhanced Property Value: Strategic renovations can significantly increase the market value of your home.
• Improved Functionality: Customize your living space to better suit your lifestyle and needs.
• Energy Efficiency: Incorporate energy-saving features to reduce utility costs and environmental impact.
• Income Generation: Rent out your ADU to generate passive income and offset housing expenses.

Want to know your specific numbers and best loan type?

I’m here to guide you through the financing process and help you select the most suitable loan option for your circumstances. Contact me today to schedule a consultation and discuss your ADU project.

Chenine Lozano, Real Estate Finance Expert

W: (562) 620-7662 C: 562-762-7511

NMLS #1655101 DRE#02069548

Endeavor Mortgage NMLS#355050