Financing

In-House 0% Down Lending Program

ADU Builder LA is excited to offer our very own financing program that requires $0 out of pocket! To do this we partner with homeowners and use a portion of your future ADU’s rental income to secure the loan. This is a great solution for those that do not have an abundance of cash on hand, home equity, or simply do not want to cover the construction costs themselves. This provides the flexibility to create your new space and increase your home’s value without having to incur costly construction expenses yourself or sacrifice the hard-earned equity in your home. Request a free consultation now to discuss this option further!

Home Equity Loans and Line of Credit

Home Equity Loans allow homeowners to access a portion of the equity they’ve accrued in their home in the form of a lump sum. Often times the maximum amount will be between 75 – 80% of your home’s value minus the outstanding mortgage balance.

Home Equity Lines of Credit (HELOC) operate on the same principle but allow homeowners access to a revolving line of credit rather than a fixed lump sum.

These options present a great solution for homeowners with significant home equity. Additionally, because this is not a refinance, these options are also suitable for homeowners that have low interest rate mortgages locked in.

If you are interested in this solution, ADU Builder LA has an extensive network of qualified lenders we would be happy to connect you with.

Cash-Out Refinance

Similar to Home Equity Loans and Lines of Credit, Cash-Out refinances allow homeowners to access a portion of the equity they have built in their home. Cash-Out refinances work by refinancing your mortgage to release or “cash-out” a portion of the equity you’ve built that can then be used to pay for the ADU construction.

A cash-out refinance is an ideal choice for homeowners who have high amounts of home equity and prefer the convenience of a consolidated monthly payment. However, if your equity is too low or your DTI too high, it might not be an option for you.

If you are interested in this solution, ADU Builder LA has an extensive network of qualified lenders we would be happy to connect you with.

Renovation Financing

A renovation loan is a type of home equity loan, specifically for home renovation projects. Essentially, a renovation loan enables the borrower to take out a predetermined amount of money based on the equity of their home. In contrast to a cash-out refinance, which is determined by the current value of your home, renovation loans allow you to borrow based on the future value of your home once the renovations are complete. This often times increases your borrowing power but often times comes at a higher interest rate than other solutions.

If you are interested in this solution, ADU Builder LA has an extensive network of qualified lenders we would be happy to connect you with.

ADU Assistance Programs

In addition to the financing options outlined above, there are some organizations and local governments that offer grants and special loans for ADU development. While they rarely offer enough funding to fully cover the cost of construction, these grants and loans can help make it more affordable for homeowners to build an additional dwelling unit on their property.

The California Housing Finance Agency offers a grant program to assist homeowners in building an ADU on their property. Qualifying homeowners can receive a grant of up to $40,000 to help pay for predevelopment costs associated with ADU construction.

Furthermore, there may be local ADU programs in your market that can help subsidize the cost of your ADU project. As part of our consultation process, we will help you explore these options.