Step 3: Financing an ADU

How to finance an ADU? How other people pay for ADU?

We could mention a bunch of ways: which one you use depends on you, your situation, your accountant and financial advisor. There is no one answer that fits all.

Take your pick between any one or any combination of cash and credit cards, cash-out refinance and home equity line of credit (a.k.a. HELOC), construction or renovation loan, borrowing from a retirement account or from friends and family, reverse mortgage loan or shared equity financing, the list goes on.

We know, the companies on this page assist homeowners with ADU projects. Each has a different approach to financing. Figure out what works best for you depending on your personal situation, equity in the main house and monthly cashflow. Or consult a mortgage broker to assist you.

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Smart Loan Depot product

Skip the paper-chase by digitally connecting your income, employment and assets—and quickly determine the loan options that will give you the greatest potential cost- and/or time-savings. Loan Depot expert loan consultants can then assist you in making the best decision for your personal financial situation. And you can estimate costs online.

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Let Unison Co-invest

With a home co-investment from Unison, you get cash today in exchange for a share in the appreciation or depreciation of your home. Don’t think loan. There’s no extra debt, no interest and no monthly payments. Just you, turning your dream life into your real life.

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Investor can participate in your property upside potential

HomeBrik Value is an estimate of the maximum realistic value of a property, with and without improvements, and its rental income potential. The projection is done using extensive analysis of data based on the property’s location, trends, zonal laws and other factors.

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Point, a home equity partner

Point pays you today for a share of your home’s future appreciation. There are no monthly payments; there is no interest rate; you can buy Point out or sell the home at any time; Point can event lose money if the home depreciates. 

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Partner in Bridge Loans

Partner with LendingHome for a solution that’s tailored to your real estate investing goals.

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Advocate for Affordable Housing

Check Housing Trust Silicon Valley Homeowner Assistance Program that will help you build an ADU and assist the Bay Area in fighting the housing crisis.

As a mission driven lender, they have a two year affordability restriction: your tenant’s income has to be less than 120% of the Area Medium Income, the rent should not be more than 30% of the income and the rent is capped at a certain number.

However, they do offer up to $200,000 to cover both soft and hard construction costs.

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Opt for a Financial Advisor

Since market conditions and mortgage programs change frequently, you need to make sure you’re dealing with a top professional who is able to give you quick and accurate financial advice.

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Need partial funding?

With SoFi, you can finance any home project without having to put your home on the line. A low-rate, unsecured loan from SoFi for up to $100,000 can help you get it done.

Have we missed a financing resource? Let us know, and we will add them to the list.

Compare traditional loan to a profit participation to a program offered by a non-profit.