How to finance an ADU.

Your main options

Option	How it works	Best when
HELOC	Revolving line against home equity; draw as the build progresses	You have equity and want flexible, staged funding
Cash-out refinance	Replace your mortgage with a larger one and take the difference	Today’s rates make refinancing your whole loan worthwhile
Renovation / construction loan	Loan sized to the project, often based on completed value	You need more than current equity allows
Dedicated ADU loan	Underwrites projected ADU rental income to boost borrowing power	You’re building primarily for rental income
Cash / savings	Self-funded, no financing cost	You want to avoid interest and qualify hassle

This is general education, not financial advice. Rates, terms, and program availability change — confirm specifics with a licensed lender or mortgage advisor.

ADU as an investment

An ADU is one of the few home projects that can pay you back. A rentable unit generates monthly income, and permitted square footage typically raises your property’s value. When you weigh financing cost against expected rent and added value, the math often works — especially in high-rent Bay Area submarkets.

This is also where the build cost matters most: every dollar saved on construction improves your return. Because we competitively bid each trade and manage the budget open-book, our model targets a delivered cost up to 10% below your best builder offer — which goes straight to your ROI. See typical numbers in our ADU cost guide.

How to start

• Get a realistic cost range for the unit you want.
• Check your equity and talk to a lender about HELOC, refi, and ADU-loan options.
• Estimate likely rent for your neighborhood to model the return.
• Get a scoped, competitively-bid estimate so your financing matches the real number.