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You can compare different loan options for your back house or granny flat, including cash-out refis, HELOCs, construction loans, and more. We make it easy to include estimated ADU costs and your home’s approximate value to crunch the numbers and determine which plans you are eligible for and will offer the best terms. When it’s time to shop for financing, we can help pair you with lenders we have worked with successfully to make our clients’ ADU vision a reality.

We work directly with several lenders and financing providers. We can provide an array of options that may be available to you to finance the construction of your ADU.

Absolutely. GoADU can work with your lender and ensure that you have the required budget, plans, and scope of work needed for your loan application and documentation. If you don’t have contacts with construction lenders already, we are happy to put you in touch with several construction lenders we have worked with successfully.

Yes. The Fannie Mae Homestyle Conventional Renovation can be used to finance either the purchase of the property, or the construction of an ADU, or both. The loan amount will be based on the future value of the home, which may include the value added by the ADU.

As of 2021, the maximum loan available under this program is $753,250 with 85% loan-to-value for investment properties, 97% LTV for primary residences. Note that this is the value after the renovation, i.e. with the added value of the ADU.

To approve a construction loan, the lender will typically require a floor plan with elevations, a scope of work, and a budget that includes all construction costs broken down by trade (plumbing, electrical, framing, sheetrock, insulation, etc.).

The process can tend to be a lot smoother if the lender has worked with the contractor before, as the lender will be familiar with the contractor’s work and documentation, and the contractor is familiar with the lender’s requirements.

If you are purchasing new property with the intention to install an ADU, if at all possible we recommend negotiating an extended due diligence period of an extra 75-90 days to research the feasibility of the ADU, take in any site requirements, and report your ADU plan to the lender so they can order an appraisal of the property based on its estimated future value with the ADU.