ADU Loans

Program Overview

ADU Loans provide specialized financing for Accessory Dwelling Units (ADUs). These programs are designed for homeowners who want to add rental income, create multi-generational living spaces, or increase their property value through the addition of a secondary dwelling unit.

What is an ADU?

An Accessory Dwelling Unit (ADU) is a secondary housing unit on a single-family residential lot. ADUs can be:

• Detached: Separate structure from the main house
• Attached: Connected to the main house
• Converted: Existing space converted to living quarters
• Garage Conversion: Converting garage space to living quarters

Key Benefits

• Rental Income: Generate additional monthly income
• Property Value: Increase overall property value
• Multi-Generational Living: Accommodate family members
• Flexibility: Use as guest house, home office, or rental
• Tax Benefits: Potential tax advantages for rental income

Program Requirements

Credit Requirements

• Minimum Credit Score: 700
• Credit History: Good credit history required
• Credit Inquiries: Limited recent inquiries preferred
• Payment History: No recent late payments

Property Requirements

• Zoning: Property must be zoned for ADUs
• Building Codes: ADU must meet local building codes
• Size Limits: ADU size must comply with local regulations
• Property Condition: Main property must be in good condition
• Access: ADU must have proper access and utilities

Income Requirements

• Stable Employment: Minimum 2 years of stable employment
• Income Verification: W-2s, pay stubs, or business documentation
• Income Stability: Demonstrated ability to maintain income
• Debt-to-Income: Maximum 43% DTI ratio

Down Payment Requirements

• Minimum Down Payment: 20%
• Source of Funds: Must be properly documented
• Gift Funds: Allowed with proper documentation
• Asset Verification: Down payment source must be verified

What to Expect

Step 1: ADU Planning

We'll review your ADU plans and verify that they comply with local zoning requirements and building codes. This includes analyzing size, location, and design.

Step 2: Construction Review

We'll review your construction timeline and budget for the ADU. This includes analyzing costs, permits, and contractor qualifications.

Step 3: Loan Application

Complete the mortgage application with our ADU-specific underwriting process. We'll guide you through the documentation requirements.

Step 4: Construction Process

During construction, we'll monitor progress and release funds as the ADU is built. This includes inspections and progress reviews.

Step 5: Completion & Closing

Once the ADU is completed and passes final inspection, we'll finalize the loan and you can begin using your new space.

Who This Program Helps

• Homeowners wanting to add rental income
• Families needing multi-generational living space
• Real estate investors looking to maximize property value
• Those wanting home offices or guest accommodations
• Property owners seeking to increase property utility