Everything You Need to Know About ADU Financing Options

We know that there is a lot that goes into moving forward on your ADU project. Permits, design, zoning codes, deciding on the necessary features — the list of what needs to get done seems to never end.

ADORE Homes was founded to help homeowners navigate this cumbersome process and, thanks to our wonderful clients, we have helped hundreds of families turn their ADU dreams into reality.

HELOC (Home Equity Line of Credit): Borrow against your home equity with flexible draw periods. Interest rates are typically lower than other loan types, and you only pay interest on what you use.

Cash-Out Refinance: Replace your existing mortgage with a larger one and use the difference for your ADU. Best when current interest rates are favorable compared to your existing rate.

Construction Loans: Purpose-built for building projects, these loans convert to permanent mortgages upon completion. They typically require 10–20% down.

CalHFA ADU Grant Program: California offers up to $40,000 in grants for qualifying homeowners building ADUs. ADORE Homes can help determine your eligibility.

Personal Loans and Savings: For smaller ADUs or as supplementary funding, personal loans or savings can fill the gap. Some homeowners combine multiple financing sources.