Add living space that fits the needs of your family.
Whether you are looking to provide options for aging parents or earn rental income — an ADU loan might be a good fit.
An ADU loan is a new product developed to provide financing options to fit the needs of our community. These loans can help achieve adding livable space to your existing home, or even building another structure on your current property. If you have a growing family and need more room or would like to add an income generating apartment in your home or build an addition for aging family – this type of a loan can fit those needs.
What to know before you consider an ADU loan
We’re excited you are thinking about an ADU loan*. Here are some quick facts you should know!
- You can finance up to 89.9% of the as complete appraised value
- Eligible properties can consist of primary residences, 2nd homes, or 2-to-3 family primary residences, if city/town permits
- If your city/town allows it, you can add on to your existing home/property or build a new structure on your existing land
*Loans are subject to credit and property approval
Accessory dwelling unit loan FAQs
What is an accessory dwelling unit (ADU)?
An ADU or Accessory Dwelling Unit is a secondary housing unit on a single-family residential lot. ADUs are a type of housing unit and are NOT a standardized structural form like a regular house. If your city/town allows it, ADUs can take different forms such as living space above a garage or a structure that is attached to or detached from your home.
What can I use an accessory dwelling unit for?
Two common uses for ADUs can be for rental income generating purposes OR to age in place. For elderly folks that may not want to move but have family to live in the main home, ADUs are a perfect way to down size into a smaller living space that is more manageable to care for.
How do I get information about a building permit?
Where there are state laws on ADUs, every municipality will have their own rules and ordinances. It’s recommended that you go to your local city/town office and review with your code enforcement office what those rules and ordinances are.
How big can an ADU be?
The size of an ADU varies from town to town. It’s recommended that you go to your local city/town office and review with your code enforcement office what those rules and ordinances are.
How far can an ADU be from the main house?
If your town/city permits a detached ADU, the distance between an ADU and the main house vary from town to town. It’s recommended that you go to your local city/town office and review with your code enforcement office what those rules and ordinances are.
Why would I get an ADU loan rather than a HELOC or refinance?
Completing an ADU loan will allow you to forego a refinance on your 1st mortgage that may be fixed at a lower rate. While Home Equity lines of credit are great options, the ADU loan will provide more flexibility as far as payment, term and leveraging equity in your home.
Do I need special insurance for an ADU loan?
While researching the possibility of building an ADU it would be worthwhile to consult with your insurance agent. There may be changes to your coverage and potentially premium with the addition of an ADU.
Contact a lender today!
Let’s see if an ADU loan is the right choice for you. Our residential loan officers are here to help you understand all the details. Call us to talk or schedule an appointment or send an email.
