Jan 3rd, 2023

Can I Finance My ADU?

You may be wondering if Anchored Tiny Homes has ADU financing options available, and what those options are. Well, the answer is yes, the company can provide financing. Kevin with Anchored Tiny Homes, recently discussed the options available to homeowners. As one of the nation’s largest stick build ADU builders, we have several financing options available for our customers.

Anchored Tiny Homes Financing Options:

  • HELOC Loans

    The first option and the most common is the HELOC or the home equity line of credit. This type of home construction loan acts as a revolving line of credit based on the equity you already have in your primary residence that you can draw on to finance your ADU.The payments on a HELOC are typically far lower than what you can rent your ADU for each month, or for the cost of housing family members in assisted living.

  • Construction Bridge Loans

    The second option is the anchored bridge loan we developed specifically for those who don’t have quite enough equity in their property. With this option, the money for your ADU construction is lent upfront, and once the unit is completed, the loan is then paid off using aHELOC or a cash-out refinance based on the new value of your property.

  • Cash-out Refi

    The third option is a cash out refinance, which is based on your home’s equity, but instead of being secondary to your mortgage, it replaces your current mortgage. Allowing you to use the difference to pay for your ADU.This option works best for those who have quite a bit of equity in their home and your mortgage rate is higher than the current going rates.

  • Standard Construction Loan

    The fourth option is a renovation or a construction loan. This home financing option is not based on your home’s equity. However, it does come with strict credit and income requirements,typically leading to higher interest rates and higher monthly payments.

When Should I Start Researching ADU Financing?

The sooner you start the quicker you can learn about your options. The best way to figure out which financing option is best for you is to have one of our ADU experts come out to your property, measure out the space in your backyard, answer any questions you might have and put together a firm estimate so that you can move forward with confidence. To schedule this no-cost, no-obligation property analysis, just follow the link to get started and talk to an accessory dwelling unit specialist in Anchored Tiny Homes today.

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