Whether you are looking to expand your property’s livable space or develop a secondary unit for rental purposes, building an accessory dwelling unit (ADU) may be a good option. The recent changes to California zoning and construction regulations are making it easier to add an ADU.
What Is an ADU? Accessory dwelling units (ADUs for short) are add-on residential units on the same land as a detached house. Also known as granny flats, guesthouses, casitas, tiny homes or backyard cottages, ADUs can add value to your property and create a steady source of rental income. Units range in size from about 400 to 1,200 square feet of living space and must include a kitchen, bathroom and living area. In addition to detached ADUs, attached garage conversions are becoming a popular and cost-effective option.
ADU Financing Options. When seeking financing for an ADU project, homeowners can shop and compare a wide range of options, including home equity loans and lines of credit, cash out refinances, and construction loans. It’s important to carefully compare the advantages and disadvantages of each type of loan.
The Benefits of E-Central’s ADU Construction Loan
To help our Members finance their projects, E-Central has designed a unique new home loan specifically for financing ADU construction. The special features include:
- No payments for up to 18 months while the unit is being built
- You may use the estimated future rental income to qualify for the loan
- Fund disbursement is based on construction progress
- Low fees and expanded loan fund uses
- Conversion to an affordable second mortgage
After your ADU has been completed, your ADU construction loan will be seamlessly converted to an affordable second mortgage – with a fixed rate and payments for the life of the loan.
Ready to explore the advantages of building an ADU? Compare your financing options with an E-Central Real Estate Lending expert today.