How am I going to pay for an ADU?

There are five main options available to homeowners to finance their ADU. Many homeowners use a mix of these options.

1. Cash savings or other liquid assets
2. Cash-out refinance
3. Loans from friends or family
4. Home equity loan or home equity line of credit (HELOC)
5. Renovation loans

As you’re doing financial planning for your ADU, remember to include the rental income you’ll receive in your calculations. See more details about financing options in the steps on the Budgeting and Finance page and in our Workbook and Exercises.