Tool · Loan
Borrow it.
Pay it back.
What an ADU loan actually costs every month, every year, and over its full term — across the five financing structures lenders actually offer in 2026.
What you'll learn
- → Your monthly payment
- → Interest vs principal
- → Crossover year
- → Side-by-side of all loan types
ADU financing FAQ
- What's the best loan type for an ADU?
- It depends on your existing mortgage rate and how much equity you have. If you have a low-rate first mortgage you want to keep, a HELOC or renovation loan is usually best. If your current rate is high and you have substantial equity, a cash-out refinance might net a lower blended rate. Construction loans make sense when you need draws across the build and don't have liquid cash for upfront expenses.
- Can I use an FHA 203k or Fannie Mae HomeStyle loan for an ADU?
- Yes — both products explicitly allow ADU construction. They roll the build cost into a single mortgage and require less equity than a HELOC. The tradeoff is more paperwork and stricter contractor requirements.
- How much equity do I need?
- Most ADU-friendly lenders cap your combined loan-to-value at 80–90% after the ADU is built (factoring in the appraisal bump). Practically, this means you typically need at least 25–30% equity in your existing home before construction.