Loan Amount: $100,000
APR: 5%
Loan Term: 15 years (180 months)
The formula for calculating the monthly payment is: M = P(1+r)n/(1+r)n - 1
Using this calculation, a homeowner who takes out an ADU loan of $100,000 with an APR of 5% and a 15-year repayment term will incur a monthly payment of about $659.96.
Our ADU contractors are the best in the business at building the following types of secondary residential structures:
Building an ADU averages between $60,000 and $285,000. Free-standing units constructed in cities with high labor and material costs can reach $360,000. The overall cost of an ADU depends on where you live, the size of the desired ADU, labor fees, and the materials used.
Most ADUs fall between 330 and 1,250 square feet and cost between $160 and $300 per square foot to build after factoring in materials, labor, and design. Budgets can exceed $600 per square foot for more complex projects. The table below includes ADU construction cost estimates by type of dwelling, which we derived from leading industry sources:
| Type of ADU | Average Cost Range |
| Detached new construction | $110,000 - $285,000 |
| Basement ADU conversion | $74,000 - $150,000 |
| Garage ADU conversion | $60,000 - $226,000 |
| Attached ADU | $75,000 - $216,000 |
| Type of ADU | Average Cost Range |
| Landscaping maintenance (mowing, weeding) | $100 - $375 per visit |
| Property tax | Added tax on assessed value of ADU |
| HVAC system | $5,000 - $12,500 |
| Plumbing system | $60,000 - $150,000 |
| Running electricity | $900 - $1,300 |
We can help you avoid common ADU problems by connecting you with an experienced contractor. Here are some of the pitfalls they will guide you through:
Adding an ADU to your property can help you accommodate additional guests without making a big move to a larger home. There's a lot to think about before breaking ground on a new ADU. Fortunately, our expert contractors know the ropes. Here’s what they will help you consider before you get started:
One requirement of accessory dwelling units is that they must have their own entrance separate from the primary residence. Depending on the ADU being built, our contractors will determine how much of the budget should be allocated toward additional walkways, driveways, or stairways.
Also, consider who will be using the space. If the guests are elderly, you might consider making accessible accommodations such as wheelchair ramps, handrails, wider doorways, and more for better mobility.
Understanding how you will use the ADU will heavily influence the direction of its design. That’s why our contractors will start by discussing your main goals for the project. For example, an attached ADU on the ground level might be more suitable for homeowners who want to keep an eye on aging parents. Meanwhile, unrelated renters might be more drawn to detached structures that offer some degree of separation from the main residence.
Whether you invite in-laws or subleasers into the ADU, our contractors will prioritize privacy during the design phase to create separate living spaces unique to each dwelling. Window blinds, landscaping, and fencing can help create peaceful retreats that are also aesthetically pleasing.
Adding another structure to your property will greatly affect utility bills and energy usage. Our experienced contractors can help you construct an energy-efficient unit that not only keeps utility bills low but also reduces the impact on the environment. Think green with sustainable building materials, high-efficiency windows, insulation, and ENERGY STAR-certified appliances.
Allow your contractor to suggest ways you can add renewable energy sources like solar panels to reduce energy consumption during the planning phase and throughout the project. Plus, some eco-friendly upgrades are eligible for a tax credit.
We know that to generate the most equity and enhance property value, you must ensure the design of the ADU complements your existing property. Our contractors take extra care to blend the materials, structure, and overall appearance with the main home.
Building an ADU can either profoundly raise or lower your property’s value. A well-designed ADU can increase the general value of the property. On the other hand, a poorly done ADU or one that doesn’t meet the code may lower property value or inhibit resale.
Rest assured, our trusted, reputable building professionals will create a space that generates a return on investment and serves your needs both now and in the future.
You may use a HELOC, cash-out refinance, renovation, or construction loan to fund your project. These options have different terms, interest rates, and repayment schedules, so consider your financial situation and consult a financial advisor to understand loan implications.
After securing the ADU loan, you’ll need to hire a contractor. Renovate can connect you with experienced contractors that offer flexible private financing, so you can get started building faster.
Renovate streamlines the process of locating ADU financing. Here are some additional benefits of getting preapproved for ADU loans with Renovate:
Renovate’s contractors offer financing options through a network of financial institutions. These options offer competitive interest rates, flexible loan amounts, and multiple terms, so you can choose a loan that fits your budget and project size.
Renovate connects owners with reputable ADU contractors and direct financing options. Our solution connects you with both a top-ranked ADU contractor and a flexible financing solution.
Our diversified lender network opens more financing opportunities to property owners with different credit profiles. Your credit score does not have to be perfect to secure funding for your ADU project.
Submitting your request for ADU financing is quick, easy, and done entirely online. Include some basic information about yourself, your finances, and your project. Based on your provided information, you may get a pre-qualification offer in minutes.
On average, homes with an ADU are priced 35% higher than those without ones, especially in larger U.S. cities. The exact value an ADU adds to your property depends on location, type of ADU, and overall design.
You may be able to secure an ADU loan even with bad credit, but it can be risky, and the interest rates and fees will be higher. Lenders that are open to providing ADU financing to homeowners with less-than-perfect credit will perform what’s known as a soft credit check and determine your creditworthiness using other aspects like your income, employment status, banking history, and overall debt.
If you are interested in financing an ADU, you have several options to choose from:
