Financing an ADU on a SFH property
Hi all,
Has anyone successfully financed an accessory dwelling in Tucson (or Arizona)?
What options are available for FHA borrowers? I want to build an ADU in our backyard and rent it out. We have the space and plans, I just want to secure financing before getting started. I know it's a relatively new phenomenon, but I've looked into refinances and HELOC's. I'm not sure if any local lenders will consider the property value once the ADU is complete when reviewing my loan application. TIA!
Hey Mason, I’m out here in Tucson AZ as well and have been wondering the same thing. Wish I could help out but let me know what you find out. I’ll follow the thread.
Kyle
Quote from @Mason Alvarado:
Hi all,
Has anyone successfully financed an accessory dwelling in Tucson (or Arizona)?
What options are available for FHA borrowers? I want to build an ADU in our backyard and rent it out. We have the space and plans, I just want to secure financing before getting started. I know it's a relatively new phenomenon, but I've looked into refinances and HELOC's. I'm not sure if any local lenders will consider the property value once the ADU is complete when reviewing my loan application. TIA!
#4 House Hacking Contributor
- Real Estate Agent
- Los Angeles, CA
I'm in Los Angeles and I did the FHA 203(k) loan. The structure has to either already exist (we converted the garage) or you can do an addition to the property and build it out that way.
One of my clients took an illegal garage conversion that was expanded into two bedrooms and used the FHA 203(k) loan to get it permitted. It still cost around $100K, but that is way cheaper than building a 2 bedroom ADU from scratch.
