Accessory dwelling unit (ADU) financing programs for builders and general contractors. Help property owners fund backyard cottages, granny flats, and garage conversions with high-limit loan options.
ADU financing for builders lets you offer homeowners monthly payment options for garage conversions, junior ADUs, basement apartments, and part of the cost of a detached backyard unit, with eligible homeowners able to explore offers up to $100,000 from participating lenders, who fund the loans and collect the payments.
Contractor Financing Solutions gives your company a personalized financing application connected to a multi-lender network. Homeowners can check their offers during the feasibility visit, after you deliver a preliminary budget, or while the plans are in permit review. Depending on the program, funds go to your company when the loan funds, or to the homeowner, who then pays you under your contract.
Many ADUs cost more than $100,000, so this financing often works best for conversions or as one piece of a larger funding plan. Because it’s non-recourse, the lender generally assumes the homeowner’s repayment risk, subject to the applicable agreements, and your team can focus on plans, utility runs, framing, and inspections.
Help homeowners finance ADU conversions and construction costs. Eligible customers can explore financing offers up to $100,000, depending on the lender, to cover qualifying garage conversions, basement conversions, or portions of larger ADU projects.
Give customers another option beyond traditional construction loans. Homeowners can check available financing offers through a soft credit inquiry without affecting their credit score, helping them explore payment options before committing to a project.
Help cover costs that exceed the original budget. Financing may provide an additional way to pay for eligible construction expenses, finishing work, or project upgrades when homeowners need funds beyond their existing budget or financing.
Offer financing that accommodates different project schedules. Some programs pay your company directly when the loan funds, including staged payments for eligible projects, while others fund the homeowner. Participating lenders handle monthly loan repayments.
Financing fits into the feasibility study, design, and budgeting conversations you already have before an ADU goes to permit. Homeowners complete the online application themselves, so your project managers never collect W-2s, bank statements, or Social Security numbers.
Funding timing varies by lender and program. Depending on the lender, funds may be released after loan signing, after completion, or in stages across milestones such as foundation, framing and rough-in, and final inspection. Confirm funding before ordering trusses, windows, or a prefab unit, starting utility trenching, or counting a draw as paid.
An ADU is closer to building a small house than to a typical remodel. Angi puts the average cost to build an ADU at $180,000, with a typical range of $60,000 to $285,000. Few homeowners have that kind of cash on hand, and many stall out between design and permit while they figure out how to pay for it.
Being upfront about what financing can cover keeps those projects moving. A garage or basement conversion at the lower end of the range may fit within a single loan offer. A detached unit usually needs a combination: home equity, a construction or renovation loan, cash, and possibly a personal loan for the remaining gap. When you help homeowners see that full picture early, they’re less likely to shelve the project after the first budget meeting.
Offering financing on every ADU proposal also gives your team a consistent answer when homeowners ask, “How do people actually pay for these?” You aren’t giving financial advice. You’re showing one option they can check quickly and pair with others.
These examples show how loan length affects the monthly payment and total interest on loan amounts that fit ADU projects, from covering part of a detached build to fully funding a garage conversion. They use a hypothetical fixed 14.99% APR with no fees. Actual terms depend on the lender, the borrower’s qualifications, and the loan amount, and not every lender offers every term shown.
| Loan Amount | 60-Month Payment | Total Interest (60 mo.) | 120-Month Payment | Total Interest (120 mo.) |
|---|---|---|---|---|
| $25,000 | About $595/mo | About $10,677 | About $403/mo | About $23,382 |
| $50,000 | About $1,189/mo | About $21,354 | About $806/mo | About $46,764 |
| $75,000 | About $1,784/mo | About $32,031 | About $1,210/mo | About $70,146 |
| $100,000 | About $2,378/mo | About $42,708 | About $1,613/mo | About $93,528 |
Examples assume a fixed 14.99% APR, no fees, and full financing of the stated project amount. These are mathematical illustrations, not loan offers or guaranteed terms. Actual loans may include fees that affect the amount received or the total cost of borrowing.
For the $75,000 example, choosing 10 years instead of five cuts the monthly payment by about $574 but adds about $38,115 in total interest. With a real customer, show only the offers a lender actually provides.
ADU projects vary more than almost any other residential job. A junior ADU carved out of a spare bedroom and a two-bedroom detached cottage with its own sewer lateral are both “ADUs,” but their budgets can differ by six figures. Matching the financing conversation to the project type helps homeowners set realistic expectations from the first meeting.
Financing may be relevant in these common ADU situations:
State law also affects what California homeowners pay and how long they wait. The California Department of Housing and Community Development’s March 2026 ADU Handbook, which reflects legislation in effect on January 1, 2026, says local agencies can’t charge impact fees on an ADU with 750 square feet or less of interior livable space and must charge larger units proportionally. Agencies must decide whether an ADU application is complete within 15 business days and approve or deny a complete application within 60 days when an existing home is on the lot. Size limits are now measured by interior living space, and a JADU that shares sanitation facilities with the main house requires owner occupancy. For homeowners, a unit designed at or under 750 square feet can mean lower fees and a smaller amount to finance, so it’s worth raising during design. Rules differ in other states, so check local requirements before quoting.
ADU costs depend on the type of unit, square footage, whether new utility connections are needed, foundation and site conditions, finish level, local permit and impact fees, and regional labor costs. Angi puts typical construction at $150 to $300 per square foot, with some builds exceeding $600 per square foot, and total project costs ranging from about $40,000 to $360,000.
The table below shows typical ranges for common ADU types and sizes. These are national Angi estimates that exclude permits and fees unless noted, not quotes for a specific property.
| ADU Type or Size | Typical Cost |
|---|---|
| Garage conversion | $60,000 to $150,000 |
| Basement conversion | $60,000 to $150,000 |
| Attached new construction | $100,000 to $216,000 |
| Above-garage ADU | $128,000 to $225,000 |
| Detached new construction National average for all ADUs is $180,000 | $110,000 to $285,000 |
| 400-square-foot ADU A 750-square-foot unit runs $112,500 to $225,000 | $60,000 to $120,000 |
| ADU building permits National average of $1,350; varies widely by location | $1,350 to $9,000 |
Sources: Angi (updated September 2026) for ADU costs by type, size, and permits. When comparing ADU bids, confirm whether design and engineering, surveys, soils reports, utility connection and meter fees, sewer or septic work, school and impact fees, fire sprinklers if required, site grading and access, and appliances are included.
Because ADUs are expensive, many homeowners use more than one funding source. A basic understanding of each option helps your team talk through budgets without acting as a lender or financial advisor.
| Payment Method | How It Works | When It May Fit |
|---|---|---|
| Cash or savings | The homeowner pays deposits and progress payments from savings or investments. There’s no application, credit check, or interest. | Design and permit fees, a down payment alongside a loan, or smaller JADU projects the homeowner can fund directly |
| Credit card | The homeowner charges a design retainer or small invoice to an existing card. Interest may apply on balances carried past the grace period, limits are far below ADU budgets, and your company may pay processing fees. | Feasibility studies, design retainers, and small fees the homeowner can pay off quickly |
| HELOC or construction/renovation loan | A credit line or mortgage secured by the home. Lenders review credit and property value, and some renovation mortgages base the loan on the home’s as-completed value. A traditional HELOC can take 45 to 60 days to close. | Detached and attached new construction, where the budget is well above $100,000 and the homeowner has equity and time for underwriting |
| Independent personal loan | The homeowner applies on their own with a bank, credit union, or online lender. Rates, fees, limits, and how funds are disbursed vary. | Homeowners who prefer working with their own bank or credit union |
| Contractor-offered financing | The homeowner applies through your personalized financing link and reviews offers up to $100,000 from participating lenders. When the loan funds, payment goes to your company or the homeowner, depending on the program. | Garage, basement, and junior ADU conversions, or covering part of a detached build alongside cash, a HELOC, or a construction loan |
Your team can explain these options and how they combine without telling homeowners which loan suits their finances.
Some participating lenders consider applicants with lower credit scores, including scores from about 570, but approval is never guaranteed, and borrowers with weaker credit may receive smaller offers. Lenders look at credit history, income, debt-to-income ratio, and other factors. Because each lender in the network uses its own criteria, a single application lets the homeowner see what several lenders might offer.
For a homeowner with fair credit, a full detached ADU may not be realistic through financing alone. Practical alternatives include starting with a garage conversion or JADU, designing to 750 square feet or less where state rules reduce fees, using a prefab or standard plan, or adding cash or home equity. Fire separation, egress windows, smoke and carbon monoxide alarms, and any required sprinklers should never be cut to fit a loan amount. Your team should never suggest a homeowner misstate income or other information on an application.
Contractor Financing Solutions helps ADU builders, design-build firms, and conversion specialists add third-party customer financing without lending money or managing payments. It works alongside the other funding sources ADU homeowners often use and fits the way builders move projects from feasibility to permit to construction.
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ADU financing for builders gives homeowners a quick way to see what a loan could cover. That might be a full garage conversion or junior ADU, or one part of a larger detached build funded with cash, home equity, or a construction loan. Offers go up to $100,000 for eligible homeowners, depending on the lender, and funds go to your company or the homeowner when the loan funds, depending on the program. Participating lenders handle credit decisions and repayment, so your team can talk about funding honestly from the first budget meeting.
Disclosure: Contractor Financing Solutions is not a lender and does not make credit decisions. Financing is offered by independent participating lenders. Loan approval, available amounts, APRs, repayment terms, and funding timelines vary by lender, borrower qualifications, and applicable state requirements. Checking available offers uses a soft credit check that won’t impact credit scores; a hard inquiry may occur only if a borrower chooses an offer and submits a full application. Non-recourse arrangements are subject to the applicable lender and contractor agreements and do not eliminate obligations arising from fraud, refunds, cancellations, or contractual disputes. All project costs and payment illustrations are examples, not guaranteed prices or offers of credit. Information about regulations is general and does not constitute legal, tax, or financial advice.
Estimate potential returns from offering customer payment plans.
Additional Monthly Revenue
Revenue: $90,000 → $120,000
Disclaimer: Results are estimates for illustrative scenario planning only and do not guarantee future revenue, approval rates, or closing percentages. Actual revenue will vary based on customer creditworthiness, project scope, lender terms, and merchant processing fees.
Offer monthly payments to homeowners in three simple steps, without becoming a lender or handling customer loan payments.
Share your link by text, email, estimate, or in person. Homeowners complete one quick application to explore offers from multiple lenders, starting with a soft credit check that won’t affect their credit score.
Every estimate you send without a monthly payment option is a deal you’re leaving to chance. Get started with Contractor Financing Solutions and give your next homeowner an easier way to say yes.
