ADU (Accessory Dwelling Unit) Loans
What is an ADU? Accessory Dwelling Units, also called guest homes or tiny homes, are smaller dwelling structures located on the property of an existing single-family home.
Loan Features
- Owner Occupied or Investment Property
- 1st or 2nd position
- Cash out refinance up to 65% of current Loan to Value (ARV) OR Fund-controlled construction loan up to 65% of the future After Repair Value (ARV).
- Fast closing usually in less than 10 days
- Lower FICO Scores OK
- No Tax Returns or W2s Required
- No Bank Statements Required
- No YTD Paystub Required
ADU Benefits
- Create Additional Income Stream!
- New and Fast-growing market
- New State Laws Make it Easier than Ever Before.
Example: Investment Property ADU Construction Request
- Current Value $820,000
- After Repair Value $1,200,000
- Amount Owed on Existing 1st Mortgage $580,000
LTV Option
Based on the Current Value (LTV) of $820,000, the max cash-out refinance loan amount at 65 LTV would be $533,000, which would not work in this case because they already owe $580,000.
ARV Option
However, based on the After Repair Value (ARV) of $1,200,000, the max ARV construction loan at 65 ARV would be $780,000. Because the borrower owes $580,800 on their 1st mortgage, they could get about $200,000 cash out to build an ADU. This could be done in either 1st or 2nd lien position, depending on their terms on the current 1st mortgages. For the ARV loans, borrowers need to provide 2-3 recent comparable sales within 1 mile that have ADU’s.
Apply Now
To get started, please complete our application, call us at 844-574-5626 or schedule a call with a loan officer below.
.
Schedule a Call
To determine the right loan program with you, schedule some time with a loan officer to discuss your options. Call us at 844-574-5626 now or schedule a time to meet with a loan officer.