Frequently Asked Questions
What is an ADU or SB-9 Unit?
General ADU Questions
Are ADUs legal in my city/state? If you live in California, then absolutely yes. Most other states and cities as well. Here's how to find out.
What are the best loan options to build an ADU? ADUloans.net offers more than 400 options including construction-to-permanent loans, Fannie Mae Homestyle, FHA 203k, and jumbo options tailored to your project and property type.
How much can I borrow to build an ADU? It depends on your income, equity, and projected rental income — but ADUloans.net provides tools to estimate your budget in minutes.
What stops an ADU from being built?
What is the timeline or steps to build an ADU? How long does it take to build an ADU?
Do ADUs earn extra money? What is the cash flow?
Do I need permits in place before I apply? No — in many cases, you can apply and get prequalified before final permits are issued. ADUloans.net will guide you through the timeline.
Can I finance both the lot and construction of an ADU? Absolutely. We offer “one-time close” construction loans for new purchases, including land and ADU development.
📐 Design & Types
How many ADUs are allowed on my property?
How many ADUs are allowed on a rental property?
Do ADUs have to match the design of the main house? Only if your homeowner's association requires it.
Can I add a second story to an ADU? Most likely, but call your local permit office to ask.
Do I need separate utilities for an ADU? In most cases, yes. Only your local utility provider can answer that question.
🛠️ Construction & Permitting
Do I need a permit to build an ADU? Yes, or you could face fines and penalties.
What are the setbacks and zoning requirements for an ADU? Every municipality is different, but the State of California has minimum rules.
What if my permit office isn't abiding by State rules?
How can I fireproof my ADU?
What's better: Factory built homes, prefab, modular or traditional "Stick Built" homes?
How can I reduce the cost of construction?
Is there a difference if the ADU is attached or detached to the primary home? It’s DEFINITELY cheaper and better to finance it as attached if you can swing it. We can finance up to 110% of future value (which provides more budget) at typically .5% lower. However, if the ADU is detached, we’ll provide a complimentary rate & term refinance after construction is done to reduce your interest rate.
How do I plan in case of construction cost overruns?
📈 Rental & Income Potential
Can I sell my ADU as a home? Yes!
How much rent can I charge for my ADU?
Can I rent my ADU on AirBnB? It depends on the regulations of your local municipality.
Does ADU rental income count toward mortgage qualification? It depends on the loan and your qualifications, so book a call with us to find out.
🧾 Regulations & Legalities
Do I need to notify my homeowner's association? Can they stop me from building an ADU? They must approve your plans within 60 days. The only thing they can require is that the ADU meet the same architectural guidelines as the primary house.
What insurance do I need for an ADU? And ADU is part of your parcel and should be insured as part of your homeowner's insurance. We see an increase of $20 per ADU, typically.
Will my property taxes be reassessed? Nope! However, the ADU is tacked on to your build, typically $100 more per month. Call you country tax assessor's office to verify. And we have ways to fight that increase!
Is an ADU tax deductable? Boy, is it ever!
How can I get a permit for an unpermitted ADU?
💰 Financing & Costs
How can I finance an ADU?
Can I use a home equity loan or HELOC to build an ADU? Yes, if you have enough equity. We can lend up to 90% of your combined loan-to-value.
To pay for my ADU, is it better to use cash, stocks or a mortgage?
Can I use credit cards to build my ADU?
Can't you just tell me the interest rate?
Should I want to build my ADU until interest rates are lower? No!
Why did an appraiser give $0 value to my ADU?
Can I use future rental income from my ADU to qualify for a mortgage? Yes! ADUloans.net helps you qualify using projected rental income — even without a lease — based on appraised market rent.
👵🏽 Use Cases & Lifestyle
Can I build an ADU on my parents' home?
Is an ADU a good option for multigenerational living? Can my adult children live in an ADU?
Should I help my adult kids buy a house or build an ADU for their family?
If I let one adult child build an ADU on my property, then how do I keep it fair to the other siblings?
Can I buy a house and build an ADU? Absolutely!
Can I downsize into an ADU and rent out my main home? Absolutely! It's your property, and often the ADU is better to age in place.