Steps to Building an ADU: Checklist & Flowchart

This checklist provides a clear, steps for homeowners planning to build an Accessory Dwelling Unit (ADU), integrating financing, design, permits, and construction. The first steps are free: Feasibility and Financing. Those determine your path forward.

Step 1: Check Local Zoning & Property Feasibility

·         Confirm your property allows an ADU

·         Understand size limits, setbacks, and height restrictions

·         Check for pre-approved ADU plans to speed permitting

Step 2: Get Loan Pre-Approval (Financing!)

·         Determine your maximum loan amount before spending on designs or permits

·         Explore financing options:

• Construction or renovation loans if you don't have much equity or recently purchased your home

• Digital HELOCs for smaller, fast-access projects

• Cash-out refinance if you have sufficient equity

Ensure budget includes design, permits, utility connections, and contingency

Step 3: Engage Designer / Architect

·         Create plans that comply with zoning and your pre-approved budget

·         Consider pre-approved ADU designs to save time and money

Step 4: Select Builder / Contractor

·         Choose contractors experienced with ADUs

·         Get multiple bids and check references

·         Ensure alignment with financing and construction timelines

Step 5: Finalize Financing

·         Submit detailed plans, contractor information, and cost estimates to lender

·         Lock in funding schedule for construction draws

Step 6: Submit Permits & Begin Construction

·         File plans with your local building department

·         Pay required permit fees

·         Schedule inspections and follow approved plans

Optional: Digital HELOC Usage

·         Ideal for smaller projects, initial design, and permit fees

·         Flexible draws and fast approval through ADU-focused lenders

·         Works alongside larger construction loans for phased funding

✅ Key Takeaways

·         Pre-approval first: Avoid wasted money on designs or permits

·         Budget-driven design: Ensure ADU plans fit financing and zoning limits

·         Specialized lenders help: Use ADU-focused lenders for appraisal advocacy and flexible financing

·         Stepwise approach: Follow this sequence to reduce delays, cost overruns, and surprises