About ADU Properties
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Are you dreaming of transforming your property and adding an Accessory Dwelling Unit (ADU)? I'm Jeff, and I'm here to turn that dream into reality.
Tailored Solutions: I understand that every ADU project is unique. I'll work with you to create a financing solution that fits your needs, ensuring a seamless and stress-free process.
Experienced Guidance: With years of experience in financing ADU projects, I bring the expertise needed to guide you through every step of the process. From planning to completion, I'm here for you.
Ready to embark on this exciting journey of adding value to your property and enjoying the benefits of an ADU? Contact me today, and let's discuss how we can make your ADU dreams a reality!
What is a Accessory Dwelling Unit?
By definition an Accessory Dwelling Unit (ADU) is a secondary unit, house, or apartment that shares the building lot of a larger primary home.
ADU's have become an attractive option and have become increasingly popular in providing extra living space on the property or even a potential rental opportunity.
This is also known as "House Hacking" to reduce increasing housing costs.
How to Get Started?
Speak with a loan officer to identify your maximum amount of finance and payment for ADU.
Speak with a contractor that builds ADUs.
Determine zoning and permit criteria.
Identify the right type of ADU to build for your needs.
Figure out the cost to build the ADU.
Complete bid forms (the cost breakdown)
ADU Guideline Highlights
Our unique financing option is your sole choice when it comes to utilizing rental income for an Accessory Dwelling Unit (ADU) that hasn't been built yet. With our solution, you can leverage the potential rental income to qualify for the construction of your ADU. Choose the only option that empowers you to turn your ADU plans into reality while maximizing your financial capabilities.
HomeStyle and CHOICE allow free standing or attached ADUs.
Standard 203(K) allows only attached to the primary residence ADUs.
CHOICE also allow potential rental income to be used to qualify.
Building an Accessory Dwelling Units:
Build a Tiny Home Free Standing In the Back Yard with home style or choice that is not attached.
FHA 203(K) the ADU has to be attached.
Pros
Endless potential uses for the space.
Potential increases to a property's value.
Potential for passive income.
Nearby utilities to tap into (water/sewer/gas/electric)
Prefab and modular units are allowed.
Rental Income is allowable for qualification on CHOICE.
Cons
Property taxes may increase.
Possible issues with renters.
Maintenance.
Not all jurisdiction or homeowners associations allow ADUs.
Manufactured homes are not allowed.
Appraisal must have one like comp with an ADU.
What's Included in an ADU?
ADUs typically tap into the utilities of the primary house on the property and must include a kitchen, a bathroom, a living area/bedroom, and a private entrance.
Building a ADU can cost anywhere form $80,000-$140,000, or as much as $180,000.
Must be in accordance with zoning laws.
Permits must be attainable.
Costs to Consider:
Property Costs
Contractor and Labor
Construction vs a Prefab ADU Kit
Amenities (Electrical, Plumbing, HVAC)
Appliances
Q: What if there are separate meters for ADU (Water or Electric)?
A: This is acceptable assuming it is classified as an accessory dwelling unit and not a second unit (2-unit property or duplex).
Q: When is it considered a 2nd Unit?
A: It depends on zoning and how the local building department defines the existing unit. Planning and zoning will be able to provide whether you specific unit is considered a 2nd Unit. Separate meters or addresses are not determinative.
Providing a Solutions
More homeowners are seeking homes with flex space as an ADU.
Work from Home: Leverage your ADU as a long-term rental, and the monthly rent has potential to cover the cost building the unit. It's a smart financial move that can turn your property into a self-sustaining investment.
Rental Unit: An ADU isn't just functional; it's an asset that has potential to significantly boost your property's overall value. Enjoy the benefits of a higher appraisal and increased equity.
Extend Family Space: Over time, your ADU has the potential to generate consistent, passive income for your family. Imagine the financial freedom and flexibility that come with having an additional revenue stream.
Why Build an Accessory Dwelling Unit?
Long-Term Rental Unit
In Some areas an Airbnb
Children to Live In
Parents to Live In
A Separate Office from the Home
Place for Visitors to Stay
Backyard Cottage
Pool House
Flex Space
Guest House
Mother-In-Law Unit
Garage Conversion
Office Space
Unlock Extra Income with an ADU!
Have you considered turning your property into an investment opportunity? Adding an Accessory Dwelling Unit (ADU) can be a game-changer. Here's how:
1. Long-Term Rental Potential: Leverage your ADU as a long-term rental, and the monthly rent has potential to cover the cost building the unit. It's a smart financial move that can turn your property into a self-sustaining investment.
2. Increase Property Value: An ADU isn't just functional; it's an asset that has potential to significantly boost your property's overall value. Enjoy the benefits of a higher appraisal and increased equity.
3. Earn Passive Income: Over time, your ADU has the potential to generate consistent, passive income for your family. Imagine the financial freedom and flexibility that come with having an additional revenue stream.
Net Rental Income Calculation Requirements
Lease and ADU rental analysis 75% of the gross monthly rent.
Schedule E to calculate the net rental income.
The rental income generated from an ADU may be considered in an amount up to 30% of the total stable monthly income that is used to qualify the borrower for the mortgage.
Contact Me About a Renovation Loan
We appreciate your interest in our mortgage services.
Jeff Carlston is a Licensed Loan Officer NMLS #315077 with Augusta Lending Utah NMLS# 353774 Align Lending Michigan NMLS# 2041154
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Renovation Loan Webinar Outline:
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Renovation Programs
Calculating the Loan Amount
Repairs and Improvements
Forms, Contractors, and Bids
What to Do After Closing
Draw Process
Resources
Augusta Lending - Utah
NMLS 353774
Align Lending - Michigan NMLS#2041154
Renovation Loan Flyers
About Renovation Loans
Renovation Loan Webinars
The information provided on this page is for general informational purposes only and is not financial advice. Loan products and terms are subject to change. Specific eligibility and terms may vary based on individual circumstances. This website is not a lender, and loan approval is subject to credit approval by the lender. Use of this site does not create a client-lender relationship.
Any reliance on the information presented is at your own risk. Consult with a qualified loan officer before making any financial decisions. We strive for accuracy but make no warranties about the completeness, accuracy, or suitability of the information. We are not liable for any loss or damage arising from the use of this website. This disclaimer is subject to change without notice. Accessing and using this website indicate your agreement with these terms.
