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Financing

Find clear, straightforward information about ADU Financing , costs, and payment options. Learn about budget-friendly solutions, flexible financing plans, and ways to maximize value without compromising quality.

Financing Options

Partner with trusted lenders to offer flexible financing solutions for ADU projects. Include an easy-to-use calculator so clients can estimate their monthly payments before committing.

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Financing

Understanding Modular Home Financing

Because modular homes are built on a permanent foundation, they are considered real property. This means you can finance a modular home with a traditional mortgage, just like any other house.

Financing Your ADU

Accessory Dwelling Unit (ADU) loans can finance your ADU, whether you call it an in-law unit, granny flat, backyard apartment, or secondary dwelling unit. These loans can significantly increase your home's value. While the average cost of an ADU can range from $100,000 to $300,000, keep in mind that rental income for ADUs in California can range from $1,900 to $2,300 per month for a two-person family, offering a substantial return on investment.

Funding Options for Modular Homes and ADUs

When it comes to modular home financing, several loan options can help you secure the funding you need. These include:

If you're building a new modular home, you'll need a construction loan. If the land isn't already acquired, a land loan will also be necessary. Be aware that construction loans often require higher down payments.

Home Equity Line of Credit (HELOC) lets you borrow against your home's equity, offering a revolving line of credit up to a set limit. With HELOC, you only pay interest on the amount of cash you've actually drawn, typically over a period of up to 10 years.

Loan Requirements

Modular Home Loan Requirements

As you move through the modular home purchase process, here are the typical loan requirements you’ll encounter:

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Credit Score

While lenders often prefer good credit, many are willing to work with prospective modular home buyers who may not have a perfect score. For instance, the USDA does not have a minimum credit score requirement.

Down Payment

A 20% down payment isn't always necessary. In fact, some loan programs require no down payment at all.

Sufficient Income

You'll need to demonstrate enough income to comfortably cover your loan payments.

Debt-to-Income (DTI) Ratio

Most lenders set a maximum DTI ratio, typically around 43%, though this can vary. If your DTI is high, consider paying down other debts before applying for a home loan.