California’s ADU laws have made accessory dwelling units faster and cheaper to build than ever before — but most homeowners do not know how to finance them. DiVita Home Finance offers multiple ADU financing solutions, from cash-out refinances to renovation loans, for California homeowners ready to build.
📞 Call (800) 239-1103 to discuss ADU financing options for your property.
What Is an ADU?
An accessory dwelling unit (ADU) is a secondary housing unit on a single-family or multi-family property — a converted garage, a detached backyard cottage, an in-law suite, or a basement apartment. California law (AB 68, AB 881, SB 13, and subsequent bills) has dramatically streamlined ADU permitting since 2020, and most California cities must now approve ADU applications that meet objective standards.
ADU Financing Options
Cash-Out Refinance
If you have significant equity in your home, a cash-out refinance converts that equity into cash — which you use to build the ADU. This gives you a single new mortgage at a fixed rate. Best for: homeowners with a low existing rate who want to access equity without a second mortgage. Note: cash-out refis add to your mortgage balance and rate, so the math needs to work.
HELOC or HELOAN
A HELOC or home equity loan lets you borrow against your equity without replacing your existing mortgage. If you have a low first mortgage rate, this is often the preferred structure — you keep your first mortgage intact and add a second lien for ADU construction costs.
Construction-to-Permanent Loan
A dedicated ADU construction loan funds the build in draws as work progresses, then converts to a permanent mortgage at completion. Available as a standalone second mortgage on properties with sufficient equity.
RenoFi Loan / Renovation Loan
RenoFi-style loans are structured on the after-renovation value (ARV) of your property — the value your home will have once the ADU is complete. This can unlock significantly more borrowing capacity than a standard HELOC based on today’s pre-ADU value.
Can ADU Rental Income Help You Qualify?
Yes — with documentation. If the ADU already exists and is rented, rental income can count toward mortgage qualification. For proposed ADUs, some lenders will use a market rent estimate (from an appraisal) to credit future rental income — boosting your qualifying income and your borrowing capacity.
ADU Value Impact
A well-built ADU in a California market typically adds $150,000 to $400,000+ to the property value, depending on size, quality, and location. In high-demand Marin County, San Francisco, and Bay Area markets, ADUs commanding $2,500 to $4,500/month in rent represent a compelling investment for homeowners who can finance the build.
📞 Call DiVita Home Finance at (800) 239-1103 to discuss which ADU financing structure makes the most sense for your California property and financial situation.
About DiVita Home Finance
DiVita Home Finance is a small, family-owned mortgage company based in Marin County, California. When you call, you speak directly with Michael DiVita — the owner — not a call center, not an out-of-state rep, not someone reading from a script. We’re here for a low-key, no-obligation conversation about your situation.
We take your privacy seriously. We will never sell your information to third-party lenders or lead generation companies — unlike many of the large mortgage platforms. Your inquiry stays with us, period.
📞 Call: (800) 239-1103 | 💬 Text Michael directly: (310) 849-9124
