Rancho Cucamonga Office

ADU Financing

Welcome to Homes by NPHS, your trusted partner in building Accessory Dwelling Units (ADUs) in Southern California.

We understand that traditional financing avenues may not always align with the circumstances of newer homeowners or households that possess substantial home equity but limited liquid assets. That’s why Homes by NPHS introduces a groundbreaking loan solution designed specifically for ADU construction. Eligible homeowners can access up to $200,000 to finance the purchase of a factory-built ADU, empowering you to realize your ADU dreams seamlessly.


Accessory Dwelling Unit Loan

Complete the Inquiry Form to unlock the financial solutions you need to turn your ADU vision into reality.

ADU Financing Available Throughout Southern California

When embarking on the journey of constructing an ADU, securing the right financing option is paramount. That’s why we’ve teamed up with reputable lenders and credit unions to offer you competitive rates and flexible terms, all without the hassle of refinancing.

Our lending partners extend their services throughout Southern California, spanning Los Angeles, Orange, and San Diego Counties, ensuring that wherever you reside, there’s a financing program tailored to your needs.

Home Equity Line of Credit (HELOC)

A home equity line of credit, sometimes referred to as a “second mortgage”, is an alternate way to finance your ADU construction. The benefit of a HELOC is that you can withdraw funds from your line of credit as needed, and interest is only paid on the amount used.

Renovation Loan (Fannie Mae Homestyle)

Renovation loans are a type of construction loan that allows homeowners to finance their project based on future appraised value. This type of loan is beneficial if you do not have equity in your current home. It usually takes 60-90 days to fund a renovation loan due to the collaboration between the lender, homeowner, contractor, and HUD inspector. The post construction value of the property is determined by the appraiser using the design and contractor bids and appraisal of the existing dwelling. The lender must then work with a HUD inspector who will oversee the work and pay the contractor as per the payment schedule. The bank does not give the funds directly to the homeowner.

Home Equity Conversion Mortgage (HECM, ages 62+)

A home equity conversion mortgage is better known as a “reverse mortgage”. In order to qualify, one of the homeowners must be 62 or older, the property must be your primary residence and must have significant equity in the home. The owner takes equity out of their home and can use those funds to finance their ADU project. Disbursements are usually monthly, given as a line of credit without fund control or a combination of both.  Third-party financial counseling is mandatory for a HECM loan. Some of the benefits of a “reverse mortgage” are interest rates are not based on credit score and history and there is no minimum monthly payment.  HECM loans are no recourse FHA loans and there is no time limit as long as you reside in the home.

Cash-Out Refinance

A cash-out refinance will replace your current mortgage with a new mortgage for more than the current amount owed. In order to qualify for this type of loan, you need to have more equity than your present loan amount. Limits usually apply as to what percentage of your home’s value can be financed, typically 80% LTV. The difference goes to you in cash which can be used towards the construction of your new ADU.

Construction Loan

A construction loan is yet another option for financing your ADU if you lack equity in your home. These are usually temporary loans used to finance a building project. Once construction is complete, you can refinance into a single loan that includes the primary dwelling. Loan amounts are usually $150,000 or more, cover all construction costs, and carry interest-only payments.

Not sure which loan option is right for you?

Contact us today so that we can connect you with our vetted lenders to learn more.