Financing is, by far, the biggest barrier for most homeowners seeking to build an ADU on their property. Recently, I was trying to gain some clarification about three conventional loan products that can be used to help fund the construction of an ADU: First Mortgage Cash Out Refinance- taking out extra money when refinancing your ‘first mortgage’ .
Regan Gray and her husband George Okulitch were looking for a way to increase the value of their rental property and landed on building an ADU on the alley in the backyard. Regan likes that with the ADU they created more housing without changing the look and character of the neighborhood.
Here is nicely formatted summary to the ways ADUs are being financed in Portland today. Even if you don’t live in the area, it should provide some ideas and precedents you can use. Enjoy!
Government rules strongly limit the development of ADUs, but they are not the only factor.
If the “grassroots” nature of their development is properly understood, ADUs have a lot of potential to address affordable housing needs.
Will building an ADU raise your property taxes? Very likely yes. Is that a good thing for the community?
Appraisals for ADUs have always been tricky. Here is a new guide to help appraisers, real estate agents, and finance professionals understand current “best practices” for appraising ADUs.
Financing your ADU has become easier. I am sure that when someone mentions financing, or budgeting, or anything to do with numbers for a project there is a slight shudder … Continue reading
In most markets, financing the construction of ADU’s is notoriously difficult. When constructing an ADU, you need to have all the cash upfront to pay a contractor for the cost … Continue reading
Today the Appraisal Journal publishes a research paper about residential properties with accessory dwelling units (ADUs). The paper describes an income-based method for appraising properties with ADUs, and concludes that … Continue reading
As a mortgage broker in the Portland area for almost 8 years, I’ve learned “the harder I work, the luckier I get” is really true. In this instance hard work … Continue reading
I spent a lot of 2011 learning about Accessory Dwelling Units (also known as in-law units, granny flats, backyard cottages, etc). Beat that in terms of geekiness! (Okay, I bow … Continue reading
In a post on my personal ADU blog, I described an awesome building incentive that was made available for my ADU from the Energy Trust of Oregon (ETO). My ADU … Continue reading
[update Nov. 2012: the paper, including updated results, is out in Appraisal Journal… click here] This year I’ve been working with appraiser Taylor Watkins of problem of appraising properties with … Continue reading
(Update January 2013: please note that the research on which the following piece was based has now been published in Appraisal Journal. Please read the full text of that article … Continue reading