An accessory dwelling runs from $147,000 to $388,000 and a new house starts at $325 per square foot, so most of these jobs are borrowed against something. Below is how that is usually done here, and who to talk to. We are builders rather than lenders, and none of this is financial advice.
If there is already a house on the lot with equity in it, a HELOC is usually the shortest road. If there is not, a construction loan is. The third is there for owners whose plan is to let the finished unit out.
A short-term loan that pays the build in stages and then converts to a standard mortgage once the work is finished. The usual route when there is no existing house to borrow against.
Equity in the house you already own, borrowed against to pay for the one going in the back yard. Often the simplest path for an accessory dwelling, because the security already exists.
Written against the rent the finished unit is expected to produce rather than against your personal income. Worth asking about if the accessory dwelling is going to be let.
A lender is being asked to underwrite a number. A number with the clearing, the foundation, the septic and the utility runs already inside it is a number they can work with. One that stops at the building is the one that comes back short halfway through the job.
A turn-key figure for the project you actually want, with the site work inside it rather than listed as an unknown.
An introduction to banks in Maine and New Hampshire that already write these loans and already know the local ADU rules.
The plans and the estimate go to the lender together. A number with the site work in it is a number they can underwrite.
Once the money is in place, the site work starts and the build follows it.
The lenders introduced here are Maine and New Hampshire banks that have already written loans against accessory dwellings in these towns. That matters mostly because they do not have to be talked through what an ADU is, or why a town that allowed none three years ago allows one now.
You are free to use your own bank, and plenty of people do. Nothing about the build depends on where the money comes from.
