Are you looking to construct a structure in Los Angeles County, CA? If so, you may be wondering what financing options are available to you. Fortunately, there are a variety of grants and loan programs that can help middle-class homeowners finance the construction of an Accessory Dwelling Unit (ADU).If your garage structure is in good condition, it may be more cost-effective than new construction. A construction loan can help those with less equity in their properties borrow the money they need to build an ADU. However, this option requires you to have accumulated equity in your home.
Additionally, you will need to refinance the loan, which could mean losing a very good fixed rate. Alternatively, a cash-out refinance allows you to refinance your first mortgage and free up some of the capital accumulated in your home to finance the construction of your ADU. This consolidates the financing needed for construction and your first mortgage into a single loan. The cost of constructing an ADU is often a challenge. Fortunately, many states have created financial incentives to build ADUs to combat the housing crisis. Additionally, Los Angeles has launched an initiative called the Standard Plan Program for Accessory Housing Units, which streamlines the permitting process and makes it cheaper by offering pre-approved plans. If your credit score isn't high enough to get a regular construction loan, an FHA construction loan can help.
This type of loan accumulates the costs of building a home from scratch. Even when a housing unit is built entirely with borrowed funds, it can generate positive returns through rentals and an increase in the value of the property in the future. Finally, a RenoFi loan is perfect for financing an ADU. This type of loan takes into account the value of your home after construction is finished and allows you to access this increase up front to finance construction. If you're looking for ways to finance the construction of a structure in Los Angeles County, CA, there are several options available to you. From grants and loan programs to FHA construction loans and RenoFi loans, there are plenty of ways to get the funding you need to make your vision a reality.