How to Finance Your ADU in Fort Collins
Compare rates, find local lenders, and discover local grants to fund your backyard cottage or garage conversion in 2026.
Financing Options Comparison
| Loan Type | Rate | Max Amount | Pros | Cons |
|---|---|---|---|---|
| HELOC | 7.5% - 9.5% | Up to 85% LTV | Flexible draws Interest only period | Variable rates Requires current equity |
| Cash-Out Refi | 6.5% - 7.5% | Up to 80% LTV | Fixed rate Single mortgage | Resets 30yr clock High closing costs |
| Construction Loan | 7.0% - 9.0% | Based on future value | Great for low equity Large loan amounts | Complex draws Higher rates initially |
| Home Equity Investment | No Monthly Pmt | Up to $300k | No monthly payments Easy qualification | Give up future appreciation Expensive long-term |
Local Grants & Incentives in Fort Collins
Larimer County Affordable ADU Permit-Fee Waiver (2026)
Larimer County will waive building permit fees for new ADUs if the owner commits to renting at an affordable rate — the county estimates savings of roughly $3,000–$14,000 per project. Funded by a $105,000 Colorado ADU Grant, it is expected to cover about 8–10 units in unincorporated Larimer County and launch in mid-2026. City of Fort Collins lots may not qualify; confirm eligibility with the County.
Value: $3,000–$14,000 waivedColorado ADU Finance Program (CHFA)
New $8M state program of relending, interest-rate buydowns, and credit enhancement so participating lenders can extend ADU loans to low- and moderate-income Colorado homeowners in DOLA-certified ADU-supportive jurisdictions. Rolling out to residents in 2026 — ask lenders whether they participate.
Value: Rate buydown + relendingAccessory Dwelling Unit Grant Program (ADUG)
DOLA grants awarded to local governments that support ADUs. Homeowners benefit indirectly through pre-approved plans, fee waivers, and streamlined review in jurisdictions that win awards. Confirm whether Fort Collins or Larimer County participates.
Value: Varies (via jurisdiction)Top ADU Lenders Operating in Fort Collins
Elevations Credit Union
Larimer County HELOCs & Home Equity Loans (Fort Collins Branches)- Rates: From 7.5%
- Max Loan: Subject to LTV
FirstBank (Colorado)
Local Construction Loans & HELOCs- Rates: From 7.25%
- Max Loan: Subject to LTV
Canvas Credit Union
Northern Colorado Home Equity Lines & Loans- Rates: From 7.5%
- Max Loan: Subject to LTV
Bank of Colorado
Fort Collins Construction-to-Permanent & Renovation Loans- Rates: From 7.75%
- Max Loan: $500,000
CHFA ADU Finance Program
State Rate Buydown & Relending for Income-Qualified Owners- Rates: Rate buydown
- Max Loan: Income-qualified
RenoFi
Renovation Loans Based on After-Renovation Value- Rates: From 7.5%
- Max Loan: $500,000
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