How to Finance Your ADU in Honolulu

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 Honolulu

Hawaii Housing Finance & Dev Corp (HHFDC)

State-backed ADU financing assistance and grants for homeowners building affordable ADUs.

Value: Varies — grants + low-interest loans

Hawaiian Community Assets

Nonprofit offering ADU navigator services, pre-development grants, and construction financing assistance.

Value: Up to $40,000

Top ADU Lenders Operating in Honolulu

Bank of Hawaii

Local HELOCs for Island Homeowners

Rates: From 7.5%
Max Loan: Subject to LTV

First Hawaiian Bank

Home Equity & Construction Loans

Rates: From 7.25%
Max Loan: $500,000

Hawaii National Bank

Residential Construction Financing

Rates: From 7.75%
Max Loan: $400,000

Hawaiian Community Assets (HCA)

ADU-Specific Grant & Loan Navigator

Rates: Varies
Max Loan: Varies

RenoFi

Renovation Loans Based on After-Renovation Value

Rates: From 7.25%
Max Loan: $500,000

Figure

Fast Online HELOC (5-Day Funding)

Rates: From 7.75%
Max Loan: $400,000

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