How to Finance Your ADU in Los Angeles
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 Los Angeles
LA ADU Accelerator Program
City of LA offers streamlined permitting through Standard Plan Program with pre-approved designs, reducing soft costs.
Value: Faster permits + reduced design costsCalHFA ADU Grant (CLOSED)
Previously offered up to $40K for ADU construction. Fully allocated as of December 2023. May reopen with future state budget allocations.
Value: Currently UnavailableLADWP Rebates
LA Department of Water & Power offers rebates for energy-efficient appliances and solar installations in new ADUs.
Value: Varies by programTop ADU Lenders Operating in Los Angeles
Kinecta Federal Credit Union
SoCal credit union with ADU-specific loan programs- Rates: From 6.99%
- Max Loan: Up to 90% LTV
LA Federal Credit Union
Los Angeles-based HELOC and home equity- Rates: From 7.25%
- Max Loan: Up to 85% LTV
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
Point
Home Equity Investment — no monthly payments- Rates: No monthly payment
- Max Loan: Up to $500,000
LightStream
Unsecured Home Improvement Loans- Rates: From 7.49%
- Max Loan: $100,000
Prosper
Unsecured Personal Loans for smaller ADUs- Rates: From 8.99%
- Max Loan: $50,000
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