How to Finance Your ADU in Portland
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 Portland
Portland SDC Waiver Program
Waives System Development Charges ($15K–$37K) if you agree not to use the ADU as a short-term rental for 10 years.
Value: $15,000–$37,000 savingsOregon IDA Program
Individual Development Account matching funds for low-income homeowners building ADUs for affordable housing.
Value: Up to $9,000 in matched savingsPortland Clean Energy Fund
Grants for energy-efficient ADU construction in underserved communities.
Value: VariesTop ADU Lenders Operating in Portland
Umpqua Bank
Local construction loans & HELOCs for ADUs- Rates: From 7.0%
- Max Loan: Subject to LTV
OnPoint Community Credit Union
Oregon-based HELOC and home equity options- Rates: From 7.25%
- Max Loan: Up to 90% 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
Unison
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
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