How to Finance Your ADU in San Jose

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 San Jose

San Jose ADU Ally Program

City-run program offering streamlined permitting, pre-approved plans, and financing navigation.

Value: Technical Assistance + Fast-Track

GSFA Platinum ADU Grant

California state grant for ADU construction on owner-occupied properties.

Value: Up to $40,000

Top ADU Lenders Operating in San Jose

Technology Credit Union

Local HELOCs for Silicon Valley Homeowners

Rates: From 7.0%
Max Loan: Subject to LTV

Star One Credit Union

Home Equity Loans & Lines

Rates: From 7.25%
Max Loan: Subject to LTV

Opes Advisors

ADU-Specific Renovation Financing

Rates: From 7.5%
Max Loan: $500,000

RenoFi

Renovation Loans Based on After-Renovation Value

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

Villa Homes

Zero-Down ADU Financing (Build + Finance)

Rates: From 8.0%
Max Loan: $400,000

Figure

Fast Online HELOC (5-Day Funding)

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

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