Once you know roughly what your ADU will cost, the next question is how to pay for it. Most homeowners choose between two paths: paying cash as the project progresses, or financing against the equity in their home. Neither is universally "better" — the right choice depends on your liquidity, your timeline, and how you want your monthly budget to look during construction.
The Cash Program
Paying cash means covering the project cost in draws as work is completed — typically tied to milestones like permit issuance, foundation, framing, and final inspection. Because there's no lender involved, this is our lowest total price: no interest, no loan fees, no underwriting timeline to wait on.
The tradeoff is obvious — you need the liquidity to cover draws as they come due, without financing to spread that cost over time.
The Equity Program
Financing against your home's equity lets you build now and spread the cost over time, using the value you've already built up in your property as collateral. Our Equity Program is available up to $600,000, based on 75% loan-to-value (LTV) — meaning the loan amount plus your existing mortgage balance generally can't exceed 75% of your home's current value.
The Equity Program also includes a 12-month period with no payments due from close, which can be useful if you're timing the project around a move-in date, a tenant placement, or simply want breathing room before payments begin. Interest may still accrue during that period, so it's worth running the numbers on total cost, not just the monthly payment.
A quick way to think about it
- Choose Cash if: you have the liquidity available, want the lowest total cost, and don't want to go through a credit-based approval process.
- Choose Equity if: you'd rather preserve cash on hand, want time before payments start, and have enough home equity to qualify.
Either way, the price itself doesn't change based on how you pay — every AAADU quote is one final, out-the-door number, so you're comparing apples to apples. The only difference between programs is how and when you pay it.