ADU construction financing — is this a real market?

Owen, ADU financing is a growing niche but the small loan sizes are a real challenge for most private lenders. Options I've seen work: 1. Home equity-based products: if the homeowner has equity, a HELOC or cash-out refi can fund the ADU 2. ADU-specific lenders: a few lenders have emerged with ADU-specific programs (Mosaic, Renovate America, some credit unions) 3. Construction loans: some private lenders will do small construction loans ($150k+) for ADUs The economics for brokers are tough at these loan sizes. I typically refer ADU inquiries to a mortgage broker who specializes in residential products rather than trying to force them into a private lending box.

Marcus — the referral approach makes a lot of sense. I've been trying to place these with private lenders and struggling. Going to build a referral relationship with a residential broker instead.

Small loans are small fees. Know when to refer out.