How
much will
it cost?

An ADU can range in cost from under $100,000 to $300,000, depending on the type of unit. It’s important to think about your budget and communicate it to design and construction professionals early-on, as it can affect your ADU options. Typically, a conversion of your existing residence or garage will be in the less expensive half of this range. New construction, such as a detached ADU, tends to be more costly. The size of your ADU will also affect the cost. You should work with the necessary design and construction professionals for guidance about your specific plans.

Architectural renderings

Construction labor and materials

Upgraded/upsized underground utilities

City and County fees

Plat of survey

General contractor costs

Increased property taxes & maintenance

In some cases, construction costs may also include the following:

Flexibility

MULTIPLE OPTIONS

Paying For Your ADU

The best way to finance your ADU will depend on the cost of your project and your financial position. 

01

Home Equity Line of Credit (HELOC)

If you have enough equity in your property, you may be able to use a HELOC to build your ADU. A HELOC is a revolving source of funds which you can access as you choose, and it is a second mortgage on your property.

02

Cash-Out Refinance Mortgage

With a cash-out refinance, you turn a portion of your equity into cash, and start a new first mortgage with a higher principal amount.

03

Renovation Mortgage

Similarly, you can use the loan proceeds from a Renovation Mortgage to finance your ADU. Different from a cash-out refinance, these loan products consider the “as-completed” value of your property, including the ADU, to determine how much you can borrow. The FannieMae Homestyle Renovation loan and the Freddie Mac CHOICERenovation loan are two common renovation mortgages that can finance ADUs.

Let's Work
Together

Whether you’re interested in building your own ADU or you want to join AARP Illinois in bringing the ADU option to more communities across Illinois, we’d love to hear from you.
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