Finance of America launches new ADU refi option
Oct 6, 2021
Finance of America Mortgage LLC (FAM), has launched a new feature on certain conforming loan products that may enable homeowners to refinance and consolidate loans used to build an accessory dwelling unit (ADU) on their property at lower interest rates.
FAM's ADU refinance option is designed to allow some borrowers to refinance their primary mortgage and certain ADU financing like a credit card or home equity line of credit into a single, new conforming mortgage loan.
This option is intended to help borrowers potentially reduce their monthly interest payments if they financed the construction of the ADU at a higher rate.
"We recognized a need to help increase access to new housing in areas that have increased density, as well as assist homeowners who wish to leverage that garage or section of land to generate additional income," said Bill Dallas, president of FAM. "The demand for ADU development will continue to grow, especially as the pandemic has shifted housing preferences and more cities adopt ADU-friendly zoning changes. We're ready to help expand access to this cost-effective way for homeowners to enhance their properties and make the dream of homeownership more attainable for the modern family."
Beyond the potential rate reduction, FAM's ADU offering is designed to help create more affordable housing options and allow homeowners to take advantage of recent state changes that have encouraged the construction of ADUs.
Sometimes called in-law suites or "granny flats," ADUs can be detached or attached to a home. Some examples of attached ADUs might be a guest space converted above an attached garage or a basement. Detached ADUs include carriage houses, guest cottages, or other structures that are free-standing from the main home structure.
ADUs are seen as one solution to help address the nation's growing housing affordability crisis as homeowners can convert a garage or unused portion of their lot into a new housing unit to generate a new stream of income by renting it out.
Download Mortgage Calculator Toolkit App
Current version for Android devices - 1.2.1