Finance Of America Mortgage Launches ADU Refinancing Option
Summary
This option helps borrowers potentially reduce their monthly interest payments if they financed the construction of the ADU at a higher rate. Beyond the potential rate reduction, FAM says its new 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. With the scarcity of new land to build on in many localities and the high cost of new construction, many cities have adopted ADU-friendly zoning ordinances to increase housing inventory. The growth in ADU development has been seen around the country, reaching about 1.4 million units as of 2019, according to a Freddie Mac report, and demand is highest in some of the most rapidly-growing regions in the U.S. such as California, Florida and Texas. ADUs are also an attractive living arrangement for multigenerational households, particularly for homeowners who have aging parents or adult children who need affordable housing.