Real Estate Agents
Help your clients qualify for more home!

Adding an ADU will increase your clients buying power Significantly.

See below example.

4-Step Process: Adding an Accessory Building to Your Home Purchase

Step 1: Include the Accessory Building in Your Loan

When purchasing your home, you can add the cost of an accessory building (e.g., guest house, in-law suite, or ADU) directly into your mortgage.

Example: Home price + $70,000 for the accessory building = total loan amount.
This allows you to finance the project upfront without needing separate financing.

Step 2: Finance with Long-Term Affordability

Because the accessory building is rolled into your 30-year loan at 6%, the cost is spread out over time.

Approximate added monthly loan payment for $70,000 at 6% over 30 years = about $420/month.
This is a manageable way to build equity in both your home and the new structure.

Step 3: Generate Monthly Rental Income

Once built, the accessory building can be rented out.

Estimated rental income = $1,500 per month.
After covering the $420 loan cost, that’s $1,080 in positive cash flow each month.

Step 4: Increase Buying Power & Value

The rental income can effectively help you:

Qualify for a larger home since lenders may consider rental income when calculating your debt-to-income ratio.
Offset monthly housing expenses, freeing up your budget.
Build long-term equity while owning a more valuable property with an additional dwelling unit.

The Numbers, Adding and ADU to your home purchase.

Purchase Price $500,000

Monthly Rental Income $1,500

ADU Cost $70,000

Interest Rate (Annual) 6.00%

Term (Years) 30

Down Payment % 20.00%

Without ADU With ADU

Down Payment$100,000Down Payment$114,000

Loan Amount$400,000Loan Amount$456,000

Monthly Payment (P&I)$2,398Monthly Payment (P&I)$2,734

Monthly Rental Income$0Monthly Rental Income$1,500

Net Effective Monthly Housing Cost$2,398Net Effective Monthly Housing Cost$1,234

Net Monthly Cost Difference (With ADU vs. Without)-$1,164

Estimated Annual Savings (if negative above)$13,971

Using 75% of the rental income ($1,125/month) as qualifying income,

the borrower could support an additional ~$187,600 in mortgage at 6% over 30 years.

👉 In other words, the ADU rental stream can effectively increase their buying power by about $187,600 more home value.

$187,000 more in purchasing power!!