Accessory Dwelling Units (ADUs) are becoming increasingly popular in Santa Barbara and Ventura Counties. They provide additional living space, increase property value, and can generate rental income. If you’re 62 or older and own your home, a reverse mortgage can be a great way to fund the construction of an ADU.

What is a Reverse Mortgage?

A reverse mortgage allows homeowners aged 62 and above to convert a portion of their home equity into cash. Unlike traditional loans, no monthly mortgage payments are required. The loan is repaid when the homeowner sells the home, moves out, or passes away.

Benefits of Building an ADU with a Reverse Mortgage

1. Access to Funds: Use the cash from a reverse mortgage to cover the costs of building an ADU without dipping into your savings or taking on additional debt.
2. Increase Property Value: An ADU can significantly increase the value of your property, making it a smart investment for the future.
3. Generate Rental Income: Rent out your ADU to generate additional income, which can help cover living expenses or enhance your retirement lifestyle.
4. Stay in Your Home: Enjoy the benefits of an ADU while continuing to live in your primary residence. There’s no need to sell your home to finance the construction.
5. No Monthly Mortgage Payments: With a reverse mortgage, you won’t need to make monthly mortgage payments, providing additional financial relief.

Steps to Get Started

1. Evaluate Your Eligibility: Ensure you meet the basic requirements: being 62 years of age or older, owning a home in Santa Barbara or Ventura County, and having significant home equity.
2. Consult a Professional: Speak with a knowledgeable reverse mortgage loan officer to discuss your plans and determine how much you can borrow.
3. Plan Your ADU: Work with a contractor to design your ADU and estimate the costs. Make sure to comply with local zoning and building regulations.
4. Apply for a Reverse Mortgage: Complete the application process with the guidance of your loan officer

Building an ADU can provide valuable benefits and financial opportunities. Contact us today to learn more about how a reverse mortgage can help you achieve this goal in Santa Barbara and Ventura Counties.