Building an Accessory Dwelling Unit (ADU) in California is one of the smartest ways to increase property value, generate rental income, or create extra living space for family members. But one of the biggest questions homeowners face is: How do I finance my ADU project? Whether you are considering prefabricated homes in California prices or exploring cheap prefab homes California, understanding your financing options can make the process smoother and more affordable.

At Meka Modular, we specialize in high-quality prefab homes in California, including ADU kits California, prefab tiny homes California, and container homes in California. Below are the most popular financing options every homeowner should know in 2025.

1. Home Equity Loans and HELOCs

For many homeowners, the most accessible financing route is tapping into existing home equity. With property values in California consistently rising, this can be a cost-effective solution. A Home Equity Loan offers a lump sum with fixed interest rates, while a Home Equity Line of Credit (HELOC) allows flexible withdrawals as needed. These are ideal for funding pre built homes California or custom ADU kits California.

2. ADU-Specific Loan Programs

Several California banks and credit unions have introduced loan programs specifically for ADU development. These loans often come with favorable terms, recognizing that modular homes builders in California and California prefab home builders provide faster, more cost-efficient housing solutions than traditional construction. Such programs can help finance the best prefab ADU California projects with streamlined approvals.

3. Construction Loans

If you’re planning a larger or more customized unit—such as multi-room prefab homes in California or container homes in California—a construction loan may be the right option. These short-term loans cover the building process and then convert into a permanent mortgage once the ADU is complete.

4. Cash-Out Refinance

Another option is refinancing your mortgage and cashing out some of the equity. This can be particularly useful for homeowners looking at prefabricated homes in California prices, since refinancing can secure a lower interest rate while also freeing up funds for your ADU project.

5. Government Incentives and Grants

California has been actively promoting ADUs as a solution to the housing crisis. In 2025, new state and local incentive programs are expected to expand, offering grants or low-interest loans to homeowners adding prefab tiny homes California or pre built homes California. Partnering with trusted California modular home companies like Meka Modular ensures compliance with these programs, making you eligible for financial assistance.

6. Personal Loans

For smaller-scale projects like ADU kits California or compact container homes in California, personal loans may be sufficient. While interest rates may be higher, they require less paperwork and can be processed quickly.

Final Thoughts

Financing an ADU doesn’t have to be overwhelming. From equity loans to government incentives, homeowners have multiple pathways to bring their vision to life. At Meka Modular, we make the process even easier by offering affordable, high-quality ADUs designed to fit your budget and lifestyle.

Whether you’re exploring cheap prefab homes California, considering modular homes builders in California, or searching for California prefab home builders, Meka Modular is here to guide you every step of the way.