Building an ADU and a nest egg

$399,350 real estate improved

When Marisol and Sean purchased their first house in southwest Portland, they chose a property where they could build an accessory dwelling unit (ADU). They were interested in the potential for an ADU to help them build wealth, increase the value of their home, save for retirement, and provide housing.

As former renters, they knew just how expensive Portland had become and how tight the rental market is. They were thrilled to play a small part in addressing Portland’s housing crisis by renting their ADU as a long-term rental.

However, when Marisol and Sean started looking into how to finance their ADU project, they encountered obstacles. New to real estate, they were overwhelmed by technical banking terms (loan-to-value, debt-to-income, and ability to repay) and told, “No,” by bank after bank. Marisol recalls, “Many banks said we didn’t have enough equity in the home and suggested we wait a few years.” In short, they didn’t qualify for bank financing and they didn’t have enough cash on-hand nor did they want to take out a personal loan.

Reflecting on these setbacks, Marisol remembered an ADU presentation by Craft3 she’d attended at Hacienda Community Development Corporation, where she works. She got back in touch with Craft3. Because our ADU loans require no down payment and can fund the total cost of a project (including permitting and design).

Marisol and Sean were able to realize their plan sooner than later. Marisol is grateful they were able to build an ADU — an enduring asset, a source of future income, and now part of their new home! “Craft3 was able to give us a loan when we’d exhausted other options. It means a lot to us. We’re focused on building a little nest egg and we worked hard to make this project happen.”