ADU Loans: Create Housing & Generate Income
Flexible financing with projected rental income options
ADU Solutions for Cape Cod Housing
Accessory Dwelling Units (ADUs) are becoming a vital housing solution on Cape Cod, addressing the region’s critical year-round rental shortage while creating income opportunities for homeowners. At Cape & Coast Bank, we’ve designed specialized financing tailored to Cape Cod’s unique ADU requirements.
ADU Solutions for Your Property
Transform your property into multiple income streams with an ADU. Whether you’re planning a garage conversion, in-law suite, or detached unit, Cape & Coast Bank offers flexible financing solutions to make your vision reality.
Why Build an ADU
Accessory Dwelling Units offer homeowners a unique opportunity to generate income while helping solve housing challenges. With recent Massachusetts bylaw changes making ADUs easier to build, now’s the perfect time to explore this investment opportunity.
Financial Benefits of ADU Investment
- Generate monthly rental income to offset loan costs
- Increase your property value by 20-30% with functional living space
- Create independent space for family while maintaining privacy
- Support local workforce housing needs in your community
Cape & Coast Bank ADU Loan Advantages
- Local decision-making by people who understand your community’s needs
- Flexible guidelines that consider projected rental income
- Choose from HELOC, home equity loans, or refinance options
- Competitive rates for qualified borrowers
- Loan amounts up to $450,000 for various project types
- First and second lien options available
ADU Loan FAQ
Get answers to the most common questions about financing an accessory dwelling unit, local regulations, and the benefits of working with Cape & Coast Bank.
What exactly is an Accessory Dwelling Unit?
An ADU is a secondary living unit on your property with its own kitchen, bathroom, and entrance. These are regulated by town-specific bylaws with size limitations typically between 800-1,200 square feet.
How much rental income can an ADU generate?
Current year-round ADU rental rates range from $1,800-$2,500 monthly depending on location, size, and amenities. Most towns require year-round rentals with minimum lease terms of 6-12 months.
Can I use future rental income to qualify?
Yes! Our unique ADU loan program considers projected rental income when calculating your debt-to-income ratio, making it easier to qualify than with traditional lenders.
What documentation is required for an ADU loan?
Beyond standard mortgage documentation, you’ll need town-issued building permits, construction plans and specifications, and septic design approval from your local health department if applicable.
How long does the ADU loan approval process take?
Pre-approval typically takes 3-5 business days, with full approval in 15-30 days. Our local decision-making process is faster than regional or national banks for local property projects.
Can I finance septic system upgrades?
Yes, septic system upgrades—often necessary for ADU projects—can be included in your financing package. Many properties require these upgrades to support additional bedrooms.
What makes Cape & Coast different for ADU loans?
Our program was specifically designed for the local housing market with community-based decision-making, consideration of projected rental income, and expertise in navigating town-specific ADU regulations.
Cape Cod ADU Regulations by Town
Each Cape Cod town has specific ADU regulations. Our lending team stays current with all local bylaws to guide you through the process. Find your town below to understand key requirements before applying.
Cape Cod ADU Regulations by Town
| Town | Max Size | Min Lot Size | Max Bedrooms | Special Requirements | ADU Type Allowed | Town Guidelines |
|---|---|---|---|---|---|---|
| Barnstable | 1,200 sq ft | None | 2 | Year-round rental only | Attached/Detached | View Now |
| Brewster | Lesser of 900 sq ft or 40% of main home | None | 2 | Exterior stairway for attached units | Attached/Detached | View Now |
| Bourne | Lesser of 1,500 or 50% of main home | 5,000 | 2 | Minimum 90 day rental | Attached/Detached | View Now |
| Chatham | 900 sq ft | 20,000 sq ft | 2 | Owner must occupy main home | Attached/Detached | View Now |
| Dennis | 800 sq ft | 15,000 sq ft | 2 | Limited to 9 new ADUs yearly | Attached/Detached | View Now |
| Eastham | 1,200 sq ft | None | 2 | Year-round rental only | Attached/Detached | View Now |
| Falmouth | 900 sq ft | None | 2 | Rental periods minimum 6 months | Attached/Detached | View Now |
| Harwich | 1,000 sq ft | None | 2 | Owner occupancy required | Attached/Detached | View Now |
| Mashpee | 800 sq ft | None | 2 | Year-round rental, minimum 30-day rental | Attached/Detached | View Now |
| Orleans | 1,000 sq ft | None | 2 | Year-round rental only | Attached | View Now |
| Provincetown | 1,200 sq ft | None | 2 | Year-round housing priority | Attached/Detached | View Now |
| Sandwich | 1,000 sq ft | None | 2 | Owner occupancy required | Attached/Detached | View Now |
| Truro | 1,000 sq ft | None | 2 | Year-round rental only | Attached/Detached | View Now |
| Wellfleet | 1,200 sq ft | None | 2 | Year-round rental only | Attached/Detached | View Now |
| Yarmouth | 900 sq ft | None | 2 | Minimum 1-year rental | Attached/Detached | View Now |
Complete ADU Financing Support System
3 ADU Financing Paths on Cape Cod
We offer multiple financing options to match your unique situation, whether you’re building new, converting existing space, or modernizing an in-law apartment to meet ADU codes.
Start Your ADU Journey Today
Whether you’re ready to apply or just exploring options, our local ADU lending specialists are ready to answer your questions and guide you through financing your accessory dwelling unit with personalized expertise.
ADU Construction Cost Guide
Understanding the real costs of building an ADU helps ensure your financing aligns with your project. Below are typical cost ranges based on our lending experience.
ADU Cost Breakdown
| ADU Type | Size Range | Average Cost Range | Typical Loan Amount |
|---|---|---|---|
| Basement Conversion | 500-900 sq ft | $100,000-$180,000 | $100,000 |
| Garage Conversion | 400-700 sq ft | $175,000-$250,000 | $125,000 |
| Addition to Home | 500-1,000 sq ft | $175,000-$300,000 | $200,000 |
| Detached New Construction | 600-1,200 sq ft | $300,000-$400,000 | $275,000 |
Additional Cost Considerations:
- Septic system upgrades: $15,000-$45,000
- Site preparation: $5,000-$25,000
- Utility connections: $7,500-$20,000
- Permitting fees: $2,500-$10,000
- Design and engineering: $5,000-$15,000
Real Cape Cod ADU Success Stories
Discover how Cape & Coast Bank has helped clients finance and build ADUs, creating practical housing solutions and reliable income across Cape Cod.
Yarmouth Garage Conversion: 6-Year ROI
- ADU Type: Garage conversion to 650 sq ft one-bedroom apartment
- Total Cost: $125,000 financed with a 15-year fixed Home Equity Loan
- Monthly Payment: $992
- Monthly Rental Income: $1,950 (year-round lease)
- Net Monthly Income: $958
- Property Value Increase: Appraised at $175,000 higher after completion
- Projected Payback Period: 6.2 years from rental income alone
Dennis Detached ADU: Family Solution Plus Income
- ADU Type: New construction 800 sq ft two-bedroom cottage
- Total Cost: $245,000 financed with HELOC, then converted to fixed rate
- Monthly Payment: $1,678
- Usage: Currently housing parents with future rental income of $2,200/month projected
- Property Value Increase: $290,000 (22% increase in total property value)
- Added Benefit: Allowing multi-generational living while building equity
Brewster Basement ADU: Fastest Construction Timeline
- ADU Type: Walkout basement conversion, 700 sq ft one-bedroom
- Total Cost: $95,000 financed through Cash-Out Refinance
- Monthly Payment: Additional $415 to existing mortgage
- Monthly Rental Income: $1,850 (year-round essential worker tenant)
- Net Monthly Income: $1,435
- Construction Timeline: Just 4.5 months from financing to occupancy
- Septic: No upgrades needed (existing system had capacity)
What Cape Cod Homeowners Are Saying
James & Theresa Martinez
Eleanor Kingsbury
Michael & Sarah Donovan
Cape Cod Housing: By The Numbers
Understanding the Cape Cod housing market helps illustrate why ADUs are such a valuable investment opportunity and community solution.
Key Statistics:
- Average rent for a 1-bedroom apartment on Cape Cod: $2,076/month as of April 2025
- Year-round housing vacancy rate: Below 1% across most Cape towns
- Median home price increase since 2020: 35%
- Estimated ADU construction on Cape Cod in 2024: 115 units
- Percentage of Cape workforce commuting from off-Cape: 23%
- Average ADU construction time: 4-8 months (vs. 3-5 years for larger developments)
- Typical ADU property value increase: 20-30%
- Average monthly ROI on ADU investment: 8-12%
Solving Housing Challenges Together
By creating an ADU with financing from Cape & Coast Bank, you’re not just making a smart investment—you’re helping provide critically needed housing for your community’s workforce, seniors, and families.
Cape Cod ADU Planning Resources
Access these valuable resources to help plan your ADU project. As Cape Cod’s ADU financing leader, we’re committed to supporting you beyond just the loan.