A second home on the lot you already own.

Four ways in

Pick the one your house already wants.

The cheapest square foot is the one that already has a roof and a slab over it. Most homeowners assume "ADU" means a new building in the backyard — often the garage or the basement gets there for a third of the money.

Layouts that actually work

What fits in 450, 800 and 1,000 square feet.

Every extra corner costs money to frame, flash and heat. These are the arrangements that keep the shell simple and still live like a real apartment.

Where the money goes

The line items people forget.

Construction is the number everyone quotes. These are the ones that turn a $300K project into a $380K project after the contract is signed.

Conversions, in detail

Whether your garage or basement qualifies.

A conversion is either the cheapest unit you will ever build or a money pit, and three or four measurements decide which. Check these before anyone draws anything.

• 7 ft of clear ceilingThe floor-to-joist minimum for habitable space. Short by a few inches means lowering the slab ($15K–$40K) or lifting the house — usually the point where a detached unit wins instead.
• Egress from every sleeping roomA code-size window or door out. In a basement that means a window well and excavation: $3,000–$7,000 per opening.
• Its own exterior entranceEvery ADU needs a door that isn't through the main house. A basement walk-out runs $8,000–$20,000 to cut and build.
• A dry slabMoisture mitigation and a vapor barrier under the finished floor: $1,500–$6,000. Skipping it is the single most common reason a converted garage smells musty within a year.
• Plumbing within reachKitchen and bath rough-in is $15,000–$30,000 where nothing exists. Stack the wet wall against the existing stack and it's a fraction of that.
• Heat that stands aloneExtending existing ductwork costs $1,200–$2,500 if the furnace has 500–800 sf of spare capacity. Otherwise a dedicated mini-split at $3,500–$6,500 — and the tenant controls their own bill.
• The garage door openingInfilling it and matching the siding is $3,000–$8,000, and it's the line homeowners underestimate most. Done badly, the house reads as a converted garage forever.
• Sound and fire separationAn attached or basement unit needs a rated assembly between the two dwellings. Budget for it up front — retrofitting it after drywall is brutal.

Rules where you live

What each city allows in 2026.

HB 1337 set the floor statewide: two ADUs on essentially every residential lot, no owner-occupancy requirement, no extra parking within half a mile of major transit, impact fees capped at half the main house's, and cities must let you sell an ADU as a separate condo unit.

Paying for it

Five ways homeowners fund an ADU.

• HELOC or second mortgageFastest route if you have equity. Conventional and FHA products cap out around 80% loan-to-value on the combined balance.
• Fannie Mae HomeStyle RenovationRolls the build into one mortgage underwritten on the after-improved value. Works on primary residences, second homes and investment property; funds release in draws as work completes.
• FHA 203(k)3.5% down for qualified buyers and flexible credit, but primary residence only. Also underwritten on after-improved value.
• Construction-to-permanentOne closing covers the build and the long-term mortgage — fewer fees than closing twice.
• VA renovationEligible veterans can finance an ADU with no money down on a primary residence.

Worth asking your lender directly: several programmes now let projected ADU rent count toward qualifying income even with no rental history — HomeReady among them. That changes what you can borrow before a tenant ever moves in.