learn about the pathways to financing that fit your needs.
Finance Your Elbow Room
Own Primary Home
Authorizes Payment
Lenders Compete
& Amounts Up to $100k
Seamless Financing
within BuilderTrend
Soft Credit
Pre-Qualification
Home Equity Loan
or Line of Credit
Learn about our preferred lenders
Embedded Financing
Online Marketplace
Traditional Bank Lender
Work with one of our Preferred Lenders or Use your own
There's An Elbow Room For Every Budget. Find Out What Works For You!
You handle the application.
We're here to support.
How Does Financing
With Elbow Room Work?
Once you're approved, you pay us per the contract milestones and we build your beautiful new Elbow Room.
Fund & Build.
You choose the lender and submit your application. We'll work with your lender and supply andy information they may need for loan approval.
Apply directly with your lender.
Use our guide to identify the loan types that fit your situation.
Pick your path.
Most clients choose HELOC, unsecured personal loan, or DSCR loan.
Loans At A Glance
Use your home's Equity to fund the build
Loans With Home As Collateral
- Appraisal needed
- Closing timeline
- Places a lien on the collateral property
Cons
- Lower rates
- Higher limits
- Interest may be tax-deductible
Pros
- HELOC
- Home Equity Loan
- Cash-Out Refinance
Common Options
- In-yard ADUs
- Larger builds with bigger budgets
Great For
- Lowest typical rates
- Strong approvals
- Places a lien on your home
Summary
Equity % | DTI | Credit History | Stable Income
Lenders Look For
ID | W2s/1099/Tax Returns Insurance | Mortgage Statement Property Info
Documents
- Variable interest rates can change
- Lien on your home
Cons
- Pay interest only on draws
- Great for phased builds
- Lower typical rate
Pros
- Variable rate
- 10-year draw/repay periods
Typical Features
Owners with solid equity who want flexibility during construction
Who Does It Fit
A revolving credit line secured by your home's equity. Draw as you build and only pay interest on what you use
Summary
Similar to HELOC
Documents
- Usually a variable rate
- Payment can rise after the draw period
- Requires equity and project documents
Cons
Only pay often lower rate than unsecured loans
Pros
Owners who prefer a fixed payment and clear payoff schedule
Who Does It Fit
A lump-sum loan secured by your home's equity with a fixed rate and term.
Summary
Similar to HELOC
Documents
- Full interest accrues from day one
- Lien on your home
Cons
- Based on the improved value of home
- Often lower rate than unsecured loans
- Interest on drawn amount only
Pros
Owners who want to pay only the interest on the loan during construction.
Who Does It Fit
Similar to a HELOC, except it is based on the future value of the property after the improvements are complete. Generally, these are secured with home equity.
Summary
Fund Your Project Without Tying Up Your Home
Unsecured Loans
Without Home as Collateral
- Typically higher rates
- Lower maximums
- Shorter terms
Cons
- No lien on real estate
- Fast approvals and funding
- Simple documents
Pros
- Personal Loan
- Personal Line of Credit
- Construction Loan
Common Options
- Backyard Offices/studios
- Smaller Builds
- When title/collateral is tricky
Great For
- Higher rates
- Shorter terms
- Based on creditworthiness
Summary
Lenders Look For
ID | Proof of Insurance
Documents
- Higher Rates
- Shorter Terms
- Payment may be higher vs. equity loan
Cons
- Easy process
- Quick funding
- Lower typical rate
Pros
- No lien on your home
- No collateral
- Simple process
Typical Features
- Quick timelines
- Parent funding on a child's lot
- Office/Studio Builds
Who Does It Fit
Fixed-term loan based on creditworthiness
Summary
Lenders Look For
ID | Income & Employment Stability | Strong Credit | Banking Relationships | DTI | Assests & Cash Flow
Equity % | DTI | Credit History | Employment Verification
Documents
- Variable interest rates can change
- Could impact your credit score
Cons
- Pay interest only on draws
- Great for smaller builds
- Options for LOC with alternate security
Pros
- Variable rate
- 10-year draw/repay periods
Typical Features
Those who like flexible access to cash or want to borrow a smaller amount.
Who Does It Fit
- A revolving credit line based on your creditworthiness.
- Draw only what you need.
- Pay interest on what you use.
What Is It
Strong Credit | Consistent & Stable Income | DTI | Sufficient Downpayment | Adequate Financial Reserves | Detailed Plans & Budget
Lenders Look For
Similar documentation to a standard mortgage plus builder package and deed information
Documents
- More documentation
- Higher credit needed
- Down payment of 20-25%
Cons
- Interest only payments during construction
- May convert to standard mortgage
Pros
Access to funds given as milestones are complete
Typical Features
People who only want to pay interest during the construction phase.
Who Does It Fit
Designed or new builds. The lender releases funds in stages as work is inspected. You typically pay interest only durning construction, then refinance or convert to a permanent loan when the project is complete.
Summary
Qualify Using the Unit's Rental Income
Investment Loans
- Require rent comps/pro formas
- STR rules vary by city
Cons
- Leans on property income
- Flexible borrower profile
Pros
- DSCR
- Build-To-Rent
Common Options
- Long-term rentals
- Short-term rentals where income supports the loan
Great For
These loans consider projected rent vs. payment
Summary
Budget | Rent comps | ID | Entity Docs
Documents
- Rate and terms vary
- City STR regulations can affect viablity
Cons
- Uses projected rent
- May allow for multiple properties
Pros
- Market rent estimates
- Expense assumptions
- Project budget
Lender Needs
Investors and owner-investors adding an income ADU.
Who Does It Fit
An investment loan underwritten primarily on rental income.
