Accessory dwelling units β also called granny flats, in-law suites, backyard cottages, or secondary suites β are self-contained living spaces on the same lot as a primary single-family residence. An ADU has its own kitchen, bathroom, and sleeping area, making it independently livable, but it shares the lot (and sometimes the building structure) with the primary home.
Despite the variety of names and configurations, the defining characteristic is the same: an ADU is a secondary, subordinate living unit on a residential lot that already contains a primary home.
Types of ADUs
ADUs fall into three broad categories based on their physical relationship to the primary residence.
Attached ADUs are added onto or built into an existing structure. Common examples include converting an attached garage into a living space, adding a wing to an existing home, or finishing a basement with a separate entrance. Attached ADUs typically cost less to build because they share at least some structural and utility infrastructure with the main house.
Detached ADUs are entirely separate structures on the same lot β the most common type being a backyard cottage or a garage-apartment combination. Our ADU garage loft plans are designed specifically for this configuration: a functional two-car garage on the ground level with a complete apartment above. Detached ADUs offer the best separation between the primary residence and the rental or guest unit.
Junior ADUs (JADUs) are a specific category recognized in California and some other states: a unit created entirely within the footprint of an existing single-family home, typically by converting a bedroom with its own entrance and a kitchenette. JADUs are often subject to different, more permissive regulations than full ADUs.
What Qualifies as an ADU
To meet the legal definition of an ADU, a unit typically must have:
- An independent entrance separate from the primary residence
- A full kitchen or kitchenette (at minimum a sink and cooking appliance)
- A bathroom with toilet, sink, and shower or tub
- A sleeping area (either a dedicated bedroom or a studio open-plan configuration)
Structures without an independent kitchen β like pool houses or home offices β generally don't qualify as ADUs. Structures intended purely for storage, vehicle parking, or work (workshops, studios) also don't qualify, though a garage with a complete apartment above does.
Size Limits and Setbacks
Regulations vary significantly by jurisdiction, but most municipalities place an upper limit on ADU square footage β often between 850 and 1,200 SF, though some jurisdictions allow larger structures. California allows up to 1,200 SF for detached ADUs as a baseline, with local variations.
Setbacks β the required minimum distance from property lines β are typically 5 feet for rear and side yards for detached ADUs in most jurisdictions, though some require more. Always confirm specific setback requirements with your local planning department before selecting a plan, since building a structure that violates setbacks can require costly demolition.
Owner Occupancy Requirements
Many jurisdictions historically required the property owner to live on-site as a condition of renting out an ADU. Some states, including California and Oregon, have eliminated owner-occupancy requirements for certain ADU types. This is one of the most important regulatory details to confirm locally, particularly if you're considering the property as a pure investment rather than your primary residence.
Benefits of Building an ADU
- Rental income: Homeowners can rent out their ADUs to generate income, helping offset construction costs or mortgage payments.
- Multigenerational living: ADUs provide a separate living space for elderly parents or adult children who want proximity without sharing a front door.
- Property value: A permitted, livable ADU adds measurable value to the property at resale β particularly in markets where rental income potential is a factor in buyer calculations.
- Flexible use: An ADU can serve as a rental unit now and convert to a home office, guest suite, or caregiver space as needs change.
ADU Financing Options
ADU financing is one of the more complex aspects of these projects because ADUs are improvements to an existing property rather than standalone real estate purchases. Common approaches include:
- Home equity line of credit (HELOC): Uses existing equity in your property. Interest rates are variable and the credit line is revolving. Works best if you have substantial equity and the ability to repay relatively quickly.
- Cash-out refinance: Replaces your existing mortgage with a larger one and gives you the difference in cash. Works best when current mortgage rates are competitive with your existing rate.
- ADU-specific construction loans: Some lenders and state programs offer loans specifically designed for ADU construction. California, for example, has had ADU grant and loan programs through CalHFA. Check with your state housing agency for currently available programs.
- Renovation loans: FHA 203(k) and Fannie Mae HomeStyle loans allow financing of home improvements into a single mortgage product.
Getting Started
The fastest path to a permitted, livable ADU is: confirm your zoning allows it β select a permit-ready plan set β hire a local architect or engineer to stamp the plans β submit for permits β build. Each of those steps takes real time, but starting with professionally drawn plans compresses the design phase from months to weeks and significantly reduces architect fees compared to custom design from scratch.
