Financing laneway homes
March 27, 2024 | Posted by: Chad & Patty Southwell
Laneway homes have a lot of buzz between municipalities all over the country legalizing these structures and a massive housing shortage. Tiny homes, accessory dwelling units (ADU), laneway homes, coach homes essentially describe the same thing, a secondary structure behind an existing home. Popular uses are rental unit, home office space, and housing family members.
A laneway home must follow these guidelines:
- Secondary homes can be no greater than 40% of the main house size, and use no more than 40% of the yard space.
- Single story homes only.
- No rooftop patios are allowed.
- Water and sewage for secondary homes must be shared with the primary home.
- Coach homes cannot be built if the main home already has a rental unit.
Not all lenders are equal. It's best to work with a mortgage agent who specializes in construction and is familiar with ADUs. We work with lenders who will finance these properties and recognize their full value upon completion.
Not all builders are equal either. Make sure the builder specializes in laneway homes, and is familiar with the by-laws and permitting requirements. Ideally, the builder has plans or models which already match the municipalites regulations. Some will build from the ground up and others have pre-fabricated designs.
All of this criteria applies to small homes behind an existing home, not tiny homes on their own lot.
You can expect to pay approximately $230,000 minimum for this type of build. Not all homes and lots are appropriate for this added dwelling, consult with your local municipality to inquire if your home is a good fit.
