CAP_14 / FINANCING / DES MOINES
An honest, builder-side walkthrough of how Des Moines homeowners actually fund an ADU in 2026 — HELOC, construction-to-perm, cash-out refi, and renovation loans — with real numbers from current Des Moines projects, not a generic lender brochure.
Cost is anchored to our 2023–2025 Puget Sound trade-bid archive scaled by Des Moines's cost multiplier. Home-value estimate is a directional median, not a site-specific appraisal. Replace with your own numbers before signing anything.
We don't originate loans, so this isn't a sales sheet. Each row is what we've actually watched close on Des Moines projects in the last 24 months.
OPT_01
Prime + 0.5–2% (≈ 8.75–10.25%)
LTV Up to 85% combined LTV
Most Des Moines owners with 5+ years of equity. Draws as we hit milestones; you pay interest only on what's drawn.
Watch Variable rate — model worst-case at Prime + 3% before committing.
OPT_02
Prime + 1–3% during build, then locked refi
LTV 75–80% of as-completed value
Ground-up DADUs in Des Moines where you'd rather not touch your primary mortgage. Single close, draws funded by the bank as inspections clear.
Watch Appraisal is done on plans + comps; lender chooses the appraiser. We supply the comp set.
OPT_03
Market + 0.25–0.75% (≈ 6.75–7.5% as of writing)
LTV Up to 80% LTV
Des Moines owners still sitting on a 4–5% note rarely want this; owners with a 6.5%+ note often net better all-in by resetting.
Watch You're re-amortizing 30 years on the entire balance — model the lifetime interest delta, not just the rate.
OPT_04
Market + 0.5–1.5%
LTV Up to 97% of as-completed value (owner-occupied)
Des Moines buyers wrapping the ADU build into a purchase, or low-equity owners. Single 30-year loan, no HELOC stack.
Watch HUD-style draw schedule with consultant sign-offs — adds 2–3 weeks to permitting timeline.
A typical 800 sqft detached ADU in Des Moines runs around $387k all-in (design, permits, construction, utilities). Garage conversions land 35–45% lower; attached ADUs (AADU) split the difference. These numbers are pulled from our active Des Moines bids, not generic per-sqft averages.
Go deeper: Read the Five hidden ADU costs that wreck Puget Sound budgets guide
Empirical King/Pierce/Snohomish appraisals 2023–2025 show $1 of ADU build returns roughly $0.70–$0.85 of appraised value. For a $387k build in Des Moines, expect an appraisal lift around $300k against an estimated median home value of $645k. Rental income is the bigger long-term return.
On a $300k construction-loan draw at ~8.25% interest-only, expect about $2,063/mo during the build. Des Moines permit reviews currently average 10–14 wk, so plan for that many weeks of pre-construction carry before draws begin.
On a $387k all-in basis at ~6.2% blended financing plus a 30% operating buffer (taxes, insurance, vacancy, maintenance), break-even rent works out to about $2,599/mo. Long-term 1–2 BR market rents in Des Moines typically exceed that, which is why ADUs pencil here.
For owners with 30%+ equity, HELOC wins on speed and flexibility. For ground-up DADUs without significant existing equity, construction-to-perm is the default. Cash-out refi is rare unless the existing note is above 6.5%. Renovation loans (HomeStyle/CHOICERenovation) work best when the ADU is bundled into a new purchase in Des Moines.
Yes — the assessor will reappraise the parcel after the certificate of occupancy. Expect the assessed value to rise by roughly the appraisal lift figure above (~$300k). At Washington's 1% statutory cap plus voter levies, that's an extra $275–$325/mo on your tax bill. Underwrite that into your pro forma.
Go deeper: Read: What an ADU does to your property tax in King County
Yes for construction-to-perm and HomeStyle/CHOICERenovation, no for HELOC. Most lenders will credit 75% of projected Des Moines market rent against debt-to-income once you provide a signed lease or a Form 1007 rent schedule from the appraiser. We supply local comparable rent sets for the appraisal package.
Des Moines doesn't currently publish an ADU-specific incentive program, but Washington's HB 1337/1110 preemption removed many fee barriers statewide. Some Puget Sound Energy and Seattle City Light efficiency rebates apply to new ADU envelopes and heat pumps.
INTERNAL_LINKS / Deep Map
Big-bank ADU lending in Des Moines is a maze. We'll match you to three regional lenders we've personally closed with this year.
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