In observance of Independence Day we will be closed on Thursday, July 4. We'll reopen on Friday, July 5.

Accessory Dwelling Units 101

Accessory Dwelling Units, or ADUs as they are commonly known, are growing in popularity as many of our local municipalities make planning, zoning and permitting changes to make them easier to build and a more affordable housing option. ADU’s make for a great home office, a guesthouse for visitors, an income-producing rental, or a space for multi-generational living.

ADUs provide an affordable housing option because they allow homeowners the opportunity to build an income property on their existing lot while providing a reasonably priced rental unit for our community. In addition, they also provide a solution for multi-generational families looking to create a cost-prohibitive living space for aging parents or young adult children. There is so much flexibility that an ADU can provide.


We have been a leader in local construction financing for 117 years and we’re one of the only banks in the area with a dedicated plan for funding ADUs.


Isabella Marocco at Left Bank pastry in Olympia, Washington

Financing Options

With the cost of ADUs varying somewhere between $150,000 to $250,000 depending on size and finishes, we’ve developed six different loan options to meet your needs.

Home Equity Line of Credit (HELOC)

This is a great option if you have sufficient equity in your current home because it provides flexible payments with no origination fee and you keep your first mortgage.

Home Equity Loan Program (HELP)

This is another fantastic choice if you have sufficient equity in your current home and you’re looking for a fixed rate option with no origination fee and the ability to keep your first mortgage.

HELP Construction

If you don’t have enough equity in your current home, this loan option allows you to include the ADU into the appraised value of your home, giving you more borrowing power. With this selection, you keep your first mortgage and you can choose from either an adjustable or fixed-rate loan.

HELP Retrofit Loan

This is a great option to provide energy-efficient upgrades to your current home, while also providing the financing for a new ADU. With this loan, the planned improvements and ADU can be added to the appraised value giving you more borrowing power.

Refinance | Cash Out Equity

This is another option if you have sufficient equity in your current home and it generally gives you a lower rate option. It’s also a wonderful financing opportunity to expand the income potential of an existing rental property.

Refinance | Construction

If you have insufficient equity in your current property, this option generally gives you a lower rate with an all-in-one mortgage. This loan choice also allows you to include the ADU in your appraised value, giving you more borrowing power. This is also a great loan option for expanding the income potential of an existing rental property.

Next Steps | Contact a Loan Officer

Your best next step is to discuss your goals and objectives with our knowledgeable and non-commissioned Loan Officers. They are available to answer your questions and determine which options would work well for you.

Please don’t hesitate to email or call us at (360) 754-3400, so we can answer your questions.

Hannah in the Tumwater branch helping a customerIf you look up OlyFedder in the urban dictionary you’ll find a description of our extraordinary group of financial professionals who find joy and purpose in the meaningful work we do with our customers and community. We look forward to helping you!

Your Team Schedule an Appointment Learn About Our ADU Partnerships

ADU plan from The Artisans Group in Olympia, Washington

The Artisans Group

The Artisans Group has designed four ADU options that have been pre-approved for use and permitting by many of our local municipalities. Their flexible designs allow for these ADU’s to fit various kinds of lots and siting situations.

Options range from a 480 square foot studio or one-bedroom model to an 800 square foot, two-bedroom, two-story home.

Learn More

The designs are the intellectual property of The Artisans Group but are rented indefinitely by the cities and can be modified through the firm for a small fee.

ADU plan from The Artisans Group in Olympia, Washington

Olympia Master Builders

The Olympia Master Builders (OMB) is an excellent resource for finding contractors to help with the construction of ADUs. OMB has the guides, resources and expertise to connect you with any professional help you might need in building an ADU.

Learn More

Details from Local Municipalities 

Each of our local municipalities has recently made changes to its policies to make ADUs more affordable and accessible. Please check out the links for more details.


OlyFed ADU Flyer & Presentation 

Below you will find two additional resources from OlyFed. The first is a one-page flyer with info regarding our ADU Loan Program options and the second is a presentation that provides more details.

ADU Flyer ADU Presentation