This is part of our Garage ADU series for San Antonio homeowners. Also in this series: cost · rules & permits · rental income · financing · timeline · FAQs.
Most garage conversions aren’t paid for out of pocket. Here are the four financing paths San Antonio homeowners actually use.
1. HELOC (Home Equity Line of Credit)
Borrow against your existing equity as needed during the project. Flexible and popular for mid-range conversions — you draw funds as construction progresses rather than taking a lump sum.
2. Cash-Out Refinance
Replace your current mortgage with a larger one and take the difference in cash. Works well when rates are favorable and your home has meaningful equity.
3. Construction or Renovation Loan
Specialized loans underwritten on the future completed value of your property with the ADU in place — not just what it’s worth today. This is often the right tool for full ADUs with kitchens and baths.
4. FHA 203(k) Rehabilitation Loan
The standout option for garage conversions: FHA now lets qualifying borrowers count 50% of the ADU’s projected rental income toward qualification. If the future rent helps you qualify, this program deserves a look — talk to a lender experienced with 203(k) ADU projects.
Which One Fits?
It comes down to your equity position, credit, timeline, and whether you want the future rental income working for you at qualification. We can walk through the trade-offs during a free estimate — and connect you with lenders who understand ADU projects.
Is Your Garage a Candidate?
If your garage is structurally sound, your lot meets setback requirements, and your HOA allows it, you’re likely a strong candidate. The fastest way to find out is a free feasibility review — we’ll tell you straight whether the numbers and the rules work for your property.
Book a free estimate or start with our Casita / ADU Cost Guide for San Antonio & the Hill Country.