ADU Cost and Financing in Phoenix & Scottsdale (2026)
What it actually costs to build an ADU in Phoenix or Scottsdale, broken down by project type, plus the financing options Arizona homeowners use to pay for one.
Last updated: October 15, 2026
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How Much Does an ADU Cost in Phoenix and Scottsdale?
Arizona is one of the more affordable major ADU markets, and Phoenix and Scottsdale both allow ADUs by right under the state's HB 2720/HB 2928 framework. Scottsdale build costs run somewhat higher than Phoenix, mainly due to larger lots and higher finish expectations.
| Project Type | Phoenix | Scottsdale |
|---|---|---|
| Garage conversion | $100,000–$150,000 | $110,000–$165,000 |
| New detached ADU | $160,000–$250,000 | $180,000–$280,000 |
| Junior ADU (interior conversion) | $25,000–$45,000 | $30,000–$50,000 |
Statewide, Arizona ADUs run $90,000–$220,000 for a typical detached build — see the full breakdown in our Arizona ADU laws guide. Run your own numbers, including finish level and size, with the ADU cost calculator.
What Drives Your Budget
- Project type: a garage conversion reuses an existing foundation and roof, so it's consistently the cheapest route to a finished unit. New detached construction costs more but gives you a purpose-built layout.
- Size: both cities cap ADUs at roughly 1,000 sq ft or 75% of the primary dwelling under the statewide baseline, though actual permitted size depends on your lot and zoning.
- Finish level: builder-grade finishes stay near the low end of these ranges; custom cabinetry, higher-end appliances, and upgraded flooring push toward the top.
- Lot access: Scottsdale's larger lots can mean longer utility runs and more site work, which is part of why its ranges sit above Phoenix's.
Financing a Phoenix or Scottsdale ADU
Most Arizona homeowners pay for an ADU with one of these:
- HELOC — draw against your home equity as construction proceeds; interest-only during the draw period, variable rate.
- Cash-out refinance — roll ADU costs into a new first mortgage at a fixed rate; makes the most sense if you're also refinancing a higher-rate existing loan.
- Construction loan — underwritten against the property's value after the ADU is built, useful if you don't have enough current equity for a HELOC.
- Personal loan — unsecured and faster to close, typically used for smaller garage-conversion or JADU budgets under $100,000.
Lenders generally cap total borrowing at 80–85% of your home's value, so the equity you have today sets the ceiling on what you can finance without a construction-loan product. For a full side-by-side comparison of rates and terms, see our ADU financing options guide.
ADU-Friendly Lenders to Compare
Start by getting quotes from a few lenders that work with ADU borrowers so you can compare rates and draw schedules before you commit:
- LendingTree — compare HELOC and cash-out refinance offers from multiple lenders at once.
- Better.com — fully online cash-out refinance with no lender fees.
- RenoFi — construction loans underwritten against your ADU's after-build value, useful if you don't have 20%+ equity today.
- Desert Financial Credit Union — Phoenix-based credit union offering home equity products to Arizona members.
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Once you have a cost estimate and a financing plan in mind, model the rental return to see how long the ADU takes to pay for itself.
Permitting Notes for Phoenix and Scottsdale
Both cities fall under Arizona's statewide ADU law (HB 2720), which requires at least one attached and one detached ADU by right on single-family lots and caps rear/side setbacks at 5 ft. Phoenix permits typically take 60–90 days; Scottsdale tends to run 90–120 days. Full detail on the statewide law and each city's specifics is in our Arizona ADU laws guide.
Frequently Asked Questions
How much does it cost to build an ADU in Phoenix?
A garage conversion in Phoenix typically runs $100,000–$150,000, while a new detached ADU runs $160,000–$250,000. A Junior ADU (interior conversion) is the cheapest option at $25,000–$45,000.
How much does it cost to build an ADU in Scottsdale?
Scottsdale costs run somewhat higher than Phoenix: $110,000–$165,000 for a garage conversion, $180,000–$280,000 for a new detached ADU, and $30,000–$50,000 for a Junior ADU.
What's the best way to finance an ADU in Arizona?
It depends on your equity position. A HELOC offers flexibility for staged construction draws, a cash-out refinance locks in a fixed rate, and a construction loan works if you don't yet have enough equity for a HELOC. See our ADU financing options guide for a full comparison.
Do Phoenix and Scottsdale require a permit for an ADU?
Yes. Both cities process ADU permits through their own planning departments, within the bounds of Arizona's statewide HB 2720/HB 2928 framework. Phoenix typically takes 60–90 days; Scottsdale typically takes 90–120 days.
Get Cost Quotes
The fastest way to turn these ranges into a real number is to get quotes from builders working in your city. Our Arizona ADU contractor directory lists vetted builders serving Phoenix and Scottsdale — filter by service type to find garage-conversion specialists versus new-construction builders.