RenoFi vs Figure HELOC for ADUs: Which One Fits Your Build?

RenoFi vs Figure HELOC at a glance

The fastest way to use this comparison: find the row that describes your situation and start with the right product. Everything below the table is the verification you need before you actually apply.

Sources: RenoFi published how-it-works disclosures and FAQ; Figure published HELOC FAQ; Bankrate RenoFi Review (Feb 27, 2026) and Best HELOC Lenders (May 2026); NerdWallet Figure HELOC review (May 6, 2026); CNBC Select Figure HELOC review (April 2026). Last verified May 21, 2026.

Is RenoFi or Figure better for an ADU?

This is the heart of the page. The next sections break each side down in detail; the borrowing-power matrix further down shows the math for seven realistic homeowner profiles.

What RenoFi actually is (and what it isn’t)

The “broker, not lender” distinction matters

RenoFi states plainly on its own FAQ and how-it-works pages that it is not the lender — loans are made through its third-party lending partners, almost always credit unions. RenoFi’s role is to package the project, source the appraisal, and route the file to a partner credit union licensed in your state. The credit union holds the note. The credit union services the loan. If something goes sideways during repayment in year four, you’re talking to the credit union.

This isn’t a criticism — it’s a structural fact that affects three practical things:

1. Your timeline. RenoFi’s own FAQ states the process generally takes 30 to 60 days after documents are collected, and the company explicitly does not guarantee approval or timing. The file passes through both RenoFi’s renovation-specific review and the partner credit union’s standard underwriting.
2. Your exact terms. RenoFi advertises product frameworks — fixed and variable structures depending on partner, loan terms up to 20 years, and specific borrowing caps that vary by partner program. The specific number you get depends on which credit union accepts your file.
3. Your state availability. RenoFi’s footprint is the union of its partner credit unions’ state licenses, which is why the company is unavailable in some states even when standard HELOCs are widely available there.

What “after-renovation value” actually buys you

The single most important concept in this comparison is after-renovation value (ARV) — the appraiser’s estimate of what your home will be worth once the renovation is complete. Bankrate’s May 2026 Best HELOC Lenders review describes RenoFi as letting borrowers draw on up to 95% of after-renovation value rather than current market value, while RenoFi’s own homepage and product pages cite frameworks up to 90% of ARV and up to 125% of current home value depending on partner program. We use the more conservative 90% in our worked examples below. Source-conflict note: confirm the specific cap with your matched partner before counting on it.

A standard HELOC underwriter looks at this:

Maximum HELOC = (current appraised value × 0.80–0.85 max CLTV) − current mortgage balance

A RenoFi-style renovation HELOC underwriter looks at this:

Maximum RenoFi-style line = (projected after-renovation value × up to 0.90–0.95) − current mortgage balance, capped at up to 125% of current home value depending on the partner program

For a recent homebuyer, the difference is enormous. A buyer who closed in 2022 with $130K of current equity in a $650K home, planning a $250K ADU that the appraiser projects will lift the home to $850K, sees roughly:

• Current-equity HELOC capacity: ($650K × 0.85) − $520K mortgage ≈ $32,500. Not enough to fund a single milestone draw on a real ADU build.
• ARV-based capacity (at 90% ARV): ($850K × 0.90) − $520K ≈ $245,000. Functionally covers the project, with realistic contingency planning.

The borrower hasn’t changed. The home hasn’t changed. Only the value basis has.

Where RenoFi gets weaker

The damaging admission: RenoFi is not unlimited borrowing power. Real limits apply:

• The appraisal can come in low. ARV is an estimate. When comparable ADU sales are thin in your neighborhood, the appraiser may not project the value lift your builder assumed. Underwriting then caps at the lower projected ARV.
• DTI, credit, lien position, and partner overlays still apply. Even with strong ARV, a marginal credit profile or stretched debt-to-income ratio will be declined.
• State and partner availability. Per Bankrate’s February 2026 RenoFi review, RenoFi does not operate in Hawaii, New York, or Massachusetts. RenoFi’s wholesale documentation excludes Texas from the after-renovation-value program. Verify your state directly with a RenoFi advisor before assuming eligibility.
• Servicing complexity. Because RenoFi sits between you and the credit union, escalation paths are longer than with a direct lender.

Bankrate’s review also notes that some RenoFi partner credit unions assess a renovation servicing charge of up to $150 per month for the duration of the construction phase. On an eight-month ADU build, that’s up to $1,200 in additional cost that doesn’t show up in the headline rate. Confirm whether your matched partner charges this before you sign.

Real homeowner experiences

RenoFi’s Trustpilot profile shows a mix of customer experiences. Positive reviews emphasize advisor responsiveness and the ability to unlock ARV-based capacity that other lenders wouldn’t underwrite. Negative reviews most commonly cite timeline overruns and broker-fee surprises — one reviewer noted a 2% broker fee that surfaced late in the application. Read the full range before applying, and ask your advisor in writing what all fees will be before you commit. These are voice-of-customer signal, not proof of loan terms. Verify any specific number with the advisor and the lending partner before you sign.

What a Figure HELOC actually is

The 100%-draw-at-closing requirement

Most HELOCs work like a credit card: you have an approved line, you draw on it as needed, you pay interest only on what you’ve drawn. Figure does not work that way. At closing, Figure funds the entire approved line into your bank account. Interest accrues on the full balance immediately.

You can take additional draws during the 3-to-5-year draw window — the exact length depends on the repayment term you select at origination — but those redraws happen only as you pay down the initial balance. Each additional draw locks in the lender’s rate at the time of that draw, not your original rate.

Credit Karma’s review confirms the requirement plainly: borrowers must initially withdraw 100% of the approved amount at closing, similar to a home equity loan or cash-out refinance rather than a traditional revolving HELOC. NerdWallet’s May 2026 Figure review describes the draw window as three to five years.

Why this matters specifically for an ADU build

An ADU build typically pays out in milestones: a deposit, permits, foundation, framing, finishes, final. Your builder doesn’t ask you for the full $250K on day one. They invoice you in 3 to 5 stages over 6 to 12 months. We work through the dead-interest math on that exact scenario in the cost section below.

Speed as the real feature

Figure advertises funding initiated in as few as five days from a complete online application. That is genuinely fast for the category — most credit unions, banks, and broker-mediated products run 30 to 60 days. For homeowners under permit-clock pressure or builder-slot pressure, that speed has real value.

The origination fee

Figure charges an origination fee of up to 4.99% of the loan amount. The structure is intentional: paying a higher origination fee buys you a lower locked rate. For a borrower who plans to pay the loan off in 5–10 years, the trade can be worth it; for a 30-year payoff, the math depends on the rate spread. On a $250,000 HELOC, a 4.99% origination fee is up to $12,475, added to the loan balance at closing. NerdWallet, CNBC Select, and LendEdu all flag this as Figure’s primary affordability drawback in their 2026 reviews.

State availability, product mechanics, and minimums (verified)

• Available in 49 states: Per multiple 2026 reviewer sources, Figure does not lend in Hawaii.
• New York: Figure’s own published FAQ states that its Home Equity Line application is not for New York mortgage applications or products through its site. Verify directly with Figure before assuming product availability in NY.
• Minimum loan amounts: $10,000 in most states; $25,001 in Alaska; $35,000 in Texas. Minimums vary by channel and disclosure date, so verify against Figure directly.
• Maximum line size: Up to $750,000 for the most qualified borrowers. Loans above $400,000 may require a full appraisal in addition to Figure’s standard automated valuation.
• Minimum credit score: Source-specific. NerdWallet currently lists 600; Credit Karma describes minimum qualification requirements as generally 600 (with a 660 minimum on investment properties); LendEdu lists 640. Verify the current minimum directly with Figure.
• Rate type: Fixed and variable options depending on product, channel, and state. The fixed-rate-per-draw mechanic is the more commonly described structure in published reviews.
• Repayment terms: 10, 15, 20, or 30 years, chosen at origination.
• Property eligibility: Figure HELOCs may be available for primary residences, secondary residences, and investment properties, with different minimum-score requirements for each. Verify investment-property eligibility directly with Figure for the current product.

Sources: Figure published HELOC FAQ; NerdWallet Figure HELOC Review (updated May 6, 2026); CNBC Select Figure HELOC Review (April 2026); LendEdu Figure HELOC Review (May 2026); Credit Karma Figure HELOC Review; Figure/Lowe's HELOC partner disclosure. Last verified May 21, 2026.

Real cost comparison: fees, draws, and dead interest

Origination, closing costs, and renovation servicing fees side by side

For a $250,000 HELOC, the fee picture looks roughly like this:

Figure’s higher origination fee is real money — $12K+ on a $250K loan — but it’s bundled into the balance and amortized. RenoFi’s closing costs are typically lower, but the renovation servicing charge from some partners can add over a thousand dollars during a long build.

The phased-draw dead-interest calculation

This is the cost almost nobody surfaces in lender reviews. We worked through it because it is the single most consequential mechanical difference between these two products for an ADU buyer.

Path A — True phased-draw HELOC. You draw only as your builder invoices. Average outstanding balance across the 8-month construction window ≈ $125,000 (half of the full line, because you ramp to it over time).

Path B — Figure 100%-draw-at-closing. You draw the full $250,000 at closing. Even if you park the unused portion in a high-yield savings account, your loan balance is $250,000 from day one. Average outstanding balance across the 8 months ≈ $250,000.

Dead-interest cost difference at a 7% rate, over the 8-month construction phase:

($250,000 − $125,000) × 7% × (8 ÷ 12) ≈ $5,830 in extra interest paid on the Figure structure

Even if you offset by parking the undrawn balance in a 4% high-yield savings account, net cost is roughly:

$5,830 − ($125,000 × 4% × 8/12) ≈ $2,500–$3,000 of net dead interest you wouldn’t pay on a true phased-draw HELOC

What rates look like as of May 2026

Per Bankrate’s national HELOC survey, the average rate for a $30,000 HELOC was 7.26% as of May 6, 2026. Curinos data via Yahoo Finance shows national-average HELOC rates around 7.21% as of May 20, 2026, for applicants with 780+ credit and CLTV under 70%. The Federal Reserve has held its benchmark rate at its March, April, and May 2026 meetings.

• Figure’s fixed-rate mechanic (when used) protects you against rate increases but doesn’t capture rate decreases if they happen.
• A variable-rate HELOC (the typical structure with RenoFi’s credit union partners, or any traditional HELOC) tracks the prime rate — currently 6.75% — and floats with it.

Neither is universally better. It depends on how quickly you’ll pay down the balance and your view of the rate path.

How much could RenoFi and Figure actually let you borrow? The ADU Borrowing-Power Matrix

The formulas we used

• Figure-style current-equity HELOC capacity: (current home value × 80%) − current mortgage balance
• RenoFi-style ARV capacity: the lower of [(projected after-ADU value × 90%) − current mortgage balance] or [(current home value × 125%) − current mortgage balance]
• Project funding gap: (estimated ADU budget × 1.15 for contingency) − estimated borrowing capacity

We deliberately used 80% LTV on the Figure side (conservative; Figure can reach 85% for top-tier borrowers per its disclosures) and the 90% ARV cap on the RenoFi side (Bankrate’s May 2026 review cites up to 95%; we use 90% because not every borrower will hit the published ceiling). Real numbers will land inside this range.

The pattern across all seven rows: Figure wins when current equity already solves the problem. RenoFi wins when the project itself creates the equity that funds it. Scenarios 1, 4, and 5 — the recent-buyer and phased-build cases — are where the structural difference matters most.

When does RenoFi make more sense than Figure?

The four situations RenoFi is built for

1. Recent buyers (under 5 years in the home) with limited current equity but a meaningful ADU plan. This is RenoFi’s flagship use case — the borrower who would otherwise be told “come back when you have more equity.”
2. Detached ADU builds in the $200K–$500K+ range. Larger projects exceed pure current-equity capacity for most homeowners; the ARV-based structure stretches what’s available.
3. Owners who want to preserve a low first-mortgage rate. If you locked a 3% mortgage in 2020 or 2021, you don’t want to cash-out refinance into a 7% rate. RenoFi’s product sits as a second lien behind your existing mortgage.
4. High-cost metros where ADU costs structurally exceed current equity for most owners. Bay Area, Los Angeles, Seattle, Boston-area, Denver — ADU builds in these markets commonly run $300K–$500K+, which routinely exceeds what a current-equity HELOC can support.

Where RenoFi gets weaker

• If the appraisal comes in low. ARV is an estimate. Underwriting is capped at the lower projected ARV.
• If you’re in Hawaii, New York, Massachusetts, or Texas. Bankrate’s RenoFi review (Feb 2026) confirms RenoFi does not currently operate in HI, NY, or MA. RenoFi’s wholesale documentation excludes Texas. Verify directly before assuming eligibility.
• If you need money in 5–10 days. The broker-to-credit-union handoff produces a 30–60 day timeline per RenoFi’s own FAQ.
• If your matched partner credit union charges a monthly renovation servicing fee. Bankrate notes this can run up to $150/month during construction.

When does Figure make more sense than RenoFi?

The four situations Figure is built for

1. Long-tenured owners with substantial existing equity. If you’ve owned for 10+ years in any reasonable appreciation market, you likely have plenty of current equity to fund an ADU without needing ARV math.
2. Garage conversions and smaller ADUs in the $80K–$150K range in non-coastal markets. These projects typically fit inside current-equity capacity, and Figure’s speed advantage matters more than the ARV stretch.
3. Builder-slot-driven timelines. When your builder has a slot opening in three weeks and your alternative is to lose the slot for six months, a 5-day funding timeline has real value.
4. Borrowers who want a fixed-rate product. Figure’s hybrid structure can lock your rate at each draw. In a sideways or rising-rate environment, that protection has value.

Where Figure gets weaker

• The 100%-draw-at-closing requirement. You pay interest on the full balance from day one even if your builder won’t invoice for it for months. The dead-interest math above shows this commonly runs $2,500–$6,000 net on a typical phased ADU build.
• The origination fee. Up to 4.99% of the loan amount, added to the balance. On $250K, up to $12,475.
• Hawaii is excluded. New York mortgage applications are blocked through Figure’s site per its own FAQ.
• Texas has a $35,000 minimum loan amount and operates under Texas Constitution Section 50(a)(6) home-equity rules.
• Apples-to-apples rate shopping is harder than it should be. Figure’s rate structure (origination-fee-for-rate-buydown) means a published APR isn’t directly comparable to a standard credit-union HELOC.

Where each lender actually works (state availability)

The state-availability matrix

The Texas wrinkle

Texas has unique home-equity rules under Section 50(a)(6) of the Texas Constitution that affect both maximum CLTV and the timing of when you can take a second lien. This isn’t a RenoFi or Figure problem specifically — it’s a Texas-borrower-using-any-HELOC-product problem. If you’re in Texas, work with a lender who has explicit Texas home-equity experience and confirm in writing how 50(a)(6) applies to your specific loan structure before you sign anything.

What can go wrong with either HELOC during an ADU build

Your home is the collateral

Per the Consumer Financial Protection Bureau (CFPB) HELOC consumer guidance, a HELOC is a secured loan, and the security is your home. If you can’t repay, you can lose your home. That risk doesn’t change between RenoFi and Figure. It changes between “HELOC of any kind” and “personal loan or unsecured financing.” Treat the decision accordingly.

Payment shock after the draw period ends

The CFPB also warns that HELOC payments can rise sharply when the draw period ends and the repayment period begins. During the draw period on a traditional HELOC structure, you may be paying interest only. Once draw ends — typically year 10 on a traditional HELOC, or sooner on Figure’s 3-to-5-year draw window — you begin paying principal plus interest on the outstanding balance over a shorter remaining term.

Practical step: Before you sign either product, ask the lender to show you the post-draw monthly payment, not just the draw-period payment. The two can differ by several hundred dollars on a six-figure balance.

The lender can freeze or reduce the line

Per the CFPB, lenders may reduce or freeze a HELOC if the property value declines significantly or if your financial circumstances change materially. This matters specifically during construction — if your ADU build runs over budget and you’ve already drawn most of the line, you may not be able to draw the additional cushion you assumed would be available. This is one reason we recommend planning your ADU budget with a 15% contingency baked in before financing, not as an afterthought.

Construction costs commonly run over

Three categories drive most ADU budget overruns, none of them predictable from a builder’s headline per-square-foot price:

• Utility hookups — electrical service upgrades, sewer laterals, water meters, gas extensions
• Site work — grading, drainage, demolition, retaining walls, tree removal
• Permits and impact fees — vary widely by jurisdiction and can run $5K–$20K+ before construction begins

A $250K detached ADU bid can easily become $290K once site work is fully scoped. Build the contingency. Don’t borrow against optimism.

What if neither RenoFi nor Figure covers the full ADU budget?

The full alternatives table

If you’re considering cash-out refinance

If your existing first mortgage rate is at or above today’s market rate, a cash-out refinance can be the cleanest single-payment path to fund an ADU. If it’s below today’s market rate, the math almost always works against you. Run the numbers before assuming.

Is HELOC interest deductible if I use it to build an ADU?

What IRS Publication 936 actually says

In plain English: home equity loan and HELOC interest is potentially deductible only if (1) the loan is secured by the home, (2) the proceeds are used to buy, build, or substantially improve that same home, and (3) the borrower itemizes deductions and stays within the overall mortgage-interest cap ($750,000 for loans originated after December 15, 2017, in most cases). For an ADU built on the property securing the HELOC, condition (2) is typically met because constructing a new dwelling unit qualifies as a substantial improvement to the property.

Where it gets complicated

• Mixed-use draws. If you draw $300K and use $250K for the ADU and $50K for a vacation, only the $250K portion’s interest is potentially deductible.
• The standard deduction. If you take the standard deduction, the HELOC interest deduction provides no benefit.
• The $750K cap. Total mortgage debt (first mortgage + HELOC combined) above $750K may not be fully deductible.
• State tax treatment varies. Some states diverge from federal rules.

Does building an ADU affect my property taxes?

Yes. In most jurisdictions, new ADU construction is added to the property tax roll at its current assessed value. In California, per the California State Board of Equalization, new construction is generally assessable and the assessor determines fair market value of new construction when completed; under Proposition 13, your original primary residence retains its protected base-year value and only the ADU addition is assessed at current value. Check with your county assessor for your specific jurisdiction.

How to decide in 10 minutes: a checklist

If you answered five or more of these confidently, you have enough inputs to start lender-specific verification and compare quotes. If three or more are still unclear, run the Feasibility Engine first.

Frequently asked questions

What we verified

Verified on May 21, 2026. If you’re reading this more than 90 days after this date, treat lender-specific terms as starting points and reconfirm with the lender directly.

Methodology

We built this comparison by combining each lender’s first-party product disclosures, third-party review data from publications that update their numbers regularly (Bankrate, NerdWallet, CNBC Select, LendEdu, Credit Karma), primary-source consumer-protection and tax guidance (CFPB, IRS, California BOE), and our own ADU cost dataset.

For the borrowing-power matrix, we used conservative formulas: 80% LTV on the current-equity (Figure) side, and the 90% ARV cap with the 125%-of-current-value secondary cap on the RenoFi side. Every scenario is illustrative and disclosed as such — none represents a loan quote, approval, or guarantee. Actual borrowing capacity will fall within or below these ranges based on your credit, income, DTI, lien position, property type, appraisal results, and lender overlays.

For the dead-interest calculation, we modeled the standard 4-milestone ADU draw schedule against Figure’s 100%-draw-at-closing requirement, then sensitivity-tested with the offset of parking unused funds in a 4% high-yield savings account. The resulting net cost of $2,500–$6,000 on a $250K HELOC over an 8-month build is the calculation we surface in the body.

Where sources disagreed on a specific data point, we cited the range and flagged the source — most prominently on RenoFi’s 90% vs 95% ARV cap and Figure’s minimum credit score. The Dwelling Index is an independent research resource covering ADU financing, costs, and regulations. Editorial conclusions on this page are formed from the verified facts cited above; they are never influenced by compensation.

Final word

The honest comparison is not “which is better” — it’s “which is structurally designed for your situation.” Recent buyer with a big plan and limited equity? Start with RenoFi’s ARV path and pressure-test the appraisal early. Long-tenured owner with substantial equity and a builder slot opening next month? Figure’s speed advantage is real. Project that exceeds both products’ realistic reach, or in a state that excludes one or both? Pivot to construction loans, conventional renovation products, or your local credit union — and don’t force a fit that wasn’t designed for you.

The most expensive mistake we see in ADU financing is the homeowner who picks a product based on marketing language, signs application paperwork, gets a quote that doesn’t match the marketing language, and finds out three months in that the project is underfunded with deposits already paid. That’s avoidable. Run the math first.

Full affiliate disclosure

The Dwelling Index is reader-supported. When you use our links to explore financing options, request prefab pricing, or purchase floor plans, we may earn a commission at no extra cost to you. We are not currently in an affiliate or referral relationship with RenoFi or with Figure, and earn no commission if you apply with either. We maintain affiliate relationships with Mortgage Research Center for broader mortgage, refinance, cash-out refinance, and construction-loan content, and with other partners listed elsewhere on this site. Our editorial conclusions are formed from the verified facts cited above and are never influenced by compensation. Nothing on this page is financial, legal, or tax advice. Loan products, rates, fees, and state availability change frequently. Verify current terms directly with any lender before applying.

Sources

• Bankrate — Current HELOC Rates In May 2026 (bankrate.com/home-equity/heloc-rates/)
• Bankrate — Best HELOC Lenders In May 2026 (bankrate.com/home-equity/heloc-lenders/)
• Bankrate — RenoFi: 2026 Home Equity Review (Feb 27, 2026) (bankrate.com/home-equity/reviews/renofi/)
• NerdWallet — Figure HELOC Review (updated May 6, 2026) (nerdwallet.com/mortgages/reviews/figure-heloc-review)
• CNBC Select — Figure HELOC Review (April 2026) (cnbc.com/select/figure-heloc-review/)
• LendEdu — Figure HELOC Review (May 2026) (lendedu.com/blog/figure-home-equity-loan-review/)
• LendEdu — RenoFi Review 2026 (lendedu.com/blog/renofi-review/)
• Credit Karma — Figure HELOC Review (creditkarma.com/home-loans/i/figure-heloc-review)
• Figure — Home Equity Line FAQ (figure.com/faqs/home-equity-line/)
• Figure / Lowe's — HELOC partner disclosure (lowes.com/l/Credit/Figure)
• RenoFi — Homepage and how-it-works (renofi.com)
• RenoFi — FAQ (renofi.com/faq/)
• RenoFi — Wholesale documentation (renofi.com/wholesale/)
• Consumer Financial Protection Bureau — HELOC consumer guidance (consumerfinance.gov/ask-cfpb/)
• IRS — Publication 936, Home Mortgage Interest Deduction (irs.gov/publications/p936)
• California State Board of Equalization — New construction property tax guidance (boe.ca.gov/proptaxes/newconstructionproperty.htm)
• Patelco Credit Union — ADU HELOC product (patelco.org/credit-cards-and-loans/home-equity/adu-line-of-credit)
• Yahoo Finance / Curinos — HELOC and home equity loan rates (May 2026)