With multigenerational home purchases reaching an all-time high in 2024—17% of all homebuyers are now choosing homes that accommodate multiple generations under one roof—families are clearly seeing the value in this lifestyle. Not only does a multigenerational home offer meaningful social and family benefits, but it can also be a wise financial choice. Let’s explore why families are beginning to choose this living arrangement and how financing options, on Accessory Dwelling Units (ADUs), can help make it an affordable and flexible option.
The top reasons for buying a multigenerational home include:
• Cost Savings: 36%
• Caring for Aging Parents: 25%
• Children or Adult Relatives Moving Back Home: 21%
• Children Over 18 Who Never Left Home: 20%
These statistics show the motivations behind this trend, allowing families to adapt to various life stages while managing costs.
For families looking for financial savings, a multigenerational home can be an great option. By sharing housing expenses families can reduce their overall cost of living. This setup not only eases financial pressures but can also increase purchasing power, which can allow for a larger or better-suited home than a single family might be able to afford.
One popular option within multigenerational homes is the use of Accessory Dwelling Units(ADUs), such as casitas or tiny homes, to create independent living spaces for family members or rental income. For those considering an ADU, here are some financing advantages:
• Income Qualification: Rental income generated from an ADU on the property of a1-, 2-, or 3-unit primary residence can be used to qualify for a purchase or refinance.
• Income Limits: Qualifying rental income cannot exceed 30% of the total income used to qualify.
• Zoning Compliance: The ADU must meet zoning and land use requirements.
• Available for Purchase or No Cash-Out Refinance: ADUs offer flexibility in financing options for both new buyers and existing homeowners.
ADUs are especially attractive for families who want to provide independent living space to parents, adult children, or other family members for a lower cost than supporting a separate living arrangement. Alternatively, they can bring in residual income by renting out the unit, which helps offset monthly expenses and contributes to long-term financial goals.
Beyond financial savings, multigenerational living can offer many other benefits:
• Stronger Family Bonds: Living together can help with family bonding.
• Emotional and Practical Support: Family members can support each other emotionally and help with childcare or elder care.
• Aging in Place: Older adults can age comfortably in a familiar environment surrounded by family.
• Cultural Preservation: Multigenerational homes allow families to share and preserve cultural traditions and languages.
• Environmental Benefits: Sharing a home can reduce the environmental footprint families leave.
• Health and Wellness: Family members can help seniors manage their health care.
If you're considering the advantages of a multigenerational home, reach out today to learn more about your financing options. From ADUs to tailored mortgage solutions, we’re hereto help make your goals a reality.
