Advice for building an ADU with an unsecured construction loan

[Amy Turnbull]

Hello! I want to build an accessory dwelling unit on my property in Western Massachusetts. It will cost about $100 - $120 dollars. I want to take out a loan independent of the the existing property. The lender I'm considering wants to do a construction-to-permanent loan, blending the cost of construction with a refinance of my existing loan. That loan has a 4.25 interest rate so I would rather not touch it. Is it possible just to finance the construction? I have 25% for the down payment so I'm looking to borrow $75,000 to $95,000 dollars. Ultimately, the ADU will bring in about $1,000 per month. I have an 825 credit rating, a current lease and two years of experience. The DSCR is about 1.25 to 1.5. My income is not great but the current property and the potential ADU will both be income-producing. Thanks in advance for any responses!