Home + Rehab Loan Combination?

[Manco Snead]

Greetings all,

I'm hoping I can get some feedback from those more experienced than myself. I am looking to buy a small house and ultimately have an ADU built on the property. However, if there already happens to be a detached garage, pre-existing ADU, or something similar then the scenario changes. Without any pre-existing outbuilding I will need a construction loan to have an ADU built. With a preexisting structure in decent condition I can likely convert it myself with my own cash and not need the loan.

I have never dealt with construction loans, but know that I want the home and construction loan to be combined into one, to avoid having to pay off 2 separate loans.

So, in the whole preapproval process I am not sure how to approach this as I may or may not need the construction loan, depending on what I find. I am in a difficult market with few options and competition.

Any thoughts would be much appreciated.

Thank you.