Need help regarding Fannie Mae's criteria for an Accessory Unit

[james stephens]

Need help regarding Fannie Mae's criteria for an Accessory Unit. Just trying to understand the correct way to classify an in-law suite in basement, in particular the issue of privacy. Any feedback is appreciated.

In the past, houses that have had finished basements which included a full kitchen, full bathroom, and at least one bedroom I have considered to be Accessory Units. Haven't had any pushback from lenders until yesterday when a lender indicated that the classification of finished basement area was "unexpected". It seems to be related to the issue of reasonable expectation of privacy. The lender seems to think that since there is an "open stairway" to the basement then the area should not be considered an ADU. In my opinon the stairway is not open since there is a door at the top of the stairs.

FWIW, There is a door at the top of the stairway that can be locked from inside the primary dwelling, what you typically expect from a house with a basement. Also, the finished basement area does not have separate meters, utilities, postal address, etc. It does have ingress/egress via sliding glass door and double pedestrian doors in the rear that lead to a patio which in turns has access to a path/stairs that connects to the driveway. The finished basement area is legal use per zoning, but cannot be rented out and only family members can occupy it. Also, the county does not consider that an ADU per their definitions.

Should it be classified at an Accessory Unit or just finished basement area? It seems that Fannie Mae and HUD understand that finished basement areas can be Accessory Units, but not sure why I'm getting such strong pushback on this. Maybe different technical interpretations of an Accessory Unit related to privacy? Lending guideline issues? Thanks in advance, James

 

[Mike Ault]

I can't believe they are disputing your ADU classification and would rather have a "second kitchen" of some sort in a SFR. It would seem that the lender would be supporting your decision. From what you described it seems like a perfectly functional ADU to me. It is segregated for privacy & has a separate entrance to the exterior. Slamdunk ADU.

 

[Dublin ohio]

is there adequate ingress/egress through a window or exit to the exterior in case of fire? Or would the occupant of the basement burn down with the house? Unless there is another exit I wouldn't call that functional sleeping quarters.

I assume you mean in the bedrooms. Since op says that there is a sliding door to the outside.

 

[Dublin ohio]

I am sure you looked at the following. But it does mention expectation of privacy

What is required for accessory dwelling units (ADUs)?

selling-guide.fanniemae.com

 

[Dublin ohio]

There is a door at the top of the stairway that can be locked from inside the primary dwelling

That could be a safety issue. Unless it can be unlocked from the other side without a key

 

[james stephens]

I can't believe they are disputing your ADU classification and would rather have a "second kitchen" of some sort in a SFR. It would seem that the lender would be supporting your decision. From what you described it seems like a perfectly functional ADU to me. It is segregated for privacy & has a separate entrance to the exterior. Slamdunk ADU.

Thanks, that's what I've been thinking and why I'm confused

 

[Terrel L. Shields]

That could be a safety issue. Unless it can be unlocked from the other side without a key

or vice versa? whose letting who out? It should be the occupant of the basement with dual egress.

 

[james stephens]

Thanks for your replys so far. I think it is a matter of the interpretion of "privacy" which could be open for many ideas

 

[Sadie]

Need help regarding Fannie Mae's criteria for an Accessory Unit. Just trying to understand the correct way to classify an in-law suite in basement, in particular the issue of privacy. Any feedback is appreciated.

In the past, houses that have had finished basements which included a full kitchen, full bathroom, and at least one bedroom I have considered to be Accessory Units. Haven't had any pushback from lenders until yesterday when a lender indicated that the classification of finished basement area was "unexpected". It seems to be related to the issue of reasonable expectation of privacy. The lender seems to think that since there is an "open stairway" to the basement then the area should not be considered an ADU. In my opinon the stairway is not open since there is a door at the top of the stairs.

FWIW, There is a door at the top of the stairway that can be locked from inside the primary dwelling, what you typically expect from a house with a basement. Also, the finished basement area does not have separate meters, utilities, postal address, etc. It does have ingress/egress via sliding glass door and double pedestrian doors in the rear that lead to a patio which in turns has access to a path/stairs that connects to the driveway. The finished basement area is legal use per zoning, but cannot be rented out and only family members can occupy it. Also, the county does not consider that an ADU per their definitions.

Should it be classified at an Accessory Unit or just finished basement area? It seems that Fannie Mae and HUD understand that finished basement areas can be Accessory Units, but not sure why I'm getting such strong pushback on this. Maybe different technical interpretations of an Accessory Unit related to privacy? Lending guideline issues? Thanks in advance, James

It depends on your jurisdiction. In some areas here, the water heater must be separate and the ADU gets its own address. What ever constitute a legal ADU in your area. It may not be a legal ADU, but I bet it get used like one. I would point out the locking separation door to the lender. (again?)

 

[Mike Ault]

I get lots of static for "canning kitchens" which are second smaller kitchens designed for home food canning & common in older farmhouses. Two kitchens under one roof is a red flag to some simpleton lenders.