Does anyone knows the official HUD/FHA definition for an ADU or a kitchen?

[sputnam]

The UW may be trying to shift the 'blame' to Fannie, Freddie, HUD, etc. I've seen them do this in the past when they did not want to, either personally or for the Lender, to deny the loan. I'm sure that a lot of us remember hearing UWs claim that Fannie REQUIRED all the comparables to be within 1 mile. Of course, Fannie never required that. They may be genuinely concerned about it based on the Client's lending policies and guidelines. Or, that UW may be ignorant about the issue.

 

[MMing5000]

The UW may be trying to shift the 'blame' to Fannie, Freddie, HUD, etc. I've seen them do this in the past when they did not want to, either personally or for the Lender, to deny the loan. I'm sure that a lot of us remember hearing UWs claim that Fannie REQUIRED all the comparables to be within 1 mile. Of course, Fannie never required that. They may be genuinely concerned about it based on the Client's lending policies and guidelines. Or, that UW may be ignorant about the issue.

i think you could very well be right. This FHA appraisal was for a reverse mortgage. The Lender's reviewers or underwriters have been very critical on appraisal. Recently did another appraisal for reverse mortgage purposes where the property owners told me their loan was denied due to "the appraisal", even though i had gone out of my way to respond to every revision request and answered all their concerns such as whether the afternoon shadow from a nearby mid-rise apartment building would affect value and marketability where i had to expand comp search back to 5 years to find another property in the neighborhood that experiences the same afternoon shadow from the apartment building. The hoops that appraisers must jump through to answer asinine questions and frivolous revision requests are getting out of hand simply because we are probably at another peak of the market where the Lenders want to be more conservative on their loans so they use the appraisers as a scapegoat.

 

[sputnam]

Could be. The Lenders never want to tell their customer....'sorry. we don't think your property is good collateral for the loan you are seeking. goodbye.' So, they sometimes... some of them.... blame it on the appraisal.

 

[Sid Holderly]

If accessible from inside the main floor, (stairs to the former garage),now living area in thie lake areas near me are ether GLA or a finished basement with a functional deficiency of likely flooding. In my lake area you can not find a difference in value based on bedroom count.

 

[MrLA]

I build adus. It must have a kitchen. It can be detached or attached. In my county it can not be larger than 1,200 sf.

 

[MrLA]

Fannie, Freddie. Etc needs to revamp the way adus are given value. In my personal opinion, it should be included in the GLA, bed, bath count, etc. Hoping things change down the road.

 

[J Grant]

Appraised a larger than typical hign-end 1 bedroom dwelling with 1,000 sf GLA improved on concrete piers located in a flood zone A area in a beach community for FHA financing where the garage below the dwelling has been newly improved as a family room with 1/2-bath (no shower stall no tub) and a wet bar where there is no existing electrical wiring for a stove. The appraisal report noted that there are no similar large 1 bedroom comparable dwellings within 5-mile radius, however, there are smaller 800 and 900 sf dwellings with 2 bedrooms in the immediate area which were used as comparables to demonstrate there is market acceptance for smaller dwellings and used a couple of larger 3 bedroom dwellings to bracket the upper end of subject's dwelling size, then adjusted $10,000 for differences in the number of bedrooms based on estimated cost from a local contractor for carpentry work and electrical work needed to add a bedroom with door and windows.

The Lender's Underwriter came back and said the family room with wet bar and 1/2 bath is considered an ADU. I had responded that the family room does not have a functional kitchen because it has no stove, and only has a half bath and sent the attached article found online that an ADU requires a functional kitchen. The reviewer replied and said that HUD/FHA has no requirement for a stove in the kitchen, nor does it have a requirement for a full bath in the ADU. The reviewer also insisted a similar 1 bedroom dwelling must be used to demonstrate marketability or they can't do the loan.

I can't find any legal or official definition of an ADU on HUD/FHA website. Can anyone help?

Appraised a larger than typical hign-end 1 bedroom dwelling with 1,000 sf GLA improved on concrete piers located in a flood zone A area in a beach community for FHA financing where the garage below the dwelling has been newly improved as a family room with 1/2-bath (no shower stall no tub) and a wet bar where there is no existing electrical wiring for a stove. The appraisal report noted that there are no similar large 1 bedroom comparable dwellings within 5-mile radius, however, there are smaller 800 and 900 sf dwellings with 2 bedrooms in the immediate area which were used as comparables to demonstrate there is market acceptance for smaller dwellings and used a couple of larger 3 bedroom dwellings to bracket the upper end of subject's dwelling size, then adjusted $10,000 for differences in the number of bedrooms based on estimated cost from a local contractor for carpentry work and electrical work needed to add a bedroom with door and windows.


Why does UW believe the garage converted into a family room is an ADU? Did you include it in living area of the main dwelling? Might be more of an ANSI issue where a below grade area is not counted in living sf of main dwelling ?

Forget the kitchen issue, there are times we have to stand up to a client when they are wrong. It is not a ADU, perhaps a mother inlaw suite if it has its own entrance.

A client normally does want to see a one bedroom comp so search back further in time or use a one bedroom villa if need be.

 

[Gingerman]

I just received a similar revision request (FHA) about ADU.

The subject meets the definition of a single family unit an ADU per HUD handbook 4000.1 pg 572. Appraiser to revise the report accordingly per HUD guidelines addressed on pg 573. Appraiser to comment if the ADU is in compliance with local zoning /building codes for a single-family residence and if it is tenant occupied.
Appraiser to expand time and distance parameters to provide a comparable that has a similar ADU to support this feature is common to the area and comment on the effect on marketability this has.
Appraiser to add living room/sitting area of ADU to sketch based on photo provided (additional master bedroom view) Thank you.

I am a little mad at the moment. Trying to remain calm lol. So the ADU they are talking about is the master bedroom on the first floor. It has a "kitchenette" in it. I can't imagine anybody would use this as an ADU. The ONLY case, in my opinion, that this would be used as a quote on quote ADU is for a grandparent. It is perfect for someone who is caring for a grandparent. I could be wrong but no chance this would ever be used to rent or anything like that.

 

[MMing5000]

Appraised a larger than typical hign-end 1 bedroom dwelling with 1,000 sf GLA improved on concrete piers located in a flood zone A area in a beach community for FHA financing where the garage below the dwelling has been newly improved as a family room with 1/2-bath (no shower stall no tub) and a wet bar where there is no existing electrical wiring for a stove. The appraisal report noted that there are no similar large 1 bedroom comparable dwellings within 5-mile radius, however, there are smaller 800 and 900 sf dwellings with 2 bedrooms in the immediate area which were used as comparables to demonstrate there is market acceptance for smaller dwellings and used a couple of larger 3 bedroom dwellings to bracket the upper end of subject's dwelling size, then adjusted $10,000 for differences in the number of bedrooms based on estimated cost from a local contractor for carpentry work and electrical work needed to add a bedroom with door and windows.


Why does UW believe the garage converted into a family room is an ADU? Did you include it in living area of the main dwelling? Might be more of an ANSI issue where a below grade area is not counted in living sf of main dwelling ?

Forget the kitchen issue, there are times we have to stand up to a client when they are wrong. It is not a ADU, perhaps a mother inlaw suite if it has its own entrance.

A client normally does want to see a one bedroom comp so search back further in time or use a one bedroom villa if need be.

Subject has a level lot located in Flood Zone AE area. Main dwelling is improved above a large 1,000 sf garage, where the garage has been completely renovated into a larger family room with a small wet bar and 1/2-bath, all done without building permit. Any new improvements or renovations must conform to current zoning and building codes. Because it is located in a Flood Zone AE area, it is not likely the County will approve a living area on the lower level, let alone an accessory dwelling unit, in my opinion.

I just received a similar revision request (FHA) about ADU.


I am a little mad at the moment. Trying to remain calm lol. So the ADU they are talking about is the master bedroom on the first floor. It has a "kitchenette" in it. I can't imagine anybody would use this as an ADU. The ONLY case, in my opinion, that this would be used as a quote on quote ADU is for a grandparent. It is perfect for someone who is caring for a grandparent. I could be wrong but no chance this would ever be used to rent or anything like that.

i am sort of glad that someone else is able to appreciate my frustrations

 

[J Grant]

Subject has a level lot located in Flood Zone AE area. Main dwelling is improved above a large 1,000 sf garage, where the garage has been completely renovated into a larger family room with a small wet bar and 1/2-bath, all done without building permit. Any new improvements or renovations must conform to current zoning and building codes. Because it is located in a Flood Zone AE area, it is not likely the County will approve a living area on the lower level, let alone an accessory dwelling unit, in my opinion.

i am sort of glad that someone else is able to appreciate my frustrations

Nothing has changed since the first post - the lower level is not an ADU and appraiser has to explain why. The UW does not tell the appraiser what the house consists of.

The UW asked for a one bedroom comp or they can not do the loan. Well that is their lending decision. Either the appraiser can find a one bedroom comp, ( back in time, further distance search) or they can't. If no one bedroom comp can be found, appraiser states the extent of search and none was found. If lender decides the loan can not go forward, so be it. Not the appraiser's fault. That is a lender decison.