ADU included in main dwelling

[gorillakimchi]

I'm currently working as a trainee & always thought ADU is a detached unit, but today I figured that I was wrong after I researched forums for few hours.

Subject property : 3 stories. Spanish style over 3 millions. Total 3533 SF. lower level(493 SF) is not a basement(above grade) but doesn't have access from inside. Recently remodeled and equipped with small but full kitchen, office, living and bedroom.

I should've noticed this could be a problem when there's no access from inside the dwelling. However, due to lack of my experience & knowledge, I didn't even think that this area could be considered as ADU.

Conditions that I received from a reviewer

(1) Please confirm if the lower level functions as an ADU.
(2) According to the sketch, this area meets the functions of sleeping, sanitation, cooking, and living. If this area is an ADU, the appraiser to confirm if it is legally permissible.
(3) Please provide a SOLD Comp with similar ADU to support value and marketability. Thank you.

If I respond that lower level is ADU, then I think I have to make a whole new report (taking new 6 comp photos, value, etc.) Also, there are no comps like subject in that market area. 1 comp has an extra kitchen in a guest house, but it's a detached guest house, so I don't think I can use it to support value & marketability as the reviewer requested.

Please advise the best way to respond regarding reviewer's condition. Or do I have to work all over again & make a new report? (Oh no...)

 

[Terrel L. Shields]

Yes, an ADU can be part of the house. The SF of it should be counted separately. And yep, you need to find a comp for it. Download the selling guide and all that info is in there.

Fannie Mae will purchase a one-unit property with an accessory unit. An accessory unit is typically an additional living area​

independent of the primary dwelling unit, and includes a fully functioning kitchen and bathroom. Some examples may include​

a living area over a garage and basement units. Whether a property is defined as a one-unit property with an accessory unit​

or a two-unit property will be based on the characteristics of the property, which may include, but are not limited to, the existence​

of separate utilities, a unique postal address, and whether the unit is rented. The appraiser is required to provide a​

description of the accessory unit, and analyze any effect it has on the value or marketability of the subject property​

 

[Tim The Enchanter]

doesn't have access from inside.

Well, it's not GLA then. How did you treat it? Yep, you're gonna have to do more work on this one.

 

[RSW]

You need to do a H&BU analysis and determine if an ADU is legal. If it is then, using the property with the detached guest house should be ok.

 

[TMG]

Realtors do that all the time, combine guest house GLA with dwelling GLA.

 

[gorillakimchi]

Yes, an ADU can be part of the house. The SF of it should be counted separately. And yep, you need to find a comp for it. Download the selling guide and all that info is in there.

Fannie Mae will purchase a one-unit property with an accessory unit. An accessory unit is typically an additional living area​

independent of the primary dwelling unit, and includes a fully functioning kitchen and bathroom. Some examples may include​

a living area over a garage and basement units. Whether a property is defined as a one-unit property with an accessory unit​

or a two-unit property will be based on the characteristics of the property, which may include, but are not limited to, the existence​

of separate utilities, a unique postal address, and whether the unit is rented. The appraiser is required to provide a​

description of the accessory unit, and analyze any effect it has on the value or marketability of the subject property​

Yes I read it while I was searching answers. Thanks for your comments

 

[gorillakimchi]

doesn't have access from inside.

Well, it's not GLA then. How did you treat it? Yep, you're gonna have to do more work on this one.

Included in GLA. It's my first time to see that kind of property so didn't even think or notice it can be ADU. As I mentioned, I just thought ADU = Detached unit. Honestly, I don't want to work all over again (research, take photo, new value...). Do you really think there's no way to handle it?

 

[gorillakimchi]

You need to do a H&BU analysis and determine if an ADU is legal. If it is then, using the property with the detached guest house should be ok.

H & BU analysis sounds scary for a beginner. Can you give me some hints? Also, I need to contact a borrower and ask that ADU is legal or not right?

 

[gorillakimchi]

Realtors do that all the time, combine guest house GLA with dwelling GLA.

It's a bit different sir. I never combined a detached ADU(guest house) to main dwelling like realtors. It's 1 SFR but lower level functions as ADU, and I didn't know ADU can be part of main dwelling. I know what you mean and I hate it too.

 

[Dublin ohio]

Also, I need to contact a borrower and ask that ADU is legal or not right?

Check zoning and local building dept. Not owner. Is it legal per zoning. Zoning determination is also part of HBU (legally permitted)