Changes In Adu Reporting For Fannie/freddie Work?

[hastalavista]

I was speaking with a colleague today who works for a large lender. We were discussing a potential change that might be working its way through the system in regards to ADU units and how they are reported in the 1004 form for CU-applicable appraisals.

So my question is very general: Has anyone been asked to report ADUs or ADU-like areas differently in the 1004 form?

Here is a "for example":

Assume that a house is 2,000sf. Within that 2,000, there is an area that (let's say 350sf) that could be used as an ADU unit. This 350sf is directly accessible via the interior of the house and doesn't necessarily have its own exterior access. This area would need to have a bathroom; it may include a bedroom and a small living room area or it may be a single room with a bath. But, it has a kitchen counter with sink (it may or may not have a stove/range appliance). In many cases, it could function as a wet bar.

Question: Has anyone been asked to identify this area as an ADU for a GSE-type appraisal?

The "how" this area is valued is not part of the question. The question is, has there been any requests to identify such an area as an ADU (requiring that box be checked and that area to be identified as such)?

Thanks!

Denis

 

[jay trotta]

Assuming the ADU = Additional Dwelling Unit; in my area the question would pertain to Zoning and how it is perceived/approved via permit & use; IE: In Law / Accessary etc. - to date have explained how it has been approved via zoning (Use) and have Not been questioned on it as yet.

 

[hastalavista]

Thanks, Jay!

From what I heard, what I'm asking about doesn't have to do with what is legally permissible, zoning, etc. It is a reporting item. So, in other words, if the space fits the parameters even if the appraiser wouldn't consider it a potential ADU, appraisers are being asked to check the ADU box. They may value the space as GLA and include it in the GLA box, but they are being asked to check the ADU box.

 

[CindyR]

There was a lot of talk about these a couple years ago - big builders referred to them as 'multi generational' housing. kind of an apartment for mom to move in but well within the confines of the main dwelling. i haven't appraised one in a while but don't recall any disputes in years past.

 

[Mike Kennedy]

1. B4-1.3-05: Improvements Section of the Appraisal ... - Fannie Mae
   www.fanniemae.com/content/guide/selling/b4/1.3/05.ht...
   If the subject property has an accessory unit, the appraisal should describe it. .... is defined as a one-unit property with an accessory unit or a two-unit property ...
   
   
2. Accessory Unit and Boarder Income Flexibilities - Fannie Mae
   www.fanniemae.com/content/fact_sheet/homeready-board...
   Sep 29, 2016 ... HomeReady® mortgage's accessory unit and boarder income flexibilities help to meet the diverse needs of today's home buyers by expanding ...
   
   
3. Appraisal and Property-Related Contents - Fannie Mae
   www.fanniemae.com/content/FAQ/appraisal-property-rep...
   May 16, 2017 ... If the accessory unit is in compliance with zoning requirements, the ... must not be selected on a relative basis, meaning the ratings are not.
   

 

[hastalavista]

Thanks, Mike.

I know what the existing/stated position is.
I'm asking if appraisers have received any requests to change the way they've identified space as an ADU (not necessarily change the way they value that space; but specifically are asked to identify such space as an ADU whether it is used as such or not).

This is more of a reporting-change that is due to UAD than a valuation-process change.

 

[gregb]

Denis, no requests received regarding the reporting of ADU's.

 

[J Grant]

No

 

[Slappy]

None yet. My guess as to the intent is that they want to notify to the lender of the potential of an ADU unit. It is more risky to underwrite a SFR loan on a home with an illegal rental unit or potential rental unit. They want to be notified of the added risk potential

 

[timd354]

I was speaking with a colleague today who works for a large lender. We were discussing a potential change that might be working its way through the system in regards to ADU units and how they are reported in the 1004 form for CU-applicable appraisals.

So my question is very general: Has anyone been asked to report ADUs or ADU-like areas differently in the 1004 form?

Here is a "for example":

Assume that a house is 2,000sf. Within that 2,000, there is an area that (let's say 350sf) that could be used as an ADU unit. This 350sf is directly accessible via the interior of the house and doesn't necessarily have its own exterior access. This area would need to have a bathroom; it may include a bedroom and a small living room area or it may be a single room with a bath. But, it has a kitchen counter with sink (it may or may not have a stove/range appliance). In many cases, it could function as a wet bar.

Question: Has anyone been asked to identify this area as an ADU for a GSE-type appraisal?

The "how" this area is valued is not part of the question. The question is, has there been any requests to identify such an area as an ADU (requiring that box be checked and that area to be identified as such)?

Thanks!

Denis

Sounds like a lender change to me. I have not heard anything from Fannie or Freddie regarding this.