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FHA Loan, Single Family + Garage Apartment + Adu Or Multi Family

Single Family ADUs or Multi Family

  • Multi Family

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geota

Thread Starter
Freshman Member
Joined
Dec 16, 2015
Professional Status
General Public
State
Texas
I am looking to purchase a 1930's 2-1 home that has an original 1930's detached garage apartment ADU. In the 1950s the homeowners built an un-permitted secondary ADU/mother-in-law studio suite attached to the primary home. I plan to tear down the mother-in-law ADU to expand the main house and would not like the square footage valued in the appraisal. The home is near a university and there a number of these type of units in the area and likely has long standing legacy use. The detached garage apartment has its own meter that is original from when the home was built. The mother in law ADU shares a meter and hot water heater with the main home.

I would like to get a single family home loan granted, my loan officer is thinking the home will be treated as a duplex.

Do you think the secondary ADU will prevent me from acquiring a single family home FHA loan? Would the appraiser care that I plan to tear it down? Would they be willing to grant a Single Family home if I agree to connect to the mother-in-law suite to the main home (very easily done)?

Any ideas on how I can maximize my chances of the home being treated?

Thanks~
 

JTip

Elite Member
Joined
Oct 12, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
You can get a FHA loan on a two unit building owner occupied.

The detached garage apartment has its own meter that is original from when the home was built.
You have a two unit.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
You can get a FHA loan on a two unit building owner occupied.



You have a two unit.
That is not a determining factor.

An ADU is usually subordinate in size, location and appearance to the primary Dwelling Unit and may or may not have separately metered utilities or separate means of ingress or egress. The Appraiser must not include the living area of the ADU in the calculation of the Gross Living Area (GLA) of the primary dwelling
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Do you think the secondary ADU will prevent me from acquiring a single family home FHA loan?
Try it and see. I bet it is a dice roll. I'd get a conventional bank loan, buy, and then add on; Then go refi.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
I am looking to purchase a 1930's 2-1 home that has an original 1930's detached garage apartment ADU. In the 1950s the homeowners built an un-permitted secondary ADU/mother-in-law studio suite attached to the primary home. I plan to tear down the mother-in-law ADU to expand the main house and would not like the square footage valued in the appraisal. The home is near a university and there a number of these type of units in the area and likely has long standing legacy use. The detached garage apartment has its own meter that is original from when the home was built. The mother in law ADU shares a meter and hot water heater with the main home.

I would like to get a single family home loan granted, my loan officer is thinking the home will be treated as a duplex.

Do you think the secondary ADU will prevent me from acquiring a single family home FHA loan? Would the appraiser care that I plan to tear it down? Would they be willing to grant a Single Family home if I agree to connect to the mother-in-law suite to the main home (very easily done)?

Any ideas on how I can maximize my chances of the home being treated?

Thanks~
1. Which Governing Municipality?

2. It may, or may not have similar requirements such as >>>>

(see ARTICLES 2 & 3 esp. Illegal ADU)

http://www.codepublishing.com/WA/Enumclaw/html/Enumclaw19/Enumclaw1934.html#19.34.040
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
  1. Accessory Dwelling Units: Case Study - HUD User
    www.huduser.gov/portal/publications/adu.pdf
    of existing illegal accessory units into compliance. ... Accessory dwelling units are permitted in the following zones on lots of 5000 square feet or more ...

  2. APPENDIX D: VALUATION PROTOCOL - HUD
    portal.HUD.gov/hudportal/documents/huddoc?id=DOC_35984.doc
    The FHA appraisal may not be transmitted to the lender without a case number. ... No Zoning, or Illegal Use. ... Accessory Dwelling Units ...
also see
http://accessorydwellings.org/2011/11/21/appraisals-and-gses-critical-issues-in-adu-financing-and-development/

and

http://accessorydwellings.org/2012/11/20/appraisal-journal-on-adus-and-an-editorial-on-evidence/
 
Last edited:

timd354

Elite Member
Gold Supporting Member
Joined
Jan 11, 2008
Professional Status
Certified Residential Appraiser
State
Maryland
I am looking to purchase a 1930's 2-1 home that has an original 1930's detached garage apartment ADU. In the 1950s the homeowners built an un-permitted secondary ADU/mother-in-law studio suite attached to the primary home. I plan to tear down the mother-in-law ADU to expand the main house and would not like the square footage valued in the appraisal. The home is near a university and there a number of these type of units in the area and likely has long standing legacy use. The detached garage apartment has its own meter that is original from when the home was built. The mother in law ADU shares a meter and hot water heater with the main home.

I would like to get a single family home loan granted, my loan officer is thinking the home will be treated as a duplex.

Do you think the secondary ADU will prevent me from acquiring a single family home FHA loan? Would the appraiser care that I plan to tear it down? Would they be willing to grant a Single Family home if I agree to connect to the mother-in-law suite to the main home (very easily done)?

Any ideas on how I can maximize my chances of the home being treated?

Thanks~
From your description, it sounds like there are 2 separate accessory units. 2 accessory units are not going to fly for an FHA or Freddie or Fannie loan "as-is". If you are going to tear down the second, unpermitted ADU, I suggest that you ask your lender about an FHA 403(k) loan, which will finance the purchase and your renovations.
 

geota

Thread Starter
Freshman Member
Joined
Dec 16, 2015
Professional Status
General Public
State
Texas
Thanks for the replies. I thought I also saw that line in the FHA rules that said ADU's cannot have their own meter - must of misread it. That said, I think I am covered under legacy fair use since ALL the homes with garage apartments that were built during that time have their own meters.

If it helps, the governing municipality is Austin, Texas.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Thanks for the replies. I thought I also saw that line in the FHA rules that said ADU's cannot have their own meter - must of misread it. That said, I think I am covered under legacy fair use since ALL the homes with garage apartments that were built during that time have their own meters.

If it helps, the governing municipality is Austin, Texas.
http://austintexas.gov/sites/default/files/files/Imagine_Austin/ADU_Overview.pdf

ALSO SEE PAGES 8 & 9 >>>

"Secondary Apartment special use"
ftp://ftp.ci.austin.tx.us/npzd/Austingo/infill_tools.pdf

THEN SEE>>>


http://www.austintexas.gov/page/residential-building-review

"The Residential Plan Review Division reviews new construction, additions, interior remodeling and demolition of single-family, duplex or two family houses and/or accessory buildings on one lot. Residential construction projects are reviewed for compliance with Chapter 25-2 of the Land Development Code, the 2012 International Residential Code, and Chapter 25-12, Technical Codes (local amendments).

Depending on the type of construction and location, residential plans may also be reviewed for compliance with the the following items:
  • Accessory Dwelling Unit - At the November 19, 2015 Council meeting, the Council approved the following changes to the ADU regulations. Click here to learn more.
http://www.austintexas.gov/sites/default/files/files/Planning/Residential/OFFICIAL_BUILDING_TECHNICAL_REVIEW_HANDOUT.pdf
 
Last edited:

geota

Thread Starter
Freshman Member
Joined
Dec 16, 2015
Professional Status
General Public
State
Texas
Appraiser came out... treated as a single family with ADU.
 
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