GLA with attached Guest House

[CAK2018]

VA Appraiser used attached guest home as part of the GLA. Underwriter is disputing this. Previous VA Appraiser also included in GLA. Any help is appreciated.

 

[WarEagleFL]

The problem is that FNMA guidelines allow it if it is attached AND within the functional flow of the home. However VA has a different stance.

Lenders Handbook - VA Pamphlet 26-7 Chapter 11: Appraisal Report (New) #6 page 11-10

An ADU is usually subordinate in size, location, and appearance to the primary dwelling unit and may or may not have separately metered utilities and separate means of ingress and egress. The appraiser must not include the living area of the ADU in the calculation of the GLA of the primary dwelling. The ADU must be valued separately as a line item on the market data grid.

Seems cut and dry to me

 

[Terrel L. Shields]

ADUs are to be separated from the GLA. Appraiser is wrong to lump them together regardless how similar or attached they are.

 

[CAK2018]

The problem is that FNMA guidelines allow it if it is attached AND within the functional flow of the home. However VA has a different stance.

Lenders Handbook - VA Pamphlet 26-7 Chapter 11: Appraisal Report (New) #6 page 11-10

An ADU is usually subordinate in size, location, and appearance to the primary dwelling unit and may or may not have separately metered utilities and separate means of ingress and egress. The appraiser must not include the living area of the ADU in the calculation of the GLA of the primary dwelling. The ADU must be valued separately as a line item on the market data grid.

Seems cut and dry to me

Room Additions and Car Storage Conversions

Change Date

February 22, 2019 This Chapter has been revised in its entirety.

a. GLA Considerations

Room additions and enclosures of garages and carports into the living area should be included in the GLA if the added space is: accessible from the interior of the main dwelling in a functional manner, has a permanent and sufficient heat source, and is similar in design, quality of construction and appeal to the main dwelling.

 

[CAK2018]

Since the space is attached and accessible through the interior of the home, I do not see how it would not be part of GLA. Seems odd that two VA appraisers would have this incorrect

 

[WarEagleFL]

Room Additions and Car Storage Conversions

Change Date

February 22, 2019 This Chapter has been revised in its entirety.

a. GLA Considerations

Room additions and enclosures of garages and carports into the living area should be included in the GLA if the added space is: accessible from the interior of the main dwelling in a functional manner, has a permanent and sufficient heat source, and is similar in design, quality of construction and appeal to the main dwelling.

I'm sorry, i thought you said....

VA Appraiser used attached guest home as part of the GLA. Underwriter is disputing this. Previous VA Appraiser also included in GLA. Any help is appreciated.

You ask a question about guest houses/accessory units/ ADUs and then try to apply it to room additions and garage additions.
Unfortunately it is not odd that a Realtor doesn't understand the guidelines, regulations, requirement, etc.

If it quacks like a duck....

a. Single Real Estate Entity

is a living unit including kitchen, sleeping, and bathroom facilities added to or created within a single-family dwelling, or detached on the same site. A manufactured home on the site could be an ADU. The dwelling and the ADU together constitute a single real estate entity.

 

[Tim Hicks (Texas)]

Since the space is attached and accessible through the interior of the home, I do not see how it would not be part of GLA. Seems odd that two VA appraisers would have this incorrect

Agents tend to confuse living area with Gross Living Area. Fannie Mae, HUD, the VA and ANSI all have definitions regarding accessory dwelling units and why they are not included in GLA. If it is attached to the home, then why isn't it considered a two family property (duplex)? That would be a more logical question than why is the ADU not considered GLA. There is a reason we have a "accessory dwelling unit" check box on our URAR forms. If the function and use is a "guest home" as you classified it, then it is an accessory dwelling unit and not considered in the GLA. Now, It may have the same contributory value as the GLA counted separately, but it depends on each individual market and the proper market reaction for that market.

 

[Tru Red]

If the ADU has interior access to the main body of the home and uses the same HVAC system and is built in a manner that is consistent with the quality of construction throughout the home......then yes I would add the GLA into the equation.

 

[GWISC]

OP, it could possibly be that the ADU (attached guest house) was considered as GLA due to possibly being that the local zoning law may not allow for an ADU (guest house or mother-in-law quarters) thereby necessitating the need for it to be attached, but likely reported to the municipality as just an addition to the house. It could be the two VA appraisers HBU discussed the allowable uses. The local zoning code may not allow for an ADU. The owner/seller may have skirted the rules by simply making the addition to the house even though it functions as a guest house. In this hypethetical case, the legal use portion of the HBU would allow a single family residence, rather than a single family residence with an ADU.

Or, it could be both appraisers should have just included only the GLA of the house separate from the ADU.

My guess it is likely the latter.

 

[Elliott]

You could make a case, IF all six comparables were similar to the subject + ADU, and the ADUs were similar in their living area. But unless there is great data, you are more likely to be comparing houses with and without ADUs similar to the subject's main house. Its not appraisal logical to lump the GLA together. Makes little sense to compared a 2200 sf house with a 800 sf ADU with a 3000 sf house.