Is this an ADU?

[NORTON]

For this property, it's garage was converted to what could be considered an ADU although it is without a permanent heat source, as this is what as Appraiser stated in their report. It's assumed the Appraiser is stating fact, so the wall AC unit would not be a combo unit which also would provide heat.
This area is in addition to a detached bonus room, which is not part of my question.
The photos of this area are pics 38 - 42 in the listing below.
So, bathroom and sleeping areas are present, as is a kitchen but no heat in this unpermitted detached converted garage living space Southern CA, would you guys call it an AdU?

Thanks.

https://www.zillow.com/homedetails/725-W-107th-St-Los-Angeles-CA-90044/20965357_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare

 

[glenn walker]

So all it needs is heat ? That's a minimal cost to do so why not just make it a condition like a repair. What else are you going to do call it a outside party room with bathroom....lol

 

[NORTON]

Yes, no permanent heat source was present at time of inspection.
The Appraiser valued it as a 2 car garage with a CTC noted it in the report but not a deduction in the sales grid.

But ultimately, would most appraisers call it an ADU, or garage?

 

[chad hampton]

I’d call it an ADU.

 

[nstanbru]

I'd call it what the building permit says it is.

 

[alebrewer]

Yes, no permanent heat source was present at time of inspection.
The Appraiser valued it as a 2 car garage with a CTC noted it in the report but not a deduction in the sales grid.

But ultimately, would most appraisers call it an ADU, or garage?

Ancillary to the primary conversation, but at least he/she handled it correctly. 'As is' with a CTC, or 'subject to' with required repairs/changes and HC.

 

[J Grant]

It does not look like a garage anymore - at least per the photos shown. It is an ADU that needs a permanent heat source, subject to install one

 

[Tom4value]

D

I'd call it what the building permit says it is.

I'd call it what the building permit says it is.

Ding, ding, ding! We have a correct answer!
For highest and best use all the tests need to be performed and IMHO, legally permitted is the first test I look at. It may look like a duck, act like a duck and sound like a duck but if the building inspector says it isn’t a duck, it isn’t a duck.

 

[J Grant]

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Fannie Mae’s Position on Non‑Permitted ADUs or Garage Conversions​

Fannie Mae does not automatically lend on non‑permitted ADUs or garage conversions — but it can finance them if certain conditions are met, and the appraisal process is handled carefully.

1. ADU rules
Fannie Mae’s Selling Guide requires that an ADU be zoning‑compliant and legally treated as a separate unit LinkedIn. If an ADU is not permitted under local zoning, the appraiser must:

• Comment on its impact on value and marketability.
• Show market support (comparables) if the space is valued as part of the property.
• If no comparables support the use, value it as a garage or other original use LinkedIn.

Fannie Mae generally requires one ADU per parcel and that it be subordinate in size to the primary dwelling, with its own kitchen, bathroom, sleeping area, and entrance Fannie Mae Selling+1. Non‑permitted ADUs are not automatically excluded, but they trigger extra scrutiny.

2. Garage conversions / unpermitted additions
For garage conversions or other unpermitted additions, Fannie Mae’s guidelines (aligned with FHA/VA) require:

• The work to be in a workmanlike manner.
• The appraiser to base value on current condition and market acceptance, not code.
• If no permit is required (e.g., minimal plumbing/electrical, “workmanlike” quality), comparables must support the value.
• If comparables don’t support the use, value it as the original garage.
• If permits are required by contract or local law, they must be provided danieldobbs.org.

3. When it can work

 

[chad hampton]

I would note what is actually there.