Rural property with "guest house" not adu.

[Tom D]

Poster, how cold does it get there, and how often. FHA adu guideline has to meet HUD minimum stardards, which means a fixed permanate heater. But does it actually get cold enough for homes there to need permanate heaters

If cold, it ain't an adu per HUD definition. Just ask search saying FHA adu unit. It was amended several years ago. It therefore is what now, upgraded work shed.

 

[Terrel L. Shields]

FHA requires a permanent automatic heat source for it to be called habitable.

I don't care what FHA wants to call it. Reality is reality. hundreds of thousands of people live in homes that do not meet FHA requirements. So deal with it. Reality says these are "habitable" and FHA can go take a hike. Any lender should know that and any appraiser with half a brain is not going to try and turn a house into an FHA compliant building by pretending it does not exist.

upgraded work shed.

I'd simply call it a non- FHA compliant (occupied) cabin. FHA require all living areas have a safe, permanently installed heating system. Pretending no one is living there seems to skirt that requirement. A conventional non-conforming loan (bank loan) probably doesn't care. It's there, and likely contributes value.

 

[GWISC]

Regardless of being an FHA, there are other issues the poster should consider.

Is the "ADU", or are the "ADU's" (for lack of a better word), legal uses? Does the township/county know of these uses. When you do an HBU analysis, what is the legal uses permitted for the zoning? Are the "ADU's" just being utilized for now by the owner for incidental income? Could those buildings offer another use? I'm thinking workshops with washrooms. That being said, are workshops with washrooms a legal use for the subject's zoning? Would the township/county require the current uses to be discontinued? I think you need to investigate the legal uses and possibly talk this over with the township zoning department.

If the "ADU" is not legal, then deem it a heated/cooled workshop with a washroom and kitchenette that is currently being utilized as a living quarter for the interim.

If it is permitted legally to be an ADU, then discuss this in your HBU and count it as such.

I prefer to value an ADU's contributory value by determining an estimated market rent (I know, ADU's are for family and not technically rentable to the general public). Then I estimate a GRM from the market. Viola, you have support for a contributory value for the ADU. Hopefully, you have comps with ADU's.

Again, make sure the ADU is legal before estimating a contributory value. If it is a legal ADU, and you did not research this to make sure, but went ahead and simply deemed it a workshop to get around additional work, then you potentially will be doing your client, and by extension the borrower, a disservice. You may be off on your final value estimate. You don't want to undervalue or overvalue a property. You want to get it right.

Don't guess. Make sure. It saves aggravation later on.

 

[J Grant]

AI Overview



Yes, FHA guidelines require an Accessory Dwelling Unit (ADU) to have a permanently installed, automatic heat source
that can safely maintain a temperature of at least

(

) in all habitable rooms. The system must be safe, properly installed, and not rely on portable heaters, fireplaces, or wood stoves as the primary source.
https://encrypted-tbn3.gstatic.com/faviconV2?url=https://archives.HUD.gov&client=AIM&size=128&type=FAVICON&fallback_opts=TYPE,SIZE,URLHUD Archives (.gov) +3
Key FHA Requirements for ADU Heat Sources:

• Permanent & Safe: Must be affixed to the structure (e.g., HVAC, baseboard heating, or permanent wall units).
• Automatic: Must operate without human intervention for extended periods, usually via a thermostat.
• Capacity: Must ensure comfortable living conditions, generally interpreted as keeping the unit at least
  
  (
  
  ).
• Habitable Rooms: All habitable rooms must be heated, and in some cases, areas containing plumbing require heat.
• Local Exception: Exceptions for heat sources may exist in specific warm climates (e.g., parts of Florida, Hawaii, Caribbean) if lack of heat is typical.
  https://encrypted-tbn3.gstatic.com/faviconV2?url=https://archives.HUD.gov&client=AIM&size=128&type=FAVICON&fallback_opts=TYPE,SIZE,URLHUD Archives (.gov) +4

If the ADU lacks a compliant, safe heat source, it likely will not pass the FHA appraisal.

 

[Andy Taylor]

no better than calling kittens born in the oven "biscuits".

I used the full version of that saying in a Bible study one night and everyone looked at me like I was crazy. I couldn't believe that group of older Southerners had never heard that.