SLR, ADU+JADU, not qualified for conventional loan?

[Sarah625]

I have a single family residence which I'm living in. I want to build a ADU, and an Junior ADU that is attached to the main house. Dose it mean that when selling the property in 10yrs or so, the buyer won't be able to get the conventional loan, because I have more than one ADU, even one is a Junior ADU?

If that's the case, what if I don't build the JADU, but make it an in-law suite? the suite will have independent entry, bedroom, bathroom, kitchen but no stove, only an electric hotplate. It will have door to the main living space, but it's a double door/ communicating door (like in the hotel rooms). I hope is that in this way the suite won't be count as an ADU, so I will only have one ADU on this R1 lot, and the future buyer can get the conventional loan. Please let me know if this will work. Thanks for the help!

 

[CGinMN]

2 ADUs are ineligible. Your workaround does not mean the in-law suite isn't an ADU.

 

[Sarah625]

2 ADUs are ineligible. Your workaround does not mean the in-law suite isn't an ADU.

But I see Fannie Mae's guide said " requirements for classifying an ADU" is " The ADU must ...have a kitchen", "The kitchen must have a stove, hotplates ... not acceptable stove substitutes" ?

 

[glenn walker]

I would not do it that way )

 

[CGinMN]

But it also says the removal of a stove does not change the ADU classification. The guides change all the time, so I wouldn't make a 10-year plan based on what the Selling Guide says. Ultimately it is up to the appraiser to determine what constitutes an ADU, not Fannie. What you describe might be considered 2 ADUs by the appraiser, that's all I'm saying.

 

[Sarah625]

But it also says the removal of a stove does not change the ADU classification. The guides change all the time, so I wouldn't make a 10-year plan based on what the Selling Guide says. Ultimately it is up to the appraiser to determine what constitutes an ADU, not Fannie. What you describe might be considered 2 ADUs by the appraiser, that's all I'm saying.

OK I got it now. Thanks so much for the advice!

 

[Terrel L. Shields]

But I see Fannie Mae's guide said " requirements for classifying an ADU" is " The ADU must ...have a kitchen", "The kitchen must have a stove, hotplates ... not acceptable stove substitutes" ?

Pretty subjective and FNMA has an annoying way of changing their mind. Also, the appraiser may interpret it as 2 ADUs anyway and if they don't the Underwriters may then challenge them and argue that it is 2 ADUs... just saying. It gets treated as a commercial loan.

 

[Jerry Bone Jr]

I have a single family residence which I'm living in. I want to build a ADU, and an Junior ADU that is attached to the main house. Dose it mean that when selling the property in 10yrs or so, the buyer won't be able to get the conventional loan, because I have more than one ADU, even one is a Junior ADU?

If that's the case, what if I don't build the JADU, but make it an in-law suite? the suite will have independent entry, bedroom, bathroom, kitchen but no stove, only an electric hotplate. It will have door to the main living space, but it's a double door/ communicating door (like in the hotel rooms). I hope is that in this way the suite won't be count as an ADU, so I will only have one ADU on this R1 lot, and the future buyer can get the conventional loan. Please let me know if this will work. Thanks for the help!

Ten years down the road, convert all three to condo ownership. Sell them off individually.

 

[sputnam]

This seems to be a question for a Lender. An appraiser would likely consider it to be a three unit property and would appraise it in that manner. And of course, the problem with trying to guess about the future is... things change.... including lending rules.