What constitutes a Secondary Unit versus an Accessory Dwelling?

[ftbutler]

I'm trying to refinance my existing loan with CW.

I an not asking for any cash out. This is just a straight refinance. I have also locked in a rate that is 1.5 lower than my existing rate.

I had a guest house/carraige house ie accessory dwelling built on my property last year. The accessory dwelling is completely paid for, no liens. The accessory dwelling has it's own power but well and septic are shared. The accessory dwelling and my existing house are all on the same property. The county considers it an accessory dwelling and would not have allowed it to be constructed otherwise. I do not need the accessory dwelling in my assessment to maintain an LTV < 80%.

Now CW is saying that their Underwriter considers the accessory dwelling to be a second unit and will not accept the loan per Fannie Mae guidelines. I've asked them to present to me the Fannie Mae documentation stating these underwriting guidelines but they have not done so do date.

I told the person with CW that I'm working with to ask for the appraiser to provide an assessment. I can explain to the appraisser that I only want him to consider my original house.

My question is what are the determining factors when deciding what is a secondary unit as opposed to an accessory dwelling? Is the ultimate decision the appraisers?

I've been unable to find any Fannie guidelines around accessory dwellings.

Thanks in advance.

-Frank

 

[Mike Kennedy]

obtain a letter from the municipality stating whether or not the accessory dwelling is for "family, owner-occupancy" ONLY, or whether it can be a rental. Most Accessory Units, whether detached or attached, typically are restricted from use as a rental to non-family members. Also check and see if the Cert. of Occupany for it's use expires on tranfer from the original owner - you.

 

[Paul Isolda]

In addition to what Mike said, do not think about asking an appraiser to separate elements of the property and only appraise certain aspects of it. It's the whole thing or nothing. FNMA will lend on a single family property that has an accessory unit. The determination of what is an accessory unit lies mostly with the municipailty like Mike said but you did not tell us much about it like how big is it in relation to the main dwelling? Is the quality of construction significantly superior to the main dwelling?

 

[Laughing Heir]

This may not help you at all, but ... try a local bank, credit union or S&L. National lenders could care less about your personal situation, you are a check box and a number to them. If your situation or your real property does not fit nicely in their box, or, they cannot get someone to make it fit inside that box they will not be able to help and you'll be throwing good money after bad for something that will never happen.

I just financed a home purchase through a local bank here and they were more competitive than national banks in terms of the fixed interest rate.

 

[Bill_FL]

A couple of other questions:

1) What is your property zoned? Are two units allowed? can it legally be used as a secondary unit? Or is it only allowed to be used as a guest cottage?

2) How big is it? How big is your house? If it is zoned for multi-family and is close to the size of the main home, it would be hard to argue that it is not multi-family.

3) Do you have it rented?

 

[Walter Kirk]

As suggested above, try a LOCAL lender. Avoid big national lenders.

 

[ftbutler]

A couple of other questions:

1) What is your property zoned? Are two units allowed? can it legally be used as a secondary unit? Or is it only allowed to be used as a guest cottage?

2) How big is it? How big is your house? If it is zoned for multi-family and is close to the size of the main home, it would be hard to argue that it is not multi-family.

3) Do you have it rented?

Thanks for all of the responses.

1) My propery is zoned residential. Accessory Dwellings, Guest Houses, In-law suites are allowed. I went through the county zoning and building department to get the approval to build a guest house.

2) My house is around 2000 sqft. The guest house is 1200 sqft. There is no multifamily zoning.

3) No it's not rented. Currently there are grandparents living there.

I went through CW since they have my mortgage already. The broker that I'm dealing with has agreed to let the appraiser look at it and decide and then "hopefully" the UW will go with the appraiser. If not then I hope I'm not out my $400 for the appraisal.

Thanks again for all of the responses,
-Frank