Can You Finance a Home with an Illegal or Unpermitted ADU?

Breaking news! FHA loans now allow ADU rental income to count for loan qualifying. On a standard FHA loan 75% of rents get added to income, just like a conventional loan. On a 203k renovation loan 50% of rents get added to income.

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In this video:
00:00 - Introduction: Can you finance a home with an illegal ADU?
00:14 - Accessory dwelling units add affordable housing
00:43 - Why do people build illegal ADUs?
01:12 - Why am I qualified to talk about ADUs and financing?
01:36 - Definitions: there are 4 possible zoning classifications
01:48 - Zoning #1: No zoning rules at all
02:04 - Zoning #2: Allows ADUs, but there are zoning rules
02:12 - Zoning #3: Legal, but non-conforming
02:23 - Zoning #4: Illegal
02:34 - Zoning and permitting are different things
03:07 - A real-life example of how this works
03:34 - Illegal ADUs and USDA rules
04:09 - Why USDA loans and ADUs are a bad fit
05:39 - Illegal / unpermitted ADUs and FHA and VA rules
06:25 - Illegal / unpermitted ADUs and Fannie Mae rules
07:26 - Illegal / unpermitted ADUs and Freddie Mac rules
08:25 - The important role of the appraiser
09:07 - A challenge: finding comps for an ADU
09:28 - Let’s talk about insurance…
09:54 - Can you count ADU rent as income for loan qualification?
10:14 - A pending, exciting development regarding FHA rules on ADU income
10:38 - Can you finance a home with multiple ADUs?

#ADU #AccessoryDwellingUnit #USDA #FHA #VA #FannieMae #FreddieMac #zoning #planning #unpermitted #permits #CodeEnforcement
Julee Felsman, SVP of Mortgage Lending NMLS 120831
Guaranteed Rate Inc NMLS 2611 Equal Housing Lender.
www.nmlsconsumeraccess.org
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