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Topic 6. Accessory Dwelling Unit
February 22, 2019
This Chapter has been revised in its entirety.
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a. Single Real Estate Entity
An Accessory Dwelling Unit (ADU) is a living unit including kitchen, sleeping, and bathroom facilities added to or created within a single-family dwelling, or detached on the same site. A manufactured home on the site could be an ADU. The dwelling and the ADU together constitute a single real estate entity.
b. Highest and Best Use
As part of the highest and best use analysis, the appraiser must determine if the property is a single- family dwelling with an ADU, or a two-family dwelling. The highest and best use must be a legal use (see Topic 10). A two-family dwelling must be appraised on the Fannie Mae Form 1025, Small Residential Income Property Appraisal Report.
c. ADU Valued Separately
An ADU is usually subordinate in size, location, and appearance to the primary dwelling unit and may or may not have separately metered utilities and separate means of ingress and egress. The appraiser must not include the living area of the ADU in the calculation of the GLA of the primary dwelling. The ADU must be valued separately as a line item on the market data grid.
d. Notify the Lender if More than One Unit
The appraiser must notify the lender if a property has more than one ADU.
e. Detached Buildings
A manufactured home, shed, or other detached building on the property which does not have kitchen, sleeping, and bathroom facilities or cannot be legally used as a dwelling, may be valued as storage space if it does not present any health or safety issues.