What you need to know about Accessory Dwelling Units (ADU)
Accessory Dwelling Units (ADU) are sometimes known as granny flats, in-law units, secondary units, guest houses, backyard cottages, and the list goes on.
As affordable housing today is in low supply, people across the country are in search of viable solutions, making ADUs a popular option. ADUs are independent living facilities located on the same parcel as the primary unit. These can function as long- and short-term rental units to help the owner drive additional revenue.
The boom in ADUs helped create a needed supply of housing inventory in many cities in California and beyond.
The square footage of the average ADU can range from 600 square feet to up to 1,200 square feet, depending on the state and municipality, and it will most often have its own kitchen or kitchenette, living area, and a separate entrance, making it ideal for extended family, guests, or additional income when used as a rental property.
Recent Freddie Mac Updates now allow rental income for ADUs
Freddie Mac recently announced that rental income for single-unit ADUs in California can now be used to qualify for some programs. Freddie’s policy expansion allows an ADU on more property types and permits income from a rented ADU on a 1-unit primary residence to be used to qualify the borrower. Best of all, ADUs can be included on any Freddie Mac mortgage.
Right: New backyard ADU ready to rent.
JMAC offers more options for ADUs
These products allow ADU Rental Income for qualification:
Primary Resident with ADU income to qualify (Purchase and Rate/Term on the subject property)
Agency - FHLMC LPA
Home Possible - FHLMC LPA
Home Ready - FNMA DU
Jumbo Plus - FHLMC LPA
Malibu Plus Jumbo - FHLMC LPA
Manhattan Plus Jumbo - FHLMC LPA
Primary Resident and investment with ADU income can Qualify (only allowed on California properties. Cash-Out allowed.)
Zuma Non-QM
Venice DSCR
Let us help. Contact your JMAC Account Executive or email us at the link below.