A new federal policy counting income from accessory dwelling units is expected to make it easier for homeowners to qualify for Federal Housing Administration financing. Noting that the move will increase the nation’s supply of affordable housing, the U.S. Department of Housing and Urban Development has determined that small units of housing built inside, attached to, or on the same property as a primary residence should be included as part of the site’s built environment. In so doing, homeowners will see their eligibility for FHA loans and even rehabilitation mortgages increase. In a statement, Marcia Fudge, HUD Secretary, said the new policy will both increase the amount of affordable housing across the country, while “helping families to create generational wealth.” As defined by the Housing Department, an accessory dwelling unit is a “single habitable living unit with a means of separate ingress and egress that meets the minimum requirements for a living unit.” Such units, by federal law, are also defined as having a kitchen and bathroom, with an overall space independent of the primary dwelling unit. A press release issued by HUD notes that “FHA-approved lenders may begin offering borrowers mortgages on properties with accessory dwelling units under the new policies effective immediately.” A recent survey conducted by the Federal Home Loan Mortgage Corporation revealed that homeowners have considered building an accessory dwelling unit primarily to either host out-of-town visitors or rent to tenants. But a separate consideration has seen accessory dwelling units used as both permanent and temporary housing for family members. The family member angle has particularly seen seniors moving into such spaces. In a statement, the American Association of Retired Persons noted that it has been active “around the country lobbying for state and local lawmakers to lift zoning regulations and other barriers” to the development and building of accessory dwelling units. It is thought that there may be more than 1.5 million accessory dwelling units currently in the U.S., with Texas, Florida and Georgia seeing the most of such housing. In California alone, according to a recent Cato Institute study, the number of such residences built annually has jumped from 3,100 in 2018 to 17,460 last year. By Garry Boulard
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