A covered Fannie Mae assignment includes a detached structure expressly meeting the applicable ADU definition. How is its living area treated relative to the primary dwelling’s finished above-grade area?
Correct Answer
B) Report and analyze the detached ADU separately from the primary dwelling’s finished above-grade area
For the specified detached ADU, report its qualifying area and supported contribution separately from the primary dwelling’s finished above-grade area. Other accessory structures are not automatically ADUs. The cited policy has particular treatment for an above-grade ADU contained within/part of the primary dwelling with interior access, so a universal all ADUs separate rule is inaccurate.
Why This Is the Correct Answer
Option B is correct because Fannie Mae guidance states that when reporting the living area of an ADU, it should not be included with the finished above-grade square footage calculation of the primary dwelling. The detached ADU's qualifying area and its market-supported contribution are therefore reported and analyzed separately from the main dwelling's gross living area.
Why the Other Options Are Wrong
Option A: Add it to the primary dwelling’s area on the same line
Option A is wrong because adding the ADU's area to the primary dwelling's area on the same line is exactly what the guidance says not to do. Combining them would overstate the primary dwelling's finished above-grade square footage.
Option C: Ignore it whenever the main dwelling exceeds 1500 SF
Option C is wrong because there is no rule that a qualifying ADU is ignored whenever the main dwelling exceeds 1,500 square feet. That size cutoff does not follow from the facts or the guidance; the ADU is still reported and analyzed.
Option D: Label each detached structure an ADU and add its cost to the primary dwelling’s value dollar for dollar
Option D is wrong because not every detached structure is an ADU, and an ADU's contribution is not measured by adding its cost to value dollar for dollar. Contribution must be supported by market evidence, and other accessory structures are not ADUs by default.
ADU area stands apart
Picture the ADU with its own measuring tape: its square footage is counted on its own, not folded into the main house's above-grade total.
How to use: Use this when deciding whether a secondary unit's area belongs in the primary dwelling's gross living area.
Exam Tip
For a qualifying detached ADU under Fannie Mae guidance, pick the answer that reports its area and contribution separately; be wary of answers that value it by cost alone.
Common Mistakes to Avoid
- -Adding the ADU's living area to the primary dwelling's gross living area
- -Calling every detached outbuilding an ADU
- -Valuing the ADU at its construction cost instead of its market-supported contribution
Concept Deep Dive
Analysis
This question tests how Fannie Mae treats the living area of a detached structure that meets its ADU definition. The key reasoning point is that ADU living area is kept out of the primary dwelling's finished above-grade square footage, and the ADU's area and supported contribution are reported and analyzed on their own.
Background Knowledge
An accessory dwelling unit is a secondary living unit on a property that meets specific program criteria. Fannie Mae requires that ADU living area be kept separate from the primary dwelling's finished above-grade square footage, and the ADU's contribution to value must be supported by the market. Its policy also has particular treatment for certain ADUs located within the primary dwelling, so the correct handling depends on the type of ADU involved.
Real-World Application
A subject property has a 2,000-square-foot main house and a 600-square-foot detached backyard cottage that meets the ADU definition. The appraiser reports 2,000 square feet for the primary dwelling and describes and adjusts for the ADU separately, using comparable sales with and without ADUs to support its contribution.
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