FHA issued Mortgagee Letter 2023-17 establishing policies for accessory dwelling units.
Per the Mortgagee Letter, FHA expanded financing options for borrowers seeking to purchase properties with an accessory dwelling unit (ADU), rehabilitate existing structures to add an ADU, or construct a new home with an ADU. Specifically, FHA:
- Now allows prospective borrowers financing a property with an ADU to use some of the actual or projected rental income from the ADU to help meet FHA income requirements;
- Added a requirement to require the analysis and reporting of ADU rental history or market rent in FHA appraisals;
- Clarified that an ADU is an eligible improvement type for the FHA Standard 203(k) Rehabilitation Mortgage Insurance Program; and
- Added single-family homes with an ADU to the types of improvements that can be financed under FHA’s mortgages for new construction programs.
The Mortgagee Letter went into effect October 16, 2023.
Click to view the FHA Mortgagee Letter 2023-17: https://www.tenaco.com/wp-content/uploads/2023/10/FHA-Mortgage-Letter-2023-17-10-16-23.pdf
Click to view the FHA Info #2023-81: https://www.tenaco.com/wp-content/uploads/2023/10/FHA-Info-2023-81.pdf
