Originating & Underwriting

Accessory Dwelling Units (ADUs)

ADUs can add value to a borrower’s home, provide additional space for extended family, or allow a borrower to earn rental income, all while helping address the country’s affordable housing shortage. Selling Guide loan products can be used to purchase homes with ADUs, renovate an existing ADU or add an ADU to a borrower’s existing home.

What qualifies as an ADU?

An ADU, commonly referred to as an accessory apartment or in-law suite, is a smaller additional living space on the same lot as a single-family home. It must include space for living, sleeping, cooking and bathrooms independent of the primary residence. While the ADU may or may not include access to the primary residence, it must be accessible without going through the primary residence and there must be some expectation of privacy from the home.

ADUs can be
  • Within a primary residence, such as a basement apartment
  • Attached to a primary residence, such as a living area over a garage
  • Detached from the home entirely; It could even be a manufactured home

You can find additional requirements in our Selling Guide.

Help borrowers add, build, or buy an ADU with any Selling Guide product

Fannie Mae treats ADUs the same as any other home feature or improvement. They can be financed with any Selling Guide loan product, including standard purchase or refinance loans or affordable lending products. There is no specific type of financing required for a home with an ADU.

Note: ADUs are not eligible with a 2-4 unit dwelling, or when a manufactured home is the primary residence. Properties with multiple ADUs are also ineligible for Fannie Mae financing.