Chief Appraiser Says
Reading the actual guideline text below — never a general AI guess
What "ADU" Means in Appraisals
Here's what the guidelines say an ADU actually is: we're talking about a second living space on the same property as the main house that has its own kitchen, full bathroom, and sleeping area, with separate ways in and out from the primary dwelling. It's typically smaller and positioned as secondary to the main house, though it can be attached to the house or garage or sit alone. The space generally ties into the primary house's utilities rather than having completely independent systems.
VA goes a step further in the appraisal process — the appraiser has to decide whether the property should legally be treated as a single-family dwelling *with* an ADU, or whether it should actually be classified as a two-family dwelling instead. That distinction matters for how the property is valued and what it's truly worth as a legal use.
Straight from UAD 3.6 / URAR (FNMA), Fannie Mae Selling Guide, and VA Lenders Handbook (Pamphlet 26-7) — nothing added.
Here's what the guidelines say an ADU actually is: we're talking about a second living space on the same property as the main house that has its own kitchen, full bathroom, and sleeping area, with separate ways in and out from the primary dwelling. It's typically smaller and positioned as secondary to the main house, though it can be attached to the house or garage or sit alone. The space generally ties into the primary house's utilities rather than having completely independent systems.
VA goes a step further in the appraisal process — the appraiser has to decide whether the property should legally be treated as a single-family dwelling *with* an ADU, or whether it should actually be classified as a two-family dwelling instead. That distinction matters for how the property is valued and what it's truly worth as a legal use.
Straight from UAD 3.6 / URAR (FNMA), Fannie Mae Selling Guide, and VA Lenders Handbook (Pamphlet 26-7) — nothing added.
Read the actual documents:
→ Selling Guide Supplement: UAD 3.6 Policy (official agency copy)
→ VA-Lender-Handbook (Chief Appraiser Document Library)
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© Copyright Notice: © Fannie Mae. UAD 3.6 / URAR reference materials shown for research and reference only. Full documents available at fanniemae.com/uad. Reproduction restricted per Fannie Mae copyright policy.
© Copyright Notice: © 2026 Fannie Mae. Excerpts shown for research and reference only. Full document available at selling-guide.fanniemae.com. Reproduction restricted to Fannie Mae-approved lenders.
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UAD 3.6 introduces dedicated ADU section for casitas in appraisal reports
UAD 3.6 reporting now includes a dedicated, dynamic Accessory Dwelling Unit framework that captures casita living area, kitchen facilities, climate control, and entry access separately from the main dwelling.
Read full story at The Brenku Team →
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B. Title II Insured Housing Programs Reverse Mortgages 2. Origination/Processing Handbook 4000.1 548 Last Revised: 8/12/2026 the Borrower is responsible for notifying the…
HUD/FHA Single Family Handbook 4000.1 · HUD_FHA_4000.1.pdf · Page 573
· View at official source (HUD.gov — SFH Handbook 4000.1) →
· Last verified: 2026-10-10
B. Title II Insured Housing Programs Reverse Mortgages 2. Origination/Processing Handbook 4000.1 548 Last Revised: 8/12/2026 the Borrower is responsible for notifying the Mortgagee of absences from the Property in excess of two months to avoid determinations that the Borrower’s Principal Residence has changed; • FHA insures fixed rate HECMs, as well as annual and monthly adjustable rate HECMs; • the amount of funds made available to the Borrower is based on the age of the youngest Borrower or Eligible NBS; • principal limit growth for all payment plan options; the Principal Limit may increase monthly but there are restrictions for disbursing those funds during the First 12-Month Disbursement Period; • the Initial Mortgage Insurance Premium (IMIP) payment methods and
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to or on behalf of the Borrower, except as allowed from a Set-Aside established at closing; and • Disbursement of HECM proceeds during the First 12-Month Disbursement Period is…
HUD/FHA Single Family Handbook 4000.1 · HUD_FHA_4000.1.pdf · Page 574
· View at official source (HUD.gov — SFH Handbook 4000.1) →
· Last verified: 2026-10-10
to or on behalf of the Borrower, except as allowed from a Set-Aside established at closing; and • Disbursement of HECM proceeds during the First 12-Month Disbursement Period is limited to the amount of the Borrower’s Advance, plus Disbursements from a Set-Aside that was established at closing. For adjustable rate HECMs: • the Borrower may choose from five, flexible payment options, allowing for future Disbursements, and the Borrower may change payment plans to one of the other available payment options at any time provided funds are available; • the frequency of annual and monthly adjustable rate changes; and • Disbursement of HECM proceeds during the First 12-Month Disbursement Period is subject to an Initial Disbursement Limit. (2) Required Documentation At
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Appendix 1: Glossary Appendix F-1: URAR Reference Guide Page 346 of 375 Version 1.3 Appendix 1: Glossary Term Definition Accessory Dwelling Unit (ADU) An additional living area…
UAD 3.6 / URAR (FNMA) · Appendix F-1 URAR Reference Guide v1.3.pdf · Page 346
· View at official source (fanniemae.com/uad) →
Appendix 1: Glossary Appendix F-1: URAR Reference Guide Page 346 of 375 Version 1.3 Appendix 1: Glossary Term Definition Accessory Dwelling Unit (ADU) An additional living area that is independent of the primary dwelling unit that includes a kitchen, full bathroom, and sleeping area. It has a separate ingress and egress from the primary dwelling unit. It is generally subordinate in size and location to the primary dwelling, and may be attached to a house or garage, or built as a stand-alone unit. Generally, it will use the utility connections of the primary house. Apparent Environmental Condition A contamination (hazard or nuisance) that may affect the value and marketability of the site. Assessor Record Recorded information that identifies and describes