All Forum Posts by: Account Closed
Account Closed has started 9 posts and replied 43 times.
Post: Adding ADU to fourplex in California
- Rental Property Investor
- San Diego, CA
- Posts 44
- Votes 16
Originally posted by @Chris Mason:
Originally posted by @Account Closed:
So apparently the ADU law (SB 1069) in California allows the addition of an ADU to a fourplex.
Does anyone know if conventional lenders will still consider this to be a residential property?
(Is it still a fourplex?)
If it becomes a fiveplex, are there comparable lending options anyway?
Fannie Mae residential will not lend on 2-4 unit properties that also have one or more ADUs. It's pretty black and white, this is now commercial real estate.
No, commercial financing isn't really comparable to residential. "Only X higher / more expensive / etc than a residential loan!" is a boast for a commercial borrower or lender, as in "5.75% and a 25 year term with 30% down, not far off of Fannie!"
Good to know! I figured as much for my fourplex, but what about my girlfriend's triplex...? Is a triplex + ADU still unlendable with conventional financing?? Wouldn't it just be considered a fourplex? (And still qualify as 2-4 multifamily)
Post: Adding ADU to fourplex in California
- Rental Property Investor
- San Diego, CA
- Posts 44
- Votes 16
Originally posted by @Adam Mayberry:
I think it means that ADUs are allowed to be build in Multifamily Zoning, but it doesnt say specifically that if there is an existing multifamily home (2-4 units included) that it would allow an additional ADU on the parcel
Typically local jurisdictional control only allow the ADU to be built where there is an existing Single Family Home, independent of the zoning
Actually, SB 1069 explicitly allows an ADU to be added to multifamily parcels. It wiped out most of the local ordinances because the local ordinances were thinly-veiled attempts at outlawing ADUs in spite of state law. So, I'm confident that an ADU is permissible on multifamily parcels. My question is whether an ADU added to a fourplex makes it a fiveplex (for conventional mortgage purposes).
Source:
Post: Adding ADU to fourplex in California
- Rental Property Investor
- San Diego, CA
- Posts 44
- Votes 16
So apparently the ADU law (SB 1069) in California allows the addition of an ADU to a fourplex.
Does anyone know if conventional lenders will still consider this to be a residential property?
(Is it still a fourplex?)
If it becomes a fiveplex, are there comparable lending options anyway?