🏡 What’s Changing?
Buying a home just got easier — especially if your dream home has a bonus living space! The Federal Housing Administration (FHA) has updated its rules to help buyers like you. Now, you can use rental income from an Accessory Dwelling Unit (ADU) to help you qualify for an FHA mortgage.
An ADU is a separate living space with its own entrance and exit. You might call it an “in-law suite,” a finished basement apartment, or even a guesthouse. Some homes have pool houses or bonus living areas that qualify too.
This new rule means you may qualify for more home than you thought — or turn part of your home into a rental to help cover costs.
💡 How Can This Benefit You?
- Multi-Generational Living
Many families live with parents, grandparents, or adult children. If they stay in the ADU, the rent they pay can help you qualify for your mortgage. - FHA Renovation Loans for Future ADUs
Buying a fixer-upper? You can use an FHA renovation loan to build an ADU after closing. Once complete, the potential rental income from that space can boost your qualifying income. That means more home options! - Renting Out a Portion of Your Home
Want to rent to a friend or tenant? If your home has an ADU with a separate entrance, the income counts toward qualifying. It helps offset monthly payments and makes homeownership more affordable.
🔑 Term of the Week: ADU
An Accessory Dwelling Unit (ADU) is a bonus living space with its own entrance and exit. It can be attached or detached but must meet FHA guidelines.
💬 Curious how an ADU can help you buy or renovate a home? Let’s chat!