Duplex with ADU - freddie-mac && fannie-mae insured loans

[Chakri Dew]

Hi Folks - 
First time investing in a multi-unit.

I am on a contract and might close in 30 days if everything goes well. It is a duplex plus a garage converted without a permit as a studio according to building code. I spoke with the city and got to know I can get a permit (with the 2020 new ADU rules) without much hassle.

Question: According to my loan officer, Freddie-mac and Fannie-mae loans do not come forward to loan the Multi-unit + adu. Single-family + ADU is more favorable. Is it true? Even if lenders consider to loan, permitted ADU does not come under appraisal value, this is shocking. Is it true?

I think my loan officer does not have enough experience with multi-units or maybe I am too noob to understand.

Edit: I just found some info from https://sf.freddiemac.com/faqs...

• Q1. Is a Mortgage secured by a property with more than one accessory unit eligible for sale to Freddie Mac? click for dropdown

  No. A Mortgage secured by a 1-unit property with more than one accessory unit is not eligible for purchase by Freddie Mac. Additionally, a 2- to 4-unit property with one or more accessory units is not eligible.

[Chris Mason]

Originally posted by @Chakri Dew:

Exactly Greg. 

Lately, most of the cities have eased the ADU rules and big-brother (Freddie Mac and Fannie Mae) rules are still uninviting.

There are those that argue that Fannie/Freddie/FHA/etc shouldn't do ANY lending on anything larger than a vanilla single family home.

Anyways, the pragmatic solution is to go all the way. Instead of duplex+ADU, get permits/zoning/etc to make it a real legit triplex.

If your potential buyers in the future cannot get institutional financing, the ADU very well may cause the value of your property to go DOWN, even if you spend $200k on the improvement. Values are dictated by willing and able buyers. It does not mater that people want to pay $XYZ more dollars, they have to be able to. And if most of them can't, because they can't get the loan, then your buyer pool is reduced to cash buyers only. Everyone knows that a non-luxury listing with "cash buyers only" in the MLS description is going to sell for a non-trivial discount. In general, anything reducing the buyer pool is going to harm the value. The fact that buyer-spouse 2 often doesn't want to share walls with neighbors, for example, is why 2-4 unit real estate tends not to appreciate as fast a SFRs - spouse 2 (times a zillion spouse 2s) not wanting the shared wall reduces the size of the buyer pool (incidentally, this slowed appreciation serves to help price:rent ratios).