Primary residence with ADU: Any loans that count ADU Income?

[Michelle Herbst]

I'm looking to purchase a primary residence with an existing ADU in Contra Costa county. Are there any loan programs that will allow me to count the ADU rent as income to help me qualify for the home loan? Or are there other creative, nontraditional financing options out there that would help me purchase the home? The HomeReady loan program won't work because my income is a tad higher than the median for that area, but not high enough for me to purchase the home without counting the income.

[Jonathan Taylor]

@Michelle Herbst the issues you are running into come down to zoning. Conventional lending guidelines for owner occupied properties don't view a duplex and an SFH with an ADU as equal. In a duplex (zoned as a duplex), you can use 75% of as-is or market rents to help qualify if your DTI is above the required limits. You cannot do the same (at the time of this writing) with your situation since you are an SFH zoning with an additional unit. You are asking why, the simple answer is the conventional guidelines are INCREDIBLY slow to adjust to changing housing conditions. ADUs are very new and conventional guidelines are national. ADUs are only pertinent in HCOL markets, yours being one of the top. So short answer is conventional owner occ guidelines do not incorporate ADU rental income into your income to help qualify. I know this as I have an ADU I built in 2021 in my LA market and appraisers nor conventional lenders provide market or rental value for it. This could change but as of now, no market value or rental value can be used.