I am not a lender, I'm an investor that typically buys major city-center multifamily. 

That will typically generate a response from the PM to negotiate a settlement and avoid an investigation.

FHA loans typically require the property to be a primary residence for at least one year, so he should confirm compliance with his lender.Once rented, he can deduct expenses like mortgage interest, property taxes, maintenance, and depreciation starting from the date it's available for rent.

A typical PPM will cost about $10K. 

What you will find is they typically appraise for far less than the hands off cost to add the ADU.  

If this is the case then typically you only have to comply when you make alterations.2.

Typically, structures are grandfathered under old codes and zoning in which case it would be called compliant, but non-conforming. 

@Polat CaglayanI've never seen a formula but here is a general rule of thumb for multifamily:The class of an apartment refers to the quality of the building, which can be determined by a number of factors, including age, location, and condition: Class A: These are the highest quality apartments, typically built within the last 15 years.

From what I have seen, the typical remedy is termination of the contract, refund of the EM deposit and all expenses incurred by the buyer during the failed transaction.

Older homes will typically have systems that are out of date - even if only partially.