Most of the data mentioned (and more), can't be accurately interpreted by the REI on their face value. 

Because that appraisal report is designed by the lender, for the lender, and not intended for you whatsoever, despite the fact you paid for it and have a copy of it in your possession, you really don't know what you're looking at or how to really interpret what it says.

You don't necessarily want to be someone's live beta test of something they, or their bank, has never done before... if it's the first time that underwriting team has referenced the above guideline, it's a total crap shoot how they will interpret it.

According to this you may build up to two ADU's on a multi-family property.This is my interpretation of the law and may not be correct.

You never know how what you say is going to be interpreted by outside observers.

As I read the statute, I do not interpret pre-paid rent (ie last month's rent) to be the same as a security deposit. 

Well, I personally don't like to make interpretations and assumptions.

-She paid rent for Feb already so I interpret that to mean she needs to be completely out by the end of March. 

You can request help on interpreting any of the rules on BP, but for the definitive answer, email ADU@ the HCD domain (BP does not permit email addresses). 

The HCD has created this summary sheet for their interpretation.