Valuation Overview of Accessory Dwelling Units

Program Overview:

Introduction Module

Module 1. What Is An Accessory Dwelling Unit (ADU)? 

• ADU Definitions and Descriptions
• Use and Roles of ADUs in the Housing Market
• Pros of Adding an ADU
• History and Recent Legislation
• California ADU Law Reform
• Causes of Housing Shortage and Where It Occurs
• ADUs as Housing Solution
• Uniform Residential Appraisal Report (URAR) and ADUs
• Pros and Cons of Attached vs. Detached ADUs
• Internal or Interior ADU
• Basement Units
• Ideal Lot or Improved Property for an ADU
• Reasons for Resistance to ADUs
• Users of an ADU
• Highest and Best Use

Module 2. History, Zoning, and Laws Affecting ADU Valuation 

• Impact of Comprehensive or Master Plan and Zoning
• Zoning Description
• Is this an ADU?
• Appraiser Certification Concerns
• URAR Appraiser Certifications

Module 3. Secondary Mortgage Market Appraisal Guidelines and Government Agency Appraisal Requirements for ADUs 

• Fannie Mae Appraisal Guidelines and ADUs
• Fannie Mae – General Property Eligibility
• Fannie Mae – Special Property Eligibility Considerations
• Fannie Mae – Site Section
• Fannie Mae – Acceptable Forms of Property Ownership and Dwelling Types
• Fannie Mae – Ineligible Properties
• Fannie Mae – Construction of an ADU
• Fannie Mae – Examples of ADUs
• Fannie Mae – Zoning Considerations
• Fannie Mae – ADUs and GLA
• Best Practice Tips
• Fannie Mae – Property Identification
• USPAP Standards and Advisory Opinions
• Useful Definitions for Property Identification
• One- to Four-Unit Property with an ADU
• Illegal ADU
• Converted Space

Module 4. Freddie Mac, HUD-FHA, and VA Appraisal Guidelines 

• Freddie Mac – Eligible Properties
• Freddie Mac – Ineligible Properties
• Freddie Mac – Zoning Compliance
• Freddie Mac FAQs
• USPAP Application to Freddie Mac FAQ #10
• HUD-FHA Handbook 4000.1 and ADUs
• HUD-FHA – Property Type Definitions I, II and III
• HUD-FHA – Required Reporting Protocols
• HUD-FHA – Legal Zoning
• HUD-FHA – ADU Identification
• HUD-FHA – Comparable Sales Requirements
• VA Appraisal Guidelines and ADUs
• Lending Appraisal Guidelines Comparison
• Differences in Requirements
• Data Limitations

Module 5. Data Challenges that Complicate the Assignment

• Problem: URAR Appraiser Certification 11
• Multiple Listing Service (MLS) Data Challenges
• MLS Search Challenges
• Using the Matrix™ System
• Data Challenges Overview
• MLS Data Challenges
• Real Estate Search Platforms Challenges
• Zillow Search Example
• Real Estate Search Platforms Challenges – Summary
• Digging Deeper: Applicable USPAP Standards and Rules
• Scope of Work
• Digging Deeper: Energy-Efficient Properties

Module 6. Approaches to Valuing Properties with ADUs 

• Sales Comparison Approach and ADUs
• Paired Data Analysis: ADU Value Contribution
• Sensitivity Analysis
• Paired Dataset
• Income Capitalization Approach and ADUs
• Income Capitalization Approach Examples
• Cost Approach and ADUs
• Approaches to Value – Summary
• Resource Review and Commentary

Module 7 Solving Real-World ADU Valuation Dilemmas

• Assignment: Real-World ADU Dilemmas
• Conclusions: ADU Valuation Dilemmas

Conclusion Module

Assignments:

NA

Equipment:

None

Additional Information:

Online Course Access
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Other Details:
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Requirements:

Online Education FAQ

• The Appraisal of Real Estate, 15th ed. Chicago: Appraisal Institute, 2020
• The Dictionary of Real Estate Appraisal, 7th ed. Chicago: Appraisal Institute, 2022 
• Scope of Work, Third Edition, Chicago: Appraisal Institute, 2020