MassHousing Allowing ADUs on some loan products

Good news for buyers! MassHousing has reviewed Freddie Mac’s Bulletin 2022-11 (that bulletin contains a bunch of interesting information on Freddie Mac loans you should check out).  As a result of this bulletin, MassHousing is now allowing ADU’s on the following mortgage loan products:

  • Conventional Product 1002- FNMA HFA Preferred above 80
  • Conventional Product 2002- FHLMC HFA Advantage above 80
  • Conventional Product 1001- FNMA HFA Preferred up to 80
  • Conventional Product 2001- FHLMC HFA Advantage up to 80
  • Government Product 3003 – FHA (FHA Single Family Housing Policy Handbook 4000.1 must be followed)

Underwriting Considerations for ADU’s:

  • # Of Units: FHLMC allows for one ADU on 2- and 3-unit properties, while FNMA only allows ADU’s on 1-unit dwellings.
  • Rental income: generated from an ADU on a subject 1-unit Primary Residence to be considered when qualifying a borrower for a purchase or a “no cash-out” refinance, provided the requirements in FHLMC’s Selling Guide are met. FNMA requirements however state that a borrower must qualify for the mortgage without considering any rental income from the ADU.

Please contact MassHousing at 888-843-6432 option 1,4, or email or contact your Relationship Manager for assistance.