Saturday Jun 11, 2022
Using ADU Rent to Qualify for More home
You can now use the income on an auxiliary dwelling unit to qualify to purchase or rate and term refinance your home. Well, that is a game-changer, especially for people who have an investor's mindset. How can I optimize the home I'm living in? Can I look at buying a two-unit, a three or four-unit, a single-family, a rentable basement?
Well, those auxiliary dwelling units, those separate buildings in the backyard. They were not a legal unit. Now they do have to be permitted right and zoned properly. But those auxiliary dwelling units were just that they were an auxiliary dwelling unit, whether they were apartments above a garage or self-standing buildings in the backyard, but they weren't a legal unit. It's not like it was a duplex. It's a single-family home with an ADU. That ADU income had not been able to be used when qualifying for a purchase price or a loan amount.
Well, that just changed. That literally is a game-changer. Now I can afford more say I'm a first-time home buyer and I'm maxed out at $600,000 purchase price. If there's an ADU in the backyard and the market rents on that are $1,500. Now I'm not maxed out at $600,000 anymore.
Now I can qualify for a $711,000 purchase price by putting 10% down. Those kinds of numbers need to be explored, especially given today's market with rising and rising home prices where people know you need to get in. You need to stop paying rent and start building your own equity. And that auxiliary dwelling unit will do two things for you. Now it'll help you qualify for more and put money in your pocket so that you can save for the next one. If you want to know more information, know exactly how much you can qualify for, please call me - 303-214-6393.
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