Will legalizing duplexes and ADUs help people buy them?
It is the first step. Zoning decides what may be built, and a home loan decides who can buy it and live there. In 2025 about three of every four mortgages to buy a fourplex went to an investor. A house with an ADU or a duplex can be bought and lived in today.
WHAT MOST PEOPLE ARE NEVER TOLD
Fannie Mae counts rent from one existing ADU, such as a garage apartment, up to 30 percent of the income you qualify with. A city may allow more homes on a lot than a mortgage will count.
Zoning has to allow the home first. The Urban Institute tracked 180 zoning changes across more than 1,100 cities. Loosening the rules was followed by about 0.8 percent more housing within three to nine years.
Loans on the homes that already exist show who buys them. On single houses, about nine in ten purchase mortgages in 2025 went to buyers who would live there. On duplexes it was a little over half, on triplexes under four in ten, and on fourplexes about one in four.
The FHA makes a three or four unit home pass a rent test. It counts a duplex with an ADU as three units, so adding an ADU the city now allows can put a duplex under that test.
GOOD TO KNOW
If you are counting on ADU rent, ask your lender how it will count that rent before you buy or build. Where few of these homes exist, supply is the limit.
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WHERE THIS COMES FROM
- U.S. Census Bureau, New Residential Construction: Housing Units Started, annual table by units in structure
- HMDA Data Browser (FFIEC and CFPB), 2025 home purchase loans. Shares by number of units and by occupancy are Series Homes analysis of this data.
- Fannie Mae Selling Guide B3-3.8-02, Rental Income from the Subject Property (09/02/2026)
- HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (revised August 12, 2026): pages 170 to 171, three and four unit homes and the rent test
- Urban Institute, Land-Use Reforms and Housing Costs (Stacy and others, 2023)
Researched and written by Series Homes. Checked against its sources on . Lending rules change. This page is general information, not a loan offer or legal or tax advice.