ADU Pass
Federated States of Micronesia
The Federated States of Micronesia faces unique housing challenges across its island communities. Accessory dwelling units offer a practical way to expand housing capacity on existing residential land. ADU Pass helps property owners in the FSM work through permit requirements for secondary structures.
Map
State ADU details
State financing programs
FSM has no ADU-specific loan or grant program. National-tier residential financing is provided by the FSM Development Bank (FSMDB), a national development bank headquartered in Palikir, Pohnpei, with branch offices in Chuuk, Kosrae, and Yap. FSMDB created a residential home loan program in 2008 to help FSM citizens build or renovate homes, and operates a Housing Home Energy Loan Program (HELP) for new-home construction and energy-efficiency renovation at roughly 9% interest, terms up to 20 years, with a payment holiday and an applicable subsidy on qualifying loans. None of these products names accessory dwelling units; a detached secondary dwelling on the same parcel would be underwritten as new home construction or renovation. FSMDB lends only to FSM citizens (and companies with at least 25% FSM-citizen ownership). The dominant gating factor on any FSM housing loan is land tenure: customary clan/family land cannot be pledged as conventional fee-simple mortgage collateral, so financing realistically reaches parcels with registered, individually held title -- a minority of land nationwide.
State insurance regimes
FSM is a sovereign nation and regulates insurance through its national government rather than through any US state insurance department; there is no US-state FAIR Plan, no US-state wind pool, and no US insurer-of-last-resort regime in FSM. The FSM insurance market is small and served by a limited number of private carriers; property coverage is written as standard dwelling/homeowner policies. FSM is highly exposed to typhoons, storm surge, and -- as a low-lying island nation -- to sea-level rise and coastal flooding, and this exposure dominates property-insurance pricing and availability. The US National Flood Insurance Program (NFIP) is a US-domestic program and is not extended to FSM as it is to US states and territories; FSM is not an NFIP-participating jurisdiction. FEMA's relationship to FSM runs through disaster-assistance provisions tied to the Compact of Free Association and FEMA Region 9 coordination, not through NFIP flood-insurance policies. Accessory dwellings are not a separately named insurance category; a secondary dwelling would be covered, where coverage is available at all, under a standard dwelling policy or as 'other structures'.
Known state issues (4)
- other — Any ADU guidance for FSM should not assume US statutes, US lender programs, or NFIP flood coverage apply. The operative legal framework is the FSM Constitution plus the four state constitutions, state and municipal land-use rules, and customary land tenure. Financing realistically means the FSM Development Bank, and only on parcels with registered individual title.
- other — Whether a household can add an accessory dwelling -- and whether that dwelling can be financed by FSMDB or rented for market value -- is parcel-specific and tenure-specific. On customary land, a second dwelling is typically accommodated by family and clan agreement with no recordable title and no conventional mortgage. On registered individually titled parcels, conventional financing and rental economics are more workable. The two tenure worlds produce very different ADU outcomes.
- other — ADU rules in FSM are not uniform nationally. The applicable framework depends on which of the four states a parcel is in, whether it falls inside a municipality that has adopted zoning, and the land's tenure classification. State-tier and city-tier ADU Pass research for the four FSM states carries the substantive land-use detail; the national tier is correctly mostly applicable:false.
- other — Any ADU cost model for FSM should include a typhoon-resistance and coastal-hazard premium and should not assume NFIP flood coverage is available. Foundations, roof attachment, and parcel siting are all governed by the same hazard exposure that constrains primary-dwelling construction.
Federal (United States) — ADU-relevant rules and programs
Federal ADU law
The United States has no federal statute that directly regulates accessory dwelling unit entitlement or design. Land-use authority over ADUs resides with states and local governments under the traditional police power. Federal engagement is limited to financing (Fannie/Freddie/FHA/VA/USDA), flood insurance (FEMA/NFIP), and discretionary housing programs (HUD), which are recorded in sibling sections of this file.
Federal financing programs
Federal housing-finance agencies and GSEs set nationwide underwriting rules that govern whether an ADU can be financed, appraised, and counted toward mortgage qualifying income. The relevant actors are Fannie Mae, Freddie Mac, FHA (HUD), VA, and USDA Rural Development.
Federal tax credits
There is no ADU-specific federal tax credit. ADUs may incidentally qualify for existing federal energy-efficiency and clean-energy tax credits when the ADU construction includes qualifying measures.
Federal housing programs
HUD administers several discretionary programs that can fund ADU-related activity at the grantee's election, but none is an ADU-specific program.