Shelby County

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 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.

• Fannie Mae Selling Guide — ADU policy
• Freddie Mac Single-Family Seller/Servicer Guide — ADU policy
• FHA 203(k) Rehabilitation Mortgage Insurance
• VA-guaranteed home loans — ADU treatment
• USDA Single Family Housing Guaranteed Loan Program

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.

• Energy Efficient Home Improvement Credit (IRC §25C)
• Residential Clean Energy Credit (IRC §25D)

HUD administers several discretionary programs that can fund ADU-related activity at the grantee's election, but none is an ADU-specific program.

• Community Development Block Grant (CDBG)
• HOME Investment Partnerships Program
• PRO Housing (Pathways to Removing Obstacles to Housing)