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#2249709 - 02/24/21 07:33 PM Shed with living quarters
Beth175 Offline
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Beth175
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Wisconsin
Hello,

I am hearing the newest trend with rural properties is to have a "shouse" which is a shed with a portion of the inside being used as living quarters/house. I am thinking these would be HMDA reportable and not a mixed used property as they will typically be on a rural residential property. I realize if being added on a farm/primarily ag land, the shouse would not be reportable for HMDA. Has anyone come across any of these properties and do you treat them as a dwelling for HMDA?

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#2249712 - 02/24/21 07:46 PM Re: Shed with living quarters Beth175
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
I think they would qualify as dwellings.

https://www.epsbuildings.com/shouse-gallery.php
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#2249713 - 02/24/21 07:46 PM Re: Shed with living quarters Beth175
raitchjay Online
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I don't think there's a one-size-fits-all answer to your question.....but i do think by definition, they WILL (usually anyway) be a mixed-use property......which only means that you then need to determine the PRIMARY use of the property to determine whether it meets the definition of a dwelling for HMDA purposes. I guess it depends on what you mean by "rural residential property" and what these "shouses" are designed for. Are you saying there is no ag. purpose whatsoever attached to them?
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#2249714 - 02/24/21 07:53 PM Re: Shed with living quarters Beth175
Skittles Offline
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Skittles
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TN
Well you learn something new every day. I have never heard of a 'shouse' - but google brought up a lot of plans for them.
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#2249715 - 02/24/21 08:00 PM Re: Shed with living quarters Beth175
Adam Witmer Offline
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I too think it depends. My brother-in-law built a structure about 20 years ago similar to those Dan shared. His is a combo barn/house where his stables are right under his bedroom and accessible from the door on the back of the kitchen. His structure is clearly a dwelling. On the other hand, my father-in-law once converted a pool shed into his office he used almost daily. This was more of a typical 10 x8 shed that was not attached, didn't have running water, and didn't have sleeping quarters. In his case, I wouldn't qualify it as a dwelling. The same goes for some of these really nice tree houses or play houses some parents are making for their kids.

Whatever you do, I would clearly document the file as to why you called it a dwelling or not.
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#2249719 - 02/24/21 08:21 PM Re: Shed with living quarters Beth175
raitchjay Online
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Even with living quarters, i think it depends. For example, a "shouse" could be built or purchased that has living quarters, but is primarily used for an ag. or business operation.....or where the majority of the square footage is devoted to a non-dwelling pursuit.
Last edited by raitchjay; 02/24/21 08:24 PM.
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#2249742 - 02/24/21 10:59 PM Re: Shed with living quarters raitchjay
Beth175 Offline
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Beth175
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Wisconsin
The file I saw today was on a property that is primarily ag but what if one came in that wasn't on ag land - just a residential property out in the country. I am thinking this may be a way to possibly lower taxes as it appears to be a pole barn or shed from the outside. For example, I know someone who built a giant garage attached to a manufactured home as the garage wouldn't be taxed as heavily as if was the dwelling. The only thing that make that a "garage" is the garage door they installed but it is all living space.

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#2249782 - 02/25/21 07:51 PM Re: Shed with living quarters Beth175
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
We have financed several of these but to date the "shed" sections have just been oversized garages or personal workshops.

Unless you can document a business use or ag use for the "shed" section then IMO you will have to treat these as dwellings.
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#2249836 - 02/26/21 03:42 PM Re: Shed with living quarters Beth175
raitchjay Online
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Yes, i should mention that around here, "shouses" (or as they're actually called around here, "shomes") are generally self-contracted and built from the ground up with varying plans, and their uses vary pretty radically....from what Dan describes above (the shed section simply being oversized garages or personal shops) to ones that are 75% a welding shop with a small living quarters.
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#2249861 - 02/26/21 07:39 PM Re: Shed with living quarters raitchjay
InFairness, CRCM Offline
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InFairness, CRCM
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USA
Originally Posted by raitchjay
Yes, i should mention that around here, "shouses" (or as they're actually called around here, "shomes") are generally self-contracted and built from the ground up with varying plans, and their uses vary pretty radically....from what Dan describes above (the shed section simply being oversized garages or personal shops) to ones that are 75% a welding shop with a small living quarters.


I vacation sometimes at one of these in Alabama. The home part is a lovely 4 bedroom, 4 1/2 bath that would look right at home in an upscale neighborhood, but the back has a multiple warehouse-like sections with a giant garage storing boats, golf carts, and ATVs, a woodworking shop, an indoor gun range, and a bunkhouse with additional kitchen and bath.
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#2269319 - 04/19/22 01:43 PM Re: Shed with living quarters Beth175
Anonymous Offline
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We have our first Shouse loan. The collateral is the land with a shed, which they are turning into a livable "shed/house". Would this me considered a purchase or home improvement?

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