Homeowner Advice

Can an ADU Be a Primary Residence? What Homeowners Need to Know

February 16, 2026

34 min read

An accessory dwelling unit (ADU) is typically considered a secondary home on the same lot as a primary residence. However, in certain situations, an ADU can legally function as the primary residence — depending on state law, local zoning rules, and how the property is structured. This guide explains when that’s allowed and what homeowners need to understand before making that decision.

A partially constructed ADU with solar panels, showcasing sustainable upgrades and energy-efficient solutions in the early stages of development.

Get to know the writer

Bar Zakheim is a seasoned licensed general contractor and co-owner of Better Place Design & Build, guiding San Diego homeowners to maximize property value through high-ROI ADUs.

TL;DR: Can an ADU Be a Primary Residence?

An ADU can be used as a primary residence in some cases, but it depends on state law, local zoning rules, and how the property is legally structured.
In California, an ADU is generally considered accessory to a main home, though exceptions such as condo conversions (AB 1033), lot splits, or temporary occupancy may allow primary residence use.
You typically cannot build an ADU on a vacant lot without a primary dwelling already existing or under construction, unless a legal lot split or similar exception applies.
Financing, taxes, and insurance may treat an ADU differently depending on whether you live in it or rent it out, which can affect long-term costs and risk.
The rest of this article explains legal definitions, owner-occupancy rules, California exceptions, and financial considerations homeowners should understand before deciding to live in an ADU full-time.

Can an ADU be a primary residence is a common legal question, and the answer depends on state and local regulations. In many areas, an ADU is considered accessory to a main home, but certain exceptions—such as condo conversions, lot splits, or temporary occupancy during construction—may allow full-time primary use. Approval typically requires zoning verification and permitting before occupancy.

What Is an ADU and How Does It Function?

An ADU is a secondary housing option built on the same lot as the main dwelling unit, and can be either attached or detached. These compact living spaces have surged in popularity, especially in urban areas like San Diego, because they offer an affordable living option in densely populated regions.

An ADU in the framing stage, showcasing the early steps in constructing a detached unit in California.

California’s ADU policies create flexible living solutions, addressing housing shortages while enhancing property value.

Typically, an ADU must be equipped with all essential amenities, including a kitchen, bathroom, and living area. They are designed to function as self-contained living quarters, making them suitable for full-time occupancy.

Interior of a fully equipped ADU kitchen with modern finishes, demonstrating the essential amenities needed for independent living.

Equipped with essential amenities, ADUs offer efficient, self-contained housing ideal for urban living.

Exceptions: When Can an ADU Be a Primary Residence?

While they typically serve as additional living spaces to a primary residence, ADUs can be used as a primary residence in certain circumstances. An ADU can be a primary residence when it’s:

Purchased as a Condo

In high-density areas like San Diego, an ADU can be purchased as a condominium, allowing it to be used as a primary residence. This option provides flexibility for homeowners seeking to maximize their living space or invest in real estate while adhering to local regulations.

Converted as a Secondary Unit

A secondary unit can be converted into a primary residence, but this is only permissible if the main dwelling was established prior to the construction of the ADU. This rule ensures that the primary home remains the focal point of the property while still allowing for the ADU to serve as a living space.

A Temporary Living Solution

Homeowners may be permitted to reside in the ADU temporarily while the main house is under construction or renovation—but this is dependent on local zoning laws. This arrangement can provide a practical solution for those who need immediate housing during the building or renovation process. It is essential to follow any specific laws regarding this to ensure compliance.

A San Diego property with a separate ADU, reflecting the region’s progressive ADU regulations and incentives aimed at addressing housing needs.

San Diego’s progressive zoning enables ADUs to serve as primary residences under unique circumstances.

Owner-Occupancy Rules: Do You Have to Live in the Main House?

Owner-occupancy rules determine whether a property owner must live in either the primary residence or the ADU. These requirements vary by state and city and can significantly impact whether an ADU may function as a full-time primary residence.

In California, statewide ADU laws have temporarily removed many owner-occupancy requirements, but local implementation and future legislative updates can affect how this rule applies.

Common Owner-Occupancy Scenarios

The homeowner lives in the main house and rents out the ADU.
The homeowner lives in the ADU and rents out the main house.
The property is investor-owned with tenants in both units (if allowed by local law).
A junior ADU (JADU) requires owner occupancy in either the main house or JADU.

How to Verify Owner-Occupancy Requirements

Review current state ADU law (if applicable).
Check local municipal zoning ordinances.
Confirm rules for JADUs, which often have different requirements.
Verify with the local planning department before leasing either unit.

Quick Answers

Is owner occupancy currently required for ADUs in California? In most cases, no—but this has changed over time and may be reinstated depending on future legislation.
Are JADUs treated differently? Yes. Junior ADUs typically require owner occupancy in either the JADU or the primary residence.
Can a property investor rent out both units? This depends on local jurisdiction and current state rules.
Do owner-occupancy rules affect financing? Yes. Some loan programs require the borrower to occupy one of the units.

Can an ADU Be Sold Separately? (AB 1033 Explained)

Under California Assembly Bill 1033 (AB 1033), some cities may allow ADUs to be sold separately from the primary residence through a condominium conversion process. This changes how the ADU is legally classified and may allow it to function as its own primary residence.

This option is not automatic and depends on local adoption of the law.

When Separate Sale May Be Possible

The city has adopted AB 1033 provisions.
The ADU meets building and safety requirements.
The property is legally subdivided or structured as a condo.
Separate utilities and legal documentation are established.

General Process Overview

Confirm whether the local jurisdiction allows ADU condo sales.
Obtain approval for condominium mapping.
Establish separate legal ownership and documentation.
Record necessary legal instruments before transfer.

Quick Answers

Can I automatically sell my ADU separately? No. The city must adopt AB 1033 provisions first.
Does this make the ADU a primary residence? Yes, if legally sold and separated, it may function as an independent primary residence.
Are there additional costs? Yes. Condo mapping, legal filings, and compliance costs may apply.
Is this available in all California cities? No. Each municipality must opt in.

ADU vs JADU: Can Both Be a Primary Residence?

An ADU (Accessory Dwelling Unit) and a JADU (Junior Accessory Dwelling Unit) are regulated differently. While both provide independent living space, their legal treatment varies.

JADUs are typically created within the existing home and often have stricter occupancy requirements.

Quick Answers

Can a JADU be used as a primary residence? Generally, no. JADUs are more restricted.
Is an ADU more flexible than a JADU? Yes, particularly regarding size and potential sale.
Which option is better for rental income? Detached ADUs typically offer greater flexibility.

Comparison Table

Feature	ADU	JADU
Detached Allowed	Yes	No
Separate Kitchen	Yes	Efficiency kitchen
Owner Occupancy Required	Usually no (varies)	Typically yes
Separate Sale Allowed	Possible under AB 1033	No
Can Function as Primary Residence	Sometimes	Limited

California ADU Regulations: Can You Build an ADU Before the Main House?

The California statewide ADU laws define an ADU as an accessory unit with complete living facilities located on a lot with a proposed or existing primary residence. This means that the primary dwelling must be either existing or under construction before ADU permits are issued, and they are not allowed on vacant lots without a primary residence. There are exceptions and special cases when an ADU can be built before the main structure.

California ADU legislation continues to evolve, with periodic updates affecting owner-occupancy rules, condo conversions, and lot split eligibility, making it important to verify current regulations before proceeding.

Temporary Use Permits allow temporary occupancy of an ADU during construction of the main residence. This is often subject to strict time limits and requires demonstrating active progress on construction of the main house.
Lot Splits: A recent California law allows certain single-family lots to be split, potentially allowing for separate ownership of what was originally planned as an ADU, resulting in an ADU becoming the primary residence on its own lot.
Scenarios where there is a rebuild due to a disaster or renovation can permit temporary occupancy of an ADU as the main residence.
Rural or agricultural zones usually have more lenient ADU rules for agricultural worker housing.

ADU regulations are complex and constantly changing. Homeowners should consult directly with a local planning department and work with a local company that has extensive knowledge of this project type.

Temporary permits and lot splits allow for ADUs to function as primary residences in specific scenarios.

Financing an ADU as a Primary Residence

Financing rules differ depending on whether you live in the main home or the ADU. Lenders classify properties based on occupancy type, and that classification affects loan terms and eligibility.

Recent updates from Fannie Mae allow projected ADU rental income to be counted toward mortgage qualification in certain situations.

Common Financing Scenarios

Living in the main house and renting the ADU.
Living in the ADU and renting the main house.
Refinancing a property that includes an ADU.
Using projected ADU income to qualify for a loan.

Steps to Clarify Financing Eligibility

Confirm whether the lender considers the property owner-occupied.
Determine if ADU rental income can be counted.
Verify underwriting guidelines specific to your loan program.
Confirm insurance classification requirements.

Quick Answers

Can ADU rental income help me qualify for a mortgage? In many cases, yes—if documentation requirements are met.
Is an ADU considered a multi-family property? Generally no. Most ADU properties are classified as single-family with an accessory unit.
Does living in the ADU affect my interest rate? Possibly, depending on lender guidelines.
Can I refinance after building an ADU? Yes, subject to appraisal and underwriting requirements.

Tax and Insurance Considerations When Living in an ADU

Using an ADU as a primary residence may impact property taxes, homestead exemptions, and insurance coverage. Treatment varies depending on occupancy and local tax rules.

While an ADU typically increases assessed value, it does not automatically trigger reassessment of the entire property in California under most circumstances.

Key Considerations

Property tax reassessment of the new construction only.
Homestead exemption eligibility.
Insurance policy updates for multi-unit use.
Rental income reporting requirements.

Quick Answers

Will building an ADU reassess my entire home? In California, typically only the new construction is reassessed.
Can I claim a homestead exemption if I live in the ADU? Possibly, depending on how the property is recorded and occupied.
Do I need special insurance? You may need to update your homeowner’s policy to reflect dual occupancy.

Comparison Overview

Topic	Living in Main House	Living in ADU
Property Classification	Single-family with ADU	Single-family with ADU
Homestead Exemption	Typically applies	May apply depending on filing
Insurance Policy	Standard homeowner + rider	May require policy update
Rental Income Reporting	If renting ADU	If renting main house

California-Specific Rules for Using an ADU as a Primary Residence

California ADU law requires that an ADU be accessory to a primary residence, but several exceptions allow flexibility in how the units are used.

These include lot splits, disaster rebuild scenarios, temporary occupancy permits, and condominium conversions.

Situations That May Allow Primary Use

Temporary occupancy during main house construction.
SB 9 lot splits creating separate parcels.
AB 1033 condominium conversion.
Agricultural zoning exceptions in rural areas.

Quick Answers

Can I build an ADU before the main house? Generally no, unless a temporary use permit or similar exception applies.
Does SB 9 change ADU rules? It may allow lot splits that change how units are classified.
Are rules the same across California? No. Local interpretation and implementation vary.

San Diego-Specific ADU Regulations and Trends

San Diego has embraced ADU construction to address housing challenges. The county and its cities have implemented a more streamlined approval process and progressive policies, allowing multiple ADUs on single-family lots and offering incentives like fee waivers and pre-approved plans.

Popular neighborhoods, like North Park and coastal areas in Encinitas, have seen a surge in ADU development. ADUs have become increasingly attractive in the high-cost housing market because they offer more affordable homeownership options, potential rental income, and flexibility for multigenerational living.

Local initiatives such as the San Diego ADU Bonus Program, ADU Acceleration Program, and Housing Solutions Program provide additional support and incentives for ADU construction. These efforts reflect a shift in urban planning priorities, focusing on infill development and diverse housing options to combat the region’s housing shortage and affordability issues.

San Diego’s ADU-friendly policies streamline construction and incentivize innovative housing solutions.

Benefits and Challenges of Using an ADU as a Primary Residence

A common way homeowners use ADUs as a primary residence is by renting out their main house and living in their ADU. By weighing the benefits and challenges of using an ADU as a primary residence, homeowners can make an informed decision if this is the right course of action for their situation.

Benefits	Challenges
An ADU as a primary residence will cost less than building another traditional home.	Because ADUs are smaller than primary residences, there will be space constraints and limited privacy.
ADUs are more energy-efficient and have a smaller footprint because they use fewer resources, such as water and electricity.	Choosing to use an ADU as a primary residence may lead to potential issues with zoning and building permits.
An ADU can increase property value, especially in San Diego’s competitive real estate market where the housing supply is limited.	Additional utility expenses can arise from managing a separate living unit on the same property.
An ADU can be a great temporary living solution when renovating a primary residence.	Though cheaper than building a traditional home, building an ADU can still be costly and may pose financing challenges.

Frequently Asked Questions (FAQ)

Additional questions? We have the answers. If you can’t find the information you need, don’t hesitate to contact us!

Yes, you can rent out an ADU even if it’s your primary residence. Here are a few scenarios— if you live in the main house, you can rent out the ADU; if you live in the ADU, you can rent out the main house; or if you have multiple ADUs on your property, you can live in one and rent out the others.

To build an ADU in San Diego, you typically need a building permit, electrical permit, plumbing permit, and mechanical permit. You may also need a grading permit or demolition permit (if you are removing an existing structure). San Diego has streamlined its ADU permitting process, allowing people to apply for all these permits together as part of the ADU project application.

A detached ADU can be up to 1,200 square feet, regardless of the size of the main house. If the ADU is attached to the main house it is limited in size to 50% of the primary dwelling’s living area. So technically, an ADU can be larger than the main structure as long as it complies with all other zoning requirements.

Contact Better Place Design & Build for Personalized ADU Solutions

At Better Place, our experienced team guides you through the entire ADU process. From design to construction to permitting—we are committed to bringing your ADU vision to life. Ready to explore your options? Schedule your free consultation now.