How to Buy a Multigenerational Home

Household configurations in the 21st century include an amorphous mix of parents, grandparents, adult kids, young kids, siblings, extended family, singles, couples and roommates. According to Pew Research Center, a record 64 million Americans — one in five — lived in a multigenerational household in 2016. Builders are adding flexible spaces to their floor plans and introducing homes designed specifically for multiple generations under one roof to accommodate changing lifestyles.

“Homeowners appreciate the flexibility multigenerational floor plans offer while still providing the residents independence by featuring private living quarters,” says Jessica Hansen, vice president of communications for D.R. Horton Inc.

According to Stephen Paul, executive vice president of Mid-Atlantic Builders in Rockville, Md., it’s much simpler and less costly to have a house that’s been designed from the beginning to accommodate multiple generations rather than to try to retrofit a house.

The genesis of multigenerational houses for Lennar Homes, which introduced its Next Gen homes in Phoenix in 2011, was the aftermath of the foreclosure crisis and recession when families were doubling up.

“An architect brought the design to us, which has almost a separate apartment under the same roof as the main house,” says Jeff Roos, western regional president of Lennar Homes. “It’s a cost-effective solution and functions well compared to a granny flat above the garage or a separate casita.”

About 65 percent of Lennar’s Next Gen homes are sold to families bringing grandparents into the household, but the floor plan also works for adult kids returning home, families who want to accommodate long-term visitors and people with special needs who require a live-in caretaker, says Roos. Some people choose to rent the multigenerational space, but the ability to legally rent part of your home for short-term or long-term use is regulated by local jurisdictions and homeowner associations.

Multigenerational Floor Plan Features

Whether you’re ready to expand your household with your parents or in-laws or adult offspring, it’s important to plan for your changing family when shopping for a new house.

“As a semi-custom builder, we’ve converted a first-floor powder room to a full bathroom or a study into a bedroom, but when you’re combining households it’s best to add a larger space so the people who are sharing your home don’t feel like an afterthought,” Paul says.

The floor plan that works best for you depends on how you’re sharing your home. If you have adult kids moving in, a loft or a finished lower level apartment might work well. For families moving older people into their home, Roos advises always keeping the multigenerational suite on the first floor to avoid stairs.

“With a focus on independence and privacy, multigenerational plans typically feature a private entrance to the secondary residence, which includes a private living space, kitchen, bedroom, bath and laundry,” Hansen says.

Ideally, you want two areas for social interaction in the house, says Paul Lester, a real estate agent with The Agency in Los Angeles, so the whole family can be together but they can also have separate space when they want it.

Depending on the market, Roos says that Lennar’s Next Gen homes can include a suite like a studio apartment or a one-bedroom or even a two-bedroom home. If possible, the suite has both a private exterior entrance and an interior entrance to the rest of the home that can be locked like adjoining hotel rooms.

“It’s best if people in the multigenerational suite can get to the kitchen without needing to go through the family room where other family members may be entertaining or relaxing,” Paul says.

Having a kitchen in a multigenerational suite depends on available space as well as local laws.

“We put in a full-size sink and refrigerator and sometimes a dishwasher,” Roos says. “A lot of jurisdictions won’t allow a range or oven, but you can usually have a microwave or toaster oven.”

In Prince George’s County, Md., where Mid-Atlantic builds multigenerational homes, cooktops and ovens are banned from second kitchens because that would shift the house to a “multi-family” property rather than a multigenerational home.

“In Los Angeles, city regulations have changed a little so now you can have a full kitchen in a pool house or a guest house, so you could have a multigenerational compound,” Lester says, “but you still can’t have an oven in a second kitchen in the main house.”

Some homes have separate laundry equipment, a private outdoor space and even a separate garage for the multigenerational suite. You’ll need to determine how many cars will be owned by household members and where they can be parked, since some planned communities have rules about street or driveway parking.

While most multigenerational homes have a first-floor master suite, they’re not limited to single-story homes or even to single-family homes. You can find two-story single-family homes and even townhouses with elevators or with upper or lower level space suitable for younger adults.

Whatever you choose, it’s important that the design for the multigenerational section doesn’t compromise the rest of the house, Roos says.

Financial and Legal Tips for Multigenerational Buyers

While the simplest way to buy a multigenerational property is with one buyer, every family needs to work together to determine how to finance it.

“Even if everyone has cash, you need a written agreement about how much each person contributes,” Lester says. “Lenders are open to several people applying together for a loan, but they’ll take a hard look at the weakest link. The lender must feel confident that someone will be able to repay the loan even if someone else defaults.”

The most common ownership structure of Lennar’s Next Gen homes is for one person or a couple to be on the title while the parents or grandparents provide down payment funds and share in the daily expenses and sometimes the mortgage.

Multigenerational homes typically have more square feet and an extra bathroom, so they’re likely to be a little more expensive than a one-family house. At the same time, the cost is significantly lower than maintaining two separate households, Roos says.

It’s important to discuss legal arrangements when more than one generation is on the loan and the title, particularly in the context of estate planning.

“The main thing we want to do in our multigenerational homes is build in flexibility so that the house can turn on dime and work for whoever is living there at any time,” Paul says.

While the practicalities of buying a multigenerational home are important, Roos says he relishes the heartwarming stories of their buyers who appreciate the experience of living with extended families.