HUD Regulations do not define a unit. The dictionary definition of unit is:
“a self-contained section of accommodations in a larger building or group of buildings that may contain food preparation or sanitary facilities, or both.”
Without specifics in the regulations, the industry normally defines a single family residence as one unit. Some contractors report that they use the number of water heaters as the number of units and some contractors charge for extra “units” when the single family residence has more than two bathrooms.