Structures of this nature, even when used as a primary residence, are referred to as garage apartments, and were considered very modern in the 1920s and 1930s, the height of their popularity. Variations are still being built today. They featured a garage on the lower level and an apartment, usually a bedroom, bathroom, and combined living area and kitchen on the upper level. Since most were part of properties that featured a primary residence, they were often rental properties. In a sense, they were the carriage houses of the early automobile era. Surviving examples are often still used for rental income or as guest houses.
We have several of these in the Cherokee Heights Neighborhood in Waycross. I remember visiting a friend years ago who lived in one of these. It was very much like you describe here. It was very neat and compact with beautiful hardwood floors.