Bonus Rooms to Include or Not Include in GLA

[Amy Perkins]

When is it appropriate to include a bonus room? Sometimes builders include these in the GLA and sometimes they don't. Sometimes the assessor counts it as GLA sometimes not. It is typically a heated and cooled room that is finished but the ceiling slopes down by the sides. My understanding is that ANSI says they have to be six feet high to be GLA. What are your thoughts on this issue and how can we get this through underwriting when the assessor doesn't count it and now all your GLA is not matching County records. Anyone have some theories as to why builders keep it off the record sometimes? Also since it is inferior to full ceiling height how do you account for the difference.

 

[Renee Healion]

If it is only entered from outside of living area, then not included in GLA. Address it on a separate line.

Whether it is permitted or not is for you to address. Sometimes the builder roughs it in and the owner finishes it later without applying for approvals.

When the market changes direction, builders are often the first to respond. They are more nimble than homeowners, by contrast. So they throw in the finish of the bonus space as a concession to buyers. And they do it to keep their crews together because if they disperse, it is tough to get going again. Bonus finish is a good thing to pay attention to in general, not just with your subject. A lot of appraisers miss signs of a market direction change.

 

[Amy Perkins]

If it is only entered from outside of living area, then not included in GLA. Address it on a separate line.

Whether it is permitted or not is for you to address. Sometimes the builder roughs it in and the owner finishes it later without applying for approvals.

When the market changes direction, builders are often the first to respond. They are more nimble than homeowners, by contrast. So they throw in the finish of the bonus space as a concession to buyers. And they do it to keep their crews together because if they disperse, it is tough to get going again. Bonus finish is a good thing to pay attention to in general, not just with your subject. A lot of appraisers miss signs of a market direction change.

What a sneaky way to hide it...

 

[Tim The Enchanter]

I would count the area that has at least a 6 foot ceiling. Had one recently 2 upstairs bedrooms had ceilings that sloped to less than 2' high at the side walls.
Counted the middle parts of the rooms, and explained. Got no stips.

 

[Riick]

If it's above grade, heated, and the finish is similar to rest of the house, it's part of the GLA.
Fannie & Freddie have specific rules for areas where the walls slope, these more or less say you count the floor area where the effective wall height is four (4) feet or more.
Appraising the extra space is a horse of a different feather. Comparables are usually around, they'll tell you what the market thinks.

 

[Amy Perkins]

If it's above grade, heated, and the finish is similar to rest of the house, it's part of the GLA.
Fannie & Freddie have specific rules for areas where the walls slope, these more or less say you count the floor area where the effective wall height is four (4) feet or more.
Appraising the extra space is a horse of a different feather. Comparables are usually around, they'll tell you what the market thinks.

Fannie does not have authority or ANSI right?

 

[Terrel L. Shields]

When is it appropriate to include a bonus room?

Most of the FROGs (finished room over garage) here are fully finished, have a stairs inside the house, and central heat and air. The assessor often over measures them however because a high percent has sloped walls and they use the garage footprint, when it should probably be about half to 2/3rd due to wall heights.

 

[Mr Rex]

The ANSI standard is that in a room with sloped ceilings, you count all the square footage where the ceiling is at least 5 foot tall and over 50% has to be over 7 feet tall. Some builders will put the knee walls at 4 feet high so you don't measure from wall to wall, you measure from where its at least 5 feet high.

 

[Riick]

Thank you Mr. Rex, I stand corrected -- It's 5 feet, and not 4.

IIRC, Fannie's Guidelines: https://www.allregs.com/tpl/public/fnma_freesiteconv_tll.aspx

>>Fannie does not have authority or ANSI right?
---- I think the Golden rule applies here:
................... "Them what got the gold, makes the rules."

 

[CCAAMO]

The 50% of the ceiling being over 7' high is as important as the 5" high and higher side walls.