Fannie Mae: NO more Finished Basement included in GLA Starting February 2022

[Gingerman]

Below the dirt, below grade. BUT if the basement is finished the same quality as upstairs, I adjust it the same $/sqft as upstairs. Sometimes this just isn't possible because upstairs is super nice with vaulted ceilings, extensive trim, etc etc that a simple basement can't provide but for the most part if it is finished the same I adjust it the same.

 

[Terrel L. Shields]

Who is “they” in this statement?

lender

I adjust it the same $/sqft as upstairs.

That works in some situations. Sometimes not. But by lumping it in with the GLA a finished basement is being mis-characterized by the appraiser under FNMA rules. So to play the game using Fanniespeak the appraiser should segregate the GLA from Basement finished SF. The rule is pretty plain, walk out or not, the basement is defined as 'below grade' and should be separate.

There are local variation. Here if you own a hillside lot near Beaver Lake (AR) or Grand Lake (OK) the lower level tends to sell for the same per SF as the GLA (but it is still not GLA) But away from the lake area, basements are uncommon, even on hillsides (and this is the Ozarks, we do have hills and hollows galore) and the lower levels rarely sell for the same as the upper level.

I attribute this partially to the lack of builders competent to weatherize that lower level. Whether using sealer or not, failure to have gravel backfill and French drains makes 11 out of 10 such basements have a musty smell - finished or not. And/or actual water issues. Our clay soils are rocky and appear porous but the clays are often very high moisture content - an irreducible water at that - making the soil rather light in weight, and having a high water holding capacity...in other words, they never really dry and as a consequence are a ready source of mold.

 

[TerryRohrer]

There are local variation. Here if you own a hillside lot near Beaver Lake (AR) or Grand Lake (OK) the lower level tends to sell for the same per SF as the GLA (but it is still not GLA) But away from the lake area, basements are uncommon, even on hillsides (and this is the Ozarks, we do have hills and hollows galore) and the lower levels rarely sell for the same as the upper level.

I attribute this partially to the lack of builders competent to weatherize that lower level. Whether using sealer or not, failure to have gravel backfill and French drains makes 11 out of 10 such basements have a musty smell - finished or not. And/or actual water issues. Our clay soils are rocky and appear porous but the clays are often very high moisture content - an irreducible water at that - making the soil rather light in weight, and having a high water holding capacity...in other words, they never really dry and as a consequence are a ready source of mold.

Around here, it is about as opposite as you can get. Almost everything, until lately, had a basement and the exceptions were those without. But, the average annual precipitation is 14" to 19", so even with occasional drainage problems, they tend not to get musty unless they are surrounded by irrigated land. And, they are cool during the hottest part of summer and warm during the coldest part of winter (relatively speaking) and are valuable living spaces. Lately, a few fly-by-night builders have been building homes on slabs (mostly just outside the jurisdictions where permits and inspections are required), with the utilities in the slab. It is going to be interesting to see what lender losses on these are when they go into foreclosure and don't get winterized properly.

But these differences highlight the problem with FNMA dictating a one size fits all reaction to everything so they have a database they understand. They don't understand valuation so the data has to be dumbed down to the point they can run models that reflect good statistics without necessarily having anything to do with actual value in a given locale.

 

[djd09]

Nominations for 2022 ANSI Leadership and Service Awards Open Through June 24​

NEW YORK, May 19, 2022 /PRNewswire/ -- The American National Standards Institute (ANSI) is pleased to open the call for nominations for its 2022 Leadership and Service Awards. ANSI will present the awards at a banquet and ceremony on October 12, 2022, at The Fairmont Washington, Washington, DC, during the fall 2022 World Standards Week events. Nominations for all 12 categories of awards are due by June 24, 2022 (5 p.m. Eastern).


ANSI's Leadership and Service Awards honor individuals and organizations who have made significant contributions to voluntary consensus standards development, conformity assessment activities, and workforce development, and whose contributions have consistently demonstrated a commitment to their industry, the nation, and the enhancement of the global standardization system.

Nominations for 2022 ANSI Leadership and Service Awards Open Through June 24

/PRNewswire/ -- The American National Standards Institute (ANSI) is pleased to open the call for nominations for its 2022 Leadership and Service Awards. ANSI...

www.prnewswire.com

congrats to the future winners of the Measuring Visionary awards

 

[The Warrior Monk]

Appraising is easy in the sense that all the appraiser has to do is reflect what is happening in the market.

Appraising becomes difficult and tedious when bureaucrats standardize guidelines that don't reflect that way market view things. This results in the appraisers have to create new paths through the nonsensical bureaucratic guidelines to actually reflect the market.

 

[Mark K]

I appraised this house a few years back for a road project. 0 sq.ft. and 3,000 sq.ft. basement per the new F/F regs. Lot rolls to rear, back of house is above grade.

 

[Dublin ohio]

I appraised this house a few years back for a road project. 0 sq.ft. and 3,000 sq.ft. basement per the new F/F regs. Lot rolls to rear, back of house is above grade.

View attachment 62942

If it is a one floor home. You use GX001. The 3000 sf then goes on the GLA line.

 

[djd09]

the anti market measuring standard is so good , that fannie needed an exception code and already 19 FAQ's

 

[Tiffany Gibbons]

Converted garages below the level of the main raised foundation floor could be included as gross living area, but not a sloping home with one wall even half way up to the windows. I had one luxury ocean view property that had half build into the hillside. It was a multi-million dollar property, I suppose only the entryway and the garage were actually above grade. This also leads to the question of guest houses and whether they are included in the gross living area. Maybe they are above grade, but I will usually adjust for these on the lines below for a Pool house or "Casita." Agents tend to include these areas. Assessors in Santa Barbara will typically include these as gross living area, but sometimes not. I suppose how ever the mood strikes at the moment is how it goes. Tennessee is even worse as their assessors are not even appraisers! So they have no standards or guidelines to follow, what's worse is if they put it in as GLA they get taxed at a higher rate, NO Prop 13 here. They have a formula and they just enter the data. If this market crashes it's going to be tax appeals all day long. I even doubt they could keep up with it since the government is used to a smaller population. The infrastructure is like a levee ready to break with this surging population influx. When these people on a fixed income get their doubled tax bill; it's going to get rough. The state assessor said that it's a red state, so they wouldn't want Prop 13. I was thinking why would a red state want to pay more taxes? I thought red states were all about lower taxes. I suppose they think that they would pay less if it is assessed every two years. Nope, not happening. Prices doubled in two years.

Amy, Tennessee does not have a State Assessor. The DPA is under the Comptroller of the Treasury here. If you want Propostion 13, contact his office. That might be a good idea. Also. all 28 counties in Middle Tennessee use different methods. Smaller jurisdictions are on the State issued Tyler product for mass appraisal while most of the larger counties use Patriot. They are similar There are some licensed appraisers who work for the county assessors, but you won't deal with them unless you appeal your tax appraisal. They also have MLS, Costar, etc. available to qualify sales. There is a tax relief program for elderly, disabled homeowners as well, where the assessed value can be frozen, but homeowners much reapply every year. There are special programs for the military in some counties too.

 

[Fernando]

Nominations for 2022 ANSI Leadership and Service Awards Open Through June 24​

NEW YORK, May 19, 2022 /PRNewswire/ -- The American National Standards Institute (ANSI) is pleased to open the call for nominations for its 2022 Leadership and Service Awards. ANSI will present the awards at a banquet and ceremony on October 12, 2022, at The Fairmont Washington, Washington, DC, during the fall 2022 World Standards Week events. Nominations for all 12 categories of awards are due by June 24, 2022 (5 p.m. Eastern).


ANSI's Leadership and Service Awards honor individuals and organizations who have made significant contributions to voluntary consensus standards development, conformity assessment activities, and workforce development, and whose contributions have consistently demonstrated a commitment to their industry, the nation, and the enhancement of the global standardization system.

Nominations for 2022 ANSI Leadership and Service Awards Open Through June 24

/PRNewswire/ -- The American National Standards Institute (ANSI) is pleased to open the call for nominations for its 2022 Leadership and Service Awards. ANSI...

www.prnewswire.com

congrats to the future winners of the Measuring Visionary awards

Winner for ANSI award is the one who was able to convince Fannie in forcing appraisers to use ANSI standard.
Big win and money for ANSI.