What Lee said, and FHA says
A. GROSS LIVING AREA
Gross Living Area is the total area of finished, above-grade
residential space. It is calculated by measuring the
outside perimeter of the structure and includes only
finished, habitable, above-grade living space. Finished
basements and unfinished attic areas are not included in
total gross living area. The appraiser must match the
measurement techniques used for the subject to the
comparable sales. It is important to apply this measurement
technique and report the building dimensions consistently
because failure to do so can impair the quality of the
appraisal report.
Each living unit must contain the following:
o domestic hot water
o a continuing and sufficient supply of potable
water under adequate pressure and of appropriate
quality for all household uses
o sanitary facilities and a safe method of sewage
disposal
FANNIE
A level is considered below-grade if any portion of it is below-grade—regardless of the quality
of its finish or the window area of any room. A walk-out basement with finished rooms would
not be included in the above-grade room count.
For units in condo or co-op projects, the appraiser must use interior perimeter unit dimensions to
calculate the gross living area. In all other instances, the appraiser must use the exterior building
dimensions per floor to calculate the above-grade gross living area of a property.
The following must be observed when calculating and reporting above-grade room count and
square footage for the gross living area:
• Only finished above-grade areas can be used in calculating and reporting of above-grade room
count and square footage for the gross living area.
• Garages and basements, including those that are partially above-grade, must not be included in
the above-grade room count.
Below-Grade Areas
Rooms that are not included in the above-grade room count may add substantially to the value of
a property—particularly when the quality of the finish is high.
The appraiser must report the basement or other partially below-grade areas separately and make
appropriate adjustments for them on the “basement and finished areas below-grade” line in the
“sales comparison analysis” grid.
Appropriate Above-Grade and Below-Grade Comparisons
To ensure consistency in the sales comparison analysis, appraisers must compare above-grade
areas to above-grade areas and below-grade areas to below-grade areas.
Appraisers may deviate from this approach if the style of the subject property or any of the
comparables does not lend itself to such comparisons.
However, in such instances, the appraiser must explain the reason for the deviation and clearly
describe the comparisons that were made.
