Are Finished Basements Living Area?

March 11, 2017

 

The answer to that question likely depends on the person answering the question. Many homes have basements that are finished to such a degree that they have the look and feel of living area. However, real estate appraisers, when appraising homes for mortgage lending purposes, have to follow the guidelines of the lenders. Note the following quote from Fannie Mae regarding finished below grade areas:  "Fannie Mae considers a level to be below-grade if . Fannie Mae considers a level to be below-grade if any portion of it is below-grade, regardless of the quality of its finish or the window area of any room. Therefore, a walk-out basement with finished rooms would not be included in the above-grade room count. Therefore, a walk-out basement with finished rooms would not be included in the above-grade room count. 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. For that reason, the appraiser should report the basement or other partially bel