ANSI FAQ

Fannie Mae recognized that although a strong correlation exists between property values and GLA, there was little consistency as to how GLA was determined. This was evidenced recently in a survey of appraisers attending a class on ANSI standards and provided eleven different techniques they use to measure a one-and-a-half-story residence.

Per Fannie Mae, data also showed that when a second appraisal was submitted on the same property appraisers would report a difference of greater than 10% more than 20% of the time; and 40% of all submitted appraisals reported the square footage exactly as reported in public records.

Additionally, Fannie Mae has identified the following benefits of a universal standard:

• Creates alignment across multiple professions and sources
• Consumer protection and reduction in potential bias
• Transparent for the appraisal report reader.
• Professional and defensible for the appraiser.
• Consistent, repeatable unit of comparison for transactional data
• Higher confidence risk management and valuation modeling.
• Less re-training (ANSI is the most widely used GLA standard)
• In use by some states and county assessor offices
• Adopted by the National Association of Home Builders
• Ease of use: only 16 pages
• Existing continuation education classes are available.

American National Standards Institute, inc.

Contact the Home Innovation Research Labs at homeinnovation.com, select Bookstore from the drop-down menu or Phone: 800-638-8556. Cost is $25.00 for an electronic copy.

So far at least two states have adopted ANSI standards for appraisers in some manner. Those states are: Kentucky, and Mississippi.  There are states, like North Carolina, that have measurement requirements for other market participants like real estate sales agents.

In their December update, Fannie Mae listed some ANSI-related items for appraisers to consider when using the ANSI standard, which is provided below:

• Measurements are taken to the nearest inch or tenth of a foot, and the final square footage is reported to the nearest whole square foot.
• Staircases are included in the GLA of the floor from which they descend.
• Basement is any space that is partially or completely below grade.
• The GLA calculation does not include openings to the floor below, e.g., two-story foyers.
• Finished areas must have a ceiling height of at least 7’. In a room with a sloping ceiling, at least 50% of the finished square footage of the room must have a ceiling height of at least 7’ and no portion of the finished area that has a ceiling height of less than 5’ can be included in the GLA.
• If a house has a finished area that does not have a ceiling height of 7’ for 50% of the finished area, e.g., some cape cods, in conformance with the ANSI Standard, the appraiser may put this area on a separate line in the Sales Comparison Grid with the appropriate market adjustment. The report will be ANSI-compliant and also acknowledge the contributing value of the non-GLA square footage.

Yes. Appraisers should be aware of the following definitions found on page 1 in the ANSI Z765-2021 Standard.

2.1 Attached Single Family House: A house that has its own roof and foundation, is separated from other houses by dividing walls that extend from roof to foundation and does not share utility services with adjoining houses; for example – may be known as a townhouse, rowhouse, or duplex.

2.2 Detached Single-Family House: A house that has open space on all its sides.

2.3 Finished Area: An enclosed area in a house that is suitable for year-round use based upon its geographical region, embodying walls, floors, and ceilings that are like the rest of the house.

2.4 Garage: A structure intended for the storage of automobiles and other vehicles.

2.5 Grade: The ground level at the perimeter of the exterior finished surface of a house.

2.6 Level: Areas of a house that are vertically within 2 feet of the same horizontal plane.

2.7 Square Footage: An area of a house that is measured and calculated in accordance with the standard. When employing Metric or Standard International (SI) measurement units, the term floor area is used in place of square footage.

2.8 Unfinished Area: Sections of a house that do not meet the criteria of finished area.

No. Duplex is identified in the definition of Attached Single-Family House, however, ANSI would only be adhered to when appraising a singular-unit  described as side-by-side houses in the ANNEX Commentary on ANSI Z765-2021 on page 4 of the ANSI Standard, and also described in the calculation of square footage, 3.3 – attached single-family finished square footage where it states (or from the centerlines between houses, where appropriate).

ANSI should not be used if the architectural design is an apartment or multifamily building.

ANSI identifies duplex as a semi-attached single-family residential home.

When measuring a condominium or co-op that is part of an apartment or multifamily building, Fannie Mae’s policy of using interior perimeter measurements for the subject property should be applied.

No, the requirements do not extend to outbuildings.

However, a separate computer-generated footprint sketch that includes exterior wall dimensions must be provided for each additional structure with room labels, if applicable.

if an appraiser is unable to adhere to the ANSI Z765-2021 standard due to reasons beyond the appraiser’s control, the appraiser will enter “GXX001” at the beginning of the Additional Features field of the appraisal report and provide an explanation of why they were not able to comply.

Example – a house that is built into a hill where exterior measurements are not possible.

Also – if the appraiser is performing an appraisal in a state that requires adherence to a different measuring standard.

Square footage calculation of single-family houses are made by using exterior dimensions.

When using English measurement units, the house is measured to the nearest inch or tenth of a foot; the final square footage is reported to the nearest whole square foot.

• Calculation of square footage for a proposed construction made by using plans and specifications must be stated as such when reporting the results of the calculation.
• For detached single-family houses, the finished square footage of each level is the sum of finished areas of that level measured at floor level to the exterior finished surface of the outside walls.
• For attached single-family finished square footage, the finished square footage of each level is the sum of the finished areas on that level measured at floor level to the exterior finished surface of the outside wall or from the centerline between houses, where appropriate.

GLA for properties in local MLS systems and assessor records may not be ANSI-compliant. The appraiser may not know what method an MLS listing or assessor used to calculate the GLA. Through research and their knowledge of the local market, appraisers determine if the GLA provided through alternate sources should be adjusted. The adjustment process does not change the requirement to report subject GLA to the ANSI standard.

The area of both stair threads and landings preceding to the floor below is included in the finished area of the floor from which the stairs descend. (not to exceed the area of the opening in the floor). Openings to the floor below cannot be included in the square footage calculation.

To be included in finished square footage calculations, finished areas must have a ceiling height of at least 7 feet.

An exception would be

• under beams, under ducts, under other obstructions where the height may be 6 feet 4 inches
• under stairs where there is no specified height requirement
• where the ceiling is sloped
  • if a room’s ceiling is sloped, at least one-half of the finished square footage in that room must have a vertical ceiling height of at least 7 feet.
  • No portion of the finished area that has a height of less than 5 feet may be included in finished square footage.

An excellent illustration is found in the Appraisal Institute course – Measure it Right-Using ANSI Z765-2021, which is also Figure 5 on page 10 of the ANSI Z762-2021 publication, shown below.

Additional note: To be ANSI compliant, the Entry Level must be reported as Below Grade finished area. To be counted as Above Grade Finished Area it must be entirely above grade.

The above grade finished area of a house is the sum of finished areas on levels that are entirely above grade.

Below-grade finished square footage of a house is the sum of finished areas on levels that are wholly or partly below grade.  Per ANSI “Given the above-grade and below-grade distinction and the definition of grade, the committee acknowledges that this may result in houses that—depending on topography, design, or grade line—have no calculated above-grade finished square footage derived from the method of measurement employed by this standard.”

Finished areas that do not meet the criteria of calculated square footage such as those areas not connected to the house, unfinished areas, and other areas that do not fulfill the requirements of finished square footage but may be listed separately.

The portion of the house that is at or above-grade would be calculated as above-grade finished area and/or unfinished area. The portion of the house that is even partly below grade must be calculated as below grade finished area and/or unfinished area and would be reported in the Basement & Finished Rooms Below Grade in the Sales Comparison grid.

An excellent example is also illustrated in the Appraisal Institute course Measure It Right – Using ANSI Z7652021 and shown on the following page.

The illustration shows a split level detached SFR with four levels. Level 1 is unfinished below grade, level 2 is below grade finished, level 3 is above grade finished, and level four is above-grade finished.

Level 3 and 4 sould be reported in the sales comparison grid as 1040 sq. ft. Above Grade Room Count Gross Living Area.

Level 1 and 2 will be reported in the Basement and Finished Rooms Below Grade section of the grid – 572 sq ft finished and 468 sq ft unfinished.

No. To be ANSI compliant, the walk-out basement should be reported in the Basement and Finished Rooms Below Grade section of the Sales Comparison grid, similar to the illustration in the previous answer relating to a split level SFR.

Bay windows can be included in the finished area calculations if they extend from the floor to the ceiling and meet the minimum ceiling height requirements.

Yes, our clients do require a general statement in the report that the appraiser has adhered to the ANSI standard.

Per ANSI, to claim that you follow the ANSI standard you must include one of the three specific “Declarants” (Statement of Finished Square Feet) located in the standard; per ANSI, failure to provide the declarations…where applicable – voids any claim of adherence to the standard.

·        Declaration #1 applies when the dwelling is measured from the exterior only and the interior was not accessed.

·        Declaration #2 applies when the dwelling is measured per plans and specifications (e.g. blueprints)

·        Declaration #3 applies when the dwelling is measured partially from the interior (e.g. second floors)

To obtain the ANSI Z765-2021, click here.