Learn · Real Estate · 7 min read

Part of: Square Footage by Property Type: What Counts and What Doesn't

Bi-Level Square Footage in Appraisals: What Actually Counts as GLA

A bi-level home — also called a raised ranch — looks simple from the outside but creates one of the most debated square footage questions in residential appraisal. The lower level sits partly underground. Depending on exactly where the grade line falls, it might count as gross living area, as finished below-grade space, or as something in between. Here is how appraisers work through it.

What is a bi-level home?

A bi-level (raised ranch) has two living levels connected by a short staircase — usually five to eight steps — right inside the front door. The upper level contains the main living spaces: living room, kitchen, dining area, and bedrooms. The lower level, which is partially set into the ground, typically holds a family room, garage, laundry, and sometimes an extra bedroom or bathroom.

The key structural fact is that the lower level floor sits below the exterior grade on at least some sides of the house. How far below — and on how many sides — is exactly what determines whether that lower level counts as above-grade GLA or below-grade finished area.

This is different from a split-level, which has three or more floor levels offset at different heights, and different from a standard basement, which is entirely underground. Bi-levels occupy a gray zone that confuses tax assessors, listing agents, and borrowers alike.

The grade line rule

Under ANSI Z765 and Fannie Mae guidelines, gross living area must be above grade. "Above grade" means a room is above the exterior ground level — not partially buried. ANSI Z765 is explicit: a level is considered above grade only when it is entirely above the grade plane on all sides.

For a bi-level home, this creates a hard rule: if the lower level is below grade on any exterior wall, the entire lower level is classified as below grade. It does not matter how finished or functional it is. It does not matter that residents use it as main living space every day. Below grade is below grade.

Key rule: A level must be entirely above the exterior grade on all sides to be counted as above-grade GLA. If any portion of the lower level is below the ground line on any exterior wall, that entire level is classified as below-grade — even if it is fully finished, heated, and walkout on one side.

In practice, most bi-level homes fail this test. The lower level is typically buried three to five feet on the uphill side and at or above grade only on the front or downhill side. That means most bi-level lower levels are below-grade finished space, reported separately from GLA on the appraisal.

How appraisers measure a bi-level

An appraiser will first determine the above-grade level — almost always the upper floor — and measure it using ANSI Z765 exterior wall methodology. This becomes the GLA figure. Ceiling height must be at least 7 feet for living areas, 6 feet 4 inches for hallways, and 5 feet for the measuring threshold in sloped or irregular ceilings.

The lower level is then measured separately. If it is finished and conditioned, the appraiser reports it as below-grade finished area on the appraisal form. This space can still contribute to value — it just contributes at a lower rate per square foot than the above-grade GLA, because the market consistently pays less for below-grade space.

On Fannie Mae's Uniform Residential Appraisal Report (URAR), the appraiser fills in both figures: above-grade GLA and below-grade finished rooms. Comparables must be selected and adjusted consistently — a comp with a fully finished lower level should be adjusted against a subject with an unfinished lower level, and vice versa.

The walkout exception — and why it does not change the rule

Many bi-level homes have a walkout on the lower level — a sliding glass door or standard door that opens to the backyard at grade level. Homeowners often assume that a walkout means the lower level is above grade. It does not.

ANSI Z765 measures grade exposure around the entire perimeter of the structure, not just at the walkout wall. If the opposite wall — or even a side wall — is buried below ground, the level is still classified as below grade. A walkout improves the livability and market appeal of the lower level, and a good appraiser will reflect that in the adjustment. But it does not change the GLA classification.

This is one of the most common misconceptions in bi-level appraisals. Sellers and their agents regularly include the walkout lower level in the GLA total, inflate the listed square footage, and create a discrepancy that surfaces at appraisal time.

Why tax records are almost always wrong

County assessors measure for tax purposes, not for mortgage lending. Many assessors simply count all finished square footage on all levels — above and below grade — as a single number. They are not following ANSI Z765 or Fannie Mae guidelines. Their goal is equitable assessment, not GLA calculation.

The result: the tax record square footage for a bi-level home is often inflated by 500 to 900 square feet compared to what an appraiser will report as GLA. A 2,400-square-foot listing based on tax records might appraise at 1,500 to 1,600 square feet of GLA, with the remainder reported as below-grade finished area.

If you are buying a bi-level, do not rely on the tax record or the listing square footage to understand what the appraiser will report. Ask for the appraisal sketch or hire your own appraiser before closing.

The gray zone: when the lower level is mostly above grade

On a sloped lot, a bi-level can present genuine ambiguity. If the home is built into a hillside and the lower level is buried on the uphill side but fully exposed on the other three sides, the grade determination requires careful on-site measurement. The appraiser will typically take grade readings at multiple points around the perimeter and document the findings in the workfile.

In some cases — usually where the grade difference is very shallow (a few inches of burial on one wall) — the appraiser may make a judgment call and include the lower level in GLA, provided they can support it with comparable sales treated the same way. This is a defensible approach when the below-grade exposure is nominal and the market clearly treats the entire structure as above-grade living space.

These edge cases require local market knowledge and appraiser judgment. There is no bright-line rule for "mostly above grade." When in doubt, conservative classification (below grade) is the safer choice for a lender-ordered appraisal.

How bi-level value compares to a ranch or two-story

Home style	GLA	Below-grade finished	Typical value contribution
Ranch (1,500 sqft)	1,500 sqft	0	Full GLA rate
Bi-level (upper 1,000 + lower 800 finished)	1,000 sqft	800 sqft	Upper at full GLA rate; lower at 50–70% of GLA rate
Two-story (1,500 sqft)	1,500 sqft	0	Full GLA rate
Ranch with finished basement (1,000 + 800)	1,000 sqft	800 sqft	Same split as bi-level lower level

The practical takeaway: a bi-level with a fully finished lower level is not worth the same per square foot as a ranch or two-story of the same total square footage. The market pays a premium for above-grade living space. This is not a flaw in the appraisal process — it reflects how buyers actually behave in most markets.

Financing: does the loan type matter?

FHA, VA, USDA, and conventional loans all follow the same basic GLA classification principle for bi-level homes — above grade only counts as GLA. The difference is in minimum square footage requirements.

FHA does not publish a hard minimum GLA for single-family homes, but the property must be livable and functional for its design. A bi-level where the upper level is very small (under 400 sqft GLA) may raise marketability flags on the appraisal.

VA and USDA also have no explicit minimum GLA for standard single-family, but they require the property to be adequate for the family occupying it. None of these programs will allow below-grade space to be counted as GLA.

Conventional loans (Fannie Mae/Freddie Mac) are the most explicit about the above-grade GLA rule, since ANSI Z765 is directly referenced in their appraisal guidelines. If the appraiser misclassifies the lower level as GLA and the loan is sold on the secondary market, it creates a representation and warranty issue for the lender.

What to do if you are buying or selling a bi-level

Buyers: Get an independent appraisal before closing, or at minimum ask the listing agent to distinguish between above-grade GLA and below-grade finished area. Do not use the tax record or Zestimate as a reliable square footage source. Check whether the below-grade space is included in the listed price per square foot — it often inflates the number favorably for the seller.

Sellers: If you list your bi-level with the full square footage (both levels combined), price it accordingly — buyers and their appraisers will back-calculate value based on a lower GLA figure. It is better to disclose clearly: "1,050 sqft above grade, 900 sqft finished lower level" than to list "1,950 sqft" and have an appraiser contradict the listing at contract time.

Anyone disputing an appraisal: If you believe the appraiser incorrectly classified above-grade space as below-grade, request the sketch and document the grade readings. The appraiser must be able to show the grade line measurement. If they cannot, that is the basis of a formal reconsideration of value.

Common mistakes on bi-level appraisals

Counting the entire structure as GLA — the single most common error, usually inherited from the tax record or a prior appraisal that was wrong.
Treating a walkout as proof of above-grade classification — a walkout on one side does not override below-grade exposure on other sides.
Inconsistent comp selection — using two-story comps and adjusting for size without accounting for the GLA vs. below-grade split in both the subject and the comps.
Reporting GLA without below-grade finished area — leaving the finished lower level completely off the appraisal underreports the property.
Applying a full GLA adjustment rate to below-grade space — below-grade finished area should be adjusted at a lower rate that reflects market behavior.

The bottom line

A bi-level home is not a two-story home with extra bedrooms. It is a home where most or all of the lower level is below the exterior grade, which means it is classified as below-grade finished area — not GLA — regardless of how finished, functional, or walkout-accessible it is. The tax record will almost always overcount the above-grade square footage. The listing will often follow the tax record. The appraiser will follow ANSI Z765 and Fannie Mae guidelines.

Understanding this split before you buy, sell, or tap your home equity will prevent surprises at the appraisal and help you evaluate price per square foot accurately against other home styles.

Get the exact number from your floor plan

Upload a to-scale floor plan and PlanSnapper calculates the square footage in under two minutes.

Get Started →

Related Resources

Frequently Asked Questions

How is square footage calculated for a bi-level home?

A bi-level home has two levels separated by a short flight of stairs from the entry. The upper level is typically above grade on all sides and counts as GLA. The lower level must be assessed individually — if any exterior wall is below grade, that level is classified as below-grade and reported separately, not as GLA.

What is the difference between a bi-level and a split-level for appraisal purposes?

A bi-level (raised ranch) has two levels with the entry at the middle landing. A split-level has three or more levels staggered vertically. For appraisals, both require a grade assessment at each level. The key distinction is that bi-levels are two-story homes entered at the middle, while split-levels have more staggered floor plates.

Can the lower level of a bi-level count as GLA?

The lower level of a bi-level can count as GLA if all exterior walls are at or above finished grade on all sides. This is unusual — most bi-levels have the lower level at least partially below grade on one or more sides. An appraiser must assess grade at every wall before determining whether the lower level qualifies as GLA.

How do appraisers handle grade on a bi-level home built on a slope?

On a sloped lot, a bi-level's lower level may be fully exposed on the downhill side and partially below grade on the uphill side. ANSI Z765 requires the grade assessment on every exterior wall. If any wall is below grade, the entire lower level is classified as below-grade — even if three of four walls are above grade.

Do bi-level homes typically appraise lower than comparable ranch homes?

Not necessarily. Bi-levels are compared to similar bi-level sales when available. If the lower level qualifies as GLA, the home's total above-grade square footage is competitive with other two-story homes. If the lower level is below-grade, the effective GLA may be smaller, requiring downward adjustments compared to two-story comps.

How is a bi-level different from a raised ranch in appraisal terminology?

Bi-level and raised ranch are often used interchangeably. Both describe homes where the entry is at mid-level with steps going up to the main living area and steps going down to a lower level. Appraisers in different regions may use different terms, but the measurement methodology under ANSI Z765 is the same.

What common mistakes are made when appraising bi-level homes?

Common errors include counting below-grade lower-level space as GLA, failing to assess grade on all four walls before classification, and using ranch-style comparables without adjusting for the bi-level floor plan. Appraisers must sketch both levels separately and clearly label each with its grade classification and area.

Measure floor plans in minutes — free

Upload a floor plan to PlanSnapper, trace the perimeter, and get accurate square footage instantly. No install, no account required.

Try Free →

More guides on square footage by property type:

ANSI Z765 GLA Measurement Checklist (field-ready reference)

Gross Building Area vs. Gross Living Area: Key Differences

← Back to: Square Footage by Property Type