The decision to include an unpermitted room in the appraisal's square footage rests with the appraiser.  The unpermitted space must be workmanlike, comply with neighborhood and zoning restrictions, and have adequate, comparable sales to support additional value for the appraiser to consider.  If the unpermitted room fails to meet these criteria, the appraiser might exclude it from the square footage calculations and could also account for potential tear-down costs in the value estimation, depending on the situation.  Furthermore, if the unpermitted space does not meet HUD requirements, HUD might not approve the room in a property securing a loan they insure, such as a reverse mortgage.  It's advisable to consult with a lender about your specific situation if you have any unpermitted space.  Depending on the details, the lender might find it manageable or make the property ineligible for a loan with HUD-insured financing.