HOBOKEN, N.J. — Irene Sobolov believes the first floor of her house is just that. The federal government and her insurance company say it’s a basement.

The semantics, Sobolov has learned, are very expensive.

Sobolov and others whose lower-level apartments or businesses sustained water damage during Hurricane Sandy say the property they own is being classified as a basement, severely limiting what is covered under the National Flood Insurance Program.

“It’s the battle of the definitions,” said Sobolov, standing on concrete that a wood floor once covered. She says the damage to her home came when the sewer overflowed, sending a repellent brew of sewage, condoms and garbage water up through her toilet and drain. “No one told us about this basement thing.”

The basement classification has become a point of contention in Hoboken, a city of 50,000across the Hudson River from Manhattan. Hoboken sustained major flooding when the Hudson jumped its banks and roared into the city during Sandy, one of the strongest storms to ever hit the area. It is one of the densest cities in the country, and there are about 1,700 below-ground units that house people or businesses, according to Mayor Dawn Zimmer.

People whose homes or businesses were classified as a basement are eligible for grants that are part of the $50.7 billion Sandy aid package the House of Representatives approved last week, a spokesman for Sen. Frank Lautenberg said. It is unclear how much will be allocated or what the rules will be.

While some relief may be coming, the classification is leading some to call for changes to the National Flood Insurance Program, saying the basement definition unfairly punishes people who own property in cities.

The flood-insurance rules “do not reflect the reality” of urban living, Zimmer told Congress last month.

“A store or apartment that requires you to walk down one or two steps is plain and simply not a basement,” Zimmer told the Senate Committee on Small Business and Entrepreneurship.

“For many people, that’s their primary residence. It’s where they have the kitchen, the bedroom,” Zimmer said in an interview. “It’s their home.”

A basement is classified as “any area of the building, including any sunken room or sunken portion of a room, having its floor below ground level (subgrade) on all sides,” according to a spokesman for the Federal Emergency Management Agency.

Basement flood coverage is limited to items such as central air conditioners, water heaters and “cisterns and the water inthem,” according to the program’s website.

Floors, paneling and most personal property in buildings classified as basements are not covered.

Elsewhere, “traditionally a basement is where you throw stuff. It’s 8 to 10 feet below the ground,” Jersey City Mayor Jerramiah Healy said. “Here in Jersey City, we have a lot of places that are ground level or 3 feet below. It’s living space.”

Front Section, Pages 4 on 01/21/2013