The building envelope is an air barrier and thermal boundary that are continuous and touching and separate conditioned space from unconditioned space or the outside. The envelope of a simple house may be the floor, the walls (including exterior doors and windows) and the flat ceiling. There are many ways for a builder to define the building envelope (it can contain a conditioned basement, a sealed, insulated and conditioned crawlspace, a conditioned attic with insulation along the roofline) and even more ways for them to fail to define it properly.
I have seen homes where the builder conditioned part of the attic without insulating the roofline or gable wall and there was a case where a code official (in ignorance) required a builder to condition the garage with a duct from the house in order to keep the water pipes from freezing. The garage IS NEVER INSIDE THE BUILDING ENVELOPE! If there is a desire to provide conditioning to the garage, it must be conditioned by a separate system than the house.
The builder gets to define the building envelope by deciding where to place the insulation and air barriers.
The building envelope’s function is to protect the occupants of the home from the elements (air, heat, cold, water).
One myth about the building envelope is that all we need to do to improve it is to add more insulation. A certain utility program recommended increasing the amount of attic insulation to R-49 to decrease the amount of heat loss and gain through the ceiling; at the same time, they recommended that extensive airsealing shouldn’t be done because “houses need to breathe” and airsealing would increase the amount of pollutants in the home.
This is another myth: airsealing the home prevents pollution from entering the home from the basement, crawlspace, carport, attached garage, attic and outside.
By the way, houses don’t need to breathe, but people do- so add intentional ventilation for the people!