Underground living structures are not entirely underground, typically if they are exposed on one side when built into a hill. This exposure can significantly improve interior lighting, although at the expense of greater exposure to the elements.

Hobbits live underground, people do not and, this is in a world of make believe.

In the first place, you have to have the county approve of this, all your plans for an underground home. It would have to be virtually waterproof and have the ability to repel water when you have problems like heavy rains or you'll be floating.

Your going to have insect problems, where do insects live, why, underground of course so, you'll have problems with them.

You'll have to find a way to get electric and water to your new underground home. The wiring will be all underground cable service and probably expensive, all the water system will have to have special ways to get at it in case of problems.

There are "berm" homes and have built them but, they're about half way underground. They're warm, safe and snug, think about it. They have access to all the above mentioned things.