ASCE 7 - 16 Provides clear guidance for this situation.

You have to check ASCE 7 Section 12.2.3.1. And 12.2.3.2 for the dual stage.

However given that you have cantilever columns at the base, it is unlikely you will meet the requirements of section 12.2.3.2 and will be forced to use 12.2.3.1

Be aware of additional requirements for cantilever columns in section 12.2.5.2.

Certainly read the sections drift is pointing you to, but I'm pretty sure you'll be using 1.5 for both. The dual stage procedure is meant for stiff lower system and veerrrryyy flexible upper system (relatively speaking). Cantilever columns are unlikely to be 10x as stiff as wood shear walls.

Actually the situation is Higher R factor over Lower R factor. Which allows for the upper system to be designed with R=6.5 and the Lower for R=1.5. Forces transferred from above are scaled by R upper / R lower.

The way I have done this in the past is Run the model with R = 6.5 design the shear walls. Then run the model with R=1.5 and design the lower level. (Actually R=4 in my case, I'm not thrilled about cantilever columns in the case of the OP).

What is interesting to me is the Exception 3. It suggests that for a house all of 12.2.3.1 does not apply. But that doesn't really tell us how to select the R factor (omega and defl amp as well) for the vertical combination.
If one were gonna try to use this exception I lean towards designing the entire system for R = 1.5.

For the record I don't recommend WSW over Cantilever columns to start out with, and I would even less recommend using any exception to avoid the requirements of this vertical combination requirement 12.2.3.1

The Five over one design example from Woodworks, Thompson, P.E., S.E., Dec 2017 has an example of this procedure, for reference.

How tall is the building and what type of structure? A steel cantilevered column system has a structural height limit of 35ft if permitted at all depending on SDC. Unless you could justify two-stage analysis I think the 35ft limitation would be applicable to the total building height rather than just the height of the cantilevered column portion of the building. If the building is considered a one and two-family dwelling, per IBC 1613.1 you don't need to design EQ loading