Most people in the market for a new dwelling will buy an existing home that somewhat fits their needs. Newly built homes, on the other hand, don’t come with the problems that old homes might, such as lead paint or a kitchen crying out for remodeling. Building a house from scratch might also seem attractive because you can construct it to fit your specifications, from the number of bathrooms to creating an outdoor kitchen.
If you’re considering building your own home, here are the steps to take.
Table of Contents
- Key Points
- • Building your own home requires careful planning, starting with choosing the right location and understanding zoning rules and permits.
- • Construction involves a structured 10-step process, from preparing the site and pouring the foundation to completing interior and exterior finishes.
- • Costs vary widely based on size, materials, and labor, and building expenses do not typically include the price of land.
- • Financing options may include construction loans, Federal Housing Administration (FHA) one-time close loans, home equity loans, or personal loans.
- • Deciding whether to act as your own general contractor or to hire professionals can significantly affect both your budget and timeline.
10 Steps to Building Your Own Home
Condo. Townhouse. Single-family home. Modular or manufactured home. Cabin or even a houseboat. A house hunter has all of those types of homes to choose from, as well as the location. Here are the steps to building your own home.
1. Find a Location
The first thing you’ll need to do is find a site that’s zoned for a residential property. Look into local building regulations to see how much of the site you’re allowed to build on and how far the building must be from property lines. Check ordinances that might limit size or height. Is there a homeowners’ association? Scour the rules.
It’s generally suggested that you spend no more than 20% of your total budget on the building site. When you purchase the land, you will receive a property deed, which will also serve as the house deed.
2. Obtain Permits
Before a shovelful of earth is turned, the local building department must OK the plans and provide permits for the whole shebang: grading, zoning, construction, electrical work, plumbing, and more. When the permits are in hand, construction can start.
On a related note, your home will need to be inspected for code compliance at various points during construction. If you are using a loan for new construction, your lender may also send an inspector to keep track of construction status before releasing payments from a construction loan.
3. Prep the Site and Your Finances
Site Prep
Before you start building, you’ll need to prepare the building site. You’ll want to be sure that soil conditions are stable. You may want to engage a civil engineer to take a look at the site. A site surveyor can stake the property boundaries. Then, you’ll need to clear brush and debris around the planned perimeter of the house.
Size and Cost
The cost of building a house averaged $323,077 in 2025, according to HomeAdvisor, but it can range from $139,000 to $531,000. Location, materials, and level of detail all affect the bottom line.
But size is the biggest consideration. The larger the build, the more labor and material costs you should expect. The average new home in the country has about 2,400 square feet at $150-$200 per square foot.
In the early 2020s, there were months-long delays to receive materials, from appliances to garage doors, and construction costs increased. Oil prices significantly increased transportation expenses. Rising inflation left its mark, but prices leveled off in 2023. All of which is to say that costs are a moving target.
Finance Options
When you build a home, you may need a loan that covers the purchase of land, materials, and labor. In this case, you may want to look into a construction loan. Unlike mortgage loans, construction loans are not secured by an existing home, so approval might be tricky and take a bit longer.
The money is paid to your builder in installments. You’ll often only pay interest on the portion of the loan that has been withdrawn. After the typical 12 to 18 months of a construction-only loan, the usual route is to take out a mortgage and pay off the construction loan.
Other financing options include a home equity loan if you already own a home.
A personal loan of up to $100,000 can pay for part of the construction (or maybe all, for a modest build).
If you’re buying the land, FHA one-time close loans cover the lot purchase, construction, and permanent mortgage. But the loans can be hard to find and are tougher to qualify for than traditional FHA loans.
Check out these additional resources for homeowners.
Choosing Materials
An experienced, highly organized person may want to act as their own general contractor for a new house build. However, most people will put the job in a contractor’s hands, and add 20% to 30% for the cost of materials and labor.
General contractors have already priced and sourced many of the materials when making a bid. They usually have relationships with wholesale distributors, lumberyards, and retailers.
That said, you may have some skills that you could apply to cut costs. For example, you could look into how much it costs to paint a house and determine if painting the home’s interior could help you save.
Building a Work Team
If you choose to fly solo, you’ll be on the hook for finding subcontractors yourself.
A general contractor will hire all the team members needed to complete the project and charge 20% to 30% of the home’s overall cost. However, they also typically have regular relationships with subcontractors, who may charge them less than they would a person who hires them on a one-off basis.
As a result, you may not save much (or any) money by finding subcontractors yourself.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
Questions? Call (888)-541-0398.
4. Pour the Foundation
Once the building site is cleared, construction can begin, starting with the foundation. Some houses are built on level concrete slabs poured on the ground, leaving space for utilities such as plumbing and electrical.
A home with a full basement requires digging a hole and then forming and pouring footings and foundation walls. The concrete will need time to cure, and no construction will take place until it has set properly.
5. Set Up Plumbing
Once the concrete has set, crews install drains, water taps, the sewer system, and any plumbing going into the first-floor slab or basement floor and then backfill dirt into the gap around the foundation wall.
6. Assemble the Frame, Walls, and Roof
With the foundation complete, framing carpenters will build out the shell of the house, including floors, walls, and the roof. Windows and exterior doors are installed, and the house is wrapped in a plastic sheathing that protects the interior from outside moisture while allowing water vapor from inside the home to escape.
7. Install Insulation, Complete Electric and Plumbing Installs
Now plumbers can install water supply lines and pipes to carry water through the floors and walls. Bathtubs and showers may be added at this time.
Electricians will wire the house for outlets, light fixtures, and major appliances. Ductwork and HVAC systems can be installed.
8. Hang Drywall and Install Interior Fixtures and Trim
With plumbing and electrical complete, the house can be insulated, and drywall can be hung. A primary coat of paint goes on, and the house will start to look relatively finished.
Light fixtures and outlets can be installed, as can bathroom and kitchen fixtures, such as sinks and toilets. Interior doors, baseboards, door casings, windowsills, cabinets, built-ins, and decorative trim go in next. The final coat of paint is then applied.
9. Install Exterior Fixtures
Crews begin exterior finishes such as brick, stone, stucco, or siding. Some builders pour the driveway when the foundation is complete, but many opt to do so toward home completion, along with walkways and patios.
10. Install the Flooring
Wood, ceramic tile, vinyl floors, and/or carpet can be installed at this point.
Get matched with a local
real estate agent and earn up to
$9,500‡ cash back when you close.
Pair up with a local real estate agent through HomeStory and unlock up to
$9,500 cash back at closing.‡ Average cash back received is $1,700.
Recommended: First-Time Homebuyer Guide
Is It Cheaper to Buy or Build a New House?
There are so many variables that it’s hard to say.
The median sales price for new construction in December 2025 was $414,400, according to Federal Reserve Economic Data. Can you beat that price with a DIY build? Maybe, if you act as the general contractor and choose cheaper materials.
Keep in mind that HomeAdvisor’s average of $323,077 to build a house does not include the land.
Ultimately, the price of your dream home hinges on location, the cost of labor and materials, and your taste.
3 Home Loan Tips
1. Since lenders will do what’s called a hard pull on an applicant’s credit, and too many hard pulls in a short period can affect your application, it’s a good idea to know what interest rate a lender will offer you before applying for a personal loan. Viewing your rate with SoFi involves only a soft credit pull and takes one minute.
2. Before agreeing to take out a personal loan from a lender, you should know if there are origination, prepayment, or other kinds of fees.
3. Traditionally, mortgage lenders like to see a 20% down payment. But some lenders allow home mortgage loans with as little as 3% down for qualifying first-time homebuyers.
The Takeaway
Building your own home will allow you maximum flexibility in terms of your choices of everything from floor plan to finishes. But it is a complex process that you’ll want to take step by step, carefully considering your budget and how you plan to finance what you build.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
How long can you expect to live in a self-built home?
A well-built home can last for several decades or even more if maintained properly. However, its life expectancy will depend on many factors, such as the foundation and structure, the construction materials used, and environmental impact.
How long will it take to build a home?
The average time it takes to build a home from start to finish is just over six months for a contractor build and 14 months for an owner build. This is based on data collected by the U.S. Census Bureau.
Is it dangerous to build a home yourself?
If the question means completely DIY, i.e., clearing a lot, pouring a foundation, framing, installing electrical, and so on, the answer is it can be, especially if you lack professional experience in construction. The dangers range from physical injury on the construction site to exposure to materials such as asbestos, lead, or volatile organic compounds.
Are there safe financing options for self-build projects?
DIY builders and remodelers may use a construction loan, personal loan, home equity loan, or an FHA one-time close loan. If you do use a construction-only loan, shop for a mortgage that makes sense once you stand there admiring the finished product.
Photo credit: iStock/Giselleflissak
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement. ¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency. ²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. SoFi is not responsible for the reward.
SoFi Bank, N.A. (NMLS #696891) does not perform any activity that is or could be construed as unlicensed real estate activity, and SoFi is not licensed as a real estate broker. Agents of SoFi are not authorized to perform real estate activity.
If your property is currently listed with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®.
Reward is valid for 18 months from date of enrollment. After 18 months, you must re-enroll to be eligible for a reward.
SoFi loans subject to credit approval. Offer subject to change or cancellation without notice.
The trademarks, logos and names of other companies, products and services are the property of their respective owners.
SOHL-Q126-144