What Is a Single-Family Home? Should You Consider Owning One?

By Austin Kilham · March 08, 2022 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

What Is a Single-Family Home? Should You Consider Owning One?

The single-family residence, by some definitions, includes more than the traditional house with a yard that comes to mind. Disputing the phrase may be expected, but what’s important is that the single-family classification positively affects financing.

Here’s a look at the defining characteristics of a single-family home and some of the benefits of owning one.

Characteristics of a Single-Family Home

Generally speaking, when considering a single-family vs. multi-family home, a single-family home is one designed, built, and maintained for one person or household. A multi-family home, on the other hand, is one building set up for multiple occupants to live in separately.

That said, definitions of a single-family residence may vary according to real estate experts and government sources.

For example, according to the U.S. Census Bureau, which tracks residential construction, single-family structures include fully detached and semi-detached homes, row houses, duplexes, quadruplexes, and townhouses.

Attached units are only considered a single-family home if each unit is separated by a wall that runs from the ground to the roof, has a separate heating system, is individually metered for public utilities, and has no units above or below, the Census Bureau says.

Each attached unit must meet these conditions. If not, the building is considered to be a multi-family structure.

According to other definitions of a single-family home, there can be no shared walls; the building must stand alone on its own parcel of land and have its own entrance to the street.

In some places, a single-family home is defined in part by how many kitchens it has. Depending on zoning laws, adding a second kitchen to an in-laws apartment, for example, can cause a house to be redefined as a multi-family building. If you’re planning on doing this type of renovation, be sure to check local zoning laws beforehand.

Why is it important to know how a home is classified? It can have an impact on the types of mortgages you qualify for and how much money you will be able to borrow.

Like detached single-family homes, financing for two- to four-unit properties falls under residential lending guidelines. (A property with five or more units is considered commercial property.)

In low-cost areas, the conventional loan limit for one-unit properties in 2022 rose to $647,200. Conventional loan limits on two- to four-unit properties also saw increases.

In 2022, you can get an FHA loan of $420,680 for a single unit in a low-cost area and up to $970,800 in a high-cost area. If you were purchasing a two-unit building, you could get an FHA loan worth $538,650 in a low-cost area or $1,243,050 in a high-cost area.

Pros and Cons of a Single-Family Home

As you shop for homes, it’s important to consider the various advantages and disadvantages of a single-family residence.

Some of the advantages are:

•   More space: Single-family homes tend to offer more space than other types of housing, and it belongs to you alone. They may have large yards in which children and dogs can play or where you can plant a vegetable garden. They may also have storage in attics, garages, or basements, which aren’t shared.

•   Privacy: Single-family units that don’t share walls with neighbors offer more privacy. You are less likely to hear neighbors’ activities, and they are less likely to be bothered by yours.

•   More design features: Single-family homes may be available in a broader range of designs and layouts, from Cape Cods or colonials to ranch homes and contemporary designs. You can also make changes to the building or landscape design without input from neighbors with a shared interest in the space.

•   Room to grow: Single-family homes may offer you more options for additions if you have a growing family or if aging parents may come to live with you. For example, larger plots of land may allow additions that wouldn’t be possible in condo units.

•   May offer higher appreciation: Single-family homes tend to appreciate in value more than condos and townhouses.

•   Option to rent: As the sole owner of a single-family unit, you have greater opportunities to rent out the house if you decide to move and wish to hang on to the property.

While these factors are attractive, it’s important to weigh potential disadvantages as well.

•   More expensive: Single-family homes tend to be more expensive than other types of houses. That means a larger down payment and higher closing costs, and your mortgage payments may be higher.

•   More maintenance: With no shared spaces, you’ll be in charge of all home maintenance like lawn mowing and roof repairs. You’ll either have to take the time to do it yourself or hire others.

•   Possible HOA fees: Planned developments usually require HOA fees to cover the upkeep of common areas and shared structures.

Finding a Single-Family Home

Before you start looking for a single-family home, first determine how much home you can afford. You may want to start calculating mortgage costs and getting prequalified for a home loan, which takes minutes and provides an estimate of how much you might be able to borrow and at what rate.

A help center for home loans could prove valuable, as could a look at housing market trends in many U.S. hot spots. You’re probably already searching real estate listings online and noting the property types.

You may also want to engage a real estate agent. They have expertise in local housing and zoning laws, know whether a list price is fair or above or below average, and can help you negotiate the price of a home you’re interested in buying.

If there’s any question about how a house is zoned, you can often look up zoning information through a particular city’s website.

Check out these homeowner resources for more about what you’ll need to know to find the home that’s right for you.

Who Should Get a Single-Family Home?

Single-family homes are a good fit for people who can cover the higher price tag, want privacy and flexibility, and are willing to take on a lot of responsibility.

If you qualify as a first-time homebuyer, there may be help available to buy a single-family home in the form of down payment assistance and low- or no-interest loans.

This guide to first-time home buying features lots of tips to make that big first purchase.

If You’re Thinking of Purchasing a Single-Family Home, SoFi Home Loans Can Help

Whether you’re a seasoned homebuyer or a first-timer, purchasing a single-family home is an exciting step.

If you’re looking for options for getting an online mortgage, it’s easy to get a quick rate quote from SoFi.

SoFi offers home loans for primary residences, second homes, and investment properties. Single-family homes, townhomes, and properties of two to four units are included. And rates are competitive.

FAQ

How much does a single-family home cost?

The average price of a new single-family home as of December 2021 was $457,300, according to the U.S. Census Bureau. The average sales price of existing single-family homes that month was $378,800, the National Association of Realtors® noted.

Clearly, the price of a single-family home will vary widely depending on factors like size and location.

How much do I need to build a single-family home?

Realtor.com put the price of building a 2,600-square-foot home at about $332,500, including a pandemic-related hike in the cost of materials. Building a home on your own may cost less than buying an existing home.

Can you get a loan to build a single-family home?

If you’re planning to build a single-family home from scratch, you can apply for a construction loan. Another option is a personal loan of up to $100,000, for at least some of the build.


Photo credit: iStock/Dean Mitchell

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

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 or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOHL1221087

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender