Wood interior frame of a new home under construction.

Site-Built Homes: What You Need To Know

July 26, 2023 5-minute read

Author: Ashley Kilroy


If you’re not satisfied with the real estate market’s offerings, you might be surprised to find out that a site-built home is a financially feasible option. Instead of purchasing a home, you can design the home of your dreams and pay for the materials to come to your selected plot of land, where a contractor will build your home.

You can fund a site-built home through traditional financing. Plus, while you’ll have the building materials transported, you’ll end up with a conventional home instead of a prefabricated home. Here are the details on the features and costs of site-built homes.

What Is A Site-Built Home?

Site-built homes are built from scratch permanently on the buyer’s desired property location. This construction method transports all building materials to the site, from wood framing and roof shingles to plumbing pipes, for assembling the house within several months.

Also referred to as a “stick-built home,” they are the opposite of prefab homes, which companies build before shipping to the desired spot. On the other hand, a site-built home’s raw materials arrive at the construction site. Then, the contractor builds the home from the foundation up.

Manufactured Homes Vs. Site-Built Homes

Manufactured homes and site-built homes differ in appreciation, construction process, features, and cost. Specifically, manufactured homes are usually cheaper and faster to build because the company builds the homes before shipping them and doesn’t offer significant modifications. So, these homes take just weeks to build, while site-built homes usually require months of build time. However, the drawback is that manufactured homes are not customizable like site-built homes.

Manufactured homes are assembled in climate-controlled facilities, while site-built home construction occurs out in the elements. Therefore, a manufactured home’s components are less likely to suffer damage from weather and other outdoor hazards.

Both types of homes have similar quality and safety because the Department of Housing and Urban Development (HUD) standards apply to them. Plus, while site-built homes have historically appreciated more, manufactured homes have begun appreciating at a similar market rate to traditional homes.

As a result, manufactured and site-built homes are solid investments. Remember, though, that you must affix a manufactured home to its foundation. Otherwise, it will depreciate like a typical vehicle. In addition, site-built homes often use cutting-edge materials that boost their value.

Modular Homes Vs. Site-Built Homes

Like manufactured homes, modular homes come from factories. Premade pieces arrive at the construction site, where a team puts them together. As a result, they offer the benefits of manufactured homes. However, in addition to being faster and more affordable, they always go on a foundation, meaning they don’t risk depreciation. Furthermore, they are generally indistinguishable from site-built homes once built.

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How Site-Built Homes Are Constructed

Site-build home construction is straightforward: the raw materials arrive at the build site, and the contractor you hire builds the home. As the necessary components arrive, such as wood and bricks, experienced workers use them to build the home. The build must follow laws concerning zoning, ordinances/covenants (such as an HOA), and state-level building codes. While the red tape can be a hassle, it also ensures the quality and safety of your home.

Design Features Of Site-Built Homes

Generally, the design features of site-built homes offer tons of flexibility. You can build a home according to your preference, whether it’s having a garbage disposal or a specific type of water heating system. In addition, you decide the rooms, floors, and size of the home.

Remember, limits to the design of a site-built home include your budget, your builder’s capabilities, and municipal code regulations. However, site-built homes are customizable to your inclinations outside of these restrictions.

Time Frame For Building Site-Built Homes

The U.S. Census Bureau’s study of current housing trends showed the time frame for construction of a single-family site-built home was 7 – 12 months. Factors influencing the required time include:

  • Creating blueprints and plans for the home
  • Acquiring the necessary state and city permits
  • Clearing the ground of obstacles (like boulders or vegetation) and grading the land
  • Completing an inspection of the ground before pouring the foundation
  • Inclement weather impeding construction

Site-Built Homes Cost

Data from HomeAdvisor indicates the cost of building a house in 2022 was $285,596. For comparison’s sake, the U.S. Census reports the median cost of buying a home in 2022 was $471,200. That said, site-built home costs run the gamut due to location, build preferences, and materials costs.

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Financing Options For Site-Built Homes

Generally, those considering site-built homes don’t have hundreds of thousands of dollars lying around. Fortunately, multiple financing sources are available. Here are the types of lenders you can use:

  • FHA loan: An FHA loan has backing from the Federal Housing Administration, meaning the government takes on the financial risk of the mortgage on the lender’s behalf. These loans have less stringent financial requirements than conventional loans but require a 3.5% down payment and mortgage insurance premiums (MIP) to offset the lending risk. If you have a challenged credit history or income level, an FHA loan gives you an excellent opportunity for homeownership. While this is a government-sponsored loan, the funding comes through a traditional lender.
  • Conventional loan: A conventional loan comes from a traditional lender, like a bank or credit union. These loans typically require at least a 3% down payment and a credit score of 620 or higher, with excellent credit scores receiving lower interest rates. Conventional loans conform to federal laws, meaning they can’t be higher than $726,200 in most locations. In high-cost areas, such as Alaska, the limit is $1,089,300. These loans offer flexibility and availability, meaning anyone with sufficient financial circumstances can get one.
  • VA loan: The Department of Veterans Affairs (VA) provides VA loans exclusively for veterans and their surviving spouses to purchase and refinance homes. They require no overall credit score, down payment, or mortgage insurance, although specific lenders may have certain qualifications to meet. In addition, they have lower closing costs and interest rates than other loan types. Therefore, if you qualify for a VA loan, it’s most likely your most affordable option.

Site-Built Home Appreciation And Resale Value

Because of their superior quality and unparalleled customization, site-built homes keep their resale value more than modular or manufactured homes. Likewise, they appreciate better than other home types. Remember, your home appreciation rate also depends on location, market trends, the home’s condition, and interest rates.

FAQs On Site-Built Homes

Building a house from the ground up takes work and involves many moving parts. Here are some important questions to remember as you prepare for your home build.

Are mobile homes cheaper than site-built homes?

Mobile homes are usually cheaper than site-built homes. Typically, mobile homes cost an average of $127,250, while conventional homes cost $348,079.

Are site-built homes cheaper than buying a house?

In 2022, a site-built home cost $285,956 on average, while the median cost of purchasing a home was $471,200. Building a house vs. buying means paying different costs. Specifically, a home build involves paying for raw materials, services from a contractor and architect, and customizations. On the other hand, buying a home involves costs from real estate agents, inspections, and title insurance.

Are tiny homes site-built?

Tiny homes can be site-built or prefabricated. As a result, you can purchase or build your tiny home based on your preferences.

Are site-built homes anchored?

An essential step to building your home is pouring the foundation and placing the house on it. Then, the builders will anchor the home to the foundation.

The Bottom Line: A Site-Built Home Could Be Your Dream Home

If you want a conventional home to customize to your heart’s content, a site-built home may be the solution. Although it will cost more than a prefabricated home, it will also contain the features you like and the materials you want. In addition, it won’t risk depreciation like a mobile home. Plus, it can be cheaper to build than buy a home in today’s economy, and funding is widely available for site-built homes.

If you’re interested in a site-built home, apply online with Rocket Mortgage® and explore your financing options.

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Headshot Ashley Kilroy

Ashley Kilroy

Ashley Kilroy is an experienced financial writer. In addition to being a contributing writer at Rocket Homes, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.