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Site-Built Homes: What You Need To Know

May 13, 2024 6-minute read

Author: Ashley Kilroy

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If you’re looking to own a new home in the near future, you might find what you’re looking for in a site-built home. 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.

Let’s take an in-depth look at site-built homes, including how they differ from manufactured and modular homes, how they’re constructed and some of their most important features.

What Is A Site-Built Home?

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

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

Manufactured Homes Vs. Site-Built Homes

Manufactured homes and site-built homes differ in cost, customization opportunities, assembly, and value over time.

  • The cost: 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.
  • Customization options: Manufactured homes aren’t customizable like site-built homes.
  • Assembly: 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.
  • Value over time: While site-built homes have historically enjoyed higher increases in value over time, manufactured homes have started appreciating at a market rate similar to traditional homes. As a result, both manufactured and site-built homes can be solid investments. Remember, though: If you don’t affix a manufactured home to its foundation, it will depreciate more.

Despite their many differences, both manufactured and site-built homes have similar quality and safety standards because the Department of Housing and Urban Development (HUD) standards apply to them.

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. Once they’re built, they’re generally indistinguishable from site-built homes.

Despite the similarities between manufactured homes and modular homes, modular homes tend to cost more than manufactured homes and, also different from manufactured homes, they always go on a permanent foundation. As a result, they don’t risk depreciation to the extent of manufactured homes.

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How Site-Built Homes Are Constructed

The site-build home construction process 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 ensures the quality and safety of your home.

Design Features Of Site-Built Homes

Generally, the design features of site-built homes offer lots of flexibility. You can build a home according to your preferences, from something as small as including a garbage disposal to something as significant as including a specific type of water heating system.

Home buyers have control over decisions, including:

  • Floor plans
  • Overall home size and square footage
  • Type of flooring
  • The number of bedrooms and bathrooms

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.

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Time Frame For Building Site-Built Homes

A U.S. Census Bureau study of current housing trends showed the time frame for construction of a single-family site-built home was an average of 7.6 – 12.1 months as of 2022, with owner-build homes usually taking longer than those built for sale or by contractors. Factors influencing the time required to complete the building process include:

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

Site-Built Home Costs

The average cost to build a house in 2024 is $312,866, but the cost can range anywhere from $135,991 to $523,416, depending on your personal stipulations.

It’s important to keep in mind that due to location, build preferences and material costs, the overall cost of a site-built home can vary significantly from one site-built home to another.

Financing Options For Site-Built Homes

Multiple financing sources are available for anyone who can’t afford the entire cost of a site-built home. Next up, we’ll briefly explore some mortgage programs that could be options for financing your site-built home.

Financing A Completed Site-Built Home

It’s worthwhile to note that the type of financing available will depend in part on whether the site-built home is complete. Here are some popular options for completed homes:

  • Conventional loan: This kind of loan comes from a traditional lender, such as a bank or credit union, and you’ll usually need a credit score of 620 or higher to qualify. The loan limit for a conventional conforming loan associated with a one-unit property in 2024 is $766,550 in most locations, while high-cost areas, such as Alaska, have a higher limit of $1,149,825.
  • FHA loan: Backed by the Federal Housing Administration, an FHA loan has less stringent credit score requirements than conventional loans but requires borrowers to pay a mortgage insurance premium (MIP) to offset the lending risk.
  • VA loan: The Department of Veterans Affairs (VA) provides VA loans exclusively for qualifying veterans, active-duty service members, National Guard and U.S. Army Reserve members, and surviving spouses to purchase and refinance a home. Loan requirements vary by lender, but the VA loan program doesn’t require a specific credit score, and there’s no down payment or mortgage insurance requirement.

Financing The Construction Of A Site-Built Home

If you’re looking to finance the construction of a site-built home from the beginning of the building process, you might consider one of the following construction loans. Please note that Rocket Mortgage® doesn’t offer construction loans.

  • Construction-only loan: This type of loan is meant to cover the actual construction period only and is typically issued for just a year. A construction-only loan is considered higher-risk, which makes it tougher to qualify for. You can likely expect a higher interest rate on this type of loan.
  • Construction-to-permanent loan: A construction-to-permanent loan is another one-time loan that prospective custom builders can apply for. This loan starts as a way to fund construction and later converts to a permanent mortgage.

Site-Built Home Appreciation And Resale Value

Because of their superior quality and customization, site-built homes may hold their resale value better than modular and manufactured homes. They also may gain value at a higher clip.

Remember, your home appreciation rate also depends on home 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 the answers to some questions you may have as you prepare for your home build.

Are mobile homes cheaper than site-built homes?

Mobile homes – known today as manufactured homes – are usually cheaper than site-built homes. A mobile home costs $126,600 on average, while building a home costs an average of $312,866.

Are site-built homes cheaper than buying a house?

The average cost to build a house in 2024 is $312,866, while the average cost to buy a new house as recently as March 2024 was $430,700. That’s a notable difference, but keep in mind that building a house versus buying means incurring different costs. Home building involves paying for raw materials, services from a contractor and architect, and customizations. On the other hand, buying a home involves costs for real estate agents, inspections and title insurance.

Are tiny homes site-built?

Tiny homes can be site-built or prefabricated. You can purchase or build your tiny home based on your preferences.

Are site-built homes anchored?

Yes, a site-built home is anchored to the land on a foundation. 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 you can customize to your heart’s desire, a site-built home can be a great option. Although it will cost more than a prefabricated home, it will consist of the features and materials you covet. In addition, it won’t risk depreciation in the manner of many manufactured homes.

If you’re interested in a site-built home, start an application online with Rocket Mortgage® and check out 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.