4 Things to Consider BEFORE You Break Ground

Ah, the appeal of the custom-built house. For many, it’s an American dream. Finding a piece of land all your own, working with a builder (or your own two hands!) to build something specifically designed for your family, and being the first ones to call it home. Unfortunately, as with many multi-faceted projects, just finding a lot of land and getting ready to build can often be more difficult and time consuming than most people realize.

As a portfolio lender, lot loans and construction financing are one of our areas of expertise. Unlike many lenders, we keep all the loans we make. And because we don’t sell our loans, we’re less confined by rigid, “standard” underwriting guidelines that hold many lenders hostage. We’re able to make more flexible, common sense lending decisions. As a result, we’ve ​seen A LOT of land and custom construction homes built over the past 100 years. So how does it all work?

Photo of a lot for sale

Get to know your land.

The ground that makes up your land will determine much about your future home –like where it sits on the property and what types of materials you can use. Depending on the type of land you are building on, you may need a geo–tech survey, which involved core samples of soil to determine whether the land will support a building structure. The city or county that issues the building permit will make the determination as to whether a geo-tech survey is required.

Where will you get your water?

In order to build a new home, you’ll need to determine the availability of utilities or install new access to utilities, like sewer or septic, electricity, gas and/or propane, municipality water or well. The local city or county that issues the building permit should be able to provide you with guidance on the available utilities. 

Draft your design.

This will probably involve hiring an architect to assist you in the design of your new home. They’ll also oversee the construction and provide additional services in connection with the building process. Because the architect’s plans affect public safety, an architect must complete specialized training, licensing and certification depending on the city or county where the home is being built.Draft of a house design

The architectural plans will include different views or angles of the finished home. In addition to the different views, the plans will also include elevations from different points on the subject property to guide the general contractor in the overall build of the home. 

Apply for a building permit.

After you’ve confirmed your plans and cost breakdown for your project, you must obtain a building permit from the local city or county BEFORE you can begin construction on your new home. The process of applying for a building permit may go through several stages before the actual approval and final permit is issued. Here are a few things you’ll be expected to provide.

Zoning compliance will require you to provide several pieces of information, including:

  • Residential zoning for the area
  • Number of units
  • Maximum square footage in relation to lot size 

Environmental impact:

  • Availability of water, power and utilities
  • Your plan for clearing the lot and removing greenery 

Building code compliance:

  • Height of the building
  • Subject to recorded easements, maintenance, agreements, etc

During the final review, any revisions required by the city or county will be added to your estimated cost.

If you’re thinking about building a home, we’re here to help. We’ve been specializing in helping people achieve their home ownership dreams for over 100 years. To find out more, contact one of our neighborhood branch managers or call us at 800-324-9375. 

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