New construction in Winston-Salem.

Semi-custom: a builder's plan on your lot

Between a production community and a fully custom home sits semi-custom: a builder builds one of its own floor plans on your lot, with room to choose finishes and some changes to the plan. It is often faster and more predictable on price than fully custom, and you still choose exactly where you live.

• True Homes On Your Lot ↗Semi-custom homes on your lot in the Triad, including the Greensboro, Winston-Salem and High Point areas.
• Eastwood Homes Build On Your Lot ↗Eastwood plans built on your land across the Triad, including Greensboro, Winston-Salem, High Point and nearby towns.

Financing a build on your lot

Buyers who build on their own lot can pay cash or use a construction loan. A construction loan works differently from buying a finished home: instead of one mortgage on a completed house, the lender pays the builder in stages as the work is done, and the loan then becomes (or is replaced by) your long-term mortgage.

• Paying cashSome buyers fund the build themselves. You still pay the builder in stages, so get the draw schedule in writing and release each payment only after the work is done and checked.
• Construction-to-permanent (one-time close)One loan, one closing. It pays the builder in stages during construction, then converts to a regular mortgage when the home is finished. During the build you usually pay interest only on the money drawn so far.
• Two-time closeA short-term construction loan for the build, then a separate mortgage at the end. It means two closings and two sets of costs, but you can shop the permanent loan when the home is done.
• Lot or land loanIf you are buying land now and building later, a land loan covers the lot. Expect a larger down payment and shorter terms than a home mortgage.
• Using land you already ownIf you own the lot, its equity can often count toward your down payment on the construction loan.
• FHA, VA and USDA optionsSome lenders offer one-time-close construction loans through these programs, with their own eligibility, builder and property rules.

Expect the lender to appraise the home from the plans, approve the builder and the budget, and release money in draws after inspections. Build a contingency of roughly 5 to 10 percent into the budget for overruns, and ask each semi-custom builder how its on-your-lot program handles deposits and construction financing. Not every lender offers construction loans, so compare at least two. Your agent can recommend qualified local lenders who regularly handle them.

Finding a custom builder

• Start with the land, or at least the areaMany custom builders work in specific towns, and some custom neighborhoods require a builder from an approved list.
• Talk with two or three buildersTour homes they finished recently and homes under construction, and call a few past clients.
• Check the license and insuranceIn North Carolina, a project of $40,000 or more requires a licensed general contractor. Look the builder up with the NC Licensing Board for General Contractors and ask for proof of insurance and a written warranty.
• Compare contracts line by lineFixed price or cost-plus, allowances for finishes, how change orders are priced, and the draw schedule all affect your final cost.
• Line up financing earlyTalk with a construction lender before you sign with a builder. The lender will review the builder, the plans and the budget.

A realistic timeline

1. Find and evaluate land1 to 3 monthsSurvey, soils, utilities and due diligence.
2. Design and plans2 to 4 monthsFloor plan, engineering and builder pricing.
3. Permits and approvals1 to 3 monthsSeptic or utility approvals, HOA review and the building permit.
4. Construction9 to 14 monthsLonger for larger or more complex homes, and weather matters.

About 12 to 24 months from land search to move-in, depending on the land, the design and the builder's schedule.

Site prep for raw land

• Zoning, survey and flood zoneConfirm zoning, setbacks, easements and any HOA or architectural rules, and order a boundary survey. Check the FEMA flood map for the lot.
• SepticWhere there is no public sewer, the county Environmental Health office evaluates the soils and issues an Improvement Permit, then an Authorization to Construct, before a building permit. The soils decide the system type and where the house can sit. Give yourself time to complete this before you are committed to the land.
• WellPrivate wells need a county well permit. Ask about typical well depths nearby and plan to test the water.
• Public water and sewerIf city water or sewer is available, confirm it can serve the lot and budget for tap and connection fees, which can be significant. Some cities require annexation to connect.
• Water-supply watershedsParts of northwest Guilford County drain to Greensboro's drinking-water lakes, where rules limit lot size and how much of the lot can be covered.
• Driveway and accessA driveway onto a state road needs an NCDOT driveway permit. Check road frontage and sight distance.
• Clearing, grading and erosion controlDisturbing more than an acre requires an approved erosion and sedimentation control plan in North Carolina, and some local rules are stricter. Budget for clearing, grading, drainage and the driveway.
• Power, gas and internetAsk how far power has to be extended, whether natural gas is available and which internet providers serve the road.

Site work on raw land can add tens of thousands of dollars before the foundation is poured. Get a site-work estimate before you are committed to the land.