We started our house in 1987 with a loan of $3,000. We had carefully figured the price of building materials, and that amount was enough to build the shell.
Both of us worked full time and still managed to move into the house in early 1989. Before we moved into our new home, we lived in the "little house," previously built by my husband on the property — his only building experience.
The land we built on was already paid for ($8,700 for more than 30 acres). After the initial $3,000 loan was paid off, we obtained a home equity line of credit. We probably had about $5,000 in loans altogether. We have paid for the rest of the house with paychecks and savings as we went along.
Our plan, which worked well for us, was to figure out the minimum number of square feet we required to live in, and then double it. Thus, we lived comfortably in the downstairs while we finished the upstairs at our leisure.
The house is a little less than1,500 square feet. It is passive solar with big windows on the southwest side and no windows on the north side. It has a solar roof that heats our hot water in summer (a woodstove in the cellar heats our hot water in winter).
We did most of the labor ourselves, including all of the wiring, although we hired out the sheetrock installation and the downstairs plumbing. We also benefited from a couple of work parties our friends organized. As plumbing materials became easier to work with, we took on that job, too, putting in our upstairs bathroom by ourselves.
One advantage to living in our state is the building code. We had to apply for one permit, and endure one inspection.
I would make two cautions about building your own house. One: It goes on forever. People who build their own house never seem to "finish" them. This can mean you live for years with silver insulation (known locally as “Washington County wallpaper”), or it can mean you will take on remodeling and/or additions at the drop of a hat. Two: You’ll be tempted, especially at first when money is tight, to go for the cheapest option. Sadly, the cheapest option often turns out to be more expensive because you end up replacing it well before its expected life span is up.
Several factors contributed to our no-mortgage strategy: Low labor costs, because we did most of the work, and low building materials cost, because we used low- to medium-priced wood and some secondhand features, and built slowly over a period of time.
We are still working on our house, and have planned for a sunroom and shade porch. We would definitely do it again. We had fun designing and building it together, and find that living in it is very comfortable and inexpensive to run.