<prompt> Human: Husband and I are first time home buyers. Both in our mid-30s, both self employed. Husband is an architect and is interested in building and designing the home himself. He has several close friends who are contractors who have offered help us with the build at near cost. Buying a home as opposed to buying a lot and building is also on the table, so weve been looking at both houses and land. Heres where we need guidance: I dont know the ins and outs involved with getting a construction loan. Right now, the empty lots that weve looked at have ranged from 60-70K. Were estimating well need 300K for the build. Im worried if we use a good portion of the money weve saved for our down payment towards a chunk of land, we wont be able to secure a construction loan because our savings will be depleted. Ive also read that its more difficult to obtain a construction loan than a mortgage, and that interest rates on construction loans are higher. Are we potentially setting ourselves up for a bad situation by pursuing the build route and would we be better off to just look at finished homes? Or is it possible that we could get more housea custom house for a similar price if we build, and that the construction loan wont turn out to be as big a deal as Im imagining? Heres our stats: Total annual income on average is about 130KNo credit card debt, two solid cars with no note100K in student loansEmergency fund has 10K, not to be used for house, also we both have IRAs with about 60K total in themHave 75K saved for a down payment, plus family have offered us a no interest loan of an additional 10KOnly asset is a small chunk of land we bought a while ago at auction as an investment property and currently have on the market for 35K. Estimating that it will sell for closer to 25K.No children currently, but one on the wayHouses weve been looking at average about 360-400K. Unfortunately, housing prices in our once-affordable city have ballooned and 400K still doesnt go very far unless you want to live in a dangerous neighborhoodAny guidance is appreciated! Thank you!  <response>: When I built my house as ownerbuilder I bought the lot and took that and plans to the bank. The lot became basically my down payment for the loan and the construction loan converted to a conventional mortgage when I got CO. When we moved in I had 20 equity just from acting as my own contractor. Whatever a contractor would charge for building the house becomes your equity when you do it yourself. I never did any actual work just managed the subcontractors. One of the most rewarding accomplishments of my life. 