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Kit Homes: Everything You Should Know

WHAT IS A KIT HOME?


A kit home is a kind of building that is assembled on-site (like a traditional wooden frame building) but where all the parts of the structure have been pre-cut at a factory and they’ve been delivered in packages (usually flat-packs, to save on transport cost).

In most cases, kit homes can be customized as per customer’s wish (i.e. the size of the rooms can be altered, windows can be moved, …). 

Kit homes allow flexibility while maintaining the affordable cost of building and the entire process not to complex. 

 

What you can expect from kit homes

A kit home can bring several benefits to your project. The most important are:

      1. Less time used on site.
        A house kit contains all the parts necessary to build the structure of the house. All parts are pre-cut at the factory and the kit comes with detailed assembly instructions.
        Compared to a traditional construction (where parts are measured and cut on-site), using a kit shortens (by weeks) the time spent on the building site for putting together the structure.

      1. Less waste.
        When building with traditional methods, carpenters cut wood beams on-site and they cut what they need when they need it. Consequently, there is no optimization of materials and a lot of wood goes to waste in the form of pieces that are too short to be used in the build.
        Home kits are cut in the factory using an automated saw. The machine knows in advance all the pieces it has to cut and optimizes the work so that there is the minimum possible amount of waste left.

      1. Less skilled workforce.
        Since the thinking is done at the factory, construction workers on-site do not need to be skilled carpenters.
        Putting together the structure is quite easy as the kit home comes with IKEA-like detailed instructions.

      1. Sourcing materials and services locally.
        The house kit contains most of the parts necessary for getting the building Weathertight. However, to save on transport costs, some materials are not included in the kit and they must be sourced locally (insulation for example).
        This allows buying those components at a better price, thus saving a considerable amount of money.
        Sourcing materials and services locally also allow getting competitive prices on interior finishing works and technical installations.

    On the other hand, in order to get all these benefits, you need to invest in planning before you order the kit home.

    Getting a very clear idea of what you want to build is critical to the success of your project.

    This is why we always recommend creating your vision first.

    What does it cost to build a kit home?

    When figuring out your kit home budget, it’s important to consider more than just the price of the kit itself.

    In most cases, the house kit—the pre-cut structural shell—will make up roughly a quarter of your project’s final cost. If, for instance, your selected kit comes in at $15,000, it’s realistic to expect your finished home to cost around four times that amount after factoring in labor, finishing materials (like drywall, flooring, and paint), and site-specific expenses. That puts your total in the neighborhood of $60,000, though this will always depend on your size choices and budget for finishes.

    But let’s not forget the costs that aren’t included in the kit. Here’s what you need to plan for:

    • Land preparation: You’ll be responsible for purchasing your plot and handling any necessary clearing, grading, or demolition.
    • Utilities: If you want tumbling hot showers or light more reliable than a campfire, you’ll need to arrange for professionals to connect water, electricity, sewer, or septic systems. Costs here can vary greatly depending on your site’s location and existing infrastructure.
    • Building permits and fees: Local regulations might require additional paperwork and payments before you can start construction.
      Interior finishes and fixtures: While structural elements are included, finishes like cabinets, tiles, and lighting will be up to your taste—and wallet.
    • Labor: If you aren’t planning to DIY every aspect, you’ll need to budget for skilled trades like plumbers, electricians, and finish carpenters.

    By getting clear on the total cost picture early—factoring in both the kit and the full range of additional expenses—you’ll avoid unpleasant surprises and keep your build on track.

    How durable are kit homes compared to traditional houses?

    You might be wondering whether a kit home stands the test of time—or if it’s merely a “temporary” option. Rest assured, when properly assembled and maintained, kit homes are every bit as robust and long-lasting as conventionally built houses. Many kit homes routinely match or exceed a 50-year lifespan, performing admirably in a variety of climates and conditions.

    This isn’t just theory: Avrame structures have weathered decades of use across Europe and North America. Their wooden frames, when protected and maintained, resist the elements just as well as stick-built homes down the street. In short, with thoughtful construction and regular maintenance, a kit home becomes a lasting investment—not a short-term solution.

    Is the Kit Home Industry Standardized or Regulated?

    One important point to consider before taking the leap is that the kit home industry is still developing and, as of now, there are no universal standards or comprehensive regulations governing it. This can have a significant impact on your project for a few reasons:

    • Varying Definitions Across Suppliers
      What one company defines as a “house kit” might be very different from another. For instance, some manufacturers may include everything from the foundation up to roofing and internal walls, while others provide only the structural shell—meaning essentials like interior walls or drywall could be excluded. This variation means you need to carefully study exactly what is part of your chosen kit.
    • No Overarching Regulatory Body
      Unlike traditional homes, which are subject to clear codes and oversight—such as those administered by local municipalities or broader organizations like the International Code Council—kit homes do not yet fall under consistent national regulation. The U.S. Department of Housing and Urban Development (HUD), for example, mainly regulates manufactured homes (often called mobile homes), but not the modern kit or prefab homes you’ll find on the market today.
    • What This Means for You
    • Research is Essential: Since there’s no uniform standard, it’s crucial to read specifications closely and compare multiple providers.
    • Check Local Building Codes: Approval may depend on local standards, so it’s wise to coordinate with your local permitting office early in the process to make sure the kit you choose will be approved for your site.
    • Ask the Right Questions: Don’t hesitate to request detailed parts lists, sample assembly manuals, and, if possible, to see completed examples of the provider’s previous projects.

    By entering the process well-informed and prepared to ask plenty of questions, you’ll be far more likely to avoid surprises and get the home you envisioned.

    What a kit home is NOT

    When it comes to prefabricated wooden buildings, the internet does not paint a very clear picture. 
    In fact, there is a lot of confusion online about terminology.

    Manufacturers use terms like “modular”, “prefab”,  “pre-cut” interchangeably and this is plain wrong and misleading.

    A kit home is a building that has to be built entirely on-site and it comes in packages of pre-cut material.

    Now, the building might have a modular architecture (based on some geometric pattern that repeats itself, like Avrame triangular structure) but this doesn’t make it a modular building.

    In the prefab industry, a “modular” house is a building that comes on-site in ready-made boxes. The boxes are fully finished (even inside) and they just need to be installed on the ground and connected together.

    Needless to say, this form of construction is faster but way more expensive (it saves time and it burns money).

    Kit homes are nothing like that. The idea behind building with a kit is to save money.

    A kit home will require investing some of your time (either in the building works or in the planning) and it will repay in a more affordable construction process.

    Of all the prefabricated techniques, kit homes are the most basic one and the one where you can save the most since you can use your own time in various stages of the building and you can customize a lot of details to your own wish (even finish some parts later if you like).

     

    What to pay attention to when building a kit home?

    Even if building with a kit it is relatively easy and “forgiving”, good thoughtful planning is always necessary.

    There are a number of things that go wrong during construction that will cost you time and money and cause painful headaches.

    Timing is very important. There are certain things that have to be done in a specific order and following a precise time schedule… otherwise your project might get stuck.

    If you are serious about building, you should invest some time in learning what could go wrong and which are the points that need more attention.

    To help with that, we developed two guides:

        • the 100 Questions Guide.
          Are you sure you are asking the smart questions?
          Chances are there are things you are not even considering, things which can halt or delay your project (or break your budget) once you realize you did not take them into account.
          In the 100 Questions Guide, we collected over 100 questions you should get an answer to BEFORE you start your project.
          Each question comes with and guidance on who can help you to answer that.
          The guide is a 44 pages PDF and it is a paid product. You can find it here.

        • the Budgeting Guide.
          When you get closer to building, you need to get your numbers straight.
          The Budgeting Guide is a tool that will help you to figure out the total cost of your project.
          It is composed of a professional spreadsheet and a 30 pages PDF guide. The guide expands on the concepts discussed in the 100 Questions Guide and explains how to use the spreadsheet.
          The Budgeting Guide is a paid product and you can find it here.

      How can you finance a kit home?

      Let’s talk about money—because, let’s face it, even the smartest plans need funding to become reality.
       
      Most kit home manufacturers don’t provide financing directly, so you have a couple of paths to explore:
      • Construction Loans:
        The most common approach is to secure a construction loan through a bank or credit union. This kind of loan typically covers the costs of building your home from start to finish. It’s a short-term commitment, and the lender releases funds as your build progresses—think of it as unlocking levels in a video game, only instead of a boss fight, you get another roof truss or a delivery of windows.
      • Transitioning to a Mortgage:
        After your kit home is complete and passes inspections, you can usually convert your construction loan into a standard residential mortgage. This process is called “refinancing,” and many mainstream lenders will work with you at this stage (just be ready with all your paperwork).
      • Paying Cash or Using Savings:
        Of course, if you have enough savings set aside, self-financing is the simplest route—no banks, no paperwork, no surprises.
       
      A few tips:
       
      Some lenders are more comfortable financing modular homes than true “kit” homes, so be sure to clarify your home type upfront.
      • You may need detailed plans, itemized budgets, and a clear building schedule to satisfy your lender’s requirements.
      • Third-party lenders like Wells Fargo, TD Bank, and local credit unions are all accustomed to dealing with construction loans—shop around for the best terms.

      The bottom line: financing a kit home is completely doable, but it requires a bit of planning and patience, much like the rest of the building process. Secure your funding, and you’re one big step closer to making your vision a reality.

      What are the steps involved in getting a loan for a kit home?

      Securing financing for a kit home is definitely possible, but it does require a few extra considerations (and a bit of patience). If you’re not planning to pay the full cost in cash, here is the process you’ll typically follow:

      Explore Your Lending Options
      Most kit home manufacturers do not provide built-in financing. Instead, you’ll want to look at banks, credit unions, or specialized construction loan lenders (think of names like Wells Fargo or U.S. Bank as examples). Lenders familiar with construction loans are more likely to understand the nuances of building with a kit.

      Apply for a Construction Loan
      The most common approach is to obtain a short-term construction loan. This type of loan covers the build phase, with funds released in stages as the construction progresses. The lender may want to see detailed plans, a contract with your builder, and your overall project budget—so having your house plans and guides ready will pay off here.

      Meet Lender Requirements
      Be prepared for a more involved approval process than a standard mortgage. Lenders often require:

      Building permits and site plans

      • A fixed-price contract with the manufacturer or builder
      • Proof of insurance
      • A solid credit history
      • Sometimes, a higher down payment (often 20% or more)

      Building and Inspections
      As your project moves forward, the lender will visit the site before releasing funds at each stage (these are known as “draws”). Your job: keep all paperwork organized and anticipate regular check-ins.

      Convert to a Traditional Mortgage
      Once your kit home is fully built and passes final inspections, your construction loan typically transitions (“converts”) to a long-term mortgage with the same lender or a different one. This process is called a “construction-to-permanent” loan. If your lender doesn’t offer this, you’ll refinance with a traditional mortgage at this point.

      Keep in mind: patience and organization are your best friends here. A little extra homework upfront means fewer surprises (and headaches) when it comes time to finance your project.

      How you can pull it off

      You need to get a very clear idea of how the entire process works.
      Once you have a bird’s eye view on the process and all its components, you can start making decisions.

      The supplier of your kit home should be able to help you creating this high-level picture in your head (this is exactly why here at Avrame we have the guides described above).

      The process is more or less the same whether you build an A-frame or another kit home. Therefore, the time and money you invest in your education prior to launching the construction project are never wasted.

      We stress so much about following a process because we know that things can go out of control really fast if one does not do the homework. We can tell several stories of clients who did not follow the process and ended up aborting the construction.

      Typical reasons are:

          • the municipality did not approve the construction while the client already placed the order (bad planning)

          • the bank did not finance the construction while the client already placed the order (bad planning)

          • the client did not allocate enough money to complete the entire house (bad budgeting)

          • the client found out there were costs he did not consider (bad budgeting)

          • the client built foundations that were not suitable for the house (bad execution)  

        Here at Avrame, we invested heavily to get a solid process and strive to help our customers to make their journey one step after the other, in the right order.

        Kit home alternatives

        There are several alternatives to kit homes. At the end of the story, the decision comes to how much of your time you are willing to invest in the build and how much money you can afford to spend.

        Here is a list of options (more expensive on top):

            • traditional on-site building, bricks & mortar

            • traditional on-site building, wooden

            • modular construction

            • prefabricated elements construction

            • prefabricated frames construction

            • pre-cut construction (like Avrame)

          NOTEevaluating all the options above can take a long time. One should get the feeling of what he doesn’t want to do and rule out that option from the list at the beginning of the evaluation process.

          One alternative no one ever mentions is to buy a house which is already on the market.

          As a matter of fact, this is by far the biggest competitor of kit homes.

          The reasons are simple:

              • a ready-made house (or apartment) needs no work and no planning

              • you can move in immediately

              • you have fewer risks

              • you don’t need permission to build (no architect, no paperwork)

              • the Bank has an easier time to finance an object that already exists

              • you don’t need to learn any process or any new skill

            On the other hand, you will not get your dream home and you cannot say you built a house for your family.

             

            Conclusions: are kit homes for you?

            Kit homes are a great way to build your dream home on a budget.
            Building a kit home requires being and remaining in control of the construction process.

            You do get to build what you want exactly and you do so at a reasonable price but:

                • you need to do some homework and understand how the entire process works.

                • you might need to learn a few new skills (project management or carpentry for example).

              Keep in mind you will need to make several decisions and to account for many details.

              The best way to cope with that is to invest time in learning BEFORE you commit to the construction project.

              What next?

              You can go and browse our energy and cost-efficient A-frame models or get useful knowledge about building your own home (hassle free) by getting our e-guide.