Glossary: Terms Commonly Used In The Home Building Process

Accessory Dwelling Unit (ADU)

A term for a secondary structure or attached apartment that shares the building lot of a larger, primary home. Requirements for ADUs depend on your local municipality, city, or county. Typically refers to a space attached, where DADU refers to a Detached Accessory...


Most commonly the homeowner, but also can be a reference for the home builder company, who acts on behalf of the homeowner during construction.

Construction Loan

A non-conventional ARM loan typically lasting the duration of the construction phase. These loans are generally interest-only payments for no longer than 24 months and balloon after maturity. The criteria for these loans and benefits vary from lender to lender.

Construction Reserve Account

A reserve to pay (in accordance with the Construction Budget) Project Costs not anticipated at the time of any applicable Advance.

Construction-to-Permanent Loan

A loan product that covers the short-term construction phase financing and then is converted to a long-term conventional loan. Not all lenders provide this product and when they do it varies from lender to lender.


The system of wiring, outlets, switches, and circuit breakers that distribute electricity to power various appliances, lighting, and other electrical devices in a home.


The final decorative touches applied to the interior and exterior surfaces of a home, including paint, wallpaper, trim, moldings, and other elements that enhance its visual appeal.


The materials, such as hardwood, carpet, tile, or laminate, used to cover the floor surface of a home, providing aesthetic appeal, comfort, and durability.


Permanently fixed to the land.  The solid base upon which a home is constructed, typically made of concrete or masonry, providing stability and support for the structure. Typically distinguishes a home from a mobile home criteria in regards to financial lending.


The structural framework of a home consists of wooden or metal studs, beams, and joists, forming the skeleton onto which other building components are attached.  Vernacular term stick-build.

General Contractor

A company or an individual contracted by the homeowner who coordinates all aspects of the construction phase and ensures the project is on track until owner approval. This includes but not limited to: deliveries of materials, managing onsite personnel, and safety and...

Horizontal Development

The act of clearing raw land of plants, leveling the land, setting up utility connections, and paving roads and sidewalks.


Acronym for Heating, Ventilation, and Air Conditioning, which refers to the systems and technologies that regulate temperature, air quality, and ventilation within a home.


Materials used to reduce heat transfer and maintain a comfortable indoor temperature within a home, enhancing energy efficiency and reducing heating or cooling costs.


A porch or veranda. The name "Lānai" carries with it a rich history that intertwines with the cultural heritage of the Hawaiian Islands. Derived from the Hawaiian language, the term "Lānai" refers to an island renowned for its pristine beauty, serene landscapes, and...


A term more common in financing that describes the role of the owner as residing in the structure. Some loan products can disqualify applicants based on this status.

Permit Runner

A person whose role involves submitting permits, following-up, and scheduling inspections on behalf of the homeowner in coordination with the local municipality, city, and/or county.


The system of pipes, fixtures, and appliances that provide water supply and drainage throughout a home, including sinks, toilets, showers, and water heaters.


The protective covering on top of a home that shields it from the elements, often made of materials such as shingles, tiles, or metal.

Semi-Custom Home Builder

A General Contractor, very similar to a full Custom Home Builder, but at a fraction of the cost and time to build. An on-your-lot home builder with a set base of plans that can be modified to the homeowner's liking. Typically, homeowners will make light architectural...

Septic Tank

A septic tank is an essential component of a decentralized wastewater treatment system commonly employed in residential and commercial properties not connected to public sewage networks. It serves as a primary treatment unit designed to effectively separate, retain,...


A professional or tradesman that is contracted by the General Contractor to perform a specific task within the overall project.


An expert of a trade (painters, electricians, plumbers, masons, etc.)

Windows and Doors

Openings in the walls of a home, equipped with glass panels and frames, designed to allow natural light, ventilation, and access into and out of the property.

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