How to beat home-financing pinch: build it yourself!

It's raining, and the clay is starting to stick to Bart Hosman's boots. He has taken the day off from his work as a deputy county agricultural commissioner and is waiting for a truckload of building materials to arrive from Sacramento.Worried that the truck won't make it back into his soggy building site, he wishes he had postponed the delivery.

"It's one of the things you have to contend with," he says. But other than this kind of irritation, Mr. Hosman -- like thousands of other Americans -- is happy to be building his own home. By purchasing a "pre-cut" house from a company that sells them in kit form, acting as his own contractor, and doing much of the work himself, he is able to afford a much larger and nicer dwelling than he would otherwise. For other families, such an alternative means the difference between owning and not owning their homes.

While the housing industry in general is in a slump (the US Department of Commerce reported last week that new housing sales recently took their sharpest drop in 10 years), trends in owner-builder housing schemes are much more positive.

"It's been much better than what I'd expected," says Dennis Foster of Capp Homes, a Bellevue, Wash., company that is finding increasing numbers of customers for its owner-builder housing packages, despite the national downturn.

Charles Pelkey, vice-president of Miles Homes in Minneapolis, reports that his do-it-yourself building company has increased its sales 25 percent a year for the past three years.

"Many people are finding that the only way they can afford a house is to build it themselves," says Robert Boras, an architect with the National Association of Homebuilders.

To do so from scratch can be just too bewildering for the average handyman or woman, however, and that is where home-kit companies are able to fill an increasing need. Typically, they offer a wide choice of models ranging in price from not much more than $20,000 to more than $60,000. Or the prospetive builder can start with his own design.

Some companies build the frame, siding, and roof, including doors and windows. Then the owner takes it from there, using the company-provided package of materials and detailed instructions. Other companies deliver pre-cut lumber, plus all other materials, and the owner does everything else.

In either case, report company officials and those who have bought such homes , there is a great deal of "hand-holding" as the novice builder is guided step-by-step through a building project that typically takes about a year of weekends and after-work hours.

Savings come through the owner (along with family and friends) providing all or most of the labor. In some cases, the owner may subcontract certain jobs (like plumbing or wiring) to professionals, but even here he can save a great deal by eliminating the middleman contractor.

Mr. Hosman expects to save 20 to 25 percent on his home, even though he is hiring professional craftsman to do about half the work. Many owners report that their per- square-foot building costs stay below $30, compared with $55 to

Some companies, using the owner's property as security, charge only interest until the building is finished. Then, with his new home as equity (appraised at considerably more than he paid for it), the owner is able to get a conventional mortgage that earlier he would have been denied.

Building one's own home, even from a packaged kit, can be frustrating and more than bargained for, however, say those who have done it.

"We have found it very challenging," says Sue Ryan who with her husband Tim and two young sons has just about finished a 2,400- square-foot house in Livermore, Calif. "It's always a lot slower than you think it's going to be."

"You have your highs and lows," agrees Bart Hosman. "But I'm eager to get out there on Saturday morning and start nailing my two-by-fours. To see it going up, and especially to take part in it, is very exciting."