Reference Guide

Custom Home Building Glossary

The vocabulary of custom home construction, written so a first-time buyer can read it once and feel oriented. Curated by Integra Builders for the Central Indiana market.

Allowance
A pre-set dollar amount in a custom home contract reserved for items the homeowner hasn't yet selected, such as lighting, plumbing fixtures, or appliances. Builders use allowances when final selections are unknown at contract signing. A well-run pre-construction process minimizes allowances by making selections upfront, reducing the risk of going over budget.
Architectural Control Committee (ACC)
A neighborhood or HOA committee that reviews and approves exterior design, materials, and landscaping for new homes within a covenanted community. Most luxury Hamilton County neighborhoods — including Chatham Hills, Village of WestClay, and Bridgewater — have an active ACC. Approval can add 4–8 weeks to your timeline.
Change Order
A written, signed amendment to the original construction contract that modifies scope, materials, or cost after construction begins. Every change order should be priced, dated, and signed before work proceeds. Frequent change orders are the single biggest driver of budget overruns in custom home building.
Construction-to-Permanent Loan (C2P)
A single-close mortgage that funds construction in draws and then converts into a permanent 30-year mortgage when the home is finished. C2P loans are the most common financing structure for custom homes in Indiana because they avoid a second closing and lock the long-term rate before construction begins.
Cost-Plus Contract
A construction agreement in which the homeowner pays the actual cost of materials, labor, and subcontractors plus a fixed builder fee or percentage. Cost-plus offers transparency but transfers cost-overrun risk to the homeowner. The opposite is a fixed-price (lump-sum) contract.
Covenants, Conditions & Restrictions (CC&Rs)
Recorded legal rules that govern what can and cannot be built on a lot inside a planned community. CC&Rs typically dictate minimum square footage, allowed exterior materials, roof pitch, setbacks, and accessory structures. Reading CC&Rs before purchasing land is critical for any custom build.
Draw Schedule
A pre-agreed payment timeline that releases funds from the construction lender to the builder as specific milestones are completed (foundation, framing, drywall, etc.). The bank typically inspects each milestone before releasing the next draw.
Easement
A legal right for a third party — typically a utility company, municipality, or neighbor — to use a defined portion of your lot for a specific purpose (drainage, utility lines, access). Easements limit where you can build and must be identified in a survey before site planning.
Elevation
(1) The architectural drawing showing the exterior face of the home from each direction (front, rear, sides). (2) The vertical height of the building site above a fixed reference point — critical for floodplain and drainage analysis on Geist and Morse Reservoir lots.
Custom Home Readiness Review (Feasibility Review)
A pre-construction process — championed by Integra Builders — that validates a homeowner's budget, lot conditions, design intent, and timeline before any contract is signed. Sometimes called a feasibility review, it eliminates the most common cause of failed custom home projects: discovering site or budget problems after demolition has started.
Fixed-Price (Lump-Sum) Contract
A construction agreement where the builder commits to a single, all-in price for the completed home based on finalized plans and specs. Fixed-price contracts protect the homeowner from cost overruns but require complete plans and selections before signing.
Footprint
The outline of the home as it sits on the lot, measured at the foundation. Footprint determines how the home fits within setbacks, easements, and lot coverage limits.
General Contractor (GC)
The party legally responsible for executing the construction contract, coordinating subcontractors, pulling permits, and delivering the finished home. For custom homes, the GC and the builder are typically the same entity.
HERS Rating (Home Energy Rating System)
A nationally recognized score (0–150+) measuring a home's energy efficiency. A standard new home rates around 100; a high-performance custom home in Indiana typically targets 50–65. Lower is better. HERS ratings are often required for Indiana energy code compliance.
Impact Fee
A one-time charge levied by a municipality (e.g., the City of Carmel or Fishers) to fund infrastructure expansion driven by new construction. Impact fees in Hamilton County typically range from $3,000 to $15,000+ depending on the jurisdiction and home size.
Lot Coverage
The percentage of a lot that may be covered by structures (home, garage, driveway, patios). Maximum lot coverage is set by zoning and CC&Rs and is one of the first constraints to verify when sizing a custom home.
Mechanical, Electrical & Plumbing (MEP)
The three coordinated trades responsible for the home's HVAC, electrical, and plumbing systems. MEP coordination during pre-construction prevents costly rework — for example, a beam placed where a duct needed to run.
Pad-Ready Lot
A lot where utilities have been brought to the site, the building pad has been graded, and any required site work is complete. Pad-ready lots eliminate site-work risk and are typical inside established Hamilton County developments.
Percolation (Perc) Test
A soil drainage test required for lots without municipal sewer service. The perc test determines whether the lot can support a septic system and influences both site cost and home layout. Most lots in Westfield, Zionsville rural, and Hamilton County's outer ring require perc testing.
Permit Set
The final, code-compliant construction drawings submitted to the local building department for approval. In Hamilton County, permit review currently averages 6–10 weeks depending on jurisdiction and project complexity.
Plat
A recorded map that shows lot boundaries, easements, setbacks, common areas, and dedicated rights-of-way for a subdivision. Always review the plat — not just an MLS listing — before purchasing a custom home lot.
Punch List
The list of incomplete or corrective items identified during the final walkthrough that the builder must complete before final payment. A short punch list is a leading indicator of construction quality.
Schematic Design
The earliest design phase where architectural concepts — floor plan, massing, basic elevations — are explored before detailed engineering and selections. Schematic design typically takes 4–8 weeks for a luxury custom home.
Setback
The minimum required distance between any portion of the home and the lot's front, side, and rear property lines. Setbacks are set by both zoning code and the neighborhood plat — and routinely surprise homeowners who assume more usable area than the lot actually allows.
Site Plan
A scaled drawing showing the home's footprint, driveway, utilities, drainage, and landscape features in relation to the lot. The site plan is required for permitting and for HOA architectural review.
Specification (Spec) Sheet
The line-item document that defines every material, fixture, finish, and brand included in the home — from window manufacturer to cabinet hinges. A complete spec sheet at contract is the single most effective tool for preventing budget surprises.
Stake-Out
The physical marking of the home's footprint, corners, and key elevations on the actual lot before excavation. The stake-out is the last meaningful chance to verify orientation, views, and tree preservation before dirt moves.
Variance
Formal permission from a municipality to deviate from a specific zoning rule (often a setback or height limit). Variance hearings add 6–12 weeks to a project and require neighbor notification.

Ready to put the vocabulary to use?

A Custom Home Readiness Review translates these terms into a real plan for your lot and budget — before you sign anything.

Request a Custom Home Readiness Review