What lenders require from an owner builder: licence, permits, costings

Each state requires owner builders to hold a permit or consent above a value threshold: an owner builder permit in New South Wales and Queensland, a certificate of consent from the building regulator in Victoria, an owner builder approval in Western Australia, and equivalent arrangements elsewhere. Most require a short course, limit how often you can owner build, and apply to work above roughly $10,000 to $20,000. Lenders will not fund construction without it and will check the details match the property and the applicant.

The lender needs a cost breakdown by stage and trade: site works, slab, frame, roof, external cladding, windows, plumbing, electrical, internal linings, kitchen, bathrooms, painting, floor coverings, fit-off and external works. Major items need written quotes from licensed trades. Allowances are accepted for minor items. The lender or its quantity surveyor checks the total against typical cost per square metre for the region and will add contingency if yours is thin. Costings that look optimistic get the loan reduced or declined.

A stage-by-stage program with dates, usually spanning twelve to eighteen months and within the lender's maximum construction period. Council-approved plans and specifications. Contract works insurance covering the build and materials, public liability, and where required by the state, workers compensation or personal accident cover. Certificates of currency before the first draw.

A licensed builder or tradesperson building their own home is the ideal owner builder from the lender's view. Next is someone with project management or construction experience, or a previous completed owner build. A first-time owner builder with an office job can still be funded at a lower LVR, usually with professional costings and a program manager or building supervisor named in the file. Some lenders require a licensed builder to supervise the structural stages regardless.