These beautiful tiny homes cost less than $20,000 to build — take a look inside

After more than a decade of designing, editing, and reworking, the students at Rural Studio — Auburn University 's architectural-design program — built two cottages in 2016 with raw materials that cost just $14,000 each. (The team calls them the "20K Homes.")

The goal was to create a model for building homes that are both beautiful and affordable.

In late summer 2017, Rural Studio will begin planning two more homes with materials that cost even less than $14,000. The students expects to start construction in early 2018.

Take a look inside the first two homes.

The Rural Studio students built the homes at Serenbe, a community of nearly 500 people in northwestern Georgia. The site features a 25-acre organic farm, seasonal Saturday farmers markets, art galleries, films, and lectures.

"There's a need for affordable homes to be designed with integrity," Serenbe cofounder Steve Nygren told Business Insider. "We need to downsize in general."

The 500-square-foot homes' walls are primarily made from local pine lumber, and the roofs are made tin. They share a connected wooden porch.

Most state zoning laws (including Georgia's) do not allow for micro homes under 1,000 square feet. But Rural Studios and Serenbe got special permits to build the two cottages, Nygren said.

There are a number of design elements that make the cottages feel larger than they are.

The windows have deep sills that bounce off natural light, and the open layouts promote ventilation.

The interiors feature rustic details, like stained plywood floors, modern light fixtures, furniture with pops of color …

... and even vintage typewriters.

Nygren admits there's no real secret to the livable micro cottages. "It's just basic good design and simple materials," he said.

The micro-cottages will be used for artist residencies. To stay in one, artists apply for its fellowship program. If chosen, they are each granted housing for a one-month stay, a $1,500 stipend, and access to workshops and performances.

The two cottages at Serenbe follow a growing minimalist housing trend.

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"People are downsizing, living in smaller homes on smaller lots in more walkable communities. They are sitting on front porches, and there's more sense of a connected community," Nygren said. "There are a lot of advantages to that."

The $14,000 material cost doesn't take into account the permit fees, furniture and interior design, or labor to build the homes, Nygren said. He estimates that, in reality, the entire production costs around $65,000 per home — which is still relatively affordable.

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After rallying more Serenbe volunteers and trying new design patterns, the team will build a third and fourth cottage to see if it can lower the construction price even more.

The team will also create an instruction manual that explains how to build the homes outside of Serenbe. Replicating the homes in the real world won't be an easy task, however.

Typically, when someone tries to buy a home on a limited income and can't afford $20,000, banks won't give them a loan for a such a small amount of money. Regions Bank, which works with Rural Studio, told the team that a mortgage for a $100,000 house would cost the bank the same amount as a $20,000 house. So banks have little incentive to grant a $20,000 or $65,000 loan for these micro-cottages.

The team is trying to address this challenge (along with the state's square-footage restrictions) so that, with the right instruction manual, anyone can one day afford and build their own cottage.