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There are two kinds of log homes: "handcrafted" and "milled" (also called "machine-profiled"), made with a log house moulder.

Handcrafted Log Homes
A home made of logs which have been peeled but otherwise have natural appearance as when they were trees, is called a “handcraft log home.” Logs for handcrafted home are peeled, notched, and scribed by hand to fit on top of each other.

Milled Log Homes
A milled or machine-profiled log home is constructed of logs that have been run through a manufacturing process to remove the natural features and imperfections of the log and to convert them into timbers of consistent size and appearance. Milled logs come in a variety of round and rectangular shapes milled from freshly-cut or dried trees, or logs can be created using a laminating process.
[Citation: http://en.wikipedia.org/wiki/Log_home]

Handcrafted vs. Milled
In many handcrafted homes, the logs are stacked alternately, so the large end of a log is stacked on top of the tapered end of the log beneath. In contrast, a milled log home features logs that are uniform in size and shape. These logs are modified by milling process into timbers, to stack together easily and evenly A home made of logs which have had their natural imperfections removed, is called a “milled or machine-profiled log home”.

One major factor that isn't always addressed is moisture content. Any timber, large or small, will have moisture in it when it is fresh cut. Log homes of all types have varying degrees of moisture content.

In the case of "handcrafted" logs, this moisture will naturally leave the timber, drying it out until it stabilizes with its surrounding climate it. This drying out causes movement and shrinkage in the timber; as the timber dries, the pores on the exterior of the wood seal up. The moisture in the center of the timber keeps trying to escape and eventually opens a crack in the timber. This crack, also known as a "check," can continue all the way to the heart of the timber sometimes leaving quite a large crack on the side of the home.

Milled logs are processed in a different manner than are handcrafted logs. Logs destined to become milled logs can become one of several types, depending on the desired quality and end result. The end quality of a milled log has a lot to do with its moisture content at the time of construction.

Many handcrafted log builders do not consider milled logs to be logs at all, a position which milled-log manufacturers disagree with.
[Citation: http://en.wikipedia.org/wiki/Log_home]

Home packages
Log home packages can consist of walls only, structural shells only, or complete packages. [Citation: http://en.wikipedia.org/wiki/Log_home]

Modern technology enables log homes to be built using computer-aided design. Logs are pre-cut, and pre-packed in the factory, disassembled, and then transported to the building site to be re-assembled.