'The House that Drought Built' will be auctioned off later this year, with all proceeds going to the Salvation Army to assist families in the region impacted by drought.

The idea originally came to G.J. Gardner Homes Tamworth franchisees Daniel and Natalie Urquhart.

"Noticing the increasing level of devastation this ongoing drought is causing, we wanted to do something to help," Mr Urquhart said.

"Why not do what we do best and raise funds for our local farming community by building a house and auctioning it off?" he said.

The property is located in the Lampada estate.

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"Tamworth is an incredibly resilient community and it is so heartening to see people come together to support one and another through this difficult time," Salvation Army NSW public relations secretary Brad McIver said.

The design by G.J. Gardner Homes has been dubbed 'The Tamworth 300' and will feature four bedrooms and two bathrooms.

"It has ... a distinct brand of its own and the support from the trades right across the region and the city has been amazing," Tamworth mayor Col Murray said.

"We have been happy to support with the planning of the project with things like contribution of our fees and charges," he said.

Local businesses are also digging in to help with the project, with PRD Tamworth heading the sale and some trades and suppliers offering discounted services to help lower the cost of the build.

A community open day is planned for February 22, following the ground break.

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