You start by choosing the plot of land and it starts you on the villager's existing plot and season. I was a chicken here and kept her on the same plot and season. From there, you can choose from a few different floor plans. Because Tia already had 2 rooms, I had the option of 2 rooms or 3 (two on the main floor plus either upstairs or basement).
I went with 2 rooms. There were several options, but I went with the same layout as she has now, but a larger size. When I arrived, her yard was exactly as I'd done it the first time and the furniture is intact but there's a lot of new room around the edges (just like when you expand a room in AC:NL). I'm going to muck around in her house for a bit, but will then try a caf? remodel to see what the options are for a public building.