The dueling teams are challenged this week to create event-friendly homes that are tailor made for entertaining and hosting. This week, the contestants will work on two Spanish-style homes in North Hollywood, Calif. Team Red, led by site manager Erinn, is determined to end up victorious after coming up short in the first two challenges. Team Blue is feeling strong and confident with all of their original six team members still in the competition. However, they struggle to get along with site manager Elaine's strong opinions. Tensions arise when Elaine turns to opposing teammate Lukas for help with the design of her living room. Nate Berkus invites a "neighborhood council" in to vote on which house they feel is the best makeover. In the end, one member of the losing team will be sent home. Nate Berkus hosts, Eddie George and Monica Pedersen serve as judges.

Forced to forego their previous teams, the remaining eight designers are put into pairs and asked to design four exact modular homes in just three days. Faced with a blank slate, the contestants must find a way to work together with ease and transform the raw space quickly. The stakes are at an all-time high and the winning team receives a spread in the June issue of Better Homes & Garden magazine. Nate Berkus hosts while Eddie George and Monica Pedersen serve as judges. One designer is sent home.