Check with your local planning department or building contractors about foundation requirements and customs in your area. They will be able to give you information on the types of soil, how deep you'll have to go to avoid freezing, and the likelihood of earthquakes. Usually they go for overkill, but this will give you some useful information.
Scrape off the topsoil and put it on the garden area. Dig down (at the very least 6 inches) to SOLID subsoil or rock. You can tell when you get to the subsoil because it is so much harder to dig. Dig down to where you will be reasonably safe from frost heave. Pile the soil somewhere handy for making cob mixes later.
Roughly level the base of the foundation ditch.
Where the ground is sloped, you can make steps to sit the foundation on.
This will help prevent the house from sliding down the hill. You can even angle the steps slightly into the hill.
Dig out any roots near the foundation. Live ones can grow into the foundation and pry it apart. Big dead roots under the foundation will decay, leaving a hollow spot in the ground under your house.
For those of you who live where the ground freezes deeply, a substantially deeper foundation will be needed. Doing a deep rock foundation will take a lot of rock, dedication, effort, and time. If you want the look of a stone foundation, you may want to make a reinforced poured-concrete base up to ground level for your stonework to sit on. Embed the first layer of stonework into the top of the wet concrete.
You may decide to make the foundation beneath the door deeper than the rest so you can create a strong continuous foundation. (See illustration page 36.)
Often a few inches of gravel are placed directly beneath the foundation. If you decide to do this, make sure you dig the trench that much deeper for the gravel. Tamp the ground before you put the gravel in, then tamp the gravel after it is in the trench.
The gravel under the foundation is good for: