You can up-grade your house into two story house, but you need to ...:
- Earn all the items in Harvest Moon Back To Nature including power berry, legendary fish etc.
- Fill your chicken coop, barn, etc until they are full.
- Sell all the items until it's 999
- The year is more than 9 years in Harvest Moon Back To Nature
Then, the carpenter will come to your house and ask if he can build a two story house for you. It's free!
But you must not use game-shark, the system will not work that way ...
Happy Harvest Moon!