On this account, I had 20 cottages placed when I reached my limit. I had 15 level 1 farmhouses and 3 level 5 farmhouses.
I sold 5 farmhouses but still couldn't build anymore cottages. Then I sold a 6th farmhouse and was able to build another cottage. Long story short, I sold all of my level 1 farmhouses and now have 30 cottages placed. Of course, now I need to actually construct a lot of them!!!! Lol