"You cross the street and you go into the small, blue building: I live there."
Translation:Átmész az utcán és bemész a kicsi, kék házba: ott lakom én.
Yes, the translation is inaccurate. But in Hungarian, "ház" and "épület" are used somewhat interchangeably. There is a definite overlap. A house is not just a home. You can call a building a house. "Épület" is usually used for taller, bigger structures. So that's why probably it was mistranslated.
"kicsi" and "épület" don't go well together at all?
I imagine a "kicsi ház" to be a single family standalone house, but a small building still sounds like a building with 2, 3... whatever floors and several flats in them, just a smaller building compared to the other taller buildings surrounding it.