April 19, 20244-minute read
Author: Carey Chesney
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Modular and manufactured homes are two types of homes that are generally more affordable than other housing options. Understanding the key differences between these property types is essential for anyone interested in learning more about how to buy a house. Let's explore the differences between modular and manufactured homes to help you determine whether one of these home types is right for you.
What Is A Modular Home Vs. Manufactured Home?
Modular and manufactured homes areprefabricated structures, meaning they are partially or fully constructed in an off-site factory. The primary difference between modular and manufactured homes is that modular homes are held to the same local, state and regional building codes required for on-site homes. Manufactured homes are held to a federal code set by the Department of Housing and Urban Development (HUD) and have the ability to move from one location to another. Amodular homeis like a traditional home in that it’s placed on a permanent foundation. The house structure is partially constructed in a factory and shipped to the homeowner’s lot. The construction of a modular home must comply with local building codes and standards in the area where the home will be placed. Modular homes come in all shapes and sizes. In many cases, it’s hard to tell the difference between a modular home and a traditional stick-built home. Similar to standard homes built on-site, modular homes fluctuate in value with the traditional housing market. Most banks and mortgage lenders offer financing on modular homes, which means buyers will have a more diverse range of options when it comes time to purchase their home. Often called a mobile home, amanufactured homeis built in a factory or warehouse in accordance with building codes set forth by HUD. The homes are transported from the factory to the home site, either in sections or as a whole, and installed on either a temporary or permanent foundation. In most cases, they'll be permanently affixed. Modern manufactured homes can come in three general floor plans: Rocket Mortgage® nowoffers financing for manufactured homesbuilt on permanent structures after June 15, 1976. This is the date the HUD code setting federal safety standards on manufactured houses went into effect. We’ll get into HUD code later on in the article. The terms “mobile home” and “trailer” are often used to describe modern manufactured homes, but the terms are a little outdated. Manufactured homes are typically referred to as mobile homes because manufactured homes are built in a factory and don’t have a permanent foundation. Rather, they’re constructed on a steel chassis that can be affixed to land. Manufactured homes can also be transported from one place to another, so they’re considered “mobile” in nature.Modular Home Defined
Manufactured Home Defined
Modular And Manufactured Vs. Mobile Homes
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What’s The Difference Between Modular And Manufactured Homes?
While both manufactured and modular homes are cost-effective alternatives to traditional site-built homes, there are some key differences to consider. If you have your heart set on a site-built home but want to take a more cost-conscious and efficient approach, a modular home build might be the way to go. Once modular homes are assembled, they’re essentially the same as site-built homes, sitting on a permanent foundation. While both modular and manufactured homes are built in factories, manufactured homes are held to federal standards after the National Manufactured Housing Construction and Safety Standard Act was passed in 1974. This act authorized HUD to establish construction standards for manufactured homes. These safety standards, known as the HUD code, became effective in 1976 and apply to the following aspects of manufactured homes: The law went into effect on June 15, 1976. So, any manufactured homes built before this date do not comply with HUD code. The established code also transformed the term “mobile home” into the upgraded, modern manufactured homes that you see today.
Modular Vs. Manufactured Homes: An At-A-Glance Comparison
Below we compare modular and manufactured homes based on a variety of structural features.
Modular Homes | Manufactured Homes | |
Construction | Multiple factory-made pieces assembled at home site | Built in sections, can be single- or multi-width |
Foundation | Permanent/Traditional | Steel chassis with ability to be affixed to land |
Mobility | No | Yes |
Real Property | Considered real property once completed on-site | Must be permanently affixed to the site, then must be converted from chattel to real property through the county |
Financing options | Standard | Limited |
Relative customizability | Higher | Moderate |
Code requirements | Local, state and regional codes | Federal HUD code |
Home site | Private property | Private property or land-lease |
Customizing Modular And Manufactured Homes
Modular and manufactured homes can be customized to fit your needs. Let’s take a look at some of the ways you can design your modular or manufactured house. Modular home plans today come in all shapes and sizes, from tiny homes to two-story colonials. A modular home can have a lot of custom features such as an attached garage, a wrap-around porch and an endless variety of floor plans. Manufactured homes have also come a long way from the basic single- and double-wide days. While newer manufactured homes may not be as customizable as modular homes, they still come in a variety of architectural styles, floor plans and add-ons that can meet your needs.Modular Home Designs
Manufactured Home Designs
Financing Modular Vs. Manufactured Homes
Mortgage loans are secured by real estate or land, and the permanent fixtures that are built on the land. Modular homes are placed on a permanent foundation. Once a modular home is assembled, it’s treated exactly like a site-built home so it can be financed through a regular mortgage. Financing a manufactured home is a little more complex. The difference between taking out a mortgage to buy a modular versus a manufactured home comes down to the legal definitions of real property and personal property. Essentially, personal property is movable property and real property is immovable property. Real property includesland and anything attached to the land. Some lenders don’t finance the purchase of manufactured homes because the land on which they sit is generally rented, and the home itself can be moved. So, manufactured homes aren’t oftenconsidered real property. While conventional loans are a common way to finance manufactured homes, there are certain circ*mstances where FHA loans or VA loans may be available. Keep in mind that Rocket Mortgage offers financing on manufactured homes built on or after June 15, 1976, that are permanently affixed to real property and have a HUD tag.
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Zoning Laws For Modular And Manufactured Homes
Modular homes are subject to the same zoning laws as site-built homes, another characteristic that makes them more like traditional homes than manufactured ones. Manufactured homes are constructed according to a code administered by HUD and the local building code. The foundation for manufactured homes is also up to local code. When it comes to zoning, this means that local ordinances on land use can restrict where manufactured homes can be placed. For example, if a manufactured home is built for a specific state and the buyer cancels their order, the home must be resold to a buyer in that state.
The Bottom Line: Understand The Pros And Cons Of Modular And Manufactured Homes Before You Buy
There are several factors to consider if you’re deciding between a modular or manufactured home. If you’re looking for a home that will appreciate over time with a lot of options for upgrades and expansion, a modular home could be the perfect fit for you. If you’re more interested in saving money and the ability to move your house from one place to another, a manufactured home may be the better option for you. If you’re thinking about financing a manufactured home and are ready to move forward in the home buying process, apply online today.
