What Are Modular Vs. Manufactured Homes? (2024)

February 25, 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.

Modular Home Defined

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.

Manufactured Home Defined

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:

  • Single-wide:A home built as one long section.
  • Double-wide:Two sections joined to make a larger home. This model is popular withfirst-time home buyers.
  • Triple-wide:A less common model with three sections joined together for a larger, more spacious home.

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.

Modular And Manufactured Vs. Mobile Homes

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.

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What Are Modular Vs. Manufactured Homes? (2)

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:

  • Quality and design
  • Durability
  • Safety
  • Fire resistance
  • Energy-efficiency
  • Affordability

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 Designs

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 Home Designs

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.

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.

What Are Modular Vs. Manufactured Homes? (2024)

FAQs

What Are Modular Vs. Manufactured Homes? ›

Modular homes are built in modules so they can be transported from a manufacturer, then assembled into one unit at the building site. Manufactured homes are what used to be referred to as mobile homes. These are assembled again at a factory, but ready to roll to the mobile home site.

Is there a difference between a modular home and a manufactured home? ›

Modular homes are assembled on a site and anchored to a foundation, whereas a manufactured home is transported in one piece to a site and can be relocated. Because they can be moved, manufactured homes are considered chattel (personal property) — like a recreational vehicle.

Which of these identifies a manufactured home and not a modular home? ›

While modular homes are built on a removable chassis, manufactured homes are fixed to permanent chassis, which helps guarantee its mobility if desired by the homeowner later on.

What is the disadvantage of modular homes? ›

Lack of customization – You might choose from several designs of modular homes, but you never get the possibility to fully customize your dwelling, unlike a site-built house. Social stigma – Some time ago, modular homes were associated with low quality.

What is one advantage of a manufactured home? ›

Customization: You can customize the floor plan, kitchen, living room and exterior of a manufactured home, such as choosing kitchen islands, backsplashes, porches, roof and siding preferences. Fast construction: It may take less time to build a manufactured home compared to a stick-built home.

Is modular better than manufactured? ›

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.

How do you tell a manufactured home from a modular? ›

The main difference between manufactured and modular homes is that manufactured homes are built to the national HUD code, while modular homes are built to all applicable state and local building codes. This is similar to the way traditional site-built homes are constructed.

How can you tell if a house is a modular? ›

If it is a metal frame, it is likely that metal is the old chassis of the home and it is a “manufactured home.” If the frame is wood and lines can be seen where the sections of the home join up (doubled up joists bolted together), then it is likely a “modular home.”

How do you tell if it's a manufactured home? ›

It is also important to remember that manufactured homes are built under the HUD code. Therefore there should be a HUD tag attached to the outside of each piece of your home. You should also be able to locate a HUD label that has a compliance certificate somewhere in the kitchen or master bedroom.

Why do people not like modular homes? ›

It may be difficult to make changes once construction has started because so much of the home is pre-built. Bias exists. Some people confuse modular homes with manufactured or mobile homes, which don't have a foundation, and may therefore avoid them.

What is the downside to a manufactured home? ›

A disadvantage of buying a mobile home is that its value will depreciate quickly. Like a new car, once a mobile home leaves the factory, it quickly drops in value. Stick-built homes, on the other hand, normally appreciate in value over time because the stick-built home owner almost always owns the underlying land.

What is the life expectancy of a modular home? ›

The short answer is that modular homes can last just as long as traditional site-built homes, if not longer. In fact, many modular homes come with warranties of up to 50 years. The key to a modular home's longevity lies in its construction process and the materials used.

Are manufactured homes well insulated? ›

Today's homes are the best-insulated homes built, and that includes both modular and manufactured homes. Before we get into detail about insulation, you will need to know about the term R-value. R-value measures an insulating material's resistance to conductive heat flow.

Why do mobile homes have a bad reputation? ›

The term “manufactured housing” often comes with negative connotations: poorly maintained homes, sub-par quality, and aesthetically unappealing. This unfavorable stereotyping belies the fact that today's HUD Code manufactured homes are not unlike the ugly duckling flourishing to a refined adulthood.

How much do most modular homes cost? ›

Custom Design Prefabricated Home Prices. Custom modular home prices range from $100 to $250 per square foot. Prices are $200,000 to $500,000 when including all site-work, installation, and finishing. Most modular builders will customize their existing designs to change the finishes, floor plan, or the home's size.

Are modular homes as good as stick built? ›

“People assume that because it shows up in pieces, the quality is less than” a site-built home, Braun says, “and that's actually completely the opposite. “Most of my colleagues would agree that modular homes are actually a superior product because you're getting an engineered house,” Braun adds.

What is the meaning of modular home? ›

Modular homes are houses built off-site, usually in an indoor, quality-controlled setting. Modular homes are completed in sections called modules, according to specific plans. These sections are then transported to the site where they are assembled by builders and installed into the foundations.

Are modular homes safe in a tornado? ›

These structures are made inside factories, so the materials that go into your home reside in a controlled environment with little moisture. Modular homes are built to be safe in case of a tornado or storm, and inspectors check surfaces for structural soundness before shipping.

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