A Homebuyers Guide to Modular vs. Manufactured Homes

When buying a house, one of the first decisions is choosing what type of property best suits your needs. Some buyers opt for a modular or manufactured home, which are known for their flexibility and affordability. Modular and manufactured homes are considered types of prefabricated homes, more commonly known as prefab homes, which means they are primarily built in a factory instead of on-site. 

Both types of homes share some common characteristics, such as the construction process and installation, but there’s also some major differences between the two. This guide will provide an overview of the main differences between a modular versus manufactured home so you can decide which option is best for you.  

What is a Modular Home?

A modular home is a housing unit that is built in an off-site, indoor, quality-controlled facility and constructed in sections, which are called modules. The home is then shipped to the homebuyer’s property in multiple pieces where the modules are then assembled and installed. 

What is a Manufactured Home? 

A manufactured home, sometimes referred to as a mobile home, is a property that is manufactured in a factory and fully assembled before it ships to the new location. Manufactured homes generally have three main floor plans, depending on the needs and space requirements of the buyer.

Modular vs. Manufactured Homes

Though similar in nature, there are some key differences between a modular vs. manufactured home. 

Building Codes 

Modular homes are held to the same local, state, and regional building codes that are utilized for the building of traditional, on-site homes. The codes and standards required for the construction of modular homes can differ depending where the modular home is built. Counties, cities, or townships often have different standards that home builders must abide by.

Meanwhile, manufactured homes are held to a federal code. This federal code is defined by the Department of Housing and Urban Development, more commonly referred to as HUD. These two types of properties were distinguished from one another in 1974, thanks to the National Mobile Home Construction and Safety Standards HUD code.

Construction

While both modular and manufactured homes are prefabricated, they have differences when it comes to construction. 

Manufactured homes are built entirely in a factory and then shipped to their new location fully assembled. Then, they are installed on a fixed, steel chassis instead of a permanent foundation. This makes it easy to relocate to a new home site.

Meanwhile, a modular home is fully constructed off-site but assembled on-site. The builder assembles the home in sections, similar to building blocks, on top of a permanent foundation. Upon completion, it is considered “real property,” which refers to a fixed property that can’t be picked up and moved again.

Sizes

Both types of homes range from between 10 to 16 feet wide, although this can slightly vary from state to state.

Manufactured homes generally come in three sizes — a single-wide, double-wide, and triple- or multi-wide. The square footage for these types of homes can range from 1,000 square feet to over 2,000 square feet.

A modular home, however, is more customizable when it comes to sizing with the most common modular homes sizes spanning from 600 to 3,000 square feet.

Type of Foundation 

Another difference between these two types of homes is the type of foundation used for each build. 

HUD construction code states that manufactured homes do not require a permanent foundation. 

Modular homes have a permanent foundation, and can even have basements and a crawl space. Once they are placed upon their foundation, a modular home becomes increasingly more difficult to move — similar to a traditionally built single-family home — while a manufactured home can be moved with more ease.

Financing Options

Financing options available for buyers are another key difference between a modular vs. manufactured home. A modular home can be financed like a traditional home where the homebuyer puts down a down payment and takes out a mortgage loan. Meanwhile, some lenders are hesitant or unable to offer mortgages for manufactured homes.

Pros and Cons of Modular Homes

If a modular home is what you’re drawn to, here are some of the benefits and disadvantages that you can expect. 

Pros

• Energy efficiency: Modular homes are engineered to increase energy efficiency. This can help reduce the amount that homeowners will pay for electricity, reducing monthly expenses.
• More mortgage options: A perk of purchasing a modular home versus a manufactured home is that there are more mortgage options available. This includes a conventional mortgage, FHA loan, VA loan, or USDA loan.

Cons

• Cost of foundation: Modular homes require a foundation to be poured, which can be a costly expense that can range from $5,000 to $40,000, depending on the size of the home. It’s helpful to keep this added expense in mind when considering your budget. 
• Lower resale value: When it comes to the real estate market, modular homes typically have a lower resale value than site-built homes since the demand for modular homes is not as high as traditional single-family homes.

Pros and Cons of Manufactured Homes

Read on to learn about some of the benefits and disadvantages of manufactured homes. 

Pros

• Affordability: Compared to a modular home and site-built, traditional single family homes, manufactured homes are typically less expensive. This is largely in part due to the production process and materials used. 
• Short construction time: Manufactured homes often have a shorter completion time, thanks to the streamlined building process. In fact, the process from placing an order to moving in can take as little as 2 to 4 months, as compared to about 9 months for a traditional contractor-built home.

Cons 

• Less customization options: While site-built homes can offer flexibility to homeowners, manufactured homes do not grant this same level of leniency when it comes to customization or floorplans. Buyers might find that they have a limited selection of colors and materials to choose from when it comes to home design.
• Less mortgage loan options: Most lenders are unlikely to offer mortgages for manufactured homes since they are not considered real property. Additionally, many manufactured home purchases don’t encompass the land the house sits on, which can be less secure for banks to lend against. 

How Do I Know Which Option Is Right for Me?

If you’re wondering whether a modular or manufactured home is best for you, here are some important factors to consider. 

Consider Your Finances

Sit down and carefully consider your budget before making a decision so you can know how you plan to pay for your home. The price of a manufactured vs. modular home can depend on a variety of factors, such as the size, floorplan, materials utilized during the construction, and more. Don’t forget about extra expenses you’ll be responsible for paying as the homeowner, including:

• Preparing the site of the home
• The cost for pouring foundation, transportation, and installation
• Property taxes
• Homeowners insurance

Consider Your Timeframe

In addition to thinking through your finances, be sure to look at your timeline and how soon you would like to move. As compared to a site-built home, manufactured or modular homes are a great option for quick moves.

Homebuying With Aalto 

Both manufactured and modular homes have their upsides and downsides. Whether you buy a prefab home or are interested in other types of property, the best decision for you will depend on your unique situation. When it comes to pursuing homeownership, Aalto is there to help you navigate the real estate market. We connect buyers and sellers directly and ensure that both parties have a smooth and seamless transaction.

When you work with Aalto, you’ll have access to our real estate experts who recommend questions to ask when buying a house and provide assistance. Sign up on Aalto today and start the journey to find your dream home.