Modular Vs Manufactured

Modular Vs Manufactured

Do you ever confuse the two?  I did all the time and in fact a lot of agents and sellers don't really know the difference.  Knowing the difference between the two is important because financing them can be difficult.

You generally see more modular/manufactured homes on acreage because of the difficulty involved in transporting building materials to isolated areas.  One thing you should be aware of in relation to financing on acreage (as a side note) is that the land (with many loans) cannot be most of the value of the purchase.  So, for instance, you may have a hard time financing a 600 square foot home on 50 acres.  

So what is the difference?

A modular homes is "manufactured" in a factory in sections.  The "manufactured" in factories description is what often confuses people.  It has to conform to local, state and national building codes just like a stick built home so this is the better option.  They are usually fine as far as financing goes.  They also must be approved by inspectors and they receive a CO (certificate of occupancy) just like a stick built home.  Some people believe the construction is actually better than stick built and have cited a FEMA study that showed that modular homes withstood Hurrican Andrew better than stick built homes.  

A manufactured home is better known as a mobile home, or a trailer.  Essentially these are homes on wheels.  They even transfer via title, like a car, rather than via deed.  If you want to purchase a manufactured home, you generally have to do 20% down and go through a local bank.  Often they are located in a mobile home park where you pay lot rent and don't own the land.  Occasionally they are able to be financed, if they have a HUD tag (meaning that they adhere to HUDs building code but not necessarily all local building code), are built after a certain year and have had their title "purged".  Purging a title means that you're changing the property from movable property into something that is affixed to the land and transfers via deed with the land.  The home needs to also be put on a foundation.  

One good way to tell if a property is manufactured or modular, is to look in the crawl space.  Manufactured homes are on a steel chassis that never gets removed.  If you see steel beams running under the home, it's manufactured.  Manufactured homes are never more than one story (although there are one story modular's so that's not a great way to tell, but if it's 2 stories you know it's a modular home).  

I would stay away from manufactured homes.  They don't hold their value and are difficult to finance.  Even if you find one that meets all the criteria for hard as it was for someone to prove all that means that when you go to sell it, you're going to have a hard time too.  Modular's are a good option on acreage property and tend to hold their value and appreciate similarly to stick built homes.  

Sarah Rowan Headshot
Phone: 970-397-5774
Dated: June 9th 2014
Views: 403
About Sarah: Sarah was a licensed real estate agent for 10 years before transitioning into the mortgage industry ...

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