Manufactured vs Modular Homes: What is the Difference?
There has always been a great deal of confusion regarding what constitutes a manufactured home and what constitutes a modular home. A large portion stems from incorrect word usage, as many people use these terms interchangeably. However, these two types of homes are largely different and do not reference the same type of home. The other issue lies in the fact that modular homes are technically manufactured but do not fall under that classification. Manufactured probably isn’t the best naming device since both types are technically factory made. At the end of the day, knowing the difference is important as it could have a rather large impact on your home mortgage.
Manufactured, Modular, Mobile… oh my!
As if there was not enough confusion between manufactured and modular homes, there are also mobile homes. In all honesty, all of these types of homes could possibly be referred to as mobile, but here’s the real difference; by definition, mobile homes are factory built and made before 1976 when the Department of Housing and Urban Development (HUD) code standards for those homes was instituted. After the codes, they came known as manufactured. Manufactured homes are essentially trailers (single, double, and triple wide) that are standardized by HUD. In contrast, although they are factory built, modular homes are actually difficult to distinguish from traditional stick-built onsite homes.
According to the International Association of Certified Home Inspectors (InterNACHI), there is a list of items that help distinguish between a Manufactured home and a Modular home:
Manufactured Homes Checklist
- conform only to HUD code. Some homes contain a red tag that confirms that the unit was manufactured in compliance with this code;
- are inspected, but do not have to be structurally approved by an inspector;
- are manufactured in sections at factories;
- are never more than one story;
- do not have a permanent or conventional foundation;
- tend to lose value over time because they are difficult to expand or improve;
- are transported to the site on their own wheels;
- are transported on steel chassis that are never removed;
- are often placed on property owned by others, such as public land that is leased by the homeowner;
- are treated as a separate lending category from modular and on-site built homes; and
- are rarely custom-designed. The buyer can choose from homes that have already been built and receive it within days.
Modular Homes Checklist
- must conform to the same local, state and regional building codes as homes built on-site;
- are treated the same by banks as homes built on-site. They are easily refinanced, for example;
- follow the same market trends as site-built houses;
- must be structurally approved by inspectors;
- can be of any size, although the block sections from which they are assembled are uniformly sized;
- are often more basic than homes built on-site, but they tend to be sturdier;
- are highly customizable. Design is usually decided by the buyer before construction has begun; and
- generally, take eight to 14 weeks to construct. Differing from a site-built home, the foundation can be dug at the same time that the house is being constructed.
Are you interested in purchasing a manufactured or modular home? Riverbank Finance can help you finance that! Learn more about Manufactured Home Financing here.
Have a specific scenario you’d like to run past us? Give us a call to speak with one of our licensed loan officers. We would love to recommend the best loan program for you and your situation.
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