Modern Modular Home With Landscaping

Modular Versus Manufactured Homes

Carey Chesney4-minute read

April 08, 2021


You’ve probably heard many names for homes that differ from traditional site-built houses: “trailer,” “mobile home,” “manufactured home” and “modular home” may come to mind. You may wonder how each of these differ from one another. Here we’ll differentiate these types of houses so you can make an informed decision when considering your next move.

The biggest difference between modular and manufactured homes is how permanent they are. Simply put, manufactured homes can be moved from one site to another, while modular homes rest on a permanent concrete foundation.

As you may have guessed, there are advantages and disadvantages to both. For example, because a modular home is a permanent structure, it can be financed with a traditional mortgage, which is a clear benefit over manufactured homes. However, manufactured homes can travel from place to place, making them more flexible if you like the option of moving your home without needing to look for a new house.

What Is A Modular Home?

Modular homes are built in a factory and then moved in parts on a truck to the site where they are assembled on a permanent foundation according to a previously agreed-upon plan. Because modular homes are built in sections, you can customize them to fit size requirements you may have.

What Is A Manufactured Home?

Like modular homes, manufactured homes are built in a factory instead of on-site like traditional houses. The difference is that once the manufactured home is completed, it’s mounted on a steel chassis and wheels at the factory and moved to the site, where it’s strapped to cinder blocks.

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Differences 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 when deciding between the two.

If you had your heart set on a site-built home but want to take a more cost-conscious and efficient approach, a modular home might be the way to go. After all, once they’re assembled, modular homes are essentially the same as site-built homes, sitting on a permanent foundation.

If you have a wanderer’s heart and like the idea of being able to pack up and move to a new location whenever the desire hits you, then a manufactured home might be the right route. It’s all about preference and what you feel is best for your or your family’s situation. Beyond the obvious differences in mobility and permanence, there are more facets to explore when deciding between a modular or manufactured home.

Let’s look at some other important differences in these housing types.

Customizing Modular And Manufactured Homes

Both modular and manufactured homes are customizable, but to different degrees.

Modular homes are generally completely customizable, even though the various sections are all usually the same size. You can change where the sections connect and what direction they face to create an unlimited number of layouts. In addition, the number of sections you can use has no limit, so you can make the house as big as you want (depending, of course, on how big the foundation is).

Manufactured homes are customizable as well, but less so. This is due to the constraints of the building specifications used when they’re assembled. For obvious reasons, there are limits to the size they can be. After all, the whole point of a manufactured home is to make sure it can still travel down the road when you want it to. 

Financing Modular And Manufactured Homes

Mortgages are loans secured by real estate, or land, and the permanent fixtures built on it. Remember that word “permanent” we emphasized earlier when it comes to distinguishing between modular and manufactured homes? It comes into play in a big way regarding mortgages.

Once a modular home is assembled, it’s treated exactly like a site-built home so it can be financed through a regular mortgage. When it comes to a manufactured home, well, not so much. The difference comes down to the legal definitions of real property and personal property.

Essentially, personal property is movable property and real property is immovable property – land and anything attached to the land. Many lenders, including Rocket Mortgage®, do not finance the purchase of manufactured homes because the land on which they sit is generally rented, and the home itself can be moved. Thus, it is not real property.

While there are some lenders that may finance manufactured homes, they may charge high interest rates because the risk they take on is higher. Do your homework. There are certain circumstances where FHA or VA loans may be available for manufactured homes. Step one when it comes to financing: Talk to a Home Loan Expert.

Compliance With Local Zoning Laws

Modular homes are subject to the same zoning laws as site-built homes, another characteristic that makes them more like a traditional home than manufactured ones.

Manufactured homes, on the other hand, don’t need to comply with local building codes. Instead, they’re constructed according to a code administered by the U.S. Department of Housing and Urban Development (HUD). When it comes to zoning, this means that local ordinances on land use can restrict where manufactured homes can be placed.

Appreciation Of Modular Vs. Manufactured Homes

You may be recognizing a theme that modular homes follow many of the same rules and patterns of traditional site-built homes. No change here, as when it comes to appreciation, modular homes are like site-built homes.

Manufactured homes may or may not appreciate the same way, depending on geography.

Modular Vs. Manufactured: Which Is Right For You?

As you can see, the choice between buying a manufactured home and a modular home leaves you with much to consider. While modular homes are almost the exact same as site-built homes, manufactured homes are very different from both. This applies to their construction, mobility, financing, and even the laws that regulate where they can be located.

If you’re buying a house, make sure you do your homework to determine whether a modular home, manufactured home or site-built home is best for you.

Already done with your homework? Start the mortgage application process.

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Carey Chesney

Carey Chesney brings a wealth of residential and commercial real estate experience to readers as a Realtor® and as a former Marketing Executive in the fields of Health Care, Finance and Wellness.