Red manufactured home.

Modular Versus Manufactured: Which Home Is Right For You?

Carey Chesney4-minute read

February 15, 2021


You’ve probably heard many different ways of referring to nontraditional homes that differ from traditional site-built houses. Terms like trailers, mobile homes, manufactured homes and modular homes may come to mind but still leave you wondering how each of these differ from one another. Here we’ll take a closer look at how to differentiate among these types of houses so you can make an informed decision when considering your next move.

One way to think about the difference between modular and manufactured homes is to focus on 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 an entirely 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 any size requirements you may have.

What Is A Manufactured Home?

Like modular homes, manufactured homes are also built in a factory instead of on-site like a traditional house. 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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What Are The Main Differences Between A Modular And A Manufactured Home?

So, 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 and like the feeling of permanence that comes with it but want to take a more cost-conscious 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 and not on wheels.

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/your family’s unique situation. Beyond the obvious differences in mobility and permanence, there are many more facets to explore when deciding between a modular or manufactured home. Let’s take a look at some frequently asked questions.

FAQs: Modular Vs. Manufactured Homes

Can I Customize Either Modular Or Manufactured Homes?

Yes, but to varying 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 a pretty unlimited number of layouts. In addition, the amount 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 in a much more limited way given 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. 

Can I Finance Either Modular Or 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 will usually charge very high interest rates because the risk they take on is higher when lending on personal property as opposed to real property. Do your homework though, because there are certain circumstances where FHA or VA loans may be available for manufactured homes. Step one when it comes to financing: Talk to your lender.

Do Modular And Manufactured Homes Both Have To Comply 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 are constructed according to a code administered by the U.S. Department of Housing and Urban Development (HUD Code). 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, they’re like site-built homes. Conversely, manufactured homes may or may not appreciate the same way, depending on geography.

Summary: Different Types Of Homes Give Home Buyers Choices

So, 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. Given all that, don’t jump into a decision before you do your homework and be sure to learn more about home buying of all types before you make your move.

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Carey Chesney

Carey Chesney brings a wealth of real estate sales and marketing experience to his buyers and sellers as they navigate highly competitive markets. Carey and his wife Ilze work together as Realtors® in Michigan.