Prefabricated container houses in building under construction

Panelized Homes: What Are Panelized Home Kits And How Are They Built?

April 20, 2024 4-minute read

Author: Melissa Brock

Share:

When you want to build a new home, you have many options at your fingertips. But if you don't think a stick-built home fits your needs, have you considered panelized homes, also called panelized home kits? 

What’s A Panelized Home?

Panelized kit homes, or panelized building systems, are built in climate-controlled indoor factories. Panelized homes are built in less time than stick-built homes and limit the home's exposure to the elements before it’s completely built.

In these factories, wall sections, roof and floor systems join to create panels. These panels are put on a truck and delivered to the job site to become finished, just like a stick-built home.

Panelized homes must follow state and federal building code requirements and be inspected like on-site-built homes. However, the factory offers more quality control you can't achieve when building a home from the ground up.

Panelized Homes Vs. Modular Homes Vs. Manufactured Homes

What's the difference between panelized homes and other prefab houses (homes built in a factory and assembled on site)? Let's take a look.

Modular homes are built almost entirely in a factory, including walls, floors, ceilings, wiring and interior fixtures. These homes achieve about 80% – 90% completion in the factory, then travel by truck to the building site on a permanent foundation. They go by the International Residential Code (IRC), based on state and local building regulations, unlike manufactured homes.

Manufactured homes adhere to the U.S. Department of Housing and Urban Development (HUD Code). They were commonly called mobile homes in the past. However, since 1976, new regulations have established them as manufactured homes, so the industry no longer uses the term "mobile home." These types of homes are constructed in climate-controlled building facilities like modular and panelized homes. They’re built within federal regulations and usually come in single, double and triple sections. Once it’s built on a steel chassis, the home is transported in one piece to a home site. Unlike modular and panelized homes, manufactured homes can go anywhere.

See What You Qualify For

0%

Type of Loan

Home Description

Property Use

Your Credit Profile

When do you plan to purchase your home?

Do you have a second mortgage?

Are you a first time homebuyer?

@
Your email address () will be your Username.
Contains 1 Uppercase Letter
Contains 1 Lowercase Letter
Contains 1 Number
At Least 8 Characters Long
Go Back

Consent:

By submitting your contact information you agree to our Terms of Use and our Privacy Policy, which includes using arbitration to resolve claims related to the Telephone Consumer Protection Act.!

NMLS #3030
Rocket Mortgage Logo

Congratulations! Based on the information you have provided, you are eligible to continue your home loan process online with Rocket Mortgage.

If a sign-in page does not automatically pop up in a new tab, click here

Rocket Mortgage Logo

The Building Process For Panelized Home Kits

Here is the building process for panel home kits:

  • Choose and customize layout: Design your custom home and the details of your floor plan to fit your preferences and budget. Your home package should fit your lifestyle and your family's needs.
  • Manufacturing begins: Once the design finalizes, the manufacturing process begins. Wall panels and roof trusses get built, and components are wrapped, labeled and stacked for shipping.
  • Delivery: These components are loaded on trucks and shipped to the job site. They will arrive put together, so it will take less time to assemble than a stick-built home.
  • On-site completion: Home-building then gets underway, and the materials go up like a stick-built home with the appropriate crews to put the house together.

Cost Of Panelized Home Kits

According to BuildGreenNH, panelized home kit typically runs between $40 to $60 per square foot, but those aren't the end costs. You might get a construction loan to complete construction, a short-term loan that covers the cost of home building. Once the home build is complete, you must get a mortgage to finance the rest of the home.

In comparison, modular home costs range from $180,000 to $360,000, or between $80 to $160 per square foot. The final cost ultimately depends on square footage, installation location, materials, floor plan and additional customizations.

Benefits Of Panelized Homes

Panelized homes can be popular among first-time home buyers and experienced buyers alike. That’s due, in part, to the following benefits.

Flexible Designs

Panelized homes offer the option of flexible home design and floor plans for panelized homes. For example, you can choose from various building materials, cosmetic opportunities, floor plan flexibility and architectural variety. The sky's the limit to what you want to work into your plan due to programs that allow designers to help you create your home.

Energy Efficient

If you want to build an energy-efficient home, panelized homes allow you to do so. Made with green building certifications, including the ICC 700 National Green Building Standard, there is less waste, and clean-up is more manageable. Furthermore, panelized homes also contribute to energy efficiency and lower heating and cooling costs because the house components are safer and drier when built indoors. This can help protect against warping, mold, mildew and other issues that plague stick-built homes.

Quality Construction Process

The construction process for panelized homes can be more controlled. Because the structure and materials are built in a factory and employ the best technology, there’s typically less construction waste and more exact measurements and specifications that meet the local building code.   

Cost Savings

Panelized home kits can be one of the cheapest ways to build a house in comparison to homes built on-site. Since they come together in a factory, they help control construction costs, with fewer delays and added expenses.

Convenience

The convenience and benefits of working with one person or company to design, engineer and build a panelized home are undeniable. You can get panels engineered and created in days, whereas a stick-built home might face weather, delivery and subcontractor delays.

Ready to talk details?

Connect with local custom home builders on HomeAdvisor.

Drawbacks Of Panelized Homes

The drawbacks of panelized homes include the following:

  • May be more expensive: You may spend more on panelized homes compared to modular homes. The more "options" you add, the more it will cost. The materials used will also influence the cost of the home. Choosing higher-quality materials can also affect the price.
  • Transportation fees: Transportation companies may charge you a lot of money to transport the pieces of your home to the construction site. Note that you still must buy the land for your home, utility hook ups and more.
  • Assembly issues: You may experience issues with panel damage during either delivery or assembly. For example, the assembly process could reveal joint problems and leaks.

The Bottom Line

Choosing the right building system is one of the most important aspects of home construction. Panelized homes take less time to build and limit parts of the home’s exposure to the elements than stick-built homes. Considering the pros and cons of panelized and other prefab homes, such as modular and manufactured homes, is a good idea.

If you're ready to build a manufactured home or consider a construction loan, you can start online with Rocket Mortgage®.

Get approved to buy a home.

Rocket Mortgage® lets you get to house hunting sooner.

Melissa Brock headshot.

Melissa Brock

Melissa Brock is a freelance writer and editor who writes about higher education, trading, investing, personal finance, cryptocurrency, mortgages and insurance. Melissa also writes SEO-driven blog copy for independent educational consultants and runs her website, College Money Tips, to help families navigate the college journey. She spent 12 years in the admission office at her alma mater.