Manufactured Homes: Defined And Explained

If you’re looking to make an affordable home purchase and are considering your housing options, manufactured homes might show up in your research. But how does a manufactured home differ from other types of homes, and is a manufactured home the right choice for you?

Typically, manufactured housing offers a relatively inexpensive alternative to more traditional real estate options. Understanding the common characteristics of manufactured homes can help you reach a clear conclusion on the right purchase as you navigate the home buying experience.

What Is A Manufactured Home?

Manufactured homes are, as their name suggests, “manufactured” in factories piece by piece. This happens in accordance with building codes set by the U.S. Department of Housing and Urban Development (HUD). These homes are then transported to the home site and installed on either a temporary or permanent foundation.

Modern manufactured homes come in one of three general floor plans:

• Single-wide: This is a home built in one long section.
• Double-wide: A model that’s popular with first-time home buyers, a double-wide features two sections joined together to make a larger home.
• Triple-wide: The least common of the three manufactured home models, a triple-wide has three sections joined together to create a larger, more spacious home.

Manufactured Housing Vs. Other Prefab Homes

While prefabricated housing comes in multiple forms, subtle differences between the types of houses matter.

Mobile Homes And Trailer Homes

While the terms “mobile home” and “manufactured home” are often used interchangeably in the home buying process, the former term has technically been obsolete since 1976, when the National Manufactured Housing Construction and Safety Standards Act enforced by HUD went into effect. The same is true of “trailer.” While the term is still sometimes used colloquially, it no longer accurately represents the concept of a manufactured home.

A “mobile home” refers to any manufactured home made before June 15, 1976. Manufactured homes these days feature more solid structures and greater amenities than their predecessors, making the distinction between them important.

If your home has been converted to real property – meaning it’s been permanently affixed to land – Rocket Mortgage^® can help you finance your home with a conventional loan, an FHA loan or a VA loan.

Modular Homes

Modular homes are also built in factories – or, more accurately, their sections are built there. But, unlike manufactured homes, modular homes are:

• Delivered in sections and built on-site, almost always on a permanent foundation
• Generally governed by local state building codes rather than the HUD Code
• Subject to the same zoning laws as site-built homes
• Known for entirely customizable floor plans
• Automatically considered real property once completed

If you’re looking at either of these housing options, be sure to fully dig into the differences between modular and manufactured homes. Rocket Mortgage offers financing for modular homes.

Kit Homes

Kit homes are a “some-assembly-required” housing option. Pieces of the house arrive at your property in a kit and must then be assembled on-site by the homeowner or a contractor. In contrast, a manufactured home typically arrives completed.

Rocket Mortgage doesn’t offer financing for kit homes.

How Much Do Manufactured Homes Cost?

According to the U.S. Census Bureau’s Manufactured Housing Survey, the average sales price for a new manufactured house as of 2023 was $124,300.

Manufactured homes are often significantly less expensive than building a house because:

• Manufacturers purchase building materials in bulk and at lower costs
• Indoor factory construction allows for more controlled costs and an efficient construction schedule
• Construction time isn’t hindered by weather conditions or other delays

As with more traditional housing, several factors contribute to the total cost of a manufactured home. In addition to the unit price, the items below influence the overall cost of the home.

Square Footage

The average cost per square foot of a manufactured home is $40 – $80. That’s significantly lower than the cost of most site-built homes.

Land

You can either lease a spot in a manufactured home community or purchase a piece of land to install your house on. The price of land can vary significantly based on location, but rural land is generally more affordable than land in urban or suburban areas.

A land loan can be used to purchase the land for your home.

Foundation

If the land you’ve built upon is yours to own, you may want to invest in a permanent foundation, as opposed to a temporary one. This can include having a basement, crawl space or other additions.

Property Taxes

Many states regard manufactured homes as property and charge a property tax if a manufactured home is permanently affixed to the property it sits on. Other states may charge a vehicle or licensing tax if a manufactured home isn’t affixed to a permanent foundation.

Delivery And Installation

Delivery and assembly fees will depend on the manufacturer from which you buy your home. Delivery may be included in the price if the home’s location is within a certain radius of the facility – otherwise, an additional fee may apply.

Utilities

As with any type of home, configuring utilities such as water, plumbing, heat, electricity, internet and cable add to the overall cost of a manufactured home. Many manufacturers include a home warranty that can cover issues with certain utilities and appliances.

Pros And Cons Of A Manufactured House

Explore the pros and cons of a manufactured home to get a sense of whether this is the right housing option for you.

Advantages Of Manufactured Housing

The benefits of manufactured homes are as follows:

• Manufactured homes are typically more affordable than site-built houses.
• It’s possible to qualify for conventional financing at traditional mortgage rates if the home is converted to real property by affixing it to the land.
• The homes are reasonably customizable with various upgrades, features and amenities. Homeowners can also make further improvements as with any type of home.
• Manufactured homes are known to be energy-efficient, durable and built to meet the HUD Code.

Disadvantages Of Manufactured Housing

Here are the downsides of manufactured homes:

• Loans for manufactured housing not attached to the land typically include a higher interest rate than traditional mortgages.
• Zoning restrictions in cities may limit your location choices to more rural areas.

How To Buy A Manufactured Home

Manufactured homes are typically sold through retailers.

Manufactured housing models can be viewed on a sales lot, where you can choose customized features and apply for a home loan. Many retailers will even arrange the home’s delivery and installation.

The process of buying a manufactured home generally starts with choosing a lot. You can either rent or buy land to hold your new home. Depending on where you live, manufactured home communities may also be an option. But you’ll need to consider your local zoning laws to see what restrictions apply for manufactured homes. 

With a place to put your new home, it’s time to pick a loan option.

• Government-backed mortgages: HUD-approved loans such as Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans are available to those who qualify. In the case of VA loans, only buyers who’ve served in the military and surviving spouses of military personnel are potentially eligible.
• Conventional loans: Freddie Mac and Fannie Mae both guarantee conventional mortgages designed specifically for manufactured homes, but these homes must be permanently affixed to the property on which they sit.
• Chattel loans: Chattel loans are secured loans that put up your movable property, or “chattel,” as collateral. A loan repayment term for a chattel loan is typically 10 – 20 years.
• Dealer financing: In some cases, the dealership will offer some financing opportunities. While dealer financing tends to be more expensive than a traditional mortgage, it could be a good option if you’re struggling to get a loan.

Rocket Mortgage offers financing on manufactured homes that were built on or after June 15, 1976, are permanently affixed to the land (real property) and have a HUD tag.

The Bottom Line: A Manufactured Home Offers Perks Worth A Look

If affordability and speedy construction are what you desire most in a house, a manufactured home might be the abode for you. If you’re still on the fence because of financing and zoning issues, there are other affordable home options to choose from – such as modular homes and kit homes.

Ultimately, where you feel the most at home and what’s best for your budget should be the main factors in your home buying decision.

Begin the home loan approval process today with Rocket Mortgage. You can also give us a call at (888) 452-8179.