Manufactured or Modular Homes
Manufactured or modular homes are produced in sections — that may even include carpeting — and then shipped to the building site, where the parts are assembled to form a house. Some houses are very plush and are virtually indistinguishable from site-built (or in-the-ground) homes. Others are quite large, but simpler in style.
Manufactured homes used to be called mobile homes, but now, because they are permanent residences, the term is no longer used. That fact was recognized by Congress in 1980, when it changed the word “mobile” to “manufactured” in all of its federal laws and publications. However, you might still see the word mobile in some older parks, and it is used by some retailers who feel buyers continue to relate to the word. Manufactured homes must comply with federal standards set by HUD.
Modular houses are also constructed in a factory and then shipped to the building site to be assembled. However, modular homes must adhere to state and local standards rather than federal ones.
Homebuyers (and developers) choose these homes for one simple reason: They are usually less costly than site-built homes of similar size. An average three-bedroom, two-bath house with amenities can cost under $50,000, including setup or installation (but not including the cost of land where the house will be located). According to
You have three options for these homes.
You can have one assembled on your lot in the area you have in mind. Be careful. Some communities do not allow manufactured homes that meet federal, rather than local, standards.
You can purchase an already-built manufactured or modular home by itself or as part of a new- or resale-home community.
You can buy a house from a dealer and have it put in a planned community that you choose.
A fourth, and less common, option does exist. You can buy a manufactured home and place it in a rental community, where you lease the land beneath the house. You should look into this move very carefully before committing, and ask a number of questions of the owner or manager of the community. For example, will you have a written lease for the land? For how long? How will the financing of your home work? How much are utility-hookup charges in that community? Can you afford that expense? Who handles maintenance there? What if the owner of the community wants to sell his land? Will you have to move your home?
If you want to purchase a home that is already built or, more correctly, already assembled, shop at existing or brand-new communities, just as you would for a site-built house. Ask at the sales office about any developments that interest you and about whether a particular community features site-built or factory-built construction style.
If you own land and want to have a manufactured or modular home put on your lot, you can contact one of the more than 100 companies nationwide that build these houses; they are represented by thousands of retailers around the country. The company you call will be able to put you in touch with the retailer nearest you. Some manufacturers have their own sales centers in certain parts of the country, too, where you can also buy a house.
If a manufactured or modular home is permanently set on a foundation and is sold with land or erected on land owned by the new homeowner, it can usually be financed with a real-estate mortgage. Mortgages can be secured from the same variety of lenders that offer financing for site-built homes, including FHA and VA sources. The key in this case is that the home and land are considered a single real-estate entity under state law.
Manufactured homes on rented land and houses that are considered personal property rather than real estate (such as the old-style mobile homes) are treated differently than other houses and are not financed as real estate — that is, with a mortgage.
Manufactured-home retailers can arrange financing for these purchases, or you can shop around for better terms from banks and other lending institutions in your area.