Manufactured, Mobile and Traditional Homes
Posted by Kathy King /
When considering a manufactured or modular home, consider the differences between the two and how lending is affected.
By definition, Manufactured homes are built as dwelling units of at least 320 square feet in size with a permanent chassis to assure the initial and continued transportability of the home. The requirement to have a wheeled chassis permanently attached differentiates “manufactured housing” from other types of prefabricated homes, such as modular homes.
Modular buildings and modular homes are sectional prefabricated buildings, or houses, that consist of multiple sections called modules. The modules are six sided boxes constructed in a remote facility, then delivered to their intended site of use. Using a crane, the modules are set onto the building’s foundation and joined together to make a single building. The modules can be placed side-by-side, end-to-end, or stacked, allowing a wide variety of configurations and styles in the building layout.
Modular buildings, also called prefabricated buildings, differ from mobile homes, which are also called manufactured homes, in two ways. First, modular homes do not have axles or a frame, meaning that they are typically transported to their site by means of flat-bed trucks. Secondly, modular buildings must conform to all local building codes for their proposed use, while mobile homes, made in the United States, are required to conform to federal codes governed by HUD (U.S. Department of Housing and Urban Development). There are some residential modular buildings that are built on a steel frame (referred to as on-frame modular) that do meet local building codes and are considered modular homes, rather than mobile homes.
So what does this mean? Basically both homes comply with building codes and can be affordable alternatives to traditional stick built construction. When it comes to lending, modular homes are treated exactly the same as stick built homes while getting a loan on a manufactured home is much more difficult.
The first challenge with a manufactured home loan is that the home must have been built after June 15, 1976. The date of manufacture can be found on the homes HUD Data Plate that is commonly found in the water heater closet. Next, the home must be at least 12 feet wide and 600 square feet in size. It must be attached to a permanent foundation and be located in the same place it was originally built. In other words, the home cannot have been moved from one location to another. The home must have a 433A recorded. A 433A is a certification from the building department that the home is affixed to a permanent foundation. If the home meets all of these requirements, a loan can be made on the property as long as the buyer meets the lenders wage and income requirements.
Suppose a buyer wanted to purchase a new manufactured home and move it onto a lot they own. This is possible. The buyer would need to be pre-approved before they enter into a contract with the manufactured home builder. Then, “interim financing” or a construction loan would be required to pay for the home and any “on site” improvements such as pad preparation, utility hook-ups, permits, and septic etc. Many builders provide this interim financing. In this case, the buyer would need to have a minimum of 5% of the cost of the loan as a down payment.
Lending is also available if a buyer wanted to purchase both a new manufactured home and lot to place it on. In this case the land is typically purchased first then the manufactured home is ordered and financed as described above.
Manufactured homes are not exempt from the County of San Diego’s flood control requirements. Make sure you have fully investigated their requirements before you enter into a contract with anyone.
Manufactured homes are typically less expensive to build when compared to traditional building methods. But because of their design, lending is much more challenging. When considering a manufactured home, you must consider how difficult it will be to sell the home. Typically manufactured homes do not appreciate in value as much as stick or modular construction homes. Additionally they are very difficult to improve or expand in size, and they are not as energy efficient as other homes.
Comparison of Building Types
||Homes built in a factory following the Federal Government HUD Codes not the local building codes. The HUD Code requires that all mobile home be manufactured on a non-removable steel chassis (steel building platform). Mobile homes are subject to local zoning regulations
||Modular homes are treated as traditional homes and must follow the local building codes and regulations. Also it must follow local zoning regulations.
||Traditional homes are subject to the loal building codes and to the local zoning regulations.
||There is very limited customization. Normally you purchase a mobile after it has been built. The number of manufacturers allowing you to design and customize your mobile home is increasing. Mobile homes are almost always single floor homes since they must be built on a non-removable steel chassis.
||No construction occurs until the homeowner picks the design. Most builders prove sample plans to help guide you in your customization. Modular homes are normally highly customized in their interior and exterior appearances. In some cases it is even possible to have your personal architect design a home and then forward the plans to your modular building center.
||Can be customized to the owner’s preferences. Sometimes developers will buy large plots of land, divide it into smaller plots and build identical homes next to each other. You can also hire an architect to design your home according to your preference or purchase home plans online and then hire a contractor to follow those plans.
||These homes follow the HUD Codes designed in the 1970′s so they are not generally not as energy efficient as other homes.
||These homes are built in a climate controlled factory using high quality materials and more precise building techniques that are capable inside a factory. Modular homes are intentionally designed with additional insulation and other energy savings to reduce your maintenance costs.
||Since they are built on-site in all types of weather the quality of the product varies greatly. Research has shown that traditional homes are more likely to require repairs and higher maintenance costs.
|Re Sale Value
||Generally mobile homes depreciate in value since it is very hard to improve or expand an existing mobile home.
||Modular homes increase in value over time. Once they are completed it is near impossible to tell the difference between traditionally built homes and modular homes. These homes can also be improved or expanded.
||Traditional homes will increase in value over time. They can be improved and expanded to accommodate new owner’s preferences.
||Typically there is no waiting time. You can have a mobile home delivered almost the same day since they are normally already built and waiting for someone to buyer them.
||The normal timeframe is 8-14 weeks. There are some time savings since construction can begin in the factory at the same time your foundations is being created on your site. Also weather has almost no impact on the schedule.
||The normal timeframe is several months. Since all construction occurs on site, work projects can not start until the previous project is completed. The work schedule is dependent on the weather conditions.
||They can be in any color but typically all look similar since they are almost always one story buildings. They can be single, double or triple wide
||Appearance can be the same as any traditional sit-built home. You can add any style of window, door, wall or architectural feature you prefer. Once completed you cannot tell the difference between modular and traditional homes.
||The appearance can be customized to the home owners preference. Traditional homes can accommodate any architectural preference.
||The process gains from assembly-line manufacturing. This saves time and money which results in much lower prices to the consumer. Labor costs are also greatly reduced since the same craftsmen work on each home and master their section of work
||It enjoys the benefits of assembly-line building. In a manufacturing factory. This removes delays caused by the weather and vandalism damages. This more efficient process reduces the cost when compared to traditional homes
||The most costly building process which requires almost the entire house to be custom constructed. It will require more people which will take more time since they do not work on the same type of house every day. It is also vulnerable to weather delays and vandalism costs. This process is the most likely to result in damaged building products like warped wood from rain exposure.
Stick built homes
Site built homes