Modular vs Manufactured Homes - The Ultimate Guide

Depending on where you are in your homeownership journey, a wooden-framed or stick-style home may not be the right dwelling style for the land you've bought. 

Folks looking for a smaller home with less footprint and overall cost than site-built houses might be better suited for a modular or manufactured prefab home. Inspired by new building materials and easy upkeep, many people consider purchasing one of these homes as an alternative to a single-family home or townhouse. 

To give buyers a comprehensive understanding, the team at Prevu Real Estate put together a guide outlining the differences between a manufactured home and a modular home. 

What is a modular home?

A modular home is a form of prefabricated housing where construction starts in a controlled factory environment. Modular homes can vary widely in style, size, and layout and are customized to meet the preferences and needs of the homeowner. 

Once built, the sections or modules are transported to the buyer's plot of land. With all the pieces ready-made, builders will assemble and affix the dwelling to a permanent foundation. 

What is a manufactured home?

A manufactured home, or a mobile home or trailer, is a type of prefabricated housing built in a factory. 

Once completed, it gets transported to a plot of land and secured on a foundation. Unlike modular homes, manufactured homes are movable, as they sit on a steel frame, allowing owners to transport them to a chosen location. 

Key differences between modular and manufactured homes 

• Building codes and standards
• Construction location
• Design and customization
• Resale value 

Building codes and standards

Since modular homes usually have a bespoke design, they must follow the same local building codes and standards as traditional stick-built homes. They often need to meet specific state and local regulations. 

Manufactured homes differ because they're prefabricated in a factory and transported to their final destination. The U.S. Department of Housing and Urban Development (HUD) codified national construction and safety standards set for manufactured homes. So now manufactured homes are built with specific rules around structural design, fire resistance, energy efficiency, and overall safety.

Construction location

Modular home designers have a unique factory setting for building sections of the home, from the exterior walls to the interior ones. Once completed, the pieces get shipped to the buyer's destination and are either put together by developers or the modular home builders on a permanent foundation. 

By contrast, the manufactured home leaves the factory either wholly built or in double sections that are joined together on-site. A steel chassis sits under the house, making it easier to move the dwelling to the buyer's plot of land. 

In some instances, a manufactured home might be delivered to a community exclusively made up of manufactured homes. In this case, you might own the home but not the land underneath it. 

Design and customization

Thoughtful design and efficiency are at the forefront of a modular home's architectural specs, as the components must travel to their final destination. 

Because the homes are being shipped to a location in parts, there is a limit on customization compared to traditional homes. Additionally, the homes also have to follow local building codes. The dwellings usually have a square footage ranging from 650 to 1,000 square feet. 

Modular homes can feature wood-framed themes or sport a more modern look with steel and glass as the primary materials. The homes usually sit on a concrete foundation that might even have a basement.

Manufactured homes have a more standardized design, as the houses must be transportable. But there are double-section trailers where each half of the home gets shipped out and fitted together on-site. The homes often sit on a concrete slab or are secured to the land via metal tie-downs.

Manufactured homes can be 500 to 1,200 square feet. But there are manufactured homes called double sections or double wides that range from over 1,000 to 2,000 square feet, as the home consists of two fully-built parts that get fitted together at their final destination. Overall, the federal standards mean there is less room to modify the home in the factory. 

Once the house reaches its final destination, owners can build around and even on top of the abode, so long as the designs meet local and state building codes. If the home will be part of an HOA-managed community, design options may be limited to the association’s rules.

Resale value

Modular homes often carry a high value due to their custom design. Some modular homes sit on a foundation, sometimes even a basement, which can help raise the value when selling the house. 

While a manufactured home is a great way to get on the property ownership ladder, the dwellings may not appreciate in value the same way as modular or traditional homes on the housing market. 

Pros and cons of a modular home

• Pro: Quality construction - Modular homes are known to feature precise and high-quality construction. The assembly line process ensures consistency and adherence to strict building codes, often resulting in homes of comparable or superior quality to traditional site-built homes.
• Pro: Faster turn-around - Modular homes generally have a faster construction timeline than traditional homes. The building process is more efficient since the modules are constructed simultaneously on-site.
• Con: Limited customization - While modular homes offer various floor plans and design options, buyers generally have fewer choices regarding customization. But the sky is the limit once the dwelling gets erected. Buyers can then build and add onto the home’s modules.
• Con: Transportation costs - Modular homes are transported to the building site in sections, and the cost of transportation can be a significant factor. The distance from the factory to the site can affect overall costs. Additionally, the need for oversized trucks and specialized equipment can add to the expenses associated with the delivery and installation of modular homes. 

Pros and cons of buying a manufactured home

• Pro: Affordability - Manufactured homes typically cost less per square foot than traditional site-built homes. This affordability makes homeownership more accessible to a broader range of buyers.
• Pro: Fast setup - The controlled environment of a factory means that weather delays are minimized, and the assembly line process can lead to quicker completion. This can benefit those who need a home in a relatively short time.
• Con: Resale value - Manufactured homes often face challenges regarding resale value. While they offer affordability, the perception of lower quality compared to traditional homes can impact resale values. Additionally, depreciation rates may be higher, particularly in the first few years after purchase.
• Con: Limited customization - Because the homes are built in the factory, manufactured houses have limitations when it comes to customization. While there are ways to switch up the interior floor plans, the homes must abide by HUD code. This means homeowners might find fewer choices for unique design elements or modifications than building a custom site-built home.

Financing a modular home or a manufactured home

Your budget plays a big part in this decision, as you need to consider how you'll cover the costs of your new home. 

Regardless of the home type you choose, you have to consider location, foundation type, floor plan, and materials. For example, a modular home can feature unique roof and siding choices at a higher cost, whereas a manufactured home will come with fewer choices but at a lower price point. 

Generally, a manufactured home can cost between $80,000 and $160,00 to build. Because a modular home sometimes has more design choices, the price range is slightly higher, usually ranging from $75,000 to $200,000, or potentially more for larger spaces or multi-story structures. 

For financing, folks can use Federal Housing Administration (FHA) loans to make purchases. For instance, Title I loans allow buyers to finance the purchase of a manufactured home, even if they don't own the land the dwelling will sit on.