Key Takeaways
- Manufactured homes are often more affordable than traditional site-built homes.
- Financing is easier if you own the land under your manufactured home.
- Construction indoors reduces weather delays and can lower overall costs.
- Manufactured homes must meet HUD Code standards for safety and durability.
Article Summary
A manufactured home is a home built in a factory, then delivered to a property address.
Manufactured Home: Explained in Plain English
Manufactured homes, sometimes called mobile homes, are built to the HUD Code, which establishes national standards for design, construction, durability, transportability, fire safety, energy efficiency, and quality. These homes must be at least 8 feet wide and 40 feet long, built entirely in a factory, and transported on their own chassis. Sections are built in a factory and then delivered to the site for assembly.
Homes can be placed on private land that the homeowner owns or in communities where the land is leased. Financing options change depending on whether the buyer owns or rents the land.
Key Differences from Traditional Homes
Construction Process
Manufactured homes are built indoors in factories where conditions are controlled. Every step of construction follows standardized processes with quality checks at each stage.
Building indoors reduces delays from weather and allows materials to be stored and used efficiently. This efficiency often lowers costs and shortens the time it takes to complete a home compared to site-built construction, which relies on local labor, outdoor conditions, and multiple subcontractors.
Building Standards
All manufactured homes are built to the HUD Code, which sets national requirements for durability, strength, safety, energy efficiency, and transportability. The HUD Code provides one uniform standard that applies across the country, ensuring consistent quality no matter where the home is delivered.
Site-built homes, by comparison, must follow local building codes, which can vary widely by city or state and create differences in quality and requirements.
Financing Options
Financing depends on land ownership. When a buyer owns the land, a manufactured home can qualify for the same loans used for traditional homes, including conventional mortgages, FHA loans, VA loans, and USDA loans.
If the home is placed on leased land, lenders treat it as personal property, and financing must be through a chattel loan. Chattel loans are faster to close but usually come with higher interest rates, shorter loan terms, and larger monthly payments compared to traditional mortgages.
Appreciation
Whether a manufactured home gains value depends largely on the land. Homes on leased land may not appreciate because the owner does not control the site. Homes placed on owned land, however, can gain value in line with traditional homes, especially in strong housing markets.
Over the last decade, manufactured homes with land appreciated by 88 percent, compared with 48 percent for new site-built single-family homes, showing that manufactured housing can be a strong long-term investment when tied to land ownership.
Reference: Characteristics of a Manufactured Home
| Feature | Description |
|---|---|
| Construction | Built entirely in factory to HUD Code, at least 8' wide and 40' long, transportable on chassis |
| Building Standards | HUD Code (federal standards) with energy efficiency requirements |
| Financing | Conventional mortgages, FHA loans, or chattel loans depending on land ownership |
| Special Programs | MH Advantage® for homes meeting traditional design standards |
| Foundation | Delivered without a permanent foundation but may be placed on one later |
Manufactured Home: A Real World Example
A young couple is buying their first home. They find a new manufactured home built to MH Advantage® standards. The home looks and functions much like a traditional site-built house, with a steeper roof pitch, a covered porch, and a permanent foundation. It costs $220,000, including the land.
Because the home meets MH Advantage® requirements and is permanently attached to land they own, the buyers can finance it with a 30-year fixed-rate conventional mortgage. Their lender offers the same interest rate available to site-built homes, with a low down payment requirement.
The couple qualifies for a 30-year fixed-rate conventional mortgage with terms similar to site-built homes. The MH Advantage® program allows them to access affordable financing and long-term stability while building equity in a property that may appreciate like a traditional single-family home.
Common Questions About Manufactured Homes
Get answers to frequently asked questions about manufactured homes, including financing options, maintenance requirements, and how they compare to traditional homes.
What is the difference between manufactured and modular homes?
Manufactured homes are built to the HUD Code and are considered personal property unless permanently attached to land. Modular homes are built to local building codes and are considered real estate from the start. Modular homes may have more financing options available depending on lender guidelines.
How long do manufactured homes last?
With proper maintenance, manufactured homes can last 30-55 years or more. The lifespan depends on factors like climate, maintenance, and the quality of the original construction. Regular upkeep is essential for longevity.
Can I get a traditional mortgage for a manufactured home?
Yes, if you own the land. Manufactured homes permanently attached to owned land may qualify for conventional mortgages, FHA loans, VA, and USDA loans depending on lender guidelines and borrower qualifications. If you are leasing the land, you will need a chattel loan instead.
Are manufactured homes energy efficient?
Modern manufactured homes built after 1994 must meet HUD energy efficiency standards. Many newer models include energy-efficient features like better insulation, efficient heating systems, and energy-star appliances.
Do manufactured homes hold their value?
Manufactured homes on leased land may depreciate over time, while those on owned land may appreciate more like traditional homes. Location, maintenance, and market conditions all affect value retention. Past performance does not guarantee future results.
What are the maintenance requirements?
Manufactured homes require regular maintenance like any home, including roof inspections, HVAC maintenance, and structural checks. The HUD Code ensures these homes are built to withstand normal wear and tear.
Can I customize a manufactured home?
Yes, many manufacturers offer customization options for floor plans, finishes, and features. However, major structural changes after delivery may require permits and professional installation. Customization options vary by manufacturer.
Are manufactured homes safe in severe weather?
Modern manufactured homes built to HUD standards are designed to withstand normal weather conditions. However, they may be more vulnerable to extreme weather events like tornadoes compared to site-built homes with deeper foundations.
