If you’re looking for a unique, stylish, custom-built home, modular housing is quickly becoming a reliable alternative to traditional homes. Regardless of whether you are a seasoned homeowner or a first-time buyer, we’ll discuss the benefits of building and owning a modular home and why it’s right for you.
What is a modular home?
Modular homes, also known as prefabricated homes, are built within climate-controlled factories. This form of construction allows for hundreds of design possibilities. Generally, a company will offer you a pre-designed selection of homes with different sizes and layouts. However, everything about a modular home can be customized to suit your needs and are often indistinguishable from traditional homes.
Each home is to meet local and state safety regulations. However, sometimes a state will attach it’s own safety guidelines and certifications when it comes to building modular homes, so it is imperative to check with your state.
Interestingly, modular homes are often confused with manufactured and mobile homes. We’ve all taken a road trip and seen those long-bed trucks driving down the highway with half a house sitting on top of it, and a banner that says “Wide Load.” The difference lies in how they’re created and attached to a property. Modular homes can be built and transported on a permanent chassis or a temporary one.
• A home built on a permanent chassis called “on-frame.” It is transported to the site on wheels and placed on the foundation when it arrives at the building site. This is more common for manufactured and mobile homes.
• Homes built on a temporary chassis are referred to as “off-frame,” meaning that it is not attached to wheels. Instead, the pieces are carried on a truck bed and assembled at the delivery site. This is more common for a modular home.
Modular Home vs. Manufactured Home
Manufactured homes are very similar to modular in that they are also factory-built. However, a manufactured home is built entirely in a factory and transported as one entire unit. Modular homes are delivered in sections and constructed on location. Manufactured homes are also listed as “chattel” (personal property; T.V., computer, cell phone, etc.) and not classified as “real property.” This classification will affect your financing options, your taxes, and your protection rights.
Modular Home vs. Mobile Home
Mobile homes are usually not set on a foundation. Most of the time, the wheels remain attached, allowing the owner to move if they wish. However, when a mobile home’s wheels are removed, the owner now takes the risk of damaging their home if they change their mind. If a mobile homeowner owns the land their home sits on, much like a modular home, this could be a good, cheap alternative to a traditional home. However, oftentimes mobile homeowners rent a space on someone else’s property (usually a mobile home community).
The mobile homeowner is in a unique situation where their rent for that space can be raised without limit by the landowner, and unless the mobile home is still attached to wheels and in a good enough condition to move, they may be faced with eviction. That means either pay the increased rent, or don’t, and leave your investment behind! Modular homes are built in sections before being transported to their final destination.
Unlike mobile homes, modular homes are secured to a concrete foundation and cannot be moved after assembly. These are permanent structures made to last. Much like a traditional home, modular homeowners own and invest in their own land–no surprise rent increases, no unexpected loss in investment due to greedy park owners.
Benefits of Building and Owning a Modular Home
Unlike traditional home construction that can take weeks, or even months to complete, modular homes are delivered ready to piece together. Providing the land is prepped, and your building permits are all in order, constructing a modular home is easy and will take less than half the time of traditional site-built construction. This benefit also means that your home will have less exposure to outside elements and weather conditions, making it less likely to be affected by moisture that could lead to mold issues- and you can move into your new home much sooner!
These homes can also save you money. Less construction time equals less interest paid toward financing and less labor cost. Modular homes are also more energy-efficient, which helps lighten your monthly expenses and lessen your carbon footprint. During factory production, any excess materials will be recycled on-site, making these homes more appealing to environmentally conscious people.
What Kind of Loan Can I Get for a Modular Home?
Fortunately, modular homes come with the same loan options as traditional site-built homes.
• Construction-to-Permanent Loans: This loan provides funds for construction upfront and will automatically convert to a traditional mortgage after your home’s construction is completed.
• Conventional FHA Loans: Standard requirements apply to these loans. It is beneficial to visit the U.S Department of Housing and Urban Development (HUD) website to understand these options better. It is important to note that not all mortgage lenders will work with you in constructing a modular home, so you must do a little shopping around to find the right company. To help you find a lender, you can use the HUD search tool on the HUD website to filter through lenders in your area of interest.