First differences between Modular & Manufactured Homes
How can you see the first differences between a modular home and a manufactured home?
Well, I will explain this, because I have deal with these ones several times for some customers who are looking very inexpensive houses, I have told by an appraiser the first difference that you can see between a modular home and a manufactured home.
The manufactured has a metal tag somewhere outside the house that says "it conforms to a federal building code, called HUD Code", modular do not have that metal tag outside. Sometimes you can not see the metal tag and you need to check in the closets and try to find them.
Modular Homes
- Built in sections at a factory.
- Built to conform to all state, local or regional building codes at their destinations.
- Sections are transported to the building site on truck beds, then joined together by local contractors.
- Local building inspectors check to make sure a modular home's structure meets requirements and that all finish work is done properly.
- sometimes less expensive per square foot than site built houses.
Manufactured Homes
- Formerly referred to as mobile homes or trailers, but with many more style options than in the past.
- Built in a factory.
- They conform to a Federal building code, called the HUD code, rather than to building codes at their destinations.
- Built on a non-removable steel chassis.
- Sections are transported to the building site on their own wheels.
- Multi-part manufactured units are joined at their destination.
- Segments are not always placed on a permanent foundation, making them more difficult to re-finance or sell.
- Building inspectors check the work done locally (electric hook up, etc.) but are not required to approve the structure.
- Generally less expensive than site built and modular homes.
- Sometimes decrease in value over time.
Greets to Janet Wickel.
Aurora Colorado Real Estate Homes for sale in Colorado Spanish Speaking Real Estate Agent Realtor
marti,
I have seen that there are some agents that do not see the difference, I decided to post it, hope that it helps, when I call to listing agent and I ask them if it is a manufactured or modular, they do not know and you must know, manufactured and modular are different for loan purposes, so if you want to go with an alternative credit on a manufactured, just they accept up to 95% financing, not 100% with alternative credit, that is very something that started to interest me
Ray Saenz
Manny are much different from the Moddies wheni comes to financing. The default rayte on mannies is twice the rate for other properties.
I have posted info on Manufactured Home Loans at www.Manuloan.com
Hey Brian,
Great and thanks to support it !
Eddy,
Yes :) the famous metal tag ! we need to look for it
Ray Saenz
Ray - Great blog.
Another difference between modular and manufactured housing is that an Appraiser will use "stick built" homes for comps on the modular home.
My next door neighbor builds modular homes. If you have a Buyer interested in a well built modular home, give me a call !!
Lenders have strict underwriting guidelines for modular and manufactured homes...Some Lenders will not touch them with a ten foot pole.
Ray - Great blog.
Another difference between modular and manufactured housing is that an Appraiser will use "stick built" homes for comps on the modular home.
My next door neighbor builds modular homes. If you have a Buyer interested in a well built modular home, give me a call !!
Lenders have strict underwriting guidelines for modular and manufactured homes...Some Lenders will not touch them with a ten foot pole.
Hey Ray
Very informative post. We have a few modulars in the area, usually spot builds where someone sells off a lot in an existing neighborhood with no HOA and 2 or 3 months later there's a new home amongst the 30 or 40-year-old homes.
hey guys and gals,
thanks for the comments,
Mariana, you meant Personal Property? my appraiser told me that Mobile homes are considered Personal property, so lenders do not finance on those, just land.
Ray Saenz
Ray, we have a Modular Home Loan Program, but I have not done any yet. I am looking for my first opportunity to do one of these.
I didn't know about the metal tab, I will have to look for it next time I am in one of these.
Ray, Some lenders do lend on the mobile home along with the land. There are also a few niche lenders that will lend specifically on the mobile (comes in handy for people living in a prak where they have to pay land rent.) The only time I have had an issue with mobiles and land is where the land was more than 5 acres. In that case, the lender would only lend based on the value of the mobile and 5 acres that it sat on. The rest of the land was not able to be used in determining values.
For those that are mortgage professionals that have not done a mobile home, there are two main questions to ask right off the bat. 1) Are the wheels off and is it secured to the ground? 2) Is the license plate off? You may laugh, but I have come across it more than you would think.
Ray great tips, in my market place can be found both products. I have not worked much with manufactured homes, however I have heard other agents having issues with the financing. I will use the information you provided.
Thank you.
You are welcome guys / gals,
Jason, thanks for add info on this topic
Ray Saenz
Hi Ray,
Interesting stuff. It's good to see you put it out there as there seems to be a lot of confusion on this topic.
As a lender who deals primarily with the manufactured/modular industry, I encounter these questions frequently from prospective buyers and Realtors.
Many lenders are backing away from Manufactured Homes. There are really only a few left, and as been stated previously, the requirements are becoming more strict. We've got plenty of options for manufactured homes, nationally.
Modular homes, at least with our company, are treated the same as "stick-built". However, please note, there are 2 different types of modular homes, and the financing options are different. There's what is called "on frame" and "off frame" modular, and the "on frame" is treated more like a manufactured home.
Another consideration is the appraisal. Most lenders will want to have comps of similar construction when dealing with a modular, so if it's not common for the area you may have a problem.
Thanks for sharing the information. Well informed, is well prepared!
Take care, Chris (www.MfgHomeLoans.Info)
We have a lot of manufactured homes in this part of Northern Michigan. As you say, the building inspectors only check the work done locally (electrical, etc) but the first thing they do, before ANYTHING else is check the roof snowload rating.
I talked to an inspector a few years ago who told me they have at least one a year that is rejected because it doesn't meet the requirements. Has to be taken apart (double-wide) and shipped back to the factory/dealer.
I'm sure the buyers are just tickled when that happens.
Garret,
sorry to make you wait, modular
Ray Saenz
Garret,
you are welcome :)
Hi Ray,
Great blog! You sound like a MH pro. Just want to let you know that we specialize in mobile/manufactured home (HUD) engineered certifications, 433A recorded document of an existing approved foundation system (California only) and the installation and/or retrofitting of certified and approved manufactured home foundation systems for FHA and VA guaranteed loans. We service all 48 contiguous states. Feel free to check us out at www.onthelevelcontractors.com or call us at 800 909-1110.
Thanks,
John DL Arendsen
CEO: ON THE LEVEL General Contractors