Vast trailer park, mobile home court on sunny summer morning.

Have you ever been on the interstate and seen sections of a house or even the fully assembled real deal going by on a flatbed truck? What you were witnessing was the transportation of a manufactured or modular home.

Sometimes manufactured homes are confused with modular homes because the word “modular” implies prefabricated and moveable – however, there is a difference.

Manufactured and modular homes each have their own unique characteristics, advantages and disadvantages. There are also factors to consider if you’re looking to get a loan on these kinds of properties.

Manufactured Homes

Manufactured or mobile homes come from the factory either whole or in a few parts. They’re built on a permanent chassis and have wheels for transport, which are detached when the home reaches its location.

Because of the nature of these manufactured homes, it’s possible to move the home elsewhere, but the area must be zoned for that particular mobile home structure type.

One of the good things about mobile homes is that they’re often a more affordable entry point into homeownership. According to the Consumer Financial Protection Bureau (CFPB), a basic single-section home could cost less than $20,000, whereas a home with a custom design might cost $100,000 or more.

Manufactured housing is completely fabricated in factory conditions and inspected at each step in the process. They’re manufactured based on codes set up by Department of Housing and Urban Development (HUD). One of the primary ways to identify a manufactured home is by its HUD tag.

There are some complications to getting a mortgage on a manufactured home. Some dealers and local lenders may offer financing. Quicken Loans doesn’t do financing on mobile homes, and only a few lenders offer mortgages on this type of housing. Fannie Mae and Freddie Mac do offer conventional loans for manufactured housing, and loans through the FHA are common because of different underwriting standards. Loan amounts vary depending on whether you’re getting a loan for the home itself, the lot or both. The term of the loans can also vary.

Another disadvantage of going with a mobile or manufactured home is that depending on whether you own the land, mobile homes can depreciate similar to the way cars do, unlike other homes whose values move up or down based on market conditions.

Modular Homes

Modular homes consist of several parts that are prefabricated offsite. Once they’re transported to the home’s lot, they’re placed on a permanent foundation and assembled. Once on the permanent foundation, they look and function the same as a traditionally built home.

The key distinguishing features that separate a modular home from a manufactured home are the modular home’s permanent foundation and lack of HUD tag certifying it as a manufactured or mobile home. Modular homes are made and assembled according to local standards in the area where the home will be placed.

Modular homes also have values that tend to go up or down right along with the rest of the housing market.

It’s fairly standard to be able to get a mortgage on a modular home. Most lenders, including Quicken Loans, offer financing on modular homes.

The difference between manufactured and modular homes can be a bit confusing, so if you still have questions, let us know in the comments, and we’ll do our best to answer them. If you think a modular home is right for you, go ahead and get in touch with one of our Home Loan Experts – get started online or call (888) 728-4702.

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This Post Has 13 Comments

  1. Please note that in Texas, manufactured and modular home builders require a construction loan (during the construction phase), which is then transitioned to a permanent loan. Quicken/ Rocket does not offer construction loans. I went through the whole process only to find this fact in the end.

    1. Hi Steve:

      I’m very sorry to hear you had this experience. I’m going to forward this to our Client Relations team to find out what happened here. Thanks for reaching out!

      Thanks,
      Kevin

  2. I own a 1089 horton16by80 single wife mobile home on 1.8 acres.No mortgage but lots of problems. I am on Medicaid and Medicare plus united healthcare..I only get 650.00 myhly plus 66.00 food stamps.I don’t have a life.I feel like I am lost .

    1. Hi Rachel:

      We don’t do mortgage loans on mobile homes, but that’s not really what you need. You need financial counseling and someone to help you come up with a game plan for the future. I would do a web search for nonprofit financial counseling in your area. Hope this helps!

      Thanks,
      Kevin Graham

  3. Let me thank you for addressing an important topic, while respectfully saying – where does one begin with the corrections needed in this article?

    1) There have been no mobile homes build in the U.S. in over 40 years.

    2) Manufactured homes don’t sometimes come on a chassis, under current law, they always do. However, this doesn’t make them ‘mobile’ in the same sense as the trailer houses of yesteryear, that could be pulled by a car or light truck. A single section home may weigh 40,000 pounds (+/-) – that’s 20 tons! – and requires specialized equipment, trained and licensed personnel to install.

    3) Manufactured homes can appreciate or depreciate for the same reasons as conventional housing, and that can occur in a land-lease or on privately owned land (fee simple, the so-called land-home package).

    4) Modular homes are built to a local or state building code, while manufactured homes are built to a federally preemptive building standard.

    5) Manufactured homes cost about half what conventional housing does, while the savings on a modular home vs. conventional building isn’t as great, but is still significant and depends on the market.

    6) Getting financing on a manufactured home is different than a mortgage, because the home can be financed without having to own the land – or for those who do own land – without having to tie the land up in the loan. There are pluses and minuses to that, but both options are available.

    7) Bloomberg, HousingWire, Realtor and Fox News have all come out recently with stories that point to the importance of manufactured housing as a solution to the nations affordable housing crisis.

    8) Perhaps the biggest misnomer about manufactured homes is that they blow away with the first big wind. It should be obvious that a home that is being transported at about 60 MPH, and can buck headwinds of another 20 MPH is traveling through winds the strength of a category 1 hurricane. Manufactured homes are stronger, greener, lower in cost to buy and maintain and can look and live the same as other homes.

    9) How do I know? Because over the years I’ve owned several conventionally built housing and manufactured homes. We also publish the industry top two trade journals, MHProNews.com and MHLivingNews.com. Third party studies back up every point made above.

    10) Please, before you do any articles on manufactured homes, or modular homes, consultant experts in each field. Feel free to reach out to our publication for individuals who could fit the bill for any articles you plan to do.

    Thanks again.

    L. A. “Tony” Kovach

    1. Hey Tony:

      Thanks for your feedback! I agree with you that this is an important topic. Regarding your feedback on the chassis portion in particular, this was an oversight on our part that I intend to correct shortly. Thanks for reading!

      Kevin Graham

  4. Another distinguishing characteristic of a manufactured / mobile home is that it has a VIN number, just like a vehicle.

    A modular home is built to much stricter codes (just as a site-built home would be). Because much of the work is done in a factory, a modular home is not subjected to weather elements the way a site-built home is. And when you figured that a modular home is hauled long distances and then lifted in the air (sometimes) to be placed on the foundation, you know that it is structurally sound.

  5. Thank you for your article, but you can convert a manufactured home to real property that appreciates along with the land it sits on by simply releasing it’s title and permanently siting it. This is done frequently and it means your home increases in value over time just like any other home. I know, my home has more than tripled in value since we moved in 20+ years ago. Quicken may not lend on manufactured homes, but other lenders do. Thanks for a chance to clarify. Joyce

    1. Hi

      We purchased a modular home in 1996, or so we were told. We have had nothing but grief with this house since we purchased it. The house is a Victorian Homes, Northridge floorplan. It was brought in on 2 flatbed semis and then placed on a poured foundation. We have been trying to refinance this house since we purchased it. We just recently found out that there are tags on the outside of the house with the HUD information on them. The house never had wheels or axles attached to it. The house is listed as Real Property every where except with appraisors. We just had another appraisal done and now it has depreciated by almost $30,000 in the past several years. I wish I had never purchased such a house and I don’t recommend anyone doing it. If you have any suggestions on what we can do to finally find out if we were actually took by the company we purchased the House from that would be great! And also the house sits on a 1.13 acre lot in a rural area.
      Mary-Lou

      1. Hi Mary Lou:

        If you can find documentation stating they were selling you a modular home, you may have legal options and I would talk to an attorney in your area. The reason I say this is the HUD tag is one of the key signs of it being a manufactured home. This isn’t always the case, but manufactured homes tend to depreciate. This is fine if you knew that going in, but if you were told it was a modular home, you wouldn’t expect this. For the purposes of a mortgage with mortgage investors, things with a HUD tag are considered manufactured homes. I would advise talking to someone if you have documentation stating it was a modular home.

        Thanks,
        Kevin Graham

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