What Is A Manufactured Home?
It’s time to rethink manufactured homes. After decades of being called “mobile homes” or even “trailers,” the modern manufactured home offers far fewer compromises than the mobile homes of the past. But, what's considered a manufactured home nowadays? And how is a manufactured home different from a traditional house?
A manufactured home is built off-site and then transported to a different location to be installed. And today, they’re safer, sturdier and more efficient than ever.
Here’s what you need to know about their pros and cons, building costs, financing options and more.
Manufactured Houses, Defined
A manufactured house is a factory-built home constructed piece by piece and assembled onto a temporary chassis for transportation. The structure is moved to its final location and installed on a short-term or long-term foundation. In comparison, a traditional home is built on-site on a permanent foundation.
Manufactured House Vs. Mobile Home
Today’s manufactured homes are built based on standards set by the Department of Housing and Urban Development (HUD). The terms “manufactured home” and “mobile home” are often used interchangeably, but there are key differences between the two.
Mobile homes are prebuilt homes that were created before June 15, 1976. After that, HUD’s standards went into effect, and anything built after that date is considered a manufactured home.
Manufactured Home Costs
Establishing a budget is a key part of buying a house, and cost is one of the primary reasons people purchase a manufactured home. They are much more affordable than a traditional house. But just like a traditional home, the cost varies depending on the type of manufactured house you buy and the size.
In 2021, a manufactured single-wide home had an average sale price of $76,900, and you could expect to pay closer to $170,600 for a double-wide. On the other hand, the average construction cost of a site-built home in 2023 is $280,514.
Manufacturing efficiency is the key factor explaining the price difference in this comparison. Most manufactured homes are built on an assembly line, which is a controlled environment. Site-built homes can encounter delays because of weather and supply issues.
How To Buy A Manufactured Home: Financing Options To Consider
While manufactured houses are less expensive than their traditional counterparts, that doesn’t mean most buyers can afford a cash purchase. Thankfully, there are several mortgage options available to potential borrowers, such as:
- Conventional loan: Depending on the lender, you may be able to use a conventional home loan to buy your manufactured house. However, you may need to install it on a permanent foundation to secure a conventional loan.
- VA loan: If you’re a veteran, active-duty service member or surviving spouse, you may be able to use a VA loan if your lender determines the home is real property.
- FHA loan: Borrowers can use an FHA loan to purchase a manufactured house and plot of land, but the home must be a primary residence.
- USDA loan: If you want to purchase a manufactured home and live in a rural area, a USDA loan could be an excellent option. The home must be at least 400 square feet and use a permanent foundation. Rocket Mortgage does not offer USDA loans at this time.
- Chattel mortgage: A chattel mortgage is another good option to finance your purchase. It uses the manufactured home you’re buying as collateral. And the interest rate on a chattel mortgage may be higher than a conventional mortgage rate.
- Manufacturer financing: Some manufactured home companies offer their customers financing directly or through a third-party lender.
The Pros And Cons Of Manufactured Homes
Like any single-family home, a manufactured house has advantages and disadvantages. Before you decide to buy, you should carefully consider the pros and cons.
Owning a manufactured home can bring these benefits:
HUD Safety Regulations
HUD has strict regulations to control the quality of modern manufactured homes. This means your manufactured home must meet certain requirements before you purchase it. Here are some of HUD’s codes:
- The home must be at least 400 square feet.
- There must be two outside doors located at least 12 feet from each other in single-wide units.
- Single-person bedrooms must have 50 square feet of floor space.
- Two-person bedrooms must have 70 square feet of floor space.
- The home must have adequate windows for ventilation.
Another benefit of this type of home is that many manufacturers offer a wide variety of sizes, styles and layouts. For instance, a single-wide home could have 1 or 2 bedrooms, while a double-wide may offer 3 – 4 bedrooms. You should be able to find the right option that fits your needs while staying within your budget.
Simplified Moving Process
Since manufactured homes are built on a temporary chassis, they can be transported from one location to another. If you want to relocate, you can purchase a new plot of land, set up utility hook-ups and hire a company to move your house.
Unfortunately, owning a manufactured house can also come with these drawbacks:
Some towns and cities have zoning restrictions that limit where you can put a manufactured home. So if you want to live in a densely populated area, you might have fewer options. However, rural areas typically have fewer of these rules.
Even though there are several types of loans you can use to finance your manufactured house, it can be difficult to secure approval. If you don't want to use a permanent foundation or your home isn’t considered real property, getting a mortgage may be challenging.
There are many advantages to buying a manufactured home, but the biggest downside is that you might not own the land your home sits on. More than 37% of manufactured homes are in communities where a landowner rents land to homeowners.
If you don’t own the land where you’ve installed the manufactured home, the home could decrease in value while the value of the land increases
Manufactured Homes Vs. Modular Homes
There can be some confusion about manufactured and modular homes. Both homes are manufactured off-site, so that’s understandable. Fortunately, the differences are simple.
Manufactured homes aren’t held to the same building codes as on-site homes. The homes are held to the standards set by the Department of Housing and Urban Development.
Drilling down further, manufactured homes often use a steel chassis, while modular homes use a traditional/permanent foundation. A few other quick differences separate manufactured homes from modular homes:
- Manufactured homes generally have a lower cost per square foot.
- Manufactured homes often depreciate faster than modular homes.
- A modular home cannot be moved once installed on-site.
- Modular homes usually arrive at the home site in multiple pieces.
- A modular home may be easier to finance because it uses a permanent foundation.
Manufactured Home FAQs
Learn more about manufactured houses with the answers to these frequently asked questions.
What’s the difference between a single-wide vs. a double-wide?
The main difference between a single-wide and double-wide manufactured home is space. A single-wide home is typically 14 – 18 feet wide and 52 – 80 feet long.
In comparison, a double-wide home is 28 – 36 feet wide and 52 – 80 feet long. You’ll typically pay about 25% less per square foot for a single-wide home than you would for a double-wide.
How are manufactured homes built?
The materials used to build manufactured homes are like the ones used for traditional homes, including lumber framing, fiberglass insulation and wood flooring. The difference for manufactured homes is that these items are ordered in bulk and put together in a temperature-controlled area.
How long do manufactured homes last?
This is a hotly debated topic. But according to the Manufactured Housing Institute, most manufactured homes have a lifespan of 55.8 years. Given updates in manufacturing and building materials, a 2018 Federal Housing Finance Agency study concluded that manufactured houses could retain their value for the same length of time as traditional homes.
Would I have to live in a community of manufactured homes?
Manufactured homes are located in rural, urban and suburban locations across the country. More than a third of them are in manufactured home communities. However, living in a community is not a requirement.
Are manufactured homes more energy-efficient?
Many newly built manufactured homes are designed to be more energy-efficient. These homes often come with energy-efficient windows and doors, added insulation and more. It’s also possible to remodel older homes for added energy efficiency.
Do cities have special requirements for manufactured homes?
Yes, state regulations often require manufactured homes to be a certain size. You should check your state’s laws regarding manufactured homes before you purchase one.
Are manufactured homes safe?
Thanks to HUD regulations, manufactured homes are safer than they used to be. According to the Manufactured Home Institute, properly installed manufactured homes are as safe as traditional houses during a major storm. However, manufactured homes don’t come with a basement, which could make them less safe during a tornado.
How much does it cost to move when you live in a manufactured home?
The cost of a move will depend on the size of your manufactured home and how far you’re moving. According to MYMOVE, it can cost anywhere from $1,000 to $20,000. But if you’re moving fewer than 100 miles, you can probably move on less than $5,000.
The Bottom Line
There’s no shortage of different home types on the market. Fortunately, buyers looking at the lower end of the price spectrum can find a safe, affordable path to homeownership by choosing the manufactured home route. Unlike outdated stereotypes about mobile homes, manufactured homes are well built and made of high-quality materials.
If you’re ready to start your homeownership journey, you can get started today and talk to a Home Loan Expert about buying a manufactured house.