Modular vs. Manufactured Homes: What’s the Difference?

Learn the difference between modular and manufactured homes.

Image by Tim Liedtke © The Balance 2019

For many, buying a home remains an important financial and life milestone. However, as you begin your search for the perfect home, there’s a good chance you’ll hear terms like modular, manufactured, and site-built.

Understanding these terms—especially when it comes to modular vs. manufactured homes—can help you make a more informed decision about what you buy. Here’s what you need to know.

Site-Built vs. Modular vs. Manufactured Homes: The Basics

As you might expect, site-built homes are those that are completely constructed in place. These homes are entirely built according to specifications on their final site. From the foundation to the walls to the inside, the whole thing is assembled on-site. 

On the other hand, both modular and manufactured homes are built in factories. Modular homes are assembled in sections and then transported to the home site by flatbed truck, where they are put together according to a predetermined plan. It’s possible to customize modular homes since they are built in sections. You can have a home of any size, but the sections that make up the home are all the same size.

Manufactured homes are also built in factories, but they are completely constructed before being transported on their own chassis or frame, and on their own wheels, to the home site. It can be more difficult to customize manufactured homes, but at the same time, it’s also often possible to have a manufactured home delivered within days.

Both modular and manufactured homes can be lower-cost alternatives to site-built homes. However, there are some very important differences to take into account before you make the decision between modular vs. manufactured homes.

Modular Homes

In general, modular homes are treated similarly to site-built homes. Even though they are assembled from pre-built sections, they are usually set on a traditional foundation. Additionally, modular homes are structurally inspected by professionals and must adhere to local building codes.

It’s often possible to customize a modular home to some degree, although you won’t have as many options as you’d get with a site-built home.

You can find a number of manufacturers that offer modular homes, and look at the available options related to size, layout, and construction timing. Often, a modular home takes less time to build than a site-built home. Modular homes are titled as “real” property, just like site-built homes, so buyers have the same financing options, the same legal rights and protections, and the same tax treatment. 

Pros

  • Can be less expensive than a site-built home

  • Generally sturdy and holds up well to weather

  • Financed in the same category as a site-built home

  • Often constructed faster than a site-built home

Cons

  • Might be more expensive than a manufactured home

  • Less ability to customize than a site-built home

  • Must meet the same local building codes as a site-built home

Manufactured Homes

Manufactured homes are entirely built in a factory and then are delivered to the home site on a steel chassis and its own wheels. While the wheels are removed, the steel chassis usually isn’t. In the past, these homes have been referred to as “mobile homes” or “trailer homes.”

A manufactured home can be placed on land you own, or on land that you rent. However, it’s important to understand the ordinances associated with the land. If it’s land you own, double-check to make sure it’s OK to add a manufactured home. 

In some cases, you can move a manufactured home to a trailer park or other land designed for the purpose. In that case, you own the home, but you have to pay to lease the land. Before you decide to get a manufactured home, make sure you understand all the agreements, restrictions, and land ownership details.

When buying a manufactured home, it’s important to understand that many lenders treat them as a different category of property than a site-built or modular home. Financing terms are usually less favorable, due in part to the fact that manufactured homes often decrease in value, rather than increase in value like other homes. It can be difficult to expand or improve manufactured homes.

Manufactured homes are often titled as personal (or “chattel”) property, like TVs or cars, rather than as “real” property, like houses or apartments. This has significant implications for financing, taxation, and consumer rights and protections.

Finally, keep in mind that manufactured homes don’t have to meet local building codes. Instead, they are manufactured according to requirements from the Department of Housing and Urban Development (HUD). While some of the work involved (such as electrical) might be inspected, there is no requirement for structural inspection.

Pros

  • Usually less expensive than modular or site-built homes

  • Can be delivered to your home site within days

  • It’s possible to move them to another home site

  • Doesn’t require a lot of time and effort to set up

Cons

  • There might not be an inspection to ensure structural soundness

  • Likely to lose value

  • Financing terms are different than what’s available for site-built and modular homes

  • Restrictive covenants might prevent you from placing the home where you want to

Choosing Between Modular vs. Manufactured Homes

If you decide that you want a modular or manufactured home instead of a site-built home, it’s important to consider your needs and preferences. 

Modular homes are generally considered sturdier, and they follow market trends similar to what is seen with more “traditional” site-built homes. However, they can be just as expensive as other homes and must meet local building codes. 

Manufactured homes, on the other hand, can be much cheaper than other types of homes. However, they are rarely set on a permanent foundation and might not be as sturdy as other homes. Plus, they might lose value and be harder to refinance in the future.

Weigh the pros and cons of modular vs. manufactured homes as you make your decision so you can get the type of home that works best for your situation.

Article Sources

  1. United States Census: "Survey of New Residential Construction (Definitions: 'construction method')." Accessed Sept. 30, 2019.


  2. International Association of Certified Home Inspectors: "Modular vs. Manufactured Homes," Accessed Sept. 30, 2019.


  3. National Association of Home Builders: "Modular Building Systems," Accessed Sept. 30, 2019.


  4. Consumer Finance Protection Bureau: "Manufactured-Housing Consumer Finance in the United States," Page 8. Accessed Sept. 30, 2019


  5. National Consumer Law Center: "Manufactured Housing Resource Guide: Titling Homes as Real Property," Page 1. Accessed Sept. 30, 2019.