Modular vs Manufactured Home: Which Is the Better Option?

Modular vs manufactured home? The average price of a modular home is typically 15% cheaper than traditional stick-built houses. This also comes with added perks like quicker build times, energy efficiency, and customizable designs.

On the other hand, manufactured homes have a median price of about $127K and make up nearly 10% of all single-family housing in the US. While they offer significant savings, they’re often associated with outdated perceptions of mobile homes and tend to have lower long-term value.

What Is a Modular Home?

A modular home is built in sections (or modules) in a factory setting, then transported and assembled on a permanent foundation at the home site. These types of houses are constructed to meet local or state building codes, just like traditional site-built homes.

1. Modular Meaning

The term modular refers to the method of construction where individual modules are pieced together like building blocks. This highlights the flexibility and scalability of modular housing.

2. Cost of Modular Homes

The cost of a modular home varies depending on size, location, and customizations. On average, modular home cost ranges between $180,000 to $300,000. That’s often 10-20% cheaper than traditional homes, offering great value with faster construction timelines.

What Is a Manufactured Home?

Now, let’s define the other side of the coin. A manufactured home is also built in a factory, but it’s constructed on a permanent chassis and adheres to the federal HUD Code, not local building regulations.

1. What Is Manufactured Housing?

Manufactured housing is the broader category that includes homes, commonly known in the past as mobile homes. But don’t let the old reputation fool you, modern manufactured homes have evolved significantly.

2. Manufactured Home Prices

One of the biggest selling points is affordability. Manufactured home prices typically range from $80,000 to $150,000. It is an appealing option for first-time buyers. Also, manufactured house prices remain lower than their modular counterparts due to more standardized production and materials.

Modular vs Manufactured Home: Key Differences

Here are some of the key differences between manufactured or modular homes:

If you’re comparing modular home vs manufactured home options, consider your long-term plans, financing eligibility, and zoning restrictions.

Pros and Cons of Modular Homes and Manufactured Homes

Here are some benefits and drawbacks of modular homes:

✅Pros

• Quality Control: All the modules go through a quality test, which helps to build a strong structure.
• Flexible Specs: The modular homes are customizable. You can choose the pre-designed module or present your plan to build the house.
• Construction Efficiency: The construction is completed quickly since the modules are 90% pre-ready in factories.

❌Cons

• Land Issues: The cost of renting land can increase if you do not own it. Additionally, the government has banned the construction of modular homes in some areas.
• Extra Cost: You may have to bear additional expenses when you choose to customize your home.

Here are some benefits and drawbacks of manufactured homes:

✅Pros

• Affordable Option: Manufactured homes are one of the cheapest options that you can opt for.
• Factory-ready: These homes are pre-assembled and have a chassis with wheels, making them portable.
• Energy Efficient: The manufactured homes come under HUD regulations, resulting in quality and energy efficiency.

❌Cons

• Depreciating Asset: The value of the manufactured houses may decrease over time unless they’re fixed on a permanent foundation.
• Lesser Customization Options: The manufactured homes have few to no customization options.

What Are the Financing Options?

Here are the financing options for modular homes as well as manufactured homes:

1. Conventional Mortgage Loans

Applies primarily to: Modular Homes

• Eligibility: If the modular home is placed on a permanent foundation and meet local building codes.
• Lenders: Banks, credit unions, Fannie Mae, Freddie Mac.
• Benefits: Lower interest rates, longer terms (15-30 years), higher loan limits.

2. FHA Loans

Applies to: Both Modular and Manufactured Homes

• Requirements:
  • To opt for an FHA loan, the property must be your primary residence.
  • For manufactured homes, it must be built after June 15, 1976, and be on a permanent foundation.
• Benefits: Low down payment (as low as 3.5%), more lenient credit requirements.

3. VA Loans

Applies to: Both, but more commonly Modular Homes

• Eligibility: Veterans, active-duty service members known as VA, certain reservists.
• Requirements: Permanent foundation, meets HUD code for manufactured homes.
• Benefits: No down payment, no private mortgage insurance (PMI).

4. USDA Loans

Applies to: Both Modular and Manufactured Homes in rural areas

• Requirements:
  • Home must be in a USDA-eligible rural area.
  • Borrower must meet income limits.
• Benefits: No down payment, low interest rates, government-backed.

5. Chattel Loans

Applies to: Manufactured Homes not on owned land (personal property)

• How it works: Loan is for the home only (not the land).
• Terms: Typically shorter (15–20 years), higher interest rates.
• Use case: Manufactured homes in parks or leased land situations.

6. Personal Loans or Dealer Financing

Applies to: Mostly Manufactured Homes

• Used for: Homes not classified as real property.
• Pros: Easier qualification, fast approval.
• Cons: High interest rates, shorter terms, limited loan amounts.

7. State and Local Housing Programs

• Many states offer down payment assistance, tax credits, or special loan programs for factory-built housing.
• Check with your local housing authority or HUD-approved lenders.

Modular vs Manufactured Home? Which One Should You Choose?

Modular homes are built in sections and assembled on-site, offering greater customization and higher resale value. In contrast, manufactured homes are fully factory-built and typically more affordable upfront.

The right choice depends on your budget and lifestyle needs. To make an informed decision, explore homes for sale that match your preferences on Houzeo, America’s best home buying website.

Frequently Asked Questions