What Is a Manufactured Home and Why You Should Buy It

Homeownership has always been a dream for Americans. But, buying a home comes with a huge price tag. The sales price of houses in USA is 510K which makes it a challenging goal for many individuals. But there’s a cheaper alternative- manufactured homes.

21.2M Americans live in new manufactured homes, making up 1 in 10 new homes built each year. Besides, a traditional home costs $446K, and a manufactured home cost is $126K. This help buyers achieve their dream of homeownership without breaking the bank.

What Are Manufactured Homes?

A manufactured home is exactly what it sounds like—a factory-built, prefabricated home. These homes are made with standardized parts and secured on a pre-designated land. Besides, these homes make up 9% of all single-family homes in the U.S.

To ensure quality and safety, manufactured houses must comply with the Manufactured Home Construction and Safety Standards compiled in 1976. These standards include:

• Fire Safety: According to these guidelines, manufactured homes must have proper fire resistance, such as systems like fire extinguishers.
• Energy Efficiency: These standards mandate energy-efficient designs and materials to reduce energy consumption.
• Safety Measures: The standards include installing safety devices and warning systems, such as smoke alarms and carbon monoxide detectors, to protect the family from unfortunate hazards.

Difference Between Manufactured Homes and Other Prefab Homes

Here are the key differences between manufactured homes and other prefabricated homes:

1. Manufactured Homes vs. Modular Homes

The main difference between modular and manufactured homes lies in building codes. Modular homes adhere to local and state codes (International Building Code), while manufactured homes follow federally mandated codes (HUD code).

2. Manufactured Homes vs. Mobile Homes

Prefab homes that are built pre June 15, 1976, are considered mobile homes, whereas homes built after that are considered manufactured homes. Where Mobile homes have outdated safety standards. manufactured homes use updated construction methods.

3. Manufactured Homes vs. Tiny Homes

Tiny homes are small, often mobile living spaces that are cheaper than manufactured homes. They can sometimes bypass government regulations due to their size. Besides, their mobility allows for easy towing with a good trailer hitch.

How Much Does a Manufactured Home Cost?

Manufactured homes cost around $125,800, which is significantly cheaper than traditional site-built homes. Apart from that, here are the manufactured home prices according to their sizes:

On top of this, don’t forget to factor the cost of the land on which you’ll place the house. You can either buy a piece of land or rent a space. Additionally, consider if you want any upgrades like a switch from carpet to hardwood flooring will cost more.

How Can You Finance Your Manufactured House?

The process to finance a manufactured house is similar to that of a traditional home. The most common method is via a retail investment contract that your retailer provides. Here are the several home loan options available to finance a manufactured home:

1. Chattel Loans

These are personal property loans for manufactured houses, which use the home as collateral rather than the land. These loans often have higher interest rates. Besides, while they offer an affordable living option, borrowers lack the foreclosure protections available to homeowners.

2. Government-Backed Loans

3. Conventional Loans

Conventional mortgages follow guidelines set by Freddie Mac and Fannie Mae. These loans generally require higher credit scores, 620 or above. You’ll likely need a down payment between 5-20% as well.

You should get a mortgage pre-approval after you decide to buy a manufactured house. This helps you compare rates from lenders that fit your budget. Besides, some HUD-approved counseling agencies are also there to advice you about mortgage programs.

What Are the Pros and Cons of Manufactured Homes?

Here are the advantages compared to the downsides of manufactured homes against a traditional built house:

Pros ✅

1. Affordability: Compared to a newly built traditional home in the US, which costs around $414,500, manufactured homes are 77.9% cheaper.
2. Easy Customization: You can personalize your home to suit your lifestyle and tastes. Choose from diverse floor plans, fixtures, and appliances to create your dream living space.
3. Quick Construction: You can build manufactured homes in weeks, whereas traditional homes take months or even years.
4. Energy Efficiency: Manufactured homes come equipped with energy-efficient features, such as efficient heating and cooling systems and insulation.
5. Easy to Maintain: The standardized parts of a manufactured home can be easily replaced. Additionally, these homes come under manufacturer-offered warranty.

Cons ❌

1. High Land Costs: While the manufactured home itself is cheaper, you still need to account for land costs to place the home. Typical land currently costs $4,080 per acre in the USA.
2. Difficulty Obtaining Loans: Lenders view manufactured homes as higher risk. Getting financing can be more challenging compared to site-built homes.
3. Property Value Concerns: Manufactured homes tend to depreciate 3% to 3.5% per year unlike site-built homes which usually appreciate.
4. Limited Mobility: While manufactured homes are movable, relocating one is quite difficult and costly after installation.
5. Cookie Cutter: Personalizing these home are difficult. Moreover, while the model homes might be available for viewing, you won’t see the actual home until it’s fully prepared.

How Can You Buy a Manufactured Home?

Follow these four steps to buy a manufactured home:

1. Find a Manufacturer and Create Floor Plans

The first step to buying a new manufactured home is finding a reputable manufactured homes builder. Look for manufactured homes for sale near you. Once you find a few good options, you can compare the manufactured home cost and select the floor plans. 

Consider how much space you need and what amenities you want, such as the number of bedrooms, bathrooms and kitchen size. Having a specific floor plan in mind makes the purchase process smooth.

2. Select Land and Apply for Permits

You must decide where to place your new manufactured home. You can buy a plot or rent a space in a land-lease community. However, make sure you consider all the legalities and zoning regulations that might affect your home purchase.

Here are the most important permits you’ll typically need when buying land for a manufactured home in the US:

• Zoning Permit – Confirms the land legally allows manufactured homes.
• Building Permit – Authorizes placement or construction of the home.
• Septic System Permit – Required if no public sewer is available.
• Electrical Permit – Needed to connect your home to the power grid.
• Foundation Permit – If placing the home on a permanent foundation.
• Driveway Permit – Needed if you’re adding or modifying driveway access.
• HUD Certification – The home must meet HUD code standards.
• Flood Zone Approval – Additional clearance if the land is in a flood-prone area.

3. Get Pre-Approved for Manufactured Home Loans

As your home plans are completed, talk to your lender and get approved for manufactured home loans. Compare mortgage lenders and loan programs to find an affordable option that fits your needs. This will help you get the best rates of down payments.

Moreover, some lenders might refuse to offer loans for manufactured homes. So, it is important to get pre-approved before buying a manufactured home. Once pre-approved, you can lock in rates and move toward closing on the home purchase.

4. Close the Deal

Before closing, do a final walkthrough. Visit the factory to discuss transportation for your manufactured home. Confirm they’re using the right trailer size and check that the land is clean with no squatters. Once finalized, the factory will give you the keys to your new home!

Is a Manufactured Home Ideal for Your Next Move?

You can move to a manufactured home if it suits your needs. These homes give you space, safety, and customization. No wonder retirees and downsizers are all over it. But hold up—don’t forget the land costs, financing, and yes, the value drop.

Still think it’s a fit? Great. Go find your future home the smart way—check out Houzeo to get the best deal for manufactured homes.

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