21.2 million Americans live in manufactured homes. These homes constitute 1 of every 9 new homes built each year. Besides this, the median selling price of a traditional home is $430,700. Whereas, a manufactured home costs much less at a $126,600 median price.
Manufactured houses are becoming increasingly popular. They cost up to 50% less per square foot than traditional homes and offer the same quality of living. Manufactured homes are a cost-effective alternative that enables budget homebuyers to achieve their dream of homeownership.
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What Are Manufactured Homes?
Manufactured homes are a type of prefab homes built in factories. They undergo a streamlined production process before they are fitted on land.
To ensure quality and safety, manufactured houses must comply with the Manufactured Home Construction and Safety Standards. It’s a nationwide code enforced by the HUD. It sets guidelines for design, construction, energy efficiency, fire resistance, and more.
Manufactured Homes vs. Other Prefab Homes
Manufactured homes provide affordable housing. But they are not the only prefab home option. Here are some others:
1. Modular Homes
Modular homes are also built in parts in a factory. These sections get transported to the building site and assembled on permanent foundations. The key difference between manufactured homes and modular homes is in their building codes. They conform to the same local building codes as traditional site-built homes.
2. Mobile Homes
Mobile homes are prefab homes built before June 15, 1976. That’s when nationwide HUD standards were enforced. Mobile homes lack modern energy efficiency and safety features. On the other hand, manufactured houses have these updated construction methods.
3. Tiny Homes
Tiny homes are built in very small living spaces. Many have wheels for mobility. While manufactured homes provide affordable housing, tiny homes downsize further. They range from 100 to 400 square feet. The average tiny house costs between $40,000 to $100,000.
How to Buy a Manufactured Home?
To ensure a smooth buying process follow the step-by-step guide below:
1. Find a Manufacturer and Create Floor Plans
The first step is finding a reputable manufactured house builder. Look for manufactured homes for sale near you. Once you find a few good options, you can explore their floor plan selections.
Consider how much space you need and your desired amenities, 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 Seek 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.
If you are planning to buy a manufactured home on land, you must research plots in a zone that allows housing. You may need permits for site preparation, utility hookups, and construction.
3. Get an Approval and Close the Rates
Get approved for a loan as your home plans are completed. Compare mortgage lenders and loan programs to find an affordable option that fits your needs.
Once pre-approved, you can lock in rates and move towards closing on the home purchase.
How Much Do Manufactured Homes Cost?
As per the latest data available from the U.S. Census Bureau, the average cost of manufactured homes is given below:
| Type of Manufactured Home | Size (sq. ft.) | Average Cost |
| Single-wide | 500 to 1,200 | $85,900 |
| Double-wide | 1,000 to 2,200 | $154,100 |
Remember, you’ll also need to factor in the cost of land for the manufactured house to sit on. You can either buy a plot of land or rent a space in a home park, which will have monthly fees.
How Can You Finance Your Manufactured House?
Financing a manufactured home is similar to financing a traditional home. You have several types of home loan options to consider:
1. Government-Backed Loans
The most common government-backed loan option is an FHA loan. These loans accept down payments as low as 3.5% with a 580 credit score or 10% with a 500 credit score.
The government also offers loan programs like VA loans and USDA loans. However, these mortgages have different eligibility criteria.
2. 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.
3. Chattel Loans
A chattel loan is a type of personal property loan specifically for manufactured houses. The home itself serves as collateral, not the land it sits on. They are available for new or used manufactured homes.
You should get a mortgage pre-approval before you buy a manufactured home. This will help you compare rates from multiple lenders that best fit your budget.
Pros and Cons of Manufactured Homes
Manufactured homes offer several advantages over traditional houses, but it’s crucial to consider the potential drawbacks as well. It will help you make an informed decision:
Pros
- Affordability: The lower costs make buying a home achievable on almost any budget. Compared to traditional homes, you can save thousands of dollars.
- 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.
- Quick Construction: You can build manufactured homes in weeks, whereas traditional homes take months or even years.
- Energy Efficiency: Manufactured homes come equipped with energy-efficient features such as efficient heating and cooling systems and insulation. These features help you save money on utility bills in the long run.
Cons
- High Land Costs: While the manufactured home itself is cheaper, you still need to account for land costs to place the home.
- Difficulty Obtaining Loans: Lenders view manufactured homes as higher risk. Getting financing can be more challenging compared to site-built homes.
- Property Value Concerns: Manufactured homes tend to depreciate over time, unlike site-built homes which usually appreciate.
- Limited Mobility: While manufactured homes are movable, relocating one is quite difficult and costly after installation.
Bottom Line
Manufactured homes can be a better option if you want to buy a cheaper house. They are built quickly and meet strict safety standards.
However, you need to factor in the cost of the land, financing options, and the fact that they may lose value over time. Considering these factors will help you decide if a manufactured home is right for you.
Once you’ve determined the type of property you want, consider using a trusted platform like Houzeo to find your perfect fit.
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Frequently Asked Questions
What does a manufactured home mean?
Manufactured homes are built entirely in factories for affordability and faster moving timelines. They undergo a streamlined production process before they are fitted on land.
What is the difference between a manufactured and mobile home?
The term mobile homes is often used for homes built before June 1976, while manufactured homes refer to those built after this date. Manufactured homes are considered safer and more durable than older mobile homes.
Why should you buy a manufactured home?
A manufactured home's average cost is $126,600, which is significantly cheaper than traditional site-built homes. So, they are a great option for those looking for an affordable housing option.
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