Modular Vs. Manufactured Homes | Quicken Loans (2024)

Both modular and manufactured houses are prefabricated homes, meaning they’re either partially or fully constructed in an off-site factory. While they share many similarities, they also have some key differences every home buyer should understand.

In this article, we’ll cover how modular homes differ from manufactured ones, the pros and cons of each and some considerations you should make think about buying either option.

What’s The Difference Between A Modular Home Vs. A Manufactured Home?

From a legal standpoint, the primary difference between modular and manufactured homes is that modular homes are held to the same local, state and regional building codes required for on-site homes, while manufactured homes are held to a federal code set by the Department of Housing and Urban Development (HUD).

Admittedly, this legal distinction doesn’t tell us much in and of itself. So, what are the discernible differences between modular and manufactured homes? Let’s have a look.

What Is A Modular Home?

A modular home is a house that’s partially constructed in a factory and shipped to the homeowner’s lot, where it’s pieced together, put on a foundation and then completed.

Like on-site stick-built homes, modular homes are placed on a permanent foundation and often have full basem*nts or crawl spaces. The construction of a modular home must comply with local building codes and standards in the area where the home will be placed.

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Modular Home Pros

While the construction process differs quite a bit from that of traditional homes, you’d be hard-pressed to identify a modular home just by looking at it. They can come in all sorts of floor plans and designs, from a sprawling ranch or Cape Cod to a two-story colonial.

Like traditional, site-built homes, modular homes have values that tend to go up or down right along with the rest of the housing market. In other words, you can build equity in your modular home just like you would with an on-site house.

Also, most banks and lenders offer financing on modular homes, meaning buyers will typically have a good range of mortgage options when it comes time to make a purchase. In fact, our friends at Rocket Mortgage® offer financing for modular homes.

Modular Home Cons

Even though modular homes come with several benefits, including affordability and easier financing, they do have some disadvantages. For instance, some HOA communities may prohibit the construction of any type of prefab home, including modular houses.

There are also numerous manufacturers with varying levels of service and amenities. You might have to spend a lot of time researching different modular home companies to find one that offers the services and designs you’re looking for.

What Is A Manufactured Home?

Manufactured homes, sometimes referred to as mobile homes or trailers, are houses completely constructed in a factory and built on a fixed, steel chassis (rather than a permanent foundation). These homes are also usually built with wheels, which are detached after towing the home to the location, which is either privately owned or leased to the homeowner.

Construction on a manufactured home must comply with building codes set up by HUD. One of the primary ways to identify a manufactured home is by its HUD tag.

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Manufactured Home Pros

Newer manufactured homes don’t always look like the double-wide trailer you may be picturing. While they might not be as customizable as site-built or modular homes, manufactured homes can be built with a variety of architectural styles, floor plans and add-ons, such as decks and porches.

Another misconception about manufactured homes is that they are unsafe or poorly built. With the passing of the National Manufactured Housing Construction and Safety Standards Act of 1974, HUD began requiring stringent construction and safety standards for all HUD-certified manufactured homes. It’s important to note that manufactured homes built before June 15, 1976 – when the law went into effect – aren’t considered compliant with HUD code.

Modern day manufactured homes are also energy-efficient, durable and affordable. Since these structures are built in a controlled environment, home builders can use more cost-effective constructive methods and better ensure uniform quality as the structure is built.

Manufactured Home Cons

Unfortunately, like any type of home, manufactured houses come with some drawbacks.

One disadvantage of buying a manufactured home is that it can be more complicated for home buyers to get a mortgage. Some dealers and local lenders may offer financing, but only a few lenders offer mortgages on this type of housing. While Fannie Mae and Freddie Mac do offer conventional loans for manufactured housing, government-backed loans are a more common choice because of different underwriting standards.

Rocket Mortgage offers financing on manufactured homes built on or after June 15, 1976, that are permanently affixed to the land (real property) and have a HUD tag. FHA loans for manufactured homes require a foundation inspection according to the standards set by the Permanent Foundations Guide for Manufactured Housing. If you’ve had a prior inspection, that can be used to qualify.

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Additional Differences Between Modular And Manufactured Homes

The differences between modular and manufactured homes have serious implications when it comes to affordability, financing, long-term value and a variety of other factors. Here’s a chart that breaks down some of the important differences between modular and manufactured homes:

Modular Homes

Manufactured Homes

Construction method

Multiple factory-made pieces assembled at home site

Built-in on top of a chassis, can be single or multi-width



Can be transferred to property then permanently affixed

Financing options


Limited (more options may be available if the home is permanently affixed to the land)

Code requirements

Local, state and regional codes

Federal HUD code

Relative home cost



Some home buyers opt for a manufactured home over a modular home based on affordability alone. It’s true that manufactured homes tend to be less expensive overall, but the broader range of mortgage options for a modular home might offer qualified borrowers the ability to get into a modular home more quickly and easily, with more lending options and more simplified loan processing.

The Bottom Line: Both Manufactured And Modular Homes Have Pros And Cons

While these types of homes may be similar in construction, they have different implications for home buyers, like you. Modular homes may be difficult to differentiate from other homes and they must comply with local building codes and standards, while manufactured homes are built on a fixed chassis and must comply with building codes established by HUD. With other considerations like customization and mortgage options, knowing the difference between modular and manufactured homes will help guide you to make the right decision.

If you have questions about financing a manufactured or modular home, now or give us a call at (888) 452-0335.

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Modular Vs. Manufactured Homes | Quicken Loans (2024)


Modular Vs. Manufactured Homes | Quicken Loans? ›

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.

Why is it harder to get a loan for a manufactured home? ›

Because mobile homes depreciate over time, it can be more difficult to find a lender that offers manufactured home financing. But there are still plenty of options available. Just be sure to do your due diligence to find the right one based on your creditworthiness, financial situation, needs and preferences.

What I wish I knew before buying a modular home? ›

Once you've done your advanced preparation, you can move forward with confidence.
  • #1 – Understand the Modular Home Building Process. ...
  • #2 – Research Your Modular Homes Builder. ...
  • #3 – You Must Prepare the Building Site. ...
  • #4 – Customization Will Cost More and Take Longer. ...
  • # 5 – Construction Loans and Financing.

Why are mortgage rates higher for manufactured homes? ›

Manufactured home loans often have higher interest rates than traditional home loans because they are considered higher risk. Additionally, borrowers may need to make a larger down payment and have a shorter loan term.

Is modular home the same as manufactured home? ›

Modular homes are assembled on a site and anchored to a foundation, whereas a manufactured home is transported in one piece to a site and can be relocated. Because they can be moved, manufactured homes are considered chattel (personal property) — like a recreational vehicle.

Why don't banks like manufactured homes? ›

Most lenders won't give you a conventional loan for a mobile or manufactured home. That's because these structures aren't considered real property. Rocket Mortgage offers conventional loan financing on manufactured homes that have been permanently attached to land and converted to real property.

Why are modular homes hard to finance? ›

Why are Loans for Manufactured Homes so Difficult to Find? When it comes to financing a manufactured home, some lenders tend to shy away from these popular structures. This is due to the fact that some manufactured homes may age more quickly than their site-built counterparts.

Who makes the highest quality manufactured homes? ›

Skyline Homes

What is the oldest manufactured home that can be financed? ›

The question of financing older manufactured homes often puzzles buyers, as lenders typically have strict criteria regarding the age and condition of the property. Generally, the oldest manufactured home that can be financed is one built after June 15, 1976.

Why is it so hard to refinance a manufactured home? ›

Manufactured Home Mortgage Refinancing Requirements

One major requirement for a mortgage is for the manufactured home to be on a permanent foundation. Manufactured homes that aren't on a permanent foundation are considered chattel property or personal property, and you'll have fewer loan options.

What are four drawbacks of modular homes? ›

Of course, modular houses have their downsides. These include less customization capabilities than stick-built homes. The cost of the land and construction of the home may be higher than some people can afford, land restrictions, and perceive quality issues. Modular homes may also have more a complicated loan process.

Are modular homes safe in storms? ›

These structures are made inside factories, so the materials that go into your home reside in a controlled environment with little moisture. Modular homes are built to be safe in case of a tornado or storm, and inspectors check surfaces for structural soundness before shipping.

How to tell a modular home from a manufactured home? ›

On modular homes, the serial number may be found on or in the utility box. Manufactured homes are frequently referred to as mobile homes. They typically are sold as personal property from the manufacturer and ownership is evidenced by a title issued by the Department of Motor Vehicles.

What is the loan term for a mobile home? ›

FHA loans with terms up to 30 years are available for manufactured housing. They require only a 3.5% down payment and are more flexible about credit score.

What is the advantage of a manufactured home? ›

Thanks to the lower cost of materials, faster build timeline and greater energy efficiency than stick-built homes, manufactured homes are cost-effective and can be a great option for buyers on a budget.

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