Modular vs Manufactured Homes

Modular vs Manufactured 101

When it comes to prefab homes, the terms “modular” and “manufactured” are often used interchangeably. However, while they are both technically prefab structures, there are significant differences between them.

Whether you’re building a new home or looking to purchase a prefab home, it’s essential to understand the difference between modular vs manufactured.

What’s the Difference Between Manufactured & Modular?

Modular and manufactured homes are both prefabricated in a manufacturing facility, but that’s where the similarities end. Not only are these homes built to different standards, but one actually depreciates over time rather than appreciating in value.

What is a Manufactured Home?

Manufactured Homes Definition: A prefabricated home built to federal HUD code.

The primary difference between a manufactured and modular home is that a manufactured home is built to federal HUD code. HUD code requires manufactured homes to have a permanent steel chassis attached.

A manufactured home is built in a facility using assembly-line construction. Typically, they are built in sections on steel and frame chassis. They are then transported to the building site, where no assembly is required apart from the joining of the sections and utilities installation.

Because manufactured homes aren’t placed on a permanent foundation, they can be easily transported to new locations. Manufactured homes can also be placed on either land that is owned, or land that is leased/rented.

Manufactured homes can only be single-story, with a maximum length of 70-80 feet and width of 16-18 feet. While you can customize some manufactured home features, your options are more limited than a modular home.

There are three general floor plan options:

  • Singlewide: A single, long section
  • Doublewide: Two sections joined together to create a larger home
  • Triplewide: Three sections joined together to create an even larger home

Additionally, manufactured homes tend to lose value over time (depreciate).

Financing options for manufactured homes are constantly evolving, and buyers have more flexibility now. However, it’s generally more challenging to finance a manufactured home for a few reasons:

  • Manufactured homes may sit on land that is rented or leased. Therefore, it is technically not considered real property, according to Rocket Mortgage.
  • Local ordinances can restrict where manufactured homes are placed.

Buyers may need to seek out specialized financing for a manufactured home. These loans generally have shorter terms and much higher interest rates.

What is a Modular Home?

Modular Home Definition: A prefabricated home built to local and state building codes.

Modular homes are built to International Residential Code (IRC) standards. Generally, modulars must be built to higher standards than a manufactured home. Yes, both types of homes are built in factories, but a modular will have to be meet more stringent requirements.

Because modular homes are built to IRC standards, they are treated as stick-built homes and appreciate in value.

Modular homes are also:

  • Placed on a permanent or traditional foundation
  • Placed in sections using a crane

A modular home can be placed on any type of permanent foundation – pier, slab, etc. Whatever foundation you choose, it will need to be designed by an engineer and it will need to pass local inspections.

Like a site-built home, modular homes go through several inspections before they are given the certificate of occupancy.

In some ways, modular homes are better than site-built homes. After Hurricane Andrew, a study from FEMA found that modular homes withstood the storm better than surrounding site-built homes.

In the design department, modular homes can be customized to your liking (for the most part). While manufactured homes do have more financing options today, it’s generally easier to finance a modular home with a conventional mortgage.

Two Types of Modular Homes

There are two types of modular homes: off-frame and on-frame. It’s crucial to understand the difference between them.

#1 – Off-Frame

An off-frame modular home:

  • Doesn’t have a steel chassis underneath
  • Is built with 2” x 10” floor joists, and floor joists are 16” centers
  • Is built to the same standards as a stick-built home

#2 – On-Frame

An on-frame modular home:

  • Does have a steel chassis underneath
  • Is built with either 2” x 8” or 2” x 6” floor joists, and floor joists are 24” centers

Essentially, an on-frame modular is a manufactured home. Technically, it’s still a modular, but it’s usually considered a glorified manufactured home.

How Can You Tell the Difference Between a Modular and Manufactured Home?

If you’re building or buying a home, it should clearly state whether it’s a modular or manufactured home.

Modulars are treated as stick-built, so a listing may not necessarily state that it’s a modular building. However, if you are having a home built, the difference should be clearly stated.

There is also another way to tell the difference between a manufactured and modular home:

  • Manufactured homes, like doublewides and singlewides, will have a data plate tag on the exterior of the home with its HUD number.
  • Modular homes have a permanent modular home seal that can be found in two places in the home: Under the kitchen counter (typically near the sink) and inside the main electrical box.

The seal indicates that the home is, in fact, a modular home.

Modular vs Manufactured Homes at a Glance

 ModularManufactured
FoundationPermanentSteel chassis
FinancingConventionalLimited
CodeIRC, local, state and regionalHUD
ValueTypically appreciatesGenerally depreciates
CustomizationGreater flexibilityLimited

If you’re considering a prefab home and you’re unsure whether to choose a manufactured or modular home, ultimately, it comes down to your budget, personal preference and life goals.

  • If you want a home that generally appreciates in value, a modular home is the better option.
  • If budget is your primary concern, a manufactured home may be ideal.

Additionally, if you own a piece of land, your deed restrictions may also prohibit manufactured/mobile homes, which means that an off-frame modular may be your only option.

Today’s manufactured homes are built to much higher standards than in the past, but they are still very different from modular homes. That doesn’t necessarily mean that a manufactured home isn’t a worthwhile investment. Consider your life goals (whether you want your home to be an asset) and your budget.

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