What is the difference between a Manufactured home and a Modular home?

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Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
Many people have wondered what the difference is between a manufactured and modular home. In some cases when shopping for new homes you will run across homes that are considered modular when in reality they are manufactured. Not many lenders specialize in manufactured home loans, we are one of a few that do.

Modular Homes: Usually built in 3 or more pieces, they are delivered to the lot and put on fixed permanent foundation. I'll list some of the requirements below for a traditional loan:

Modular Homes:
  • Must be built in accordance with the Uniform Building Code administered by the state agencies responsible for adopting the administering building code requirements for the state in which the modular home is installed.
  • On-Frame modular - NOT Eligible. On-Frame modular construction is defined as having a permanent chassis, but no evidence of compliance with the June 15, 1976, Federal Manufactured Home Construction and Safety Standards.

Prefabricated, Panelized and Sectional Homes:
  • Eligible
  • These properties do not have to satisfy HUD's Federal Manufactured Home Construction and Safety Standards or the Uniform Building Codes that are adopted and administered by the state in which the home is installed. The home must conform to local building codes in the area in which it will be located.
  • Factory-built housing not built on a permanent chassis such as modular, prefabricated, panelized, or section housing is not considered manufactured housing and is eligible under the guidelines for one-unit properties. These types of properties
  • Must assume the characteristics of site-built housing,
  • Must be legally classified as real property, and
  • Must conform to all local building codes in the jurisdiction in which they are permanently located.
  • The purchase, conveyance, and financing (or refinancing) must be evidenced by a valid and enforceable first lien or deed of trust that is recorded in the land records, and must represent a single real estate transaction under applicable state law.
  • Fannie Mae affords modular, prefabricated, panelized, or sectional housing homes the same treatment as site-built housing. Therefore, Fannie Mae does not have minimum requirements for width, size, roof pitch, or any other specific construction details.

A Manufactured home is a property that is usually 2 pieces put together to create the home. In some cases these properties are in parks (we cannot lend in parks unless you own the land) or in some cases on their own land. The biggest recommendation I can give is to find a manufactured/mobile home on it's own land, try to avoid the park as financing can be challenging, come with very high terms and in addition renting the space in which your home will be located.

Manufactured Home Requirements
  • Must be on it's own land as discussed above
  • Must be on fixed permanent foundation. The towing hitch, wheels, and axles must be removed. The dwelling must assume the characteristics of site-built housing.The manufactured home must be attached to a permanent foundation system in accordance with the manufacturer’s requirements for anchoring, support, stability, and maintenance.
  • HUD Data Plate and the HUD Certification Label should be present, there are alternatives that can be obtained from the Institute for Building and Technology and Safety.
  • The manufactured home must be a one-unit dwelling that is legally classified as real property.
  • The dwelling is NOT a single-wide manufactured home; multi-width ONLY allowed.
  • The manufactured home must be permanently connected to a septic tank or sewage system, and to other utilities such as water and power, in accordance with local and state requirements.

As you can see the above requirements need to be met in order for financing to be made available. I have had a situation where the buyers installed the permanent foundation through their own contractors, had the structural engineers report confirming it met standards and obtained a survey with ALTA7 complete. There are different requirements for other states and as we lend nationwide we have become familiar with each states requirements.

If you would like more information please feel free to give us a call at 619-379-8999 and/or e-mail at: [email protected]