“Aren’t modular homes and manufactured homes the exact same thing?”
At Zook Cabins, we are used to hearing that question when they first call us. Especially when it comes to the first round of questions that people have about out products.
However, even though it is important to know the difference between the two it can be a challenge to know what you are actually getting into.
So to dispel the myths and set the record straight we are going to help you know the difference between the two so that you can have a clear understanding about the differences.
But before we get started, a quick vocab lesson.
In this blog, when we say modular home, we are talking about a home that is built off-site in a shop to the IRC (International Residential Code). This means that the homes you receive will be built to be compliant with your local building code.
When we say manufactured home, we mean a home that has been built to meet HUD standards.
Now with that out of the way, let’s dive into understanding these two amazing kinds of homes.
What Is The Main Difference Between Modular Homes and Manufactured Homes?
The main differences between modular homes and manufactured homes are just like what we mentioned above, the way they are built. Modular homes are built to the IRC standards for your area. This means that your home will be built off-site in modules that comply with your local building code, then delivered and assembled on your prepared foundation.
On the other hand.
HUD Certification stands for U.S. Department of Housing and Urban Development Certification. In a nutshell, this means your home is built to meet HUD’s required construction and safety standards.
One of the most important characteristics of a HUD-certified home is that it is built on a permanent chassis. Traditionally, this means the home is not separated from the chassis, but it can be relocated to a new site if needed. This style is typically what people think of when someone mentions a “mobile home” or “trailer”. Yet at Zook Cabins, we refer to these style homes as luxury mobile homes.
Does a Manufactured Home and a Modular Home require the same foundation?
No.
At a minimum, manufactured homes and modular homes require different types of foundations. That said, there are some areas of overlap where certain foundation types can be used for either.
A manufactured luxury mobile home, such as our Sonoma HUD or Willow HUD models, requires a concrete slab foundation as a minimum. In addition, you will need concrete blocks and shims for leveling and hurricane tie-downs.
On the other hand, modular homes require a crawl space or basement foundation. This is because, unlike a manufactured home, your modular home is not built on a chassis and will need to be permanently bolted to your foundation for stability.
All of this being said, a manufactured home can be placed on a crawl space or a basement foundation. However, this isn’t required and can add a high cost to the overall home setup process.
Typically, homeowners choose this option when they want their home to appreciate in value more, similar to a site-built or modular home. However, once you factor in the additional foundation costs, the total investment may be comparable to that of a modular home.
Do Modular Homes or Manufactured Homes Have A Better Resale Value?
Traditionally, modular homes have a better resale value than manufactured homes. This is because all modular homes need to be placed on a permanent foundation. This, in turn, makes your home real estate as the home is tied to the property and can not be removed .
On the other hand, manufactured homes are often not placed on a permanent foundation, they may not have as high a resale value as they are not viewed as real estate property. This is because mobile homes are on a chassis with wheels and azels and could be moved to a new location if so desired.
However, if your manufactured home is set on private property that you own, and the wheels and axles are removed. You may be able to have a successful resale value. However, this is often because of the land sold with the home, not the home itself.
Do Modular Homes Or Manufacted Homes Require More Electricity?
Manufactured homes require less electricity than modular homes do. At Zook Cabins, all of the manufactured homes we sell require only 100 amps of electrical service, while modular homes require 200 amps of service. Generally speaking, 100 amps of service is enough for daily living needs. However, if you desire extras like a hot tub, sauna, or EV charger, you may find that 100 amps of service may not meet your needs.
However, at Zook Cabins, we have a solution! All of our manufactured homes can be upgraded to 200-amp service, creating a housing solution that fits your needs.
Are Modular Homes and Manufactured Homes Built To The Same Standard?
No, but that isn’t necessarily a bad thing.
As we mentioned earlier, modular homes are built to your local building and zoning requirements as defined by the IRC. Manufactured homes, on the other hand, are built to the standards established by HUD.
In some cases, the requirements for a HUD-certified home may differ from the IRC requirements in your area. However, because HUD standards are federally regulated, they take precedence over local IRC requirements for manufactured homes.
Neither standard is inherently better than the other; they’re simply different building systems designed for different types of homes.
Are Modular Homes and Manufactured Homes Financed The Same Way?
No, modular homes and manufactured homes are not financed in the same way. To better understand the differences, we talked with Zook Cabins’ lending manager Tim Brazil to learn more about how these homes are financed.
Modular Homes
Types of loans
A big distinction is that modular homes are considered real estate, and are permanently secured to the property with a foundation. So how does that factor into financing?
“[Modular homes] usually require a mortgage product such as a Home Construction Loan or a Renovation Loan,” Brazil shares.
Home Construction Loans are used for modular homes built on vacant land, he explains, while Renovation Loans are used for modular ADUs built on property with an existing home or dwelling.
“Both of these loans use ‘After-Market Value’ appraisals to determine the project’s maximum loan limit,” Brazil continues. “This is the property’s value after the modular home or ADU project is completed.”
Finding the right lender
To make the process easier and save yourself some time, Brazil says finding the right lender for these loans is important.
“It can be tricky,” he says. “Most lenders only offer construction loans for ‘Ground-Up Construction’ projects, or ‘Stick-Built Homes’, built outside of a climate-controlled factory. They don’t even know what a modular home is.”
He says it’s important to let the lender know upfront that you are financing a factory-built modular home, not a ground-up home.
“Show the lender the specifications, floor plans, and pictures of your home,” Brazil encourages. “There is nothing worse than wasting months applying with the wrong lender, only to find they don’t accept modular homes right before closing. We see this quite often.”
Getting started
To keep your project on schedule, Brazil recommends asking your sales rep about Zook Cabins’ Approved Modular Home Lenders.
“There’s no need to risk using the wrong lender who doesn’t understand modular homes,” he explains. “Zook Cabins also partners with home equity lenders and unsecured lenders (non-mortgage loans that offer same-day approvals), so customers don’t always need a Construction Loan to finance their dream cabin.”
Manufactured Homes
Flexible financing
When it comes to financing, Tim Brazil says manufactured homes typically offer more flexibility than modular homes.
“Both are factory-built homes, but Manufactured Homes (colloquially called Mobile Homes) are built on a permanent steel chassis or frame that includes axles, wheels, and a towing hitch and may also be known as a ‘trailer’,” he explains.
“Since the home is on a trailer, the manufacturer must issue a Manufacturer’s Certificate of Origin (or MCO),” he continues. “This is where manufactured homes get their flexibility from.”
You can find more information about the difference between modular homes and manufactured homes here.
We know this is a lot of information to understand all at once. To help make it easier, our sales team can help you understand all the avenues of financing or get you in touch with Tim directly. To do this, simply fill out a quote form, and your designated sales rep will be able to get you pointed in the right direction.
Is there a difference between Modular Homes and Manufactured Home Insurance?
Yes, modular homes and mobile homes differ in policy coverage and usage.
For example, mobile home insurance covers your home and the contents within it. However, because a mobile home is not typically an appreciating asset, many times the policy may not cover the total purchase price of your home, as they traditionally lose value over time.
Modular homes, on the other hand, are typically covered by standard homeowners insurance. However, there may be a period between when the home is set on the foundation and when the certificate of occupancy is issued.
During this time, lenders may require a policy known as builder’s risk insurance (sometimes referred to as risk insurance). This coverage protects the home’s value while construction and final inspections are being completed, before the home becomes eligible for traditional homeowners insurance, which is issued after the certificate of occupancy is awarded.
Are Modular Homes or Manufactured Homes More Affordable?
Generally speaking, manufactured homes are more affordable than modular homes. This comes down to the cost of building the home itself as well as the type of foundation that it needs.
Let’s take a look at this at a basic level.
At Zook Cabins, all of our luxury mobile homes are built to withstand a 40 lbs of snow load. This is in compliance with HUD home building standards. Allowing your home to be approved for our delivery zones.
On the other hand, modular homes are built to meet whatever your local building code requires. For example, in Maine, the IRC building code requires that roofs qualify for snow loads of 50 pounds. Because of this, more materials are required to build a stronger roofing system. This in turn, causes the cost of the structure to increase.
This is just one of the many examples that lead to a price differential between the IRC and HUD building specs that will result in different price points.
Can Modular Homes and Manufactured Homes Be Placed Anywhere?
Yes, they can be.
This is where modular homes and mobile homes overlap in their similarities. Because modular and mobile homes are delivered via semi most of the time, either home can be delivered almost anywhere. However, because crane setting is included in the price of your modular homes, there may be a bit more flexibility in how the home can be set in place, allowing what may seem like a difficult home setting to be done easily.
One thing to keep in mind is site accessibility. So long as your property is accessible via semi-truck, there should be no issue in having your home delivered. If you are concerned about delivery, reach out to your sales team representative and discuss your concerns.
Are Modular Homes or Manufactured Homes Built Better?
Generally speaking, modular homes are built to more robust standards than manufactured homes. This is because all modular homes must comply with the IRC building codes in your local area.
However, this is not to say that manufactured homes are built poorly; in fact, quite the opposite. In many cases, at Zook Cabins, you would have a hard time telling the difference between a Zook Cabins manufactured home and a modular home in terms of quality.
Conclusion…
By the end of this blog, we hope you will find it easier to understand the differences between modular and manufactured homes. In a nutshell, both homes styles are built off-site, while manufactured homes are built on a chassis with axels and wheels, their modular counterparts are built in sections and placed on a permanent foundation. We know that, at the end of the day, there are still many questions that may need to be answered to fully understand how either of these structures will fit your needs and wants. To better assist you, please fill out a quote form, and one of our sales reps will be able to help you determine which home is best for you.