Modular homes are assembled on a site and anchored to a base, while a prefabricated house is transported in one piece to a site and can be relocated. Mortgages are loans secured by real estate or land, and permanent fixtures built on them. Modular homes are placed on a permanent base. Once a modular home is assembled, it's treated exactly like a site-built home, so it can be financed through a regular mortgage.
When it comes to a prefab house, well, not so much. The difference comes down to the legal definitions of real estate and personal property. A modular house is built in sections in a factory. The starting site is prepared while the sections are being manufactured.
Once the site is ready and the sections of the modular home are complete, the parts are transported to the site of origin. Centennial Homes then places the sections in the mezzanine or basement and completes the rest of the work required for the final inspection and certificate of occupancy. Although a modular home is manufactured, it is not the same as a “prefabricated” or “mobile” house. Department of Housing and Urban Development (HUD), modular homes are built to the same local, county and state building codes as site-built homes.
Prefab homes, on the other hand, are built in accordance with the federal HUD Code. The HUD requires that a prefabricated house be built on a permanent chassis and not on a foundation. Modular homes are available in many of the same styles as site-built homes. The most common styles offered by Centennial Homes are the ranch and the divided lobby.
We can build quite elaborate contemporary styles that are indistinguishable from their site-built counterparts. And as with site-built house plans, modular floor plans can be customized. Unload-bearing walls can often be moved or removed, and all kinds of extras can be added, from a garage to an attic, a terrace or a porch. Financing a modular home is the same as financing new construction built on site.
The mortgage loan begins as a construction loan that is disbursed in several “drawings” as construction progresses towards predetermined milestones. For example, the first drawing can be made after excavating the ground and the next, after the foundations have been laid. Work must be inspected at every stage. Once it has been determined that the work has been completed correctly, the buyer is asked to sign the payment so that the next phase of construction can begin.
Once all of the construction loan money has been disbursed and the buyer takes possession, the loan becomes a standard mortgage loan. The main benefits of modular construction compared to on-site construction is that modular construction has stricter quality control. Every component in every home is made exactly the same way every time, and the results of each process are inspected several times before the house leaves the factory. In addition, the construction of the factory makes the weather not a problem.
Because the house is built inside, there is no concern for weather-related damage or delays. Finally, modular homes are less expensive than homes built on-site because volume discounts on materials and automated processes keep prices low. A comparison by the National Association of Home Builders revealed that the average cost of building a modular home is approximately 11% lower than that of a site-built home. The time it takes to build a modular module depends on size and style, but a general guideline for completing work in the factory is one to two months.
According to the Research Center of the National Association of Home Builders, modular homes are delivered to the house site with a 70 to 90% advance. It takes just a few days for a local contractor and finishing team to put the house together and prepare it for the move. Built off-site and in a controlled environment, according to the federal code commonly known as HUD, prefabricated homes are built in one or several sections and are transported and installed at the construction site. They can be placed on pillars, a mezzanine or a conventional base, depending on your needs.
The HUD Code requires that these homes be built to specific standards of strength, durability, fire resistance and quality. Modular homes are built offsite, in a controlled environment, according to the same local, state, or regional codes that all conventional site homes are built with, and include delivery to the site. They must be placed and permanently attached to a mezzanine floor or to the base of the basement. A disadvantage of buying a manufactured home is that it can be more difficult for buyers to obtain a mortgage.
For example, if a manufactured home is built for a specific state and the buyer cancels their order, the house must be resold to a buyer in that state. Modular homes, keep in mind that either option will cost significantly less than buying a traditional house built on-site. A modular home can have many custom features, such as an attached garage, a wraparound porch, and an endless variety of floor plans. While both prefabricated and modular homes are cost-effective alternatives to traditional site-built homes, there are some key differences to consider when deciding between the two.
Because mobile, prefab, and modular homes sound so similar, you might be left with questions about how they're different. Modular and prefab homes are prefabricated structures, meaning that they are partially or fully built in an off-site factory. While the phrase “mobile home” is still commonly used outside the federal government, a key difference between a mobile home and a manufactured home is that HUD standards have grouped all types of factory-built as manufactured mobile homes. However, before planning a mobile manufactured home move, there are some details you can consider, such as the age and condition of the home and whether your home will meet all local zoning regulations at the new location.
The differences between modular and prefab homes have serious implications when it comes to affordability, financing, long-term value, and a variety of other factors. Some lenders don't finance the purchase of prefabricated homes because the land they're on is usually rented and the house itself can be moved. While they may not be as customizable as modular or site-built homes, prefabricated homes can be built with a variety of architectural styles, floor plans, and add-ons, such as terraces and porches. Like traditional homes, modular homes are placed on a permanent base and often have full basements.