The Difference Between Manufactured & Modular Homes

Manufactured home.  Double Wide. Trailer.  Sectional home. Mobile home.  Modular home. These words, for decades, have been used at one point or another, by various individuals, to describe different homes.  Sometimes, this can be because of different names used in different parts of the country. Most of the time, though, it’s because there’s so much confusion around these terms, that no one knows what they’re selling!

So in this post, we’ll examine the difference between the two major types of non-site-built homes:  Manufactured and Modular. Let’s will begin with a discussion on how to tell the difference between the two.

What is a manufactured home?

According to HUD, “A manufactured home (formerly known as a mobile home) is built to the Manufactured Home Construction and Safety Standards (HUD Code) and displays a … certification label on the exterior of each transportable section. Manufactured homes are built in the controlled environment of a manufacturing plant and are transported in one or more sections on a permanent chassis.”

In plain English, you ask?

Ok.  If you have the following, you’ve got a manufactured home:

1. Manufactured homes are built on steel beams as opposed to wooden floor trusses. Below is a photo taken from the crawl space of a manufactured home. Most also have metal tie-downs which help secure the home to the site (you can see the gray tie-down just in front of the closest set of concrete blocks.
   
   
2. As manufactured homes are built to HUD code, they must have a HUD Certification Label (HUD Tag) attached to the exterior of each section, just like this one:
   If you have a single-wide manufactured home, you’ll only have one tag.  If you have a triple-wide (yes, there is such a thing!), you’ll have three.  And just so you know, a triple-wide isn’t actually three sections wide.  But it is three sections.
3.  Just as you should have a HUD Label (or set of labels), you should also have a HUD Data Plate/Compliance Certificate, usually found attached to the inside of a kitchen cabinet or the master bedroom closet wall (though it could be found anywhere). Here’s an example of one:
   This paper has very important information about the manufacturer, date of manufacture, wind & roof loads, and also has the HUD and serial numbers listed.

If you have an older manufactured home or one that has been remodeled, it’s very possible that the Certification Labels and/or the Data Plate will be missing.  Even if these are missing, it’s still a manufactured home.

What is a modular home?

Unlike a manufactured home, a modular home is not built to HUD code.  By exterior appearances (and sometimes even interior), a modular home can often be hard to distinguish from a manufactured home.  Modular homes are entirely customizable. Therefore, any home you see while driving down the street could be a modular home.

A modular home is pre-built in sections at a factory or other controlled environment.  It is then assembled on-site and must conform to all local and state building codes. Unlike a manufactured home, a modular home is not built on a non-removable steel chassis.

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Why is it important to know the difference?

As with any appraisal, an appraiser wants to be able to compare your home with others that would be considered ‘substitutes’.  Essentially, we ask ‘would that sale have been considered by a purchaser if it were on the market at the same time as the subject?’  In many instances, modular homes and manufactured homes are not considered reasonable substitutes.  One exception would be in the case of a very high-quality manufactured home set on a permanent foundation.

When appraising a manufactured home, there are certain guidelines appraisers must follow.  We even have a form made specifically for appraising a manufactured home. Most lenders will want to see a minimum of two closed sales of manufactured homes.  If sales are extremely limited, an appraiser might be able to use a sale of a modular home or other home, if needed.

Modular homes are somewhat similar in that a lender will want to see as many sales of modular homes as possible, but the options are greater for alternate sales.  I can use a site-built home, high quality manufactured home, or other if I don’t have modular home sales. I just need to be careful to be aware of, and account for, any differences in quality of construction, design, and marketability.

All of this means that it is highly important that the home is classified correctly.  Either by the taxing authority, Realtor, or seller.  Because when an appraiser searches for sales, he or she needs to be able to find the best, most comparable sales!

Answers to common questions:

1. What if my home sits on a permanent foundation and/or was recently converted to real estate?
   Once a manufactured home, always a manufactured home.  That’s the answer, basically. Converting your home to ‘real estate’, or placing your manufactured home on a concrete block foundation, for instance, will not change the fact that it is manufactured.  It will still be appraised the same way and will have the same marketability as before.
2. My manufactured home has vinyl skirting.  Will it qualify for FHA financing?
   Not without backing.  FHA states that “if the perimeter enclosure is non-load bearing skirting comprised of lightweight material, there must be adequate backing (such as: concrete, masonry, or treated wood) to permanently attach and support or reinforce the skirting”  This means that your vinyl skirting will need to be reinforced with backing. It’s been our experience that treated wood is the cheapest and quickest fix.
3. I can’t find my HUD Data Plate / Compliance Certificate in my house.  Is that going to be a problem when I sell? It depends.  Don’t you love that answer?  It really comes down to the lender.  When needed, your lender will be able to guide you through this process.  But to get you started, you can check out this helpful link by HUD: https://www.hud.gov/program_offices/housing/rmra/mhs/mhslabels

Whether you’re buying or selling, knowing the difference between a manufactured and modular home could mean the difference between making and breaking the sale.  Make sure you advertise your home for sale correctly and make sure if you’re a buyer that you do your homework to make sure the home is what the seller says it is.

If you have any questions, feel free to contact us anytime!

Helping homeowners navigate the appraisal process,

Ryan Bays, SRA, AI-RRS