Is Manufactured Housing Right for You?
July 21, 2021 - By: Matt Sterkenburg
Whether you are buying your first house, a starter home for your family, or your forever home in retirement, most are looking for a way to save on their home buying costs. This cost-effective mindset is what leads many home buyers to the idea of manufactured or mobile homes.
Like any major decision, deciding what best suits your needs may best be achieved with a good old-fashioned pros and cons list. Before writing out each item, be sure you are informed about manufactured homes as they compare to other affordable housing options currently available on the market.
Mobile homes are manufactured homes built before the HUD code governing standards for factory-built homes was instituted in 1976. Modular homes and manufactured homes both fall into the category of “prefabricated homes”. Modular homes are pre-built in sections at a factory site and then are transported to and finished on location at the home buyer’s property. Manufactured homes are pre-constructed completely in the factory on a permanent steel chassis. Manufactured homes can be located on private property, but many homeowners choose to live in mobile home parks or communities.
Now that we’ve outlined the difference, how can you tell if a manufactured home is the right form of affordable housing to meet your needs?
Questions to Ask Yourself First
What size is right for you and your family?
Consider how large your current living arrangements are, and how much of that space your family uses. Make a list of wants and needs with the other members who will be living in your household.
Keep in mind you should plan for any possible family expansion, frequent overnight guests, or children who are nearing the age to leave the house to get an accurate picture of how much space is needed before buying.
Do you own land or need to finance?
In many heavily populated areas, land is scarce and expensive. In other places, the local laws only allow site-built construction on land. The size of your land parcel will largely dictate how big of a manufactured home can be safely delivered there, while leaving space for utilities and hook-ups.
Mortgage lenders usually offer loans to buyers of land and what are considered ‘permanent structures’ built on it. Manufactured homes can only be considered for traditional mortgage loans if the axles are removed and the structure is placed on a concrete foundation or basement. This can greatly affect one’s ability to obtain financing for a manufactured home.
Are you planning to buy new or used?
Buying a manufactured home can have advantages regardless of whether you go the new or pre-owned route.
Purchasing new manufactured homes allows you to choose the exact layout and size you want. In addition, you can choose all the custom features you want like countertop material, custom cabinetry, or soaking tubs and fireplaces.
The main advantage of purchasing used manufactured homes is the lower price. However, like any used home purchase, you want to have it inspected and also have the chassis (if still fixed) and structural integrity inspected for the long-term safety of the home.
The Pros of Manufactured Housing:
One of the most recognized benefits to manufactured homes is their affordability. Manufactured homes have become a great option for first-time home buyers and retirees with a limited budget.
Because they are mass-produced and built on assembly lines, manufactured homes cost less to make. As of September 2018, the median price of a home in the United States was $225,000. Comparatively, the average manufactured home price hovers around $87,000.
Manufactured home buyers historically spend up to 20 percent less on housing than those building or investing in traditional, stick-built homes.
- Luxury for Less
Lower base prices considered, buyers can usually add upgrades to manufactured homes that might take the price of a traditionally built home out of their budget. Manufactured housing makes upgrades like a soaking tub, fireplace or granite countertops much more attainable. Some buyers even opt for adding square footage to get a bigger living space for less.
- Eco–Friendly and Energy-Efficient – Manufactured homes are energy-efficient, including upgraded insulation both under the building as well as in the walls. Energy efficiency by way of on-demand water heaters, energy saving appliances, and energy-efficient windows are standard in most models.
- Quality Builds
Manufactured homes are built inside a factory in accordance with HUD codes. They must meet structural integrity standards, design specifications, energy efficiency standards, and fire spread ratings. Additionally, the factory-built process ensures no weather damage comes to the home during the build process, unlike site-built homes.
- Fast, Efficient Install
While traditional homes can take months or years to build, manufactured homes typically average about three months. Since the home has premade sections, the final installation moves much more quickly. This leaves little room for error on the assembly line and no weather delays to affect production in the same way that it does a site-built home.
- Low-risk construction
Traditional homes experience delivery delays, theft of materials, and weather damage. However, with manufactured housing, these risks are greatly minimized and often completely avoided throughout the factory-built process.
The Cons to Manufactured Homes:
- Long-Term Appreciation of Value
While location is typically the biggest variable and predictor of value, appreciation rates of manufactured homes are traditionally lower than that of stick-built homes. The long-time stigma of mobile homes can be blamed for this result.
- Design Limits
While the interior of manufactured homes can be filled with luxury upgrades, the exterior and structural components are pre-made before installation, so the variety is quite limited. Changes often must be approved by a local governing authority.
- Limited Loans
This impressive cost-saving of manufactured homes can come with a caveat. Often, lenders only offer traditional mortgages to people buying what the law calls “real property,” or “land and anything permanently attached to it.” For this reason, stick-built homes meet this qualification but mobile homes and manufactured homes typically do not.
In order for lenders to view a manufactured home as a permanent structure, it must be permanently attached to a basement or concrete foundation with the axles removed.
- Difficulty of Repairs
In heavily populated cities like San Francisco, strict rent control remains another pivotal variable. While it’s designed to help tenants renting apartments, houses, and spaces for manufactured homes, rent control also limits the amount of money mobile home park owners can charge their tenants. For this reason, many tenants and managers find it difficult to find the finances to repair common amenities, like shared roadways or septic systems.
With all large purchasing decisions, weighing the pros and cons will help you decide what home buying options best suit your needs. While a manufactured home certainly has a number of variables that any home buyer should give careful attention to, its affordability and accessibility for millions of homeowners make it a viable option that deserves serious consideration.