What Is a Manufactured Home? Plus How It Differs from a Modular Home

If you’re looking to buy a home or build one, you might have considered going with a manufactured home. Manufactured homes—or prefab homes—sometimes get a bad rap because they’re often associated with a type of housing in trailer park communities. However, many factors are involved in the construction of these types of homes that make them an affordable and smart choice for the right homeowner. 

“The stigma surrounding ‘mobile homes’ is based on the ones from the ’70s, ’80s, and ’90s that you sometimes see falling apart in a field,” says Erin Hybart, a real estate agent with the blog ReErin.com. “Those were not built to last and were constructed very cheaply. The homes built today are made to last 50+ years and have come a long way. “

Manufactured homes differ from modular homes. In this article, experts weigh in on the key differences between these types of homes and whether a manufactured home might be right for you. 

What Is a Manufactured Home?

Manufactured homes are built at factories, shipped to home sites, and installed. “The goal here is to build houses that look and feel similar to regular types of housing at a lower price point,” says Raja Ghawi, partner at Era Ventures, a venture capital firm. “So the lower price point might mean that these homes are smaller, maybe a little lower quality.” 

There are a couple of methods for this type of construction. “You can either build the entire home at a factory, and then basically load it up on a truck and ship it to a site where you’ve done some land prep, and you kind of drop it, connect the water and the electricity, and some of the pipes, and you’re done,” Ghawi says. “Or you could have what they call a kit of parts. So you should have the walls, and the floors and stack them on top of each other. You ship these to the site and then assemble them. It feels a little bit like Legos.” 

How Manufactured Homes Differ from Traditionally Built Homes

Manufactured homes differ structurally from traditionally built homes, given that they must be shipped. “Basically, the construction of regular site-built houses occurs by directly attaching to the permanently established foundation, while manufactured houses are built on a permanent steel chassis,” says Daniel Cabrera, the owner and founder of Sell My House Fast SA TX.

Hybart says the homes are built either in whole or in sections. “These homes are built using assembly lines in factories. This streamlines the process and helps with cost-effectiveness. Common materials include wood for framing, vinyl for siding, and metal for roofing. Newer homes are offering full sheetrock and ceiling AC vents,” said Hybart.

There is some truth to the idea that materials used in building manufactured homes are of lower quality or at least lower price. “Traditional homes are constructed on a concrete foundation or piers and anchored permanently to the ground,” Hybert says. “Some materials used in manufactured homes may fall on the lower end of builder-grade quality, affecting durability and finish compared to traditional homes.”

There’s another perk to building a home in a factory. There are often fewer delays due to weather and other unforeseen conditions that many on-site builds encounter. Plus, no damage is done to these homes while they’re exposed to the elements during the building phase on site. In that sense, the factory is considered a controlled environment. 

“To ensure efficiency and affordability, manufactured houses are constructed in controlled environments utilizing assembly line techniques and materials such as wood and insulation, all in compliance with the HUD regulation,” says Paul Corazza, principal at Independent Property Group.

What Is a Modular Home?

Modular homes are a cross between site-built homes and manufactured homes. They typically offer more customization options, and once they’re on-site, they look like traditionally built homes.

Cabrera explains that a modular home has a foundation poured on the land, making it a permanent structure after the modular home is transferred to the site and installed. 

Because of this, modular homes must meet regional building codes. Modular homes have a better reputation than manufactured homes. 

“They offer more customization and typically resemble traditional homes more closely,” Hybart says. “These homes qualify for better financing and have fewer placement restrictions than manufactured homes. Most people consider modular homes just ‘regular homes’ built in a factory.”

The Pros and Cons of a Manufactured Home

As with any decision, there are pros and cons to weigh. Here are the pros and cons of choosing a manufactured home over another type of home, including traditionally built and modular homes.

Pros of a Manufactured Home

Speed: One of the biggest perks of choosing a manufactured home is the speed at which it can be built. These homes are built at factories and shipped to a lot, so the process is streamlined and doesn’t require an on-site crew working on your home while exposed to precipitation, extreme heat, or frigid temps. Completing a build in a factory setting means fewer delays and setbacks. 

Affordability: Perhaps the biggest reason buyers look to manufactured homes is for the price. Manufactured homes are often much more affordable than their traditionally built counterparts because of the method with which they’re made.

“The cost of housing has skyrocketed, and insurance is right there with it. There must be more affordable options, and manufactured homes are a top choice to fit that need,” Hybart says. 

Lower Maintenance Costs: Finally, manufactured homes require maintenance like any other type of home, but these services and materials are usually much more affordable than their counterparts. 

Cons of a Manufactured Home

Fewer Options: Manufactured homes offer fewer ways to customize your build. These homes are designed and built in a factory setting, and customizations slow down the process, although a few layout options are usually available.

Still, having fewer custom options doesn’t always speed things along.

Quality Concerns: “In theory, manufactured homes should be faster and cheaper even if you may not have as many customization options, but for a lot of people, especially at that price point, that’s totally fine,” Ghawi says. “In reality, I think there are delays and some quality concerns where you have to spend a little bit more money for someone to come and fix it before you can move in. That offsets whatever cost savings you have.”

Land Cost: Another con for these homes is that you must purchase the land or rent the land on which the house sits. While that’s not a bad thing in and of itself, it’s a complication that requires two loans in some cases or regular HOA fees in other cases. 

Poor Reputation: Finally, these homes sometimes have a poor reputation. While that is changing with time, you might still find that the connotation of a manufactured home is enough to dissuade you or other potential buyers from considering this option. Keep in mind it’s a personal choice that could be perfect for you. 

“Despite these cons, the appeal of a manufactured home lies in its lower cost because it may be all someone can afford,” Hybart says.