Modular vs. manufactured homes: What's the difference?

If you’re interested in building or buying a prefab home, you may wonder about your options, particularly among various types of prefab homes.

In this article, we’ll take a look at modular homes vs. manufactured homes to help you determine the differences, pros, and cons of both types of home.

What is a modular home vs. a manufactured home?

Modular and manufactured homes are prefabricated structures, or prefab homes. They’re both built in factories, but that’s where the similarities generally end. A modular home is then transferred to a permanent foundation, similar to a stick-built home, except it’s assembled in blocks, unlike a stick-built or site-built home. Manufactured homes, on the other hand, are portable homes set on a steel chassis or piers. Let’s take a closer look at both prefab home types below.

Modular home defined

Modular homes can cost between $250 – $400 per square foot. They can have a similar resale value as a traditional stick-built home because of their permanent foundation. They must follow state, local, and regional building codes and can have many different sizes and levels of durability. Construction on a modular home is similar compared to a stick-built home because it’s assembled in blocks.

Most banks and mortgage lenders offer financing on modular homes, which means buyers will have a more diverse range of options when it’s time to purchase their home.

Manufactured home defined

The words “mobile home” and “trailer home” are sometimes used to describe a manufactured home, but it’s worth noting these terms are somewhat outdated. Manufactured homes average $87 per square foot, while the average cost of a site-built home is about $166 per square foot. Manufactured homes adhere to federal Housing and Urban Development (HUD) regulations and often have limited customization, with standard rectangular forms and finishes. They are extremely efficient to set up because of their portable nature.

Rocket Mortgage offers financing for manufactured homes built on a permanent structure.

Modular vs. manufactured homes: Key differences

To simplify the differences between modular vs. manufactured homes, take a look at the chart below.

Modular home vs. manufactured home: Pros and cons

Modular homes and manufactured homes have definite pros and cons, and it’s worth considering them for both types of homes.

Pros and cons of modular homes

The table below compares the pros and cons of modular homes.

Pros and cons of manufactured homes

Now, check out the pros and cons of manufactured homes below.

Modular home vs. manufactured home: Pros and cons

As you weigh your options, consider the advantages and disadvantages of modular homes and manufactured homes.

Pros and cons of modular homes

Pros and cons of manufactured homes

Customizing modular and manufactured homes

Modular and manufactured homes can be customized – at least a bit – to fit your needs. Explore some of the ways you can design your modular or manufactured house.

Modular home designs

Modular home plans come in all shapes and sizes, from tiny homes to two-story colonials. A modular home can have many custom features, including an attached garage, a wrap-around porch and a floor plan of your choosing.

Manufactured home designs

Manufactured homes have also come a long way from the basic single- and double-wide days. While newer manufactured homes may not be as customizable as modular homes, they still come in various architectural styles and with floor plans and add-ons that can meet your needs.

Financing modular vs. manufactured homes

You can borrow to buy both modular and manufactured homes. While manufactured homes are commonly financed with a conventional loan, FHA or VA loan¹ financing may be available. It’s worth considering property law and the distinction between real property and personal property. Real property refers to land and things permanently attached to it, and personal property refers to movable items.

You can get a construction loan for modular homes, which is short-term financing to construct a property, which then transitions to long-term mortgage financing once builders finish the home. A chattel mortgage is a loan for purchasing movable personal property, including manufactured homes.

Can you use a personal loan to purchase one of these types of homes? You can, but the interest rate may be higher. Check with your lender to learn more and compare several different types of loans and their interest rates.

Rocket Mortgage offers financing on manufactured homes built on or after June 15, 1976, that are permanently affixed to real property and have a HUD tag.

Zoning laws for modular and manufactured homes

Modular homes are subject to the same zoning laws as site-built homes. On the other hand, manufactured homes are constructed according to a code administered by HUD. Local zoning ordinances on land use can restrict where they are placed. Check with your local legislative body to understand zoning requirements for both modular and manufactured homes.

FAQ about modular and manufactured homes

Read on for answers to questions about modular vs. manufactured homes.

Can you get a mortgage for a manufactured or mobile home?

Yes, you can get a mortgage for a manufactured or mobile home. For example, you can use a chattel mortgage to purchase movable personal property, including manufactured homes. Check with several lenders to learn about terms, interest rates, and other factors so you choose the right one for your situation.

Can you get a mortgage for a modular or prefab home?

Yes, you can get a mortgage for modular or prefab homes. Construction loans are available for modular homes, which is short-term financing to construct a property. The short-term loan transitions to mortgage financing after building the home. Check with several lenders to learn about construction loan details, including the mortgage terms. 

Are there down payment assistance programs for manufactured homes?

Yes, many states offer down payment assistance programs. In several states, these programs can assist with a down payment on a mobile home or the land on which it will sit. HUD keeps a list of active programs by state.

The bottom line: Know the differences between modular and manufactured homes to make the right choice

Choosing between a modular vs. a manufactured home is a matter of preference and involves careful consideration of both the pros and cons.

If you’re interested in flexible customization, fast construction, and affordability compared to stick-built homes, you may want to consider a modular home. On the other hand, if you like the idea of affordability compared to both modular and stick-built homes and streamlined maintenance, a manufactured home may fit your needs. A quick comparison can help you decide the perfect home for you.

Ready to buy a home? Start your mortgage application online today. 

¹ Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.