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Modular homes gain fans


Building a home? Good luck.

With thousands of individual parts that need to be ordered, installed and inspected in a specific order, delays and errors are frequent. Plus, the front end of the process (from clearing the site to completing the exterior, a step called "drying in") is heavily dependent on good weather.

And, oh yes, the industry has a shortage of skilled labor, material prices have escalated rapidly in the last year and job-site theft of materials is a regular occurrence.

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Were you thinking four months until closing? Better make that six, no, nine months -- and sometimes longer.

Compare that to the experience of Michael O'Brien, an architect and professor in the School of Architecture + Design at Virginia Tech in Blacksburg, Va. He designed his own three-bedroom, two-story house with a finished basement. In the week it took him to have a basement dug and the utilities installed, Nationwide Custom Homes in Martinsville, Va., built his house in its factory. It was built in modules, put on trucks and hauled the roughly 50 miles to his site. Six hours later, it was enclosed. O'Brien went to work putting on the siding and adding some porches, and a month later, he had his certificate of occupancy.

Of course, the process didn't go off without any hitches. The fireworks started as soon as the trucks pulled up to the site.

"A guy across the street was real upset," O'Brien says. "He said, 'You can't build mobile homes here. I'll go get a court order.' I said, 'If it looks like a mobile home in eight hours, I'll take it down.' He never came back."

It didn't look like a mobile home because it wasn't one. It was (and is) a modular house, a growing segment of the construction industry that can save consumers dramatic amounts of time and frustration in building a house.

The two terms can be confusing, and it's critical for a consumer to understand the difference. Mobile homes, also called manufactured housing, are built to the Housing and Urban Development Code, says Steve Snyder, executive director of the Modular Building Systems Association. The HUD Code addresses construction for affordable housing. Manufactured housing is built on a permanent metal chassis, may or may not be permanently placed on a foundation, and is the term used to describe a single- or double-wide mobile home.

While they offer an affordable housing alternative for many families, can be well-built and attractive, manufactured homes generally depreciate in value and many banks are reluctant to finance them.

Modular houses are built to the same code as a site-built house (also known in the industry as a stick-built house). They are built with their own wood floor systems, are shipped on a carrier that goes back to the factory, and they are always placed on a permanent foundation. In terms of investment potential, modular homes increase in value at the same rate as a comparable stick-built home in the same area, Snyder says. Banks finance the purchases the same way (they're both construction loans for new houses) and for the purpose of getting a mortgage, appraisers can compare a modular home to a similar stick-built house.

Modular houses fall under a construction process called "building systems," which refers to any kind of house built at least in part off-site, says Eric Fulton, communication manager of the Building Systems Councils of the National Association of Home Builders. The term also includes log homes, panelized building packages, geodesic domes, post and beam houses, and structural insulated panels. (For information on each of the processes, visit

Panelized building, the other process that's gained popularity with builders, involves building walls, floors and roof sections in a factory setting and assembling them on-site.

Even stick builders are moving more and more toward factory products, using pre-constructed panels, cabinet modules, pre-hung doors and windows, and pre-built stairs and roof trusses, says Kevin Flaherty, vice president of sales and marketing for Michigan-based Genesis Homes, the country's only national modular builder.


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-- Posted: July 22, 2004

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