real estate

Is the time right for a prefab home?

Highlights
  • Are prefabs still the domain of "the newly-wed or nearly dead?"
  • There are misconceptions about mobile, modular and manufactured homes.
  • Mortgage financing is similar to that of conventional homebuying.

Could your next home be a prefab?

Don't scoff. The days are over when mobile homes and modular homes were considered the exclusive domain of "the newly wed or nearly dead."

Now that the housing bust has knocked some of the swagger out of conventional, single-family construction, consumers may be surprised to discover that prefabricated homes offer value, energy efficiency and upgraded amenities in an eco-friendly alternative to sticks and bricks.

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No less a seer than Warren Buffett recognized the value proposition of prefab homes back in 2003 when Berkshire Hathaway acquired Clayton Homes of Maryville, Tenn., one of the industry's top sellers. Five years later, Clayton's i-house made its debut at a shareholders' meeting in Omaha, Neb.

A new i-house's cantilevered, butterfly roof collects rainwater for drinking and gardening, and its photovoltaic solar cell option converts sunshine into electricity to power the home. It uses less than half the energy of similar site-built homes. And the Core i-house's $75,000, 723-square-foot, one-bedroom model and $94,000, 1,023-square-foot, two-bedroom model beat most site-built new home construction on price.

Similar high design can be found in the Earth-friendly contemporary prefabs of Fleetwood Homes, Blu Homes' Blu Evolution and the Go House by Genesis Homes.

"It's going to make a big difference, not just in our company, but in the way that people build homes everywhere," i-house product manager Brandon O'Connor says.

What's with all the names?

There's a good deal of misconception about mobile, manufactured and modular homes these days, a holdover from snootier times when anything other than the traditional home was considered "declasse."

Mobile homes, also known as manufactured homes, are built to Department of Housing and Urban Development codes and must carry a HUD certification sticker before leaving the manufacturing plant. They range in size from 900 square feet to 3,000 square feet, may be mobile or not, and may be sited on owned land or a leased lot, according to a report by the Manufactured Housing Institute in Arlington, Va. Depending on state and local ordinances, they may be licensed as a vehicle or taxed as a permanent residence.

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Modular homes are built to the same building codes as site-built homes. The difference is their various parts are engineered and preassembled in a factory and then installed on a permanent foundation. In recent years, modular home builders have used the term "prefabricated" to differentiate their products from the other M's.

Is a mobile home or modular home right for you?

With an average sales price of $65,000, new mobile homes and modular homes can be a cost-effective way to own your own home without a large outlay of cash, the Manufactured Housing Institute says. Ideal candidates may be college-bound students, downsizing adults or anyone seeking lower utility bills or a refuge off the grid entirely.

 

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