real estate

Is the time right for a prefab home?

Mortgage financing is similar to that of conventional homebuying: credit evaluation and approval, underwriting and a typical down payment of 5 percent to 10 percent, the housing institute says. Financing is often available through the home manufacturer as well as private lenders. Thanks to recent changes to federal lending laws for manufactured housing, homebuyers have more financing options today.

Be sure to factor in the location of your home before pursuing financing. If you plan to place your mobile home on land you own, be sure to check for any zoning laws or covenants that could prevent you from doing so. If you choose to lease land in a mobile-home community, get the lowdown on restrictions, monthly fees and utility connections before committing.

Manufactured and modular homes typically come with a homeowner extra: a manufacturer's warranty. These warranties can be complex and may involve several manufacturers and vendors, including the company that transports your home. The Federal Trade Commission suggests these questions to ask:

  • What warranties do I get with my home?
  • What is covered by each warranty? What is not covered?
  • How long do these warranties last?
  • How do I request warranty service? Who will provide it?
  • Are extended warranties available? If so, what do they cover and cost?

For more mobile-modular homebuying tips, visit the Manufactured Housing Institute's buying guide.

Having weathered a decade of declining sales and a subprime lending mess, there's a renewed sense of right time, right place, right product among mobile home and modular home manufacturers. Thayer Long, executive vice president of the Manufactured Housing Institute, sees mobile and modular homes as the residential equivalent of a fuel-efficient, hybrid car.

"The ability to mass produce homes that are Energy Star (rated) and energy-efficient is something that our industry can do that is unparalleled in other forms of construction," he says. "Consumer demand for that kind of home is only going to be growing."

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