Modular homes | Fernando Bengoechea/Getty Images

A modular home is a house built in sections in a factory.

The prefabricated sections are then transported to the building site on a large trailer, where a builder places the sections on a pre-made foundation, joins them together and completes the finishing touches.

While at one time modular homes were discounted as subpar, the stigma no longer exists.

These homes provide many of the same high-quality benefits that regular homes offer. In fact, most people are surprised to find that they can’t tell the difference between a modular home and a site-built home when the two finished models stand side by side.

Modular home vs. manufactured home

Modular homes are often mistaken as manufactured homes, but they are not the same.

Sometimes referred to as a mobile home, a manufactured home is not placed on a permanent foundation, and it can be moved from one location to another. Conversely, a modular home is affixed to a permanent foundation and can never move.

Additionally, all manufactured homes are built very similarly and need to conform to the same federal codes, while a modular home has to conform to codes specific for its building location. This gives a modular home much more leeway in the terms of look and build.

Building a modular home

Modular home pieces are built in a factory, where they are subject to strict quality control guidelines.

Many times, these homes can be built in the factory in as little as two weeks. Once the home is delivered to the building site, the builder can put it together in two to four weeks.

Many people prefer this type of home to building on-site, because the modular home isn’t affected by the typical weather delays that can delay a site-built home.

Additionally, modular homebuyers know that the home they are purchasing has passed specific codes and guidelines.

Benefits of a modular home

There are many benefits of a modular home that can appeal to buyers in the real estate market. These include some of the following:

  • Fast build time: Because there are no delays due to weather, unexpected contractor issues or the like, modular homes are finished and ready to move into much sooner than traditional site-built houses.
  • Affordable: Modular homes are typically less expensive than site-built homes, since most of the construction takes place inside a controlled factory environment. With site-built house delays, inclement weather or any number of other interruptions can result in unexpected fees.
  • Energy-efficient: Most modular homes are built with energy-efficient windows, doors and insulation.

Disadvantages of modular homes

While there are many advantages to a modular home, there are some reasons why this choice of home isn’t for everyone. They include:

  • Land: The buyer must own the land where the modular home will be built, which can be a substantial additional upfront cost. Plus, available land parcels may need to be outfitted with a septic system or connected to sewer lines.
  • Fewer customizable options: While modular homes undoubtedly offer more customizable options than manufactured mobile homes, they aren’t as easy to customize as site-built homes.
  • May be harder to sell: While modular homes are every bit as good as traditional homes, there is a common misconception that they are not. This skewed perception could deter buyers when you want to sell your home at a later date.  

Financing a modular home

Many times, banks and mortgage brokers offer financing for a modular home in the exact same way they would for a home built on site.

A mortgage broker can give you a good idea as to rates and help you find a lender. Some modular home manufacturers also may offer their own financing, but buyers should compare rates with a traditional lender to make sure they are getting the best deal possible.

A modular home is a viable alternative to a traditional house built on site. With its careful construction and energy-efficient design, it can be a worthwhile investment, but buyers should be careful to take into account land costs and other fees before settling on this type of home.

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