Manufactured homes: Not tin cans on wheels
By Marilyn Bowden • Bankrate.com

Your best deal on a new home may roll off a factory assembly line.

With the cost of homeownership spiraling out of the reach of many working Americans, experts say manufactured homes, which cost up to 35 percent less per square foot to build, may be the haven of the future.

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The savings for buyers come from economies of scale, not scrimping on quality, says Bruce Savage, vice president of Manufactured Housing Institute, a nonprofit trade association.

"Manufacturers that build houses in quantity buy components, from refrigerators to plumbing and building supplies, in bulk," he says. "Also, in factory construction you have better quality control and much less theft than on building sites and no weather delays. All of these economies can be passed on to the consumer."

According to the Institute, one in 10 new single-family housing starts in 2004 was a manufactured home.

An image problem
Why aren't more home buyers opting for factory-built over site-built homes?
Depending on where you live, financing can be a problem. Where good deals are available, they're not always easy to find. And they require a good credit rating.

But image is the biggest hurdle, industry representatives say. Say "manufactured housing," they lament, and people start thinking tin cans on wheels -- flimsy, ugly and destined to fall apart long before the mortgage is paid.

It ain't necessarily so. Today's factory-built models are much more likely to be destined for a permanent home on a concrete foundation.

"This is not your grandmother's mobile home," says Leroy West, president of Superior Real Estate, a Southern California company that puts up factory-built models on empty lots, in existing single-family-home developments and is planning a community of 68 homes north of Los Angeles with solar-energy options.

"The standards that are in place today are equal in most ways to any site-built home -- the same installation, the same structure," he says.

Built to last
All manufactured homes must comply with the U.S. Department of Housing and Urban Development, or HUD, building code, unlike their site-built counterparts, which are subject to local codes.

The primary difference between the HUD code and the Universal Housing Code, on which local codes are based, says West, is that HUD requires a steel transport frame under the wooden floor joists.

"If anything," he says, "that makes it stronger."

After much research into the issue, the Ford Foundation has come to the same conclusion. Ford is sinking millions of dollars into raising the image and financing options of homes built in a factory.

"There's no reason to believe that being in manufactured housing puts a homeowner in more danger than in any kind of site-built housing," says program officer George McCarthy, "with the proviso that it is sited according to existing code.

"In high-wind areas where there are tornados, manufactured housing is perceived to be worse to live in. That's because if it's built on a slab, there's no basement to escape to underground. But that's a feature of many site-built homes in the same area, so it's not the method of construction that's the problem.