Is the time right for a prefab home?


At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

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.

Prefab homes get a facelift

The prefab homes of today are snazzy and more eco-friendly than earlier models.

Prefab homes get a facelift

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.

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.

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.”


Prefab homes get a facelift

The prefab homes of today are snazzy and more eco-friendly than earlier models.

Prefab homes get a facelift