Manufactured housing

What is manufactured housing?

Manufactured housing refers factory-built homes that can be placed on a piece of land. Styles vary from modest trailers to dwellings that look like houses built permanently on a site.

Deeper definition

Manufactured housing units are assembled mostly offsite before they are moved to the property where they are set up. Often, the expense associated with a manufactured home is far less than what an equivalent on-site house is worth.

Manufactured homes were particularly popular during the 1990s, when they accounted for roughly one quarter of all new homes sold in the U.S.

Even so, they’ve been around for nearly a century, and units constructed before 1976 often were referred to as mobile homes. Since 1976, it is technically incorrect to call these units “mobile homes,” and they always should be referred to as “manufactured homes.”

U.S. Housing and Urban Development code defines exactly what a manufactured home is and has established a federal standard to guide the construction of these homes. This code covers quality of all aspects of a manufactured home:

• Design and construction.
• Strength and durability.
• Fire resistance.
• Some degree of energy efficiency.
• Overall quality.
• Performance standards, including electricity, plumbing, heating and air conditioning systems.

Financing a manufactured home is different than financing a traditionally built home. If you buy a manufactured home away from the property where you intend to keep it, you must take a chattel loan, rather than a mortgage.

Chattel loans carry higher interest rates than traditional mortgages do. You may want to purchase a manufactured home that already has been moved to land so that you can attempt to finance with a mortgage.

A variety of HUD loans, including Federal Housing Administration (FHA) loans and Veteran’s Affairs (VA) loans are available for financing manufactured homes in many circumstances.

Manufactured housing example

Tiny homes that are only about 400 square feet in size are an example of modern manufactured homes. They’re usually manufactured off-site and transported to a piece of property via a flatbed truck.

Manufactured homes can be a good option for first-time homebuyers, since they’re far less expensive than traditional homes. They also can be financed with an FHA loan, making them even more accessible to first-time buyers.

Learn more about how to refinance your mobile home and lock in a lower rate.