Occasionally a more affordable option for home buyers is manufactured or modular housing. The terms are sometimes used interchangeably; however, they are not the same type of construction. Making it even more confusing is that when completed, they will sometimes look similar.
A modular house is house that is partially assembled offsite typically at a factory. The modules of the house are assembled at the plant and they are brought to the site where they are assembled into a complete house. Sections such as the roof and supports, walls, and car storage are brought in in sections. Once on-site, they modules are secured to a permanent foundation and assembled. Once completed, the property will resemble a typical newly constructed property.
Financing for a modular home is the same as any other regularly constructed house. The appraiser does have to note that the property is a modularly assembled and comment whether there are any marketability issues due to the type of construction. If there isn’t, typical financing can be placed on the house.
A manufactured house is a dwelling that is fully assembled at a factory and then transported, fully assembled typically, to the final permanent site. Manufactured housing may also be brought in in two sections (a “double-wide”) and the two pieces permanently assembled and the physically attached to the site. Even though this situation is two pieces, it is not modular construction, but manufactured housing.
Manufactured housing has special requirements from lenders. Because of this, manufactured represents special challenges for financing and will often be ineligible for traditional financing. Lenders will take special care to verify whether the property is modular or manufactured. One defining characteristic of manufactured housing is that the dwelling will have a “vehicle identification number” (“VIN”) affixed to the dwelling. If the property has a VIN, it is a manufactured and not a modular home.
If you are considering purchase either a manufactured or modular home, contact your Googain Loan Officer for more information regarding eligibility of manufacture and modular homes for financing.