What is the Difference in Manufactured Housing and Modular Housing?

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Valuation Management Group often is asked, “What is the difference between manufactured housing and modular housing or in our review of the appraisal?” Our purpose of this blog is to bring clarity to the identification of manufactured or modular housing.

Present day (post 1976) manufactured housing, and oftentimes erroneously referred to as mobile homes, is a home that is built in one or more sections in a controlled environment in accordance with strict HUD code restrictions.   Perhaps they are still called mobile homes because the section or sections are transported to the home site via wheels that are mounted to the homes steel undercarriage.  Most often, the wheels are removed after the home has been placed on the homes foundation.   The steel undercarriage will always remain intact as it is the homes primary structural component.

Manufactured housing units are sold as motor vehicles with motor vehicle titles.   Even when permanently affixed to a foundation, many manufactured housing units remain classified in public record as chattel or personal property.  It can be legally titled as real estate provided the title is properly surrendered to the state and specific steps are taken to have the home titled as real estate.  The steps required to have a home titled as real estate vary from state to state and can be complex.    As such, the majority of manufactured housing and the land and/or lot they reside on are financed as “land home” packages.

Secondary market financing (Fannie Mae, Freddie Mac and FHA – the GSE’s) is available for manufactured housing, however many banks and mortgage lenders choose not to offer secondary market  financing due to the complexity of having the home titled as real estate which is necessary for the transaction to be eligible for purchase by the GSE’s.  Manufactured housing is rarely confused with site built housing although modern day manufactured housing offers many of the same amenities as modular or site built housing.

Modular homes are believed to currently be the fastest growing type of housing in the housing industry.   Like manufactured housing, modular homes are constructed in environmentally controlled factories according to building codes, and in far less time than site built housing would take.  Additionally, constructions costs are dramatically reduced because modular homes are built in an efficient environment without construction waste, or damage or work stoppages due to weather.   Modular homes are shipped to the home site on flatbeds and are joined at the site on the homes solid slab foundation.   Depending on the design of the home (multi-floor) the use of cranes may be necessary in the placement of the home on its foundation.  Once erected, modular homes must meet all local building codes in order for a certificate of occupancy (CO) to be issued and utilities being connected.  It is not unusual for modular housing to be confused with site built housing based on its design, quality and amenities.  Unlike manufactured housing, secondary market financing is readily available as these homes are titled as real estate.

Manufactured Housing vs. Modular Housing – An overview:

  • Both are efficiently built in environmentally controlled settings in accordance with either HUD standards or local building codes;
  • Manufactured is transported by its own wheels and modular via flatbed(s);
  • Manufactured is considered a motor vehicle (personal property) until the title is surrendered to the state and adequately titled as real estate, while modular is considered to be real estate as soon as the home is placed on its foundation;
  • Both provide a viable housing option for many families throughout the United States

Valuation Management Group is a national appraisal management company with 50+ percent of its staff being real estate appraisers, with an average appraisal experience of 18+ years. The company provides quality reviews of manufactured, modular and site built houses.


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