Any type of homeownership comes with a particular set of drawbacks and benefits, including manufactured homes. Manufactured homes, for example, don't always build equity, which is the percentage of the home's value free of any liabilities, but have lower taxes than traditional homes. Before you buy a manufactured home, you need to consider the potential positives and negatives.
Low Building Cost
A modular home is usually less expensive than a traditional home. You're not buying an existing structure in a neighborhood with amenities that add to the home's value or building a new home outside, where it's exposed to the elements. A manufactured home is made inside a factory under controlled conditions, where it's less likely a costly event or accident will impact the build. However, since you must rent or buy land on which to place the home, you'll need to consider land cost as a possible drawback.
While you'll pay less for a manufactured home than a stick-built one, you still must finance the transaction if you can't pay in cash. You can't get a conventional mortgage on a new manufactured home build unless the home has a permanent foundation, you're buying the land and the deal meets the lender's criteria. You may have to get a personal property loan from a lender or the home dealer, and the interest rates on personal property loans are often higher than the rate you'd get on a mortgage secured by real property.
Manufactured homes take less time to build than traditional homes. A traditional home build can last over six months and go a year or more if problems occur. A manufactured home build take less than three months. Even if you pick a traditional home that is already built, remodeling or repairs can force you to wait months before you can fully move in. Since a manufactured home has pre-made sections, part of the construction work is already done by the time the dealer moves the home to the assembly site.
Variety and Additions
Manufactured homes styles represent potential pros and cons. You'll find a lot of variety in terms of design, layout and other significant features, but you may not find the exact home design you're looking for in the prefabricated styles. While adding on to a manufactured home could be less expensive than additions to a traditional home, doing so out of dissatisfaction with the home's original layout is a drawback.
- Modular Today: Pros and Cons of Buying a Modular Home
- J&M Homes: Pros and Cons of Buying a Manufactured Home
- Consumers Union: Line Up Financing
- Cornerstone Builders: How Long Does Building a New Home Take?
- Northeast Realty: How Long Does It Take to Build a Modular Home?
- Mobile Home Living. "Manufactured Home Facts Everyone Should Know." Accessed June 30, 2020.
- International Association of Certified Home Inspectors. "Manufactured Housing and Standards." Accessed June 30, 2020.
- U.S. Department of Housing and Urban Development. "Hud Labels (Tags)." Accessed June 30, 2020.
- U.S. Department of Housing and Urban Development. "Manufactured Housing and Standards—Frequently Asked Questions." Accessed June 30, 2020.
- Mobile Home Living. "Manufactured Home HUD Tags, Labels, Serial Numbers, and Data Plates." Accessed June 30, 2020.
- FDIC. "Manufactured Home Mortgage." Accessed June 30, 2020.
- U.S. Department of Veterans Affairs. "Purchase Loan." Accessed June 30, 2020.
Anna Assad began writing professionally in 1999 and has published several legal articles for various websites. She has an extensive real estate and criminal legal background. She also tutored in English for nearly eight years, attended Buffalo State College for paralegal studies and accounting, and minored in English literature, receiving a Bachelor of Arts.