Facts and Fiction about Manufactured/Modular Homes

MYTH: Manufactured homes don't provide the same potential as an investment site-built or stick-built homes.

TRUTH: For many years, people have assumed that the value of manufactured homes depreciates. This is not so. Studies conducted at two Universities revealed that the determining factor of appreciation in both types of homes was their location. Maintenance also plays a major role.

If a home of any kind is built or setup in a bad neighborhood or area it will probably depreciate no matter what. In a good area or neighborhood they will generally appreciate in value depending on the local housing market and economy. In the case of a manufactured home, if it is setup on a permanent foundation with a concrete pad, blocked properly and anchored properly, with good drainage so water does not sit under the home and if one buys from a reputable dealer who uses good setup people, the home will be no different than a site built home. It would appreciate in value at the same rate as a site built home in the same area.

The cost of manufactured homes is significantly lower than the cost of site-built homes. This gives them an instant appreciation between what the home actually cost the homebuyer and what its market value is. In some cases, a multi-section manufactured home has sold for more the second time than the first. Properly setup and well taken care of, you are talking about a fantastic investment potential.

MYTH:Manufactured homes can't meet the same construction standards and pass the same inspections as site-built homes and that is why they are inexpensive.

TRUTH: Actually, most manufactured homes are built to a higher quality than the average site-built home. Many manufactured homes use 2x6 construction on exterior walls, unlike the 2x4 in a site-built home that is their industry standard. Many of the components used in a manufactured home are the same as those found in site-built homes. Both manufactured homes and site-built homes use the same windows, doors, roof truss systems, siding and more.

Manufactured houses also have to be built to the stringent HUD Code standards. Built in a controlled, factory environment, the homes are tested and inspected by HUD for construction, strength and durability, design, fire resistance, energy efficiency and performance of internal systems.

HUD inspectors are on every job, every home has to be inspected in at least one station by an independent inspector. This assures consistency of workmanship and quality that cannot easily be surpassed by a site-built home.

MYTH: All manufactured homes look like trailers.

TRUTH: Not anymore. There are probably many manufactured homes around, well setup with options added, that make them fit right in the neighborhood they are in. You probably don't even know which ones they are. There are hundreds of floorplans available, many types of models such as ranch styles, Cape Cods, California bungalows and Southwest types with stucco exteriors and tile roofs. Manufactured homes can be customized by ordering them from a manufactured home dealership. By doing this you will be sure to get what you want and realize your dream.

MYTH: Modular homes are built better than manufactured homes.

TRUTH:The main differences between modular and manufactured homes are 1) The manufactured home is built on a frame which allows wheels and axles to be applied long enough to move the home, the modular homes have to be transported through some other means, usually on a flatbed trailer which provides the wheels and axles to get it to the site. 2) Modular homes are built to the state's building code for the state they will be sold in which may or may not meet or exceed HUD standards to which manufactured homes are built. As a matter of fact, they are both manufactured homes.

MYTH: Manufactured homes are always the first to be hit by fire, flood and tornadoes and have more problems than site-built homes.

TRUTH: Foremost Insurance, an insurance company specializing in manufactured housing safety issues, found that manufactured homes are safer than site-built homes in many ways.

More about safety...

A University report revealed that manufactured homes have a lower rate of fires than site-built homes. When there is a fire, research shows no fire safety differences between manufactured homes and site-built homes.

MYTH: Insulation in today's manufactured home is poor compared to site-built houses.

TRUTH: Manufactured homes commonly have insulation with R-values -- the higher the number, the better the insulation -- of 21 in the roof, 11 in the side walls and floor.

In one study, manufactured home models were tested with a blower for air leakage. These homes were tested as they came off the assembly line and qualified for a four-star rating. Not bad. Not bad at all.

MYTH: Manufactured housing is difficult to finance or must be financed as personal property.

TRUTH: Some buyers of new manufactured homes finance their homes through the retailer where they purchased their manufactured home. Some buyers have arranged their own financing through their bank, savings association or credit union.

Back in the old days, manufactured homes were financed as personal property because they were usually sold without land. Lenders are now offered loan insurance and loan guaranty programs for personal property home loans by the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA). But more than 90 percent of new manufactured homes are placed on permanent foundations on private land and are never intended to be moved. These homes are financed as real estate.

Manufactured homes may be financed as real estate when the home and land are both purchased or owned by the homeowner, the home is on a permanent foundation and the home and land are treated as a single piece of real estate under state law. Both FHA and VA programs for real estate mortgages accept these loans.

MYTH: I don't know anyone who lives in a manufactured home.

TRUTH: Are you sure? As stated above, today's manufactured homes are not the trailers or mobile homes of the past. They are attractive, well-built and have great investment potential. Approximately 18 million people live in manufactured homes. Are you SURE you don't know one of them?

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