You want to build your own home, but the price tag is a bit too high. You may have found modular or manufactured homes when researching the most cost-effective choices. The cost of these home types is usually lower than the traditional “site-built”, or new construction. A manufactured home is half the price per square […]

You want to build your own home, but the price tag is a bit too high. You may have found modular or manufactured homes when researching the most cost-effective choices.

The cost of these home types is usually lower than the traditional “site-built”, or new construction. A manufactured home is half the price per square foot of a traditional site-built house, according to The Manufactured Housing Institute. A 2017 study conducted by the Terner Center for Housing Innovation, University of California Berkeley, estimated construction savings of 20 %.

A new modular or manufactured home may cost even less depending on the land prices and model that you select.

Both modular and manufactured houses are prefabricated or “prefab” homes. They are built in a factory and then moved to the construction site. Just because both begin in a manufacturing facility doesn’t make them the same.

Explore the differences between two types of homes.

Modular homes vs. Manufactured Homes

A modular home is what?

Modules are large three-dimensional blocks that can be used to construct a modular home. The modules are 90% completed when they leave the factory. On the construction site, the final touches are made by attaching the modules to the permanent foundation as well as each other. After the home has been completed, it is checked to make sure that local building codes have been met.

A manufactured home is what?

When you hear “trailer” or “mobile home”, you may think “manufactured home”. However, this terminology is outdated. Modern manufactured homes are available in many different styles and designs.

As with modular homes, factory-built homes are also built. They are either transported in a single piece (also known as “a single wide”) or multiple pieces, also known as “a double or triple width”, depending on the size.

Contrary to modular houses, manufactured homes have a fixed chassis. The term mobile home comes from a metal framework that is attached to wheels. You cannot remove the chassis, but can cover or remove the wheels.

Manufactured houses are built according to the HUD Code, which is a national building standard set by HUD.

Did You Know…

The term “mobile homes” is technically only applicable to manufactured houses built before June 15, 1976. The HUD code came into force on June 15, 1976. HUD code set federal safety standards and durable manufactured home.

Differences between pros, cons and

Modular and manufactured home are more affordable than new construction on-site. Consider these factors when choosing between the two options:

  • Costs and resale values: A modular home is typically more expensive than a manufactured home. Although manufactured homes are much better in quality than they used to be, their value can still depreciate over time. The value of modular homes changes with the market, similar to that of site-built houses.

  • HUD Code: Manufactured houses are built according to this code. The same building codes apply to site-built homes and modular homes.

  • Modular homes allow for more customization, but the sizes are different. Modular homes are more resistant to hurricanes and high winds than manufactured homes.

  • Portable: The manufactured home must be attached to a chassis made of steel. They can be assembled and shipped in their entirety from the factory, depending on size. Modular homes do not have a chassis. The modular homes are constructed in sections, then transported to the site and assembled.

  • The construction efficiency of modular and manufactured homes is superior to site-built houses. Construction indoors virtually eliminates delays due to weather. Construction on a production line is faster, cheaper and more efficient. Home buyers will save money by reducing construction waste. They’ll also be able to move into their new home sooner.

Financing and loans

Modular Homes

You may have to pay the modular house builder in advance or by installments. You can pay in cash, or with a construction credit. After the construction of a modular house is completed, you can finance it with a conventional mortgage.

Manufactured Homes

Mortgages for manufactured homes may not be available. You have a few options.

  • Mortgages traditional: In order to qualify for a loan, the land on which the home is built must be owned and the title of the property should read “real estate”.

  • FHA Title 1 Loans: The Federal Housing Administration offers Title 1 loan financing for manufactured homes if your house does not qualify for mortgage. FHA Title 1 loans allow the purchaser to lease land in which the manufactured home is located, for example, in a manufactured-home community, sometimes called mobile home parks.

  • Chattel loans are often used to finance the purchase of manufactured homes. Chattel loans are a form of direct financing, much like an auto loan. These loans have typically higher rates of interest than conventional mortgages. According to the Consumer Financial Protection Bureau, around 42 percent of owners of manufactured homes use chattel loans to fund their purchases.

Differences between

Manufactured home

Modular home

Site-built home

Cost to build

Type of foundation

Semipermanent (e.g. pier and ground anchors) or permanent.




Yes. (Has a chassis that can be attached to wheels to move the home.)

No. (Once modules are delivered, they are permanently attached to each other and the foundation.)

No. (Built entirely on-site.)

Building code

International Residential Code (local building codes).

International Residential Code (local building codes).

Options to customize


Financing (after construction)

Chattel loan, FHA Title 1 loan or traditional mortgage.

Traditional mortgage.

Traditional mortgage.

Value over time

Typically decreases.

Typically increases.

Typically increases.

Which one is best for you?

It is cheaper to buy a manufactured home and you can achieve your homeownership goal sooner. This is especially true if you reside in rural areas where housing options are scarce. The U.S. Census Bureau, citing January 2023 statistics, reports the average price of a manufactured home at $126.100. The future value of manufactured homes is not as predictable. Their value will usually depreciate over time. It could also remain the same, depending on local real estate markets. The value of your property can also be affected by other factors such as whether you own or lease the land beneath it and its landscaping.

The initial cost of building a modular home may be higher, but it will grow in value over time just like a home built on site. The modular construction is also more durable than manufactured homes. You may need to have a better credit rating and a lower debt to income ratio to finance a module home with a construction mortgage, as compared to the credit requirements for buying an existing house. This is because you do not have an existing home as collateral.

Alternatives for modular and manufactured home

There are many affordable options for home ownership.

  • Condominiums and townhouses: If sharing walls is not a problem, a condo or townhouse can be rented out at incredibly low prices. Budget for homeowners’ association fees.

  • Site-built home: You’ll spend more on a square foot for a traditional build if you are committed to building a brand new house. You can save money by choosing modest finishes and a smaller house.

  • Tiny homes: These houses are usually 400 square feet in size or less. They can either be on wheels, or they can have a foundation that is permanent. Consider the pros and con of minimalist living before downsizing.