What Is the Difference Between Manufactured, Mobile and Modular Homes?

Looking for a new home is an emotional roller coaster. One moment you’re excited. Then, there’s confusion. This confusion is especially the case when searching online for manufactured homes. Unfortunately, there is widespread uncertainty about what a manufactured home is and if it is the same as a mobile home. Additionally, many buyers get confused by the differences between modular and manufactured homes. This confusion is a result of many lenders and even home manufacturers who still use the terms interchangeably.

Potential home buyers should be aware that a mobile home, a modular home and a manufactured home are not the same things. There are several key differences with these homes’ age, safety, durability and financing.

What Is the Difference Between Mobile Homes and Manufactured Homes?

While there are similarities between modular, mobile and manufactured homes, they have some key differences you’ll want to be aware of. By knowing how these homes differ, you can make a better choice when you’re looking to purchase a new home. Find out more about the differences between mobile, modular and manufactured homes below:

Mobile Homes

In the mid-1970s, the U.S. Department of Housing and Urban Development (HUD) enacted quality standards for manufactured homes with the “Manufactured Home Construction and Safety Standards” law, which became effective on June 15, 1976.

This law separated mobile homes from manufactured homes, with a “mobile home” being a specific type of manufactured home. The term applies to any manufactured home built before June 15, 1976.

So, what is a mobile home? By its very definition, any mobile home on the market today is over 40 years old. Since the term “mobile home” only refers to prefabricated, transportable homes made before 1976, it’s a largely obsolete phrase.

Mobile homes gained widespread popularity after World War II as veterans returned to a shortage of site-built housing for sale. Manufacturers filled in the housing gap by building mobile homes.

Mobile homes were appealing for several reasons. First, they could be built more quickly than site-built homes and were typically cheaper. Second, the ability to transport these homes was a plus, as many veterans needed to move their families to find new jobs.

Before HUD enacted the Manufactured Home Construction and Safety Standards, mobile homes were constructed with little to no oversight. In an effort to keep costs down, many of these homes were made of inferior materials. This choice of materials came at the expense of both safety and durability.

There are several considerations to keep in mind for mobile homes built before June 15, 1976:

  • Mobile homes do not meet HUD’s standards for safety or energy efficiency.
  • Most lenders will not provide loans for the purchase of a mobile home.
  • Generally speaking, mobile homes have a history of depreciating very quickly.

At times, mobile homeowners will try to modify their home so it’s up to HUD code, as they believe this will help them sell it. However, it’s important to note that mobile homes can never meet HUD requirements, even if homeowners make significant modifications to them. If you’re on the market for a home, you should know that a mobile home will never have a retroactively issued tag by HUD.

What Is A Manufactured Home?

The term “manufactured home” refers to transportable homes constructed on or after June 15, 1976. These homes meet HUD’s modern safety and quality requirements. Manufactured homes are also built on their own steel chassis and wheels. Manufacturers then place these homes on permanent foundations with a wide variety of skirting options, including brick, giving the appearance of a site-built home.

When comparing manufactured vs. mobile homes, it’s important to know that manufactured homes do meet HUD’s Manufactured Home Construction and Safety Standards. HUD indicates that manufactured homes have met modern standards by issuing a HUD label, also called a HUD tag. Manufactured homes constructed in the U.S. on or after June 15, 1976, have a HUD label. This label is usually necessary to secure financing.

These standards are important because it means the house:

  • Is safe to live in
  • Was constructed with durable materials
  • Complies with regulations on heating, cooling, electrical, plumbing, energy efficiency, and fire resistance.

Unlike mobile homes, many lenders will finance a manufactured home. HUD indicates that manufactured homes have met their modern standards by issuing a HUD tag for each home. You can use this article to understand how most lenders define a manufactured house.

modular homes are factory-made

Modular Homes

Modular homes are defined as factory-made homes that only have 80% to 90% of their construction completed before they’re transported to a building site. Once the modular home pieces arrive at the building site, a crane operator will put the pieces on a foundation, connecting the home together.

Modular and manufactured homes often get confused for one another, and it’s no surprise since they’re fairly similar. The main difference between manufactured vs. modular homes is that the modular home isn’t fully assembled before it’s shipped, while manufactured homes are fully assembled before transportation.

Modular homes also distinguish themselves from manufactured homes by not being built on a chassis. Additionally, while manufactured homes have to be built following the national HUD code, modular homes do not. Instead, companies have to follow state and local building codes when building modular homes. These codes are generally intended to ensure the home is safe and durable.

elaborate manufactured home

The Benefits of Purchasing a Manufactured Home

Today’s manufactured homes are built to the same quality and safety standards as site-built homes. However, manufactured homes have a more affordable price tag, making homeownership a reality for more people. And unlike mobile homes, many manufactured homes are almost indistinguishable from site-built homes.

Manufactured homes are built in an indoor, controlled environment. This construction process offers many advantages:

  • The building materials are never exposed to outdoor weather, allowing them to stay dry and at a consistent temperature.
  • Manufactured homes can be built more quickly, as inclement weather does not affect construction.
  • Manufacturers save money by purchasing their materials in bulk. In turn, they pass the savings onto the home buyers, which is one of the reasons why manufactured homes are typically less expensive than site-built homes.
  • Many manufactured home builders offer some level of customization. Buyers can still create the home of their dreams while staying within their budget.
  • Many factors affect a house’s appreciation. However, much like site-built homes, well-maintained manufactured homes can appreciate in value.

Manufactured homes are built on their own steel chassis and wheels. Manufactured homes are placed on permanent foundations with a wide variety of skirting options. This includes brick, giving the appearance of a site-built home.

The Benefits of Purchasing a Modular Home

Buying a modular home also comes with several advantages. When deciding between modular vs. manufactured homes, you can make a more informed choice by reviewing some of the main benefits of buying a modular home:

  • Like homes built entirely on-site, companies can construct modular homes into any shape, floor plan or size.
  • Buyers can also customize modular homes to ensure they get a home meeting their tastes exactly.
  • Construction for modular homes is fast, with companies taking somewhere between four to eight weeks to construct a home at their factory.
  • Since most of a modular home’s construction is done in a factory, the manufacturing company reduces wasted building materials, leading to lower building costs. These lowered costs allow homeowners to purchase modular homes for less money than a traditional home.
  • Like traditional homes, modular homes regularly appreciate in value, making them a wise investment for many home buyers.


Financing a Manufactured or Modular Home

Unlike mobile homes, manufactured and modular homes are eligible for a variety of home loans:

  • Conventional mortgages
  • Federal Housing Administration (FHA)
  • The Veterans Administration (VA)
  • Rural Housing Services (RHS)/United States Department of Agriculture (USDA)

Since lenders treat modular homes the same as site-built homes, homebuyers can often easily receive financing. The process of financing a manufactured home is different than for site-built homes. Two different types of loans are available for the purchase of a manufactured home:

  • The borrower owns both the manufactured home and the land it’s on.
  • The borrower owns only the manufactured home and not the land.

Choose CIS Home Loans for Your Modular and Manufactured Home Financing Needs

Since you can receive home financing for manufactured and modular homes, you might be interested in a loan for one of them. At CIS Home Loans, we’re ready to help you receive the best loan possible for your needs. We offer some of the most competitive rates in the U.S. and fast turnaround times.

Review our home loan programs and offerings today. If you have any questions, please feel free to contact us.

Zack Rogers, III, is an accountant (CPA) by trade and has spent most of his career in mortgage lending, starting in the 80s as the CFO of Goldome Credit Corporation, a renovation lender. In the 90s and 2000s, he was President and CEO of Phoenix Financial Services and First Choice Funding, having built a network at First Choice of over 500 loan officers across 15 states. The company was sold in 2011, and Zack has been running local branches ever since, staying close to his community as a licensed loan officer in Alabama and working with his neighbors. NMLS#: 54454