Looking for a new home is an emotional roller coaster. One moment you’re excited. Then, there’s confusion. This is especially the case when searching online for manufactured homes. Unfortunately, there is widespread confusion about what a “manufactured home” is and if it is the same as a “mobile home”. 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 and a manufactured home are not the same things. There are several key differences when it comes to the age of the home, safety, durability, and financing.
What Is the Difference Between a Mobile Home and a Manufactured Home?
In the mid-1970s, the U.S. Department of Housing and Urban Development (HUD) enacted quality standards for manufactured homes. This is the “Manufactured Home Construction and Safety Standards” law. Further, it became effective on June 15, 1976.
- A “mobile home” is a specific type of manufactured home. The term applies to any manufactured home built prior to June 15, 1976. By its very definition, any mobile home on the market today is over 40 years old.
- The term “manufactured home” references homes that were constructed on or after June 15, 1976. These homes meet HUD’s modern safety and quality requirements.
HUD indicates their standards have been met 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.
Mobile homes gained widespread popularity after WWII. 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 quicker 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 the “Manufactured Home Construction and Safety Standards” was enacted, 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 came at the expense of both safety and durability.
There are several considerations to keep in mind for mobile homes built prior to 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.
Some mobile homeowners, in an attempt to sell their home, may make modifications to bring their homes “up to code”. Even with modifications, mobile homes will not meet HUD’s requirements. It’s important for potential buyers to understand that HUD will never retroactively issue a tag for mobile homes.
Manufactured homes, on the other hand, do meet HUD’s “Manufactured Home Construction and Safety Standards.” These standards are important because it means the house:
- Is safe to live in
- 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 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 home ownership 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 to stay dry and at a consistent temperature.
- Manufactured homes can be built quicker, as inclement weather does not affect construction.
- Manufacturers buy 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 in budget.
- There are many factors that affect a house’s appreciation. But 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.
Financing a Manufactured Home
Unlike mobile homes, manufactured 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)
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.
The CIS Home Loan Difference
At CIS home loans, we’ve been helping people achieve their dream of homeownership since 1991. We are a national home loan provider, serving clients in 49 states.
We offer the following manufactured home loan programs:
- Conventional mortgages
- USDA loans
- FHA loans
- Chattel loans: home only, no land