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Modular Homes vs. Mobile Homes: What’s The Difference?

modular house

In an era where housing costs feel higher than they ever have before, more people might find themselves turning to less traditional housing options. Two such housing types are modular homes and mobile homes. These types of homes have been on the market for decades and are very similar to one another. Sadly, they also get a bad rap compared to traditional homes.

What is the difference between a modular home and a mobile home? Is one better than the other? How do they compare to traditionally constructed houses? These are a few of the questions that will be looked at in this article.

This is the overview and the differences between modular homes and mobile homes.

divider 5Overview of Modular Homes:

Modular homes are houses that have their component parts built in a factory and then shipped to a home site to be assembled. Unlike traditional homes, modular homes are built largely in a factory, with only the final steps being done on the job site. Modular homes sit on permanent foundations and must comply with all local and state building codes.

Modular homes have recently been growing in popularity, especially in rural areas. At first glance, it is hard to tell a modular home from a typical home. Modular homes have a lot of flexibility and a lot of customization options. They are also traditionally cheaper than standard homes.

Unlike mobile homes, modular homes aren’t mobile. They are placed onto permanent foundations, and once they are installed and signed off on, they do not move. In fact, modular homes never move in one piece. That is where the term modular comes from; they are put together in preassembled sections.

Because modular homes are put on permanent foundations and must comply with local building codes, they have similar strength and reliability as standard homes. That differs from mobile homes in that mobile homes do not have to comply with local building codes, so their longevity and ability to withstand poor conditions is lower than that of a modular home.

The similarity to traditional homes is reflected in their status, as seen by mortgage lending banks. Banks will give traditional mortgages to buyers looking to purchase a modular home. That is a big deal because the same cannot be said for other types of housing like tiny homes or mobile homes. If buyers cannot secure a stable loan for a home of any kind, it puts a big damper on the prospects for the future. Luckily, modular homes do not have that issue.

Also, there are no size constraints for modular homes. There are modular homes on the market that are well over 2000 square feet in size. A larger modular home simply means more sections to be shipped from the factory. In some markets, modular homes can appreciate similarly to traditional homes.

Pros
  • Permanent foundation
  • Can get a traditional mortgage
  • Looks similar to a traditional home
  • Has to abide by all building codes
  • Easy to customize when ordering
  • Not confined by size
Cons
  • Not mobile
  • More expensive than mobile homes
  • Less value than traditional homes
modular house
Image Credit: Pixabay

Overview of Mobile Homes:

Mobile homes, also known as manufactured homes, are built in a factory and then shipped to the buyer in one single piece. This is possible because mobile homes are built on large steel chassis that can be towed by a truck. Hence the term mobile home. Given the right preparations, mobile homes can technically be moved and placed almost anywhere. Although moving them can also be a headache and include a significant amount of risk.

To keep the homes mobile, they are not put onto permanent foundations. You may have heard the term “on blocks,” and that comes from the fact that mobile homes are often set onto cinder blocks to keep them off the ground but not secured as well as a permanent foundation. Putting a mobile home on a permanent foundation would make them immobile, which defeats one of the main purposes of having such a home to begin with.

Because mobile homes are not technically permanent structures, they have different rules that govern their construction. Instead of abiding by local building statutes, mobile homes are beholden only to The US Department of Housing and Urban Development (HUD) regulations. In fact, one of the easiest ways to tell if a home is a mobile home or a permanent structure is to look for the HUD tag that all mobile homes have to display by law.

Mobile homes are constrained by the fact that they must fit on a trailer to haul. That severely decreases the variability of design and size. Most mobile homes are one of just a handful of sizes and layouts. If mobile homes stray from the specified dimensions, they cannot be shipped via truck.

Since mobile homes are not considered permanent structures, they often run into a lot of issues with financing. First, most banks won’t mortgage a mobile home with a traditional home loan. Instead, special loans that are more similar to car loans are given out for mobile homes. This can make it more difficult to purchase one if you do not have the money to buy one outright. That is partially offset by the fact that mobile homes are a lot cheaper than traditional homes and are still cheaper than modular homes. Mobile homes also rarely appreciate in value. In some markets, they will hold their value longer, but they will never appreciate as a typical home will over time.

The biggest upsides to mobile homes are the fact that they are mobile, they are affordable, and they are not beholden to local regulations. That makes them popular in areas with expensive home costs or complicated building codes. If an area is not building enough houses to meet demand, a mobile home can be purchased and dropped almost anywhere. Certain areas allow mobile homeowners to lease space similar to that of an RV instead of buying land, which is also a plus when it comes to taxes and insurance.

Pros
  • Affordable
  • No local building codes
  • Mobile
  • Good for expensive areas
  • Lower taxes than traditional homes
Cons
  • Severely restricted in size and layout
  • Does not appreciate
  • Hard to secure a loan
  • Not on a permanent foundation

The Key Differences

The important differences between modular homes and mobile homes can be broken down into three parts.

  • Modular homes sit on permanent foundations while mobile homes sit on movable chassis.
  • Modular homes are built in large, pr-eassembled sections then pieced together at the site, while mobile homes are built entirely at the factory and then shipped via truck in one piece to the site.
  • Modular homes must adhere to all local and state building codes, while mobile homes only have to meet the HUD codes.

All these things together also create a disparity in perception between modular homes and mobile homes. Mobile homes are seen as cheap, dangerous, and a bad investment.  And in some cases, these perceptions are correct. Mobile homes have a bad track record in severe weather, and they do not hold their value as well as other home types. But most of the misconceptions about mobile homes are exaggerated or rooted in myth.

Modular homes have a better reputation overall, which can be seen by the fact that banks will mortgage them like a standard home. However, many people do not know the difference between a modular home and a mobile home, so they often get misconstrued. This has caused modular homes to also get a similarly bad reputation in some areas because of this mix-up.

How Much Cheaper Are Mobile Homes Than Modular Homes?

The average cost of a new mobile home runs between $60,000 and $80,000. Pre-owned mobile homes can be found for as little as $30,000 in some markets. This makes them extremely affordable for people who do not have the capital to buy a traditional home or a modular home.

The cost of a modular home runs between $80,000 and $200,000, depending on the size, style, and market. There is some overlap on the peripheries between modular homes and mobile homes. The highest-end mobile homes might overlap with the most basic modular homes. However, overall, mobile homes are significantly cheaper than modular homes.

As a rule, you can probably count on mobile homes being roughly half the price of a modular home. That is a lot of money in many cases.

modular house
Image Credit: Pixabay

Why Can’t I Find Official Information About Mobile Homes Anymore?

If you are curious about looking up the regulations, materials, and official specifications for mobile homes, you might be frustrated to find that very little information comes up. That is because “mobile home” is an unofficial term. Thanks to regulations passed by HUD in the past, the term mobile home was dropped in favor of the term manufactured home. According to the US government, there is no such thing as a mobile home, only manufactured homes. So if you are having a hard time finding the information you are looking for online, you should switch out the term “mobile home” for the term “manufactured home.”

See also: What Is the Best Roof for a Mobile Home? 4 Common Types

When To Choose a Mobile Home Over a Modular Home

There are two main factors to consider when choosing between a modular home and a mobile home. Those factors are cost and area. If you are in a pinch and want somewhere to live on a budget without having to rent, buying a mobile home is a great option. Used mobile homes can be found for very manageable prices, but they won’t be as nice as modular homes in many cases.

The other thing to consider is the area. Not everywhere is conducive to building a modular home. Building codes or the lack of local manufacturers can make it hard to find a modular home that you like at a price you can afford. Mobile homes circumnavigate these issues by avoiding local building codes and having larger shipping ranges than modular homes.

However, if you are looking for something like a traditional home with a little bit more flexibility on the design or the price, then modular homes are a great choice. Just be prepared to deal with more red tape and higher prices than with mobile homes.

modular house
Image Credit: Pixabay

Are Tiny Homes Technically Mobile Homes?

Yes, most tiny homes are technically mobile homes. Many of the most common tiny homes are built in one location and put onto a chassis so they can be towed behind a truck. That meets every definition of a mobile home. This new generation of mobile homes looks different and is smaller than the previous generation, but the idea is still the same. They allow you to keep costs down and increase your freedom in terms of mobility.

But not every tiny home is built this way. Tiny homes on permanent foundations would not be considered mobile homes, but this is the minority of tiny homes.

Mobile Homes vs. Modular Homes Comparison

Mobile Modular
Manufactured Location 100% in factory In factory, then assembled on-site
Foundation Mobile chassis Permanent
Built to local code No Yes
Mobile Yes No
Finance Options Special Standard
Land requirement Own or special lease Privately owned

divider 5Conclusion

On their face, it seems like modular homes and mobile homes have a lot in common, but they are actually very different. They have completely different definitions, codes, and costs. The biggest similarity is that both of these home types are built in a factory rather than being built on-site by contractors. Both mobile homes and modular homes each come with their own unique set of benefits and can be an excellent alternative to a traditional home depending on your circumstances.


Featured Image Credit: Pixabay

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