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What is a Modular Home? Modular Homes Explained

render of two storey modular home

While there are some similarities, a modular home is a bit different from a manufactured, mobile home. These homes are still quite new, however, they are becoming increasingly popular. While these homes are manufactured in a factory, they are not technically “manufactured homes.”

As you can see, the terminology can get quite confusing when you’re talking about prefabricated homes.

In this article, we’re going to take a look at true modular homes. These homes are built just like most traditional homes, but they are built off of the property and then transported there.

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So, What Is a Modular Home?

Typically, a modular home is built until it is very close to being finished—usually around 80%. Then it is trucked over to the building site from the factory. It is not built on the land, in other words.

These homes are not technically “manufactured homes” because they do not ship fully assembled. There is some finishing work that needs to be done on the property. Typically, the home arrives in multiple pieces, and then it has to be put together on the site. A crane operator is needed for this part.

Once it is all put together, you can’t tell a modular home apart from a traditional house.

modular home in the warehouse
Image By: vipman, Shutterstock

Modular Home vs. Manufactured Home

While these homes are often looped in with manufactured homes, they are not the same thing. There are several differences that set them apart from each other. Here’s what you need to keep in mind:

  • Modular homes must be built to the same building codes as traditional houses, and they are usually covered by a warranty. Manufactured homes have their own guidelines.
  • Modular homes are considered traditional homes by the bank. Therefore, they are easy to get financing for.
  • Modular homes also appreciate in value just like a traditional home, though this isn’t always true for manufactured homes.
  • Modular homes can be built to any size, shape, or floor plan. In many cases, you can adjust the metrics when you order the home. Manufactured homes are mass-produced and usually cannot be adjusted.
  • Modular homes only take about four to eight weeks to build in the factory. They are built-to-order in most cases, so you will have to wait for them to be complete.
  • Modular homes are extremely safe. In fact, they are often considered to be safer than homes built on-site at withstanding natural disasters.
  • Modular homes are more expensive than manufactured homes. They also tend to be larger, which may be one reason why they are considered more expensive.

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The Pros of a Modular Home

Modular homes are a viable option for those that want a traditional home without the months-long wait that typically comes with a traditional home. Furthermore, these homes are typically cheaper because there is less waste.

Some additional benefits of a modular home are:


Because they are built in a factory, the material is never wasted with a modular home. Therefore, the price tends to be lower than a traditional home. Plus, you don’t have to factor in things like travel time for the builders, as they are all at the factory.

Overall, this makes costs quite lower than they are for traditional homes.


Most modular homes are customizable to some extent. Because each room is basically a building block, you can arrange these rooms however you see fit. In this way, you can come up with a great building plan.

However, different companies provide different levels of customization options. For example, some may only allow you to change the layout of the home, while others allow you to change practically every detail.

Easy to Add on to Later

Even if you don’t get your house the size you want, you can always add on rooms later. Because the rooms of this housework are a bit like building blocks, it is easy to add them on later. Often, you can contact the original builder and have another room built and installed.

It is much easier and cheaper than adding on to a traditional house.

Faster Build Time

It is much faster to build a modular house than a traditional one. Therefore, you’ll start moving in much faster. It only takes a few months for a modular house to be complete, while a traditional house may take much more time.

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The Cons of a Modular House

With that said, there are a few problems that commonly pop up in modular houses. Here are some things that you need to keep in mind:

Land Problems

Because the house isn’t built directly on the land, problems with the land often occur. You need to ensure that you have a suitable piece of land before ordering the house. The perfect site will also need to allow a modular home to be built on it, which may not be possible depending on the local laws.

Furthermore, you’ll also have to level and cleat the land, which can cost a great deal of money. The land will also need to accommodate a large crane, which is needed to place the house. The foundation also needs to be perfect as the house is already built.

Extra Fees and Costs

On top of paying for the modular home, you’ll also need to pay for certain extras, like the foundation, concrete floor, and utility hookups. These extras can cost quite a bit of money beyond the actual cost of the modular home itself. Therefore, be sure to take these factors into account.

Most homes come with everything you need. Therefore, they have a more inclusive price. You don’t have to do the math to figure out the total cost of the house, since everything is included in the package.

Difficult to Finance

Different banks treat modular homes differently. Therefore, some may consider them to be just like traditional homes. However, others may not, and financing them is a bit different than traditional homes.

Most modular homes require full payment upfront, which some banks can’t accommodate. Modular homes typically cost thousands of dollars, which is more than most people can afford.

transporting modular home
Image By: MODSTEEL, Shutterstock


You’ll need to have each module transported to the land, which can be quite expensive. These oversized loads are often associated with extra fees as well, leading to even higher costs. The exact fees for your state will vary. Therefore, you should take a look at your local fees and add those to your costs, as it can add quite a bit to your final price.

Resell Value

When put up, modular homes look just like traditional homes. However, some people consider them to be lower quality than other homes, and this is a common misconception. Therefore, you may lose out on some buyers if you wish to sell your home at some point in the future.

It is often harder to resell these homes. So, it is best to only purchase a modular home if that’s where you plan on staying for the rest of your life.

Finding Land

You’ll need to find land that is suitable for your home. This can be difficult, especially if you live in an area that is not known for affordable land. The land cost will add substantially to your overall costs in many cases.

Therefore, it is vital to research your land costs before you decide to go the modular route. Sometimes, the land is so expensive that it isn’t worth going this route.

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Modular homes are the up-and-coming way to build a home. They provide an affordable way to customize a home and build one exactly how you want it. These homes are different from the manufactured homes of the past. When built, they look exactly like traditional homes.

While these homes have a lot going for them, there are several things that you need to keep in mind, though. For one, you should be careful to consider the other costs that come with the home. For instance, you should consider the cost of land, transportation fees, and finishing fees. The homes arrive almost completely built, but you will need to pay for a builder to install them.

Furthermore, if you want to customize the home, you’ll have to spend even more money. Customizations often cost quite a bit of money, though it does depend on the builder that you choose.

Still, these homes do tend to be a bit cheaper than traditional homes, and they often allow you to save a bit of money.

Featured Image Credit: Giovanni_cg, Pixabay


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