Modular Homes: Pros and Cons, Cost, and Buying Guide


Some homeowners dream of their own custom home, but don’t want to spend the time and expense of managing the architects, engineers, and construction workers needed to build a home. Modular homes and manufactured homes are a great alternative to traditional design-build homes. They are cost effective and can save you a lot of time (and headaches).

What is a modular house?

A modular home is one that is built indoors in a factory-like environment. The finished products are covered and transported to their new locations, where a builder assembles them. A modular home is not a mobile home; it is simply a house that is built off site. These homes are often called factory-built, system-built, or prefab (short for prefab) homes.


Modular Homes vs Manufactured Homes:

Modular homes and manufactured homes often refer to the same thing. Manufactured homes is the general term for a home made from sections that have been assembled off-site. A modular home is often considered a manufactured home as it has been built in sections elsewhere.

Modular Homes vs Manufactured Homes:

Modular homes and manufactured homes are not the same thing. Manufactured homes are not placed on permanent foundations. Manufactured homes, sometimes (but not always) called mobile homes, can be moved from one location to another. There are specific laws and regulations regarding these relocations.

Modular Homes vs Mobile Homes:

Mobile homes are simply the term for a manufactured home built before June 15, 1976. Housing and Urban Development replaced the term with prefabricated houses.

Did you know that you can buy a modular home on Amazon?

A crane is assembling a modular or prefabricated house

Brizmaker/Getty Images

How are modular homes different from site-built homes?

Because modular homes are built indoors, they can be completed in a matter of weeks, rather than months. They don’t see the typical on-site delays caused primarily by weather. Modular homes must conform to specific rulesbuilding guidelines and codes that often exceed those of traditional homes on the site.

When considering a modular home, be sure to shop around, as not all companies that make factory-built homes are created equal. There may be significant differences in quality, price and service. As with buying or building any home, you need to do your research.

15 Must-Have Modular Home Facts:

  1. Modular homes are transported to the site of origin and established on a permanent basis.
  2. Modular homes are valued the same as their site-built counterparts; they not depreciate in value.
  3. Modular homes can be customized.
  4. Most modular home companies have in-house engineering departments that use CAD (computer-aided design).
  5. Modular home designs vary in style and size.
  6. Modular construction can be used for commercial applications, including office buildings.
  7. Modular homes are permanent structures and, like manufactured homes, are generally evaluated as royal property.
  8. Taxes on modular homes are the same as those on site-built homes.
  9. Modular homes can be built in crawl spaces and basements.
  10. Modular homes are considered a form of green building.
  11. Modular homes are faster to build than 100% site-built homes.
  12. Mortgage loans for modular homes are the same as houses built on the site.
  13. Insurance premiums for modular homes are the same as for site-built homes. Manufactured or mobile homes require their own homeowners insurance.
  14. Modular homes can be built to support up to 173mph winds.
  15. Modular homes can be built for affordable living and designed for future convenience.

Do all modular homes look alike?

Contrary to popular misconception, not all modular homes are alike. Modular homes have no design limitations. You can create any modular home style you want and embody the design style of your dreams.

You can add any window style or architectural detail you want. Almost all hosting plans can be converted to modular homes, meaning you can create your dream home.

How is a modular house assembled?

A factory-built home begins with sections that have been built in a climate-controlled area. The finished sections are transported to the construction site and then assembled using cranes. This process resembles building with Lego blocks. Modular homes cannot be moved after they have been placed and set on their foundations.

Are Modular Homes More Expensive Than Site Built?

You can save quite a bit of money with manufactured homes. Because they are built in a factory, they can be built fairly quickly, in a matter of weeks, rather than months, because there are no weather delays. Additionally, all inspections are performed at the factory during each phase of construction by an outside inspector and are completed before the homes are moved to their permanent locations.

The average modular home could cost between $90 and $120 per square foot to build. A site-built home starts at $150 per square foot. But the more complex your design and layout, the more your modular home could cost. Specialty services, like plumbing and electricity, may also be added to the base price of your home.

A modular home is being transported on a truck.

J2R / Getty Images / iStockphoto

What are the pros and cons of having a modular home?

Manufactured homes have many advantages, but there are also some drawbacks that you need to consider. If you were planning to build a house from scratch anyway, modular homes would save you time and money. But if you’re more interested in a move-in ready home, check out the pros and cons below.

Advantages of modular homes: Cons of modular homes:
  • More affordable to build.
  • Shorter construction times.
  • No home inspections needed: they are done at the factory.
  • They can be personalized.
  • Typically built with environmentally friendly materials and practices.
  • Built to be more energy efficient.
  • There are no weather-related construction delays.
  • First you will have to buy the land.
  • Cannot build on subdivisions.
  • You will need to build a foundation, add electrical connections, plumbing and sewer on site.
  • Not all manufacturers are the same; You will need to research which company to choose.
  • You may need a construction loan up front to finance the modular home, which is only good for one year.
  • Once the house is attached to the foundation in place, you will need to convert construction loan on a longer-term mortgage by going through the home loan process.

Where can you find modular homes for sale?

There are many companies that build and sell modular homes. You can order pre-built houses that just need installation, or you can customize them to your liking.

Modular Homes on Amazon:

It would only make sense that you could eventually order prefabs on Amazon. Do a quick search on Amazon and you’ll find tiny homes, modular home plans, and a 1,000-square-foot modern cabin for ECOHOUSEMARTdelivered in 100 to 120 days.

Households nationwide:

Nationwide households is a major manufacturer of modular homes serving the Southeast. They have a variety of plans including two-story manufactured homes, Cape Cod or Ranch styles. Nationwide Homes is available through manufacturer-approved builders in the states of Georgia, North Carolina, South Carolina, Tennessee, Virginia and West Virginia.

Modular company:

If you’re looking for a prefab style home that can be shipped almost anywhere, Printed Modular Manufactured homes can be shipped to any state. They have eight home styles, including popular contemporary styles and a selection of drop-in homes available based on your zip code.

Three prefab or modular homes being completed on a dirt construction site

Getty Images/iStockphoto

The bottom line

Modular homes, often referred to as manufactured homes, are a great option for homeowners who want to build their custom dream home without the hassles of traditional construction.

The process typically runs faster and more smoothly because the home is built in an off-site factory by professionals who understand zoning, permitting, and the home building process. You will work with the manufacturer to design your modular home. They will build it at your factory, transport it to your location, and anchor it to the permanent foundation faster and for less than the traditional way of home construction.

Other frequently asked questions

Do modular homes last long?

Modular homes are designed in accordance with local zoning codes and regulations and will last as long as a traditional home, if not longer.

Which is better, prefab homes or modular homes?

A modular home falls into the category of a manufactured home. Another type of prefab home is a prefab house.

How much do you have to put into a modular home?

If you plan to finance your modular home through a mortgage, you will need to make a down payment 20% of the value of the house to get the best chances of getting the loan approved.

Cynthia Páez Bowman contributed to this report.


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