Perceptions about Modular Homes

When I speak before a group of people about manufactured housing, someone inevitably asks the same question sooner or later.  Usually, it is the first or second question, actually.

The question is — “What is the difference between modular housing and manufactured housing?”

Sometimes the question is framed as a statement.  It goes like this:

“I heard that some manufactured housing, well, I heard that modular housing is good.”

Usually, this is a not-too-subtle way of saying that, in this person’s opinion, the idea of reforming manufactured housing as a tool for affordable housing is a bit like inviting pool hall dropouts to teach social studies.  Impossible and foolishly naive.

When I tell that the main difference now is minimal, I sense that some people do not believe me.  Yet we know a few things.  The main difference is codes which govern the production of each housing type.  Manufactured housing is governed by the Federal HUD codes.  Modular works under the rules set by states.

Both are often produced in the same factories using almost the same processes.

Some differences can be traced to heterogeneity in the type of consumer being met by each product.  Right now, modular often reaches in to some more expensive price points.  Manufactured housing singlewides can often be priced as low as $30,000.

In a way, these prices are somewhat the product of the financing environment that surrounds each type.  When either is situated on land and labeled as real property, they qualify for longer terms and lower interest rates.  This makes payments a lot lower.  Such a benefit can go to either type, but more often than not it is the modular home that becomes real property.

Like Bruce Hornsby said, “that’s just the way it is.”