10 Basic Facts You Should Know About Modular Homes

10 Basic Facts You Should Know About Modular Homes

What is a modular home?

A modular home is one that is built indoors in a factory-like setting. The finished products are covered and transported to their new locations where they will be assembled by a builder. A modular home is not a mobile home; it is simply a home that is built off-site as opposed to on-site. These homes are often called factory-built homes, system-built  or pre-fab homes.  Modular and Manufactured homes are NOT the same. Manufactured homes are not placed on permanent foundations. Manufactured homes, sometimes referred to as mobile homes, but are not always mobile homes, can be moved from one location to another. There are specific laws and regulations regarding these relocations.  Thanks to publications such as Dwell, the popularity of the modular home is growing.

How do modular homes differ from houses built on-site?

Because modular homes are built indoors they can be completed in a matter of a few weeks as opposed to months. These home constructions do not see the typical on-site delays that are predominantly caused by the weather. Modular homes must conform to specific rules, guidelines and building codes that often surpass those of traditional on-site homes. However, it is important to shop around. Not all companies that make factory-built homes are alike. There can be significant differences in quality, price and service.  As with purchasing or building any home, it is crucial to do your research.

Modular Home Facts:

  • Modular homes appraise the same as their on-site built counterparts do. They do not depreciate in value.
  • Modular homes can be customized.
  • Most modular home companies have their own in-house engineering departments that utilize CAD (Computer Aided Design).
  • Modular home designs vary in style and size.
  • Modular construction can also be used for commercial applications including office buildings.
  • Modular homes are permanent structures – “real property.”
  • Modular homes can be built on the following on crawl spaces and basements.
  • Modular homes are considered a form of “Green Building.”
  • Modular homes are faster to build than a 100% site-built home.
  • Home loans for modular are the same as if buying a 100% site-built home.
  • Insuring your modular home is the same as a 100% site-built home.
  • Taxes on a modular home are the same as 100% site-built home.
  • Modular homes can be built to withstand 175 mph winds.
  • Modular homes can be built for accessible living and designed for future conveniences.

Do all Modular homes look alike?

Contrary to popular misconception, modular homes do not all look alike. Modular homes have no design limitations. You can create any modular style home you wish from a traditional center hall colonial to one that is Mediterranean in style.  You can add any style window or architectural detail that you desire. Nearly all host plans can be turned into modular homes, and you can therefore create your “dream home.”

How is a modular home is assembled?

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

It is important to talk to your manufacturer as each manufacturer operates with a different set of guidelines. If you are designing your own home, it is important that you ask very specific questions. Modular homes offer hundreds of personalized features that include but are not limited to: ceramic floors, solid surface countertops, various cabinet styles and wood species, exterior finishes, plumbing fixtures, etc. You can, essentially, customize your own home.

 Are Modular home prices more or less expensive than those built on site?

Pre-fab homes can typically save you quite a bit of money.  Because they are constructed in a factory they can be built fairly quickly, a matter of weeks as opposed to months, which can be quite significant. The reason for this is that there are no extreme weather delays. Furthermore all inspections are performed at the factories during each phase of construction by a third party inspector, and are completed before the homes are transported to their new locations.

It is important to note, however, the more complex the design and specs, the more money your home will cost you. Other factors to consider such as electricity, plumbing, duct-work are often not factored into the initial pricing, so your final cost may be 20% more than what the builder is quoting you. You may need to install a septic system, install natural gas or a basement, these too will add to your bottom line.

How to recognize a modular home?

A modular home should have a metal tag on the outside of each section. These tags are small and metal and quite identifiable. If you cannot locate a tag, you should be able to find details about the home in the electrical panel box. This tag should also reveal a manufacturing date. Plates can quite possibly be located in kitchen cabinets and bedroom closets. Pre-fabricated houses are built on non-removable metal chassis. If you are looking at a home that you think could possibly be pre-fab whose markers have been removed, look for small holes in the structure where the markers should be.

What are the benefits to owning a modular home?

Modular homes can be more affordable. Their shorter build time will save you money on the overall construction. Home inspections are not needed as these are all done in factory. They are much more energy efficient, therefore your monthly expenses will be substantially less. Modular homes are environmentally friendly due to their efficiency. There are a great variety of homes from which to choose, there are many top architects that specialize in designing modular homes. As with any home, modular homes can be built on to and expanded.


A homeowner must own the land onto which the home will reside. In many cases one may end up spending upwards of $100,000 just for the land. Unlike regular homes, the lots cannot be built on subdivisions. The initial fees can be cost prohibitive for some. When building a modular home the builder must be paid first, and in full, before the process has begun or has been completed. You will need to use your savings or get a special construction loan.

This loan is valid for one year and when the work is completed the dealer will pay the loan, then a traditional mortgage will be issued. It is therefore important that you know your budget and shop around. It is important that the rules I have mentioned here apply to US residents. If you live in Canada or in Europe you will need to check your country’s guidelines.

Would you consider a modular home for yourself, or are you more of a traditionalist?


  • jeffery hartman August 24, 2013 at 17:13 PMLogin to Reply →

    I want to buy a modular home!!!! I didnt know they were so nice!!

  • Phil Wolstenholme August 24, 2013 at 17:31 PMLogin to Reply →

    My apartment building in Manchester, England is a modular building. It was quite a novel idea over here at least.

  • BOhUiginn August 25, 2013 at 03:06 AMLogin to Reply →

    Actually, not all modular homes are identifiable through metal tags, and not all of them have non-removable metal chassis. Also, not all modular homes are energy efficient. They aren’t energy efficient by default. Energy efficiency is still a feature that has to be considered when designing the modular home. You could certainly have an energy inefficient modular home. It depends entirely on the designer and not the mere fact that it’s a modular home.

  • Stuert Miller November 16, 2013 at 06:07 AMLogin to Reply →

    Off site construction, or modular building, is becoming more popular by it’s benefits . The above blog have so much information and tips about modular building project . Thank you so much for it .

  • Victorina December 11, 2013 at 15:43 PMLogin to Reply →

    Keep up the excellent work. It has a really excellent content on this subject and your comments are quite accurate.

  • Anferney Howard January 16, 2014 at 16:26 PMLogin to Reply →

    This is a great article, something anyone who is looking to purchase a modular home should know and understand. Only thing, I believe number one on the list should be where are you going to place your property once you find your perfect home? I usehttps://lotnetwork.com/ to buy and sale all the land I own. They have a great service that allows you to search all across the country. Thanks again for the article.

  • Melissa January 16, 2014 at 18:28 PMLogin to Reply →

    A great description of modular homes vs traditional built homes! A must read for anyone looking into modular living.

  • Gildera January 28, 2014 at 19:23 PMLogin to Reply →

    Very informative article, thank you. I am thinking about new house. Probably it will be modular prefabricated house.

  • Thomas May 21, 2014 at 06:28 AMLogin to Reply →

    You have to know about the facts of modular homes which is very good and easily you understand that thing.

  • Mike Ward July 2, 2014 at 12:19 PMLogin to Reply →

    Hi to everyone at Freshome, I’ve just come across your blog page whilst searching for modular buildings around the World. I must say I am impressed with your blog content – but it is this post about Modular Buildings that interests me most. I am passionate about modular buildings myself here in the UK, and my company provides alot of solutions to the education market. It’s always nice to see how similar companies are doing across the Atlantic – I’ll make a note of your blog and keep an eye on you in the future. Thanks, Mike

  • Bonobos Marcos January 12, 2015 at 20:52 PMLogin to Reply →

    Wow, after reading this I am convinced that a mobile home is the way to go. Since I just graduated from college and don’t have much spare money I want a home that wont depreciate in value and is affordable. My plan is to show this to my girlfriend and she if she would be willing to move in with me into a home like this! I think that she will love the idea.

  • Deanna R. Jonesd February 3, 2015 at 23:49 PMLogin to Reply →

    I really liked what you said about the difference between modular homes and houses that are built on-site. My friend told me that she was going to look at modular homes at noon today, then she’s going to look at homes built on-site later in the day. I didn’t know why she was looking at houses that are built on-site, because modular homes seem like they’re better. I hope that I can help her understand that modular homes are required to stick to guidelines and building codes, whereas on-site homes don’t necessarily have to stick to those guidelines.

  • jim barnosky February 18, 2015 at 16:11 PMLogin to Reply →

    I wish I had done a better job of comparing dealers. I think the choosing of who sets your modular and deals with the manufacturer is more important than which manufacturer you choose. That’s what I’m finding out right now. Unfortunately I’m at the stage where all I can do is hang on and hope for the best.
    This will be my 2nd modular, the first went well and was a great home.