Are Manufactured Homes Right for You?
How can mobile homes be right for any family? This reaction is quite common with a vision of a home on wheels. But, that reaction mellows as one realizes there is more to mobile homes these days or to be exact, manufactured homes. Manufactured homes also go by the names factory-built or factory-made. A better understanding of the jargon and the technologies built into them can make prospective home buyers regard manufactured homes in a different perspective. Being less expensive, they are housing options that are viable for many families. Before jumping into buying one, however, take stock of what they are all about, where to find providers, how to transport them, manufacturing codes that you must know, and the advantages in owning one.
Understanding the Jargon: What are Manufactured Homes?
Manufactured homes are a type of prefabricated or factory-built housing just like modular homes and panelized homes. Technically, these are defined by the federal law as: "… built as dwelling units of at least 320 square feet (30 m2) in size with a permanent chassis to assure the initial and continued transportability of the home." Consequently, this type of home is manufactured in a factory; thus, they are referred to as prefab or factory-built. These homes are also placed on steel chassis and wheels for ease of transportability from the factory to where it is to be set as a home; hence, they may also be called mobile homes. Though the wheels can be removed, the chassis stays for purposes of continued transportability.
Manufactured homes are prefab rectangular sections that are mounted on two I beams. The I beams are constructed with wheels akin to a trailer that makes it possible to have it towed through a trailer hitch assembly at the front. Most manufactured homes are nearly (80 to 95 percent) complete by the time it is transported to the building site. These homes generally consist of one to three sections, but are typically limited to one level or floor.
Finding Fabricators of Manufactured Homes
There are many manufactured home builders located throughout the world. In general they ship to locations as far away as 800 miles. Most manufacturers work with dealers who serve local markets. Some manufacturers have a network of exclusive stores where you can only buy their brand. Other options are independent dealers who may sell multiple brands. Sometimes the independent dealers are your best choice because they have the freedom to sell you the best home for your situation.
Whoever you buy from make sure they have the knowledge and the desire to make sure your home gets set properly on your land.
How Setting Affects Property Classification, Valuation and Financing
Interestingly, there are two general ways of setting manufactured homes on the building site. How it is set on the property determines its classification as a property, its stability as a structure, its valuation, how the taxes will be computed, and the home loans that can be taken out from finance institutions. These classifications are real property or titled property.
1. Setting the manufactured home as a real property requires that it is secured on a permanent foundation constructed from the ground. The best type is a pit set where the home firmly sits on actual foundation walls constructed on an excavated pad usually below the frost level. Once the setting has been completed and the pit is backed filled. The feel of a pit set is in many cases comparable with any regular stick built or modular home constructed on the building site.
This type of permanent setting makes the home taxed as real property. As real property, one can take out a mortgage home loan, such as a conventional, FHA or VA mortgage loan, that can be described as the best financing options.
Further, manufactured homes must comply with the HUD codes which are less comprehensive compared to the IBC codes imposed on stick-built and modular homes except on fire damage protection.
2. Setting the manufactured home as a titled property simply requires that it is not permanently secured on the ground. The foundation can be as simple as cement blocks and jacks. Without any excavation, the setting is less stable and the home sits higher off the ground. This is why several steps are usually required to get to the entrance landing. Adding perimeter skirting can enhance the support as well as the appearance of the home.
This setting type makes your home classified as just another titled asset like a boat or a car. In which case, the type of loan that can be taken out is comparable to a car loan and is sometimes referred to as a Chattel or home only loan. Typically these types of loans are riskier and thus more expensive.
If you want an appreciating investment, go for stick built or modular homes. If your purpose of investment is to be able to provide basic housing and a comfortable home for a lower cost that can endure for many years, a well-maintained manufactured home is as good as any home, but just remember most manufactured homes depreciate in value.