Modular and Manufactured Home Buyer's Guide

A Guide to Buying Your First Modular Home

In this modular home buyer’s guide we’re going to show you the 3 most important things you need to consider when making your modular home purchase: Price, Time, & Customization. Read on to see how these factors can make the choice to buy a modular or manufactured home an easy one.

Why buy a prefab home?

Simply put, the decision to buy a custom home built in a factory as opposed to an onsite home makes sense on several fronts. Prefab homes are constructed inside a climate-controlled factory by a team of trained craftsmen with a lifetime of experience bringing each design to life. In every building facility, strict quality assurance, inspection, and supervision at every step of the building process ensures an extremely well-constructed product that meets high code standards for quality, safety, durability, and energy efficiency. Overall quality, design, and appeal are guaranteed to be equal or superior to the traditional site-built home. The bottom line for homebuyers is this: your prefab home will be built exactly as expected and ready for occupancy within weeks, instead of months, and the cost will be considerably lower.

Why is factory-built housing less expensive?

Manufactured homes and modular homes are truly the only form of single family housing that can serve the needs and desires of almost all Americans without sacrificing construction quality or amenities, and at an affordable price that assures value unmatched by any other form of housing. Factory-built housing is less expensive than homes built on site due to the multitude of efficiencies and economies granted by the assembly line building systems that manufactured home and modular home producers utilize. Homes that are engineered by skilled craftsmen within a controlled factory environment result in less material waste and volume building material purchasing discounts. Some of the larger manufactured home building companies may produce up to 4 or 5 homes per day. There are no weather delays and other perils common with site built construction. In short, the savings of building houses in a factory are passed along to the homebuyer.

What is the true cost of building modular?

A modular home shopper will need to secure a lot of information from the manufacturer, the on-site contractors, and building officials in order to determine the actual cost of building modular. The amounts that are most easily attainable will be the manufacturer’s base price for the model chosen and the cost of the land where the home will be built. There are considerable cost differences based on the type of modular home you purchase, primarily dependent on whether the home is built by a traditional manufactured home builder or a modular home only producer. Where you build will also have an effect on your bottom line cost. We will estimate the cost for both types of modular units using a mid-priced, 1,800 square foot modular home with 3 bedrooms and 2 baths as an example. Our theoretical home will be located somewhere in Middle America, where average site-built home prices will be in the neighborhood of $225,000-$260,000.


Land: $10,000 (both modular only builder and traditional manufactured builder) – This price would probably buy you a building-sized lot on the outskirts of a small town in the Midwest, South, or Southeast. This price may buy you 5 acres in a rural area.

Base Home Price: $90,000 (modular only builder) or $65,000 (traditional manufactured builder) – Base prices of both types do not include a garageA two car garage would add about $25,000 to both total costs.

Customization & Upgrades: $30,000 (modular only builder) or $7,000 (traditional manufactured builder) – Typically, customization and upgrades add about 25% to the sales price of modular only builders’ prices. Modulars built by traditional manufactured builders have a much wider choice of pre-engineered floor plans that will meet homebuyer requirements without additional modifications. Common upgrade options include deluxe appliances, floor coverings, integrating covered porch decks, luxury baths, etc.

Site Preparation: $5,000 (both modular only builder and traditional manufactured builder) – This price assumes a level lot with proper drainage and utilities at the street. A septic system and drilling could add $10,000-20,000 to the total price.

Foundation: $12,000 (modular only builder) or $7,000 (traditional manufactured builder) – This cost estimates a block perimeter system with interim supports above grade with a crawl space and no basement.

Delivery/Assembly/Installation: $20,000 (modular only builder) or $5,000 (traditional manufactured builder) – Modular only builders will require a crane service to lift modules onto the foundation, where they will be positioned and connected by a construction crew to complete the home building process (including electrical, plumbing, and final finish). With the traditional manufactured builder, the home is installed on the foundation, sections are mated together, drywall closed up, and carpet installed. Neither of these prices will include any other site exterior accessories or services such as porch concrete walkways, patios, landscaping, etc.

Fees & Permits: $2,000 (both modular only builder and traditional manufactured builder) – Some state and local housing jurisdictions will have fees that are considerably higher. California has a permit fee structure that is considered to be the most outrageous in the nation. In most California locations, expect building permit fees and requirements as high as $10,000. These fees can include developer fees, school fees, an earthquake foundation system, full house fire sprinklers, and more.

Total Minimum Cost: $169,000 or $94/sq ft (modular only builder) and $99,000 or $55/sq ft (traditional manufactured builder) – Additional features and upgrades such as a garage or covered porch deck, as well as optional interior amenities, will still keep your total investment well below the average price of a comparable site-built home.


How can I customize my modular home?

Home shoppers are attracted to manufactured and modular homes because of three main advantages over site-built homes. These are:

  • Price
  • Time to occupancy (weeks as opposed to months)
  • Customization that allows their home to be built to their exact desires and needs

The key word in this modular home buyer’s guide is customization. To some, this means having a home built entirely from scratch to match their dreams, while others think of taking an existing floor plan and personalizing it with features that correspond to their vision and lifestyle. The extent of customization has an effect on the total price and often extends the turnaround time from production to move in. Let’s expand on this.

Manufactured and modular homes are examples of system home production using a synchronized construction process. Those systems automate the home building to achieve higher levels of quality and efficiency. Wholesale customization to the basic structure of the home will result in delays and expenses that will not necessarily add value to the home. Most manufactured and modular home builders offer a selection of pre-approved floor plans, sizes, and designs that will match the needs of a home shopper. They also have many customization options and upgrades to suit virtually any taste. These include everything from attached garages, converting a guest bedroom into a study or family room, upgraded floor coverings, state of the art appliances, luxury bath options, exterior designs, gourmet kitchens, integrated covered porch decks…in other words, just about any feature that could appeal to a home shopper.

Where can I get more tips on buying a modular or manufactured home?

Buying a home is perhaps the most important, life-changing decision any of us will make. Understanding the key factors that go into buying a modular or manufactured home will help make it a pleasant and rewarding undertaking. Your journey beings here, at! The first step is exploring our Resources section and obtaining the knowledge that will help you find the ideal home based on your needs, desires, and expectations. Read on to see a few practical tips that should be helpful in navigating your journey to homeownership.


Pick the right placement site – The home you purchase or build will likely be dictated by the regulations and restrictions of the town/county in which your property will be located. The first step to picking the right placement site is to go to your county courthouse or city hall and obtain a copy of the zoning ordinances that apply to the area in which you plan to locate your property.

Know which type of factory-built home you want – Here at, you will find a wealth of comprehensive information, including floor plans, styles, and construction specifications for almost all builders of HUD manufactured homes, modular homes built by traditional manufactured builders, and modular homes built by modular-only builders. All manufactured and modular homes are built to stringent federal and state building codes that ensure quality construction, durability, and safety. It is important to refer to our article explaining these differences – What Are the Differences Between Manufactured Homes and Modular Homes?

From whom you buy your home is just as important as the home itself – Contacting a manufacturer directly is an excellent way to receive information about the products they build. However, it is unlikely that they will quote a base price. Instead, you will be referred to either an authorized retailer or builder in your local area. There are some manufacturers that will contract directly with the buyer to complete the total building process. It is important that you not only shop the best price for your home but also for the contractor. You can do this by viewing previous similar job sites and testimonials from satisfied customers. Make sure to reference the “What is the true cost of building modular?” section above.

What do I need to know about financing my new modular or manufactured home?

A completed modular home becomes real estate; in other words, it has all the advantages of a traditional site-built home and more. There are three important advantages that equal or trump site-built homes. First, your modular or manufactured home will be equal and often superior in quality to a comparably sized site-built home. Second, modular and manufactured homes are move-in ready in a fraction of the time compared to site-built. And third, the big plus is that your modular or manufactured home will qualify for financing with the same terms, conditions, appraisals, and low-interest rates as a site-built home. A traditional loan is a mortgage on an existing home, generally for a 30-year term. These mortgages are plentifully available from conventional lenders, mortgage companies, banks, savings & loans, credit unions, etc. Also, they’re available through special government programs like those offered by the FHA (Federal Housing Administration) and the VA (veterans Administration).

A traditional loan does not commence until the home construction project has been completed. You will need a second loan, a construction loan, to pay for contractors as the home completion process continues. These incremental payments are called construction draws. The draw schedule will be determined by agreement with your building contractor. The first draw is usually to the manufacturer to cover the cost of the home incurred prior to delivery to the site. The term of a construction loan is for the predetermined length of time it takes to complete the home setup process. You only pay interest on the monies advanced as you go. When the home is completed and ready for occupancy, your primary lender will payoff (take out) the construction loan which will automatically activate your permanent mortgage. Your construction loan and permanent loans do not have to necessarily be with the same lender.

To learn more about the different types of loans available for prefab homes, and to get a quick rate quote for financing, check out our page on modular home financing.

Still have questions?

If you’re still not sure about the buying process or have additional concerns not covered in this article, get in touch with us! We’d be more than happy to answer any questions you have.

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