Things you need to know before buying a manufactured home

By Bestbuysupplier Feb 23, 2022 at 19:34 pm

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With a homeownership rate around 60% since 1960, buying a home is pretty much an essential part of the American life. From simple condo to luxurious mansion, there are many choices in the property market. However, if you are one of those first-time homebuyers who wants to start small, manufactured homes may be a good alternative to traditional site-built homes. 


1.What is a manufactured home?

Manufactured homes are factory-built homes that are transported in one or more sections and installed permanently on site. Though the terms manufactured home and mobile home are used interchangeably sometimes, there is a big difference between them. 

Both of them are factory-built housing, but mobile homes are built before June 15, 1976 with no uniform quality or safety standards. Manufactured homes, on the other hand, are built after that date according to the building and quality standards set out by Department of Housing and Urban Development, namely HUD code.

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2.Purchasing a manufactured home

Most manufactured homes are sold by dealers, which offer new and pre-owned options. You can look for sale of manufactured homes from the following places:

  Independent dealers who buy from different manufacturers and sell to homebuyers.

  Factory dealers who are like sales representatives of a single manufacturer.

  Manufactured home communities who also serve as dealers.

  Real estate listings on real estate websites, which are great for buying pre-owned manufactured homes.

Before choosing your manufactured home, spend some time checking out each manufacturer, dealer and community on the websites. Find out the option that interests you and make an appointment for a house tour.

Buying a manufactured home from a dealer is pretty much like buying a car. You can choose from the sales lot and customize your manufactured home with the features you want, and then apply for manufactured home financing. All of these can be finished in the same day. 

Available floor plans include single-, double- and triple-section. When there is more than one section, they will be built and transported individually and connected onsite. Manufactured homes come with a variety of layouts and sizes, ranging from 1-bedroom and 1-bathroom of less than 500 square feet to 4-bedroom and 3-bathroom of more than 2,500 square feet. The dealer is usually responsible for coordinating the transport and installation.


3.Price of a manufactured home

According to the Manufactured Housing Survey (MHS) conducted by the U.S. Census Bureau, the overall average sales price of a new manufactured home was about $88,200 as of August 2020.

Grissim Guides can be a good way for you to understand not only pricing, but also reputation and target markets of different manufacturers. In general, a basic single without any extras can be as low as $20,000. Some manufacturers focus on such lower-end models for people whose top priority is price. The other end of the spectrum is high-end luxury homes, which are constructed similarly to site-built homes. Price ranges from $85,000 for a single to more than $200,000 for a triple.

Factors that determine price include the number of sections, size, manufacturer, building materials, region for building and installation, and other add-ons and finishes chosen by the buyers.


4.Financing of manufactured homes

Mortgages and chattel loans are the main options for financing a manufactured home. The differences of these two loans are as follows:

  a) Chattel loans, or personal property loans, are same as the loans for buying a boat or RV. Most of the manufactured homes are financed by chattel loans, which tend to have higher interest rates than mortgages but lower upfront costs. The loan term is often from 10 to 20 years, shorter than the common 30-year of regular mortgage.

  b) Mortgages, or real estate loans, are only eligible for manufactured homes that are permanently fixed on a foundation and titled as real property with the land. It offers better interest rates compared to chattel loans.