How To Buy A Manufactured Home

Jana Klaasse
Jana Klaasse
Published on April 29, 2021

If you’re trying to buy a home right now, you know how tough it is to get a home under contract and with so much competition, home prices are going up, which is knocking a lot of buyers looking for affordable homes out of the market.

So an option for less expensive homes is prefab homes, which tend to be less expensive. and there are things though that you need to know before going that route.

So I want to discuss the different types of prefab homes, what kind of investment they are and possible financing options. I’m Jana Klaasse and my husband Paul and I are realtors here in the Eastern Panhandle of West Virginia.

The biggest lure right now for manufactured homes is the cost and the reason more buyers are considering manufactured homes. The average price of a manufactured home in this area is $140,000, while the average price of a stick built home is around $250,000 now and I think it’s going up.

So that’s quite a bit less. There’s three types of prefab homes, all are built in a factory and sit on either land that you own or land that is rented in a community of manufactured homes.

Three Types of Mobile Homes

The three types are modular, mobile, and manufactured. Modular homes are considered equal to stick built homes. They’re valued the same, appraise the same. financing available is the same. they’re built according to universal building codes that meet or go above the standards around here. They are delivered, partially constructed, and placed on a permanent foundation – a basement or a crawlspace. The only difference from a stick built is that they are built in a factory and delivered in pieces to the site and they’re put together in a day or two. Other than that, there’s really no difference.

Manufactured homes are built on a chassis – a steel framework – and after delivery, the wheels are removed and then it’s either put on piers with a skirt around it, or it can be placed on a permanent foundation, like a crawl space. A basement is possible, but it’s unlikely because the home is delivered finished, so there aren’t stairs for inside access. They are delivered in either one piece if it’s a single wide, two pieces, if it’s a double wide, and now they have triple wides – and I’ve heard there are quadruple wides.

Manufactured vs Mobile
And when you hear the terms mobile homes and manufactured homes, they’re really the same, except the term mobile home technically means it was built before 1976 when standards were established for building mobile homes.

So mobile homes built before that date were not regulated, so some of them are really poorly built and if they were built before that date, you’re probably not gonna be eligible or any type of home loan.

If a home is referred to as a manufactured home, it means it was built after 1976, so it will be built to the standards established at that time. so the difference between mobile and manufacturer just refers to homes that either are or are not built according to the codes established in 1976.

Lots of people interchange those two terms. so just know if you’re shopping for a manufactured home, a home built after 1976 is going to be much better.

Is a manufactured home a good investment?
So the big question is, will they go up in value like stick built homes or will they depreciate? and also what type of mortgage loans are out there?

And the answer to both those questions is going to depend on the type of manufactured home you’re talking about. two types of loans are used to finance a manufactured home, a mortgage home loan and a chattel loan.

Getting a loan for a manufactured home
For a manufactured home to qualify for a mortgage loan, like a conventional loan, it needs to be on a permanent foundation on land that you own.

A manufactured home on piers with a skirt around it and not on a permanent foundation is not considered real property. it is considered a vehicle. so you get a chattell loan or the same type of loan you get for a vehicle, real property is immovable property- land and anything permanently attached to the land.

And in my experience, doublewidess are going to be easier to qualify for a mortgage loan than a singlewide. and be sure to pay attention to interest rates.

They are higher on manufactured homes, especially higher for chattel type loans and some lenders won’t loan on any type of manufactured home. so it’s going to require some shopping around.

I have some resources I can share with you if you give me a call. so like I said, be sure to compare fees and interest rates. they’re going to vary depending on the lender and your credit situation. 

Will a manufactured depreciate in value?
As far as the investment potential of manufactured homes, they probably won’t appreciate as much as stick built homes in general.

But if you’ve got a nice piece of property, your home is on a permanent foundation and in good shape it’s gonna appreciate around here. and that’s especially true here. lately. I pulled some numbers for our local mls on the prices of manufactured homes.

The cost of manufactured homes in this area in 2010 was $ 40,000 and prices stayed under $60,000 until 2017. and since 2017, prices in this area for manufactured homes have gone up. in 2019.

They jumped to just over $12,0000 and this year, the average so far is 140,000. so the investment potential for manufactured homes is much better than it used to be and it is getting better as prices escalate in this area.

Download a booklet on buying a manufactured home.
If you’d like a booklet with some good information on buying a manufactured home, you can do that. i’ve got a link for you on our website, the website, https://meetusinthepanhandle.com/manufacturedhomes. Click on that and you’ll have access to booklet

All right, I hope this was helpful. If you haven’t bought a home for a while and you’d like a refresher on the steps involved, I did a video on that, it’s called “How to, Buy a Home.”  Here’s the link: https://www.youtube.com/watch?v=EwII1C2Wkvg&t=51s

Click on that and then it will walk you through the steps and be sure to contact me with any questions. I’m at 304-264-2828

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