Apr 18, 2010

Manufactured Housing 101

Factory-Built Housing is the broad category which includes the following (This blog post talks specifically about Manufactured Homes/Mobile Homes only):
  1. Manufactured Housing built under the 1976 Department of Housing and Urban Development (HUD) Manufactured Housing Code, which preempts local code standards, and commonly referred to as "HUD Code Housing" or "mobile homes". In 1980 this designation was changed to "manufactured home" in recognition of the more durable and less mobile nature of these homes. Once sited, these homes are rarely moved. Manufactured homes may be single- or multi-section and are transported to the site and installed. Federal standards regulate design and construction, strength and durability, transportability, fire resistance, energy efficiency and quality. The HUD Code also sets performance standards for the heating, plumbing, air conditioning, thermal and electrical systems. It is the only federally-regulated national building code. On-site additions, such as garages, decks and porches, often add to the attractiveness of manufactured homes and must be built to local, state or regional building codes.
  2. Modular Housing is built off-site in components or modules for assembly on-site in accordance with locally adopted and enforced building codes.
  3. Panelized Homes: These are factory-built homes in which panels - a whole wall with windows, doors, wiring and outside siding - are transported to the site and assembled. The homes must meet state or local building codes where they are sited.
  4. Pre-Cut Homes: This is the name for factory-built housing in which building materials are factory-cut to design specifications, transported to the site and assembled. Pre-cut homes include kit, log and dome homes. These homes must meet local, state or regional building codes.

Universal Building Code Approval (of Manufactured Housing/Mobile Homes):
  • This HUD approval seems to preempt local building code jurisdiction: "The Manufactured Housing Improvement Act of 2000 calls for federal preemption to ensure that disparate state or local requirements do not affect the uniformity and comprehensiveness of the HUD Code to be broadly and liberally construed."
  • Moreover, it may be a federal requirement that this type of housing be allowed in residential zoned areas: "Many communities are unprepared for the accommodation of manufactured housing and are unaware of legal obligations to accommodate manufactured housing in residential areas."
  • Except for the foundation and anchoring systems: Those need to comply with ANSI Standards (published in 1994). There is a Model Manufactured Home Installation Standards (2003 edition) avail on the NFPA website. Unsure if this is a completed/final version of the document or just a draft version. 

Mobile Homes Taxed as Personal Property vs Real Property (here's how you get around that)
  • "An additional barrier to the placement of manufactured housing is the treatment of manufactured housing as personal property. Many jurisdictions oppose manufactured housing because units are often taxed as personal property rather than real property, producing lower tax revenue that traditional housing forms, which are taxed only as real property. Similarly, personal property financing carries higher consumer interest rates than mortgage loans for real property. Several states have adopted laws declaring manufactured housing, permanently installed, as real property for tax purposes. Statues have also been adopted permitting surrender of the estate title so that a real estate mortgage may be obtained, and that the mortgage is insurable without special endorsement."

Financing for Manufactured Homes
  • According to ManufacturedHousing.org: "Just as there are choices when you buy a site-built home, there are a variety of financing options when you buy a manufactured home. Down payments and loan terms are similar - 5 to 10 percent of the manufactured home’s sales price, and loan terms of 15 to 30 years.
  • If you are buying the home and land together, or plan to place the home on land you already own, some financial institutions offer traditional real estate mortgages with similar interest rates. Should you be purchasing the manufactured home separately from the land on which it will be located, the home will probably be financed as a personal property manufactured home loan, usually with a somewhat higher interest rate.
  • FHA-insured and Department of Veterans Affairs-guaranteed (called FHA and VA) loans are available to manufactured home buyers. These types of loans may offer lower interest rates or lower down payment requirements if available in your area. They require more paperwork during the credit application and approval process and, therefore, may take longer for approval than a conventional loan."

    According to ManufacturedHousing.org quickfacts 2010 brochure, Hawaii was the only state in the United States to NOT receive any Mobile Home shipments. Rhode Island received the second least at 11 homes. Texas received the most Manufactured Homes/Mobile Homes at 11,020.

    Interestingly, Manufactured Homes still have a critical path chart of events that must happen sequentially. It's not just a matter or buying the home and plunking it down on the site. Survey, site prep, grading, utility connections, interior work, sidewalk, porch, garage additions, etc are still required.

    Further Reading:
    www.nahbrc.com search for  “manufactured,” and “modular,” to bring up lots of good,  informative pieces most of which are downloadable. Topics of interest include, “Two Story HUD-Code Homes,” “Steel Frame Modular Housing,” “On-Site House Factory,” “Manufactured Housing Ground Anchor Systems,” “Manufactured Housing Disaster-Resistant Pier Systems,” ”Tilt-up Roofs for Manufactured and Modular Home,” “Hybrid Modular/Panelized Housing,” and “SIPs Modular Housing.”

    www.pathnet.org Website focuses on technological innovation in the housing industry. A number
    of the books and research manuals listed above can be accessed and downloaded at this site.

    http://www.huduser.org/portal/ search for Manufactured Housing. Publications avail to discuss foundation requirements, financing, etc.