|
|
|
| |
| Frequently Asked Questions |
| |
|
| |
| Does a manufactured and modular
home appreciate in value? |
| People assume that the value
of manufactured or modular homes depreciates. However, recent
studies conducted at the Universities of Michigan
and North Carolina reveal that the location for
both manufactured and modular homes and conventional site-built
homes is the most telling forecast for real estate
appreciation. |
| With the building costs of manufactured
and modular homes significantly below those of site-built homes,
there is an immediate appreciation of value between
what the home actually costs and its fair market
value. In fact, multi-section manufactured and modular homes
sold for more the second time than the first --
the best definition of a profitable investment. |
|
| |
| Do manufactured
and modular homes meet the same construction standards and pass
the same inspections as conventional site-built
homes? |
| Most manufactured and modular homes are
built to a higher quality than the average site-built
home. Manufactured and modular homes use 2x6 construction on
exterior walls, unlike the 2x4 site-built industry
standard. Many of the individual products in a manufactured
or modular home are the same as those found in site-built homes.
Both industries use the very same windows, siding,
roof truss systems and more. |
| Manufactured and modular houses are also
built to the HUD Code standards. Built in a controlled,
factory environment, the homes are tested by HUD
for design, construction, strength and durability,
fire resistance, energy efficiency and performance
of internal systems. HUD inspectors are on the scene
regularly, and every home has to be inspected in
at least one station by an independent inspector.
CMHA learned through energy testing that models tested
for air leakage off the assembly line qualified
for a four-star rating through Colorado's Public
Service Energy Rated Program ( and they're currently
working towards five, which is the highest you can
achieve). That exceeds the rating received by some
custom built Colorado homes. |
|
| |
| What
type of financing options will I have if I buy a
manufactured or modular home? |
| Some buyers of new manufactured
and modular homes finance their homes through their retailer,
while some buyers arrange their own financing through
their local bank, savings association or credit
union. |
| Historically, manufactured and modular homes
were financed as personal property as they were
most frequently sold without land. Currently, the
Federal Housing Administration (FHA) and the Department
of Veterans Affairs (VA) offer lenders loan insurance
and loan guaranty programs for personal property
home loans. But more than 90 percent of new manufactured
and modular homes are placed on permanent foundations on private
land, and are never intended to be relocated. These
homes are financed as real estate. |
Real Estate
Manufactured and modular homes may be financed as real estate
when the home and land are both purchased or owned
by the homeowner, the home is on a permanent foundation,
and the home and land are treated as a single real
estate entity under state law. Both FHA and VA programs
for real estate mortgages accept these loans. |
Secondary Markets
Secondary markets provide an important source of
capital for lenders. Just as most home buyers raise
the money for their home purchase through a primary
lending source, many housing lenders raise money
to lend through secondary markets. |
Secondary Markets:Personal
Property
The Government National Mortgage Association, known
as Ginnie Mae, provides a secondary market source
to personal property manufactured and modular housing lenders
who make FHA and VA backed loans. Personal property
lenders also access the secondary market through
Wall Street by issuing what are called asset-backed
securities. |
Secondary Markets: Real Property
The Federal National Mortgage Association, known
as Fannie Mae, and the Federal Home Loan Mortgage
Corporation, known as Freddie Mac, both accept manufactured
and modular housing loans as long as they are real estate mortgages
rather than personal property loans. Also, FHA-
and VA-backed mortgage loans on manufactured and modular homes
are eligible for Ginnie Mae's single-family home
loan secondary market program. |
| Contact any one of our lender
members for more information. |
|
| |
| Why are
manufactured and modular homes so much less expensive than site-built
homes? Is it because of poorer quality? |
| They are built as well as --
if not better than -- site-built homes. Even the
type of kiln-dried lumber used favors manufactured
homes. Both manufactured, modular and site-built homes use
pre-hung windows, doors, siding and roof-truss systems. |
| Manufactured and modular houses, because
they are built in a factory environment, are carefully
controlled and built economically. |
| All the materials are gathered
in quantity, avoiding extra handling and middleman
mark-ups. They're stored indoors, out of the weather,
which preserves quality and reduces waste and loss. |
| A factory environment eliminates
site vandalism, weather delays, material shortage
and shipment delays. |
|
| |
| Isn't
a manufactured or modular home more likely to be destroyed
or damaged by natural disasters than a site-built
home? |
| Foremost Insurance, an insurance
company specializing in manufactured and modular housing safety
issues, found that manufactured and modular homes are safer
than site-built homes in many ways. In the past,
Colorado had restrictive zoning laws that forced
manufactured and modular homes to be sited in the least desirable
areas of a municipality. This meant homes were placed
in flood plains. |
| A University of Michigan report
revealed that manufactured and modular homes have a lower rate
of fires than site-built homes. When fires do occur,
research shows no fire safety differences between
the two types of homes. |
| In a full-scale experiment conducted
May 16 and 17, 2001 by researchers at the Wind Science
and Engineering Research Center at Texas Tech University,
the propeller wash from a C-130 aircraft was used
to produce high-speed winds, and a manufactured
home was used as a test specimen to collect data
on structural response. The propeller wash from
a C-130 aircraft can generate winds up to 90 miles
per hour. |
| The building was instrumented
to measure its internal and external pressures,
its deformation (deflection or movement) during
exposure to extreme winds, and changes in its insulating
properties. During the test, the structure was exposed
to wind gusts and sustained winds at normal wind
speeds, around 20-30 miles per hour. The speed was
increased gradually to approximately 90 miles per
hour. Collaborating with personnel from the National
Institute of Standards and Technology, the U.S.
Department of Energy, the Oakridge National Laboratory,
and the Texas Air National Guard, Texas Tech researchers
tested the data acquisition system and collected
a significant amount of data during the two-day
testing period. The data will be analyzed to determine
the speed of the wind generated during the test
and to characterize the response of the structure
to the high wind speed. When that data is published
we will make it available to you, but the important
thing is that the test home was not only still intact,
but the only visible signs of damage were a few
shingles blown from the roof. |
|
| |
| What is
the difference between a manufactured or modular home and a
"trailer"? |
| "Trailer" typically refers to
an older product, usually from the '40s or '50s,
that predates the HUD code. To help clarify some
of the terms associated with manufactured and modular housing,
we've included the following definitions: |
Factory-Built Housing
Many types of structures are built in the factory
and designed for long-term residential use. In the
case of manufactured or modular homes, units are built in a
factory, transported to the site and installed. |
Modular Home - UBC
These factory-built homes are built to state, local
or regional codes and are multi-section units that
are transported to a site and installed. |
Manufactured Home - HUD
This refers to homes built entirely in the factory
under a federal building code administered by HUD.
Manufactured homes may be single or multi-section
and are transported to the site and installed. The
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 national building code.
The Manufactured Home Safety and Construction Standard
(the HUD Code) was adopted by Congress June 15,
1976. |
Mobile Home
This is the term used for homes built prior to June
15, 1976, when the HUD Code went into effect. |
|
| |
|
|
|
