Modular, Manufactured, or Prefabricated Home – What’s the Difference?

prefabricated home Next Modular Goshen IN

Modular, Manufactured, or Prefabricated Home – What’s the Difference?

Even though the terms “Modular home” and “Manufactured Home” refer to two totally different things, many people use them interchangeably. This may be due to the fact that modular homes are “manufactured” in a factory the same way as the others. However, there is a huge difference. We need to  clarify that when we refer to Modular Homes in this article, that we are talking about true, “stick-built” modular homes. These are NOT “mobile homes,” “trailers,” or “manufactured homes.” A modular home is also referred to as a prefabricated home.

Glad that’s out of the way! 🙂

Ok, so on to the good stuff:


A prefabricated home is built in a factory to about 80-90% completion and then trucked over to the building site. All modulars must adhere to strict quality control standards during their construction process. They arrive at the job site in multiple pieces, and a crane operator sets each piece in its place on the foundation. Once completed the prefabricated home is literally indistinguishable from a traditional home that is built on-site.

prefabricated home Next Modular Goshen IN

Because the home is constructed in a controlled environment, there are no construction delays due to bad weather or material shortages.

In addition, modular homes:

  • must be built to the EXACT same local, state and regional building codes as homes built on-site
  • are treated the same by banks as homes built on-site. They are easy to finance and get refinanced
  • appreciate over time the same as site-built houses
  • must be inspected and approved by local inspectors on site, as well as in the factory during production
  • can be built in any size, shape, or floorplan, just like a traditional home
  • are stronger than homes built on-site due to the fact that they must withstand the rigors of over-the-road transport
  • are able to be customized and tweaked to the individual customer’s taste
  • take about four to eight weeks to construct at the factory

Unlike a site-built home, the foundation for a prefabricated home can be started and completed separately, It is usually scheduled to be built at the same time as the home is being built in the factory.

Interesting Fact:

FEMA study found that modular homes were better equipped to withstand the wind and water during Hurricane Andrew than most other site-built homes in the area.

Modulars are also much more energy-efficient and will save money on utility bills when compared to a site-built home.


mobile home

The term “Manufactured home” is the new word for what we used to call “Mobile homes” or “trailers.” Compared to modular homes, manufactured homes often cost less. They must be built to different building standards than modular and site-built homes. Mobile homes don’t typically exceed 2,200 Square Feet. Design options are limited, as most manufactured homes come in only two pieces (aka: a double wide). They cannot be stacked and therefore are not used to build two-story homes the way that modular homes are.

In addition, manufactured homes:

  • conform only to Housing and Urban Development (HUD) code. This is a universal code in the United States and allows them to be placed anywhere in the country. Since this is a Federal and not a local code, it is illegal for a local jurisdiction to prohibit their use on private property
  • are inspected in the factory so they do not have to be structurally approved by a local inspector
  • get manufactured in sections at factories
  • are rarely ever more than one story
  • can be placed on either a conventional foundation (basement or crawl space) or on “in-ground‟ piers or pads
  • appreciate at about the same rate as comparable homes when on a permanent foundation
  • are transported to the site on their own wheels attached to the steel frame under the home
  • are transported on steel chassis that remains with the home as part of the floor system and should never be removed
  • can be placed on property owned by others, such as a Mobile home park lot that is leased by the homeowner
  • are treated as a separate lending category from modular and on-site built homes; and
  • can be custom-designed just like a Modular home, although generally with fewer options


Despite being manufactured in a factory, modular homes are essentially the same as homes that are built on-site. They are treated the same by banks, realtors, and appraisers. They offer all of the design options, quality, and flexibility of site-built homes, just at a lower price point.

Manufactured homes are less expensive than either of the other options, and you can relocated them if desired. Many manufactured homes reside in mobile home parks.

It is important to know the difference when you are making a decision on your next housing purchase. If you have any questions at all please feel free to contact us and we’ll do our best to help you!

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