Q&A

Q: When I bought my house, they told me it was a modular home. Now that I want to sell it, they are telling me that it is not a modular, it is a manufactured home. How is this possible and what exactly is the difference?

A: This is a common situation. The confusion comes from the terminology. Many people in the real estate business use the terms manufactured and modular interchangeably. They are not the same thing.

The simplest way to know for sure whether you have a manufactured or a modular home is to look in the basement or crawl space and see if there is a steel frame under the home. If this frame is there, then it is a manufactured home.

Another way to look at is, "is your home two halves stuck together?" If so, it is a manufactured home. A modular home is essentially "stick built" which is the same as if a builder came in and framed it from the ground up.

The problems surface when it comes time to finance the home. A modular home is treated in exactly the same way as any other home. Financing for a manufactured home has many more restrictions.

In the case of conventional loans, it has become very difficult to finance manufactured homes. They have increased down payment requirements and made the minimum credit score restrictions nearly unattainable.

On the other hand, FHA and VA will still approve financing on manufactured homes and treat them exactly the same as a stick-built home with the exception that the home must either have the original HUD tags affixed to the exterior or a Certificate of Origin must be obtained (normally from the originally dealer/builder if possible). A structural inspection must also be obtained to ensure that the builder secured the home to the foundation properly.

So if you wish to sell your manufactured home, you should plan ahead to make sure that the home meets FHA or VA standards, and check the exterior for those HUD tags.

As a last note, a mobile or manufactured home in a park will not qualify for either FHA or conventional financing. In order to finance these homes, you should check with the local mobile home park managers and ask who is being the most competitive on these programs.