Focus on Manufactured Homes

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Since www.activeadultliving.com and this e-newsletter are both about helping you to find information about retirement housing options, it seemed only appropriate that we do a special issue in recognition of June being declared Homeownership Month in the U.S. and, more to the point as part of that, the third week of June is now the National Manufactured Housing Week.  There are approximately 18 million Americans living in manufactured homes today which accounts for six billion dollars in annual sales.

In the face of rising housing costs, the affordability of manufactured housing is attracting more buyers than ever.  These homes can cost from 10-35% less per square foot than site-built homes.  The controlled construction environment removes several problems that can occur during traditional home construction.  These problems can include inclement weather, theft or vandalism and even problems with unskilled, contract labor.  Manufactured home buyers can also benefit from builders being able to negotiate savings on large purchases of many components used in building homes such as materials and appliances.  Manufactured homes are built with virtually the same materials as site-built homes but with more cost-efficient assembly techniques.

Manufactured homes have come a long way since the early days of mobile homes.  Technological advances have made it possible to allow greater customization and a much wider variety of architectural styles, including two-story homes.  Today’s homes are dramatically different in appearance from earlier models.  Many are actually almost indistinguishable from site-built homes.

There are several common categories of homes that are built in factories.  Manufactured homes are homes built entirely in the factory and then transported to the site.  These are subject to a HUD code which is the only federally-regulated national building code.  The code regulates strength and durability and sets performance standards for internal systems such as electrical and plumbing, and for fire resistance.  Every manufactured house must be inspected by an independent, HUD certified inspector prior to being transported.  Modular homes are also built entirely in a factory but are built to meet the state and local codes in a particular location.  Panelized homes are built in a factory in panels and then assembled on site.  These are also regulated by state and local codes.  Pre-cut homes are factory homes that are cut to design specifications and then assembled on site.  These include kit and log homes.  Finally, mobile homes are those which were built prior to 1976 when the HUD code went into effect. 

There have been several weather and fire related durability questions about manufactured homes in the past.  However, in recent years, studies have shown that manufactured homes are no more prone to fire than site-built homes.  One study found that manufactured homes had a fire experience rate per 100,000 units that was 38% lower than the rate for other dwellings.  The HUD code requires standards for flame spread and smoke generation in materials, egress windows in bedrooms and at least two exterior doors.  The HUD code also calls for equivalent or more stringent standards than site-built homes in areas prone to high force winds.

Another question that has seemed to follow manufactured housing is whether they retain their value or even appreciate.  Studies have shown that when properly maintained the answer to that question is the same as other housing:  that is, it is dependent upon market conditions in the surrounding community.

Financing a manufactured home often requires a different approach than a site-built home.  The most common financing is offered through the retailer who sells the home to the buyer. When the home is sold separate from the land, it is usually financed as personal and not real property, which typically has a higher interest rate than a real estate mortgage.  That rate can be brought down, depending upon the lender by providing a higher down payment or offering land as collateral.  It is possible to get a land/home loan in a more traditional real estate loan model.  Terms vary, but lenders usually require 5-10% down with a 15-30 year term.

Some active adult living manufactured housing communities also offer home ownership with a land lease.  Equity Lifestyle Properties (www.equitylifestyle.com) is one such company.  This option makes buying into an active adult community even more affordable by saving on a down payment and monthly payment while allowing the convenience of taking advantage of all social and recreational opportunities in the community.  Further, the company will take care of utility maintenance and tree and shrub trimming.

 Whatever type of housing you are looking for, manufactured housing communities can offer an affordable, amenity-laden place to retire to.  On our website www.activeadultliving.com you can go straight to a listing of these communities by clicking on the navigation link for manufactured housing communities.