What Are Modular Homes? [The Ultimate Guide for 2024]


What are modular homes? This is a question people seem to ask quite often, and it’s not surprising because there is a lot of confusion about what modular homes actually are.

In this article, we will break down everything you need to know about them so that you can make an informed decision about whether this type of home is the best fit for you.

What Are Modular Homes?

Modular home

Simply put, modular homes are homes that are built in an indoor quality-controlled setting and then transported to the site where they will be used. According to the modular home definition, this type of prefabricated house is built in a factory to about 80%-90% completion and is then transported to its location.

Modular home styles can be very unique, and they are available in standard plans or can be customized to meet your needs. They arrive in numerous separate parts and must be put together on site. Each piece is placed on the foundation by crane. Once it’s finished, a prefabricated modular home looks no different from a traditional one.

Modular, Mobile, and Manufactured Home: What Is the Difference?

Now that we’ve defined what is a modular home, let’s differentiate between this type of home, and the ones that people often confuse it with – mobile and manufactured homes.

Mobile vs Manufactured Home

The Department of Housing and Urban Development (HUD) regulates manufactured homes and mobile homes. The only distinction between the two types of housing is the date when they were constructed. A factory-built house before June 15, 1976, is considered a mobile home, whereas one built after that date is defined as a manufactured home by HUD.

Modular vs Mobile/Manufactured Homes

Both modular and mobile homes are built in factories and then installed on-site. From there, the similarities start to fade. The primary distinction between what’s a modular home and what’s a mobile one is that a modular home’s parts are taken on-site in order to be put onto a permanent foundation. In contrast, mobile homes are typically transported on flatbed trailers and set up on-site, and they aren’t placed on a permanent foundation. In order to meet local construction laws in the state and county where they are built, modular homes must adhere to stringent regulations.

Manufactured homes, on the other hand, are homes that are almost entirely constructed in a factory and then put on a steel frame, not on a permanent foundation that their modular counterparts are built on (and which essentially defines what is a modular house). These homes might also be built with wheels, which are then removed once the construction process is finished.

DID YOU KNOW: The HUD tag is another popular way people can tell whether their house is manufactured. A HUD sticker is often attached to the exterior back side of a manufactured property. If you discover a HUD sticker, you can be certain that the structure before you isn’t a modular home.

Modular Home Installation

One of the benefits of modular homes is that they can be installed in a variety of locations. While mobile homes are typically limited to areas that have access to public utilities, what is good about a modular home is that it can also be installed in rural or suburban areas.

Although a modular home is typically quicker to build than a regular house, the process does take time – typically from four to nine months. The precise procedure depends on the size of the home and how long it takes to obtain permits, whether you’re getting a home improvement loan, as well as whether you’re using a traditional floor plan or have customized features. Usually, the modular home’s installation process consists of the following steps:

  1. The home is delivered to the site
  2. The set crew arrives and begins inspecting the foundation for a fit
  3. A crane is what is used to place a modular home module on the foundation
  4. After the modules are set, straps, bolts, and other devices are used to connect them together
  5. Once everything is connected, the roof is raised and fixed

And that’s about it. Once everything is set and given one last inspection, you’ll be able to move into your new home.

Understanding Land Restrictions

Although modular homes are more popular than manufactured or mobile homes, there may still be areas or municipalities that will not allow you to construct one. You must double-check to make sure whether the area where you want to purchase land and build your home will allow you to do that. These documents are often referred to as restrictive covenants.

Modular homes have been subjected to restrictions years ago, meaning that their construction was prohibited in certain areas. This was due to the fact that many thought modular homes were second-rate constructions. The good news is that nowadays, modular homes are starting to be treated in the same way as traditional houses, which means there’s a higher probability you’d be able to build your modular home in an area of your choosing.

DID YOU KNOW: Although the majority of zoning regulations do not apply for factory-built housing that meets the State’s Building Code (such as modular homes), the State law does require some minimal design standards. These include limitations for exterior materials and textures, wall height, roof standards, etc.

Key Takeaways

Modular homes are homes that are built indoors, in a quality-controlled setting, and then transported to the site where they will be used.
The main difference between modular and mobile/ manufactured homes is that the former is built on a permanent foundation in contrast to the latter.
The installment procedure depends on the size of the home, as well as whether you’re using a traditional floor plan or want to customize some features.
Modular homes may be subjected to zoning restrictions, so make sure you check that before purchasing one.

Are Modular Homes Good?

Now that you know how to define a modular home, you’re ready to explore the most relevant pros and cons of this type of housing:

Modular Home’s Pros:

  • AffordabilityModular homes are more affordable than traditional homes.
  • Quality These homes have a higher quality compared to other factory-built alternatives.
  • Short Building Time – They can be built in a shorter time than traditional housing options.
  • Customization The styles and layouts of modular homes can be extremely varied. If you’re opting for a more luxurious interior, consider installing a security system, just in case.
  • Location Modular homes can be installed in a variety of locations, including rural or suburban areas, on foundations or stilts, and in coastal areas that are susceptible to flooding.

Modular Home’s Cons:

  • InstallationThe installation process for modular homes can be complicated and may require the help of a contractor.
  • Land Requirements – In order to build your modular home, you’ll have to find and purchase land first.
  • Rarity – Modular homes are not as common as traditional or mobile homes, so they may be difficult to find if you’re not in a major metropolitan area.

Once you become familiar with all the major pros and cons of modular homes, deciding whether this type of housing is right for you should be much easier.

Modular Homes: Quality vs Price

Although modular homes may have a higher upfront price tag than mobile homes, in the long run, they are often more affordable considering their durability. Additionally, modular homes offer many features and options that aren’t available in mobile homes, so you can customize your home to perfectly meet your needs.

Although it isn’t a rule, in general, modular homes will cost 10% to 15% less to build in comparison to how much it costs to build a conventional house. So, what does purchasing a modular home mean for your finances? Such a home comes with a number of benefits, and when you compare its price and quality, you’ll see that it’s a pretty affordable housing choice.

DID YOU KNOW: Modular homes’ costs depend on the floor plan you choose. The cost of building a modular house, excluding any extra costs and the price of the land, will range from $100 to $200 per square foot. This means that a 1,800-square-foot modular home can range from $180,000 to $360,000.


Now that you’ve discovered the definition of modular homes and all their characteristics, you’ve probably realized that these types of homes come with a lot of benefits – flexibility, affordability, and high quality. This makes them an increasingly popular choice for homeowners. If you’re considering a new home, it’s also a good idea to check out the top home-buying sites’ latest offerings.


How long do modular homes last?

When built correctly, a manufactured or modular house has the potential to last just as long as a traditional home that is constructed on-site. Manufactured homes that are built in accordance with HUD standards can survive anywhere from 30 to 55 years.

Is a modular home cheaper than a house?

The cost of a modular home depends on the size, features, and location of the home. The most expensive modular homes cost roughly the same per square foot as a comparable stick-built house. However, on average, modular houses typically cost 10% to 20% less than traditional homes.

What are the problems with modular homes?

While modular homes have many benefits, to understand what are modular homes and whether they fit you, you have to consider some potential problems, as well. Some of the main issues might include zoning restrictions, land issues, foundation concerns, transportation issues, etc.


As challenging as she looks, Kristina loves to question things. Her analytical skills give us a fresh look at markets, products and services and her experience as a real estate agent keeps our related topics up to par.

Latest from Kristina

Can You Sell a House With a Mortgage in 2024? Types of Houses [Structural & Architectural House Types] What Makes a Promissory Note Invalid & How to Prove Validity How Much Do Mobile Homes Cost & Should You Buy One in 2024

Leave a Reply