August, 2002 - Modular Housing

House-Building Home Page

house-building.com NEWSLETTER #208
New House Building: Money Saving, Convenience and Healthy House Tips

James Todd.
August, 2002
Enjoy your vacation!

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CONTENTS:

1. A Modular Housing Primer
   How the building of a modular home can save you time and money
2. Useful Links
3. Thought for the Day
4. Subscription Information
   

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1. A Modular Housing Primer

Manufactured homes are defined as those in which a significant percentage of the structureis built in a factory. There are several classifications or different types of structures which fall under this general term. Mobile homes, modular homes, panelized homes and pre-cut homes are the most prominent examples. The focus of this months newsletter edition is on the modular home component. Modular homes still suffer from some lingering negative connotations due to their association with mobile homes under the broader term of manufactured or factory built housing. This perception is changing, and for good reason. An ever increasing number of consumers are discovering the quality, cost savings, and other advantages associated with this type of housing.


What is modular housing?
Modular housing refers to any home in which 80 to 95% of it is built in a factory. It is constructed in sections or modules. These modules are transported to a building site, placed on conventional foundations and assembled. Unlike its stick-built or site-built counterpart, when modular building techniques are used, the on-site builders involvement is limited to excavation, final grading, construction of a suitable foundation, interior and exterior wall finish, HVAC hookup and connection to utilities.


How can I tell the difference between a site built home and a modular home?
The simple answer is that you can't unless you observe the construction process. Modular builders use the same materials and construction techniques used when constructing a site built home. When a home is completed you cannot distinguish between the two.


Is it true that modular homes are of inferior quality when compared to site built homes?
No - and arguably modular homes are of better quality. The two primary reasons for this are supervision and weather. Site built homes are subject to the elements. Modular homes are built in the controlled environment of the factory. This protects building materials from the harsh outdoor environment and enables laborers to work in comfortable environs improving the quality of their work.

The second reason for the better quality of modular homes is the quality control programs used by modular manufacturers. It is doubtful, that many builders who construct site built homes have a quality control manual or program in place. Modular builders do. Furthermore, regular inspections occur during the building of a modular home. In theory this is what your builder is supposed to do in the oversight of his subcontractors. In practice however these types of inspection are not done frquently or as well as it should be.


Can modular homes be customized ?
Yes, they can. Essentially the same design flexibility exists that you would have with a site built home. If you buy a site built home in a development you will have limited customization options. Similarly there are some modular manufacturers who offer a limited selection of models from which to choose.

Conversely, there are modular builders, as there are site builders, who allow total discretion in the design and customization of a home.


Are there differences in the time required to build a modular versus a site built home?
Yes, there are significant differences. Modular home construction is much faster. The typical rule of thumb for the building of a site built home is 4-6 months from ground breaking. A modular home can be completed in 1-2 months. There are several reasons for this. All of the trades required to build a site built home are employed at the factory so there is no scheduling of tradesman. Secondly many different tasks can be going on simultaneously in the factory. Lastly, some of the site work, like excavation and the pouring of the foundation can be ongoing while the factory build the modular sections of your house.

Compare this to the site built home where most tasks must be done sequentially. In total a few weeks is all that will be required to complete the modules that comprise a modular home. Once delivered on site the builder may have another few weeks to complete the onsite assembly and finish work.

As always there are ranges but generally it is safe to assume a time to completion of less than half the time of its site built counterpart.


Is it true that modular homes are difficult to finance and Insure?
No, it is not true. At some point in the past it may have been more difficult - probably due to the confusion between mobile homes and modular homes. Clearly this is no longer the case.


Are there differences in energy costs between a modular vs. a site-built homes?
The modular industry claims that there is a substantial difference with the advantage going to modular homes. This may be true, but I could not find any direct evidence to substantiate this claim.


Are there differences in the permit requirements between site built and modular homes?
No, there are no differences. A modular home must conform or comply with the local building requirements of where the home will be placed. Mobile homes, in contrast, do have substantially different permit or code requirements - but these do not pertain to modular homes.


Is there a cost difference between the two types of homes?
There is a significant cost difference with the advantage going to the modular home. The information in the following table was taken from the following publication: Factory and Site-Built Housing, A comparison for the 21st Century. Prepared for the US Department of Housing and Urban Development, October, 1998.

Comparison of Identical 2000 Square Foot Homes
Cost Category	Site Built	Modular
Construction Costs	$ 77,140	$ 65,560
Structure	$ 71,123	$ 59,543
Foundation	$ 6,017	$ 6,017
Cost/Square Foot	$ 39	$ 33
Land Costs	$ 35,314	$ 35,314
Improved Lot	$ 34,113	$ 34,113
Site Preparation	$ 1,201	$ 1,201
Monthly Land Rent	$ -	$ -
Overhead/Admin	$ 29,380	$ 27,652
Overhead& Gen. Exp.	$ 8,394	$ 6,491
Marketing	$ 3,039	$ 2,596
Sales Commission	$ 4,776	$ 4,284
Profit	$ 13,170	$ 14,280
Financing Costs	$ 2,895	$ 1,298
Construction Financing	$ 2,895	$ 1,298
Inventory Financing	$ -	$ -
Total Sales Price	$ 144,728	$ 129,822
Savings	$ 14,906	10%

Although the costs in this table may not be realistic for your part of the country. The comparison does provide an accurate estimate of cost savings between these types of homes on a percentage basis.


Conclusion

There are many good reasons why you should explore the option of a modular home. These are time savings, quality, cost savings and perhaps energy efficiency. Regardless of whether you build a conventional site built home or a modular home, the principals discussed in the House-Building Guide still apply and should be followed. These principals will enable you to get comparability in pricing and will enhance the cost savings inherent in the building of a modular home.


2. Useful Links

The following are useful links relating to the modular housing industry may be of interest.

The Modular Building Institute is the trade association representing the Manufacturers, Dealers, and Suppliers of the Commercial Factory-Built Structures Industry. http://www.mbinet.org/web/main/index.html

Building Systems Magazine http://www.buildingsystems.com/products.htm A Web site dedicated to the modular home industry. http://www.modularcenter.com/

State by state guide to modular builders. http://www.modularhomesguide.com/

Modular Building Systems Association http://www.modularhousing.com/ Factory and Site-Built Housing, A comparison for the 21st Century. Prepared for the US Department of Housing and Urban Development, October, 1998. http://www.huduser.org/publications/pdf/factory.pdf


3. Thought for today: The true meaning of temptation

Each temptation is a question put to the soul. "What kind of being are you? Do you love God, or the following of your own inclinations?" -- B.W. Maturin


4. Subscription Information

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