MH Blog
As prices and interest rates rise, and with fewer homes available on the market, homeownership can feel out of reach to many. Yet it's still one of the most reliable paths to building wealth. Your monthly home loan payments can help build equity over time, giving you a valuable asset.
If traditional housing seems unattainable, a manufactured home can offer a quicker path to homeownership. Manufactured housing offers the same features and benefits of traditional housing, often for less. In this article, we'll explore the viability and benefits of manufactured housing for new home buyers.
What Is a Manufactured Home?
A "manufactured home" is a home that is built within a factory rather than at the location where it will be lived in. When fully constructed, the home is transported to a lot or land parcel where it is then set up and installed.
Manufactured homes are built to U.S. Department of Housing and Urban Development (HUD) standards, meaning they follow federal construction and safety requirements. While site-builders must navigate varying local codes, the HUD code provides a universal standard for energy efficiency and structural durability, ensuring high quality regardless of where the home is placed.
You can choose from a wide range of finishes, from basic to high-end. Manufactured homes are highly customizable, making it easy to find options you’ll love. Designs are modern, spacious, and comfortable for families of all sizes.
Why Manufactured Homes Cost Less
Manufactured homes are more affordable because they are built more efficiently. Building the home in a controlled facility eliminates many of the costs associated with traditional construction.
- Bulk purchasing: Because homes are built in a centralized facility, manufacturers can purchase core materials in bulk, often securing better prices than traditional builders.
- No weather delays: Building indoors means rain, snow, or extreme heat never stop production. A faster, predictable timeline reduces the interest paid on construction loans and gets you moved in sooner.
- Less material waste: In a factory, every piece of drywall and wood is measured with precision. Standardized assembly means less waste, so you aren't paying for unused materials.
- Labor efficiency: Unlike traditional homes that require subcontractors to travel to the build location, manufactured homes are built in one spot, making the labor far more cost-effective.
What You’re Really Paying for a Manufactured Home
How much does a manufactured home cost? It varies depending on the size, layout, and finishes you select. Here are the typical prices:
- Single-wide homes: $60,000 to $100,000
- Double-wide homes: $95,000 to $160,000
- Triple-wide or multi-section homes: $150,000 to $250,000+
To get the total cost, you’ll also need to include the transportation and utility setup costs. Transportation costs largely depend on the delivery distance and can range from $3,500 to $18,000.
Utility hookups vary depending on how far the home is from the mains and whether you need to install a septic system. Here is the typical cost to install a manufactured home:
- Site preparation and foundation: $4,000 to $15,000
- Utility hookups: $3,000 to $30,000+
- Permits: $50 to $5,000, depending on location
Compared to traditional homes, manufactured homes are more affordable. Let’s say you buy a mid-range double-wide home for $125,000, and your total setup costs are $20,000. Not including the land, your investment comes to $145,000. That’s less than half the average U.S. home price of $385,000.
The Part of Affordability Most Buyers Don’t Think About
Many first-time homebuyers focus on the purchase price of a home or the monthly mortgage payment. You should also budget for these ongoing costs of homeownership:
- Property taxes
- Homeowners insurance
- Maintenance
- Utilities
- Lawn care
- HOA fees (if applicable)
- Mortgage insurance (if applicable)
Not all expenses will be the same each month. Some will be variable, like your heating and cooling costs. Although modern manufactured homes are energy efficient, you may pay more during the summer and winter months. Many financial experts recommend budgeting 1% to 4% of your home’s purchase price each year for maintenance.
Financing and Affordability Options
The lower entry cost makes homeownership more attainable for first-time buyers. It means you can buy a home with a lower down payment with a conventional loan. Beyond conventional loans, several government-backed options may be available to you:
- Federal Housing Administration (FHA) loans: Ideal for those with lower credit scores and down payments; eligibility requires a permanent foundation consisting of framing beneath the home or rigid, backed skirting
- Chattel loans: Personal property loans used if you are leasing land or placing the home in a community, often with a faster closing process.
- Department of Veterans Affairs (VA) loans: Exclusive to veterans and active military, offering $0 down payment and competitive rates
- U.S. Department of Agriculture (USDA) loans: Designed for rural and suburban areas, providing a $0 down payment option for eligible households
How Manufactured Homes Fit into Wealth Building
Are manufactured homes a good investment? They certainly can be. A typical new manufactured home installed today will last about 75 years, and it can hold its value or appreciate the same as a site-built home. Like all properties, long-term value depends on the location, installation quality, local housing demand, and how well you've maintained the home.
Home upgrades, like skirting and steps, are another important factor. Some dealers may choose lower-end options to keep the purchase price low. It's worth asking your dealer if upgrades are available. Quality skirting and steps can be added to your loan for just pennies per month, and the cost can be offset with energy savings, indoor comfort, and retained value for resale.
When you buy a manufactured home, you aren’t just buying a place to live. You’ll have a valuable asset that you can someday sell or pass on to your children. Every loan payment you make builds equity that can give you an advantage if you ever need a source of affordable financing. You may qualify to tap into that equity with a low-interest home equity loan or home equity line of credit (HELOC) for unexpected expenses, a major purchase, education costs, or other needs.
An Affordable Path to Homeownership for First-Time Buyers
Should you buy a manufactured home? Consider your budget, how much you'll save, and the current inventory of homes for sale where you live. A manufactured home may allow you to start building equity in a home you own sooner and for far less. It’s an opportunity to turn your rent payments into home loan payments, with the same quality and livability as a site-built home.
