Home Buying in 17402>Question Details

Joe, Both Buyer and Seller in York, PA

Why would modular (not manufacturered i.e. mobile) or stick built have a different interest rate or resale $?

Asked by Joe, York, PA Thu Jan 1, 2009

I do not have a preference (modular or stick built) ...not interested in marketing spin. Have not heard of financing liabilities or poor reputation from these builders.

I review the specifications for system built manufactured homes from Pro-Built and Apex ect. They use 2 x 6 construction and substantial joist/ truss systems 16 on center and braced to support transport.

http://www.pro-builthomes.com/Images/PDF/EngineeredPrints/Bl…

http://www.apexhomesinc.com/apex/plan/monticello.htm

Has anyone had a bad experience with large modular home construction? The designs I have reviewed are 80% modular and 20 % stick built onsite... basement / foundation, custom bumpouts and garages built onsite.

One more thought... Ryan Homes are system built with partial finished walls shipped to the job site. They are not considered modular or lower resale value...

Any further thoughts,

Thanks,

Joe

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Answers

4
David Atherton’s answer
Joe, my understanding is Modular homes finance as stickbuilt homes. Manufactured are more difficult. Try a different lender. Right now Underwriters are really doing some crazy things that are not in their guidelines. Seems they have been given some off the grid orders. I had a mfg home sale fall through with totally made up nonsense that was not there when the process started--buy a stick built home and you do not have to have 3 months reserves in hand, buy a mfg home and you have to have three months reserves in hand? Crazy. Dave Atherton
Web Reference: http://MyCountryhomes.com
0 votes Thank Flag Link Thu Jan 1, 2009
mtgguru, I think part of the problem with manufactured homes IS the lending industry's inconsistent treatment of these homes. Just like stickbuilt homes, there are bad, good, and great ones. There are good contractors who put them together and bad ones. To a certain extent, the value is affected by the inability at times to finance the homes. So, people are cautious about purchasing one because the First law of real estate is "When you buy, think about selling." Just because I can finance this home for my purchase does not mean I can finance it when I want to sell. This is a self fulfilling situation that reduces the value of the homes.

I grant the foreclosure rate is higher on mfg homes than site built homes. To a certain extent, this is a function of the cost of a mfg home is almost always lower than a stick built home that equates one to one in terms of what is there. So, the buyer who does not make as much is the one who buys the mfg home. Because he skates a lot closer to the edge than the more affluent members of society, he is more likely to fall into foreclosure than the buyer of a stick built home.

In the end, as a RE salesperson, I wish the lending community would concentrate on the buyer's ability to pay more than the type of house it is. In the end, that is what matters.

As to which to purchase, obviously, due to lending, if you can buy a stick or modular (technical term which does not include MFG even though they are functionally equivalent.) do so.
0 votes Thank Flag Link Fri Feb 6, 2009
Joe, as an underwriter---Go with "off site stick built" or modular if you are not going to go "stick built". Typically manufactured homes lose value (depreciate) over time and are difficult to sell once you are ready to move on. Financing a brand spanking new one, well the company you buy a manufactured home from will usually have a company in mind that will finance it. But-- to save you future heartache and dissapointment when you try to value and sell the home in the future, I would pass on the manufactured.
0 votes Thank Flag Link Thu Feb 5, 2009
There is a difference between a mobile home and a modular home. A modular home is more like a stick built home, than a mobile. Most of the home is built off site and then put together on site. A mobile home can be difficult to get fininacing for and often has a higher interest rate. Even if you put a mobile on a foundation, it will still always be a mobile and are harder to sell. However, when getting financing, a modular and stick built home are basically the same.
0 votes Thank Flag Link Thu Jan 1, 2009
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