The Appraisal Institute’s dictionary of Real Estate Appraisal defines a Manufactured Home as “a factory-built house manufactured under the Federal Manufactured Home Construction and Safety Standards Act, commonly known as the HUD Code.” There are two types of manufactured homes, Mobile Homes and Modular Homes.
A Mobile Home is built on a metal frame (like a car chassis), meets HUD’s minimum federal building code, and is otherwise known as a singlewide or doublewide home. When a mobile home leaves the plant, it has axels and wheels attached to its metal frame and is pulled behind a truck down the highway. Once the mobile home arrives on-site, it is strapped on top of cinderblock foundation piers and the axels and wheels are removed and it becomes real property.
A Modular Home is a type of manufactured home that is built in compliance with Federal and State building codes. There are two types of modular homes, “on-frame” and “off-frame”. An “on-frame” modular home is constructed on a metal chassis and is transported to the homesite and attached to the foundation the same way a mobile home is. Appraisers value “on-frame” modular homes essentially the same as mobile homes. If the appraiser is unable to locate any other recent and similar “on-frame” modular homes sales (which is often the case), they then use appropriate mobile homes as comparable sales to arrive at an opinion of value for the “on-frame” modular home. In other words, it is not acceptable for an appraiser to compare an “on-frame” modular home to an “off-frame” modular home (nor to a site-built home), since it is built on a metal frame.
An “off-frame” Modular Home is built on a wood floor joist platform (like a site-built home) and when it leaves the plant is placed on top of truck bed trailer and delivered to the homesite. Once an “off-frame” modular home arrives on-site, it is hoisted off the trailer with a crane and placed onto a masonry foundation. When the appraiser appraises this type of modular home, they first look for other similar style “off-frame” modular homes to compare it to. If they are unable to locate any recent and similar style “off-frame” modular sales (which is often the case), they then compare it to similar style site-built home sales with similar roof pitches, exterior and interior finishes, etc. Some people may question why appraisers are allowed to use site-built homes as comparable sales for “off-frame” modular homes? The rational is that an argument can be made that a modular home is of equal quality (if not better) than a similar style and type site-built home, since it is not exposed to the elements during construction. In other words, the site-built home gets rained in during construction until its roof and exterior walls are installed, while the modular home stays dry during construction since it is built in an indoor climate-controlled facility.
In summary, the determining factor of whether a Manufactured Home is valued similar to a mobile home or a site-built home, is whether or not it is built on a metal frame or a wood floor joist platform. If it’s an “on-frame” modular home, its value is similar to a mobile home. If it’s an “off-frame” modular, its value is similar to a site-built home.