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The terms “modular home” and “manufactured home” are often used interchangeably by many people today, and while modular and manufactured homes do share some similarities, there are also some key differences between the two that make them entirely different types of housing. This article will explore the similarities and differences between modular and manufactured homes based on a number of important factors, from construction and building codes to differences in cost and financing.


It is in construction that we see the biggest similarities between modular and manufactured homes. Both of these housing units are constructed inside factories. This contrasts to the traditional ‘site-built home‘, and this may be the reason why the ‘modular’ and ‘manufactured’ designations are often used synonymously.

Factory construction provides a number of benefits for both modular and manufactured homes. The units are built in controlled conditions. Building materials are not impacted by elements like wind and rain. Trained builders use very uniform, precise construction procedures. Weather does not cause construction delays. These factors translate into both time and money savings.

Building Codes

‘Manufactured home’ is a label for what we used to refer to as mobile homes or trailers. In 1976, the U.S. Department of Housing and Urban Development (HUD) set standards to ensure the quality of manufactured homes. Therefore the manufactured homes of today are all inspected based on HUD codes, which regulate everything from design and construction to fire resistance and energy efficiency.

Modular homes are not regulated by HUD codes. Instead, they are regulated the same as site-built homes, and must conform to the same local, state, and regional building codes as site-built homes in the areas they are placed.

Transportation to Site

While manufactured and modular homes must both be moved to the site where they will reside, each has a different method of being transported. Manufactured homes come equipped with a steel chassis and wheels, so they are transported to the site using their own wheels. Upon arriving to the site, the wheels are typically removed but the steel chassis remains.

When it comes to transportation to the site, modular homes fall into two categories.  Category one is defined within the industry as “on frame” modular housing.  An on frame modular home is transported to the site on chassis and wheels just like a manufactured home and then placed on the foundation upon arrival.  An off frame modular home, on the other hand, is not transferred on wheels and a chassis.  Off frame modular homes are made in block sections, which are then loaded onto trucks. When they arrive at the home site they are unloaded and put into place using cranes.

Foundation & Permanence

Manufactured homes have the option to be transported again in the future, although many manufactured home owners never move them once they are in place. To unite these two ideas, manufactured homes typically don’t have a permanent foundation. Instead, they are set on rows of stacked concrete blocks and tied down with straps. That being said, manufactured homes financed on loans insured by FHA, VA, and USDA are required to have permanent foundations.

By contrast, all modular homes have permanent concrete-poured foundations like site-built homes. However, unlike site-built homes, a modular home’s foundation can be laid at the same time the home is being constructed in the factory.

Costs & Customization

The biggest advantage of manufactured homes is their lower cost. They are less expensive than site-built homes and even modular homes. However, one drawback is that many manufactured homes are not as customizable as modular and site built homes.

Modular homes, on the other hand, can often be completely customized. In many instances the buyer can choose the exact design features they would like before having the home constructed. Because of this (and other factors), modular homes are typically more expensive than manufactured homes. But in most cases a modular home still offers a buyer far more square footage per dollar than what they would find in a site built home.


Despite the fact that manufactured homes have improved dramatically in construction quality and perception over the years, most mortgage lenders still do not have loan products that work for manufactured home buyers.  And many of those that do offer manufactured home loans have interest rates and loan costs that far exceed what is available on site built homes.  However, Cascade Financial Services is known throughout the country as being one of the only lenders that offers the same low rates and great terms to factory built home buyers that are available to those buying site built homes.

Cascade can finance both the manufactured home and the land it’s on together in one loan using FHA, VA, and USDA financing options. Similar financing options are also available for modular homes. Financing for manufactured homes not on permanent foundations, on the other hand, is a little more challenging, and traditional financing options are not available for these types of home purchases.

As you can see, modular and manufactured homes do have some similarities, but these terms should not be used interchangeably. The perception for both of these home choices has increased rapidly in the past few decades, making them both reasonable alternatives to site-built homes. Modular and manufactured homes also each have their pros and cons, so the best choice for you will depend on your budget and the features you are looking for.

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