Monday, November 8, 2010

Modular Home Loans

If you are building a modular home on your land you will probably need to take out a modular home loan (unless you are lucky enough to be able to pay for your house in cash). In this case a modular home loan is different from a typical mortgage. Most likely you are working with a builder who is working with a modular home manufacturer. Your modular home loan will basically be like a construction loan you would get if you were building a custom stick built home on your land. There will be a schedule of payments agreed upon by the bank in which money will be made available to the builder after certain milestones have been met in the completion of the house. The builder will receive his final payment after the house has been completed and inspected. Once the house is completed, the loan can be converted into a traditional mortgage for the buyer. A term you will see used for these loans is "Construction to Mortgage" .

When looking for a lender for a modular home loan it is advisable to find an agent that has some experience in modular home loans. For one thing, there are still some lenders that are unclear on the difference between a modular home, manufactured home, or mobile home. I spend hours on the internet reading about modular homes and am always amazed at the number of people in the mortgage or real estate profession that use the terms modular, manufactured, and trailer interchangeably. I will say that overall, many more agents have become aware of the difference and even point out to their peers that they have worked with modular homes and have found many to be superior to stick built homes. So even if you do run across a lender that is not familiar with modular homes or modular home loans you should not be discouraged. There are plenty of qualified lenders that are very knowledgeable and would love to have your business.

One unique thing about modular home loans which makes it important to have a lender that has experience in this type of loan is that the payment schedule must include a payment to the manufacturer for the total amount of the home at the time it is delivered to the home site. This is only a portion of your total cost, but generally the manufacturer will not release the house to be set on the foundation until it is paid for in full. As long as the bank is aware of this and has provided for it in the payment schedule this should not pose any problems. As I said, there are many banks that have extensive experience dealing with modular home loans. Each one may be slightly different in the way they handle the draw schedule for the builder. Some seem to favor the builder more, some the home buyer. Ideally, the loan should allow payments to the builder in a timely manner so he has the money he needs to complete each step of the process, but still leave the builder with the proper incentive to finish the job on your timetable.

Monday, September 13, 2010

Most Interesting Modular Homes Websites

Almost every day, I spend some time looking at websites of Modular Home Builders. Sometimes the builder sends me an email and asks to be included on sometimes I hear about a new company from someone I know and other times I just search the interenet checking out the different modular home builders to see if there are some interesting sites I should add to the site. Every week or so, I will try to mention a few companies in this blog that have websites that caught my attention for one reason or another. Some may be sites you have seen before while others may be builders who are newer or not as easy to find in a simple Google search. In most cases, I have no working relationship with the Modular Home Builder whose company I am commenting on; they simply had a website that I think is particularly interesting or has a feature that I had not seen before on a modular home builder's website.

Modular Home Websites with Pricing

As I have mentioned in previous columns or blog posts, one of the hardest things to get from a modular home builder is a firm price on a home. There are many factors that affect the price of a modular home, including the amount of work completed by the builder, the options chosen by the home buyer and the land that the modular home will be placed upon. The two builders below actually have fairly detailed information on their websites regarding pricing. First is Sweetwater Homes Inc., in Big Pine Key, Florida. They list about 30-35 models, along with a base price for each home. Below that is a list of what is included in the base price and what the added cost for each option would be, along with estimated pricing for surveys, county fees and other costs that go into building a new home. Obviously none of these prices represent a contract and are subject to change, but at least you have a good starting point for estimating the costs of your new home and you can see some pricing on the various options, which should allow you to make a more informed decision on which options are really important to you.

Another builder that provides useful priceful information on their website is LaClair Builders Inc., in Ypsilanti, Michigan. They show 3 pictures of actual homes that they have built, along with the floorplan, pricing and options included on each house. The houses were built in 2006 so the pricing may have changed some since then, but it should still give you a good idea of what the company includes in their price and which items are completed by the builder.

Check back soon for my next post with more informative modular home builder's websites. As always, if you are looking for websites of local modular home builders in your state check

Thursday, September 9, 2010

Modular Home Built by Students

One of the really great programs that High Schools, Trade Schools and Colleges and Universities offer is a Construction class which allows students to actually build a house from start to finish. These programs have been going on for years across the U.S. Recently, more of the schools have been building modular homes as the focus on Green Building has increased. Sometimes the modular homes are built in a residential neighborhood and sometimes they are built at a location near the school and moved to their final location when the home is purchased. There are several different methods used by the schools to sell the completed modular homes. Some schools work with a group like Habitat for Humanity and build the home for a specific family that shows they need an affordable home. Other schools sell raffle tickets and give the home away in a drawing. Other schools sell the house at auction or list it with a local realtor. Then when the modular home is sold, the school takes the proceeds and uses it to buy materials for the house they will built in the upcoming school year. Many times these houses can be a very good deal for the buyer since much of the labor involved in building the home is free labor supplied by the students. Since the homes are built under the supervision of instructors and local contractors that donate their time the houses are built to the same high quality as a modular home built in a factory. To see some student built houses that have recently been completed and are now for sale go to

Tuesday, August 17, 2010

Financing a Modular Home

One question that mortgage lenders (and modular home builders) are asked with increasing regularity is "Is it harder to get a loan for a modular home than a "regular house?" . The short answer is "Sometimes". But it really shouldn't be. The problem lies in the amount of knowledge the homebuyer or mortgage lender has on the subject of modular homes. Sometimes the consumer is the one that is uneducated about the difference between a modular home and a mobile home so they are asking whether a loan for a trailer, which will go down in value is different than getting a loan for a permanent home, which will (hopefully) go up in value. Other times the lender is not familiar with the difference between a modular home and a mobile trailer and assume that the loan will be more difficult to obtain. If you run into a lender like this, you can either find a different lender or ask your modular home builder to educate the lender on how the loans work. So here is a very short explanation of how a loan generally works for a modular home:
First a quick refresher-A modular home is a home that conforms to all of the state and local building codes for its location and is placed on a permanent foundation. A mobile trailer is a home that conforms to HUD building codes and can be placed on a foudation but is on a frame so that it can be moved. Now back to the question of a modular home loan. When you build a new modular home on your land you will usually have a construction loan which can become a conventional mortgage once the home is completed. The loan is similar to a construction loan you would get if you were building a custom site built home except that the payouts from the bank to the builder and manufacturer are a little different. The lender will set up a draw schedule that pays the builder in increments depending on which part or what percentage of the project has been completed. One payment on the schedule is at the time the house is delivered from the factory to the land it will be placed on, the factory is generally given a payment in full for the amount that the builder is paying for the house. From that point on, the payments are made to the builder at increments agreed upon as he finishes the house. One thing to note about these loans is that depending on how the draws are set up the loan can sometimes be more beneficial to the builder than others. Although you may feel that it is better to have a loan schedule that is stricter on the release of money to the builder in my experience the best possible situation for everyone is to have a builder that you have researched and know you can trust and to have the loan set up somewhat favorable to the builder so he/she is not held up on any part of the home due to cash flow problems. (of course I am looking at it from the builder's point of view so take that for what it is worth--hey, at least I tell it like it is)

Tuesday, June 15, 2010

Delaware Green For Green Program Makes it easy for Home Buyers to get $3,000 to $6,000 CASH-but you need to act fast

A new program just enacted in the state of Delaware gives new home buyers a great incentive to build a Green house- $3,000-$6,000 cash at closing to be exact. More importantly, unlike many other Government initiatives, the Delaware Green For Green program is actually easy to understand and take advantage of. Determining if you can participate is simple as well. All buyers of NEW CONSTRUCTION or TO BE BUILT homes may ask their builter to apply for this rebate on their behalf.
So far it seems pretty familiar, right? But now for the really good news. This program has the most useful website involving a government agency that I have ever seen. The website not only walks both the builder and the home buyer through the entire process in very easy to understand terms, it includes a list of builders that have already registered and been accepted into the program. So if you have a builder already and you don't see his name on the list, you need to inform him that it needs to be done. If you don't have a builder yet and would like to build an energy-efficient home and get a few thousand dollars back at closing, I would recommend checking out the list of builders on the website. The program was enacted in the past week and there are 7 builders currently on the list. Considering the fact that it takes 48 hours to 7 days for a builder to be accepted, and having worked with builders in the past, this is quite amazing. It is also probably an indicator of the level of service you are likely to get with those builders. The list of builders has a short list of the builder's credentials and a link to their website. There is also a tab on the website for FAQs for the Builder and the Buyer. (Again, very simple).
Overall, I think this program has the potential to be very successful and hopefully duplicated by other states. The reason is probably because unlike many government policies and programs Delaware Green For Green was put together as a partnership between the government and the builders of Delaware. It is of particular interest to those of us who research Green programs and initiatives in the fact that it is one of the few programs of it's kind that focus on New Construction. Most programs that I come across give information at great length on tax rebates and other incentives on remodeling and upgrading but it is usually very difficult to even find the information relating to new construction. Delaware Green For Green is only FOR new construction.
One last, but very important point - according to the website, cash for this program is limited and is available on a first come first serve basis so ACT FAST.
If you live outside of Delaware and are interested in finding a builder that uses Green Building processes such as modular, structural insulated panels, insulated concrete forms, and more, go to

Thursday, June 3, 2010

Where to live while your dream modular home is being built

One of the biggest advantages of building a modular home is the fact that it is a faster process than building a site built home. The majority of a modular home is constructed in a factory environment which is quicker since there are no delays due to weather. Even though modular construction is quicker than site built construction the process will still take a few months to complete from start to finish, so moving from your current residence to your new modular home requires a little timing. Also, since many people who purchase modular homes like to save money by either doing some of the finishing work themselves, or managing the sub contractors who will finish the home, it is beneficial to live as close to the new home project as possible.
Here are a couple ways I've seen people deal with this issue while waiting for their modular home to be completed.
First, I must mention that if your home is being completed by a builder, because of liability reasons it is not possible to have the builder finish one part of the house so you can live in it while the rest of the house is completed. A builder is required to have the house pass inspection before anyone occupies the house. So here is one option. Many people will put a mobile home or Park Model home on the property and live in it while the modular home is being built. Park Model homes have become increasingly popular in the last few years because they can be made with the same color siding that will go on the house and once the modular home is completed the Park Model can stay on the property as a guest house or mother in law cottage. Park Models are small cottages that are built to RV specifications, but can be put on a permanent foundation and some of the newer ones look really great. Because they are considered RV's they cannot be built over 400 square feet. is a website that focuses on Green Building and building small houses in order to simplify our lives but these Park Models work great for people finishing off their modular home and they have a section that lets you search for park model home dealers by state.
There are all kinds of creative options out there for how to best transition from your current home to your new modular home so you should keep your eyes open for potential ideas on places like Craigslist, ebay, etc. For example, there is currently an interesting deal being featured on the Missouri land page of (I know, this is a shameless promotion of the site I write for, but it is a good example). The Missouri listing features 40 acres of land in the beautiful Ozark Mountains for jsut $106,000. The interesting part is that the owner offers to options to the buyer. The first option is to buy the land on an owner-finance basis with no credit check and only 10% down. This is a good deal, but the second option is the one that makes sense for someone building a modular home. In Option 2, the buyer must pay for the land in cash, but in return, the current owner will include a bonus a double wide home worth about $35,000. The home is currently being lived in so it has all lthe well, elictric, utilities, etc. hooked up. It even has a satellite dish. So for example, say you have just got an offer on your current home and are ready to build your dream modular home in Missouri. Provided you receive at least $106,000 in equity from the sale of your current home, you could then buy the 40 acres in cash and move into the double wide home while you plan and build your new modular home. With at least decent credit, you should have no problem getting a loan for the construction of the new modular home by using the land as a down payment. This could save you a great deal of money that you may have had to spend on rent as you complete construction on your new house. Then when your dream modular home is complete, since the double wide is a mobile home, you could sell it to someone else, who could hitch it up and drive away with it. Or you could always keep it on your property for when friends or relatives come to visit.

Monday, May 31, 2010

Exciting new company "New Old" Green Modular Homes

When many people think of custom modular homes, they think of a family finally realizing their dream of building their own home on their own land out in the country. Well, from June 4 to June 17 you can come see a beautiful custom modular home designed by Country Living Magazine in Manhattan. That's because a modular home company with a bold new concept has worked with the magazine to design a country style cottage called the "Hudson" to be built and placed by the World Financial Center in Lower Manhattan.

The Company is New World Home, LLC and the concept they promote is to merge historical home design with contemporary construction techniques to produce a house that blends seamlessly into its environment. They call these historic looking sustainable homes New Old Green Modular or NOGM. The result is a beautiful home that fits in perfectly with the existing homes around it while saving the owner money on utilities and leaving less of a footprint on the environment. The Hudson Cottage is scheduled to be open to the public on Tuesday June 4 on 220 Vessey St. The house has been featured in nearly every New York newspaper and magazine and the opening of the Cottage to the public is becoming a much anticipated event. If you have an interest in modular homes and you find yourself in the New York City area in early June, I highly recommend you check this house out-I know I will.

Rather than try to describe the details of the homes available by New World Home I think I'll just add a link that will send you to their website, which does an incredible job of explaining the concept of the company, the building process and the different models in an interactive manner.
Their site is

Sunday, May 23, 2010

Avoid an expensive mistake when building a modular home

So you want to act as your own contractor. One of the advantages of building a modular home is that since much of the work is performed in a factory environment, many home buyers take the opportunity to save some money by acting as their own contractor for the remaining jobs left to complete the house. Because a modular home can be set on the foundation in a day or two, the owner-builder is more able to manage the remaining work, so many home buyers take the opportunity to supervise at least some of jobs. This can help the home owner (sometimes called owner-builder) to keep costs down and possibly build a larger home than they might otherwise be able to afford.

In this post, we'll be concerned with one particular area of the modular home construction process- the Foundation. If you have begun researching modular home construction you have probably become aware of the misconceptions many people have about what a true modular home is, and why it is totally different from a mobile home, or trailer. To review, a modular home is a home that is largely completed in a factory environment to the specifications required by State and Local building Codes for the particular piece of land it will be placed on (unlike a mobile home which is only required to conform to HUD standards and sits on a frame so it can be moved). A modular home is placed on a permanent foundation, just like a traditional site built home. The foundation is one of the areas mentioned earlier that some owner-builders contract themselves in order to save money on their new home. While I am not going to discourage anyone from taking on this task, I would just like to provide a word of caution that may save you thousands of dollars and some headaches. Simply put, make sure when you hire out a contractor to build your foundation, make sure you hire a licensed contractor who has previous experience in building foundations for modular homes. I will explain why now.

If you have ever seen a modular home being placed on its foundation, it is a very amazing thing. A crew of people basically guide an entire home, or module by spinning it as it is being lowered by a crane onto a permanent foundation. One of the amazing things is that even as large as a house can be, the crew can get the house to fit squarely on the foundation to within about a quarter of an inch all the way around. And once the modular home has been set on the foundation it would be very hard for anyone driving by to tell that the house was not built on site.

With this in mind, we need to consider the fact that since a modular home is already mostly completed when it is set on its foundation, that leaves very little room for error by the group that builds the foundation. In a traditional site built home, if the foundation is a few inches off one way or another, it can be corrected as the home is being constructed without too much inconvenience. On the other hand, if the foundation for a modular home is off even a few inches, it can cause some very expensive problems to correct. I have heard of instances where the modular home was being set on a foundation and it did not fit correctly. If it is determined that the house was built to the correct specifications and the foundation was incorrect, the builder (which in some cases is the person buying the house acting as his own contractor) is responsible for correcting the problem. This can be very expensive, since the only way to correct this is to either hire an engineer to come up with a solution for fixing the problem in a manner that is safe. The other option is if the foundation was not measured correctly and the house was not even put on the foundation in the first place is to repair the foundation first, then set the house. This option is costly as well because it will probably involve an extra day of renting a crane to set the house, as well as the cost of the set up crew. These expenses can add several thousand dollars to the project.

So to conclude, I certainly do not want to discourage you from acting as your own contractor when building a modular home, I just want to point out that the building of the foundation is one area that you need to be particularly careful with, since even a seasoned veteran who has been building home foundations for years may not be aware of the extra importance of the accuracy in building a foundation for a modular home.

Friday, February 19, 2010

Modular homes Prices - Things to Consider

One thing I learned about people who decide to build a modular home on their land is that they tend to be very educated, organized and financially conservative. This certainly makes sense for a number of reasons. The fact that someone is willing to spend the time doing all of the things necessary to build a new home shows that they are more likely to carefully plan their home, as opposed to the typical home buyer that moves to a new area because of a career change or change in family status and tries to find a house that will fit their needs as soon as possible. Generally, I have found that the people most likely to buy a modular home come into a meeting with builders or salespeople armed with a lot of knowledge from research they have done on their own. When it comes time to build they have a very good idea of what they want, they are just looking for a builder they feel they can trust to do the job right. On the other hand, when someone walks into a model home and asks what the difference is between a modular home and a mobile home, they are usually not that close to making the decision to buy yet.
My tip for today is valuable for all prospective buyers of modular homes, no matter what stage of the planning they are in. The tip is this -Compare apples to apples. What I mean by this is, there are many different builders to choose from no matter where you live, and once you start talking to some modular home builders you'll find that the hardest thing to get out of a builder is a firm price. Even when you do get a number from the builder, you need to carefully loook at what you are getting because each modular home builder has his own set of items that are included in the price. Even if you are looking for a "turn key" price, two builders may have a different opinion of what that actually means. The good thing about most modular home builders is they will generally let you decide how much, if any of the labor or contracting you would like to do yourself, giving you a chance to leverage any experience or contacts you have to save money on the project. So what you really need to do is to have a checklist ready of everything that is involved in completing your home. That way once you have found a couple plans or companies you like you can get the pricing from the builders you are interested in and go through your list and find out what is included so you can compare the different builders on a level playing field. The list should include things like, "is the driveway included in the turnkey price?", " does the house come equipped with gutters or blinds?", "Does that price include painting or just primer?, etc. There are many other items, some probably surprising to most people that may or may not be included in the price depending on which builder you use. The more you have thought about this, the better prepared you will be to make an accurate comparison of the different modular home builders.