Basics that Every Manufactured Home Professional Should Know. Focus on Modular Homes, Garages & Site Installed Furnaces

In our last post we started taking a closer look at some of the important elements of the manufactured housing law and regulations that you should know. Today, we will look at a few more.

During an installer training class last week, our discussion landed on the difference between a manufactured and modular house. I like to point to 24 CFR 3282.12(c) of the Manufactured Home Procedural & Enforcement Regulations. Simply put, a modular home is ONLY intended to be placed on a permanent foundation, such as a masonry crawlspace or basement. While a manufactured home may be placed on a permanent foundation, it is not required.

Taking it a step further, a modular home is not intended to be moved once it is installed on the basement or crawlspace. A manufactured home must always remain permanently transportable regardless of the foundation used for support.

And finally, a modular home is designed and constructed to the state adopted building code (such as the International Residential Code) while a manufactured home must meet the Manufactured Home Construction & Safety Standards (AKA the HUD Code).

In a nutshell, we should never see a modular home being relocated or moved. They are designed for their specific site to a site-specific code, placed on a basement and often with the transportation components (chassis or carrier) removed. While a manufactured home must always retain the ability to be moved (permanent chassis), it is not restricted to a specific foundation, and is designed and constructed to a federal building code.

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Recently we have been seeing many more manufactured homes with attached garages. To assure that the home can safely and structurally handle a garage, the manufacturer must design and produce that is garage-ready. The process the manufacturer must follow is known as “Alternative Construction”. You may have been introduced to Alternative Construction (AC) in the past whenever a manufactured home had a hinged roof. While we could argue the benefit of the added expense and paperwork required just because the home had a 5/12 roof pitch, there is a huge advantage to going through the Alternative Construction process if you are planning on attaching a garage to a manufactured home.

Garage Ready home being installed.

Alternative Construction is basically an authorization from HUD to the manufacturer to allow them to construct a manufactured home that may not meet a specific provision of the HUD Code, but as a result of the “alternative construction” the home performance of the home is not affected.

So, if the manufacturer produces a “Garage Ready” home that has been evaluated under the Alternative Construction process, you can have confidence that all of the HUD code considerations have been taken into account. Things like the distance from the bedrooms to an exit door (without passing through the garage), that there are no windows looking into the garage, there is fire rated wall and door separating the garage from the home, and the structure of the home can accept any additional loads resulting from the garage attachment.

If you just attach the garage without benefit of the AC process, there is no assurance that the home will remain structural sound and safe as required by the HUD Code, and you assume the liability in the event any issues arise. It is always important to remember that the HUD Code still does not address carbon monoxide alarms. So please make sure you consider this important safety feature when adding a garage to a home.

Consider providing carbon monoxide alarms for homes with attached garages or that contains fuel burning furnaces, water heaters or fireplaces.

 

You should also know that Alternative Construction extends to much more than garages and hinged roofs. Alternative Construction provides a way to customize the manufactured home to fit many of the needs or desires of your customer. Tank-less water heaters and wheel chair accessible showers are common consumer requests that can be provided through the AC process. So, if you or a customer is requesting some non-traditional features in their home, maybe Alternative Construction is the process you should explore. For more information check out 24 CFR 3282.14. Also, an earlier post on this topic.

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On a similar note, did you know that the Manufactured Home Construction & Safety Standards allows for the field installation of the furnace? The HUD Code requires that the manufacturer provide connection points to the air supply and return ducts, but the actual furnace may be provided by the installer.

This is ideal for a manufactured home being placed on a basement or maybe utilizing an alternative fuel source, and no additional approvals is needed. It is provided for right in the code.  For more on this, check out 24 CFR 3280.709(e)(6).

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Ok…that is enough for now, but there is plenty more to talk about in future posts!

The highlighted text will direct you to the referenced requirement. And as always, the views expressed are mine and should not be taken as anything more than my personal opinion.

Manufactured Housing-Different From The Rest

I recently was contacted by a real estate appraisal company from Michigan that was in a heated dispute with a property owner regarding their factory-built home. Was it a modular home or a manufactured home? The homeowner claimed is was a modular, while the appraiser disagreed.

A steel chassis does NOT always mean it is a manufactured home.

This appraisal company had over 30 years experience, yet had never received any training specifically on manufactured housing. Most training courses will include a few slides that basically say that if a home has steel chassis (or frame) attached to the floor joist, it must be a manufactured home. As you know, that is not always the case. 

Now, don’t think I am criticizing real estate appraisers. I have seen tax assessors make the same mistake. In fact, not just appraisers and assessors, but code officials, zoning officers, banks and home inspectors as well. This leads me to ask, why are so many housing professionals misinformed regarding manufactured housing? 

I visited several web sites to see what they say regarding the differences between manufactured and modular housing, and found most of the information on the web is more focused on marketing as opposed to structural features and building code differences. To make things worse, too many industry professionals do not have a clear understanding of the differences, and play fast and loose with the terms manufactured, mobile, modular, etc., causing further confusion.

Now, to muddy the water even more, we are dealing with “tiny houses” which are a completely different product! Why do they use the word “house”? Calling them “Tiny Campers” would be more accurate. But, as it stands they also add to the confusion. 

A tiny home is not a Manufactured Home!

So, what is so different about a manufactured home compared to other housing? And who should be responsible to assure that manufactured homes are not confused with other housing types? And does it even matter?

Simply put, modular homes are generally built to a state specific building code and are not intended to be moved after the initial installation.  They are considered real estate and must be placed on a permanent foundation on privately owned land. And like it or not, some producers design and construct modular homes that leave a chassis in place, even after it is placed upon the foundation. But the intent is that the modular home will never be moved after placement.

As you know,  manufactured homes are built to a national building code. However each state has their own set of requirements (or lack of requirements) regarding assesment, classification, zoning, lending, sales, etc. Many states consider manufactured homes to be vehicles, registered or titled through the state Department of Motor Vechicles (DMV). Therefore, like a “vehicle”, manufactured homes are considered “personal property”. Which means instead of a low interest rate mortgage, purchasers must either pay cash or take out a high interest rate “chattel” loan.  

This home on private land will likely never be relocated.

So why are manufactured homes considered vehicles? Because by definition, a manufactured home must be permanently transportable. It doesn’t matter if the home is placed on a full basement, masonry crawl space, piers or slabs. A manufactured home must retain the ability to be moved from one location to the next. It may not always be practical, but the on-going ability to lift the home from the foundation, re-attach tires and axles, hitch and lights for transport is required.

For a manufactured home installed in a leased land community (park), a chattel loan makes sense. But today, many manufactured homes are placed on private land with permanent foundations. For these situations, a chattel loan is not the best option.  The owner of the manufactured home would have to work with their state DMV to retire the registration or title and establish the home as “real” property, and therefore qualify for a mortgage.

I hope this helps you better understand the mortgage/chattel loan issue. Banks are reluctant to lend money to a structure that could potentially be towed from the building site.

So, can you blame an appraiser who looks in the crawl space and sees a steel chassis and assumes it is a manufactured home?  

I don’t presume to have all of the answers to this decades old problem, but I do think that understanding the requirement of transportability is important. I also believe that there are some simple steps that all of us can take to help educate those in the housing industry as well as the home buying public:

  • Use the correct terminology. If it is a Manufactured Home, call it a Manufactured Home!
  • Earn the confidence of other housing professionals. Start sharing how this program is regulated, and that there is oversight to protect the consumer and the public.
  • Consider sponsoring a training session in your area for code officials, assessors, appraisers, or other housing professionals.
  • Teach the consumer that at some point the home’s label and data plate will be important and should be preserved.
  • Invite housing officials to your trade show, retail center, or to visit an installation site.
  • Become your area’s manufactured housing expert. 

The Manufactured Housing Program is likely the best kept secret in the housing industry. To encourage the industry to grow, we need to get the rest of the housing industry to better understand what makes our product different.