Factory-Built Housing

For the past 50 years, there have been many housing components produced in factories. Pre-assembled roof and floor trusses and prehung windows are examples of such components used by homebuilders. However, these types of houses are not considered "factory-built homes." The degree of construction distinguishes a factory-built home from its traditional counterpart.

A factory-built home generally is considered to be any house constructed primarily of two-dimensional panels or three-dimensional modules mass-produced. These elements are shipped to the building site where they are assembled. To complete the structure, some degree of finish work is required.

Types

A factory-built home is designed primarily for residential occupancy. Most of the construction is by a method or a system whereby the structure or its components are manufactured at a facility and transported to the building site. These houses can be divided into four types: modular, panelized, kit, and manufactured (traditionally called mobile homes). Only modular and panelized factory-built homes are discussed further in this publication. For more information on manufactured (mobile) homes, please contact your county Extension office.

Advantages of Prefab Components

The benefits of using prefabricated components include the following:

• It reduces amount of time needed to complete a house, which, in turn, reduces interest charges for financing construction.
• There is less need for skilled, on-site labor, which may be unavailable, or available only at a premium cost in certain locations. If there is an insufficient pool of skilled labor for home building, you minimize problems in trying to find and train workers.
• Prefab components reduce the danger of cost overruns, because the preconstruction price is guaranteed by the manufacturers.
• Buying materials in large quantities and centralizing labor and design skills can save money.
• There is greater potential for quality control because of standardized manufacturing procedures and factory-based inspections.
• Using accurate equipment to build components generally guarantees a high standard of accuracy and quality.
• Many manufacturers provide comprehensive product warranties.
• Indoor production almost eliminates interruptions from inclement weather and losses from vandalism.

Disadvantages of Prefab Components

The disadvantages of using prefabricated building components include the following:

• A relatively limited degree of design flexibility, including difficulties in customizing sizes and finishes. This is particularly true with modular homes.
• Building-site limitations, including the site not being readily accessible by trucks and cranes needed for erection.
• A lack of familiarity with industrialized techniques in certain municipalities, which complicates and extends the building approval process.
• Community resistance based on outdated perceptions of factory-built units.

Modular Housing

A modular house is constructed using three-dimensional boxes or "modules" that are 90 percent to 95 percent complete when they come off the assembly line (including interior and exterior sheathing, utility lines, and interior partitions and stairs). A modular home normally is shipped in two or more sections for placement on a foundation at the building site. Several boxes (modules) can be connected side-by-side or stacked to create a finished home. When completed, most modular homes are composed of groups of two, three, or four modules (boxes) fastened together.

Most modular manufacturers design their homes with integral roofs that are hinged so they will lie flat during shipment. For steeply pitched roofs, an extra roof unit is sometimes required. For roofs with multiple configurations, some manufacturers provide individual roof trusses that must be installed and sheathed at the site to finish the structure. This increases erection time and project cost but provides increased design flexibility.

Modular homes are constructed to minimize the cracking of gypsum board sheathing during shipment. Most modular manufacturers construct each box with floor and ceiling joists, even when boxes will be stacked vertically.

Approvals: Modular homes must conform to the same state and local building codes as do other residences. The Building Officials and Code Administrators National Building Code is the most commonly enforced of the national codes.

A two-step process is required for each house design being manufactured. Plans and specifications are first submitted to local authorities for building-code-compliance approval. Third-party inspectors must then inspect and approve the manufacturing process and the construction of the actual units before certification is granted and before a state-approved label is affixed to each unit.

Design: Design limitations do exist. Once a specific design is approved and certified, only minor design changes are permitted before new approvals and inspections are required. Minor design changes are modifications that do not change the overall measurements of the building or its structural elements, such as load-bearing walls and beams or roof shape.

The requirement that each new design be separately approved and certified (often by each state in which it does business) is a strong motive for modular manufacturers to offer a limited number of house designs. Manufacturers are more likely to offer standard designs that are popular and have wide economic and visual appeal than to be creative in their design concepts.

Most modular manufacturers have specialized in the design of homes with less than 2,400 square feet of living space. Some manufacturers may do custom design work, but it is far more economical to select from the standard design options.

Panelized Homes

A panelized house is produced in the factory with wall panels 8 feet high and ranging from 4 to 40 feet wide. Sometimes the doors and windows are factory-installed in the panels; other times, they are installed at the site. In most instances, the wall panels are designed to be erected immediately after delivery. The roof and interior partitions of a panelized home may be site-fabricated or constructed of factory-produced panels.

Panelized buildings come in two versions, open wall and closed wall. Open-wall panels are wall sections containing exterior sheathing only. Plumbing, wiring, insulation, and interior sheathing are installed at the building site. Closed panels are shipped from the factory as complete wall systems with exterior sheathing utilities and interior finish materials already in place.

Approvals: The approval process for panelized homes depends significantly on the type of panels being used. In closed-panel systems, the approval procedure is similar to the modular inspection system. Factory inspection by a third-party is usually required. In the open-panel system, no special procedures are required, because all aspects of the construction are visible to the local building inspector on the building site.

Design: Many shapes, sizes, and designs are available in the panelized homes. When open-panel construction is used, there is almost no limit to designs in house plans and roof forms.

Buying

Most manufacturers sell only to dealers, who usually are also builders. They do not sell directly to consumers. It may be difficult to identify builders who use panelized and modular homes. Often they do not emphasize reliance on factory-based techniques because consumers are confused by the terms modular, panelized, and factory-built and are reluctant to purchase factory-based homes.

Contracts and Warranties: Before buying a factory-built home, study and evaluate the terms of the contract and warranty agreement offered by the dealer/builder.

The primary warranty agreement is often between the factory-based manufacturer and the builder/dealer. Be sure the builder/dealer is prepared to warranty the entire project, including the portion supplied by the manufacturer. A typical warranty agreement might include a one-year warranty on all manufactured components, a "latent defects" warranty to cover defects that may surface at a later time, and warranties extended by other manufacturers for materials not produced in the factory, such as the roof or exterior siding.

Be sure your contract clearly spells out the responsibilities of the manufacturer and the builder/dealer in the construction of your home. It should state:

• Who is responsible for preparing the foundation? For erecting the boxes? For re-grading the site once the work is completed?
• Who is responsible for connecting utility lines to the manufactured components?
• Will you be able to complete any of the finish work yourself and still have a valid warranty?

Financing

Generally, panelized and modular homes qualify for traditional mortgage financing. To qualify for government-insured mortgages, your factory-built home must meet Federal Housing Administration (FHA) standards. FHA standards are designed to ensure the resale value of properties and include requirements such as minimum room sizes and window areas. If the home you select conforms to FHA standards, it expedites financing.

Consumer Checklist

Consider the pros and cons before deciding on any home purchase. Ask questions.

( ) Does the house meet our needs?
( ) Will we have enough bedrooms?
( ) Can we afford the mortgage?
( ) Is the home energy efficient?
( ) Will monthly energy bills be within the family budget?

Tips

• Work with an architect or designer familiar with the constraints of modular housing.
• Be sure to weigh the cost of the extra engineering and management time the modular manufacturer will charge.
• Remember also, since highway restrictions limit the outer box width to 14 feet, most rooms in modular homes are limited to an interior width of approximately 13 feet 2 inches in one direction when 2x4 construction is used.

Evaluate the Choices

1. Do you understand the difference between stick-built, factory-built (modular and panelized), and manufactured homes?
2. Compare the relative benefits of stick- and factory-built with respect to cost, design flexibility, and schedule.
3. Have you studied the design portfolios from several manufacturers?
4. Have you confirmed the designs meet FHA standards?
5. Have you consulted an architect or other design professional if extensive design modifications are necessary?
6. Before selecting a builder/dealer, have you:
   • Compared several different companies?
   • Checked at least three references for each?
   • Inspected houses built by your choice of builder/dealer?
7. Does the warranty:
   • State clearly who is responsible for repairing defects once the factory-built components are delivered and erected?
   • Cover defects that may appear after expiration of the standard one-year warranty on materials?
   • Clearly specify the responsibilities of the builder/dealer and the manufacturer?
8. Before you sign a contract, have you:
   • Acquired a suitable site?
   • Received zoning approvals?
   • Arranged financing?
   • Confirmed your construction schedule carefully?
9. When the factory-built components arrive:
   • Will your site be prepared?
   • Will the foundation be ready?
   • Will the site accommodate a large delivery truck and crane?
10. Does your contract with your builder specify who is responsible for completing:
    • Utility connections?
    • Landscaping?
    • All interior and exterior finishing?

Publication 1875
Extension Service of Mississippi State University, cooperating with U.S. Department of Agriculture. Published in furtherance of Acts of Congress, May 8 and June 30, 1914. Ronald A. Brown, Director

Copyright by Mississippi State University. All rights reserved.

This document may be copied and distributed for nonprofit educational purposes provided that credit is given to the Mississippi State University Extension Service.