Standard costs for a modular home will run $50 to $60 a square foot, with the most popular size homes in the 1,700 to 2,000 square foot range. Some builders also have high-end or luxury series that can run $80 to $100 a square foot with homes up to 5,000 square feet or more. However, a typical 3-bedroom, 2-bath, 1,800 square foot home will cost around $100,000, plus site work.
The financing options for modular and manufactured homes are the same as financing a stick-built one. FHA/VA and conventional loan programs are available from the same lenders as you would use for a typical subdivision home. Most home dealers or manufacturers have lenders they work with that can finance the total package of home, site work, and land.
But, like shopping for a single-family home or condo, it’s important to shop around and compare loans. Dealer loan packages that finance the lot, site work, and home are convenient but not always the most economical. You may save money by getting a construction loan through your bank or credit union and the 30-year loan through a mortgage company.
One financial plus of a modular or manufactured home is the shorter length of a construction loan if you take one out for the lot and site work. You pay interest for weeks instead of months. For example, if you bought a building lot for $50,000 and financed it for 6 percent interest, your monthly interest bill would be $250. Assume you spend a month or two fine tuning your house plans, getting the permits, and lining up your contractor or subcontractors. If all goes well, the construction can be completed and the home ready to move into in about six months. You’ve spent $1,500 in interest on the lot alone. If you had ordered a modular home, it’s likely you would have been moving into the home in four to six weeks. Your lot loan interest bill would be around $375, saving you more than $1,100. If you were to add in the construction interest of stick-building the home, the bill would be several thousand dollars more. The bottom line on financing is to shop around and compare at least three lenders’ rates. Don’t assume that the dealer’s deal is the best, even if he throws in inducements or extras. In fact, you should be wary whenever a dealer or builder offers extras to go with the financing. Somebody is paying for those extras, and that person is usually you.
