Appraising Modular Homes And Using Stick Built Homes As Comparables

[Wayne Henry]

Appraising Modular homes and using stick built homes as comparables

I usually turn down the assignment when I notice there is a HUD seal and the home was built in sections at a factory then carried to the site. In my opinion that is a Modular home and can have a stigma in certain markets.

I believe modular homes could be completed on the standard 1004 form and not the 1004c form however I am still up in the air with what comparables to use and would like to get opinions from my colleagues in case I accept one in the future. I find myself getting into a back and fourth with homeowners when I turn these down and I want to get a better grasp on dealing with these. Unfortunately, they typically do not tell the lender and I find out after the visual observation which delays there transaction when it is ultimately discovered. I usually can tell by a feel I have when conducting my visual observation. It is just something about the house that causes me to pick up on asking them if the house was built in a factory then transported to the site. When they say yes then I search for the HUD seal in the closet or under the kitchen sink. I understand the definitions of a modular versus mobile home/manufactured home, but I guess what I am looking for is a consensus on how to deal with these and not the general speak from Fannie Mae on this topic.

Your assistance is appreciated.

 

[BRCJR]

Modular is built to local code and can be compared to site built or a manufactured depending upon quality. A "true" modular should not be done on a manufactured form.
The easiest way to quickly determine a modular, in my experience, is the marriage wall thickness.

 

[CANative]

The only way to determine is to know the building code followed during the building process. Marriage lines, how it looks, where the electrical box is located, what the assessor calls it, etc. is all irrelevant.

The only visual clues you can trust are the labels, plates and other insignia and decals attached to the home.

 

[The Bob]

Mr CAN is correct. The ONLY way to tell for sure is to know which code it was built under.
Many years ago I had a MH assignment (HUD Code). It was a vacant lot and the proposed new MH was sitting at a nearby dealer. I went to look at it. There were two identical "doublewides" side by side on the dealer lot. One was a modular (built to BOCA) and one was the HUD code MH. There were no discernible differences that I could see. Both on metal frame, both low pitch roof. Both had paneled interior with low ceilings. I finally asked the sales person what was "different". He said the electrical systems and that the Modular had ceramic sinks while the HUD code had plastic sinks. So you can only tell for sure by seeing what code is was built under.

 

[Mr Rex]

Appraising Modular homes and using stick built homes as comparables

I usually turn down the assignment when I notice theres a HUD seal and the home was built in sections at a factory then carried to the site. In my opinion that is a Modular home and can have a stigma in certain markets.

I believe modular homes could be completed on the standard 1004 form and not the 1004c form however I am still up in the air with what comparables to use and would like to get opinions from my colleagues in case I accept one in the future. I find myself getting into a back and fourth with homeowners when I turn these down and I want to get a better grasp on dealing with these. Unfortunately, they typically do not tell the lender and I find out after the visual observation which delays there transaction when it is ultimately discovered. I usually can tell by a feel I have when conducting my visual observation. It is just something about the house that causes me to pick up on asking them if the house was built in a factory then transported to the site. When they say yes then I search for the HUD seal in the closet or under the kitchen sink. I understand the definitions of a modular versus mobile home/manufactured home, but I guess what I am looking for is a consensus on how to deal with these and not the general speak from Fannie Mae on this topic.

Your assistance is appreciated.

If there is a HUD seal then its not modular. End of story. The HUD labels are on the exterior of the house near the corners. The HUD Data Plate/Certification Certificate is located inside.

Not to be ugly, but it really sounds like your electives in this years required CE should be a class on both HUD code and modular construction.

 

[Mr Rex]

Mr CAN is correct. The ONLY way to tell for sure is to know which code it was built under.
Many years ago I had a MH assignment (HUD Code). It was a vacant lot and the proposed new MH was sitting at a nearby dealer. I went to look at it. There were two identical "doublewides" side by side on the dealer lot. One was a modular (built to BOCA) and one was the HUD code MH. There were no discernible differences that I could see. Both on metal frame, both low pitch roof. Both had paneled interior with low ceilings. I finally asked the sales person what was "different". He said the electrical systems and that the Modular had ceramic sinks while the HUD code had plastic sinks. So you can only tell for sure by seeing what code is was built under.

The modular will also have an attic scuttle hole. Not that anybody but a jockey sized contortionist could ever enter the attic.

 

[Deleted member 128537]

I use to own a Modular Home dealership. There is a significant difference in quality. For example some are clearly one step up from a very good manufactured home and I would consider rating them Q5. Others have a large amount of upgrades and finishing to them and I would consider rating them Q2. The home I live in is a Wisconsin home. All wood finish with very good quality Windows. I would rate it a Q4 with some elements a Q3. The appraiser rated it Q3 when I bought it. I think he was a bit aggressive in his rating. The largest home my company built came in eight sections and we pieced them together. It had half log siding, high vaulted ceilings, etc. It was really nice. I would rate it clearly Q3 to Q2. A friend of mine built one that I would clearly rate Q2. It was really nice. I live in a modular home and most people wouldn't have a clue when they walk into it. And I don't know how many times people have walked into our house and said, "Wow, this is really nice." The exterior has vinyl siding which makes it look cheap, but the interior is very nice. Thus I'm going to put some really nice SMART siding on the outside and then I would give it a Q3 rating.

All modular homes have to meet state and local codes like on site built homes. They have to go through all the requisite building inspections. We once built one in the Twin Cities and had to meet all the municipal codes. In reality most modular homes are built with a stiffer framing than site built because they have to be lifted in the air (we once lifted a section 40' over a tree) and travel down the road. In fact they have done studies of homes in hurricane areas and modular homes withstand the winds better.

I remember we put one home in an expensive neighborhood and people were complaining that it was a modular home. Just so happened that home later sold for higher than any other home in the neighborhood.

Bottom line: You can use site built homes and use homes that are similar in quality.

 

[Joe Flacco]

I don't think a modular home can be Q2. I don't care how nice it is. Impossible.

 

[Deleted member 128537]

I don't think a modular home can be Q2. I don't care how nice it is. Impossible.

http://www.westchestermodular.com/luxury-modular-homes.html

 

[Joe Flacco]

http://www.westchestermodular.com/luxury-modular-homes.html

Depending on the interiors those are at best Q3 construction.