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FHA For A Modular Home

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hal380

Thread Starter
Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
Hello All;

Here's the scenario:

Appraising a SFR our in the country side, rural area. This is a raised ranch built on a poured concrete foundation. Did the typical town hall stuff, and have returned to the office to build the report. See on the tax card that the home was built by Southern NE Modular Homes, Inc. The FHA office is closed now, and I want to know how much of a problem I have with this assignment. Any information would be appreciated.

Yes I can wait till the morning, but perhaps I can get some answers here.
I checked the FHA Handbook and did not locate anything which seemed relevant.

Regards
Hal
 

Wally Jones

Senior Member
Joined
Jan 23, 2002
Professional Status
Certified Residential Appraiser
State
Florida
You shouldn't encounter any FHA-specific problems due to the fact that it's modular. Of course, finding similar comparables may still be a challenge. Just document what you know, explain those non-modular comps and take good photos of the crawl space if possible.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Modular homes would be reported on the 1004. Is your subject an "on frame" modular (has a steel undercarriage) or an "off frame" modular (no steel undercarriage)? Hope you took photos of the crawl space. And any insignias, labels, tags, seals, tags, etc, etc that you might have found. Be sure to have comments in the report about it being originally constructed in a factory. Then for comparables. What would a typical buyer of the subject consider as substitutes? If there are other modulars that have sold recently--good deal. If not, would a prospective buyer be looking at manufactured homes or would they be looking at site built homes or would they be looking at all three???? When you have figured out the answer to that question you can start searching for comparable sales. Just remember, explain, explain, explain and then explain some more in that report!
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Form 1004C is only for manufactured homes constructed to the HUD building code. Modular homes, whether "on frame" or "off frame" are constructed to a local building code therefore they should not be reported on the 1004C. A modular home does NOT have the information required at the bottom of page one of the 1004C--HUD label, Data Plate, etc, etc.
 
Joined
Jun 3, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
The same manufacturers build both Modular (factory stick built, UBC code) and Manufactured (factory built mobile homes, HUD code) -- what is worse, both Modular and Manufactured homes can be built on steel chassis, and placed on concrete foundations.

Once a factory built home is placed on concrete foundation on a fee simple parcel, the differences between the types of construction becomes blurred. The ultimate question -- how does the market respond to these homes?

I've seen Manufactured (HUD) homes with drywall, fireplaces, and all of the features you'd want to see in a stick built home. I've seen Modular (UBC) homes with cheap paneling, cheap finishes, and all the stuff you hate to see in a trailer. The ultimate question is -- how does the market respond, once the factory built housing is placed on a permanent foundation?

All three types (stick built, modular, manufactured) are fairly common on acreage sites in rural areas east of Denver -- the last one I did, the market didn't seem to care what it was, beyond the quality of finish, curb appeal, and amenities.

Which makes sense -- out in the boonies, good help is hard to find, and if quality housing means trucking it in, the local markets often think that is fine and dandy.

Bottom line -- confirm what the subject property improvements are; then look for similar modular, manufactured, and stick built comps.
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
Placement on a foundation and the county's classification doesn't change anything, the duck is what it is depending on which building code the box was built to. Appropriate comparable selection is paramount regardless of which form is used.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Manufactured and modular classifications do not depend on how a house is sited.

They are building code descriptions. If you do not know the difference or cannot see the difference between a HUD COD mfg and a state code modular (as we refer to them in Michigan since the modulars must meet the Michigan building code), decline the order immediately as competency is in question.

Once you learn to tell the difference, then you will know what form to use and what comps to use. Till then, don't put yourself in jeopardy.
 
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