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FHA Modular or Manufactured Home

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rwp400

Thread Starter
Freshman Member
Joined
Feb 18, 2007
Professional Status
Certified Residential Appraiser
State
Nebraska
I have been ask to appraise a property that is listed by the county as a 1983 Bonavilla for a FHA loan. Does this go on a 1004C if it is a modular? What is the best way to determine if it is modular or manufactured home if the floor system is not exposed due to basement ceiling finish? Owner claims on previous appraisal it was listed as a modular home.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
If it is modular it does not go on the 1004C form. The best way is look at the paperwork from the sale. MFH homes will have serial numbers and HUD numbers, etc. The modular may have a serial number but definately not the HUD tag. Some of the modulars are so close to being MFH these days that they might as well be. You can look under it and note whether there is a steel uncarriage, but I don't feel as confident with that method any longer. On one I did recently, even after going through all the paperwork and looking through and under the unit, I still did not want to believe I knew for certain it was modular so I called the sales office that originally sold the unit when new, they checked their records, and confirmed it was a modular.

Also, a lot of the modular builders will have websites you can go to and look at their floorplans.
 

frozone

Sophomore Member
Joined
Jul 20, 2006
Professional Status
Certified Residential Appraiser
State
New York
Modular constructed homes go on the 1004 not 1004C. Ask the homeowner about what info/documentation they have on the home. Sometimes they actually provide you with helpful information. Other than that look for HUD tags. Usually at the corners of the sections if its a manufactured. Also the majority of manufactured homes Ive seen have labels on the interior with the model information and a regional map. The overall quality of construction can sometimes be a dead give away. Manufactured homes are constructed to federal regulations whereas modular and stick built homes are constructed to ,local building codes. Modular construction is factory–built, but is treated the same as stick–built housing.

As per FHA 4150.2 D–2 FNMA 1004C

"Modular housing is built to the local/state codes and is not to be considered manufactured housing. "

Hope that helps
 

Rich Heyn

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Michigan
The code to which a factory-built home is constructed determines if it's modular or manufactured. Nothing else.

Many appraisers use physical characteristics such as the presence/absence of a steel chassis, general quality, look and feel, etc. to determine modular or manufactured. This is a very dangerous practice and has resulted in more than one lawsuit.

Some manufacturers build essentially identical houses side-by-side on the same production like. At the end of the day, both houses are physically identical except for the way they are labeled. They may be high quality or low quality or somewhere in the middle. Even though the modular home may have a steel chassis, it's still a modular if it was certified as being in compliance with a code other than the HUD code. And an "on-chassis" modular will not be eligible for a loan intended to be sold to Fannie Mae.

Determination of code issues is typically accomplished by observing labels, tags, placards and decals.

Appraisers who rely on physical characteristics to differentiate between modular and manufactured are setting themselves up for a lawsuit, not to mention violating the Competency Rule of USPAP.
 

frozone

Sophomore Member
Joined
Jul 20, 2006
Professional Status
Certified Residential Appraiser
State
New York
I had one just today that was questionable. Luckily the homeowner had model info and sellers info so I could verify it was a modular. No steel undercairage, no HUD tags, butlike Rich said ya never know, its all about the CODE. Seller/Builder did say he never heard of a modular with an steel undercariage. Wonder if their out there somewhere.
 

rwp400

Thread Starter
Freshman Member
Joined
Feb 18, 2007
Professional Status
Certified Residential Appraiser
State
Nebraska
Well I looked at the house today. I am calling it a manufactured home. Everything in the Assessor office point in that direction although limited information. Walls include lots of wood Paneling, fiber tile ceiling held up with the type of screws seen in manufactured homes. It is over a basement so some of the floor system was visible, parts of the metal frame cut away and replace with a 4" piece of square steel tubing. You could see where the arm from the undercariage had been up againt the back material that held the insulation up under the floor. 2X6 floor joist spanning undetermined distance. I suggested the lender might want to have it checked by a structural engineer. Seen the previous appraisal and they called it a modular. I hope I'm right but could not find HUD tags. It has possibly been resided. I really need to learn how to say no to some assignments.
 

Rich Heyn

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Michigan
You are using physical characteristics and not code clarification to determine status. This is dangerous.

From what you have posted, I'd say the odds are in your favor that it's manufactured rather than modular. However, you are still rolling the dice here and risking major liability and licensing issues if the dice take a bad roll.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Put the problem on the shoulders of the client where it belongs---prior to writing your appraisal report. Tell the client that either the lender or the borrower has to have the HUD code verified (see link in this section) before you can complete the assignment. After all that does cost money and they are the ones that need to spend it.
 
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