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HUD or not HUD; That is the Question....

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Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Over the past 2 years or so, I've done maybe 5 or 6 of the new HUD code manufactured houses that have 8-foot, level ceilings and 5/12 pitch roofs. On first glance, they look so like the lower end BOCA modular houses that it would behoove the appraiser to be very careful doing a drive-by to not mistake these for BOCA's. They are still HUD Code and a lower quality construction.

I recently did a proposed siting of a new HUD Code house. Based on the meager "plans and specs" provided by the dealer, we assumed it was a standard HUD code house with 7' side walls, cheaper interior, etc. Nothing was said about roof pitch or snow load. When it arrived, it was 5/12 pitch, 40# snow load, all dry wall and 8' level ceilings. I noted this in my Cert of Completion and stated that subject was significantly better quality than plans and specs indicated. The lender and the owner both called and asked what the new value was. I told them that I did not do a new value with a CofC but would update the report for $100. The order was placed and the new value for the house was up 6500, some 4.8% higher than the original value.

My point is this: we have to be a little more careful these days on construction, especially doing drive-bys. Even this house, as nice as it is, is still a HUD code and not built to meet Michigan’s minimum building standards. It cannot be compared with a BOCA or site built house without some significant adjustments for quality.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
That is why it is so important reseach any and everything even before you go to the property. A HUD code home CANNOT be positively identified in the field by appearance, unless you do find either the HUD label with the inspection number embossed or the data plate that states date, manufacturer, factory location, serial number and HUD inspection number. In my area we do not have any building codes, anything can be built by anybody in any way they want to. A licensed contractor has to build per UBC, but a home owner or an unlicensed contractor does not have to follow any building codes what so ever. So a HUD code home might be the only home available where a building code was followed. However, some people have such an adversion to "trailers" that they prefer the site built home out of odds and ends, not built to code, with a poor room arrangement, etc. We have a lot of Jim Walter, DeGeorge, Miles, etc built by homeowner in this area. And because of the lack of building code or building inspectors, they get pretty interesting at times. So far we haven't had any one install a modular, but I expect to see some in the future since there is now a plant within 200 miles. But there is also a mountain range between us and the plant, so that might create some problems. A lot of new manufactured homes come from Texas plants, since it is fairly flat country with an interstate between here and the plants. But the road to Phoenix is a 2 lane state highway over the mountain range.
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
Sadest part is many Manufactured Homes are much better built than some of the sticks I am on #5 REO & it's only January Homes that in 2000 Sold for 76,000 I getting 39,000.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Karl

I hate to disagree with you but here in Michigan, there is no way a HUD Code house built in 2002 can compare in quality of constuction to a house built in 2002 under Michigan's current revised building code. The site built or approved modulars are far superior in quality of construction with far superior requirements. Snow load is just one example. Current requirements call for a 70lb PSF snow load on site built and modular. I have never seen a HUD Code with over a 40lb PSF snow loading and most are in the 30lb PSF range. This is just one example of many.

HUD Code houses are of inferior construction to site built houses. I use a different depreciation term for them (65 years vs. 100 for site & modulars) simply because they are inferior and it is my opinion that they do not hold up as well.

Perhaps Arizona has different building codes but your conclusions cannot be substantiated here in Michigan.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Richard:
Arizona doesn't have building codes--that is the problem. The two largest counties (Maricopa-Phoeix & Pima-Tucson) and the larger cities have a wide variety of building codes, from just the bare minimum to very detailed codes. In my two counties, only one city has a building code with an inspector who has never read a building code in his life, another city with a building code that only worries about the distance from the lot line and nothing about the construction. The rest of the area is--anything goes. I know of one house that radiator hoses were used for some of the plumbing lines (the owner/builder sold used cars so he built his house a piece at a time). If a home is built by a licensed contractor, then very minimal building codes have to be followed or the owner can file a complaint with Department of Contractors. But licensed contractors are expensive so Uncle Joe who watched Hometime on TV once gets the job. And some of those million dollar homes in the big city are a disaster to see before they stucco over all the mistakes! Builders love stucco in Arizona--it can cover up a lot of sins. A builder from NM came to the Phoenix area about 15 years, developed a sub division of very well constructed homes with brick veneer in the same price range of all the surrounding stucco homes--that builder went bankrupt before he could finish the subdivision. So another builder started building in that subdivision, stucco homes of poor construction, at a higher price and they sold like hot cakes.
 
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