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Manufactured or conventional

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Brad in SAC

Freshman Member
Joined
Jan 25, 2002
I was asked to do an appraisal on a home that was built with a kit but was built on site and not transported from the manufacturer. When I inspect the property, what are some key elements I should look for to determine if the home is manufacturered or conventional?
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
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Texas
Brad, do you mean "manufactured" or "modular". Conventional is too broad a term unless you are talking about financing. I would suggest that maybe you are not well versed in this type of appraisal and you might want to disclose this to your client. This is a competency issue and you need to let them decide whether they want you to do this report with no experience on this type home.

There are many different types of homes. "Manufactured" is also a broad term. It could be a "HUD code" home or a "modular" home. Each has its own type of construction and should be appraised differently. It is possible that since this home was put together in pieces on site that it is a "modular" home and built to different codes than a HUD code home. I would suggest perfoming a search on these topics here and you will find a boat load of information. Pay close attention to any post by Jo Anne, she is a leading authority on both kinds of homes.

Also, ask specific questions when you still can not find what you want. Somebody on this forum will answer with good advise. The more specific the question, the more detailed the answer will be.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Although it sounds like it might be in the "factory built" category of home, it is NOT a manufactured home because it was NOT built to the HUD building code. Manufactured homes are completely built in the factory to the HUD code with a few finishing touches on the site. If your subject was a pre-cut or panelized or kit home, then the components were manufactured in a factory, shipped in pieces to the site and then assembled on site like a jigsaw puzzle to the local building code. If your subject was almost totally constructed in a factory to a site built building code like UBC or COBA or BOAC or local building code, then it is a modular home. Anyway, disclose in your report that the subject is a factory built home (regardless of the amount of construction in a factory), look for any identifying insignia (depending on the laws in your area) the home might have, take photos and make notes of those insiginia---and then explain, explain, explain. Try to find other homes that were the same building code and similar construction techniques. See Section 304 of Fannie Mae guidelines that went into effect 6/30/2002. If it had been built to HUD code and it is FHA loan, see Section 8 in the 4150.2 and Chapter 1-9 in the National HOC Reference Guide.
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Jo Ann, ..... ? for you, in spring of last year I down-loaded on a floppy a file I had linked to and was titled......FNMA Selling Guide, Part XI Property and Appraisal Guidelines, with an April 12th, 2002 date assigned to it. (It has the Section 304 reference you mention about Factory-Built Housing in your post above, and also comments about the urban - suburban - rural issue recently discussed in Forum). It prints out as 42 letter-size pages in Word-doc. Was this April 12th date a preliminary status of the (same) text that eventually became effective on June 30th ? Were there any likely changes to it, be they perhaps minimal, between April 12th and June 30th ? Regardless of the date question, the content is a very good reference anyway. It appears to be quite clear and simple in expressing almost a field-by-field approach to our considerations of the data we acquire to place within the FNMA forms we might use, and reasonable perspective of what might be expected (from a reader of report) if we had doubt about any certain field or information requirement. --- Thanks
 

Rich Heyn

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Michigan
Jo Ann:

This topic comes up quite often in the MH class. What exactly is factory-built?

Manufactured Home/HUD code = factory-built.

Modular Home = factory-built.

Panelized Home = maybe, although I personally don't call a panelized home "factory-built" because the actual assembly of the panels takes place on-site.

Kit, Pre-cut, Pre-fab = hardly qualifies as "factory-built," since all that took place in a factory was pre-cutting of the lumber and putting together the package as you said, like a giant jigsaw puzzle.

Virtually all site built homes use some "factory-built" components such as trusses, cabinets, windows, fixtures, pre-hung doors, etc.

See ya soon in Phoenix, looking forward to the factory tour.

Rich Heyn
 

Rich Heyn

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Michigan
Brad:

Jo Ann is correct in her terminology. A true "manufactured" home is built to the HUD code and appraisers should be careful not to use the term with any other type of house.

The secondary market has different rules and guidelines for HUD code homes than for other types of housing. Fannie and Freddie both define only HUD code homes as "manufactured" homes and classify all other types of factory-built homes in the same category, if you will, as site-built homes.

If an appraiser uses the term "manufactured" in a report on a modular, panelized, pre-cut or whatever, an underwriter may be led to believe that the home is a HUD code home and consequently apply the wrong set of underwriting guidelines. This may create problems for the lender and borrower as well.

Rich Heyn
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Ross: I think there was very minimal changes--for example one place mentioned guidelines for "underwater" -that sentence was corrected to "underwriting". Thought for a minute that maybe the college degree requirement in the future would require classes in underwater basket weaving after all to become an appraiser! Any way, just to make sure I do have the latest, about a week ago I went to http://www.adfinet.com and printed out Part XI - Property and Appraisal Guidelines, had to do it section by section and couldn't figure out how to down load since you have to register (it is free) before accessing. When it came to the section on zoning it automatically jumped to the revised version from December 2002, so that was neat. Still have the version from last spring on my computer so I can search by word and then look at my latest printed copy to make sure I have the correct info. It is still identified at the top as 4/12/2002.
 

Mary Caffey

Sophomore Member
Joined
Feb 22, 2002
Once upon a time there was a "kit" seller known as Miles Homes that shipped the lumber, nails, plans , everything to the site- the rafter came already but together and the siding was cut to fit where the windows were to go- it was not a manufactured home in that it did not come in sections to be put together, so East Texas considers them conventional or stick built as they are erected on the site.

Mary
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Those are known as panelized or kit homes. They are not manufactured homes since they are not constructed to HUD building code. They would be considered in the same category for financing purposes as site built homes because they are constructed to site home building codes like UBC or BOCA or CABO or whatever is applicable in that specific government entity. A spin off from Miles was DeGeorge. Both were going strong for awhile in my area, then disappeared. And we have hundreds of Jim Walter homes that are kit or panelized homes from new to over 30 years old in my two counties. They are all considered as site built by the local governments as well as all lenders.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
In my state a kit home (also called pre-fab) is considered stick built because it is assembled on the site. Of course my state also screws up the term "modular" too.
 
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