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[F224]Financing For Manufactured Homes

by Richard Oliver, Ric

One of the problems with manufactured housing and its perceived reliability in the mind of the consmer to withstand different weather and terrain conditions has been the disconnect between how the code requires the home to be designed and engineered in the factory and how the home is installed in the field. In other words, there is a lack of continuity between what the manufacturer sends out the door and the dealer and installer delivers and sets up on the home site. While the HUD Code of 1976 established that manufactured homes had to be factory designed and engineered to federal law standards with specific electrical, heating, plumging and thermal standards as well as performance requirements for structural design, construction, fire resistance, energy efficiency and transportation from the factory to the site , the installation standards were left to the local and state jurisdictional authorities. Interestingly, in some states installation requirements are rigorous while others, lax to non-existent.

To quote the code, "every HUD Code manufactured home is built in a factory, under controlled conditions, and has a special label affixed on the exterior of the home indicating that the home has been designed, constructed, tested and inspected to comply with the stringent federal standards set forth in the code. No manufactured home may be shipped from the factory unless it complies with the HUD Code and receives a certification label from an independent third party inspector."

So let's say the home was designed to meet Wind Zone II requirements, this home would not receive a HUD label and data compliance certificate nor could leave the factory without substantive engineering and design proof that the design met those specified Wind Zone engineering requirements. However, the irony is that after all the in-factory inspections and compliance requirements had been met and certified as HUD compliant, the home could simply be shipped out of the area to a state that might not mandate or enforce wind tie-downs at all. So conceivably, all the regulations set forth for factory production could be completely abandoned when the home arrived at the site. And most anyone that stays abreast of current events has seen how vulnerable manufactured homes are in high wind zone areas. Does "Wizard of Oz" come to mind?

However the new HUD Code is in the process of changing not only how local jurisdictions (those building department enforcing local codes) oversee HUD compliant housing, but also a complete revision of rules, regulations and requirements that will affect thousands of dealers and installers (those that perpetuate the market growth of the industry). So in short, this is a good thing and here is why: manufactured housing installation will finally be standardized and will match up with the factory design criteria. For instance if the home is designed in the factory for a 30 lbs. roof load, then it makes sense that a foundation must be installed based on the same specifications. What a concept that the understructure system should be able to support the roof - the same applies for wind and seismic zones as well.

Most of this is simply common sense and something that most general building contractors of site-built homes have been following for years. Items such as site preparation, drainage, fall, soil compaction are part and parcel to the check-list protocol for a standard site-built-home-contractor, and yet, something that the maverick, often unlicensed and uninsured installer has cast aside simply as nuisance or inconsequential to the installation standards. For a general spoof on the industry and the stereotype that unfortunately still prevails but needs to change, check out You Tube Bubba Inc., http://youtube.com/watch...

Thus, better regulatory installations will not only make homes safer, but will hopefully mitigate the pervasive and on-going issues of sticky doors, mating-line inconsistencies, understructure moisture intrusion, squeaks and the laundry list of other issues that can often leave homeowners unsettled about manufactured home living. Furthermore, it is our hope that with these changes, lending institutions will also begin to regard the manufactured housing industry with higher regard.Without the helping hand of the loan industry, not even the most affordable housing is a viable alternative for those that want to grab onto the American dream. Fortunately FHA has been aware of the state-to-state inconsistencies and in order to comply with their loan guidelines, they have requiree an engineer's certification of the home's foundation and any attached structures that may impact the structural integrity of the home. The engineer must cite that the home meets the HUD guidelines detailed the PERMANENT FOUNDATION GUIDE FOR MANUFACTURED HOMES, 1996. This is one situation where regulatory policy to enforce better installation guidelines will likely benefit all involved: the homeowner, the borrower, the lender, and most of all, the reputation of the manufactured home industry.

One factor to consider is the total cost of a manufactured home (including site preparation and other construction costs) to those of a site-built home. If you look into it thoroughly, you will soon see that there can be huge savings involved.

The current labor costs and the prices of the associated materials, which are different in each area, will set the actual construction costs. It's impossible to state construction cost averages that would be valid all over the country. They vary from region to region. On the other hand, when you look into the situation yourself, as to your own locality, weighing all aspects of prefabricated houses and houses constructed on-site, you will get a much better idea of the bottom line.

If you know people in the home construction industry, they can be valuable sources of information. When comparing the two types of construction methods, keep these things in mind:

If you are deciding between the two methods of construction, one important aspect to consider is that the cost of site work is about the same for both. Keep in mind that any type of construction will need a water source, a sewage system, a power source linked to the site, finish grading of dirt, and landscaping. Thus, the costs for these features are about the same for either type of construction.

At the very beginning of the project the initial cost savings are realized. A manufactured home does not require architectural design services, as all of the engineering is done “in house". The materials, both type and quantity, are the same, but a manufactured home, which is built in a factory, has many advantages. Local building authorities need not review detailed construction prints since the house plans for a manufactured home are approved by the federal government during the permit application and review process. This also cuts the time it takes for permits to be approved by the building department.

Today's manufactured home builders buy their materials in bulk, taking advantage of volume discount pricing. These savings are then passed on to the consumer.

In the factory environment, pieces such as studs, joisting and siding are available in pre-cut lengths and widths, decreasing the waste. Much waste is incurred during on-site construction, and the cost of removing scrap-building materials should not be overlooked.

Transporting equipment and laborers to a site-built construction project on a daily basis can get very expensive. With a factory environment, all tools and equipment for construction stay in place, and the workers travel to the fixed location daily. This method keeps factory labor line costs lower than on-site construction labor due to no start-of-the-day set up, no end-of-the-day clean up, and the permanent building location.

Since the HUD (Housing and Urban Development) building code applies to all manufactured homes, they generally do not fall under the jurisdiction of local building authorities. Therefore, fewer interruptions, all of which come with a cost, arise during construction because of local building inspections, and any necessary corrections arising from them.

The time it takes for on-site construction of the home is vastly reduced, because the major home sections are joined together over a foundation, with utilities already connected, and inside flooring and interior drywall completed. As with everything else, less labor hours lowers construction costs.

Since there is a shorter time for construction on manufactured homes, there is also a shorter construction loan period. Because of the shorter period, you will spend less money on interest payments, and you may be able to lock in a permanent interest rate sooner.

If you know someone in residential construction, ask them how much a home costs per square foot, including all necessary permits and amenities. That will give you a point of comparison when inquiring about manufactured homes. You’ll definitely notice the possible savings.

Article Source : Pg. 165

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Both Richard Oliver & Bo Von Brockdorff are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Richard Oliver has sinced written about articles on various topics from Home Management, Travel and Leisure and Home Security. . Richard Oliver's top article generates over 2900 views. to your Favourites.

Bo Von Brockdorff has sinced written about articles on various topics from Home Management, Real Estate and Finances. Bo Von Brockdorff writes articles for recommends the knowledgeable folks at Village Concepts manufactured home center. He writes articles about and. Bo Von Brockdorff's top article generates over 1000 views. to your Favourites.