Today's Factory-Built Homes and Why You Should Check Them Out!

Demand for manufactured housing is growing as a way to close the affordability gap. Factory-built homes were once viewed as a low-quality alternative to site-built homes, but that's no longer the case. Factory-built homes are now built to similar standards but they cost less because it's less expensive to build any kind of product in a factory. Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review. Manufacturing housing is enjoying a rebirth of sorts. Factory-built homes were known as "mobile homes" in the 1970s, and there are plenty of them still in existence today. But the newly designed and produced manufactured homes are quite different, according to industry experts. Site-Built vs. Factory-Built Jim Ayotte is the executive director of the Florida Manufactured Housing Association based in Tallahassee. He recently spoke with the Tampa Times about today's manufactured homes and how they compare to site-built homes. (1) He told the Times that many people have an outdated perception of manufactured homes. He says people will say things like: "Oh, mobile homes, those old things? We don't want those in our neighborhoods. They're not really safe." But he says the new factory-built homes are built to the similar standards as site-built homes when it comes to "energy efficiency, wind safety and everything else." Those building codes were upgraded after Hurricane Andrew in 1992, for both kinds of homes. He says: "Today, manufactured homes are built to wind standards that are as high or higher than homes built to the Florida building codes." Today's manufactured homes also come in "all shapes and sizes." Depending on the size, some may have porches and/or garages. He says the higher-end manufactured homes are pretty much indistinguishable from a home that was built on location. Manufactured Homes in the Tampa Area Ayotte suggests that anyone interested in affordable homes should check out what you can buy today. And, he says there's plenty of places to find them in the Tampa Bay area. He says that from 2020 to 2021, manufactured home shipments have increased by 18% in Hillsborough County, which is home to the city of Tampa. To the north, in Pasco County, shipments are up 10% and farther north in Citrus County, they are up 26%. To the east, in Pinellas County and the St. Petersburg area, they are up 9%. And the manufactured housing trend is growing. He says there are nine home-building plants in Florida that have increased production by 30% over the last two years. And, he says, every one of them is backlogged. Like all home builders, they are running into supply chain issues right now, but Ayotte says that manufactured home builders buy their materials more efficiently and more cost-effectively. He says that prices are coming back down, but they never come down quite as fast as they go up. He says, currently, the average price for a manufactured home in Florida is about $101 to $102,000. That's up from about $84,500 in 2019. Those prices are without the cost of the land, but they still represent a big savings. When you do a cost comparison between site-built and factory-built homes, Ayotte says there's typically a 20% price difference. But he also emphasizes that the price difference isn't due to a difference in quality. He says it's because factory-built homes are built more efficiently. Improved Loan Access for Manufactured Housing The Federal Housing Authority is also trying to make it easier for homebuyers to get loans for manufactured homes. The agency recently issued new guidelines for its Title I loan program which provides loans for home improvements along with loans for manufactured homes. HousingWire reports that the FHA consolidated 120 separate policy documents so lenders won't have to sort through them all. It also updated some policies associated with the purchase of manufactured homes. One of the updates will permit a sales comparison approach to appraisals, for example. Another will expand allowable income sources for borrowers. (2) Manufactured homes could also make good rental homes, at a lower price point. In California, where state laws allow for Accessory Dwelling Units on single-family properties, homeowners can buy pre-made cottages to put in their backyards. And then of course, rent them out. The potential is there for not just affordable housing, but affordable rental housing. If you'd like to read more about this topic, you'll find links in the show notes at newsforinvestors.com. You can also join RealWealth, for free. As a member, you have access to the Investor Portal where you can view sample property pro-formas and connect with our network of resources. That includes experienced investment counselors, property teams, lenders, 1031 exchange facilitators, attorneys, CPAs and more. And please remember to hit the subscribe button, and leave a review! Thanks for listening. I'm Kathy Fettke. Links: 1 -https://www.tampabay.com/news/real-estate/2021/12/01/as-florida-house-prices-climb-demand-increases-for-manufactured-homes/ 2 -https://www.housingwire.com/articles/fhas-manufactured-housing-loan-program-gets-a-facelift/