What do these 3 words have in common other than starting with the letter M? 
Just that most people use them like we use the word xerox for copy. And why should you as a real estate professional care? I mean aren't they basically the same thing, built in a factory and way cheap? Right? And to be perfectly honest there are some investors that do not know the difference, their guidelines say they will not finance modular homes with a HUD TAG and they think manufactured homes are single wides. After all the main definition of modular is anything that is built in 2 or more sections and assembled on site.
Well, let us start at the beginning when the home is sold to the first buyer. Did you know that there are 2 codes HUD (manufactured) or UBC/IBC (modular, the newest term is system built) and that there is on average $15 to 20,000 dollars difference in the same floor plan between the 2 codes? Fannie and Freddie consider UBC/IBC homes to be, well "stick built" and appraisers are to use "stick built" comps. Where as HUD homes must be comped to other manufactured HUD homes. Imagine now 2 or 3 years now the line and we are selling the UBC/IBC modular, but we do our CMA and use HUD homes. Bet you don't get the listing as you might be as much as $40 to 50,000 off. But if you use tract homes or semi custom homes to do your CMA or appraisal, you will get the listing and you will be correct according to Fannie and Freddie guidelines.
How can you tell???? Wow, there are some differences and those have been covered in a past post;but let us take some time to review them here. If you walk up to 2 identical homes one is a HUD and the other an UBC/IBC, the first thing to do is head to the left side of the home; depending on the type of siding there should be a 2X3 "red tag" on the home. You should fine it near the ground either in the front left or on the left where the sections are "married together". It may not be red anymore do to time and climate, but it should be there. That is your HUD tag. This is for all intend the building permit and certificate of occupancy. This tag says that the home is ready to be lived in once it reaches the building site and is "married together" and the electrical, plumbing and mechanical systems have been "pluged in". But what if it is not there or maybe someone has covered by a deck or garage? There should also be a 8X11 data plate usually in the hot water tank compartment or under the kitchen sink. This is generally removed by the home owner because they see it all the time and don't want to look at it any more. Here are some of the construction standards to look for that may help.
HUD UBC/IBC
Floor Joist 2X6 with 10 to 12 inch steel IBEAMS 2x10 or 2x12 (there are some on frame mods)
Interior walls 3 inch walls 24 inch on center 4 inch walls 16 inch on center
Back door Std is a trailer door,but generall upgraded 36 inch House Type Door
Windows smaller lots of storm type windows Dual pane and egress
Smoke Alarms by the sleeping areas in each and every room by code
and hard wired in
If you really want to tear it down even more. There are differences in the floor decking. Venting in the plumbing and even in the level of carpet. In a HUD home every thing is done and ready to live in. Furnace , water heater all bath rooms are ready to go. In the UBC/IBC if all you want is a shell, ok. Yes the differences are subtle, but if you know what to look for you can spot the difference. If you have a reputable dealer nearby or better yet a factory, call them for a tour. As a real estate professional it is just another bit of education. Don't think your potential seller or buyer knows after all modular is just a word like xerox.
Hope this post is useful.
Have a great Thanksgiving.......
;)
;)
