Both modular homes and mobile homes are considered to be prefabricated homes, meaning that they're built in sections somewhere other than the site where they'll eventually be permanently positioned. The prefabricated sections are transported from the manufacturing location to the building site and assembled there.

Terms and Definitions

Mobile homes, which are also commonly called trailer homes, are constructed in one, two or three sections and are referred to as single-wide, double-wide or triple-wide, respectively. Mobile homes are transported to the building site on their own built-in wheels, the characteristic that has led them to be called mobile homes or "trailers." Mobile homes are more easily moved to a different location than modular homes, which are considered permanent once assembled at the home site.

Modular homes, or manufactured homes, are also built in sections and assembled at the building site, but the sections are transported on trucks rather than on their own wheels. Modular homes, unlike mobile homes, may also be more than one story in height.

Construction Differences

Modular homes are built using construction techniques and materials similar to those used in the construction of homes built on site, and they may be assembled on a foundation just like a site-built home. Because of the relatively tight construction tolerances employed in the manufacture of modular homes, along with the robust construction required for the sections to survive transport to the site, modular homes may, in fact, be sturdier than site-built homes.

Mobile homes, in comparison, tend to be more quickly and cheaply built than modular homes. They are typically not installed on a permanent foundation and are instead left to rest on the steel chassis on which they were transported to the site.

Code Differences

Mobile homes are not required to conform to the same building codes to which site-built homes must adhere. Rather, mobile homes are only required to meet the less-stringent standards set by the U.S. Department of Housing and Urban Development. They are also not required to be approved by local building inspectors in the same way that site-built homes are.

Modular homes, however, are bound by the same local, state and regional building codes as site-built homes. Like site-built homes, they must pass inspections conducted by building inspectors.

Financial Differences

Modular homes, although often less expensive than site-built homes, are typically financed in the same way that buyers finance traditional construction. Like traditional real estate, they may appreciate in value, and banks are often willing to refinance them in the years after they're built.

Compared to modular and site-built homes, mobile homes are inexpensive, and they are financed differently. Because they are often installed on land not owned by the home owner, they may be financed as personal property rather than real estate, and lenders put them in their own special lending category. Mobile homes will also depreciate rather than appreciate in value over time.