What Are the Regulatory Differences Between Manufactured Homes and Modular Homes?

When considering affordable, customizable, and efficient housing options, manufactured and modular homes are two popular choices. While both types of housing share similarities in their off-site construction and cost-effectiveness, they differ significantly in terms of regulations. These differences are particularly evident in regions like the Carolinas, where local codes and zoning play an important role.

Manufactured Homes: Federal Oversight Under HUD

Manufactured homes, commonly referred to as mobile homes, are constructed entirely within a factory setting and subsequently transported to their designated permanent locations. The regulation of these homes falls under the jurisdiction of the U.S. Department of Housing and Urban Development (HUD), which is responsible for enforcing the Manufactured Home Construction and Safety Standards, known as the HUD Code. This federal code was established in 1976 and undergoes regular updates to enhance safety, energy efficiency, and durability.

Key Characteristics of Manufactured Home Regulations:

National Standards
The HUD Code provides a uniform set of rules for all manufactured homes in the United States, including those placed in North and South Carolina. These rules govern structural design, fire safety, plumbing, electrical systems, and thermal performance.

Transportation Requirements
Manufactured homes are built on a permanent steel chassis and are designed to be transported to their site. They must comply with specific transport and installation guidelines outlined in the HUD Code.

Zoning Challenges
In the Carolinas, zoning regulations for manufactured homes can be restrictive. Many municipalities classify manufactured homes as “mobile homes,” limiting where they can be placed. For example, some cities only allow manufactured homes in designated mobile home parks or rural areas.

Permanent Affixture
While manufactured homes can be placed on permanent foundations, their designation as “personal property” (similar to your vehicle) rather than “real property” can complicate financing and property taxes. Owners in the Carolinas must often take additional steps to convert their homes to real property to qualify for conventional mortgages.

Modular Homes: State and Local Building Codes

Modular homes are also constructed in a factory setting but are regulated differently. They are built to meet state and local building codes, just like traditional site-built homes. In the Carolinas, these homes must adhere to the respective state building codes for North Carolina or South Carolina, which are based on the International Residential Code (IRC).

Key Characteristics of Modular Home Regulation:

State and Local Standards
Unlike manufactured homes, modular homes are not governed by a federal code. Instead, they must meet or exceed the building codes of the jurisdiction where they will be placed. In the Carolinas, this means compliance with state-specific requirements for wind resistance, insulation, and foundation types.

Inspection and Certification
Modular homes are inspected both during factory construction and after installation on-site. In North Carolina, for example, modular homes must receive a certification seal from the North Carolina Modular Building Program, confirming they meet state building standards.

Permanent Foundations
Modular homes are always placed on permanent foundations, making them indistinguishable from site-built homes once installed. This distinction qualifies modular homes as real property from the outset, simplifying financing and property taxes.

Zoning Flexibility
Because modular homes meet the same building codes as site-built homes, they face fewer zoning restrictions. In many parts of the Carolinas, modular homes can be placed in residential neighborhoods without issue, provided they meet aesthetic and size requirements.

Zoning Laws in the Carolinas
Both North Carolina and South Carolina have zoning laws that impact where manufactured and modular homes can be located. These laws vary significantly by municipality and county, reflecting the diverse urban and rural landscapes across the Carolinas.

Manufactured Home Zoning
Many cities in the Carolinas, such as Charlotte, North Carolina, impose strict zoning rules on manufactured homes. These restrictions often limit their placement to mobile home parks or rural areas. In contrast, smaller towns and rural counties may have more lenient zoning policies, allowing manufactured homes on private lots with fewer restrictions.

Modular Home Zoning
Modular homes typically face fewer zoning challenges in the Carolinas because they comply with state and local building codes. In areas like Raleigh, North Carolina, and Greenville, South Carolina, modular homes are treated similarly to site-built homes and can be placed in most residential zones.

Building Standards in the Carolinas
The Carolinas are known for their diverse climate, which includes coastal regions prone to hurricanes and inland areas subject to severe storms. These environmental factors influence building codes and standards for both manufactured and modular homes.

Manufactured Homes

1. • Manufactured homes in the Carolinas must meet wind zone requirements outlined in the HUD Code. Coastal regions, such as Wilmington, North Carolina, fall into Wind Zone II, requiring homes to withstand higher wind speeds.
   • HUD Code requirements also address flood resistance, which is critical for manufactured homes placed in flood-prone areas.

Modular Homes

1. • Modular homes must comply with state-specific building codes, which often include stricter wind and flood resistance standards for coastal areas. For example, South Carolina’s building code requires homes in hurricane-prone regions to meet enhanced structural integrity standards.
   • In mountainous areas of western North Carolina, modular homes must also adhere to snow load requirements to ensure roof safety.

Financing and Taxation Differences
The differences in regulation between manufactured and modular homes also extend to financing and property taxation.

Manufactured Homes

1. • Manufactured homes are often classified as personal property unless they are placed on a permanent foundation and converted to real property. This classification can result in higher interest rates and limited loan options.
   • In the Carolinas, property tax rates for manufactured homes may differ depending on whether they are classified as personal or real property.

Modular Homes

1. • Modular homes are always considered real property, making them eligible for traditional home loans and lower interest rates.
   • Property taxes for modular homes are the same as site-built homes, providing a financial advantage over manufactured homes.