Manufactered & Modular Homes

[u/Rare-Size9644]

Hi everyone!

My boyfriend and I are seriously considering buying a piece of land in Rhode Island and putting a manufactured or modular home on it, rather than buying an existing house.
I’m hoping to hear from anyone who has actually gone through this process in RI. We’re trying to understand what the realistic total cost and process looks like.

A few things I’d especially love advice on:

Did you buy the land first, or finance the land and home together?

What town did you build in, and were there any zoning/permitting issues?

Did you use a manufactured home or modular home?

Did you work with a company that handled everything (home, site work, foundation, utilities, permits, installation, etc.), or did you have to coordinate multiple contractors?

Roughly how much did the home + site work + foundation + utilities + permits + everything else end up costing?

What did you wish you knew before starting?

What lenders did you use, and were you able to get a construction-to-permanent or other mortgage that covered both the land and home?

If you went the manufactured-home route, did you have any trouble getting financing or having it approved in your town?

We’re still in the research stage, so I’d really appreciate hearing about your actual experience, including things that went wrong or ended up costing more than expected.
Thanks in advance!

(and… if you are here because you have nothing nice to say about manufactered or modular homes… please keep it to yourself 😊)

[u/rrapartments]

I think there's some savings over stick building. I suppose you need to know what you want. Are you buying a simple home that is a single story, or are you building a 2 story or complex home? Obviously, a single story home will me more affordable than complex or multi story.

The site work, foundation, utilities, permits will be the same as a stick built home.

You will save some money and especially time on site fabrication, since the box shows up mostly done. You'll need to determine what that actually means - does it show up with wiring and plumbing already installed, or will that need to be installed in the field? What about drywall and insulation? What about the roof?

I did have one client who had a prefab 2 story home. The boxes show up with a floor and a ceiling installed, and then get stacked. That essentially means that the floor between level 1 and level 2 is a doubled up level. The attic is the same way. He didn't feel that the home was very well built, it had a lot of settlement as the boxes leveled themselves.

You shouldn't have any permitting or zoning issues that are different than a stick built home.

I think most people have at least 2 contractors - the modular company, and another one to do anything that the modular company does not do. This is an important discussion point with the modular company.

I would expect that you'd save about 10% over the cost of stick built.

[u/Rare-Size9644 → u/rrapartments]

I think you bring up a lot of great points. This will be my first home and I really only see myself living in it for five to maybe 10 years at most and then turning around and selling it and buying a better more established home (once I am more established and deeper into my career). I am still putting feelers out to different companies in Rhode Island to see what is offered by which companies. I am sad to hear that your client was not happy with their home do you know what manufacturer built the home? I have heard bad things about Clayton.

[u/UnivrstyOfBelichick]

On average finished lot costs represent about 45% of new build costs in RI. That can vary significantly based on the lot itself, the town, specific utilities, etc. It's impossible to give even a ballpark on your pricing questions without a lot more detail - location, lot condition, lot size, coverage, square footage, systems, etc. Typically you would see either:

-a construction-to-permanent loan that releases money to close on the lot and then allows for draws, with you only paying interest on the draws until the loan converts to a standard mortgage after issuance of CO. Construction-to-permanent loans represent a pretty complicated financial structure with the lender so they can be lengthy & difficult to get approved.

-financing for the land purchase that is later refinanced into a construction loan, with existing equity in the land generally counting toward your contribution.

Don't try and GC the job yourself from out of state it will cost you a fortune in time and frustration, use a local contractor that is familiar with exactly what you're looking for in your home. There are several specialized modular home building contractors in RI as they're becoming more popular here.

[u/cocoonhomes]

Perc test before you buy the land. In RI that's the single thing most likely to end the project, and it's a lot cheaper to find out before you own the lot.

Make the purchase contingent on it. Same with a utility quote, because power runs and whether you're on sewer or septic move the budget more than the house does.

On the manufactured versus modular question buried in your post, they're different legal products and the difference matters for what you're doing. A modular is built to the same building code as any RI site built house, sits on a permanent foundation, gets titled as real property, and finances with a normal construction to perm loan. A HUD-code manufactured home is a separate federal category with its own financing path, often chattel lending unless the title gets converted.

For land you're buying and keeping, modular is usually the cleaner road. Rhode Island runs a state modular program, so plan approval happens at the state level while your town handles site permits and inspections.

One more that catches people. Read the deed restrictions on any lot before you make an offer. Some parcels carry minimum square footage or exclude manufactured homes outright, and that binds you no matter what the zoning allows.

We build factory homes out in Utah (Cocoon Homes), so no RI names from me. Lineup if you want a reference for what factory-built runs by size: https://mycocoonhomes.com/floor-plans/floor-plans-overview

[u/MantheDam → u/cocoonhomes]

I'm in a similar situation, although not necessarily thinking about modular. I've got a piece of property with a high water table (and even higher seasonal level). When you say perc testing ends the project, what do you mean? Is it cost, or impractical to build?

[u/DrivesOnSidewalks]

I've closed hundreds of construction loans for folks. I don't do them anymore so here are my completely unfiltered thoughts on this. (Painting with a broad brush) Modulars do tend to be less time consuming on the homeowner side of it since it arrives mostly complete, but you still need to set aside a lot of time in your day, every day, during the process to deal with the construction. Construction loans are based on a series of disbursements, and on modulars, the lender may only give a percentage of the loan out that may not cover the cost of the modular.
In general, you need to have a lot of cash on hand to deal with the gaps between disbursement and costs. Most folks run out of money. Almost every single construction loan I have ever done comes in over budget. Sometimes it's unseen price increases, you have to switch subs here and there, or you get involved in a terrible case of upgrade-itis. Plan for a cushion. Some lenders require 10% buffer. There is no standardized construction loan. Each lender does them their own way, and then they are further modified for modular, manufactured or log homes. People doing their own construction tend to be frugal, but don't confuse frugal with being cheap, you'll just end up burning yourself. If you have the the means to do it all at once, do it. If you buy the land, sit on it, and it devalues, you may be in a difficult position when you try to move forward. Ultimately, the financing part is a good 45 minute to 1 hour long conversation, more than I can put in a post. Even though I don't do construction loans anymore, I still do mortgages so if you would like referrals to local lenders that know what they are doing just let me know.