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March 10, 2020

a special section of The Derrick. / The News-Herald

2 – THE DERRICK. / The News-Herald: Tuesday, March 10, 2020

New decade may bring new homebuyers

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By WIL FERGUSONThe traditional site-built home industry is still

struggling with a shortage of affordable housing to meet the dreams and needs of first-time homeown-ers, but are hopeful the new decade will see more millennials become homebuyers for the first time.

Fortunately, there have been thousands of first-time buyers that have discovered manufac-tured housing that meets all their wishes and aspirations for high-quality affordable home-ownership.

While first-time traditional homeownership mortgage rates have been in decline over the last few years, there is a sense of optimism that some of the challenges associated with the decline may be improving as we enter into the new decade.

Manufactured housing can help millennials meet their dreamsof homeownership

See MANUFACTURED, Page 3

THE DERRICK. / The News-Herald: Tuesday, March 10, 2020 – 3

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“While we’ve recently seen a boom in refinance activity, actual homeownership rates are down. Challenges have included high home prices, sluggish wage growth, and limited housing inventory,” said Joe Mellman, senior vice-president and mortgage leader at TransUnion (reported online by HousingWire).

But we may be starting to see daylight as slowing home price appreciation, low unemployment, increased wage growth and low-interest rates are helping affordability, Mellman added.

“As a result, we are optimistic that first-time homebuyers will contribute more to homeownership than at any time since the start of the Great Recession,” he said.

Consistent growthMeanwhile, the manufactured housing industry

since the beginning of the Great Recession recovery in 2011 has posted year-over-year growth in produc-tion of manufactured homes and modular housing for eight consecutive years of the last decade.

The consistent growth of manufactured housing has been buoyed by first-time home buyers discover-ing that a manufactured home “is everything a home should be,” and will have a cost up to 50% less than a comparable traditional site-built home, including

quality of construction, appearance, safety, and value retention.

Contrary to the general narrative surrounding the Millennials (ages 23 to 38) and home buying (they would rather rent because they don’t want to be tied down by a mortgage), Millennials are responsible for more home mortgages than any other generation, especially manufactured home financing.

In a Transunion survey of 943 U.S. residents who have never owned a home and express interest in buying one in the next three years. Of those 943 sur-veyed, 45% said they were seeking more privacy when buying a home, and 44% said building equity /wealth was important when seeking a home.

Little Known Fact: When properly maintained, manufactured homes will appreciate (or depreciate) like any other form of housing in the surrounding area, and will not have a negative impact on the value of those homes.

Recent data by the Urban Institute, released by the Federal Housing Agency concluded the price index for manufactured homes performed at an annual rate of 3.4% versus 3.8% for site-built homes.

The TransUnion study indicates that respondents are delaying home purchase due to not having enough money for a downpayment is why 58% said they are delaying their home buying, and 51% said they thought they would need between 10 and 20% for a down payment, which is why they are delaying buying a home.

Little Known Fact: A manufactured home affixed

to real estate will qualify for mortgage financing similar to a site-built home, including FHA, VA, with a down payment as low as 3%.

A manufactured home not attached to real prop-erty or located within a land-lease community is financed as a chattel (personal property without encumbering the land). “Home only” financing typi-cally requires a minimum 5% down payment. Because total consideration is considerably lower, the required down payment will be proportionately less.

“There has been a lot of discussion in the market-place that younger people today may not be as inter-ested as prior generations in buying a home and being tied down to one location. Our survey results say that is not the case at all,” Mellman said. Rather, younger people may have in fact been deterred from home purchase by challenges they face in the finan-cially difficult times of the last decade.”

(Wil Ferguson wrote this article for www.ManufacturedHomes.com, an online resource for the manufactured housing industry.)

Manufactured�

Continued from Page 2

Editor’s Note:The photo on the cover of a house being built, as well as other photos inside this section, were provided by Structural Modulars Inc. in Strattanville.


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Factory-built homes offer affordable housing options

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The need for affordable, quality housing has never been greater. Today’s factory-built homes are built to a fed-eral building code and can provide outstanding quality and performance at prices ranging from 10 to 35 percent less per square foot than conventional site-built homes.

To ensure quality, the design and construction of the home is monitored by both HUD and its monitoring con-tractor.

The red seal, or certification label, attached to the exterior of the home indicates that it has undergone one of the most thorough inspection processes in the home building industry.

The more affordable pricing of man-ufactured homes can be directly attrib-uted to the factory construction pro-cess.

The controlled construction envi-ronment and assembly-line techniques remove many of the problems encoun-tered during traditional home construc-tion, such as poor weather, theft, van-dalism, damage to building products, and unskilled or undependable labor. In addition, manufacturers benefit from purchasing large quantitites of building materials, products and appliances for the construction of your home. Builders of manufactured homes are able to negotiate savings on many of the com-ponents used in building their homes, and they pass these savings directly to you, the homebuyer.

The HUD Code is the building stan-dard to which your home is built. The HUD Code is specifically designed for compatibility with the factory produc-tion process.

Home units are built inside the Structural Modulars Inc. factory in Strattanville. Factory-built homes are built according to federal building codes. They provide quality housing with prices ranging from 10% to 35% less per square foot than conventional site-built homes.

See FACTORY, Page 6

Performance standards for heating, plumbing, air conditioning, thermal and electrical systems are set in the code. Also, requirements are estab-lished for structural design, construc-tion, fire safety, energy efficiency and transportation from the factory to the future site for the home.

Advances in technology allow man-ufacturers to provide more architectur-al styles, exterior finishes and custom-ized interior designs than ever before. Unless you are purchasing a home that is already constructed, one of the first and most exciting parts of the home building process will be customizing your new home.

Create a budgetBefore you decide which particular

home you wish to purchase, you’ll want to determine a ballpark figure of what you can spend in order to make a comfortable monthly home loan pay-ment.

To help determine how much you can afford to spend towards purchasing a home each month, lenders have developed some guidelines. In qualify-ing for a home loan, lenders look at the buyer’s “home-debt ratio” and their “total-debt ratio.” The home-debt ratio is the percentage of gross monthly income (before taxes) that homebuyers will spend on monthly housing costs. Monthly housing costs include the

mortgage payment, taxes and insur-ance. Lenders generally will want to see a ratio of 28% or lower.

The total-debt ratio is the portion of income that goes toward covering both the monthly housing costs and other obligations, such as credit cards, car loans and child support. There, a lender will want to see a ratio of 36% or lower.

These ratios are flexible guidelines. For homebuyers thought to be good credit risks, or for those making large down payments, somewhat higher ratios can be used.

Customizing your homeIf you are buying a custom built

home rather than an existing model, you will work with a sales person or another team member to select the options and features for your new home that will meet your specific wants and needs.

While the options may be many, it is important to understand that only options offered by the manufacturer of

your home can be selected.You will want to develop a list of

options and features and prioritize which ones are essential, and which ones are desired and preferred. The options you choose will impact the final cost of your home, and some fea-tures may be more important to you than others. Some of the options you may want to consider for customizing your home are listed below:

Energy Savings — EnergyStar con-struction, if available: HVAC, win-dows, additional insulation; EnergyStar labeled appliances.

Exterior — 3/12, 4/12, 5/12, 6/12 or higher roof pitches; extended eaves or gutters; outside water faucets and electrical outlets; optional siding mate-rials and treatments including dormers and window trim; foundation treat-ments; decks and stairs; garage ready; shingle color and grade; and basement ready.

Doors, Windows, Walls and Ceilings — many manufacturers offer a variety of door and window styles and sizes such as bay win-dows, skylights, French doors, etc.; window treatments like blinds, cur-tains and draperies; tape-and-texture drywall construction; paint and color choices; baseboards and accent molding; and cathedral or 9-foot flat

ceilings vs. 8-foot flat ceilings.Appliances — larger water heater

for big families, dishwasher, built-in microwave oven, self-cleaning oven and refrigerator upgrades such as ice-maker and door access for water and ice.

Lighting — optional chandeliers or ceiling fans may be available; over-head lighting in family rooms and some other rooms may be optional.

Carpet and Flooring Options — upgraded carpet and padding options, vinyl, hardwood and tile.

Bathrooms — number of sinks, fixture options and shower and tub choices.

Cabinetry and Countertops — solid hardwood cabinets; customized built-ins such as pantries, book cases, hutches, computer desk, etc.; and solid surface countertops.

Once you’ve selected your custom options, your home’s manufacturer will provide a sales order confirmation. It will itemize the options you have selected and your home retailer will review the information with you for accuracy and you will need to sign and approve the order. When the home is delivered from the manufacturer, the retailer will check the home and ensure that the items that are shipped with the home are accurate and complete.

Your sales contract or purchase agreement on your new home may also include other areas of construction such as garages, porches, decks, drive-ways, etc. It is important to obtain all information about your home purchase in writing from the home’s retailer.

Once you have signed the sales agreement for your new home, you will be provided with information on applying for a home loan.

— Manufactured Housing Institute


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Factory�

Continued from Page 5

There are many incorrect notions about modular homes, including the idea that factory-built homes are infe-rior in quality to stick-built homes.

Here are some of the more common misconceptions about modular homes:

Myth No. 1 – Modular Homes are Manufactured Housing (Mobile Homes)

FACT: Even though the two words modular and manufactured sound very much alike, they can’t be more differ-ent.

Modular homes are NOT manufac-tured homes (commonly known as trailers or mobile homes).

Manufactured homes (mobile homes) are built to a set of building codes governed by HUD, thus making them lesser expensive to manufacture with faster assemblies. They remain on their frame after transport make them mobile.

Modular homes are delivered to the building site and set onto a foundation or basement.

Modulars are built to the same build-ing codes as on-site construction (all local, state and/or regional codes), but require stronger construction than on-site built homes. Also, a custom modu-lar home can be two or more stories high and in variety of widths and lengths.

Myth No. 2 – Modular Homes are Not as Safe as On-Site Built Homes

FACT: Modular homes building requirements actually exceed those of on-site built homes. Modulars have

specifications that require them to be stronger for transit. The truth lies in the fact that modulars are built with 2x6-inch wall construction and an engi-neering firm signs-off on all floor plans.

On-site builders are not required to do this and many don’t.

Even FEMA has noted that modular construction withstood hurricane Andrew better than on-site built con-struction.

“The module-to-module combina-tion of the units appears to have pro-vided an inherently rigid system that performed much better than conven-tional residential framing.”

(www.modular.org/marketing/docu-ments/FEMA_HurricaneAndrew_Report.pdf)

Myth No. 3 – Modular Homes are Cookie-Cutter Floor Plans and Materials

FACT: Again, this myth is also false. Modular homes and professional

projects built by SMI are completely customized per the customers’ needs and budget.

The company has a large spacious showroom for you and your builder to work with its sales team to choose each and every detail going into your new

home. If SMI doesn’t have a sample of it, it can get it for you.

(This article was provided by Structural Modulars Inc. Other articles can be viewed online at smihomes.com.)


Debunking common myths about modular homes

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When it comes to planning or design-ing your new modular home, there are so many things to think about.

From the wall plugs to the roofing, designers have had years of experience putting it all together to meet your life-style.

Working with the home manufacturer and your approved builder is the first step towards a smoother experience.

Step No. 1 – What’s your style?

By selecting the style of home can greatly reduce time wasted on floor plan design. Do you want it all on one floor?

Do you like a more modern look with an open floor plan or would a more con-ventional style home suit your needs.

The style of your new modular home is the place to start.

Step No. 2 – What rooms do you need?

This starts with how many bedrooms. How many baths?

Do you do a lot of entertaining and need a separate dining room?

Do you prefer a larger family room or does it need to be separate with a more

formal living room. It is best here to make a list and then your builder and our designers will work with you on your needs and your budget.

Step No. 3 – What can’t you live without?

Make a list of everything you want. Don’t think of the cost just yet.

Get your creative juices flowing and put it all down on paper.

Here are some options to consider:� Heated floors� Solar power� Walk-in closets� Built-in shelving� Finished basement� A walk-out basement� Professional kitchen and island� A master bath and bedroom� A game room� A movie room� A SMART house� A garage

(This article was provided by Structural Modulars Inc. Other articles about modular homes can be viewed at smihomes.com.)


Be circumspect when choosing the right floorplan

When it comes to customizing your modular home, there are many options available and homeowners should take their time deciding what they want and need.

manufactured modular homes€¦ · twin mattresses as low as $9900 each piece * e g flooring...

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