According to the latest National Modular Housing Council report, factory-built homes are more popular than ever, and will continue to be if the industry can continue to overcome outdated notions by homebuyers, builders, and real estate agents as to their benefits.

Manufactured housing is built in a factory and transported, in modules to the building site, while "stick-built" homes are built on site from the foundation up. Today, manufactured housing comes in a wide range of modular plans and materials, and are used to make complete homes on residential building sites, or sold in modular parts to speed stick-built housing along. In 2002, a manufactured home cost an average of $32 per square foot, while a site-built home cost over $75 per square foot.

Not only are builders increasingly using modular parts like trusses and walls in on-site building, but they are finding that building with manufactured parts can save on weather-related delays, theft of materials, labor problems, quality control, and other concerns. In addition, new innovations in technologies and delivery systems mean that manufactured and modular homes can be esthetically competitive with site-built homes. Among recent advances are the ability to produce nine foot ceilings and hinged roofs with 12:12 roof pitches, and with the addition of foundations, garages, porches and decks, manufactured homes can blend seamlessly into existing neighborhoods of site-built homes.

"Today's factory-built homes are often hard to distinguish from site-built homes because they are constructed with the same materials and features such as 5/12 pitched roofs, bay windows, and permanent foundations with garages and porches," says Mark Brunner, spokesperson for the Minnesota Manufactured Housing Association (MMHA). "Like site builders, factory-builders offer hundreds of floor plans to customize with options like fireplaces, whirlpool tubs, walk-in closets and tray ceilings."

The difference between manufactured homes and modular homes are a matter of codes. Manufactured homes meet federal codes, and modular homes meet state codes, but they are both factory-built. Every factory-built home must pass a rigorous inspection, says the MMHA, and meet the state and federal standards before it leaves the factory. The federal building code, often referred to as the "HUD Code," a performance-based building code, regulates the construction of manufactured homes. Modular homes are built to state codes, or the International Residential Code (IRC), which is also a part of the Minnesota State Building Code.

The advantage for homebuyers is that the product has to pass federal code and is labeled as such. Generally, the federal code is more flexible and allows more innovation than state codes, but both are strict as to such items as ventilation, flame spread, structural loads, window construction, vapor retarders and service wiring.

One of the most important hurdles to manufacturing housing being more widely accepted is financing, another factor in keeping costs lower, particularly for the increasingly difficult-to-serve first-time homebuyer market. Today, says Brunner, manufactured homes can be financed with conforming loans.

According to Brunner, Minnesota's modular home production reached 1,347 in 2004; an increase of 23 percent from 1,094 homes in 2003. Modular homes accounted for 3.3 percent of the new, single-family homes constructed in Minnesota. Modular home production in Minnesota has increased 53 percent during the past five years.

Brunner says that the majority of these homes are not for lease-land communities as in the past, but are being purchased and financed for single-family owned parcels.

Modular home production has increased nationally as well, building 42,700 homes in 2004, up 13 percent from 37,800 in 2003. Fueling this growth is a combination of low interest rates, a push from the federal and local governments for more affordable housing, and a growing consumer awareness that the quality in factory construction offers many advantages over site-built homes.