[StBernard] Modular Homes

[Westley Annis]

David,

I will go on record by saying a "modular" home is nothing but a fancy term
for a sectional or pieced-together mobile home.  Basically, it's a mobile
home in sections that is connected at the site, then the wheels are removed
as to avoid the term "mobile" home.

By no means am I degrading the dwelling...I'm just calling it the way it
"really" is.  If you do a little research on google, you'll find there has
been quite a legal (and legislative) battle over the years in many states
regarding the terminology of "modular" pre-fab vs. "mobile" homes.  Many
states, local governments have had to deal with this.  Where local
governments have created ordinances prohibiting mobile homes, government
lobbyist for the Mobile Home Manufactures faction have sought legislation to
change the terminology of what they build.  Naturally, state and local
home-builders associations have tried to fight this at every turn - and
rightfully so!  Sometimes they have been successful and sometimes not.

Generally, as a real estate appraiser, I stay away from appraising these so
called "modular" homes because no one has been able to proove to me they get
the long term market value of a regular built house.  I'm not saying they're
not a nice to live in.  In fact, some of them are nicer than many regular
built homes I've been in and can often be hard to tell apart from a regular
constructed home that is raised on piers.  The real difference is in the
quality of the construction and how well that quality will last over the
years.  That's why per square foot they don't cost as much as a regular
constructed home and possibly won't get the same market value over time.
There are always a few exceptions to the norm, but my comments are based on
the standard or typical product that is built.

The legal battle on this issue has often got ugly at times.  However, the
mobile home builders - I mean pre-fab modular buiders - appear to have won a
significant battle among the federal loan insurers - FannieMae, Freddie Mac,
etc.  For those agencies, they now consider the modular home to be a
dwelling like a regular built house.  This immediately outraged several
mortgage company loan officers I regularly work with.  As they put it, "just
because you screw off the wheels doesn't really make it a regular house."
These particular loan officers I know told me they try to find any reason
they can to decline the loan application on a "modular" home - especially if
it's a conventional loan - one that's not going through HUD or FHA.  If it
is a HUD or FHA loan, there's little they can do to stop it.  But, believe
it or not, it's that simple criteria by which the federal loan insurers are
going off of - whether or not the structure has wheels on it at the time
someone moves in it to live.

Personally, I think that's a crock - and that's why I personally decline to
appraise such properties.  I don't feel like putting my name to an estimate
value that might not really be there, especially in a few years - just
because some independent agency like FannieMae or FreddieMac says I have to
close my eyes and pretend it's like a regular built house.  A few years down
the road, if an owner of one of these types of properties goes to sell and
wonders why he/she can't get any more for it (or less) than when they bought
it five years earlier, they could try to accuse me (as the appraiser) of
over valuing the structure when they purchased it.  I could be facing
litigation.  That's why I do not appraise modular or mobile homes that
pertain to a loan.

Taking a lesson from Westley, let me say once again, as a disclaimer, do not
let my comments or opinion discourage you or anyone else from purchasing a
"modular home" or anything else you like .  My comments are only an opinion
and mine alone.

John Scurich