The landscape of new home construction is changing through additional methods of building. One particular method is modular construction—also termed offsite or factory-built construction. This type of construction represents only 3% of the current building market, but is growing.
When a house is built in a factory, there are many differences compared to typical construction. The completed home is shipped in sections, or modules, on a flatbed truck to the new site. A crane and certified set crew are involved to properly place the house on the foundation. (Modular construction can be designed on an infill, urban or rural lot, as long as a crane can access the site to place the home.)
At this point, the general contractor and their crew will complete the site work necessary to make the house ready to occupy. The difference is that they begin their projects on an already built house, knocking months off the schedule.
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As with traditional building, the home design is created with architectural and structural plans, which are either provided by the factory itself or can be customized per the client’s request. Once the plans are approved, the homeowner will select all the finishes: cabinet and countertop styles and colors, flooring, appliances, lighting, showers, tubs, tile, paint colors, siding, roofing and other exterior materials. At this point, the modular builder is able to provide a fixed cost to build the client’s desired home.
The builder will then send the plans, modifications, and snow and wind loads per the county building requirements to the Colorado Division of Housing for approval. Once the state reviews and approves the build plans, and the land purchase is finalized, the homeowner can request bids for site work to select a licensed general contractor for their project. The general contractor will be responsible for such details as pulling the building permit (per code for that county), creating the build schedule and selecting contractors for each phase of site work.
Financing a modular project
Modular homes are constructed under the same International Residential Code as site-built homes, which means these new homes appraise for the same value. This is important for the lending process. Mortgage companies and banks can finance modular homes with conventional and construction loans, as well as home loans through the Federal Housing Administration or the U.S. Department of Agriculture’s rural development home loan program.
If you are considering becoming a modular builder, you must be licensed with the Colorado Department of Local Affairs and have the proper building insurance. It is highly recommended you have experience in construction. You should research the factories building the products you would like to sell, as well as ensure you are able to contract with that factory. Many factories have existing partnerships with other builders (dealers) and limit the number of dealers they’ll work with in each state.
Audree Grubesic is owner of Modular Sure Site, a general contractor on modular homes, and president of Connect Home Builders, a licensed modular home builder. She can be reached at [email protected].