small block home on grass

Modular Home Drawbacks

With the rising cost of home ownership, everyone is exploring ways to save on their new home. You hear a lot about the tiny home trend these days, although their numbers are relatively few and places to put them are limited. A much more commonly considered option is the modular, or prefabricated, home. Are modular homes a good way to get the most for your money on housing? Let’s take a look at a few things you should consider.

What is a modular home?

A modular or prefab home is partially built in a factory. The home arrives in modules, or panels, at your location, and is assembled at the site. Because of this, modular homes are typically built fairly quickly. They are offered in a range of designs and styles to suit buyer tastes.

While there are some benefits to modular homes, like quicker construction and lower costs, this option is not without its drawbacks. Today we wanted to explore a few reasons why a modular home might not be the best choice.

There are three primary issues when it comes to a modular home:

  • Costs & Payment
  • Restrictions
  • Perception

Costs & Payment

While modular homes typically are the cheaper option when buying new, the difference isn’t always great when compared to buying a used conventional home. Besides the cost of the home, you’ll also need to purchase land (which can be upwards of $100,000 depending on your preferred area) and factor in any additional development costs like water, sewer and electric service.

When it comes to actually paying for the home, the loan process is more complicated. In most cases, you’ll need to pay the builder in full before the home is finished, and will likely have to take out loans to cover the cost. Then, when your home is finished, the modular home company you’ve selected will pay off the loan and issue you a mortgage. This makes it absolutely critical that you shop around for the best interest rate.


There are several restrictions you can run into with a modular home that you probably never thought of.

You’ll need to select a contractor who’s knowledgeable about modular homes, and typically you won’t get the degree of customization you’d get with a custom-built home. Once fabrication starts it’s very difficult to make changes, and if you do make changes it can greatly affect the cost and timeframe.

Some neighborhoods or municipalities may have zoning restrictions in place that prevent the buyer from building a modular home on any lot within their jurisdiction. Also, it could be difficult to get the home delivered to your location, due to size limitations on US roads that include width, height, and weight restrictions.


Right or wrong, the perception that modular homes are of lower quality than custom-built homes can make reselling more of a challenge than with traditional stick-built homes. And in some cases there may be truth to that perception:  popcorn ceilings and sheetrock stress cracks can be turn-offs to potential buyers.

If you’re considering a modular home, fully investigate your builder, your finance options, and zoning restrictions where you’re planning to locate the home. If you decide you’d like the simplicity, flexibility and long-term value of a custom home, call Norman Graham Builders at 717-656-7336 to get started on your dream home.