According to both ModularHomeowners.com and Clayton Homes, prefabricated homes are buildings that arrive on location already assembled to varying degrees. This is beneficial to the homeowner as prefabricated homes allow the flexibility of building a house to an individual's taste without the expense of a custom-made home. Once a company and home is selected, potential buyers either purchase the building outright or apply for a home loan.
According to ModularHomeowners.com, prefabricated homes are preassembled into sections in a factory and then shipped for on-site completion. Manufactured homes, on the other hand, are completed in a factory and do not require on-site construction. Clayton Homes notes that prefabricated homes must be assembled in a factory and erected on-site to qualify but also include manufactured homes in this group. Both sources attest that all types of preassembled homes must meet national building codes. Since 1976, the Department of Housing and Urban Development has overseen the regulation of preassembled dwellings.
Manufactured homes, as described by ModularHomeowners.com, are not as cost-effective as partially assembled homes. The former depreciates in value upon leaving the factory unlike homes that require construction on site that follow conventional home appreciation standards. Further, ModularHomeowners.com states that manufactured homes require frequent maintenance.