A modular home is a home built in a factory setting, typically indoors, after which the finished parts are transported to the building location where they are assembled by builders. A modular home is not the same as a mobile home since it is usually placed on a permanent foundation, which never happens to a mobile home. A modular home is typically built much faster than a traditional on-site home.
Mortgage financiers treat a modular home exactly the same as a traditional on-site home. A modular home is taxed exactly the same as an on-site home, and it is a "real property." Building a modular home may be cheaper than a traditional home given the lesser amount of time spent on construction, which can take just two weeks. In comparison, completion of traditional on-site homes may take months due to extreme weather delays. Modular home inspections are conducted at the factory during each construction phase. Most modular homes are energy efficient resulting in cost savings, but the owner has to incur the costs of installing electricity and natural gas. Prohibitive land costs may arise because modular homes usually must be installed only on land that if fully owned, not subdivisions.