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What is a Prefab Home?

by Della Wang 31 Jul 2023 0 Comments

Think about a prefab home if you have your eyes on an economical house that lets you have a free reign on floor plans and styles. These kinds of homes have advanced overtime, providing today's homebuyers an opportunity where sky is the limit.


What are Prefab Homes?


Prefab houses could be the perfect alternative when you decide on a house that falls in line with your needs and wants. Instead of being constructed on the property it will be erected on, a prefabricated home will be built in — drum rolls, please — a factory. Prefab houses can be completely constructed in a factory and supplied as-is, or they can be sent in segments and assembled on-site.


Similar to stick-built homes, you may pick your home's design and then get the amenities and floor plan you would like in a new house.


Types of Prefab Houses


Prefab houses come in a variety of styles and floor plans. The kind you select will decide how the house is built and whether it is sent as a whole unit or in prefabricated pieces.


Manufactured houses


Manufactured homes are constructed on a frame in pieces at a factory and are then put together on-site.


Modular houses


Modular homes are likewise constructed in sections and assembled on-site, but they are not constructed on a chassis (i.e., a frame). Modular homes are constructed on a sturdy base and, for the most part, offer more flexibility in terms of floor layouts and home design. A crane is used to assemble the home on site after it is delivered in several prebuilt parts. When finished, it resembles a stick-built house more or less.


Kit homes


Kit homes are assembled on-site from prefabricated sections that are delivered. They are referred to as "ready cut" homes and are relatively easy for homeowners to put together on their own. Although log cabins are the most typical style of kit home, small cottages have recently gained popularity.


Panelized homes


Panelized housing is constructed in parts and set up on a solid concrete base. A flooring system, interior/exterior walls, and roof trusses are the typical elements. First, the foundation is constructed, then the house is delivered to the location and put together.


What is the average price of a Prefab Home?


Prefab house prices can vary significantly based on the floor plans, foundation type, and style of the house. Prefab homes cost between $50,000 to $300,000 on average for an initial investment. Due to the mass manufacture of the materials, this may be among the least expensive ways to construct a home. As homeowners are able to purchase at a decreased cost of buying parts in bulk, they can build homes at a lower budget.


However, there is more to it. Prefabricated dwellings are also affordable for the following reasons:


  • Less labour and building work needed
  • No delays caused by severe weather because the house is constructed indoors
  • Bulk construction of the house's components lowers part costs


Would a Prefab Home work out for me?


Prefabricated homes require financing, just like any other type of property. In contrast to stick houses, your choices could be more constrained. Following are certain alternatives for funding before you head to the market for prefab house purchases.


Loans for manufactured houses are available from certain lenders, but not all of them. You may be eligible for conventional or governmental financing if you have good credit, money for a down payment, and a low ratio of debt to income. It relies on the type of house and whether or not it is fastened to the ground permanently. Various lenders provide prefabricated house loans using conventional procedures.


Secondly, there is a loan for construction, which includes two facets. The initial hurdle is the prefab home's construction funding. It pays for both labour and material costs. Only interest must be paid on construction loans while they are being built, and to qualify, you must have a credit score of at least 620 and 20% equity in your property.


If you are unable to obtain conventional financing for your manufactured house, chattel mortgage may be an answer for you. The majority of the time, mobile homes are purchased using this financing, while it is also utilised for other products like vehicles and boats. They are a popular choice for some since they offer shorter periods yet don't need you to have ownership of the land the house is built on.


Pros and Cons of Prefab Houses


Let’s say you have weighed in all your options. The budget fits your purchasing needs, and the process is good to go on your word. If you are having doubts, though, let us lay out the marvellous advantages and the few disadvantages of purchasing a prefab house.


The Pros


  • Affordable: Prefab houses need less labour and are less expensive to build.


  • Sustainability: Prefab homes employ energy-efficient windows and have tighter seams. .


  • Construction of high quality: When constructing a prefabricated home, homebuilders offer home purchasers a variety of alternatives, including floor layouts and home designs.


  • Safety: Prefab homes are protected from weather extremes and other factors that may endanger the life of your family or your home.


The Cons


  • Zoning rules: If your prefabricated home doesn't adhere to the local zoning requirements, you might not be allowed to build it where you wish to.


  • Installing utilities: Given the location of the property, it may be difficult and expensive to install water and other amenities.


  • Fees up-front: Since you're fronting the expense of building the home rather than purchasing an existing one, you can have a lot of upfront fees if you don't use construction loan financing.


  • Financing restrictions: Prefab house loans aren't always available from lenders.




Prefab homes are a great way for new beginnings. Whether you're on a tight budget, want an environmentally friendly house, or speed up the home-buying process, a prefab home might be a terrific alternative. Start with the application process right now to discover your financing possibilities if you believe a prefab home is the best solution for you.


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