Factory-built, Prefab and Modular Homes & ADUs - amazing! But there's a loan hitch

Factory-built, Prefabricated and Modular Homes & ADUs are often faster, stronger and built with better materials for greater energy efficiency and fire rand pest resistance. In homes hit by the #lafires, they can be built as quickly as 24 hours and craned onto a foundation. In high-cost areas, they can be cheaper than stick-built construction.

The only trick with factory built homes is the factory wants most of the funds upfront, and who can blame them. If you're using equity from your property, such a HELOC, then you're free to pay that cost. If you're using a construction loan, however, Fannie Mae guidelines only allow the upfront payment of 10% of the cost, and the remaining 90% is paid when either the house is installed or receives the final permit ("Certificate of Occupancy").

So if you're using a construction loan to rebuild your home or a new ADU, then be sure to ask the factory what their payment requirements are and whether they comply with Fannie Mae construction loans. It can make or break your order.