Buying Land for a Prefab Home? The Most Important Things About Property for Modular and Manufactured Units

With so many people being priced out of the housing market these days, more and more homebuyers are considering prefabricated homes—also known as modular and manufactured homes.

And the powers that be are getting wise to this. President Donald Trump signed an executive order to create a task force that accelerates manufactured housing development in October, while Congress codified changes to the sector in its 21st Century Road to Housing Act earlier in the year.

The desire to ramp up a road to these kinds of home is understandable: Prefab houses are way less expensive than your typical home—and often just as beautiful. Indeed, many of today's models can be easily mistaken for a traditionally built home.

Buying land to put a prefab home on is part of the adventure. Do you want to live on 40 lush acres in Stockton, MO? A desert oasis in Joshua Tree, CA? Or how about an off-grid lot in Grants Pass, OR? The possibilities are endless.

If you're dreaming of buying a shiny, new modular or manufactured home, here's what you need to know before you purchase land to put it on.

What's a prefab home?

Prefabricated homes are constructed via an assembly line production in sections inside a factory and then assembled on-site.

Modular homes are constructed to the same standards as conventionally built homes and must meet regional building codes. Homebuyers can choose from one- or two-story homes in a wide variety of floor plans and architectural styles, such as a Cape Cod, Craftsman bungalow, Colonial, A-frame, or farmhouse.

Manufactured homes (also known as single-wide and double-wide) don't need to comply with local building codes but must adhere to the strict federal building codes set by the U.S. Department of Housing and Urban Development. Manufactured homes aren't as customizable as modular homes, but they offer several different floor plans and add-ons.

A great number of tiny homes on the market are prefabricated houses that are built in factories and then assembled on site. 

Many accessory dwelling units, which are gaining popularity, are also prefabricated homes—otherwise known as modular ADUs.

How much do prefab homes usually cost?

When it comes to the costs of these types of homes, there are so many variables to consider.

First, there's the cost of the prefab home itself.

The average sales price of a manufactured home is $124,300, according the most recent HUD and Census Bureau data.

Meanwhile, a 600-square-foot, two-story tiny home that comes complete with a roof deck, glass sunroom, and up to four bedrooms is currently for sale on Amazon for $49,999.

But that's not "all-in pricing" by any means.

The cost of the land you put your prefab home on can vary widely—as can the expenses you'll likely incur next.

You've got to pay for site preparation—including clearing the land, laying the foundation, and possibly testing the soil.

Transporting the home to the site, as well as securing permits and inspections, can be quite expensive.

If your home is unassembled, you'll need to hire a contractor to put it together, unless you have the know-how to do it yourself.

And you'll need to cover the costs of setting up utilities like water, electricity, and sewage, and hooking them up as well.

All of these expenses are outlined in greater detail below.

What type of property should you buy?

You can't just plop down your new modular or manufactured home anywhere you like.

Many neighborhoods don't allow manufactured homes or tiny homes, so it's important to do your due diligence before signing on the dotted line.

Zoning ordinances, setbacks, and other requirements must be met before your home can be delivered.

Luckily, you don't always have to figure that out yourself, depending on what type of prefab home you buy.

"Our home consultants help future homeowners navigate the land-buying process to accommodate the home they are interested in purchasing," says Danny Warrick, Clayton Homes retail president.

Here are some essential things to look for when selecting the ideal property for your new prefab home:

Why zoning ordinances and setbacks are important

Zoning ordinances designate certain areas for residential purposes. And your new home will need to meet the size, shape, height, and other requirements of your local zoning board.

As recent Realtor.com research reveals, as of 2026, only about 17% of zoned land across the country expressly allows for manufactured home parks, and manufactured housing is prevented in many jurisdictions by zoning restrictions on minimum floor sizes, architectural design, and by-right installation.

If you buy a manufactured home, your home salesperson can help determine if your home checks all the boxes for a piece of land.

A property's setbacks will also be vital to determining if a home can be placed on a property. Setbacks determine things like underground facilities and breathing room from your neighbors. They also dictate where your house is placed from the front, side, and rear property lines. You probably won't have much to worry about if you have your eye on a large parcel of land, but the setbacks could limit your options in town.

And a warning if you have your sights on a coveted corner lot: "The building department typically considers a corner lot to have two front setbacks, which are typically the largest footage from each street," says Leo Poggione, chairman of the Manufactured Housing Institute and managing partner of Craftsman Homes.

So, you could wind up with two large front yards and a much smaller side yard and backyard.

What to know about utilities

You'll probably be able to set up electricity and internet services relatively easily if you buy a lot in town. But you could hit a few snags if your property is in a rural setting.

Don't just assume you will be able to get electricity because you see a pole with wires or a cellphone tower nearby. Check with your local individual provider first.

The same goes for internet service. You don't want to end up with sketchy internet or none at all. Instead of the typical installation fee, utility companies charge by the linear foot when running cable to a rural property. And that could really add up, depending on how far the house will sit from the main line.

Don't forget about sewer, septic, and water

When the land you want is in town, you might be able to tap into the city water and sewer lines.

"If not, the property will need to pass a percolation test for a septic system and a well," says Warrick.

If the soil perks too fast or too slow, this can add a large expense. Basically, you will have to have an "engineered system" designed to accommodate the septic's leach fields.

Getting your home onto your new land

You might not think this isn't your problem. After all, you're not the one driving the truck.

Yet, it's critical the truck transporting your new home can safely get to the property you have in mind.

Urban settings can be trickier than rural ones, Poggione notes.

Crowded towns can have low-hanging utility wires, overgrown trees, and department-of-transportation-specific routes for transporting wide loads.

"Always consult with your dealer before purchasing the land or the home, and have them do a site inspection," advises Poggione.

You'll also need to prepare the land for your home once you buy it.

"Trees may need to be cleared, grade works completed, and the home needs a home pad or concrete footings," says Warrick.

Make sure to account for all these expenses when planning the budget for your prefab home, as they can quickly accumulate.