Maine Modular & Custom Home News

Modular housing that complies with state construction standards must be allowed in all zones where single family residences are allowed.  That sounds pretty cut and dried, doesn’t it?  So, why are there always zoning issues cropping up?  There are several areas where the rules might get confusing.

First, there are differences between manufactured housing (previously referred to as mobile homes) and modular housing.  In some cases that means different zoning laws.  Maine is one of a handful of states that mandates the allowance of both manufactured and modular homes on property zoned residential.

Second, Code Enforcement personnel in individual towns may or may not be familiar with the building codes under which these homes are regulated.  The construction of the actual home is mandated by standards set forth in either the HUD or the BOCA codes.  These codes supercede any town codes that may be in place.

Third, there may be ordinances within an association or a sub-division that restrict either (or both) manufactured/modular homes.  Also, there may be covenants written in a deed that restrict the type of building that may be placed there.  These restrictions are in addition to any zoning and should not be confused with zoning regulations.

The best advice is to go to the town office where you are planning to build to get their regulations in writing, then review your deed to ascertain there are no restrictions.  If you are not sure about something, ask questions.  Knowing this information in the beginning of your project will save time and unnecessary heart ache.  It is just one more step to organizing a successful home building experience.

A contract is a binding agreement which is legally enforceable.  There are a lot of gray areas in construction projects, so a good contract is particularly important.  Make sure your construction contract covers at least the following areas:

• It should be written on company letterhead.
• It should contain the company’s name, address and phone number.
• It should contain the consumer’s name, address (where the work is to be performed) and phone number.
• It should be dated the day it is written.
• It should include a detailed description of the work that is to be performed.
• It should provide a dollar amount associated with each task included in the project.
• It should include an estimated time line.
• It should provide a paymend schedule.
• It should clearly state whether permits will be pulled and who will be responsible for pulling them.
• Make sure there is a provision for all changes to the original contract to be in writing, and signed by both parties.

A contract is there to clarify communication between the parties and to protect both the consumer and the contractor from a misunderstanding.  Take care to make sure the contract includes all the information necessary to make your project a good experience.

New construction and contingency funds, a confusing mix.  There are different kinds of contingency funding that your lender may build into your loan.  There can be a contractor’s contingency, available to the contractor to cover cost overrun of the contract price.  These funds may be unconditionally available to the contractor.  There may also be a lender’s contingency that is available to the borrower, to cover any unplanned expenses that may not be included in the builder’s contract.  These funds if not used, may be used to pay down the original amount of the loan. 

The point is, there is a possibility of a 15% contingency fund for your contractor and a 15% contingency fund for you as a borrower.  This is a double edged sword.  On the one hand, the funds are available to cover unforseen expenses.  On the other hand, with contingency funds built into your loan, it may restrict the amount you can borrow. The total dollar amount you “might” spend will need to be within the total limit you can borrow based on the equity in your property.

Some banks that are accustomed to working with the modular housing industry are willing to reduce the contingency fund built into your home loan.  The portion of your loan that covers the construction of the home is a fixed cost.  The home is built at the factory and the price is a given.  A contingency fund on the construction cost of the home is not necessary.  This frees up funding for your project.  With a reduction in contingency funds needed for your home, you might be able to add on that wrap-a-round porch you always dreamed of.  Just one more reason to consider building a modular home.