Pre-fab 101

Why a home built in a factory might be a key to solving our underinsurance problem

This guide was built in partnership with cityLAB UCLA, LA4LA and ARRC.

Pre-fabs are misunderstood

Like any new development in an industry that’s been around a long time, there is a lot of resistance to change. From “they’re trailers” to “you can’t change anything about them”, misinformation about pre-fab homes abounds.

We think they’re a pretty great solution to the octopus of issues fire survivors are navigating, so we partnered with cityLAB at UCLA to make sure myths don’t get in the way of what might be a great option for you. 

Here’s a rundown of the basics, but if you want a deeper dive, check out cityLAB’s incredible Prefab Housing Handbook.

Myth:

“Pre-fabs are trailers.”

Fact: “Pre-fab” homes are real homes, built in a factory to the same building codes as homes built on site. Once installed on a permanent foundation, they:

  • Appraise like traditional homes

  • Qualify for standard mortgages

  • Are inspected and permitted like any other house

  • Are indistinguishable from stick-built homes once finished

  • Appreciate in value over time, just like a regular home

The only difference between a pre-fab and a house built on site is that a pre-fab home is built in advance. 

what’s a

“Manufactured”

Home?

Often called “mobile homes,” “single-wide,” “double-wide”, think of these more like a car. They are typically thought of as personal property (not real estate), and they usually depreciate with time.

Manufactured homes are built on a steel chassis, so they can be moved - unless you permanently install it on a foundation and convert it to a single family residence, you can’t get a traditional mortgage on a manufactured home. 

Why are pre-fabs

so great for

fire survivors? 

    • Site-built custom homes often take 18–30 months.

    • A well-managed pre-fab build can land closer to 9–15 months.

    • While your lot is being prepped (demo, grading, foundations), your home is being built at the same time in the factory.

    • No waiting on weather, disappearing subs, or materials sitting out in the rain.

    With limited housing coverage, this can lift a huge burden.

  • Modern pre-fab companies can design around:

    • IBHS Wildfire Prepared / Wildfire Prepared Plus strategies

    • Chapter 7A/WUI requirements

    • Fire-resistant siding and roofing

    • Enclosed eaves, ember-resistant vents, covered gutters

    • Tight, well-insulated, energy-efficient envelopes

    Because it’s built indoors with precision, it’s often easier to hit energy codes, comfort goals, and wildfire standards, which will be essential for us if we want to stay off the FAIR plan.

  • Factory construction (partially done by high precision machines) reduces:

    • Mistakes or on-site improvisation

    • Inconsistent workmanship between subs

    • The waste, costs, and headaches associated with all of those things

    With limited budgets and the complexities of navigating insurance and mortgage escrows, this would make for one less stressor.

  • With most of the value being built indoors, there’s:

    • Less risk of rain delays

    • Less material damage

    • Less risk of theft off your lot

    • Less personality clashes

    Some folks may be able to absorb complications and delays, but most of us just want to get home as quickly and easily as possible.

Myth:

“Pre-fabs are pre-designed”

Fact: You can build almost anything you can build traditionally in a pre-fab factory.

“Pre-fab” simply means pre-fabricated, ie, built before it gets to your site. It doesn’t dictate the style, quality, or layout. 

Most pre-fab options today:

  • Offer plan catalogs you can choose from, and/or

  • Work with you and your architect to adapt a design to their system

  • Can handle a wide range of styles and layouts, with some limitations for what can be shipped and craned

Some details (porches, decks, special rooflines, custom elements) might still be built on site, but most homes you see on the street could now be built in a pre-fab factory.

Why isn’t

everybody

doing this?

Partially because of misinformation, but pre-fabs aren’t perfect. Here are some of the downsides:

    • Some pre-fab companies act as your GC.

    • Others only build the panels/modules and you still need a local GC to handle foundations, site work, assembly, and utility connections.

    • Either way, someone has to manage the site side of the project.

  • For some lots (tight canyons, steep roads, dead-ends, tricky access):

    • It may be hard or impossible to bring in large trucks and cranes.

    • Fully modular may not work, but panelized or hybrid systems still might.

  • Because pieces need to be shipped and lifted:

    • Some shapes, spans, and rooflines aren’t possible with certain manufacturers

    • Hyper-custom, one-off architecture may not be a good fit.

    If you want something wildly unusual, pre-fab might not be your path.

  • Factories often require:

    • Larger upfront deposits

    • Progress payments before the home leaves the factory

    • Site work to be fully ready before your delivery window

    If your site isn’t ready when your house is, you can lose your slot or face storage/holding costs.

Myth:

“It’s not cheaper

than a regular build”

Fact: While it is true that pre-fab construction is not inherently cheaper than site-built homes, it’s the other stuff that tips the scale: 

  • The cost (financially and emotionally) of being displaced

  • The minimization of errors 

  • The exhausting toll of 12+ months of decisions, surprises, errors and personality clashes

Want to touch and feel one?

cityLAB and their partners have a showcase where you can explore some pre-fab options in real life!

Until Dec 6th you can visit any day of the week between ___.

FAQs

  • When a pre-fab home in California:

    • Meets California Residential Code, and

    • Is installed on a permanent foundation,

    it’s treated like any other stick-built house for:

    • Appraisal – appraisers use comparable (site-built) homes, not manufactured homes.

    • Financing – you can use construction-to-permanent loans, regular mortgages, SBA loans, and certain FHA disaster programs.

    • When selling - There is no difference in the sale process with a pre-fab home. 

    Many lenders actually like pre-fab because the controlled process can reduce risk and cost overruns.

  • Yep, insurers treat pre-fabs exactly the same as stick-built homes. Their primary interest will be the level of resiliency it’s built to, and what your finishes are.

  • Yes! Your Coverage A/B/C/D proceeds should be able to fund a modular or panelized rebuild just like a traditional build.

  • “Modular” means entire rooms are constructed and delivered in cubes, which are then attached to the foundation and to each other. “Panelized” means the home is built in panels (think pre-built walls), delivered flat-packed, and then assembled and finished on site. 

    Modules can be fully finished out with plumbing, electrical, drywall, paint, etc, and dropped on your property ready to go. Panels tend to need a lot more work once they reach the job site. 

Is Pre-Fab a

Fit for You?

Pre-fab is worth a serious look if you:

  • Want a faster, more predictable path home

  • Are dealing with underinsurance and need fewer unpleasant surprises

  • Have a site that’s reasonably accessible for deliveries (or can use panelized/hybrid systems)

Explore further

Read

For deeper detail on specific systems, cost ranges, and design examples, check out the Altadena Prefab Housing Handbook created by cityLAB UCLA and partners.

visit