Modular, or pre-fabricated homes are often confused with manufactured homes. Manufactured homes are one of several types of homes constructed entirely or partially in an off-site factory, transported over roadways, and then placed or assembled on a site-built foundation. Factory built homes include manufactured homes, modular homes, panelized homes, and pre-cut homes.

Modular homes are prefabricated houses that consist of sections, or modules, which are constructed away from the building site. The prefabricated modules are delivered and installed on a permanent foundation on the home site. Modular homes must comply with the same State and local building codes as “site stick built” codes. Modular homes should be considered single-family residences since their design and construction is closer in type to single-family home construction.

Manufactured homes are built on a chassis consisting of main steel beams and cross members; fitted axles, leaf springs, and wheels making up the running gear; and a steel hitch assembly. The hitch assembly is generally removed for appearance purposes.

One easy way to distinguish between a manufactured home and a modular home is to look at the framing. A manufactured home will generally have a metal frame while a modular home will typically have a wood frame. However, the metal frame of a manufactured home may not be visible if it has been placed on a permanent foundation and skirted to look as though was a "stick-built" home constructed on site.