Gary and Debbie Halvin found an affordable solution 20 years ago when they bought an empty lot in Ralston at a tax auction for $7,100 and installed a $68,000 house manufactured by BonnaVilla Homes of Aurora, Nebraska.

“There was some opposition,” said Gary, now retired from packing plants and other Omaha businesses. “They didn’t want any manufactured homes in Ralston.”

But after some study and seeing the details of the Halvins’ plans, city officials gave the OK. With two 16-foot-wide sections, a full basement, a two-car garage and landscaping that fits the neighborhood, their home on Seymour Street ended up grander than the usual manufactured home at the time.

This spring, the Halvins got a notice that affirms their residential decision and negates the myth that all manufactured homes decline in value: Their home’s tax value rose to $163,700 from $126,300, now more than double their original cost.

Yes, manufactured homes — and their less-movable factory-built cousins, modular homes — gain value if everything’s just right. That’s why Kevin Clayton says manufactured homes should not be treated as personal property, like automobiles or campers.

“If a manufactured home meets certain aesthetic characteristics (a high-pitched roof, a garage, a porch, some masonry on the front, for example) ... we think that it should be financed, zoned and appraised like any other traditional home,” said Clayton, the CEO of Clayton Homes, a division of Berkshire Hathaway Inc. based in Maryville, Tennessee.

Gaining value is important for the growing number of people for whom the prices of site-built homes are “completely out of reach,” he said. Value appreciation is a vital part of home ownership, and factory-built homes give more people a chance to buy houses in the first place.

But manufactured homes can depreciate, said Eric Westermeyer, editor of Manufactured Housing magazine, an industry publication. Although both are built in factories and trucked to home sites, manufactured homes have steel chassis and can be moved, while modular homes are made to be permanently attached to foundations.

“Generally speaking, (manufactured) homes tend to depreciate over time, but there are exceptions to that,” Westermeyer said.

Last month Fannie Mae, the federal agency that oversees the mortgage industry, announced a new cost-saving mortgage option called MH Advantage for manufactured homes with pitched roofs and other features that Clayton describes. The idea is to provide more affordable starter homes, the agency said.

Still, Tracy Day, sales manager for Champion Home Builders, which makes manufactured and modular homes in York, Nebraska, says flatly, “It doesn’t make any difference what type of structure that it is.” A home’s future value is “really related to the property it sits on,” not whether the guy pounding the nails is outside in the weather or inside a factory.

For housing-strapped rural and small communities like Aurora, Nebraska, factory-made houses are alternatives to site-built homes that require, among other things, skilled workers who are hard to find in the countryside. Last year civic leaders in Aurora installed a mini-neighborhood of factory-built homes, five on each side of a newly developed block.

“They’ve got nice curb appeal to them,” said Wade Regier, president of the nonprofit Aurora Development Corp. and the local Pinnacle Bank market. “It doesn’t look like low-income housing.”

The project has modular homes rather than manufactured homes, he said, because it’s easier to get conventional financing. Most investors who buy mortgage-backed securities don’t want manufactured homes as collateral.

Benjamin Hynek of Lincoln, a property appraiser and chairman of Nebraska’s Real Property Appraiser Board, said modular homes appraise closer to site-built homes, but manufactured homes are viewed as movable and “are a different type of property,” even if they are attached to foundations.

It can be tricky to appraise a manufactured home because there usually are few sales of comparable homes nearby as a guideline, he said.

“There’s not a standard adjustment or a way to compare a manufactured home to a normal stick-built, site-built house,” Hynek said. “The market notices the difference between those, and it’s significant. ... You might call the bank and say, ‘This is a manufactured house.’ And they’ll say, ‘Whoa, hold up. We have a totally different process.’ ”

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Debbie Halvin in the kitchen of her manufactured home in Ralston. The home’s tax value has risen to $163,700, now more than double the original cost.

Nationally, about 80 percent of manufactured homes are titled as movable personal property, not as real estate, said Patti Boerger, vice president of the Manufactured Housing Institute in Arlington, Virginia. Home sellers say the homes are more likely to gain value now than in the past, but solid data is lacking.

“The retailers have been saying the last couple years they’ve been seeing people wanting to get more upgrades in homes — more square footage, granite countertops, higher-end shower areas,” Boerger said.

Basic single-section, no-frills manufactured homes are in demand, too, because of their low cost, she said, although some cities are restricting their use by segregating them or even banning them through zoning rules.

For example, Huntsville, Texas, passed a local rule against manufactured homes, including those on private property. Harrison County, Kentucky, required manufactured homes to have lots of 10 acres or more. Restrictions in Georgetown, South Carolina, resulted in a federal investigation into possible violations of fair housing laws.

The City of Omaha doesn’t have separate rules on modular and manufactured homes, requiring the same standards as site-built homes such as square footage, set-backs from the curb, attachment to a foundation and utility hookups.

Yet most manufactured homes still are placed in “communities of similar homes,” said Mike Wilwerding, the city’s chief building inspector. Manufactured homes have a “HUD sticker” and paperwork certifying that they meet construction and materials standards of the Department of Housing and Urban Development.

Construction of modular homes is inspected by state officials in the factory.

Even with all that checking, Wilwerding said, “Most neighborhoods have covenants that restrict manufactured or modular homes from going in.” If someone were to try to install a manufactured home in many neighborhoods, he said, “everybody would lose their minds.”

”More power to you if you want to put a manufactured home there," Wilwerding said. "But Omaha is a notoriously tough area to sell new building processes.”

Rural residents, however, accept factory-built homes more readily because it’s costly to bring in materials and difficult to line up labor, said Mike Morrow, sales manager for Chief Industries’ BonnaVilla Homes division in Aurora, Nebraska. That makes it cheaper to build a home in Omaha or Lincoln than in rural Nebraska.

“It’s a crazy kind of drill, but that’s what happens,” Morrow said. “The market has a hard time supporting the expense,” and finding permanent financing for a site-built home in a rural area can be difficult, too. In that case, the lower price for a modular home is an advantage both in the cost of construction and finding a mortgage, he said.

“Ten or 15 years from now, there really isn’t anything different other than somebody that owned it having that historical knowledge that the (building) process was different,” he said. “But the end product, what’s built and financed, isn’t any different. To the real estate market, it’s just a house on a lot like it normally would be.”

That’s what Debbie and Mike Kelley ordered to replace their 1903-vintage farmhouse near Kimball, Nebraska. After a few weeks, Dar Gardner of Stahla Homes in Kimball called to say: Your house is on its way.

And there it came down the street: Trucks hauling the two modular sections to the farm in the countryside where the old farmhouse, built from oak railroad ties, had been torn down and the new foundation was ready on the same spot.

The Kelleys chose modular over a site-built home because it was cheaper and quicker and they could see samples of the home in advance. They pre-qualified for a mortgage through Farm Credit, which lists the house as real estate, not as personal property.

The Kelleys watched a crew roll the two sections in place and connect them, and soon after they moved into a home that is much more energy-efficient and all-new inside and out, much advanced from one modular home their daughter had bought several years earlier.

”It’s amazing how much better they’re built now than they were 15 years ago,” Debbie Kelley said. “I just love my house.”

Earlier this year Gardner sold a manufactured house to M.L. Martin of North Platte for her Coyote Lake Ranch in McPherson and Arthur Counties. It’s a flat-roofed, three-bedroom, two-bath, single-wide Champion structure that serves as a family getaway, a hunting cabin and housing during branding season.

She paid $60,000 for the house and another $30,000 for utilities, hauling and other costs. It will be taxed as a regular home, as will two other factory-built homes on the ranch.

Martin said there’s no viable way to build an on-site house on the remote Sand Hills ranch. “Unless you want to sock a lot of money into something, it’s difficult to compete.”

The Omaha World-Herald is owned by Berkshire Hathaway Inc.

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