What are modular buildings?
Modular building is the combination of individual modules which are constructed in a controlled, off-site manufacturing complex and are combined into one at a building site.
What does the process look like?
The modular construction method is like building blocks as each building section is constructed to fit exactly with the other. This prioritizes efficiency, quality control, and durability. Each module is roughly 12-14 feet wide.
How are they made?
They are manufactured off-site as 60-90% of the work is done in a factory-controlled environment. Manufacturing these modules off-site allows for the opportunity to use lean manufacturing techniques to create prefabricated modules. Modular buildings are built to standards that are either equal to or greater than a module built on-site. This ensures greater levels of quality control.
Advantages of using Modular Construction
- Wastage control
- Construction can be extended to all hours of the day
- Modules are complete in 8-14 weeks
- No weather delays
- Modules are more durable as they need to meet the regulations for assemblages and travel
Disadvantages of using Modular Construction
- Large spaces could be required for transportation
- Room sizes could be limited due to transportation restrictions
Understanding the loan process
The borrower will obtain a prequalification estimate of how much capital will be needed for the modular construction project. The lender will then request the borrower’s financial information such as bank statements, personal financial statements, and real estate owned schedule. The borrower will then need to present the property that the modules will be on to the lender. The borrower will need to provide the lender with all the property information. If approved by the lender, you’ll need to provide the lender with a draw schedule and wait for approval. Once the draw schedule is approved, the lender will provide the borrower with the final loan documents. The borrower will then only be responsible for interest payments until the construction is complete. This is of huge benefit to the borrower. Then the lender will order third party reports to complete the due diligence process. If the module meets all the requirements, then the loan will be converted into a permanent mortgage and monthly mortgage payments will begin.