Modular Home vs. Tiny House

It’s becoming a common trend for people to buy smaller homes. The problem is, tiny residences come in different styles and different names.

So it’s almost possible that someone out there thinks a tiny home is the same as a mobile, modular, prefabricated, or manufactured home. That’s a wrong assumption.

Small homes have a lot of differences that you must know to avoid making mistakes. Their design, construction, zoning laws, and even costs vary to a great extent.

But hey, the fact that you are here means you aren’t going to make any blunder, right? So let’s jump right in and see how modular homes and tiny houses differ. 

Modular Homes vs. Tiny House: Clearing the Confusion

Difference between a modular home and a tiny home

Here’s how modular and tiny houses contrast based on the following:


At the risk of stating the obvious, tiny homes are minimalist in nature and therefore stripped down tiny units. So yes, space is going to be an issue unless you are a minimalist at heart.

Modular homes are big. In fact, by looking at them, you can easily think they are traditional houses. Furthermore, the owner gets to decide how big or small the house should be.


Banks rarely consider tiny homes as worthy collateral.

So basically, you would need to dig into your pockets to own one. This factor alone makes tiny homes an expensive affair for anyone who is cash strapped.

Modular homes, on the other side, are classified as real homes. As such banks find them valuable collateral and will finance anyone with a standard mortgage loan. 


Every expensive item that you own must be insured and your home comes at the top of that list. However, insurance firms mostly find it hard to peg tiny houses as proper dwelling places.

Instead, they consider them as RV properties, more so if they are on wheels. So their premium is quite different.

Modular houses, on the other hand, are considered suitable dwelling places and will be charged the same rates as traditional homes.

Building codes

Tiny homes enchant many people because of their aesthetic appeal.

However, despite how trendy they are, some may not meet local zoning laws, building codes, urban development codes, and county ordinances. This is because they are mostly taken as DIY projects.

Modular homes, on the other hand, are treated as real homes and must be built in accordance with building codes. They go under inspection while in the factory before being approved as fit for living. 


It’s nearly impossible to customize tiny homes. They will lose their appeal the moment you start adding extensions.

Modular homes, on the flip side, give owners multiple options to customize their dwellings. As a matter of fact, some are designed exactly as the buyer wants-a dream home.

Going green

Is it better to build a house or buy a modular home?

A tiny home is, as the name implies, very small and therefore less consumption. So when it comes to green living, tiny homes win big.

Nevertheless, modular homes too are designed with energy efficiency in mind.

In fact, most of them are Energy Star Certified. This means they meet EPA’s strict requirements for effective insulation, tight construction ducts, high-performance windows, and HVAC systems that consume less energy.


On average, one can spend between $10,000 and $25,000 to acquire a tiny house. However, the overall costs of a decent modular house can go far beyond $50,000. 

But like we mentioned before, the cost of buying a modular home, in the end, is cheaper because banks can issue out a loan.

For a tiny house, you have to dig inside your pockets or obtain a personal loan.


The small design of tiny houses makes them vulnerable to Mother Nature’s furious whims. It’s one of the reasons their insurance premium is sometimes higher.

Modular houses can withstand strong winds moving up to 170 mph. We obviously can’t say the same for tiny homes. So on this basis alone, modular homes are much safer.

But if you think of it from an angle of emergency evacuation from wildfire or a hurricane, a mobile tiny home feels safer, right? That’s because it can be connected to a trailer and pulled away to safe places.

Final Thoughts

The differences between a modular home and a tiny house are now clear to you. Your final choice will depend on a few things.

For instance, if you are a young person, trying to put plans together, or someone running away from corporate life, a tiny house is the way to go. Provided it’s not illegal in your city to live in small homes.

However, if you are a hardworking individual, with a family and want the home of your dreams without spending a lot, modular homes make more sense. The ball is now on your court.