(Allen J. Schaben/Los Angeles Times via Getty Images )

What is a modular home? The real estate industry is full of housing options. If you’re looking to buy a home, or considering building one, you may have heard that modular homes are an increasingly popular option. In a nutshell, modular homes have parts that are manufactured in a factory, instead of being constructed completely on the home site. Those parts are then transported to the property and assembled there by a builder.

First introduced near the end of World War II, modular homes—also called factory-built, prefabricated, modulars, or prefab—still represent only about 1.5% of the homes manufactured in the U.S. today. But modular housing is becoming hotter than ever with design-savvy buyers who want the flexibility to choose their floor plans and styles.

In other words: Just because it’s made in a factory doesn’t mean it’s a boring box just like everyone else’s. That’s a myth of modular building!

“There is a preconceived notion that modular homes are plain Jane or boring,” says Fred Hallahan, a housing industry consultant with Hallahan Associates, in Baltimore.

In reality, modular homes can come in any style the homeowner wishes, from Cape Cod to Mediterranean to modern, and with any number of floor plans and architectural and design flourishes.

Modular housing is built on nonremovable steel chassis, and each module should be identified by a small metal tag. Modular construction must meet building standards and guidelines that sometimes surpass those of traditional on-site home construction.

Modular homes should also not be confused with manufactured homes (aka mobile homes), which are built entirely in a factory, then transported in one piece.

Modular housing, by contrast, is a site-built home that a builder constructs and places on a permanent foundation. The home buyer can generally move a manufactured home at a later date, but a modular building is not intended to be moved.

The home can be much larger than a manufactured home or mobile home.

In addition, a home built in sections offers some unique benefits over a home site-built from scratch.

There are three main benefits to going modular over traditional in real estate.

You can shop for preexisting modular homes on realtor.com. If you want to build your own, you can shop for styles and sizes at ModularHomeowners.com. You can also talk to the representative of a modular home company.

Modular homes use “construction to permanent” financing, just as if you were building a regular house. The process begins with a construction loan during the building phase, and then once the modular home is complete, your loan will be converted into a “permanent” loan.

Cathie Ericson writes about real estate, finance, and health. She lives in Portland, OR.