Understanding Clayton Homes and Mobile Home Retailers

What Clayton Homes Is and How It Operates

Clayton Homes is one of the largest manufactured housing companies in the United States. The company, which became a subsidiary of Berkshire Hathaway in 2003, builds and sells mobile homes through a network of retail locations. Understanding Clayton's role in the mobile home industry helps you learn how this company fits into your housing options.

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Clayton Homes manufactures homes in factories across multiple states, then sells these homes through its own retail dealerships. As of recent years, Clayton operates over 500 retail locations nationwide. The company also provides financing options through its subsidiary, Clayton Finance, which offers loans to buyers. This vertical integration—meaning Clayton both builds homes and sells them—distinguishes it from some competitors.

The company manufactures several brands of mobile homes, including Clayton, Jacobsen, Moduline, Permabilt, and others. Each brand serves different price points and customer needs. Clayton-branded homes, the primary line, range from single-section homes to double-wide units. Homes built by Clayton must meet the federal Manufactured Home Construction and Safety Standards (HUD Code), which sets building codes for all manufactured homes sold in the U.S.

Clayton's business model relies on both new home sales and used home transactions. The company purchases used mobile homes from various sellers, refurbishes them, and resells them through its network. This secondary market represents a significant portion of Clayton's business activity. Many people purchase used Clayton homes because prices tend to be lower than new construction, though homes may show age-related wear.

The company operates in a competitive market. Other major manufactured home producers include Cavco Industries, Skyline Champion, and Fleetwood Homes. Regional manufacturers also exist in various parts of the country. Clayton's scale and financing options give it competitive advantages, but comparison shopping across different manufacturers remains important for buyers.

Practical Takeaway: Clayton Homes is a major manufacturer that controls both building and retail sales through its own dealerships. When shopping for a mobile home, you may encounter Clayton's brands or used homes refurbished by Clayton. Understanding Clayton's role as both manufacturer and retailer helps you evaluate options alongside other manufacturers and retailers.

Understanding Clayton Retail Locations and the Buying Process

Clayton operates retail dealerships throughout the country where customers can view and purchase homes. These dealerships function similarly to traditional car dealerships—salespeople work on commission, negotiate pricing, and arrange financing. Learning how Clayton retail locations operate helps you prepare for the buying experience.

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Clayton dealerships typically display multiple homes on their lots, ranging from entry-level single-wide units to premium double-wide and triple-wide models. The dealerships employ sales staff, finance specialists, and administrative personnel. When you visit a Clayton location, you can expect a sales consultant to greet you and discuss your needs, budget, and preferences. The consultant will show you available homes and explain features, appliances, and construction details.

The buying process at Clayton dealerships generally follows these steps. First, you browse available inventory and discuss options with sales staff. Second, you work with a finance specialist to explore financing options and understand monthly payments, interest rates, and loan terms. Third, you negotiate the home price, financing terms, and delivery arrangements. Fourth, you complete paperwork including purchase agreements, financing documents, and title transfer forms. Finally, you arrange delivery and setup at your chosen location.

Pricing at Clayton dealerships reflects several factors. The base price for a new home depends on size, features, and construction quality. Additional costs include delivery fees, which vary based on distance from the factory or retail location (typically $3,000 to $8,000), and setup costs including foundation work, utility connections, and permits (typically $5,000 to $15,000). Finance charges depend on the loan amount, interest rate, and loan term. Some dealerships offer promotional pricing or seasonal discounts, though these vary by location and time of year.

Financing through Clayton Finance is common but not required. The company also works with third-party lenders, though Clayton Finance often has streamlined approval processes. Interest rates for manufactured home loans typically range from 5% to 12% depending on credit quality, loan term, and down payment amount. Loan terms often extend from 10 to 20 years, though longer terms of 25 or 30 years exist for certain borrowers. Down payment requirements vary but often range from 5% to 20% of the home price.

Practical Takeaway: Clayton retail locations operate as dealerships where you can view homes, negotiate pricing, and arrange financing. Understand that the buying process involves negotiations similar to car purchases, and multiple costs beyond the base home price affect the total investment. Knowing typical costs and financing terms helps you evaluate offers and budget appropriately.

Financing Options and Loan Structures in Manufactured Housing

Financing a manufactured home differs from traditional mortgage lending in important ways. Mobile homes depreciate like vehicles rather than appreciating like real property, which affects how lenders structure loans. Learning about financing options helps you understand costs and compare different loan offers.

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Manufactured home loans fall into two main categories: chattel loans and real property loans. Chattel loans treat the home as personal property (like a vehicle), secured by the home itself. Real property loans treat the home as real estate, typically requiring land ownership. Chattel loans usually have higher interest rates, typically 8% to 12%, because they carry higher risk for lenders. Real property loans often have lower interest rates, typically 6% to 9%, because the land serves as additional collateral. Your eligibility for each type depends on whether you own the land where the home sits.

Clayton Finance offers both chattel and real property loans through its subsidiary. The company uses automated underwriting systems to make quick approval decisions, sometimes within hours. Clayton Finance considers credit scores, income, debt-to-income ratios, and down payment amounts when evaluating loan requests. The company reports that it works with borrowers across credit spectrums, though better credit typically results in lower interest rates.

Loan terms for manufactured housing typically range from 10 to 25 years, with some options extending to 30 years. Shorter loan terms result in higher monthly payments but less total interest paid. Longer loan terms reduce monthly payments but increase total interest costs. A $60,000 home with a 20-year chattel loan at 10% interest carries monthly payments of approximately $633 plus insurance and setup costs. The same home with a 10-year term at 10% interest carries monthly payments of approximately $1,008. Total interest costs differ significantly: roughly $92,000 over 20 years versus $60,000 over 10 years.

Down payment requirements at Clayton typically range from 5% to 20%, depending on creditworthiness and loan type. Some promotional financing offers lower down payments or reduced interest rates for well-qualified buyers. Insurance is required for financed homes and typically costs $800 to $1,500 annually depending on coverage levels and home value. Property taxes apply in most states for manufactured homes, though taxation varies considerably by state and local jurisdiction.

Third-party lenders including banks, credit unions, and mortgage companies also finance manufactured homes. These lenders may offer competitive rates, particularly for real property loans when land is owned. Shopping rates across multiple lenders can reveal significant savings. A difference of even one percentage point on a $60,000 loan saves thousands over the loan term.

Practical Takeaway: Manufactured home financing involves either chattel loans (treating the home as personal property) or real property loans (treating it as real estate). Interest rates and loan terms vary significantly based on loan type, down payment, credit quality, and lender. Comparing offers from Clayton Finance and other lenders helps you understand costs and find better rates.

Quality Standards, Construction, and Home Inspection Considerations

All manufactured homes sold in the United States must meet federal safety and construction standards set by the Department of Housing and Urban Development (HUD Code). These standards cover structural integrity, electrical systems, plumbing, heating, and other safety features. Understanding these standards and knowing how to evaluate home quality helps you make informed decisions.

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The HUD Code requires manufactured homes to meet specific load requirements, wind resistance standards, thermal protection standards, and electrical safety codes. Homes are inspected at the factory before leaving and must carry a manufacturer's certification plate. All Clayton homes meet these federal standards. However, meeting minimum federal standards differs from high-quality construction, and homes built to minimum standards may have different durability and longevity than homes built to higher quality specifications.