Just as site built homes are constructed according to a specific building code to ensure proper design and safety, today's manufactured homes are constructed in accordance with the HUD Code. The United States Congress laid the foundation for the HUD Code in the National Manufactured Housing Construction and Safety Standards Act of 1974, which was enacted because of three inter-related reasons:

In its legislation, Congress directed the Secretary of the U.S. Department of Housing and Urban Development (HUD) to establish appropriate manufactured home construction and safety standards that "...meet the highest standards of protection, taking into account existing state and local laws relating to manufactured home safety and construction."

Every HUD Code manufactured home is built in a factory, under controlled conditions, and has a special label affixed on the exterior of the home indicating that the home has been designed, constructed, tested and inspected to comply with the stringent federal standards set forth in the code. No manufactured home may be shipped from the factory unless it complies with the HUD Code and is released for shipment by an independent third party inspector certified by HUD.

The HUD Code is unique since it is specifically designed for compatibility with the factory production process. Performance standards for heating, plumbing, air conditioning, thermal and electrical systems are set in the code. In addition, performance requirements are established for structural design, construction, fire safety, energy efficiency, and transportation from the factory to the customer's home site. Manufactured homes are constructed with virtually the same materials used in site-built homes. However, in contrast to traditional site-building techniques, manufactured homes have the advantage of using engineered design applications and the most cost-efficient assembly-line techniques to produce a quality home at a much lower cost per square foot. To ensure quality, both HUD and its monitoring contractor monitor the design and construction of the home. The familiar red seal (the certification label) attached to the exterior of a manufactured home indicates that it has undergone and passed perhaps the most thorough inspection process in the home building industry.

Is the HUD Code less stringent than state or local building codes?

Although the HUD Code is more performance-based while model codes, such as the CABO One-and-Two Family Dwelling Code, used by many state and local jurisdictions to regulate site-built housing tend to be more prescriptive, independent analyses and comparisons of the HUD and CABO Codes generally come to the conclusion that they are comparable in nature. A 1997 comparison study of the HUD and CABO Codes by the University of Illinois Architecture-Building Research Council stated:

There are many similarities in these codes, along with minor differences of slight consequence and some differences of notable consequence. On balance, the codes are comparable.

While some areas of the CABO code are deemed "more restrictive" than the HUD Code in the University of Illinois study, there are also areas where the HUD Code is deemed more restrictive than the CABO Code, such as in ventilation, flame spread, structural loads, window construction, vapor retarders and service wiring.

While some believe the HUD Code is solely responsible for the affordable nature of manufactured housing, the National Association of Home Builders Research Center, in a report prepared for HUD, concluded that:

...the net cumulative effect of the differences between the two codes is more likely on the order of hundreds of dollars, rather than thousands of dollars per unit.