Factory-Built in Texas: How Manufactured, Modular and Tiny Homes Get Approved

Texas builds a lot of housing in factories. A HUD-code home rolls off a line in sections, a modular house arrives as boxes craned onto a slab, a tiny home may come on a trailer, and a backyard office or garage can be a kit. To a buyer they look similar. To the state and to a city's permit desk they are different products, with different agencies, inspections and zoning rules.

This guide sorts them out: who regulates each type, the steps from purchase to move-in, what the 2025 Legislature changed, and how two Texas cities Bucky now maps handle factory-built housing in their codes.

Five kinds of factory-built buildings, three rulebooks

HUD-code manufactured homes

A manufactured home is built to the federal Manufactured Home Construction and Safety Standards (the HUD code), not to a city's building code. In Texas, the Manufactured Housing Division of the Texas Department of Housing and Community Affairs administers the state Manufactured Housing Standards Act and acts as HUD's state agent. It licenses manufacturers, retailers, brokers, installers and salespeople, inspects installations, and records ownership and liens.

Older "mobile homes" built before the HUD code are a separate category. State law lets a city prohibit new installations of mobile homes, but if a mobile home is replaced with a HUD-code home, the city must grant the permit.

Modular (industrialized) homes and buildings

Texas calls modular construction "industrialized housing" (homes) and "industrialized buildings" (commercial). Chapter 1202 of the Occupations Code has governed it since 1986, and the Texas Department of Licensing and Regulation runs the program. Plans must be approved by a design review agency, every module is inspected in the plant by an approved third-party inspector, and each module carries a state decal when it ships.

The key rule for buyers: a city must apply its local requirements the same way whether a house was built in a plant or on site. The one exception lets a city require a single-family or duplex modular home to match the value of nearby houses (the median taxable value of single-family homes within 500 feet), to have siding, roofing and windows compatible with them, and to meet the city's aesthetic, setback and square-footage rules, on a permanent foundation.

Tiny homes

Texas has no single statewide tiny-home code. A tiny home on a foundation is a house: it needs whatever residential code and zoning the city applies. The model code for small houses, Appendix Q of the 2018 International Residential Code (Appendix AQ in 2021), covers dwellings of 400 square feet or less, but each city decides whether to adopt it. Austin, for example, did not adopt Appendix AQ with the 2021 code and handles tiny houses through an alternate method of compliance. A tiny home on wheels is generally treated as a recreational vehicle, which usually means an RV park or a site where the city allows RVs, not a backyard.

Sheds, backyard offices and garages

Prefab accessory buildings are regulated almost entirely by the city: zoning decides where they can sit and how big they can be, and the city's adopted building code decides whether a permit is needed. Many cities exempt small one-story storage buildings from a building permit, but setbacks, easements and deed restrictions still apply. The line that matters most: once someone sleeps, cooks or lives in a backyard building, most codes treat it as a dwelling or an accessory dwelling unit (ADU), with its own rules.

Some cities also restrict prefab accessory structures outright. Cedar Park, for instance, prohibits temporary, pre-assembled or assembled-on-site carports in every district and requires carports to be permanent, built on site and permitted.

The process, step by step

1. Check the lot before you buy the home. Zoning decides which of these products a lot can take, and whether as a principal home or an accessory unit. Look at the zone's permitted and conditional uses, setbacks, height, and any overlays such as floodplain. Check deed restrictions and HOA covenants too: state law on manufactured and modular housing does not override them.

2. Pick the product type that fits. A HUD-code home, a modular home and a site-built home can look alike but trigger different rules. If the lot's zone lists "industrialized home" but not "manufactured home," that choice is made for you.

3. Get the local permits. Modular homes need the same local permits and licenses as site-built houses; the city reviews state-approved plans and can apply the value and compatibility rules above. For new HUD-code homes, a city cannot require a specific use permit if it does not require one for other homes in the same zone.

4. Prepare the site and foundation. Utilities, driveway and foundation work happen while the home is being built. Cities often require a permanent foundation with the transport gear removed, and some add specifics such as skirting or a carport.

5. Delivery, installation and inspection. Only an installer licensed by the state Manufactured Housing Division may install a manufactured home. The installer must report the installation and pay for the state inspection. Modular homes are set by registered builders and inspected on site by the city's building official or a third-party inspector.

6. Paperwork. A manufactured home's title in Texas is a Statement of Ownership (it replaced the traditional title in 2003). A retailer must apply for it within 60 days of the sale. Owners who want the home treated as real property, which matters for mortgages and taxes, file that election with the county. Modular homes are real property from the start.

What changed on September 1, 2026

Senate Bill 785, passed in 2025, took effect on September 1, 2026. Every Texas city with zoning must now allow new HUD-code manufactured homes by right in at least one residential zoning district (or a dedicated manufactured-home district), make sure that district actually applies to land in the city, and show it on the zoning map if the city has one. Cities can no longer require a specific use permit for a new HUD-code home unless they require one for other homes in the same zone, and they cannot add their own permits, fees, bonds or insurance for licensed retailers and installers moving and placing homes.

The law has limits. It covers new HUD-code homes only. It does not override deed restrictions created before January 2, 2025, local historic districts or landmarks, or cities where every residential area was deed-restricted against manufactured homes on September 1, 2025. And it guarantees a district, not land: the permitted district may be small or already built out.

Backyard units: still a city-by-city call

There is no statewide right to build an ADU in Texas. Senate Bill 673, which would have limited how cities regulate ADUs on single-family and duplex lots, passed the Senate in April 2025 but ran out of time in the House. In July 2026 Governor Abbott called for homeowners to have an automatic right to add one, so the issue is likely to return in 2027. Until then, whether a prefab backyard cottage, office-with-a-bathroom or garage apartment is allowed depends on the city's code.

Two cities Bucky maps: Cedar Park and New Braunfels

Bucky has lot, zoning and site-condition data live for two Texas cities so far: Cedar Park, north of Austin, and New Braunfels, between Austin and San Antonio. For any lot in either city, Bucky reads the zone, permitted and conditional uses, setbacks, height, overlays such as floodplain and aquifer, and the code sections behind them.

Cedar Park's code shows how specific local rules get. Industrialized (modular) homes are a conditional use in several residential districts, provided the home sits on a permanent concrete slab or grade-beam foundation, is skirted, and has a carport or a one-car garage. ADUs are conditional in the larger-lot districts, must stay under the same ownership as the main house and cannot be rented separately, and a detached ADU may not be a metal, prefabricated or manufactured building. The manufactured-home conditions on file allow one only to replace an existing manufactured home.

That last rule is the one to watch. The Cedar Park text in Bucky's sources was last amended in June 2024, before SB 785 took effect, and the state law now requires a by-right district for new HUD-code homes. Check the city's current code and zoning map before relying on it. In New Braunfels, the commercial lot below lists accessory buildings and one accessory dwelling per lot among its permitted uses.

Before you buy a factory-built home in Texas

Confirm the product type on the label or decal, then confirm the lot: the zone, whether that type is permitted or conditional, the setbacks and size caps, any floodplain or aquifer overlay, and the deed restrictions. If the city's code predates SB 785, ask the planning department which district now allows HUD-code homes by right. And get the installer's state license number before anything is delivered.