With rising home prices over the past decade, traditional homeownership may feel increasingly out of reach. At the beginning of 2020, the median home price in the U.S. was $329,000. At the end of 2025, it had risen to $400,000. It’s a similar story with mortgage rates, which jumped from under 3% to over 7% in the first few years of the new decade.
All that to say, buying a house can feel insurmountable in today’s economic climate. But that doesn’t mean homeownership of any kind is off the table. You may need to consider other types of housing beyond the single-family home.
When you think about homeownership, you may picture a single-family home with a sprawling yard or a modern condo in the city. But looking beyond these stereotypical homes to options like modular homes or cooperative housing arrangements may be the key to making homeownership more attainable.
Here are some alternative types of housing to keep in mind as you search for your first home.
Manufactured homes, formerly known as mobile homes, are single-family houses built in a factory and then shipped to a home site on a steel frame.
Because they’re built and assembled in a controlled environment, these homes can cost significantly less than on-site builds. According to the Manufactured Housing Institute, manufactured homes cost an average of $123,300, while site-built homes average $405,939.
While affordable, however, you may have more of a challenge getting a loan for a manufactured home, as many conventional mortgage lenders won’t finance them.
Pros:
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Lower cost compared to on-site builds
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Must meet HUD’s health, safety, and durability standards
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Faster construction
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Like manufactured homes, modular homes are built off-site and later transported to a homesite. But instead of sitting atop a steel frame that allows it to be moved, a modular home is assembled on-site and permanently affixed to the property.
Similar to manufactured homes, modular homes are more affordable compared to site-built homes. But they may have more limitations when it comes to customization, especially compared to site-built homes.
Pros:
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Must adhere to the same codes as on-site builds
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Faster construction compared to on-site build
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Can use conventional financing
Cons:
If you’re a self-proclaimed minimalist, you might enjoy life in a tiny house — that is, if you can fit your life into 400 square feet or less. Tiny homes are just what they sound like, offering all (or most) of the typical features of a house in a much smaller package. Because tiny homes are so small, you can save a lot on construction costs: Tiny homes often cost between $30,000 and $60,000.
However, tiny homes aren’t allowed everywhere, so you’ll have to check local ordinances before building one. And because tiny homes aren’t eligible for traditional mortgages, you’ll need to find alternative financing.
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Also known as an accessory apartment, granny flat, or secondary suite, an accessory dwelling unit (ADU) is a secondary housing space on a single-family lot. ADUs can be separate from the primary residence, either as a completely detached structure or an above-the-garage unit. But they can also be attached to the primary home, such as a basement apartment.
ADUs can help offset a mortgage by allowing you to collect rental income from a tenant. As the homeowner, you could either rent out the ADU or live in the ADU and rent out the primary house to earn some rental income. Unfortunately, ADUs may not be allowed everywhere, and if you value your privacy, you might not like sharing a space with tenants.
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If you have a love of the open road, living in an RV, trailer, or fifth-wheel might be for you. RVs and trailers come in a variety of styles and sizes, including motorhomes or towable RVs, and prices vary accordingly. (Motorhomes average around $60,000, while trailers and fifth wheels average around $16,000.) Perhaps the biggest appeal, however, is the ability to park your “house” wherever you want — and move as often as you like.
RV life has its challenges, though. First off, an RV isn’t generally considered real estate, so you can’t use a mortgage to buy one. And unless you stay in one spot, you constantly have to think about where you’ll park next.
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A co-op lets you own a home without actually owning a specific apartment. When you buy into a co-op, you own a share of a nonprofit corporation that owns a particular property. Your ownership in the co-op gives you the right to live in a particular apartment or unit. Co-ops are generally limited to high-density cities, such as New York, Chicago, or San Francisco.
While co-ops can be more affordable than comparable condos (at least up front), they can be hard to buy and sell due to the need for a new member’s board approval.
Pros:
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Built-in community
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Shared maintenance costs
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Fewer closing costs
Cons:
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May have a larger down payment requirement
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May come with additional responsibilities, such as making collective decisions
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Harder to buy and sell
Many non-traditional homes may save you money, but they don’t all qualify for a standard mortgage. Luckily, there are other types of financing available to make your homeownership dreams come true:
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Specialized loans: Some lenders may offer specialized loans for RVs or tiny homes. These loans may have shorter terms compared to a 30-year mortgage.
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Personal loans: Personal loans tend to have higher interest rates, shorter repayment terms, and lower loan maximums compared to mortgage loans. But they tend to have a simpler application process and fast funding.
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Builder financing: Some builders of tiny homes, modular, or manufactured homes might offer builder financing or have a partnership with specialized lenders.
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Rent-to-own payment plans: With this arrangement, part of your monthly payment goes toward the eventual purchase of a home. Agreements vary widely, so get clear on the specifics before agreeing to anything.
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Government-backed loans: If you qualify, you can use certain government-backed mortgages, such as FHA and VA loans, to finance certain nontraditional housing. For example, you can use an FHA or VA loan to purchase either a manufactured or modular home.
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Down payment assistance programs: Depending on your location and circumstances, there may be down payment assistance programs available to help offset the up-front costs of buying a home. Specific programs may vary based on the type of home you’re buying.
Keep in mind that while these options can help you finance alternative housing, they may come with shorter terms, higher interest rates, or specific eligibility criteria.
Before you commit to an alternative home, understand whether or not it’s actually allowed where you live. Local zoning and permitting rules can determine what you can build — and where.
Zoning laws limit what types of structures can exist in certain areas. For example, some areas may prohibit certain types of homes, such as RVs, tiny homes, or manufactured homes. There may also be a minimum square footage requirement for your home. Zoning can vary dramatically by municipality, so check the zoning ordinances in your precise location to find out what’s allowed.
While zoning refers to where you can build, permitting ensures your home meets certain standards. Permanent structures like modular homes generally must meet local building codes and require permits before construction. Tiny homes may fall into the “permanent” category if they sit on a foundation, while manufactured homes follow HUD standards instead of local ordinances.
Regardless of the type of alternative housing you pursue, make sure you check local permitting laws before you secure financing.
There are also legal factors that affect how you finance, use, and insure an alternative home. For example, RVs and tiny homes might be considered personal property rather than real estate, affecting insurance and taxes. Rental properties are another consideration: If you rent out an ADU or any part of your property, you’ll have to follow local rental laws.
As with zoning and permitting, keep up with any recent legislation or legal considerations that may affect your alternative housing plans.
