How modular build finance works

Most of a modular home is built in a factory, away from the land it will stand on. The builder carries large costs early, while a standard construction loan pays only for work done on site and takes the land as its security. Victoria's Government put it plainly in August 2026: lenders cannot recognise the value of factory work "until it is permanently fixed to the land".

The Housing Industry Association calls access to finance "a major hurdle for modular and prefabricated homes", and Tasmania's Premier says the biggest obstacle to modular housing is access to finance, not the build.

Some banks now fund factory stages for homes on land the borrower owns, keeping the land as their only security until the home arrives on site (Commonwealth Bank). Homes on leased land, or homes that stay movable, still sit outside most home lending: brokers report they may need chattel loans instead (Home Loan Experts).

The gap matters. The National Housing Accord aims for 1.2 million new homes in the 5 years from 1 July 2024, and by August 2026 about a quarter of that target had been completed, 7 quarters in (National Housing Supply and Affordability Council). Factory-built homes made up an estimated 5 to 8% of new homes in 2025, and Victoria's analysis credits modern building methods with cutting build times by up to 20 to 50% and costs by up to 20%.

Modular build finance closes the gap by paying against certified factory stages and taking security over the home itself as it is built. That's how Woolong's Modular Build Finance works.

The builder's contract sets out the stages of the build. At each one the same 3 things happen, in the same order:

1. The surveyor certifies. An independent quantity surveyor checks the stage against the plans and the build schedule.
2. The lender pays the builder. Once the stage is certified, the draw goes straight to the builder.
3. Title passes to the borrower. Title to the stage passes to the borrowing company, and is secured to the lender the same day.

Sample schedule. Your own schedule follows your builder's contract and is set out in your letter of offer. See every step in detail.

A modular home can stand as security before it is installed, because it is built to be moved. Woolong registers a security interest over the home on the Personal Property Securities Register before delivery, and title to each finished stage passes to the borrowing company as it is paid.

On a site the company leases or licenses, the home counts at its re-sited value: what it would sell for in its next home, after the cost of moving it. The landowner signs a site deed agreeing the home stays removable. On land the company owns, the land and the finished home are valued together under a registered mortgage.

Every director guarantees the facility, backed by a mortgage over property a director owns, and the loan stays at 70% of the security or less. All 5 pieces of security are listed with the full terms.

Interest is charged on what has been drawn, and it is added to the facility while the home is built, so there is nothing to pay until handover. The rate is variable: the 1 month bank bill swap rate plus a margin, confirmed at application. Every fee is set out in your letter of offer, so you sign with every number in view.

From handover, the facility is repaid monthly, principal and interest, by direct debit for up to 10 years. The calculator estimates the interest added during the build and the monthly repayment for your contract price.

Every build brings 4 parties together, each with its own part to play and its own document, all agreed before the first draw.

• The borrower, your company, signs the facility, owns the home from the first draw, rents it out and repays the loan.
• The builder makes the home in its factory, is paid direct for each certified stage and signs a side deed with the lender.
• The site, your company or a landowner who leases or licenses the site, signs a site deed that keeps the home removable.
• The lender funds each draw, holds the security and keeps the build account until the last repayment.

3 independent experts check the work: a quantity surveyor certifies every draw, a valuer reports at the start and every 2 years, and solicitors give every guarantor independent legal advice before signing.

• The company's constitution and a current company extract
• Identification for every director
• Plans, specifications and the builder's contract with its draw schedule
• The site lease or licence, or the title to the company's land
• Details of the director's property and any loans secured on it
• Insurance quotes, including transit and re-erection cover

The application takes about 20 minutes. Start an application and we'll reply within 1 business day with your next steps.