"Factory-built" covers any home whose structure is built indoors and delivered to the site. Site-built means framed where it stands. The finished buildings can be indistinguishable. The approval paths are not.
Who approves what#
A site-built ADU is inspected by your local building department, stage by stage, as it goes up.
A factory-built ADU is inspected twice by two different bodies. The structure is approved by the state before it leaves the factory: The Colorado Division of Housing registers or certifies manufacturers, sellers and installers, and approves plans before construction. Everything from the foundation down, and every connection on site, is still inspected locally.
That split is the single most useful thing to understand. State certification covers the box. It does not cover the ground it sits on, the utilities running to it, or whether zoning allows it there at all.
What the local permit still requires#
The City of Boulder is explicit about this: A state-approved modular ADU still needs a city building permit and must meet local codes and zoning.
So a state-approved unit still has to satisfy the city's zoning, its size and height limits, and its energy code. The city's energy code is strict: New homes and additions must be all-electric, with no residential exceptions, under the code effective December 1, 2024. Smaller units get a simpler compliance route: ADUs of 1,000 sq ft or less may use the prescriptive path instead of an energy model.
In unincorporated Boulder County, factory-built and modular units are held to the same wildfire and sustainability requirements as anything else: BuildSmart and wildfire mitigation requirements apply to tiny and modular dwellings, including sprinkler systems. And whatever the construction method, All structures must sit on permanent foundations. No wheels, no trailers.
The 2026 state rules#
The state's rules in this area changed recently: The administrative rules took effect July 1, 2026, and the Division of Housing is still updating its forms.
How those rules interact with a city's own requirements is exactly the kind of question we will not guess at. For the City of Boulder: Being confirmed with State of Colorado.
If you are planning a factory-built ADU in the city right now, ask the city building department and the Division of Housing directly, and get the answer in writing before you order anything.
What the state law says about the two methods#
Where HB24-1152 applies, it removes one specific form of discrimination: No new parking space and no owner occupancy, with limited exceptions; ADUs of 500 to 750 sq ft must be allowed; factory-built ADUs cannot be treated more strictly than stick-built.
That clause protects factory-built units from being singled out. It does not exempt them from codes that apply to everyone.
Choosing between them#
The honest answer is that the choice turns on your site, not on a general rule. A steep or narrow lot may not admit a crane or a wide delivery. A tight urban lot may make weeks of on-site framing intolerable. Utility work, foundations and site preparation are much the same either way.
Where to go next#
Read the City of Boulder rules or the unincorporated county rules, and if the property is rural, wells, septic, wildfire and access.