Houses that flip and fold into place

June 19, 2013, 3:00 PM UTC

FORTUNE — Prefab houses have been around forever — at the turn of the last century you could order a kit house from the Sears catalogue — but they soon achieved a reputation for shoddy workmanship and unappealing design (think trailer-style homes). A new generation of architects and designers have decided that there’s no reason prefab houses can’t look great and be of high quality.

Turns out, prefab may be the most environmentally friendly way to build a house. When a house is built in a factory there’s less waste — materials can be precision measured and cut — plus a prefab structure can be erected within a couple of weeks — avoiding months and months of workmen driving greenhouse gas spewing trucks to the site. One speaker at Fortune’s Brainstorm Green conference earlier this year, Bill Haney — founder and CEO of Blu Homes, cited another advantage of prefab housing: “No one can build a traditional house on time or on budget. Psychology Today cited a study that said it’s more painful to build a house than it is to have a loved one die.”

Haney has added a high-tech element to his prefab green houses. Applying technology developed at MIT, Blu Homes designs its modern structures using steel frames that fold on hinges much like a card table. Today, most prefab homes must be delivered at great expense on wide-load trucks that are too big to travel on many roads and have to be accompanied by escort cars. A Blue Home, by contrast, can be folded up to fit on an 18-wheeler, allowing the house to be shipped relatively cheaply and easily from the company’s factory in Vallejo, Calif.

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Another advantage: Because traditional prefab houses are shipped in boxy modules that need to fit on a truck, there’s a limit on the size of rooms and heights of ceilings. A Blu Home can unfold into large rooms with soaring cathedral ceilings.

The houses range from the modest 465 sq ft Origin for $130,000 (not including foundation and site prep) to the elegant, California modern 3,000 sq. ft Breeze house, which starts at $540,000. As for its green credentials, Blu Homes use non-off-gassing materials (including low or no VOC paints) and materials that are formaldehyde-free. The homes are highly insulated and with the addition of solar panels energy costs can be dramatically cut.

The company has raised $69 million and is backed by, among others, the Disney (DIS) family and the Scandinavian investment company Skagen Group. The company says it expects to sell more than 100 homes this year nationwide. Blu Homes, which is not yet profitable, says it booked sales last year of $40 million and is on track to hit $70 million this year. When asked what keeps him up nights, Haney replied: “My biggest worry is keeping up with the fast growth and at the same time maintaining quality.” That’s a problem a lot of CEOs would like to have.