Company says sales of its prefab homes couldn’t scale up quickly enough to offset financial pressures caused by the sour economy

Architect Michelle Kaufmann, a major advocate of sustainable, modular construction, announced on Wednesday that the prevailing economic malaise, increasingly restrictive lending conditions, and the closing of a key factory partner have forced her company, Michelle Kaufmann Designs, to close its doors.

Founded in 2004 in Oakland, California, the firm offered several models of single-family, green modular homes, completed about 40, had orders for a couple dozen more, and had plans to build a hundred more – all with the aim of advancing affordable green design and scaling up the firm’s business.

The firm and Kaufmann herself attracted plenty of positive publicity and industry recognition. Most recently, she was a featured speaker at the National Association of Home Builders’ National Green Building Conference, in Dallas, and took home the Individual Advocate of the Year award at the conference’s National Green Building Awards celebration.

In a blog published on Wednesday, Kaufmann said even though her company was “successful at the proof of concept of a smarter way to design and build” green prefab homes, her company was not big and financially robust enough to weather the failure of the factory partner and a lending environment that has become extremely difficult for small businesses.

Still, it seems likely Kaufmann will emerge to go green again, perhaps, as she told the Los Angeles Times, with a focus on multifamily housing. She also sounds unwilling to give up on the notion that her innovations in single-family modular design might eventually bear fruit.

“We have built something important here that is not to be lost. The underlying concept works,” she wrote in her blog, adding “… it just might require a different model for scaling it. We are talking to a few larger players in the homebuilding world about potentially having them continue with our preconfigured designs.”