The construction industry has been shifting from the stick-built methods to modularization. Despite such increased adoption, the industry has not yet been able to fully capture the benefits of modular construction methods due to various associated risks and challenges. While many research efforts have studied the various decision-making processes and operations related to modular construction projects, none is perceived to have developed a risk-based framework to assess the challenges associated with the use of modularization in construction projects. This paper fills this knowledge gap. In a previous research, the authors identified 50 factors affecting modular construction projects. Consequently, an industry survey was developed to quantify the identified risk factors in terms of their likelihood of occurrence, and relative impact. Based on 48 survey responses, this study conducted statistical testing to group the modular risks into risk tiers based on their statistical significance. Furthermore, a scoring system was developed as to allow for quantitative assessment of the challenges associated with the use of modularization. This research should help stakeholders make informed decisions about utilizing modularization in their projects by allowing a proactive management to the various associated challenges and risks.