diff --git a/commands/commandeer.go b/commands/commandeer.go
index bac96fa7a..b2a995ae6 100644
--- a/commands/commandeer.go
+++ b/commands/commandeer.go
@@ -309,7 +309,12 @@ func (c *commandeer) loadConfig(mustHaveConfigFile, running bool) error {
 		doWithConfig)
 
 	if err != nil {
-		return err
+		// We should improve the error handling here,
+		// but with hugo mod init and similar there is a chicken and egg situation
+		// with modules already configured in config.toml, so ignore those errors.
+		if mustHaveConfigFile || !moduleNotFoundRe.MatchString(err.Error()) {
+			return err
+		}
 	} else if mustHaveConfigFile && len(configFiles) == 0 {
 		return hugolib.ErrNoConfigFile
 	}
diff --git a/hugolib/config.go b/hugolib/config.go
index aa9c81104..cdce19d6e 100644
--- a/hugolib/config.go
+++ b/hugolib/config.go
@@ -151,7 +151,7 @@ func LoadConfig(d ConfigSourceDescriptor, doWithConfig ...func(cfg config.Provid
 		return nil
 	}
 
-	_, modulesConfigFiles, err := l.collectModules(modulesConfig, l.cfg, collectHook)
+	_, modulesConfigFiles, modulesCollectErr := l.collectModules(modulesConfig, l.cfg, collectHook)
 	if err != nil {
 		return l.cfg, configFiles, err
 	}
@@ -166,6 +166,10 @@ func LoadConfig(d ConfigSourceDescriptor, doWithConfig ...func(cfg config.Provid
 		return l.cfg, configFiles, err
 	}
 
+	if err == nil {
+		err = modulesCollectErr
+	}
+
 	return l.cfg, configFiles, err
 }