What is a Texas Manufactured Housing Bond?

Get acquainted with this bond today!

Texas Manufactured Housing BondThe Texas Department of Housing and Community Affairs, pursuant to Chapter 1201 of the Occupations Code, requires a bond be posted by a manufacturer, retailer, broker, or installer who is applying for or renewing a license.

Manufacturer – a person who constructs a new HUD-code manufactured home in Texas.

Retailer – a person who sells, exchanges, or lease-purchases or offers to sell, exchange, or lease-purchase two or more manufactured homes to consumers in Texas within a 12-month period.

Broker – a person who negotiates for others a bargain or contract for the sale, exchange, or lease-purchase of two or more manufactured homes to consumers in Texas within a 12-month period.

Installer – a person who conducts installation functions on manufactured homes.


What is a Manufactured Housing Bond by?

The surety bond will act as a guarantee that the principal (manufacturer, retailer, broker, or installer) will abide by the rules and regulations of the Texas Department of Housing and Community Affairs, provisions of the Code, and the laws of the state.

It will also assure the TDHCA that if a lapse in business ethics occurs, resulting in a violation of the bond conditions; the obligee will be compensated, subjected to the conditions of the bond.


What is the bond amount?

The bond amount will depend on the person’s primary function.

  • Manufacturer – $100,000
  • Retailer – $50,000
  • Broker – $50,000
  • Installer – $25,000


What are the bond conditions?

  • The bond amount must be payable to the trust fund.
  • The director may require certain individuals to provide an additional amount based on these conditions:
    • The person’s license has been revoked in the past.
    • The person has a history of unreimbursed costs and liabilities that are beyond the surety bond coverage, and those costs have been incurred on the trust fund.
    • The person failed to pay an administrative penalty.
  • If a manufacturer cannot provide prompt repairs under warranty due to lack of a licensed manufacturing plant in the state, an additional $100,000 shall be included.
  • The bond must conform to the provisions of the Insurance Code.
  • A manufacturer, retailer, broker, or installer who has more than one business location within the state shall file a different bond for each.
  • A property that is used for a business located within 300 feet from the bonded location will need a separate bond.
  • In the case of cancellation, a 60-day notice is required.


How can I get this type of bond?

You must first seek the help of a dependable surety bond company that is authorized to conduct business in Texas such as Surety Bond Authority. You will then have to go through the bonding process that will include applying for the bond and undergoing a prequalification process.

During the latter, an underwriter will evaluate your financial strength, business history, and credit score. You will receive your bond immediately once qualified.

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