Manufactured Housing MANUFACTURER ($50,000) Bond - Statewide in Texas
Table of Contents
Brief Summary
Texas sizes manufacturer security by statute, and builders shipping in from another state can owe a second layer of it. Getting the face amount right before the bond is executed saves a rejected license packet. A surety bond on the Manufactured Housing Division's Form 1025 covers the requirement without locking plant capital in a Texas bank deposit.
Anyone who builds, assembles or ships a new HUD code manufactured home into Texas needs a manufacturer's license from the TDHCA Manufactured Housing Division. Texas Occupations Code 1201.106 sets manufacturer security at $100,000, plus an additional $100,000 for a manufacturer with no licensed plant or other facility in Texas that can handle warranty service. Confirm the face amount with the Division before the bond is issued.
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How to Apply for a Manufactured Housing MANUFACTURER ($50,000) Bond:
- Confirm with the Manufactured Housing Division whether your plant setup triggers the additional $100,000 for manufacturers without a Texas warranty facility.
- Complete the eight hour core license education class before applying, if you were not licensed with the department on September 1, 1987.
- Submit fingerprints and file the license application within 30 days.
- Have the bond executed on MHD Form 1025 for the face amount the Division requires, one for each location.
- Send the application, bond, class certificate, business registration and the $850 fee to TDHCA.
- Renew before the two year license expires, with the bond still in force.
Detailed Information About the Texas Manufactured Housing MANUFACTURER ($50,000) Bond:
Who needs a manufacturer's license
Texas Occupations Code 1201.101(a) bars anyone from constructing or assembling a new HUD code manufactured home in Texas, or shipping one into the state, without a manufacturer's license. TDHCA notes that a manufacturer can sell only to a licensed Retailer/Installer and cannot sell to the consumer or the public.
The security amount
Section 1201.106(a)(1) sets the security for a manufacturer at $100,000, and the TDHCA Manufacturer (M) checklist lists a $100,000 surety bond. Section 1201.106(b) adds a second $100,000 for a manufacturer that does not have a licensed manufacturing plant or other facility in Texas from which warranty service and repairs can be provided. Under 10 TAC 80.40(d), an out of state manufacturer that keeps a bona fide service facility meeting the Department's requirements may be exempt from that added security.
Section 1201.107 requires a separate bond for each location where the manufacturer keeps a place of business, and the license fee in 10 TAC 80.3 is charged for each manufacturer's plant license. The director can also require more security under 1201.106(a-1) after a license revocation, unreimbursed claims program costs, or an unpaid administrative penalty under a final order.
Because the face amount on the bond has to match what the Division requires for your license, confirm it with the Manufactured Housing Division before the bond is issued.
Who the bond protects
The bond is payable to the manufactured homeowner consumer claims program, which TDHCA runs to provide a remedy for damages caused by prohibited conduct of a license holder. It must be issued by a surety authorized to do business in Texas, or the manufacturer can instead keep other security at a federally insured depository institution in Texas.
Form, fee and term
The bond is written on MHD Form 1025, the Continuous Manufactured Housing Licensing Surety Bond, and stays in effect until the surety cancels it on at least 60 days written notice. The license fee is $850 and licenses are valid for two years from issuance. A canceled bond suspends the license on the cancellation date.
Eligibility and Requirements for a Texas Manufactured Housing MANUFACTURER ($50,000) Bond:
- Security of $100,000 under Texas Occupations Code 1201.106(a)(1).
- An additional $100,000 under 1201.106(b) unless the manufacturer has a licensed plant or other facility in Texas able to provide warranty service and repairs.
- A surety authorized to do business in Texas.
- Bond on MHD Form 1025, payable for use by the TDHCA Manufactured Housing Division.
- Financial review of the manufacturing company by the surety.
Texas Manufactured Housing MANUFACTURER ($50,000) Bond FAQs:
Texas Occupations Code 1201.106(b) adds $100,000 of security for a manufacturer with no licensed plant or other facility in Texas that can provide warranty service and repairs. 10 TAC 80.40(d) allows an exemption for an out of state manufacturer that keeps a bona fide service facility meeting the Department's requirements.
No. TDHCA states that manufacturers can sell only to a licensed Retailer/Installer and cannot sell to the consumer or public.
Section 1201.107 requires a separate bond or other security for each location where you keep a place of business, and the TDHCA license fee is charged per manufacturer's plant license.
The statute sets $100,000 for a manufacturer, with the added $100,000 where it applies. Confirm the exact face amount with the Manufactured Housing Division before the bond is issued so the bond matches your license filing.
Yes. Section 1201.105 allows other security in place of a bond, held in or by a federally insured depository institution located in Texas under a Department control agreement.
