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Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
If you sell or broker manufactured homes in Texas, the Manufactured Housing Division will not issue or renew your license until a $50,000 bond for each location is on file. A surety bond lets you meet that requirement for an annual premium instead of tying up $50,000 in a certificate of deposit that must stay pledged for two years after you close. The bond is written on TDHCA Form 1025 and goes in with your license application.
Texas Occupations Code 1201.106 sets the security at $50,000 for a retailer and $50,000 for a broker. A stand alone installer license needs only $25,000, but a combined retailer/installer or retailer/broker/installer license is covered by a single $50,000 bond. Section 1201.107 requires a separate bond for each business location. The bond is filed with the Texas Department of Housing and Community Affairs, Manufactured Housing Division, on Form 1025, and the license runs two years.
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The amount is not one flat figure for every license on this page. Texas Occupations Code 1201.106(a) sets the security by license type: $100,000 for a manufacturer, $50,000 for a retailer, $50,000 for a broker and $25,000 for an installer. If you apply for installer only, you need $25,000, not $50,000.
The $50,000 figure is correct for a retailer, a broker, and any combined license that includes retailer. The TDHCA licensing FAQ states that a retailer/installer applicant does not need a separate bond for each license type as long as the license is applied for as a single license, and the $50,000 bond is sufficient. The TDHCA application, Form 1001, offers R, B, I, RB, RI and RBI license types on one form.
Section 1201.107 requires a separate bond or other security for each location where you do business. Property that is not contiguous to, or within 300 feet of, a bonded location needs its own bond, and any location where a home is shown or offered for sale must be bonded. Two situations do not need a location bond under that section: homes installed on permanent foundations and sold as real property, and temporary trade show locations run by qualifying 501(c) nonprofits.
Many retailers assume that because a contractor sets their homes, they can skip the installer license. TDHCA says otherwise. Section 1201.352 makes the retailer of a new HUD code home warrant the installation at the initial homesite, so a retailer who sells new homes must meet the installer requirements and be licensed as an installer. The combined RI license still carries one $50,000 bond.
A retailer license is required to sell or exchange two or more homes to consumers in a year, and a broker license to negotiate two or more sales a year. Section 1201.102 lets real estate brokers and salespersons licensed under Chapter 1101 act as manufactured housing brokers or salespersons when handling a consumer they represent in a real estate transaction. Salespersons need a license but no bond.
Applicants must complete the 8 hour core Licensing Education Class plus a 4 hour retailer course and a 4 hour installer course as applicable, and pass the exams. Holding a license before September 1, 1987 exempts you from that initial course requirement under Section 1201.104. Neither the training nor the grandfather clause removes the security requirement in Section 1201.105.
Security can be a surety bond from a company authorized in Texas, on the Continuous Manufactured Housing Licensing Surety Bond, Form 1025, or a certificate of deposit at a federally insured institution in Texas, assigned on Form 1016. A letter of credit is not accepted. A CD must stay in place for two years after you stop doing business, and if a claim reduces it you have 20 calendar days to make up the deficit. The security is payable to the Manufactured Homeowner Consumer Claims Program and is open to successive claims up to its face value.
Form 1025 requires the surety to give at least 60 days notice before cancelling. Under 10 TAC 80.40(c), if the bond is cancelled during the license period, the license is automatically suspended on the date coverage ends. Licenses are valid for two years. The renewal application, fee and proof of 8 hours of continuing education must reach TDHCA before the license expires. A license expired 90 days or less renews at one and a half times the fee, more than 90 days but less than one year at two times the fee, and after one year you must apply as a new licensee. License fees under 10 TAC 80.3 are $550 retailer, $350 broker, $350 installer, and on Form 1001 $900 for retailer/broker or retailer/installer and $1,250 for retailer/broker/installer.
The premium is a yearly charge set by the surety after underwriting the owners. Personal credit, business financials, time in the industry and any claims history drive the rate. The director may also require additional security from anyone tied to a prior license revocation, unreimbursed consumer claims program costs, or an unpaid administrative penalty, which raises the bond amount and the premium with it.
No. Texas Occupations Code 1201.106 sets installer security at $25,000. The $50,000 amount applies to retailers, brokers and combined licenses that include retailer.
No. The TDHCA licensing FAQ says a separate bond is not required for each license type as long as the license is applied for as a single license, and the $50,000 bond is sufficient.
No. Section 1201.107 requires a separate bond or other security for each location. Property that is not contiguous to, or within 300 feet of, a bonded location needs its own bond.
Yes. TDHCA explains that Section 1201.352 makes the retailer of a new HUD code home warrant the installation, so a retailer selling new homes must be licensed as an installer. A combined retailer/installer license is still covered by one $50,000 bond.
Form 1025 requires the surety to give at least 60 days notice. If the bond is cancelled during the license period, 10 TAC 80.40(c) automatically suspends the license on the date coverage ends, so replacement coverage needs to be on file first.
You can assign a certificate of deposit at a federally insured institution in Texas on Form 1016, but it stays pledged for two years after you stop doing business. A letter of credit is not accepted.
Licenses are valid for two years. Up to 90 days late costs one and a half times the renewal fee, more than 90 days but under one year costs two times the fee, and after one year you must apply for a new license.
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