Manufactured housing bonds are legally binding agreements between three parties: manufactured home dealers or installers, the government agency responsible for regulating local mobile home dealers, and a surety company.
The government agency is the Obligee and establishes the obligations that the dealer or installer (the Principal) must follow. The surety (also called bonding company) issues the bond guaranteeing the performance of the dealer or installer.
Manufactured housing bonds are required in some states before being eligible to obtain a license to operate as a mobile home dealer, installer, retailer, broker, salesperson, or manufacturer. Some states where you need a surety bond include New York, Texas, Florida, and Alabama, among others. Most states handle mobile home dealer licensing directly while some local municipalities require their own bonds for installing or moving manufactured homes.
When the surety company issues the bond, they provide the government agency a guarantee that the customers of a licensed manufactured home dealer or installer will receive payment for financial losses resulting from a violation of the statutes and regulations set forth by the manufactured home dealer license.
If the dealer or installer fails to meet the obligations set out by the government agency, the surety will pay out any damages up to the bond amount. The dealer or installer is ultimately liable for the losses and is legally required to reimburse the surety company for any damages paid under the bond.
Manufactured housing surety bond costs vary depending on the total bond amount and the premium rate. The government agency sets the required bond amount and the surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium.
Premium rates for manufactured housing bonds typically cost between 1% and 10% of the total bond amount. Most manufactured housing bonds mandated by the state require credit checks. Bonds required by local municipalities with a bond amount under $25,000 do not normally require credit checks.
During the application process, the surety company may also evaluate your financial strength and industry experience. For bonds requiring credit checks, applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a manufactured housing bond. EZ Surety still offers competitive rates to individuals with low credit scores or other financial issues.
Below are the lowest premiums EZ Surety has issued for manufactured housing surety bonds in popular states.