Texas Property Tax Lender Bond: Requirements & Cost
Planning to offer property tax loans in Texas? The Office of Consumer Credit Commissioner (OCCC) requires a $50,000 surety bond as a key part of your licensing process.
⚡ Property Tax Lender Bond Quick Facts
- • Required Bond Amount: $50,000 (First license) / $10,000 (Additional)
- • Regulating Agency: Office of Consumer Credit Commissioner (OCCC)
- • Annual Premium: 1% - 5% of bond amount (typically $500 - $2,500)
- • Filing System: NMLS (National Mortgage Licensing System)
- • Purpose: Ensures compliance with Chapter 351 of the Texas Finance Code
What is the Texas Property Tax Lender Bond?
A property tax lender bond is a type of license and permit surety bond required by the State of Texas. It acts as a financial guarantee that the lender will follow all state laws and regulations outlined in Chapter 351 of the Texas Finance Code.
Unlike insurance that protects the business, this bond protects the state and Texas property owners. If a lender engages in fraudulent practices or fails to remit required payments, a claim can be made against the bond to compensate the injured parties.
Who Needs a Texas Property Tax Lender Bond?
Under the Property Tax Lender License Act, any entity that makes, offers, or negotiates property tax loans in Texas must be licensed and bonded. This includes:
- Residential property tax lenders
- Commercial property tax lenders
- Any company holding a property tax lender license through the OCCC
Note: Individual loan officers may also need to be licensed through the National Mortgage Licensing System (NMLS) if they originate loans on residential homestead properties.
How Much Does a Property Tax Lender Bond Cost?
The cost (or "premium") you pay for a $50,000 bond depends largely on your personal credit score and business financial history.
Cost Breakdown by Credit Tier
| Credit Score | Estimated Rate | Annual Premium |
|---|---|---|
| 700+ (Excellent) | 1% - 1.5% | $500 - $750 |
| 650 - 699 (Good) | 2% - 3% | $1,000 - $1,500 |
| Below 650 (Fair/Poor) | 5% + | $2,500+ |
Step-by-Step Licensing Process
- Register with NMLS: All applications for a Property Tax Lender License are submitted electronically through the NMLS.
- Obtain the Surety Bond: Purchase your $50,000 bond (Form OCCC/B22-3). The bond must be issued by a surety company authorized to do business in Texas.
- Submit Financials: Provide personal and business financial statements as required by the OCCC.
- Pay Fees: Licensing fees include an application fee and NMLS processing fees.
Frequently Asked Questions
Can I get a property tax lender bond with bad credit?
Yes. While your premium will be higher (usually starting around 5% of the bond amount), many surety companies offer "bad credit" programs to help new lenders get licensed.
Do I need a separate bond for each branch location?
Typically, you need one $50,000 bond for your primary license. Additional branch licenses may require a smaller bond amount, usually $10,000 each, or a rider to your existing bond.
How long does it take to get the bond?
If you have good credit, we can often issue your property tax lender bond within 24 to 48 hours. The bond is then uploaded directly to your NMLS account.
Get Your Texas Property Tax Lender Bond
Ready to start your OCCC license application? Get a free, no-obligation quote on your $50,000 surety bond today.
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