Housing and Community Development (HCD) Practice Exam

Which cash equivalent must be deposited into escrow for a Mh-Unit purchase?

1. Only deposits for uninstalled accessories

2. Purchaser’s bond for the deal

3. Down payments for the Mh-Unit

4. All of the above

The correct answer is: All of the above

When purchasing a manufactured home (Mh-Unit), various cash equivalents are often required to be deposited into escrow to ensure that both the buyer and seller fulfill their obligations under the purchase agreement. Each type of deposit serves a specific purpose in the transaction. Deposits for uninstalled accessories may be necessary to secure those additional features that the buyer has decided to include with their purchase of the Mh-Unit. Including this in escrow protects the buyer's investment in those accessories, ensuring that they are installed as agreed. The purchaser's bond, often required for the completion of the transaction, serves as a financial guarantee. This bond ensures that the purchaser will meet their obligations, which is critical in the context of manufactured home transactions where financing and compliance with state laws may be involved. Down payments for the Mh-Unit itself are standard in real estate transactions, representing a commitment from the buyer to proceed with the purchase. This initial financial commitment is typically held in escrow until the transaction is completed. In this context, all these elements reflect the comprehensive financial protections and commitments typically required in a manufactured home purchase arrangement. The inclusion of all these cash equivalents into escrow provides benefits to both parties in the transaction, facilitating trust and ensuring that each side is meeting their contractual obligations.