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Surety Bonds Agency Discovers Bonding Solution For Contractors Restricted By New Louisiana HMGP Bond Requirements

Home-elevation contractors in Louisiana now required to to post performance and payment surety bond before they begin work on projects funded by FEMA hazard mitigation grant program.


Syracuse, NY - November, 7 2011 - The Louisiana Office of Community Disaster Recovery Unit is now requiring contractors to be licensed and to present a performance bond for all HMGP projects starting November 1, 2011.  This has frustrated contractors, since most surety bonding companies will not provide these bonds. out of Syracuse, New York has discovered one surety company who will provide these bonds with a full application process. Contractors throughout the state of Louisiana face significant frustration and restricted job opportunities after a new bonding requirement was put into place by the Louisiana Office Community Disaster Recovery Unit (OCD-DRU).

The OCD-DRU has issued a requirement to all contractors working under the federally funded Hazardous Mitigation Grant Program (HMGP) to be licensed and to present a performance bond for any project effective November 1, 2011.The HMGP has been in effect since 2006 to provide grant money in an effort to prevent another Hurricane Katrina-like disaster for homeowners in flood-prone areas.

Since that time, contractors have been working under the program to elevate existing homes, reconstruct damaged homes, or to strengthen other parts of a home that is susceptible to damage from a flood. While most state requirements for bonding simply mean an influx of new applications for bonds to surety agencies and surety companies, this particular bond requirement has contractors and surety agencies flummoxed.

“Standard bonding companies are just not willing to even consider these bonds,” said Ralf Rigo, owner of the New York state based surety bond agency, “Since the bond is paid out directly to the homeowner, it makes most surety bond companies nervous. It took us a while, but we found one who will provide a bond.”

This is good news for contractors who are currently unable to work on HMGP jobs due to the new requirement, but contractors who want to apply for a bond should be aware that the surety company requires a full application and financial statements, according to Rigo. Despite the in-depth application process and the fact that in a typical scenario the contractor would not receive their bond for up to 5 days after applying, Rigo is relieved to have a bond option available for contractors in Louisiana who are now required to have one.

For more information about how to apply for the performance and payment surety bond, please call 1-800-331-5453 or visit



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