Mortgage-Backed Revenue Bond

Loading the player...

DEFINITION of 'Mortgage-Backed Revenue Bond'

A type of municipal agreement that pays holders based on revenues generated from real estate. Financial institutions also typically offer these bonds at relatively low interest rates. Proceeds are used to provide funds to these institutions, which in return use the funds to make low interest rate mortgage loans.



Municipalities would use such bonds to fund public construction projects, for example. Borrowers of these mortgages are responsible for interest and principal payments.

BREAKING DOWN 'Mortgage-Backed Revenue Bond'

Sometimes referred to as a housing bond, which is issued by a local housing authority. These bonds can either be short- or long-term, and are often used for construction of low- or middle-income housing or projects that help the community and the environment. Short-term bonds are typically sold as $5,000 denominations with a maturity that varies between 18 months to four years. Longer-term bonds are issued under federal agency contracts.

RELATED TERMS
  1. Revenue Bond

    A municipal bond supported by the revenue from a specific project, ...
  2. Bond

    A debt investment in which an investor loans money to an entity ...
  3. Combination Bond

    A bond, typically a municipal bond, that has financial backing ...
  4. Housing Authority Bonds

    A short-term or long-term bond issued by state or local governments ...
  5. Bond Resolution

    1. A document used with government bonds, especially general ...
  6. Bond Anticipation Note - BAN

    A short-term interest-bearing security issued in advance of a ...
Related Articles
  1. Bonds & Fixed Income

    5 Reasons to Invest in Municipal Bonds When the Fed Hikes Rates

    Discover five reasons why investing in municipal bonds after the Fed hikes interest rates, and not before, can be a great way to boost investment income.
  2. Mutual Funds & ETFs

    Why Muni Bonds and Bond Funds are Perfect Together

    Municipal bonds and bond funds differ in several ways, which is partly why they complement each other well.
  3. Bonds & Fixed Income

    The Basics Of Municipal Bonds

    Investing in these bonds may offer a tax-free income stream but they are not without risks.
  4. Professionals

    Types of Funds

    FINRA Series 6: Section 10 Types of Funds. This section describes different types of funds: Money Market Fund, Bond Fund, Government Bond Fund, Municipal Bond Fund, Corporate Bond Fund, Balanced ...
  5. Home & Auto

    How To Choose The Right Bond For You

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
  6. Professionals

    Municipal Bonds

    FINRA Series 6 Exam Study Guide - Municipal Bonds. In this section Types of Municipal Bonds: 1) General Obligation 2) Revenue Bonds.
  7. Professionals

    Types of Mutual Funds

    FINRA/NASAA Series 66 Section 2 - Types of Mutual Funds. Types of mutual funds: money market funds, bond funds, balanced funds and equity income funds.
  8. Bonds & Fixed Income

    Should You Consider Muni Bonds?

    Municipal bonds come in two types. General obligation bonds repay their holders through taxes. They often have low interest rates, but they’re safe.
  9. Bonds & Fixed Income

    The Top 5 Municipal Bond Funds for 2016

    Understand how the addition of municipal bond mutual funds can enhance a portfolio, and learn the top-rated municipal bond funds to consider for 2016.
  10. Bonds & Fixed Income

    A Look at the Pros and Cons of Muni Bonds

    Considering muni bonds? Here's a look at their pros and cons.
RELATED FAQS
  1. What do cities do with the funds generated from municipal bonds?

    Learn more about municipal bonds, including the various types of bonds issued and the purposes of municipal bond funds, such ... Read Answer >>
  2. How do the returns on municipal bonds compare to those of other bonds?

    Learn how tax-free municipal bonds may provide better returns than other types of bonds, and understand the risks of municipal ... Read Answer >>
  3. Who or what is backing municipal bonds?

    Learn about the basics of municipal bonds, including the various revenue sources that are utilized to back or secure municipal ... Read Answer >>
  4. Where can I buy government bonds?

    The type of bond determines where you can purchase it, so you need to decide which type of bond you would like to purchase ... Read Answer >>
  5. What is the difference between municipal bonds and standard money market funds?

    The primary difference between municipal bonds - also known as "munis" - and money market funds is that municipal bonds are ... Read Answer >>
  6. What is a triple tax-free municipal bond?

    At its core, a triple tax-free municipal bond is just like any corporate bond: it is a debt instrument, a loan given to a ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center