Mortgage-Backed Revenue Bond

AAA

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.

INVESTOPEDIA EXPLAINS '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.

VIDEO

RELATED TERMS
  1. Federal Subsidy Recapture

    The Federal subsidy recapture is the repayment of all or part ...
  2. Housing Authority Bonds

    A short-term or long-term bond issued by state or local governments ...
  3. Housing Bonds

    Debt securities issued by state or local governments to raise ...
  4. Revenue Bond

    A municipal bond supported by the revenue from a specific project, ...
  5. American Municipal Bond Assurance ...

    The first municipal bond insurance company, formed in 1971 as ...
  6. Bulldog Market

    A nickname for the foreign bond market of the United Kingdom. ...
Related Articles
  1. Municipal Bond Tips For The Series 7 ...
    Insurance

    Municipal Bond Tips For The Series 7 ...

  2. Tax Tips For The Individual Investor
    Retirement

    Tax Tips For The Individual Investor

  3. The Basics Of Municipal Bonds
    Bonds & Fixed Income

    The Basics Of Municipal Bonds

  4. Find The Right Bond At The Right Time
    Bonds & Fixed Income

    Find The Right Bond At The Right Time

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center