Mortgage Revenue Bonds (MRBs): Definition, Benefits, and Eligibility

Mortgage revenue bonds (MRBs) are bonds issued by local or state Housing Finance Agencies (HFA). These bonds are tax-free for investors and are backed by the aggregate monthly mortgage payments from borrowers. The funds raised through the sale of MRBs are utilized by HFAs to facilitate affordable mortgages for first-time homebuyers with low incomes.

MRBs are typically available to individuals purchasing their first home, with incomes below a certain threshold, often near or slightly above the local median income. States have varying annual issuance amounts for MRBs, with the issuance capped based on a multiple of the state’s population. Criteria for MRBs include limits on home purchase prices and borrower income levels.

MRBs have played a crucial role in enabling individuals with low incomes to achieve homeownership. These bonds offer below-market interest rates, reducing monthly mortgage payments for borrowers. Lower payments enhance borrower eligibility for mortgages and mitigate default risks, thereby providing a secure investment opportunity for investors.

MRBs are municipal bonds issued by local housing authorities to finance mortgages for qualified, typically low-income, first-time homebuyers.

Investors benefit from MRBs as they offer a tax-free and relatively safe investment opportunity, despite potentially lower interest rates.

MRBs are typically available to first-time homebuyers with incomes below a certain threshold, often near or slightly above the local median income.