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Business Glossary
obligation of local public housing agencies, which is centrally marketed through competitive sealed-bid auctions conducted by the U.S. Department of Housing and Urban Development (HUD). These obligations are secured by an agreement between HUD and the local housing agency that provides that the federal government will loan the local authority a sufficient amount of money to pay
The proceeds of such bonds provide low-rent housing through new construction, rehabilitation of existing buildings, purchases from private builders or developers, and leasing from private owners. Under special provisions, low income families may also purchase such housing.
The interest on such bonds is exempt from federal income taxes and may also be exempt from state and local income taxes.

