Definition for: Housing Bonds
A "housing bond" is a debt security issued by a municipal government to finance construction of housing, usually for low-income persons or in response to large population growth that results in an acute housing shortage, The term is also sometimes used to describe any bond issue that is backed by mortgage repayments. These bonds may be attractive to investors because the interest on such bonds is often exempt from federal, state, and local taxes. Since they are typically secured by underlying assets, housing bonds often have a low rate of default.
