Articles on Stock markets

News, Research and Analysis

Help Center
Introduction
Investment Portfolios
Investment Terminology and Instruments
Technical Analysis and Trading
Cryptocurrencies and Blockchain
Retirement
Retirement Accounts
Personal FinancePersonal BankingPersonal DebtHome RelatedTax FormsSmall BusinessIncomeInvestmentsIRS Rules and PublicationsPersonal LifeMortgage
Corporate Basics

What is a Mortgage Subsidy Bond?

Mortgage subsidy bond is another word for a mortgage revenue bond, which are municipal bonds which are used to fund mortgage relief programs and refinancing arrangements through the state or municipal government.

In 1980, the Mortgage Subsidy Bond Tax Act established some rules and definitions surrounding mortgage subsidies and their bonds, and, more specifically, removing their exemption from federal taxation.

Mortgage subsidies are loan programs that are meant to provide relief to a certain type of borrower by not charging them interest, similar to some student loans. Mortgage subsidy bonds are the municipal debt issued to raise capital to help pay for these programs on a local and state level.

There are similar federal subsidies, such as FHA loans, but states have their own housing finance agencies (HFAs), which may go under different names. The downside for investors is that these municipal bonds are not deductible from federal income taxes in the way that many municipal bonds are.

Mortgage Revenue Bonds (MRBs), a closely related type of bond, enjoyed tax-exempt status. They regain the exemption as “activity bonds” in 1986.

What are Municipal Bond Funds?
What Types of Bonds Are There?

Keywords: Federal Housing Finance Agency (FHFA), municipal bonds, subsidiaries, Federal Housing Administration (FHA), Mortgage Revenue Bonds (MRBs), Mortgage Subsidy Bond Tax Act of 1980, activity bonds,
What is active money management?What is the foreign corrupt practices act?What is a market-with-protection order?What is market research?How Do You Buy Litecoin?Why do Companies Opt for ICOs?