Mortgage Revenue Bond - MRB

See: Mortgage.

In general, bonds issued by local governments are known as municipal bonds. They cover a host of projects. Road building. Money for new sports stadiums. Funds to construct the Museum of Washing in the birthplace of liquid hand soap.

Mortgage Revenue Bonds, or MRBs, have a narrower focus. The funds raised by these debt instruments get used to build housing for lower-income people.

A muni bond issued to build a road might be backed by toll revenue. These are generally known as revenue bonds. The MRBs are backed by revenue generated by the housing built, and are backed by the government bodies issuing them. See: Federal Housing Administration - FHA.

MRBs are different than the mortgage-backed securities that contributed to the financial crisis in 2007-2008. Those MBSs were issued by private companies. The MRBs are issued by the public sector, usually by local governments or by the Housing Finance Agencies operating on the state level.

Also, because they are a form of muni bonds, many mortgage revenue bonds are exempt from federal taxes.