Housing Authority Bond

Search Dictionary

Definition of 'Housing Authority Bond'

A housing authority bond is a type of municipal bond that is issued by a local housing authority (HA) to finance the construction or rehabilitation of affordable housing units. The bonds are typically backed by the full faith and credit of the HA, and they are often exempt from federal income tax.

Housing authority bonds are a popular investment for investors who are looking for a safe and secure investment with a relatively high yield. The bonds are also attractive to investors who are interested in supporting affordable housing development.

The interest on housing authority bonds is typically exempt from federal income tax, which makes them a more attractive investment than taxable bonds. However, the interest on housing authority bonds is not exempt from state or local income taxes.

Housing authority bonds are typically rated AAA by the major credit rating agencies. This high rating reflects the strong financial position of most HAs. However, it is important to note that the rating of a housing authority bond can be downgraded if the HA's financial condition deteriorates.

Before investing in housing authority bonds, it is important to do your research and understand the risks involved. You should also consider the credit rating of the bond, the interest rate, and the term of the bond.

If you are interested in investing in housing authority bonds, you can do so through a broker or directly from the HA.

Do you have a trading or investing definition for our dictionary? Click the Create Definition link to add your own definition. You will earn 150 bonus reputation points for each definition that is accepted.

Is this definition wrong? Let us know by posting to the forum and we will correct it.