Mortgage Revenue Bonds
Bond Purchase Activity Supports Community Development
Mortgage Revenue Bonds (MRBs) are tax-exempt bonds that state and local governments issue through housing finance agencies (HFAs) to help fund below-market-interest-rate mortgages for first-time qualifying homebuyers. Eligible borrowers are first-time homebuyers with low to moderate incomes below 115 percent of median family income.
Benefits to Housing Finance Agencies (HFAs)
In purchasing MRBs, Freddie Mac works with HFAs in two ways:
- As a credit enhancement: Originating lenders pool the mortgages into securities guaranteed by either Ginnie Mae or Freddie Mac and sell the securities, rather than the whole loans, to the issuing HFAs.
- As investor: As part of its corporate investment program, Freddie Mac purchases MRBs issued by HFAs.
Benefits to Borrowers
- Our investment in MRBs enables the HFAs to help borrowers who might otherwise be unable to purchase a home while encouraging revitalization of communities through increased homeownership.
- Freddie Mac's Home Possible® mortgage for low- and moderate-income borrowers works in combination with HFAs' programs that offer down payment assistance and secondary financing to qualify more borrowers.
- MRBs are tax-exempt bonds that state and local governments issue through housing finance agencies to help fund below-market-interest-rate mortgages for first-time qualifying homebuyers
To learn more about Mortgage Revenue Bonds, contact your account manager.