Mortgage Revenue Bond - MRB

A funding source for home mortgages. Mortgage revenue bonds help low- and middle-income first-time home buyers by offering long-term mortgages at below-market rates. A state can issue mortgage revenue bonds (a form of tax-free municipal bond) to investors, then use the capital proceeds to invest in that state’s MRB home loan program.

In order to qualify, prospective home buyers must earn below stated threshold levels for annual income, and must otherwise financially qualify for a mortgage from a conventional lender. Many mortgages that were funded by MRBs first originated through the Federal Housing Administration (FHA), Freddie Mac and Fannie Mae.

MRB funding is not available in all areas of the United States. The process is run state by state where it exists, with each program targeting certain areas or neighborhoods based on state demographics.

Eligibility is different from program to program, but most states have eligibility requirements; for example, the home in question must be the primary residence, and the prospective buyer(s) must not have owned a home in the past three years. There are also limits on how much a given mortgage can be written for, which may be less than the original application source's limits (such as the FHA loan limit).