housing bond issues: overview » introduction |
General obligation bonds can be issued by states, counties, towns, cities, and other municipal authorities. Jurisdictions often use general obligation bonds to raise funds for projects that will benefit the entire community, but will not generate sufficient direct revenue to support repayment of the debt. These bonds can bridge the gap between the costs of affordable housing projects and the financing they can support through expected rents or home sales. General obligation bonds may be repaid out of the general revenue or through increases in existing taxes. Property taxes are the most common source of financing, but jurisdictions may also levy additional sales, income, and other taxes for this purpose. Because general obligation bonds are secured by tax dollars, they must go on the market through a competitive bidding process in which the broker dealer offering the lowest interest cost wins the bonds. This process assures taxpayers that the municipality is borrowing at the lowest possible rate. | Portland Place, Minneapolis MN -- Photo courtesy of LHB, Inc. |
Click on the links below to learn more about using general obligation bonds to finance affordable homes: How are states and localities using general obligation bonds for affordable homes? How can we build public support for housing bond issues? Click here to view other resources on housing bond issues. |