Capitalization and Mortgage Revenue Bonds: Methodology, Empirical Evidence, and Policy Implications
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An important part of the U. S. mortgage-origination system is creative or below-market financing. In recent years, the quantitatively dominant type of below-market financing has been mortgage loans financed by tax-exempt mortgage revenue bonds (MRBs). From 1975 through 1990, over $125 billion of these tax-exempt bonds were issued by state and local governments across the country, with the resulting funds used to provide mortgage financing, primarily to first-time buyers, at below-market interest rates.
KeywordsHouse Price Market Value Equivalent Premium Home Buyer Closing Cost
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