housing authority bond

A bond issued by local or state governments to finance construction or rehabilitation of affordable rental housing. These bonds can be either short or long term. Certain programs also allow the sale of such bonds to provide financial aid to low-income individuals and families so they can purchase a home. Investors also benefit from tax free interest when purchasing such bonds, and are generally regarded as very safe investments. Recent developments however have tarnished that reputation due to ratings downgrades of private issuers and insurers, so some care must be taken in selecting a housing authority bond.