Mortgage revenue bond
Ask USMI can help explain this term and how it shows up in a mortgage question.
Definition
A mortgage revenue bond is a tax-exempt housing-finance bond that some state or local housing finance agencies use to fund qualifying mortgages. It is a financing mechanism, not a standalone consumer loan product.
In plain English
An HFA may raise money by issuing tax-exempt bonds and then use that money for qualifying home loans. Official tax material calls those qualified mortgage bonds. The borrower still has a mortgage. The bond is how the agency funded the program. Income, price, and recapture rules are current-authority values and are not listed.
Technical definition
IRS Topic 505 is PRIMARY for tax-exempt qualified mortgage bonds and the related subsidy context. The 24 CFR 266.5 HFA definition is supporting identity for the issuer type.
Why it matters
Bond-financed HFA mortgages are easy to treat as a generic cheap product. The page names the funding mechanism without publishing program thresholds.
Related terms
Sources reviewed
24 CFR 266.5
Source reviewedSeptember 7, 2026
Topic No. 505, Interest Expense
Source reviewedSeptember 7, 2026
Important note
This page is about the tax-exempt housing-finance mechanism that may fund some HFA mortgages, not a standalone consumer loan product. Income, purchase-price, and recapture rules are current-authority values and are not listed.
Cite as
Ask USMI about this term
Explore how this term relates to a loan cost or your next mortgage question.