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State bond loans are paid out by using mortgage revenue bonds (MRBs). MRBs are used by local housing programs to spur first-time homebuyers to purchase in their area by locking people in at below-market interest rates.
The primary benefit of getting a state bond loan is that borrowers are able to get an interest rate that can be half as much as the market interest rate. Here are some of the clear benefits of getting locked in at a lower interest rate:
The exact amount that your interest rate will lower is dependent on the specific housing finance agency (HFA) or state program. Different fees are in place, as well, depending on the state or program.
There are several major criteria that must be met before a homebuyer qualifies for a state bond loan. These requirements all vary, depending on the specific state or program where the loan is issued. Here are some of the requirements for individuals looking to get a state bond loan: