Municipal Bond Forum
Land-secured bonds
Q
I am taking a tax/investment real estate class at the moment and one of the students posted a comment on our discussion board talking about land bonds. I have never heard of a land bond before.
A
James A. Klotz responds:
Municipal bonds are sometimes issued in the pre-construction phase of a single-family housing development. In the industry, they are often called “land secured” or “dirt” bonds. They are referred to as such because, initially, they are secured by a tax or assessment on the undeveloped property.
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