Two Types of Bonds: General Obligation vs. Revenue Bonds

There are over 80,000 issuers of municipal bonds in the United States. With so many different types of issuers ranging from states to cities, transportation systems, school districts, hospitals, and housing projects, you need to understand two basic types of bonds:

1. General Obligation Bonds

2. Revenue Bonds

When a state, city, hospital or any other issuer issues a bond, the issuer expects to pay back the borrowed money at some point in the future. The issuer guarantees repayment of the money in one of two basic ways:

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