participation certificate
Definition
Financing in which an individual buys a share of the lease revenues of an agreement made by a municipal or governmental entity, rather than the bond being secured by those revenues. This form of financing can be used by the municipal or government entity to circumvent restrictions that might exist on the amount of debt they might be able to take on. As of now, the only agencies to issue or guarantee such certificates are Freddie Mac, Fannie Mae, Ginnie Mae and Sallie Mae.
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