What Is a Special Assesment Bond?

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A special assessment bond is issued by a municipality to cover the financing for specific development. Find out about what a special assessment bond actually is with help from a professional financial adviser in this free video clip.

Part of the Video Series: Insurance & Personal Finance FAQs
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Video Transcript

This is Teresa Dentino, CEO and founder of The Financial 411 in Woodside, California. We’re going to be talking about, “What is a special assessment bond?” This type of bond is issued by a municipality to cover the financing for a specific development within the community - for example, repaving sidewalks or new roads within the community. The name “special assessment bond” comes from the fact that the residents of the community – homeowners – are then given an additional tax to pay – a special assessment – along with their regular homeowner's taxes. The homeowners actually accrue benefits, however. For example, in the case of a sidewalk improvement bond, they would enjoy nicer walking paths. Additionally, an improvement of that nature is going to add to their property values. So, in return for the extra tax that is levied upon them, there are some benefits to the homeowners. This is Teresa Dentino, CEO and founder, The Financial 411, in Woodside, California.


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