What type of bonds are secured by a jurisdiction's full faith and credit?

The type of bonds that are secured by a jurisdiction's full faith and credit are known as Unlimited Tax General Obligation Bonds. These bonds are backed by the full taxing authority of the issuing government, meaning it can levy taxes as necessary to ensure repayment of the bondholders. This strong backing typically leads to a lower cost of borrowing for the issuer compared to other forms of debt, as investors feel more assured of receiving their returns.

Unlike Limited Tax General Obligation Bonds, which are subject to a limit on the tax rate that can be levied, Unlimited Tax General Obligation Bonds do not have such restrictions, offering a higher level of security. This additional security makes them an attractive option for public financing projects, especially when the jurisdiction has a strong fiscal position. Revenue Bonds, on the other hand, are secured by specific revenue sources, such as fees from a project, and do not have the same level of backing from the full faith and credit of the jurisdiction. Lastly, impact fees are not a type of bond at all but rather charges imposed on developers to cover the costs of infrastructure improvements required by new development projects.