The Securities and Exchange Commission keeps in mind that community bonds typically fall under two categories:. These bonds depend on the "full faith and credit" of their providers without being secured by any assets. Government providers, however, have complete authority to tax their citizens in order to pay their bondholders. These bonds do not count on a government's authority to tax residents; rather, the bonds are paid from the income that the bonded job produces.

These bonds require voting approval prior to issuance. Bond offerings requiring citizen approval or not consist of funding for tasks such as enhancing a state's facilities, consisting of highways and bridges; financing a business's operations; structure hospitals, schools and libraries; and repairing water/wastewater facilities. Various types of bonds have different maturity dates, which are the dates on which the bond issuer repays its financiers their full principal amount.

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