The safest real estate bonds are agency residential mortgage-backed securities, says Mayra Rodriguez Valladares, a managing partner at MRV Associates in New York. These real estate bonds are backed by Freddie Mac and Fannie Mae.

Freddie Mac and Fannie Mae buy prime mortgage loans from banks and pool them into a security or a bond.

“Because these government-sponsored enterprises back the bonds, they are the safest securitizations for investors,” Rodriguez says.

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