Participation Certificate

Participation Certificate | Certificate of Participation

A mortgage pass-through certificate that represents an interest in a group of mortgages purchased by a mortgage corporation. Participation certificate (PC) rates are chosen by the mortgage corporation for each issue. Timely payment of interest and full payment of principal are guaranteed by the corporation.

The PC is designed to shift capital from mortgage-deficit areas to mortgage-surplus areas. Secondary market conditions are similar to GNMAs, but the scale of the market is smaller.

For over 1,000 additional terms and definitions please see our Investment Glossary Guide.

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