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COMMENTS

U.S. Public Finance Housing Rating Actions: September 2021 And Third-Quarter 2021

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U.S. Public Finance Housing Rating Actions: September 2021 And Third-Quarter 2021

S&P Global Ratings' U.S. Public Finance Housing rating actions for the third quarter of 2021 had 10 downgrades and seven upgrades. There were also five favorable and seven unfavorable outlook revisions.

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The number of downgrades slightly outpaced upgrades, highlighting the mixed bag of results seen over the various rated housing sectors during the ongoing COVID-19 pandemic.

There were 56 affirmations out of 87 total rating actions during the third quarter, or about 64% of rating actions. Currently, about 88% of our ratings carry stable outlooks, partially attributable to both ongoing federal support and existing balance-sheet strength, despite headwinds posed by the pandemic. However, we continue to observe volatility in the rental housing bond sector. Rental housing bond issuers, already strained prior to the pandemic, continued to experience occupancy shortfalls and subsequent deterioration in coverage, and accounted for 16 of the 19 negative rating and outlook actions. These 16 individual actions covered seven issuers.

Additionally, one issuer defaulted in the third quarter, and encompassed three rating actions based on the separate individual issuances. The ratings for Capital Trust Agency; Florida H-Bay Ministries Inc., Texas; and Affordable Housing were lowered to 'D' on July 7, 2021, and subsequently withdrawn 30 days later.

September 2021 Had Two Upgrades And Two Outlook Revisions

September's rating actions were more positive than the previous months' activity in 2021. August had multiple downgrades, mainly due to deteriorating operating performance in the Rental Housing Bond sector.

In September, there were two upgrades, driven by improved balance sheet and capital adequacy (Blue Hub Loan Fund) and operational improvement (New York State Public Housing Authority Capital Fund Financing Pool). We affirmed 20 additional ratings without revising the outlooks, and we assigned new public ratings to California Community Reinvestment Corporation and Utah Housing Corporation's Federally Enhanced Housing Pass-Through program.

The favorable outlook revision (District of Columbia Housing Finance Agency ICR) resulted largely from a stronger balance sheet and operational improvement. The unfavorable outlook revision (Lackland Family Housing Phase II, Military Housing) was due to deteriorated debt service coverage and occupancy decline. We consider a favorable outlook change to include revisions to positive from stable; to stable from negative; or, less commonly, to positive from negative, and vice versa for unfavorable outlook changes where the rating itself doesn't change.

Chart 1

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In September, we also had 12 new sales, which was a slight decline from 18 new sales in August. In total, we rated 143 new sales through the third quarter of 2021.

Table 1

Third Quarter 2021 USPF Housing Rating And Outlook Changes
State Rating Outlook Rating Action CreditWatch/Outlook Action Description
4-K Housing, Inc., TX Affordable Housing Stoney Brook Acquisition TX B+ Negative Downgrade No change Reduced operational performance
4-K Housing, Inc., TX Affordable Housing Stoney Brook Acquisition 2nd Lien TX B Negative Downgrade No change Reduced operational performance
4-K Housing, Inc., TX Affordable Housing Stoney Brook Acquisition 3rd Lien TX B- Negative Downgrade No change Reduced operational performance
Arizona Industrial Development Authority AZ Multi Family Whole Loans Interest Only AZ BBB Negative Affirmation Outlook to negative Delinquency and liquidity strain
Arizona Industrial Development Authority, AZ Multi Family Whole Loans AZ BBB Negative Affirmation Outlook to negative Delinquency and liquidity strain
Assisted Living Foundation of America, CA Section 8 Affordable Housing Parkway Villa Apts CA CCC+ Negative Downgrade No change Reduced operational performance
Assisted Living Foundation of America, CA Section 8 Affordable Housing Parkway Villa Apts 2nd Lien CA CCC+ Negative Downgrade No change Reduced operational performance
Atlantic Hsg Fndn Inc., TX Affordable Housing 2nd Lien TX BB Stable Affirmation Outlook to stable Improved operating performance and liquidity
BlueHub Loan Fund MA General Obligation MA A Stable Upgrade No change Improved balance sheet and capital adequacy
Cardinal Bay, Inc., TX Affordable Housing Village on the Park/Carriage Inn Proj TX BB- Negative Affirmation Taken off CW Reduced operational performance
Cardinal Bay, Inc., TX Affordable Housing Village on the Park/Carriage Inn Proj 2nd Lien TX B Negative Affirmation Taken off CW Reduced operational performance
Cardinal Bay, Inc., TX Affordable Housing Village on the Park/Carriage Inn Proj 3rd Lien TX B- Negative Affirmation Taken off CW Reduced operational performance
Colorado Hsg & Fin Auth, CO General Obligation ICR CO AA- Stable Upgrade No change Balance sheet and operational improvement
Dakota Cnty Comnty Dev Agy, MN Single Family Multi-Agency MBS 2002A Indenture MN A Stable Affirmation Outlook to stable Result of dependent rating action
District of Columbia Hsg Fin Agy, DC General Obligation ICR DC A+ Positive Affirmation Outlook to positive Improved balance sheet and operating performance
Great Lakes Senior Communities IL Affordable Housing Great Lakes Senior Living Communities First Tier IL CCC+ Negative Affirmation Taken off CW Reduced operational performance
Great Lakes Senior Communities IL Affordable Housing Great Lakes Senior Living Communities SecondTier IL CCC+ Negative Affirmation Taken off CW Reduced operational performance
Great Lakes Senior Communities IL Affordable Housing Great Lakes Senior Living Communities Third Tier IL CCC+ Negative Downgrade Taken off CW Reduced operational performance
Greater Cincinnati Elderly Hsg Dev Corp OH Multifamily Section 221(d)4 1st LIEN Cambridge Arms II Apts OH A+ Positive Affirmation Outlook to positive Result of dependent rating action
H-Bay Ministries, Inc. TX Affordable Housing Superior Residences Project TX D (sf) N/A Downgrade Default - outlook removed Default
H-Bay Ministries, Inc. TX Affordable Housing Superior Residences Project TX D (sf) N/A Downgrade Default - outlook removed Default
H-Bay Ministries, Inc. TX Affordable Housing Superior Residences Project 2nd Lien TX D (sf) N/A Downgrade Default - outlook removed Default
Lackland Family Housing Phase II, TX Military Housing TX AA- Negative Affirmation Outlook to negative Reduced operational performance and market position
Michigan St Hsg Dev Auth, MI General Obligation and Single Family Whole Loan - MSHDA General Resolution MI AA+ Negative Affirmation Outlook to negative Balance sheet deterioration
New Jersey Housing & Mortgage Finance Agency NJ Multifamily Insured Section 221(d)3 1st LIEN Presidential Plaza at Newport NJ A+ Positive Affirmation Outlook to positive Result of dependent rating action
New York St Pub Hsg Auth Directors Assoc, NY 2007 HUD Capital Fund Financing Pool NY AA- Stable Upgrade No change Operational improvement
Offutt AFB America First Communities, LLC, NE Military Housing NE AA Stable Upgrade No change Operational improvement
Offutt AFB America First Communities, LLC, NE Military Housing 2nd Lien NE AA- Stable Upgrade No change Operational improvement
Philadelphia Hsg Auth, PA General Obligation PA AA- Stable Upgrade Outlook to stable Criteria implementation and operational improvement
Philadelphia Hsg Auth, PA General Obligation ICR PA AA- Stable Upgrade Outlook to stable Criteria implementation and operational improvement
Trinity Affordable Hsg Corp, IL Affordable Housing Estates at Eagles Pointe Proj IL B+ Negative Downgrade Outlook to negative Reduced operational performance

Third-Quarter Rating Actions

In the third quarter of 2021, we lowered 10 and upgraded seven individual ratings (see "By The Numbers," above). By issuer, five issuers were downgraded and five were upgraded. We also affirmed 14 credit ratings while revising the respective outlooks favorably (five) and unfavorably (seven). Of the five favorable outlook revisions, two were revisions to stable from negative while three were outlooks that were revised to positive. Additionally, we removed the CreditWatch on negative rating actions for six ratings and maintained their negative outlooks. Furthermore, we assigned 44 new sale ratings for current and initial issuers.

Table 2

Third Quarter 2021 USPF Housing New Sales
State Rating Outlook Action
APP Battery Partners, LLLP TN AA+ Stable New sale
Bluebonnet Ridge Apartments Project TX AA+ Stable New sale
California Community Reinvestment Corporation CA A+ Stable New issuer
California Dept of Vet Affairs, CA Single Family Whole Loan - Cal Veterans GO Bond Resolution CA AA Stable New sale
California Housing Finance Agency CA Custody Receipts CA AA+ Stable New sale
California Housing Finance Agency CA, Series 2021-2 Series X Interest Only CA AA+ Stable New sale
Catalina TSA Housing LP CA AA+ Stable New sale
Chipp III, L.P. TN AA+ Stable New sale
Colorado Hsg & Fin Auth, CO Single Family Whole Loan - Single Family Mortgage Bonds Indenture CO AAA Stable New sale
Colorado Hsg & Fin Auth, CO Single Family Whole Loan - Single Family Mortgage Bonds Indenture 2nd Lien CO AA+ Stable New sale
Columbus Metropolitan Housing Authority, OH Magnolia Terrace Project OH A+ Stable New sale
Columbus Metropolitan Housing Authority, OH Sinclair Apartment Project OH A+ Stable New sale
Connecticut Hsg Fin Auth - CHFA General Bond Resolution CT AAA Stable New sale
Iowa Fin Auth, IA Single Family Multi-Agency MBS 1991 SFMBS Resolution IA AAA Stable New sale
Kentucky Hsg Corp, KY Single Family Whole Loan - KHC General Bond Resolution KY AAA Stable New sale
King Cnty Hsg Auth, WA General Obligation ICR WA AA Stable New sale
Lantana San Marcos Project TX AA+ Stable New sale
Maine St Hsg Auth, ME Multi-Family Whole Loans - Mortgage Purchase Program Resolution ME AA+ Stable New sale
Massachusetts Hsg Fin Agy, MA Single Family MBS - MHFA General Resolution MA AA+ Stable New sale
Michigan St Hsg Dev Auth, MI Single Family Whole Loan - MSHDA General Resolution MI AA+ Negative New sale
Michigan State Housing Development Authority, MI General Obligation HFA and Multifamily Whole Loan Rental Housing General Resolution MI AA Stable New sale
Millennium Housing LLC, CA Mobile Home Park Vista de Santa Barbara Series 2021 CA A- Stable New sale
Minnesota Hsg Fin Agy, MN General Obligation Residential Housing Finance Bond Resolution and Single Family Multi-Agency MBS MN AA+ Stable New sale
Minnesota Hsg Fin Agy, MN Multi-Family Whole Loans and Affordable Housing - Rental Housing Bond Resolution MN AAA Stable New sale
Missouri Hsg Dev Comm, MO Single Family Multi-Agency MBS First Place Homeownership Loan Program MO AA+ Stable New sale
Montana Brd of Hsg, MT Single Family Whole Loan - Single Family I Indenture MT AA+ Stable New sale
National CORE CA General Obligation ICR CA A+ Stable New issuer
New Jersey Hsg & Mtg Fin Agy, NJ Single Family Whole Loan - Homeownsherip Mortgage Bond Resolution NJ AA Stable New sale
New York City Hsg Dev Corp Multifamily General Resolution NY A-1+ NM New sale
North Carolina Hsg Fin Agy, NC Single Family MBS Whole Loan - 1998 Trust Agreement NC AA+ Stable New sale
Orange Cnty Hsg Fin Ath (Dunwoodie Place Pres) FL AA+ Stable New sale
Pennsylvania Hsg Fin Agy, PA Single Family Whole Loan - Single Family Resolution PA AA+ Stable New sale
Rhode Island Hsg & Mtg Fin Corp, RI Single Family Whole Loan - Homeownership Opportunity Bond Resolution RI AA+ Stable New sale
South Dakota Hsg Dev Auth, SD Single Family Whole Loan - Homeownership Mortgage Bond Resolution (1977 Indenture) SD AAA Stable New sale
Tennessee Hsg Dev Agy, TN Single Family Whole Loan - 2013 General Residential Finance Program TN AA+ Stable New sale
Texas Dept of Hsg & Comnty Affairs, TX Single Family Multi-Agency MBS and Whole Loans 1980 Indenture TX AA+ Stable New sale
Utah Housing Corporation UT Tax Exempt Mortgage Backed Securities Series 2021J (G2) UT AA+ Stable New sale
Utah Housing Corporation UT, Tax Exempt Mortgage Back Securities Series 2021H (G2) UT AA+ Stable New sale
Utah Housing Corporation, UT Tax Exempt Mortgage Back Securities Series 2021I (G2) UT AA+ Stable New sale
Virginia Hsg Dev Auth Rental Housing Bond Resolution VA AA+ Positive New sale
Virginia Hsg Dev Auth Rental Housing Bond Resolution *second issuance this quarter VA AA+ Positive New sale
Virginia Hsg Dev Auth Rental Housing Bond Resolution *third issuance this quarter VA AA+ Positive New sale
Virginia Hsg Dev Auth, VA Single Family Whole Loan - CMB Resolution VA AAA Stable New sale
Wyoming Comnty Dev Auth, WY Single Family Whole Loan - 1994 Indenture WY AA+ Stable New sale

During the third quarter of 2021, the seven rating upgrades covered five individual issuers. Improved operational performance was at least one of the driving factors cited for six of the upgrades, along with improved balance-sheet metrics and capital adequacy (Blue Hub Loan Fund) and implementation of the new criteria published June 1, 2021, titled "Methodology For Rating Public And Nonprofit Social Housing Providers" (Philadelphia Housing Authority's ICR and General Obligation Ratings). The 10 downgrades in third-quarter 2021 were mainly driven by deteriorated operating performance. Another three ratings were downgraded to 'D' and subsequently withdrawn after 30 days following payment default. The most-cited factors driving both favorable and unfavorable outlook revisions during the second quarter were around operational performance, balance-sheet changes, and the result of the new criteria implementation (see chart 2).

We believe the factors driving both rating changes and outlook revisions emphasize the mixed operating environment of the various rated housing sectors, considering the pandemic's effect on U.S. housing as a whole.

Table 3

Third Quarter 2021 USPF Housing Rating Affirmations
Credit State Rating Rating Action
Alaska Hsg Fin Corp Home Mortgage 2002 Revenue Bond Indenture AK AA+/A-1+/Stable Affirmed
Bernalillo Cnty (Valle de Atrisco) NM AA+/Stable Affirmed
California Department of Veterans Affairs GO Bond Resolution CA AA/Stable Affirmed
Century Housing Corporation ICR CA AA-/Stable Affirmed
Century Housing Corporation Impact Investment Bonds CA AA-/Stable Affirmed
Colorado Hsg & Fin Auth Class 1 Single Family Mortgage Bonds CO AAA/Stable Affirmed
Colorado Hsg & Fin Auth Class 2 Single Family Mortgage Bonds CO AA+/Stable Affirmed
Colorado Hsg & Fin Auth Class 3 Single Family Mortgage Bonds CO AA/Stable Affirmed
Columbus Metropolitan Housing Authority ICR OH A+/Stable Affirmed
Connecticut Housing Finance Authority Housing Mortgage Finance Program CT AAA/Stable Affirmed
District of Columbia Hsg Fin Agy (Parkway Overlook) DC AA+/Stable Affirmed
District of Columbia Hsg Fin Agy 2005A Capital-Fund-Program DC A+/Stable Affirmed
Dumas Housing Authority AR AA-/Stable Affirmed
Florida Housing Finance Corporation (WRDG Mary Bethune) FL AA+/Stable Affirmed
Harris County Housing Finance Corporation (The Vireo Apartments) TX AA+/Stable Affirmed
Iowa Finance Authority 1991 MBS Resolution IA AAA/Stable Affirmed
Kentucky Hsg Corp General Indenture (1st lien) KY AAA/A-1+/Stable Affirmed
King County Housing Authority General Obligation WA AA/Stable Affirmed
King County Housing Authority ICR WA AA/Stable Affirmed
Los Angeles Housing and Community Investment Department (Jordan Downs Phase 1B) CA AA+/Stable Affirmed
Lucas Metropolitan Housing Authority OH AA-/Stable Affirmed
Maine State Housing Authority 1972 Mortgage Purchase Bond Resolution ME AA+/Stable Affirmed
Massachusetts Hsg Fin Agy SFHRB Resolution MA AA+/Stable Affirmed
Michigan State Housing Development Authority Multifamily General Resolution MI AA/Stable Affirmed
Minnesota Housing Finance Agency Rental Housing Bond Resolution MN AAA/Stable Affirmed
Minnesota Housing Finance Agency Residential Housing Bond Resolution MN AA+/Stable Affirmed
Missouri Hsg Dev Comm First Place Homeownership Loan Program MO AA+/Stable Affirmed
Missouri Hsg Dev Comm ICR MO AA+/Stable Affirmed
Montana Brd of Hsg 1977 Single Family 1 Indenture MT AA+/Stable Affirmed
Nevada Hsg Div ICR NV AA/Stable Affirmed
New Haven Hsg Auth ICR CT A+/Stable Affirmed
New Hope Higher Education Finance Corporation (Quality Senior Housing Foundation of East Texas) Series 2019A TX BB+ (sf)/Stable Affirmed
New Hope Higher Education Finance Corporation (Quality Senior Housing Foundation of East Texas) Series 2019B TX BB (sf)/Stable Affirmed
New Hope Higher Education Finance Corporation (Quality Senior Housing Foundation of East Texas) Series 2019C TX BB- (sf)/Stable Affirmed
New Jersey Housing & Mortgage Finance Agency Single Family Housing Revenue Bond Resolution NJ AA/Stable Affirmed
New Mexico Mtg Fin Auth 2005 General Indenture NM AA+/Stable Affirmed
New York City Housing Development Corporation ICR NY AA/Stable Affirmed
New York City Housing Development Corporation MFHRB Resolution NY A-1+ Affirmed
New York City Resid Mtg Ins Corp NY AA/Stable Affirmed
North Carolina Hsg Fin Agy 1998 Home Ownership Indenture NC AA+/Stable Affirmed
Northwest Georgia Cons Hsg Auth (Charles Hight HR1 RAD) GA AA+/Stable Affirmed
Northwest Georgia Cons Hsg Auth (Park Homes RAD) GA AA+/Stable Affirmed
Parrish Housing Authority AL AA-/Stable Affirmed
Pennsylvania Hsg Fin Agy Single Family Resolution PA AA+/Stable Affirmed
Raleigh Housing Authority (Capital Towers III) NC AA+/Stable Affirmed
Rhode Island Housing & Mortgage Finance Corporation 1988 Homeowner Opportunity Bond Indenture RI AA+/Stable Affirmed
South Dakota Hsg Dev Auth 1977 Homeownership Mortgage Bond Program SD AAA/A-1+/Stable Affirmed
Tennessee Hsg Dev Agy 2013 General Resolution TN AA+/Stable Affirmed
Texas Department of Housing & Community Affairs Single Family Mortgage Revenue Bond Indenture TX AA+/Stable Affirmed
Virginia Hsg Dev Auth Commonwealth Mortgage Bond Resolution VA AAA/Stable Affirmed
Virginia Hsg Dev Auth ICR VA AA+/Positive Affirmed
Virginia Hsg Dev Auth Rental Housing Bond Resolution VA AA+/Positive Affirmed
Virginia Hsg Dev Auth Rental Housing Bond Resolution VA AA+/Positive Affirmed
Virginia Hsg Dev Auth Rental Housing Bond Resolution VA AA+/Positive Affirmed
Wyoming Comnty Dev Auth 1994 Indenture WY AA+/Stable Affirmed
Wyoming Comnty Dev Auth ICR WY AA/Stable Affirmed

Related Research

This report does not constitute a rating action.

Primary Credit Analysts:Sam Krouse, Dallas;
sam.krouse@spglobal.com
John T Mariotti, Centennial + 1 (303) 721 4463;
john.mariotti@spglobal.com
Secondary Contact:Marian Zucker, New York + 1 (212) 438 2150;
marian.zucker@spglobal.com

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