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.
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Florida H-Bay Ministries Inc., Texas; and Affordable Housing were lowered to 'D' on July 7, 2021, and subsequently withdrawn 30 days later.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
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
- U.S Housing Finance Agency Ratings Hold Strong Despite Pandemic Pressure. Sept. 23, 2021
- Keeping the Wolf From the Door, HFA Multifamily Programs Perform Well During the Pandemic, Sept. 23, 2021
- Despite Weaker Loan Performance, HFA Single-Family Program Ratings Remain Strong, Sept. 23,2021
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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