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U.S. Public Finance Housing Rating Actions, Third-Quarter 2023

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S&P Global Ratings' U.S. Public Finance Housing rating actions for third-quarter 2023 consisted of 16 positive rating actions, four negative rating actions, and 60 affirmations.

Third-Quarter Rating Actions

We took positive rating actions on 16 individual ratings: 11 upgrades, one with a positive outlook, and five outlook revisions, consisting of four to stable from negative and one to positive from stable (table 1).

The upgrades on two community development finance institutions reflected improved capital adequacy. Our upgrades on eight rental housing bond credits in the age-restricted, military, mobile homes, and Section 8 housing subsectors were based on improved debt service coverage as a result of stronger occupancy, debt maturing, increases in the basic allowance for housing, or clarification from a borrower on one-time operating expenses funded from separate sources. We upgraded one capital fund financing program based on its strong debt service coverage. The outlook revisions for five rental housing bond entities, which include two multi-tranche multifamily static pools, were based on the portfolio's improved loan and financial performance that resulted in improved loss coverage for one of the static pools.

We took negative rating actions on four individual obligors: two downgrades, one outlook revision to negative, and one CreditWatch placement with negative implications (table 2).

The downgrades reflected deterioration in operating cash flow, given increases in operating expenses resulting in weaker debt service coverage for two rental housing bonds in the military and Section 8 housing subsectors. The CreditWatch placement was an environmental, social, and governance-related action caused by recent turnover in management and weakened transparency at a social housing provider. The outlook revision to negative on one rental housing bond entity in the Section 8 housing subsector was based on the deterioration of debt service coverage in recent years due to elevated operating expenses.

Affirmations constituted 60 out of 83 total rating actions during third-quarter 2023, or about 72% of rating actions, lower than in second-quarter 2023 (80%). As of October 2023, about 90% of ratings carry stable outlooks, slightly down from last quarter (93%), reflecting resiliency and strong metrics in our rated universe. (For more information, see recent commentaries in Related Research.) We typically review the parity rating on an issuer in conjunction with any new-money or refunding debt sale. During the third quarter, we rated 41 new sales in conjunction with affirmations (table 3). This pace was slightly higher than the new sale activity in second-quarter 2023 (39 new sales).

We also rated three new issues in the quarter(table 4).

Table 1

Positive rating actions--third-quarter 2023
Issue State Sector Prior rating Current rating Prior outlook Current outlook Reason
Arizona Industrial Development Authority, AZ Multi Family Whole Loans AZ RHB multifamily static pool BBB BBB Negative Stable Portfolio's improved performance, including one loan that is no longer in special servicing
Arizona Industrial Development Authority AZ Multi Family Whole Loans Interest only AZ Interest only BBB BBB Negative Stable Portfolio's improved performance, including one loan that is no longer in special servicing
Impact Funding LLC, CA Affordable Housing 2010 Pass Through Indenture 5th Lien CA RHB multifamily static pool A A Stable Positive Improved loss coverage as a result of payoffs from recoveries on distressed loans
Impact Funding LLC, CA Affordable Housing Pool Class D 2010 Pass Through Indenture CA RHB multifamily static pool BBB+ BBB+ Negative Stable Improved loss coverage as a result of payoffs from recoveries on distressed loans
Impact Funding LLC, CA Affordable Housing Pool Class E 2010 Pass Through Indenture CA RHB multifamily static pool BBB- BBB- Negative Stable Improved loss coverage as a result of payoffs from recoveries on distressed loans
New Bedford Hsg Auth, MA HUD Capital Fund Financing MA HUD Capital Fund Financing Program A+ AA- Stable Stable Stronger debt service coverage during the past two years
Capital Impact Partners, DC General Obligation DC CDFI A A+ Positive Stable Strengthening capital adequacy and financial ratios in recent years, partly as a result of an increase in net equity from the entity combining its operations with CDC Small Business Finance
BlueHub Loan Fund, MA General Obligation ICR MA CDFI A A+ Stable Stable Strong capital adequacy with a net equity-to-assets ratio averaging more than 16% during the past five years
Quality Senior Housing Foundation of East Texas Inc., TX. Affordable Housing - Longview, Athens and WInnsboro Communities 3rd Lien TX RHB - age restricted BB- BB Stable Stable Improved debt service coverage ratio following annual increase in net operating income over the past three years, partly caused by higher occupancy
Quality Senior Housing Foundation of East Texas Inc., TX. Affordable Housing - Longview, Athens and Winnsboro Communities 2nd Lien TX RHB - age restricted BB BB+ Stable Stable Improved debt service coverage ratio following annual increase in net operating income over the past three years, partly caused by higher occupancy
Quality Senior Housing Foundation of East Texas Inc., TX. Affordable Housing - Longview, Athens and Winnsboro Communities 1st Lien TX RHB - age restricted BB+ BBB- Stable Stable Improved debt service coverage ratio following annual increase in net operating income over the past three years, partly caused by higher occupancy
Fort Irwin Land, LLC, CA Military Housing Fort Irwin/Moffet/Parks 3rd Lien CA RHB - military BBB+ A Positive Stable Improved debt service coverage driven by material increases in basic allowance for housing rates to levels commensurate with the higher rating
Corvias Military Living, LLC, RI Military Housing Fort Sill RI RHB - military A- A Stable Stable Received updated financial and operating information from the borrower detailing extraordinary one-time operating expenses funded from separate sources other than net cash flow from the project, resulting in improved debt service coverage
Caritas Affordable Housing, Inc., CA Mobile Home Park Subordinate Lien CA RHB - mobile homes BBB BBB+ Stable Stable Improved maximum annual debt service coverage following the maturity of certain debt in 2023
NV Homestead Apartments, Ltd., FL Section 8 Affordable Housing Coral Gardens FL RHB - Section 8 CCC B- Stable Positive Material improvement in debt service coverage
Chisom Hsg Grp, WA Section 8 Affordable Housing CHG Hsg Pool Proj WA RHB - Section 8 BB BB+ Positive Stable Stabilization of maximum annual debt service coverage in 2022 following the sale of one of the housing provider's 11 original properties, and the subsequent defeasance of $10.4 million in bonds.The management and governance score was also revised to weak from weak-to-very weak

Table 2

Negative rating actions--third-quarter 2023
Issue State Sector Prior rating Current rating Prior outlook Outlook Reason
Corvias Military Living, LLC, RI Military Housing Fort Sill RI RHB - military A A- Stable Stable Deterioration in operating cash flow in recent years due to additional operating expenses, along with elevated costs for maintenance, repair, and insurance
CHC Trestletree LLC, GA Section 8 Affordable Housing Steele Properties, LLC GA RHB - Section 8 B B- Negative Negative Persisting cash flow pressures in conjunction with certain elevated operating expenses, resulting in very low coverage in fiscal 2022
Los Angeles Hsg Auth, CA Affordable Housing and Section 8 2020AB and 2021A Mortgage Revenue Bonds CA RHB - Section 8 A+ A+ Stable Negative Deterioration in coverage in recent years with elevated operating costs for maintenance, repair, and insurance
Newark Hsg Auth, NJ General Obligation NJ Social housing provider A A Positive Watch Neg Placed on CreditWatch Negative due to recent turnover in management and weaked transparency

Table 3

Affirmations and new sales--third-quarter 2023
Issue State Sector Rating Outlook Type of review
Clearinghouse CDFI, CA General Obligation ICR CA CDFI A- Stable Full Review
The Community Preservation Corp. NY General Obligation ICR NY CDFI AA- Stable Full Review
Alaska Hsg Fin Corp, AK General Obligation ICR AK HFA AA+ Stable New Sale
Florida Affordable Hsg Guarantee Fd, FL General Obligation ICR FL HFA A+ Stable Full Review
Colorado Hsg & Fin Auth, CO Single Family Mortgage Bonds Class III (GO) CO MRBP AA Stable New Sale
Colorado Hsg & Fin Auth, CO Single Family Mortgage Bonds Class III (GO) CO MRBP AA Stable New Sale
Colorado Hsg & Fin Auth, CO Single Family Mortgage Bonds Class III (GO) CO MRBP AA Stable New Sale
Colorado Hsg & Fin Auth, CO Single Family Mortgage Bonds Class II CO MRBP AA+ Stable New Sale
Colorado Hsg & Fin Auth, CO Single Family Mortgage Bonds Class II CO MRBP AA+ Stable New Sale
Colorado Hsg & Fin Auth, CO Single Family Mortgage Bonds Class II CO MRBP AA+ Stable New Sale
Colorado Hsg & Fin Auth, CO Single Family Whole Loan - Single Family Mortgage Bonds Indenture CO MRBP AAA Stable New Sale
Colorado Hsg & Fin Auth, CO Single Family Whole Loan - Single Family Mortgage Bonds Indenture CO MRBP AAA Stable New Sale
Colorado Hsg & Fin Auth, CO Single Family Whole Loan - Single Family Mortgage Bonds Indenture CO MRBP AAA Stable New Sale
Colorado Hsg & Fin Auth, CO Multi-Family Whole Loans - Multifamily Master Indenture CO MRBP AAA Stable New Sale
Colorado Hsg & Fin Auth, CO Multi-Family Whole Loans - Multifamily Master Indenture 2nd Lien CO MRBP AA+ Stable New Sale
Connecticut Hsg Fin Auth, CT General Bond Resolution CT MRBP AAA Stable New Sale
Georgia Hsg and Fin Auth, GA Single Family Whole Loan - 1976 General Resolution GA MRBP AAA Stable New Sale
Iowa Fin Auth, IA MBS 1991 SFMBS Resolution IA MRBP AAA Stable New Sale
Maine St Hsg Auth, ME Mortgage Purchase Program Resolution ME MRBP AA+ Stable New Sale
Maine St Hsg Auth, ME Mortgage Purchase Program Resolution ME MRBP AA+ Stable New Sale
Michigan St Hsg Dev Auth, MI General Resolution MI MRBP AA+ Stable New Sale
Minnesota Hsg Fin Agy, MN Rental Housing Bond Resolution MN MRBP AAA Stable New Sale
Minnesota Housing Finance Agency, MN Single Family MN MRBP AA+ Stable New Sale
Minnesota Housing Finance Agency, MN Single Family MN MRBP AA+ Stable New Sale
Minnesota Housing Finance Agency, MN Single Family MN MRBP AA+ Stable New Sale
Missouri Hsg Dev Comm, MO First Place Homeownership Loan Program MO MRBP AA+ Stable New Sale
Montana Brd of Hsg MT, SF I Indenture MT MRBP AA+ Stable New Sale
Nebraska Invest Fin Auth, NE SFHRB Resolution NE MRBP AAA Stable New Sale
Nevada Hsg Div, NV Single Family Multi-Agency MBS 2008 MBS Resolution NV MRBP AA+ Stable New Sale
North Carolina Hsg Fin Agy, NC Single Family MBS Whole Loan - 1998 Trust Agreement NC MRBP AA+ Stable New Sale
Rhode Island Housing & Mortgage Finance Corporation, RI Homeownership Opportunity Bond Resolution RI MRBP AA+ Stable New Sale
South Dakota Hsg Dev Auth, SD Single Family Whole Loan - Homeownership Mortgage Bond Resolution (1977 Indenture) SD MRBP AAA Stable New Sale
Tennessee Hsg Dev Agy, TN Single Family Whole Loan - 2013 General Residential Finance Program TN MRBP AA+ Stable New Sale
Texas Department of Housing & Community Affairs Single Family Mortgage Rev Bnd Indenture TX MRBP AA+ Stable New Sale
Utah Hsg Corp., UT Single Family Multi-Agency MBS TEMS UT MRBP AA+ Stable New Sale
Utah Hsg Corp., UT Single Family Multi-Agency MBS TEMS UT MRBP AA+ Stable New Sale
Utah Hsg Corp., UT Single Family Multi-Agency MBS TEMS UT MRBP AA+ Stable New Sale
Virginia Hsg Dev Auth, VA Commonwealth Mortgage Bonds w GO VA MRBP AAA Stable New Sale
Virginia Housing Development Authority VA Rental Housing Bonds w GO VA MRBP AA+ Stable New Sale
West Virginia Hsg Dev Fd, WV Housing Finance Bond w GO WV MRBP AAA Stable New Sale
Wisconsin Hsg & Econ Dev Auth, WI Home Ownership Revenue Bonds (1988 Resolution) w GO WI MRBP AA+ Stable New Sale
Fort Irwin Land, LLC, CA Military Housing Fort Irwin/Moffet/Parks 2nd Lien CA RHB - Military AA- Stable Full Review
Fort Irwin Land, LLC, CA Military Housing Fort Irwin/Moffet/Parks CA RHB - Military AA Stable Full Review
New Orleans Navy Hsg, LLC, LA Military Housing LA RHB - Military A+ Stable Full Review
Mid-Atlantic Fam Comntys LLC, VA Military Housing 3rd Lien VA RHB - Military A- Stable Full Review
Mid-Atlantic Fam Comntys LLC, VA Military Housing VA RHB - Military AA- Stable Full Review
Caritas Acquisitions I, LLC, CA Affordable Housing Caritas MHP Proj CA RHB - Mobile Homes A- Stable New Sale
Caritas Affordable Hsg, Inc., CA Affordable Housing Caritas Afford Hsg Inc CA RHB - Mobile Homes A- Stable Full Review
Impact Funding LLC, CA Affordable Housing 2010 Pass Through Indenture 4th Lien CA RHB Multifamily Static Pool AA Stable Full Review
Impact Funding LLC, CA Affordable Housing 2010 Pass Through Indenture CA RHB Multifamily Static Pool AA+ Stable Full Review
Impact Funding LLC, CA Affordable Housing 2010 Pass Through Indenture 3rd Lien CA RHB Multifamily Static Pool AA Stable Full Review
Impact Funding LLC, CA Affordable Housing 2010 Pass Through Indenture 2nd Lien CA RHB Multifamily Static Pool AA+ Stable Full Review
Impact Funding LLC CA Pool 3rd LIEN Interest Only CA Interest Only AA Stable Full Review
Impact Funding LLC CA Pool 1st LIEN Interest Only CA Interest Only AA+ Stable Full Review
Glorieta Partners, Ltd., FL Section 8 Affordable Housing Gardens Apartment Proj FL RHB - Section 8 CCC Negative Full Review
American Agape Foundn, Inc., TX Section 8 Affordable Housing 2nd Lien TX RHB - Section 8 CCC+ Negative Full Review
American Agape Foundn, Inc., TX Section 8 Affordable Housing TX RHB - Section 8 CCC+ Negative Full Review
Trinity Affordable Hsg Corp, IL Affordable Housing Estates at Eagles Pointe Proj IL RHB - Unenhanced B+ Stable Full Review
NHP Foundation, Social Housing Provider ICR DC Social housing provider AA- Stable New Sale
King Cnty Hsg Auth, WA General Obligation ICR WA Social housing provider AA Stable New Sale

Table 4

New issues--third-quarter 2023
Issue State Sector Rating Outlook Type of review
Freddie Mac, VA Tax-exempt Multifamily GSE Guaranteed Pass-Through Series 2023-ML17 VA FEH multifamily pass through AA+ Stable New sale
National Finance Authority , NH National Housing Pool 2023-2 CA RHB multifamily static pool BBB Stable New sale
Washington State Housing Finance Commission, WA Affordable Housing Securitization Pool Series 2023-1 WA RHB multifamily static pool BBB Stable New sale
Analyses associated with positive rating actions
  • New Bedford Housing Authority, Massachusetts, Capital Fund Financing Program, Sept. 15, 2023
  • Quality Senior Housing Foundation of East Texas Inc.; Affordable Housing, Sept. 15, 2023
  • BlueHub Loan Fund Inc., Sept. 13, 2023
  • Capital Impact Partners, D.C., Sept. 3, 2023
  • Fort Irwin Land LLC, California; Military Housing, Sept. 2, 2023
  • Corvias Military Living LLC, Rhode Island; Military Housing, Sept. 1, 2023
  • Caritas Acquisitions I LLC, California; Affordable Housing, Aug. 23, 2023
  • IMPACT Funding LLC, California; Multifamily Whole Loan, July 29, 2023
  • NV Homestead Apartments LP; Section 8, July 17, 2023
  • Chisom Housing Group, Washington; Section 8, July 20, 2023
  • Arizona Industrial Development Authority; Multifamily Whole Loan, July 12, 2023
Analyses associated with negative rating actions
  • Corvias Military Living LLC, Rhode Island, Military Housing, Sept. 1, 2023
  • Los Angeles Housing Authority; Affordable Housing; Section 8, Aug. 21, 2023
  • CHC Trestletree LLC, Georgia, Section 8, Aug. 10, 2023
  • Newark Housing Authority, New Jersey, Aug. 10, 2023

Related Research

This report does not constitute a rating action.

Primary Credit Analyst:Shirley Murillo, New York (646) 831-2467;
shirley.murillo@spglobal.com
Secondary Contact:Marian Zucker, New York + 1 (212) 438 2150;
marian.zucker@spglobal.com
Research Contributor:Tribhuvan Chauhan, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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