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U.S. Public Finance Housing Rating Actions, Second-Quarter 2024

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S&P Global Ratings' U.S. Public Finance Housing rating actions (including outlook revisions) for second-quarter 2024 consisted of 10 positive rating actions, six negative rating actions, and 60 affirmations.

Second-Quarter Rating Actions

We took positive rating actions on 10 rental housing bond credits, which consisted of six upgrades and four outlook changes (see table 1). Five of the upgrades were in the military housing subsector and reflected improved financial and operating performance as net rent collections improved after receipt of higher Basic Allowance for Housing (BAH) allocations. The other credit we upgraded was a multinotch upgrade in the section 8 subsector due to strong maximum annual debt service (MADS) coverage in 2023, improved assessment of management and governance, and positive trends in the project's property-specific characteristics. Two of the outlook revisions from stable to positive occurred in the military housing subsector due to improved debt service coverage (DSC) following increases in net operating income and stronger occupancy levels at the project. The other two outlook revisions from negative to positive were in the age-restricted subsector for multitranche bonds secured by several obligated group-owned health care facilities, which saw a marked improvement in net cash flow from a combination of higher occupancy, rental rate increases, and expenditure controls.

We took negative rating actions on four federally enhanced housing (FEH) projects and one rental housing bond project within the military housing subsector, which consisted of two downgrades, one outlook change, and placing three credits on CreditWatch with negative implications (see table 2). Two of the FEH credits and one military housing project were placed on CreditWatch with negative implications. The rating actions reflected, respectively, our view that asset-to-liability (A/L) parity might have fallen below 100% and a potential deterioration in MADS coverage following receipt of the project's 2022 audit. One of the FEH credits placed on CreditWatch was also downgraded later in the quarter after we received information from the issuer confirming the project's A/L parity falling below 100%, along with our projection that DSC could fall below 1.0x in the final bond maturity year. Another FEH credit was downgraded because the rating on Caisse des Dépôts et Consignations, the bonds' guaranteed investment contract (GIC) provider, was lowered from 'AA' to 'AA-'. Lastly, the outlook revision from stable to negative was related to another FEH, based on our estimate that the bonds will default on the debt service payment within a year.

During second-quarter 2024, affirmations constituted 60 out of 88 total rating actions (see table 3), or about 68%, the same as first-quarter 2024 (68%). As of July 2024, about 90% of ratings carry stable outlooks, lower than in the previous quarter (95%). We typically review the parity rating on an issuer in conjunction with any new-money or refunding transactions. During the second quarter, we rated 44 new sales which was 29% higher than the 34 new sales we rated during first quarter. (For more information on our specific housing subsectors, see recent commentaries in Related Research.)

We also rated 12 new issuers in second-quarter 2024 (see table 4):

Table 1

Positive rating actions--second-quarter 2024
Issue State Sector Prior rating Current rating Prior outlook Current outlook Reason for rating
BSLC II, CO Bethesda Senior Living Communities Affordable Housing Bethesda Portfolio Project CO Rental Housing Bonds (RHB) - Age Restricted BBB- BBB- Negative Positive Improved net cash flow due to improved occupancy, rental rate increases, and controlled expenses.
BSLC II, CO Bethesda Senior Living Communities Affordable Housing Bethesda Portfolio Project 2nd Lien CO RHB - Age Restricted BB+ BB+ Negative Positive Improved net cash flow due to improved occupancy, rental rate increases, and controlled expenses.
Tierra Vista Comntys LLC, DE Military Housing Air Force Tri-Group 2nd Lien DE RHB - Military A- A- Stable Positive Improved debt service coverage following increases in net operating income and stronger occupancy levels at the project.
Ohana Military Comntys LLC, HI Military Housing 3rd Lien HI RHB - Military A A+ Stable Stable Improved financial and operating performance from increasing net rent collections following Basic Allowance for Housing (BAH) revenue growth.
Atlantic Marine Corps Communities LLC, NC Military Housing NC RHB - Military A- A Stable Positive Improved financial and operating performance due to increasing net rent collections from BAH revenue growth.
Atlantic Marine Corps Communities LLC, NC Military Housing 2nd Lien NC RHB - Military BBB A- Stable Positive Improved financial and operating performance due to increasing net rent collections from BAH revenue growth.
Atlantic Marine Corps Communities LLC, NC Military Housing 3rd Lien NC RHB - Military BBB A- Stable Positive Improved financial and operating performance due to increasing net rent collections from BAH revenue growth.
Tri Command Military Hsg LLC, SC Military Housing Beaufort/Parris Island Marine Corps SC RHB - Military B+ BB+ Stable Positive Improved financial and operating performance due to increasing net rent collections from BAH revenue growth.
Cavalry Family Housing LP, TX Military Housing TX RHB - Military A A Stable Positive Improved financial and operating performance due to increasing net rent collections from BAH revenue growth.
Chisom Hsg Grp, WA Section 8 Affordable Housing CHG Hsg Pool Proj WA RHB - Section 8 BB+ BBB Stable Positive Strong MADS coverage in 2023, improved assessment of management and governance and positive trends in the project’s property-specific characteristics.

Table 2

Negative rating actions--second-quarter 2024
Issue State Sector Prior rating Current rating Prior outlook* Current outlook* CreditWatch Reason for rating
New Jersey Housing & Mortgage Finance Agency NJ, Presidential Plaza at Newport
Rating placed on CreditWatch with negative implications (April 19, 2024) NJ Federally Enhanced Housing (FEH) - Multifamily Stand Alone A+ A+ Stable N.M. Negative Confirmed that the project’s asset-to-liability parity fell below 100% and our projection that debt service coverage could fall below 1.0x in the final bond maturity year.
Rating downgrade (June 11, 2024) NJ FEH - Multifamily Stand Alone A+ BBB+ N.M. Stable Our view that asset-to-liability parity may have fallen below 100%.
Sun Pointe Park LP NM Multifamily Insured NM FEH - Multifamily Stand Alone AA AA- Negative Stable GIC provider's rating was downgraded.
Oklahoma Cnty Home Fin Auth, OK Single Family GNMA MBS 1997 Indenture OK FEH - Single Family Stand Alone AA+ AA+ Stable N.M. Negative Our view that asset-to-liability parity may have fallen below 100%.
Laredo Hsg Fin Corp, TX Single Family Multi-Agency MBS 1994 Indenture TX FEH - Single Family Stand Alone CC CC Stable Negative Our estimate that the bonds will default on the debt service payment within a year.
South Texas Military Housing LP, TX Military Housing South Texas Navy Family Housing TX RHB - Military BBB- BBB- Stable N.M. Negative A potential deterioration in MADS coverage following receipt of the project’s 2022 audit.
*When a credit is placed on CreditWatch, the outlook is Not Meaningful (N.M.).

Table 3

Affirmations and new sales--second-quarter 2024
Issue State Sector Rating Outlook Type of review
Colorado Hsg & Fin Auth, CO Multi-Family Whole Loans - Multifamily Master Indenture CO Mortgage Revenue Bond Program (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
Greystone Housing Impact Investors LP, NE Multi Family Series M031 NE FEH - Multifamily Static Pool AA+ Stable Full review
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
Pacific Beacon LLC, CA Military Housing San Diego Naval Base Unaccompanied CA RHB - Military AA Stable Full review
Pacific Beacon LLC, CA Military Housing San Diego Naval Base Unaccompanied 2nd Lien CA RHB - Military AA- Stable Full review
Pacific Beacon LLC, CA Military Housing San Diego Naval Base Unaccompanied 3rd Lien CA RHB - Military A+ Stable Full review
Minnesota Hsg Fin Agy, MN Rental Housing Bond Resolution MN MRBP AAA Stable New sale
Columbus Metropolitan Housing Authority, OH OH Social Housing Provider (SHP) ICR A+ Stable New sale
Kern Cnty Hsg Auth, CA Single Family GNMA MBS 1994A Indenture SUBSERIES XI CA FEH - Multifamily Stand Alone AA+ Stable Full review
Kern Cnty Hsg Auth, CA Single Family GNMA MBS 1994A Indenture SUBSERIES XII CA FEH - Multifamily Stand Alone AA+ Stable Full review
Colorado Hsg & Fin Auth, CO, Single Family Mortgage Bonds Indenture CO MRBP AAA 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 III (GO) CO MRBP AA Stable New sale
Maine St Hsg Auth, ME Mortgage Purchase Program Resolution ME MRBP AA+ Stable New sale
New York City Hsg Dev Corp, NY, Multifamily General Resolution NY MRBP AA+ Stable New sale
Minnesota Housing Finance Agency, MN Single Family MN MRBP AA+ Stable New sale
Rhode Island Housing & Mortgage Finance Corporation, RI Homeownership Opportunity Bond Resolution RI MRBP AA+ Stable New sale
Tierra Vista Comntys LLC, DE Military Housing Air Force Tri-Group DE RHB - Military A+ Stable Full review
EMLI Pecan TC I LP, TX Multifamily Tax-Exempt Mortgage-Backed Bonds Series 2020 TX FEH - Multifamily Stand Alone AA+ Stable Full review
Massachusetts Hsg Fin Agy, MA Housing Bonds MA MRBP AA+ Stable New sale
Georgia Hsg and Fin Auth, GA Single Family Whole Loan - 1976 General Resolution GA MRBP AAA Stable New sale
Virginia Housing Development Authority VA Rental Housing Bonds w GO VA MRBP AA+ Stable New sale
Boston Hsg Auth, MA General Obligation ICR MA SHP ICR A+ Stable Full review
North Carolina Hsg Fin Agy, NC Single Family MBS Whole Loan - 1998 Trust Agreement NC MRBP AA+ Stable New sale
Wyoming Comnty Dev Auth, WY Single Family Whole Loan - 1994 Indenture WY MRBP AA+ Stable New sale
Asheboro Affordable Housing, LLC, NC and Dothan Affordable Housing, LLC, AL RHA Housing Project NC RHB - Section-8 BBB+ Stable Full review
Texas Department of Housing & Community Affairs Single Family Mortgage Rev Bnd Indenture TX 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 Homeownership Revenue Bonds (1988 Resolution) w GO WI MRBP AA+ Stable New sale
Connecticut Hsg Fin Auth, CT Housing Mortgage Finance Program Bond Resolution CT MRBP AAA Stable New sale
Colorado Hsg & Fin Auth, CO Single Family Mortgage Bonds Indenture CO MRBP AAA 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 III (GO) CO MRBP AA Stable New sale
Pennsylvania Hsg Fin Agy, PA Single Family Mortgage Revenue Bonds w GO PA MRBP AA+ Stable New sale
Tennessee Hsg Dev Agy, TN Single Family Whole Loan - 2013 General Residential Finance Program TN MRBP AA+ Stable New sale
Ohana Military Comntys LLC, HI Military Housing HI RHB - Military AA- Stable Full review
Ohana Military Comntys LLC, HI Military Housing 2nd Lien HI RHB - Military A+ Stable Full review
Alaska Hsg Fin Corp, AK Single Family Whole Loan - 1999 Resolution: Veterans Mortgage Program and GO AK MRBP AAA Stable New sale
Wasatch Advantage Group, LLC, CA Multi-Family FNMA MBS Providence Place Apartments CA FEH - Multifamily Stand Alone AA+ Stable Full review
Maine St Hsg Auth, ME Mortgage Purchase Program Resolution ME MRBP AA+ Stable New sale
Minnesota Housing Finance Agency, MN Single Family MN MRBP AA+ Stable New sale
Virginia Hsg Dev Auth, VA Commonwealth Mortgage Bonds w GO VA MRBP AAA Stable New sale
Iowa Fin Auth, IA MBS 1991 SFMBS Resolution IA MRBP AAA Stable New sale
Montana Brd of Hsg MT, SF I Indenture MT MRBP AA+ Stable New sale
Connecticut Hsg Fin Auth, CT Housing Mortgage Finance Program Bond Resolution CT MRBP AAA Stable New sale
Missouri Hsg Dev Comm, MO First Place Homeownership Loan Program MO MRBP AA+ Stable New sale
Massachusetts Hsg Fin Agy, MA Single-Family Mortgage Bonds MA MRBP AA+ Stable New sale
Nevada Hsg Div, NV Single Family 2008 MBS Resolution NV MRBP AA+ Stable New sale
New Jersey Hsg & Mtg Fin Agy, NJ Single Family Homeownership Mortgage Bond Resolution NJ MRBP AA Stable New sale
Nebraska Invest Fin Auth, NE SFHRB Resolution NE MRBP AAA Stable New sale
Virginia Housing Development Authority VA Rental Housing Bonds w GO VA MRBP AA+ Stable New sale
Minnesota Housing Finance Agency, MN Single Family MN 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
Iowa Finance Authority, IA 1991 Resolution IA MRBP AAA Stable New sale
Alaska Hsg Fin Corp, AK 1999 Resolution: Veterans Mortgage Program AK MRBP AAA Stable Full review
Louisiana Housing Corp. Deerwood Apartments L.P LA Escrow Collateral AA+ Stable Full review
Escambia County Hsg Finance Auth, 5465 Curry Ford L.P., Hollow Brook Apartments FL Escrow Collateral AA+ Stable Full review

Table 4

New issuers, second-quarter 2024
Issue State Sector Rating Outlook
Freddie Mac, VA Multifamily Series ML22 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac, VA Multifamily Series ML23 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac VA Housing MFFHLMC 1st Lien Multifamily Mortgage Participation Certs WE5056, WE5057, WE6113 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac VA Housing MFFHLMC 1st Lien Multifamily Mortgage Participation Certs WE5054, WE 5055, WE2060 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac VA Housing MFFHLMC 1st Lien Multifamily Mortgage Participation Certs WE6090 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac VA Housing MFFHLMC 1st Lien Multifamily Mortgage Participation Certs WE6114 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Stanislaus County Housing Authority, CA General Obligation CA SHP ICR A+ Stable
Community Housing Capital, Inc., GA General Obligation CA CDFI ICR AA- Stable
Santa Clara Cnty Hsg Auth, CA General Obligation ICR CA SHP ICR AA- Stable
Town Of Morehead City, North Carolina Elijah's Landing Of Morehead City LLC NC Escrow Collateral AA+ Stable
Louisiana Housing Corp. Deerwood Apartments L.P LA Escrow Collateral AA+ Stable
Chattanooga Health, Educational, & Housing Facility Board, Tennessee, DGA Shallowford L.P. TN Escrow Collateral AA+ Stable
Analyses associated with positive rating actions
Analyses associated with negative rating actions

Related Research

This report does not constitute a rating action.

Primary Credit Analyst:Shirley Flores, New York (646) 831-2467;
Shirley.Flores@spglobal.com
Secondary Contacts:Nora G Wittstruck, New York + (212) 438-8589;
nora.wittstruck@spglobal.com
Olivia Fellbaum, New York + 1 (212) 438 7428;
olivia.fellbaum@spglobal.com

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