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):
- Six were rated under our "U.S. Federally Enhanced Housing Bonds Rating Methodology" criteria, published Nov. 12, 2019;
- One community development financial institution was rated under our "Methodology And Assumptions: Housing Finance Agencies And Social Enterprise Lending Organizations" criteria, published Dec. 27, 2016;
- Two were rated under our "Methodology For Rating Public And Nonprofit Social Housing Providers" criteria, published June 1, 2021; and
- Three were rated under our "Methodology And Assumptions: Assigning Ratings To Bonds In The U.S. Based On Escrowed Collateral" criteria, published Nov. 30, 2012.
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
- Cavalry Family Housing LP, June 4, 2024
- Chisom Housing Group, Washington Public Finance Authority, June 4, 2024
- Tierra Vista Communities LLC, June 3, 2024
- Ohana Military Communities LLC, May 14, 2024
- Bethesda Senior Living Communities Obligated Group, May 6, 2024
- Atlantic Marine Corps Communities LLC, April 8, 2024
Analyses associated with negative rating actions
- New Mexico Mortgage Finance Authority, Sun Pointe Park L.P., June 21, 2024
- New Jersey Housing and Mortgage Finance Agency, June 11, 2024
- South Texas Military Housing L.P., May 28, 2024
- Laredo Housing Finance Corp., May 10, 2024
- New Jersey Housing and Mortgage Finance Agency, April 19, 2024
- Oklahoma County Home Finance Authority ‘AA+’ Series 1997A And 1997C Bond Rating Placed On CreditWatch Negative, April 3, 2024
Related Research
- The U.S. Rental Housing Sector Remains Largely Stable While Expense Pressures Loom, July 9, 2024
- Cyber Risk Insights: Hackers Are Knocking On The Door Of U.S. Affordable Housing Issuers, May 14, 2024
- U.S. Public Housing Authorities Capital Fund Ratings Remain Resilient Amid Higher Appropriations And No Planned Borrowing, March 14, 2024
- Military Rental Housing 2024 Outlook: Bond Sector Stable Amid Slow Recruitment and Higher Expenses, March 7, 2024
- U.S. Public Finance Housing Outlook 2024: A Stable Foundation Despite Emerging Risks And Slower Economic Growth, Jan. 24, 2024
- U.S. Social Housing Providers Have The Foundation to Insulate Against New Post-Pandemic Risks, Oct. 4, 2023
- U.S. Housing Finance Agencies 2022 Medians: Strong Metrics, Balance Sheets Reinforce Credit Quality, Sept. 19, 2023
- U.S. Mortgage Revenue Bond Program Medians: Strong Credit Quality Keeps The House In Order, Sept. 12, 2023
- What U.S. CDFI Ratios’ Resilience Through Changing Economic Landscapes Means For Long-Term Credit Quality, Aug. 10, 2023
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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