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

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S&P Global Ratings' U.S. Public Finance Housing rating actions (including outlook revisions) for third-quarter 2024 consisted of 14 positive rating actions, four negative rating actions, and 60 affirmations.

Third-Quarter Rating Actions

We took positive rating actions on one capital fund financing program, one community development finance institution, one social housing provider, and 11 rental housing bond (RHB) credits, which consisted of 11 upgrades and three outlook changes (see table 1). Of the 11 RHB credits, four were upgrades and two were outlook revisions in the military housing subsector due to improved financial and operating performance as a result of receiving higher Basic Allowance for Housing (BAH) allocations, while three liens within a multitranche financing in the static pool subsector were upgraded following improvement in parity and coverage after prepayments reduced debt outstanding. The remaining two upgrades consisted of an RHB Section 8 development and an unenhanced multifamily development, each of which had improved operations after large rehabilitation projects were completed in 2020 and the renewal of the project's housing assistance payment (HAP) contract, which led to stronger occupancy levels and higher debt service coverage.

Other positive actions resulted from improved debt service coverage following the U.S. Congress' fiscal 2024 grant award for a capital fund financing program. A social housing provider was upgraded based on our view of the improvements made by the organization as described in their comprehensive corrective action plan after being designated as "troubled" by the Department of Housing and Urban Development (HUD). The remaining outlook revision was on a community development financial institution, given the strong likelihood that its capital adequacy will remain above-average compared with that of similarly rated peers over the next two years as it executes its growth strategy.

We took negative rating actions on one federally enhanced housing (FEH) credit, one social housing provider, and two RHB projects within the section 8 subsector, which consisted of one downgrade, two outlook revisions, and placement of one credit on CreditWatch with negative implications (see table 2). The FEH credit was placed on CreditWatch with negative implications due to a lack of timely information regarding current asset-to-liability parity. We revised the outlook on the social housing provider to negative from stable as a result of weakening key debt ratios for the five-year financial averages used in our analysis. An RHB section 8 project had weaker coverage in fiscal 2023 due to operating expenses outpacing small increases in income, which resulted in an outlook revision. Lastly, the section 8 project downgrade was primarily driven by significantly weaker coverage in fiscal 2023 due to increased vacancies and operating expenses.

During third-quarter 2024, affirmations constituted 61 out of 91 total rating actions, or about 67%, similar to second-quarter 2024 (68%). As of October 2024, about 89% of ratings carry stable outlooks, fewer than in the previous quarter (90%). During the third quarter, we rated 38 new sales and affirmed 60 ratings (see table 3), which was 14% lower than the 44 new sales we rated during the second quarter. (For more information on our specific housing subsectors, see recent commentaries in Related Research.)

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

Table 1

Positive rating actions, third-quarter 2024
Issue State Sector/criteria Prior rating Current rating Prior outlook Current outlook Reason for rating
Meridian Hsg Auth, MS HUD Capital Fund Financing MS Capital Fund Financing Program A+ AA- Stable Stable Improved debt service coverage (DSC) following U.S. Congress' fiscal 2024 grant award and average managerial capacity in line with peers.
NeighborWorks Capital, MD General Obligation ICR MD CDFI ICR A+ A+ Stable Positive Likelihood that capital adequacy will remain above-average compared with peers over the next two years as it executes its growth strategy.
Fort Moore Family Comntys, LLC, GA Military Housing 2nd Lien GA RHB - Military A A Stable Positive Increase in BAH rates could lead to another year of increased net revenues in 2024, improving DSC in our coverage and liquidity analysis.
Fort Moore Family Comntys, LLC, GA Military Housing 3rd Lien GA RHB - Military BBB+ BBB+ Stable Positive Increase in BAH rates could lead to another year of increased net revenues in 2024, improving DSC in our coverage and liquidity analysis.
Midwest Fam Hsg, LLC, IL Military Housing 3rd Lien IL RHB - Military A+ AA- Positive Stable Improved DSC, driven by increases in BAH rates.
Midwest Fam Hsg, LLC, IL Military Housing 4th Lien IL RHB - Military A A+ Positive Stable Improved DSC, driven by increases in BAH rates.
GMAC Commercial Military Hsg Tr XVI, WA Military Housing Fort Lewis/McChord AFB WA RHB - Military AA- AA Stable Stable Improved DSC, driven by increases in BAH rates and stabilization in occupancy.
Lewis-McChord Communities, LLC WA Fort Lewis/McChord AFB Housing - Interest Only WA RHB - Military AA- AA Stable Stable Improved DSC, driven by increases in BAH rates and stabilization in occupancy.
Impact Funding LLC, CA Affordable Housing Pool Class C 2010 Pass Through Indenture CA RHB - Multifamily Static Pool A AA- Positive Stable Improved parity after prepayments reduced the amount of debt outstanding leading to improved coverage.
Impact Funding LLC, CA Affordable Housing Pool Class D 2010 Pass Through Indenture CA RHB - Multifamily Static Pool BBB+ A Stable Stable Improved parity after prepayments reduced the amount of debt outstanding leading to improved coverage.
Impact Funding LLC, CA Affordable Housing Pool Class E 2010 Pass Through Indenture CA RHB - Multifamily Static Pool BBB- BBB+ Stable Stable Improved parity after prepayments reduced the amount of debt outstanding leading to improved coverage.
NV Homestead Apartments, Ltd., FL Section 8 Affordable Housing Coral Gardens FL RHB - Section 8 B- B+ Positive Positive A material increase in DSC in 2023 due to an increase in rental revenue following a rehabilitation completed in 2020 and the 20-year renewal of the project's HAP renewal contract in 2021.
Trinity Affordable Hsg Corp, IL Affordable Housing Estates at Eagles Pointe Proj IL RHB - Unenhanced B+ BB- Stable Positive Improved DSC following increases in net operating income and stronger occupancy levels at the project.
Fall River Hsg Auth, MA General Obligation ICR MA SHP ICR BBB BBB+ Negative Stable Improvements undertaken by the authority per its comprehensive corrective action plan after being designated as 'troubled' by HUD, resulting in a 'standard' designation.

Table 2

Negative rating actions, third-quarter 2024
Issue State Sector/criteria Prior rating Current rating Prior outlook* Current outlook* CreditWatch Reason for rating
Assisted Living Foundation of America, CA Section 8 Affordable Housing Kings Daughters Court CA RHB - Section 8 BBB BBB Stable Negative Project's weaker DSC in fiscal 2023 due to operating expenses outpacing small increases in income.
Tulsa Pythian Manor, Inc., GA Section 8 Affordable Housing Pythian Manor Apts GA RHB - Section 8 BBB- BB+ Stable Negative Significantly weaker DSC in fiscal 2023 due to increased vacancies and operating expenses, and our expectation that the three-year DSC average will remain below 1.25x within the next year.
Vancouver Hsg Auth, WA General Obligation ICR WA SHP ICR AA- AA- Stable Negative Weakening in the authority's key debt ratios for the five-year financial averages used in our analysis.

Illinois Finance Auth, IL Single Family GNMA MBS 1998 Indenture

IL FEH - Multifamily Stand Alone AA+ AA+ Stable N.M. Negative Lack of information regarding current asset-to-liability parity.
*When a credit is placed on CreditWatch, the outlook is Not Meaningful (N.M.).

Table 3

Affirmations and new sales, third-quarter 2024
Issue State Sector/criteria Rating Outlook Type of review
Century Hsg Corp, CA General Obligation ICR CA CDFI ICR AA Stable New sale
Arkansas Dev Fin Auth, AR Single Family Multi-Agency MBS 1995 Resolution AR MRBP AA+ Stable New sale
California Dept of Vet Affairs, CA Veterans General Obligation Bonds (CA St GO) CA MRBP AA+ Stable New sale
California Dept of Vet Affairs, CA Home Purchase Revenue Bonds CA MRBP AA Stable New sale
California Housing Finance Agency, CA Multi-Family Mortgage Revenue Bond Program CA 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 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 CO MRBP AAA Stable Full review
Colorado Hsg & Fin Auth, CO Multi-Family Whole Loans - Multifamily Master Indenture 2nd Lien CO MRBP AA+ Stable New sale
Colorado Hsg & Fin Auth, CO Multi-Family Whole Loans - Multifamily Master Indenture 2nd Lien CO MRBP AA+ Stable Full review
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
Massachusetts Hsg Fin Agy, MA Single-Family Mortgage Bonds MA MRBP AA+ Stable New sale
Massachusetts Hsg Fin Agy, MA Housing Bonds MA MRBP AA+ Stable Event-driven review
Michigan St Hsg Dev Auth, MI General Resolution MI MRBP AA+ Stable New sale
Michigan State Housing Development Authority, MI Rental Housing 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
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
Pennsylvania Hsg Fin Agy, PA Single Family Mortgage Revenue Bonds w GO PA 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
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
Fort Moore Family Comntys, LLC, GA Military Housing GA RHB - Military AA- Stable Full review
Midwest Fam Hsg, LLC, IL Military Housing 2nd Lien IL RHB - Military AA Stable Full review
Midwest Fam Hsg, LLC, IL Military Housing IL RHB - Military AA Stable Full review
Augusta Homes Communities, LLC, CA Augusta Homes MHP Pool Series 2022 CA RHB - Mobile Home A+ Stable Full review
Caritas Affordable Hsg, Inc., CA Affordable Housing Caritas Afford Hsg Inc CA RHB - Mobile Home A- Stable New sale
Coach of San Diego LLC, CA Affordable Housing Pillar Ridge CA RHB - Mobile Home A- Stable Full review
Linc Hsg, CA Affordable Housing 2007 Franciscan MHP 2nd Lien CA RHB - Mobile Home A- Stable Full review
Linc Hsg, CA Affordable Housing 2007 Franciscan MHP CA RHB - Mobile Home A+ Stable Full review
Millennium Housing LLC, CA Affordable Housing Hacienda Valley Mobile Estates CA RHB - Mobile Home A+ Stable Full review
Millennium Housing LLC CA Union City Tropics CA RHB - Mobile Home 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 2nd Lien CA RHB - Multifamily Static Pool AA+ Stable Full review
Impact Funding LLC CA Pool 3rd LIEN Interest Only CA RHB - Multifamily Static Pool AA Stable Full review
Impact Funding LLC CA Pool 1st LIEN Interest Only CA RHB - Multifamily Static Pool AA+ Stable Full review
Glorieta Partners, Ltd., FL Section 8 Affordable Housing Gardens Apartment Proj FL RHB - Section 8 CCC Negative Full review
CHC Trestletree LLC, GA Section 8 Affordable Housing Steele Properties, LLC GA RHB - Section 8 B- Negative Full review
Housing Authority of the City of El Paso, TX General Obligation ICR TX SHP ICR A+ Stable New sale
Everett Housing Authority, WA General Obligation ICR WA SHP ICR A+ Stable Full review
North Carolina Housing Finance Agency, Weaver-PPM Portfolio* NC Escrow Collateral AA+ Stable Full review
Health, Educational and Housing Facility Board of the County of Knox, The Pines Apartments* TN Escrow Collateral AA+ Stable Full review
*These represent collateralized transactions typically without escrows that we rate under the escrowed collateral criteria

Table 4

New issuers, third-quarter 2024
Issue State Sector/criteria Rating Outlook
Freddie Mac, VA Multiple Family Multi-Agency Series M VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac VA Multifamily FHLMC VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Arc70 Capital LLC, CA Affordable Housing Securitization Pool Arc70 Capital Series 2024-1 Class A Certificates CA RHB - Multifamily Static Pool A Stable
Arc70 Capital LLC, CA Affordable Housing Securitization Pool Arc70 Capital Series 2024-1 Class B Certificates CA RHB - Multifamily Static Pool BBB Stable
North Carolina Housing Finance Agency, Weaver-PPM Portfolio NC Escrow Collateral* AA+ Stable
Kansas Development Finance Authority, Riverstone Sycamore Village, L.P. KS Escrow Collateral* AA+ Stable
Freddie Mac VA Housing MFFHLMC 1st Lien Multifamily Mortgage Participation Certs W6117 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac VA Housing MFFHLMC 1st Lien Multifamily Mortgage Participation Certs W6118 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac VA Housing MFFHLMC 1st Lien Multifamily Mortgage Participation Certs W6119 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac VA Housing MFFHLMC 1st Lien Multifamily Mortgage Participation Certs W6120 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac VA Housing MFFHLMC 1st Lien Multifamily Mortgage Participation Certs W6121 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
Freddie Mac VA Housing MFFHLMC 1st Lien Multifamily Mortgage Participation Certs W6122 VA FEH - Freddie Mac Multifamily Pool AA+ Stable
*These represent collateralized transactions typically without escrows that we rate under the escrowed collateral criteria.
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:Caroline E West, Chicago + 1 (312) 233 7047;
caroline.west@spglobal.com
Olivia Fellbaum, New York + 1 (212) 438 7428;
olivia.fellbaum@spglobal.com

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