Fitch Affirms Idaho Housing & Finance Association 2000 Indenture Bonds; Outlook Stable

NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the following ratings of the Idaho Housing and Finance Association's (IHFA) single-family mortgage bonds, series 2000F through 2002G (2000 Indenture):

--$118.9 million 2000F-2002G (class I) 'AAA';

--$4.4 million 2000F-2002E (class II) 'AA';

--$15.4 million 2000F-2002G (class III) 'A+'.

The Rating Outlook for the bonds is Stable.

RATING RATIONALE:

--Substantial and adequate levels of debt subordination support the 2000 indenture class I and II bonds. The class III bonds are supported by a general obligation (GO) pledge of IHFA.

--Most of the loan portfolio consists of fully insured loans and have additional pool insurance coverage, limiting potential loss exposure.

--Asset parity maintenance requirements provide added credit enhancement to the class I and II bonds.

--The issuer's single-family loan portfolio, which is serviced internally, is performing well.

--Indenture cash flows demonstrate sufficient funds to absorb Fitch projected loan losses.

KEY RATING DRIVERS:

--The underlying loan portfolio is well seasoned.

--Cash flow stresses indicate reliance on the general fund to pay debt service on the class III bonds.

--Upon maturity of the class III bonds in 2019 and 2020, exposure of the class II bonds to unanticipated program losses that surpass available excess funds may put pressure on IHFA's credit profile.

SECURITY:

The 2000F through 2002G single-family mortgage bonds were issued under a master indenture that pledge mortgage revenues, investment earnings, reserves, and other trust funds to secure the bonds. The class III bonds are secured by the corporation's GO pledge for payments of scheduled interest and principal at final maturity.

CREDIT SUMMARY:

The affirmation of the 2000 indenture class I and class II bonds reflects the available general fund reserves, historically strong operating performance of IHFA, the low loan loss expectations for the programs based on the underlying quality of the assets, and the substantial asset parity requirements for the class I and class II bonds. The delinquency rates for IHFA loans have historically been below state and national figures.

All Fitch-rated IHFA single-family bond programs, including the 2000 indenture, include a series of class III bonds which are secured by the assets and revenues of the respective trust estates and are additionally secured by an IHFA GO pledge, rated 'A+' by Fitch. For more information on IHFA's GO rating, please see Fitch's press release dated June 17, 2011 at 'www.fitchratings.com'.

Additional information is available at www.fitchratings.com'.

In addition to the sources of information identified in the Revenue-Supported Rating Criteria, this action was additionally informed by information from Bond Counsel and Underwriter.

Applicable Criteria and Related Research:

--'Revenue-Supported Rating Criteria', dated June 20,, 2011;

--'State Housing Finance Agencies General Obligation Rating Criteria', dated April 27, 2011;

--'State Housing Finance Agencies - Single-Family Mortgage Program Rating Guidelines', dated Nov. 26, 2008.

Applicable Criteria and Related Research:

Revenue-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=637130

State Housing Finance Agencies General Obligation Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=616250

State Housing Finance Agencies - Single-Family Mortgage Program Rating Guidelines

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=416066

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