Fitch: Outlook Stable for U.S. State Housing Finance Agencies in 2016

NEW YORK--()--Positive issuer financial performance and the continued recovery of the broader housing market will position U.S. state housing finance agencies (SHFAs) for a stable outlook in 2016, according to Fitch Ratings in a new report.

Financial ratios for SHFAs remain sound thanks to deleveraging of bond programs, resulting in increased equity. 'What has also been taking place in recent months is the onset of replacing depleted SHFA assets largely through offering down payment assistance to first time homebuyers to boost new loan originations,' said Senior Director Maura McGuigan.

SHFAs have found down payment assistance (DPA) programs to be the single, most effective tool in originating new mortgage loans in the current mortgage market environment. Offering DPA will continue to present significant opportunities for growing SHFA loan production and profitability. Another development that may pick up steam next year is more SHFAs returning to some form of mortgage revenue bond (MRB) issuance to replenish assets on their balance sheet.

Factors that could adversely affect the outlook for SHFAs include a failure of SHFAs to grow balance sheets that could hamper long term profitability levels. Additionally, 'growing SHFA issuer and program equity may increase exposure to external taps, potentially decreasing fund balances and creating negative rating pressure,' said McGuigan.

'2016 Outlook: State Housing Finance Agencies' is available at 'www.fitchratings.com' or by clicking on the above link.

Additional information is available at www.fitchratings.com.

2016 Outlook: State Housing Finance Agencies

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=873958

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Maura McGuigan
Senior Director
+1-212-908-0591
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY, 10004
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Maura McGuigan
Senior Director
+1-212-908-0591
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY, 10004
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com