Fitch Ratings upgrades the rating on Florida Housing Finance Corporation's (FHFC) affordable housing guarantee fund (GF) to A-plus from A-minus.
The rating outlook is stable.
The security for the rating is the GF's corpus, which is available for claim payments on the guaranteed portfolio of multifamily and single-family mortgage loans. The guarantee fund also benefits from limited ongoing state support through legislation that allows for drawing on a portion of future documentary stamp taxes allocated to the State Housing Trust Fund (SHTF).
The upgrade reflects the fact that the GF's risk-to-capital ratio, now at its lowest level, improved to 1.67:1 in 2014 from 3.0:1 in 2012. Fitch factors into its rating the fact that the FHFC board-directed risk-to-capital level is 5:1, which limits the rating given the potential for the risk-to-capital to increase to a higher level. However, there is no history of withdrawing corpus funds except to repay outstanding debt.
