U.S. State Housing Finance Agencies weathered the storm of the financial crisis and are now getting a boost from creative bond structuring and rising home prices, Moody's Investors Service said, raising the sector's outlook to stable from negative.

HFAs have diversified their business models to address loan financing challenges, lowered borrowing costs, are experiencing better asset positions and will benefit from the stabilization of counterparty credit and median home prices, Moody's said in a report Monday.

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