Report Finds Housing Finance Agencies Financially Stable
In a recent report, Standard and Poor's Rating Service (S&P) found that HFAs' financial ratios remained stable in fiscal year (FY) 2013 after two consecutive years of improvement. Of the 24 state HFAs that S&P rates, 20 of them have an "AA-" rating or higher.
According to the report, S&P credits the rating stability among most HFAs to their ability to take advantage of alternative financing sources during difficult market conditions for tax-exempt Mortgage Revenue Bonds (MRBs). The report also states that equity as a percent of assets for HFAs has reached 22.78 percent, the highest level S&P ever recorded.
S&P predicts that HFAs will continue to be profitable and improve their equity position over the course of the next few years, especially if low interest rates persist. The report states that if interest rates return to the 5.5 percent mark for 30-year fixed-rate mortgages, HFAs will be able to issue MRBs again.