FL HFC $95M Homeowner Mtge Rev Bnds Underlying 'AA' By Fitch IBCA.

NEW YORK--(BUSINESS WIRE)--Sept. 21, 1999--

Florida Housing Finance Corp.'s $95 million homeowner mortgage revenue bonds, 1999 series 6, 7, 8, and 9 and 2000 series 1 and 2 are assigned an underlying 'AA' rating by Fitch IBCA. The bonds are expected to be insured by FSA Inc., whose claims-paying ability is rated 'AAA' by Fitch IBCA. The bonds are expected to be sold through negotiation on Sept. 23 by Merrill Lynch & Co. The following ratings on the corp.'s outstanding parity debt are also affirmed: 'AA' rating on the $150.2 million uninsured bonds; `AA' underlying rating on the $347.8 million and $101.7 million outstanding bonds which are MBIA and FSA insured, respectively; and `AA/F1+' rating on the $87 million 1999 series 4 and 5 convertible option bonds.

Net bond proceeds from the 1999 series 6, 7, 8, and 9 bonds will be used to continue the corp.'s single family first-time home buyer program. Net bond proceeds from the 2000 series 1 and 2 bonds will be used to refund outstanding bonds under a prior indenture resulting in the transfer of Government National Mortgage Association (GNMA) mortgage-backed securities (MBS) to this indenture. The rating reflects the current and expected loan portfolio composition, which consists of MBS from prior bond programs and existing and newly purchased single family mortgages; the sufficient levels of mortgage insurance to protect against loan losses; the adequate reserve levels and liquidity; and the corp.'s successful management track record and program oversight abilities.

The master trust indenture created in 1995 provides overall bond security provisions and minimal loan requirements. Specific loan purchase requirements are incorporated into supplemental indentures at the time of each bond sale. For the 1999 series 6-9 program, all loans will be insured by the Federal Housing Administration (FHA), guaranteed by the Department of Veterans Affairs (VA) or the U.S. Department of Agriculture, through its Rural Development program (USDA/RD), or privately insured down to 67% LTV for loans exceeding 80% LTV. Additionally, all loans will be covered by a 3% mortgage pool insurance policy issued by Radian Guaranty, Inc. (Radian, formerly Commonwealth Mortgage Assurance Corp., or CMAC).

The 1999 1-3 bond series program required loans to be either USDA/RD guaranteed, VA guaranteed, FHA insured or privately insured down to a 67% LTV for loans exceeding 78% LTV. These loans are also covered by a 3% pool insurance policy from Radian. The 1998 bond series program required primary insurance coverage to 68% and a 3% pool policy with Radian. The 1997 bond series incorporated private mortgage insurance coverage down to 60% LTV and a 2% pool policy from GE Mortgage Insurance Co. into the loan program, while all of the 1995 and 1996 bond series required private mortgage insurance coverage down to 68% LTV and incorporated 7% pool policies.

Similar to all prior series under this indenture, the 1999 series 6-9 bonds require a mortgage reserve of 2% of loans and available proceeds and a debt service reserve of 3% of bonds outstanding to be funded at bond closing. The existing loan portfolio consists of more than 4,000 loans totaling approximately $271 million originated under the 1995-1999 programs, as well as $22.1 million of MBS and $1.2 million of loans transferred from prior programs. Overall, 40% of the outstanding loans originated from the current indenture is FHA insured, 38% is privately insured, 18% is VA guaranteed, and 4% is uninsured.