Fitch Affirms Indiana Housing's Single Family Mortgage Revs at 'AAA'; Assigns Stable Outlook.

NEW YORK -- As detailed in the special report 'State HFA Outlook for 2009' (dated May 4, 2009, and available on Fitch's web site at 'www.fitchratings.com'), Fitch Ratings is now assigning Rating Outlooks to its tax-exempt housing ratings. Fitch today assigns a Stable Outlook to all outstanding Indiana Housing and Community Development Authority (formerly Indiana Housing Finance Authority) single-family mortgage revenue bonds issued under the general resolution dated June, 1980.

Additionally, Fitch affirms the 'AAA' rating on the following outstanding issues for the Indiana Housing and Community Development Authority (totaling approximately $1.29 billion):

--1998 series A,D;

--2000 series A,C,D;

--2001 series A-C;

--2002 series A-D;

--2003 series A-D;

--2004 series A-C;

--2005 series A-C;

--2006 series A;

--2006 series B;

--2006 series C;

--2006 series D;

--2007 series A;

--2008 series A.

The bonds were issued to provide funds to continue the authority's single-family homebuyer program through the purchase of Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA) guaranteed mortgage-backed certificates and Freddie Mac (FHLMC) PC's (mortgage pass-through certificates).

The long-term 'AAA' rating on the bonds reflects the current and projected composition of the single-family mortgage portfolio. As of July 1, 2009, more than 99% of the mortgage portfolio consisted of GNMA (72%), FNMA (15%) and FHLMC PC (12%) mortgage-backed certificates, which are fully guaranteed for timely payment regardless of the actual performance of underlying loans. GNMA mortgage-backed securities are guaranteed by the U.S. government; Fitch rates FNMA and FHLMC PC mortgage-backed securities 'AAA'. The small amount of whole loan mortgages that are not guaranteed by certificates are generally covered by primary mortgage insurance and pool insurance policies. The rating is also supported by the high level of overcollateralization that exists within the indenture and the program's financial performance as evidenced by an asset parity ratio of 112% as of the Dec. 31, 2008 audited financial statements.

The combination of timely payment performance from mortgage certificates and deep levels of mortgage insurance on the whole loans provides a strong cushion against portfolio deterioration or cash flow interruption. Additionally, the program remains well overcollateralized, providing an additional layer of security and liquidity.

To date, approximately 14.5% of the bonds under the single-family revenue bond program have been issued in a variable-rate mode with nearly all of those bonds swapped to a synthetic fixed rate with the following counterparties: Goldman Sachs Mitsui Marine, L.P. (GSMM) (guarantee by Goldman Sachs Group, Inc.; rated 'AA-/F1+' by Fitch), UBS AG (rated 'AA+/F1+') and Royal Bank of Canada (RBC; rated 'AA/F1+'). The variable-rate demand bonds are backed by liquidity facilities from three separate standby bond purchase agreements (SBPA) provided by JP Morgan Chase Bank, NA which expire on Feb. 8, 2010 and one SBPA from RBC that expires Dec. 1, 2009.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, '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.