Fitch Confirms L-T Rating on Indiana Housing's 2005B&C & 2006A Revs at 'AAA'; Upgrades S-T to 'F1+'.

NEW YORK -- Effective Feb. 9, 2009, Fitch Ratings will confirm the 'AAA' long-term rating assigned to the $104,000,000 Indiana Housing and Community Development Authority single-family mortgage revenue bonds, 2005 series B-3 & C-3 and 2006 series A-2 variable-rate demand bonds and will upgrade the short-term ratings to 'F1+' from 'F1'.

Fitch also confirms the 'AAA' rating on the following outstanding issues for the Indiana Housing and Community Development Authority (totaling approximately $1.16 billion):

--1998 series A-D;

--1999 series A, X, Y, Z;

--2000 series A-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 rating action is in connection with the substitution of the respective current standby bond purchase agreements (SBPA) issued by Depfa Bank PLC, acting through its New York Branch (DEPFA), which provide liquidity for the respective bonds, with three separate SBPAs issued by JP Morgan Chase Bank, NA. On the effective date of Feb. 9, 2009, the short-term 'F1+' rating on the bonds will be based on the JP Morgan SBPA. Also effective Feb. 9, 2009, Goldman Sachs will act as remarketing agent on the 2006A-2 bonds, JP Morgan will act as the remarketing agent on the 2005B-3 bonds, and Morgan Stanley & Co. will act as the remarketing agent on the 2005 C-3 bonds.

The long-term 'AAA' rating reflects the current and projected composition of the single-family mortgage portfolio. As of July 31, 2008, more than 99% of the mortgage portfolio consisted of GNMA (71%), FNMA (15%) and FHLMC PCs (13%) 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 proceeds of this issue are expected to be used to purchase only GNMA and FNMA guaranteed mortgage certificates. 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 111% as of the Dec. 31, 2007 audited financial statements.

The respective SBPAs provide for payment of the purchase price of tendered bonds and are sized to cover the respective principal portions of the purchase price and 187 days of interest at a rate of 12% based on a 365-day year for the series 2005 series B-3 & C-3 and 2006 series A-2 variable-rate demand bonds. The short-term rating on the bonds will expire on Feb. 8, 2010 for the 2005 series B-3 bonds, 2005 C-3 bonds and 2006 A-2 bonds, the stated date of expiration for the respective SBPAs, unless such date is extended, or upon any earlier expiration or termination of the SBPAs. On the effective date, all of the bonds will be in the daily rate mode.

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 two counterparties, Goldman Sachs Mitsui Marine, L.P. (GSMM) (guarantee by Goldman Sachs Group, Inc., rated 'AA-/F1+') and UBS AG (rated 'AA+/F1+').

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.