Fitch Rates Indiana Housing's $120MM D-1&2 Mtge Revs 'AAA' & $141.6MM E-1&2 Notes 'F1+/AAA'.

NEW YORK -- Fitch assigns a rating of 'AAA' to the Indiana Housing and Community Development Authority (formerly Indiana Housing Finance Authority) $120.0 million single-family mortgage revenue bonds, 2006 series D and a rating of 'AAA/F1+' to the $141.6 million 2006 series E notes. The 2006 series D bonds and 2006 series E notes are expected to be sold through negotiation the week of Nov. 27, 2006, through a syndicate led by UBS Investment Bank.

Additionally, Fitch affirms the 'AAA' rating on the following outstanding issues for the Indiana Housing and Community Development Authority (totaling approximately $1.18 billion):

--1998 series A-D bonds;

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

--2000 series A-D bonds;

--2001 series A-C bonds;

--2002 series A-D bonds;

--2003 series A-D bonds;

--2004 series A-C bonds;

--2005 series A, B, C and D bonds;

--2006 series A bonds;

--2006 series B bonds;

--2006 series C bonds.

The 2006 series D bonds are being issued to refund prior series of bonds under the indenture and to provide approximately $120.0 million to continue the authority's single-family homebuyer program through the purchase of Government National Mortgage Association (Ginnie Mae), Federal National Mortgage Association (Fannie Mae) guaranteed mortgage-backed certificates and Federal Home Loan Mortgage Corporation PCs (Freddie Mac). All of the 2006 series D bonds are being issued as fixed-rate bonds. To date, approximately 14% of the bonds under the single family revenue bond program have been issued in variable-rate mode with 100% 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+' by Fitch) and UBS AG (rated 'AA+/F1+' by Fitch).

The long-term 'AAA' rating on the 2006 series D bonds reflects the current and projected composition of the single-family mortgage portfolio, which consists primarily of Ginnie Mae and Fannie Mae guaranteed mortgage certificates and may include Freddie Mac certificates using a portion of the proceeds from this issue. The rating is also supported by the high level of overcollateralization that exists within the indenture and the program's financial performance.

The short-term 'F1+' rating on the 2006 series E notes is based on the investment of the proceeds in an investment agreement with a highly rated provider in an amount and with a maturity approximately matching those of the notes through the maturity date of Dec. 20, 2007.

As of July 1, 2006, more than 99% of the mortgage portfolio consisted of Ginnie Mae and Fannie Mae mortgage-backed certificates, which are fully guaranteed for timely payment regardless of the actual performance of underlying loans. Ginnie Mae securities are guaranteed by the U.S. government; Fitch rates Fannie Mae mortgage-backed securities 'AAA'. The mortgage loans not guaranteed by certificates (whole loans) are generally covered by primary mortgage insurance.

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 over-collateralized, providing an additional layer of security and liquidity.

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.