Fitch Updates Rating Guidelines for U.S. PHA Cap Fund Bonds.NEW YORK -- Fitch Ratings has updated its rating guidelines for Public Housing Authority (PHA PHA abbr. phytohemagglutinin PHA phytohemagglutinin, a plant lectin. ) capital fund housing revenue bonds (cap fund bonds). These bonds are backed by annually appropriated capital improvement funds budgeted under the U.S. Department of Housing and Urban Development (HUD). Fitch's revised report encompasses the longer history of cap fund bond issuance, the decrease in HUD's budget for the capital fund program to the lowest level in over 10 years, and the benefit of a new financing structure in which a state housing finance agency acts as conduit issuer. With these additions to the report, Fitch's approach to rating PHA cap fund bonds remains based on two main credit areas: first, a quantitative assessment of appropriation risk, using debt service coverage as the primary factor in arriving at an initial credit rating; and second, an evaluation of structural and qualitative components that may result in an adjustment to the initial rating. These structural factors include amendments to the annual contract between HUD and a PHA to specify both the flow of funds Flow of funds In the context of municipal bonds, refers to the statement displaying the priorities by which municipal revenue will be applied to the debt. In the context of mutual funds, refers to the movement of money into or out of a mutual funds or between or among from the annual appropriation to the trustee as well as HUD's approval of the indenture. The Quality Housing and Work Responsibility Act (QHWRA QHWRA Quality Housing and Work Responsibility Act of 1998 ) of 1998 granted PHAs leveraging capability to use capital fund program (CFP 1. CFP - Constraint Functional Programming. 2. CFP - Communicating Functional Processes. 3. CFP - Call For Papers (for a conference). ) appropriations as a pledge for long-term debt service payments on bonds. Cap fund bonds have been a tool in numerous securitizations, allowing PHAs to meet capital needs. Currently, Fitch has outstanding ratings on cap fund bonds issued by the Chicago Housing Authority The Chicago Housing Authority (CHA) is a public housing authority focusing on public housing in the city of Chicago, founded in 1937. It has built a number of public housing projects over the years. (rated 'AA-' by Fitch), the Philadelphia Housing Authority (rated 'AA' by Fitch), and the Maryland Department of Housing and Community Development (rated 'AA' by Fitch). For a copy of the Fitch report, 'Rating Guidelines for PHA Capital Fund Funding Housing Revenue Bonds,' see the Fitch Ratings web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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