Moody's Affirms Aaa Rating on Maryland CDA - Single Family Housing Revenue Bonds

Strategic Insights -

The Moody's Investors Service has reaffirmed the Aaa rating on Maryland CDA - Single Family Housing Revenue Bonds, citing the program's strong overcollateralization, low debt, and high-quality loan portfolio. The outlook for the program remains stable, with Moody's noting that it will maintain its sound financial position with a program asset-to-debt ratio above 1.06x in the near to medium term. The program's reliance on Government National Mortgage Association (GNMA) and Federal National Mortgage Association (FMNA) mortgage-backed securities (MBS) provides a high level of security.

Key Takeaways:

  • Moody's has affirmed the Aaa rating on Maryland CDA - Single Family Housing Revenue Bonds, with a stable outlook.
  • The program's strong overcollateralization, with a program asset-to-debt ratio of 1.75x as of June 30, 2024, is a key factor in the rating affirmation.
  • The program's loan portfolio, comprised of GNMA and FMNA MBS, provides high-quality security for the bonds.
  • Moody's expects the program to maintain its sound financial position, with a PADR above 1.06x in the near to medium term.
  • The program's single-family housing revenue bonds are designed to finance loans for persons or families of limited incomes in the state of Maryland.
  • The principal methodology used in the ratings was the US Housing Finance Agency Single-Family Housing, published in October 2024, and available at https://ratings.moodys.com/rmc-documents/430701.

Statistics:

  • Program asset-to-debt ratio: 1.75x (as of June 30, 2024)
  • Program debt margin: 36.73% (as of June 30, 2024)
  • PADR:

+ Forecast for the near term: above 1.06x

+ Forecast for the medium term: above 1.06x

  • Program revenue: derived from Government National Mortgage Association (GNMA) and Federal National Mortgage Association (FMNA) mortgage-backed securities (MBS)

Sources:

  • Moody's Investors Service, "Rating Action: Maryland CDA - Single Family Housing Revenue Bonds" (2024)
  • Moody's Investors Service, "US Housing Finance Agency Single-Family Housing", published in October 2024 and available at https://ratings.moodys.com/rmc-documents/430701