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Rating Update:

MOODY'S INVESTORS SERVICE HAS ASSIGNED A RATING OF Aaa TO THE HOUSING FINANCE AUTHORITY OF MIAMI DADE COUNTY, FL, HOME OWNERSHIP MORTGAGE REVENUE BONDS (SPECIAL PROGRAM), 2009 SERIES A, SUBSERIES A-1

08 Dec 2010

APPROXIMATELY $25 MILLION IN DEBT AFFECTED

Housing
FL

Opinion

NEW YORK, Dec 8, 2010 -- Moody's Investors Service has assigned a Aaa rating to the $25 million Housing Finance Authority of Miami Dade County, FL, Home Ownership Mortgage Revenue Bonds (Special Program), 2009 Series A, Subseries A-1. The Aaa rating reflects Moody's view of the program's superior security provided by Government National Mortgage Association (GNMA), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) mortgage-backed securities (MBS), a sound legal structure and cash flow projections that exhibit sufficient revenues to pay timely debt service.

RATINGS RATIONALE

This bond issue represents the second issuance of bonds under the trust indenture dated December 1, 2009, as amended, issued pursuant to the New Issue Bond Program (NIBP) established jointly by Fannie Mae and Freddie Mac (the GSEs), the Federal Housing Finance Agency, and the U.S. Department of the Treasury (Treasury) under which the Treasury provides funding for bond issuance by HFAs. Under NIBP, the bonds are delivered to the GSEs in exchange for GSE securities, which are then placed by the Issuer with the Treasury.

For the purpose of the NIBP, the 2009 Series A, Subseries A-1 represents the Authority's first release of proceeds from escrow under the 2009 trust indenture for conversion to a long-term fixed interest rate mode. Under the revised NIBP guidelines, the Authority has up to six closings, including this one, to convert bonds held in escrow to fixed interest rate by December 31, 2011. Any proceeds not converted by December 31, 2011 must be used to redeem Program Bonds. After, this issuance, the Authority will have $0 million in escrow outstanding.

USE OF PROCEEDS: Bond proceeds will be used to purchase MBS and to fund portions of the down payment and closing cost assistance for homebuyers.

LEGAL SECURITY: The bonds are limited obligations of the Authority, payable solely from and secured by the trust estate which includes all right, title and interest in the mortgage backed securities, pledged receipts, interest earnings, and all moneys and investments held with the trustee and pledged under the 2009 trust indenture. The bonds are separately secured and are not issued on parity with the Authority's other bonds issued under its single family program.

INTEREST RATE DERIVATIVES: None

STRENGTHS:

- The Aaa credit quality of the MBS which provides security for the bonds.

- The program's expected asset-to-debt ratio of 100% or higher.

- The program's sound legal structure.

CHALLENGES:

- External factors that are outside of the Authority's control such as ability to continue to originate mortgage loans in the uncertain market and generate investment returns given lack of highly rated guaranteed investment contract providers.

LOAN PORTFOLIO CHARACTERISTICS AND PERFORMANCE: STRONG PORTFOLIO COMPOSITION DUE TO HIGHLY RATED MBS

Moody's believes the loan portfolio will provide the highest quality security for the bonds as the MBS to be purchased are guaranteed to full and timely payment of the principal and interest by the GNMA, Freddie Mac and Fannie Mae. Moody's rates the obligations of GNMA Aaa because the full faith and credit of the United States backs the guarantee, and rates the obligations of Fannie Mae and Freddie Mac Aaa because of their equity positions, historical access to the capital markets, and their many levels of government support. These strong mortgage guarantees protect the bond program from cash flow disruptions and losses from future loan defaults. The MBS will have an established pass-through rate and are guaranteed by GNMA, Freddie Mac or Fannie Mae, or a combination of them, with respect to payment regardless of the actual performance of the underlying pool of mortgages.

FINANCIAL PERFORMANCE: STRONG OVER COLLATERALIZATION EXPECTED FOR PROGRAM BACKED BY MBS

Moody's expects the program to generate sufficient revenue from its mortgage-backed securities to meet all scheduled debt service payments. The program's asset-to-debt ratio is expected to be at or above 100% due to interest rate spreads between the assets and debts under the indenture. This high level of over-collateralization is strong for this type of program. Interest due on the bonds is less than the interest due on the loans less all program, servicing, trustee and guarantee fees. Interest payments are passed through to bondholders, and MBS principal repayments and prepayments will be used to redeem the bonds. The program's legal provisions help to maintain ongoing credit strength via the establishment of a sound legal structure and provision for high quality investments.

CASH FLOW PROJECTIONS: FULL AND TIMELY PAYMENT DEMONSTRATED UNDER ALL PREPAYMENT SCENARIOS

Based on pre-pricing cash flow projections submitted by the Authority's senior underwriter, Moody's believes the Authority's NIBP single family program will continue to generate enough revenue from the MBS and investments to fully meet all existing debt obligations in a timely manner under all stressful prepayment scenarios. Cash flows assume various prepayment scenarios (0% PSA, 100%, 700% PSA and non-origination scenarios), late delivery of available loan proceeds that have not been committed yet to the purchase of MBS and conservative investment earnings. In all cases, parity remains above 100%. Further, no guaranteed investment contract is being solicited by the Authority. Cash flows assume 0% investment rate per annum for the life of the transaction.

What could change the rating - UP

Not applicable

What could change the rating - DOWN

Presence of economic or external factors that severely erode asset to debt ratio could put a downward pressure on the rating.

ISSUER CONTACT:

Pat Braynon

(305) 594-2518

The principal methodology used in this rating was Strength in Structure: Moody's Approach to Rating Single Family Housing Bonds Secured by Mortgage-Backed Securities published in October 1998.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following: parties involved in the ratings and public information.

Moody's Investors Service considers the quality of information available on the issuer or obligation satisfactory for the purposes of assigning a credit rating.

Moody's adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.

Analysts

Gregory W. Lipitz
Analyst
Public Finance Group
Moody's Investors Service

Florence Zeman
Backup Analyst
Public Finance Group
Moody's Investors Service

Contacts

Journalists: (212) 553-0376
Research Clients: (212) 553-1653


Moody's Investors Service
250 Greenwich Street
New York, NY 10007
USA

MOODY'S INVESTORS SERVICE HAS ASSIGNED A RATING OF Aaa TO THE HOUSING FINANCE AUTHORITY OF MIAMI DADE COUNTY, FL, HOME OWNERSHIP MORTGAGE REVENUE BONDS (SPECIAL PROGRAM), 2009 SERIES A, SUBSERIES A-1
No Related Data.
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