OREANDA-NEWS. Fitch Ratings has assigned an 'AAA' rating to the following Utah Housing Corporation (UHC or the Corporation) single family mortgage bonds:

--\$ 28.3 million Class I refunding bonds, 2015 series A (Federally Taxable).

Additionally, Fitch has affirmed the ratings on the following 2009 Indenture single family mortgage bonds:

--\$ 161.6 million 2009 Indenture Class I bonds at 'AAA';
--\$ 14.7 million 2009 Indenture Class II bonds at 'AA'.

The Rating Outlook is Stable.

SECURITY

The bonds are secured by all assets and revenues under the trust indenture, investment earnings and reserve funds. The assets and revenues of the trust estate secure the Class I and II bonds on a senior basis to the Class III bonds which are also backed by a GO pledge (rated 'AA-', Stable Outlook).

KEY RATING DRIVERS

FEDERALLY INSURED PORTFOLIO: The underlying loan portfolio is 99% insured by FHA and 1% insured by VA, limiting loan loss exposure.

STRONG ASSET PARITY: The debt subordination structure provides credit enhancement to the Class I and II bonds which, as of January 2015, had asset parity ratios of 116% and 106%, respectively. Additionally, cash flows demonstrate sufficient asset parity even after incorporating Fitch stressed scenarios.

INDENTURE PROVISIONS: The indenture has asset parity requirements which provides credit enhancement for the Class I and II bonds.

MANAGEMENT OVERSIGHT: The Corporation has an experienced management team that has demonstrated their expertise in addressing market challenges.

RATING SENSITIVITY

ASSET PARITY SHORTFALL: There will be negative pressure on the bonds' rating if the asset parity levels on the Class I and II bonds fall below minimum requirements. This is considered remote given the legal bond covenants and UHC's management oversight.

CREDIT PROFILE

The 2015 series A bonds are being issued to refund older debt obligations under the 2009 Indenture and to pay cost of issuance for the 2015 series A bonds. The 'AAA' and 'AA' ratings on the Class I and II bonds reflect the current high levels of overcollateralization, the asset parity maintenance as demonstrated by the stressed cash flow statements, and the federal insurance on the loan portfolio. Additionally, the Class I and II bonds have minimum asset requirements of 111.5% and 102%, respectively. As of Nov. 30, 2014, the program had a delinquency rate (60+ days) of 4.98%. However, the high amount of FHA insurance mitigates concerns over loan portfolio performance.

The 2009 Indenture also includes Class III bonds in the amount of \$10.2 million which are rated 'AA-' with a Stable Outlook. The rating on the class III bonds solely reflects UHC's GO pledge which was affirmed at 'AA-', Stable Outlook on May 6, 2014. For information regarding the class III bonds and UHC's GO debt pledge see the press release 'Fitch Rates Various Utah Hsg Corp Single Family Class I Bank Bonds 'AA-'; Outlook Stable', dated May 6, 2014.