OREANDA-NEWS. Fitch Ratings has updated its criteria report 'State Housing Finance Agencies: Single Family Mortgage Program Rating Criteria.' The updated report replaces the existing criteria published on July 25, 2013.

Fitch's analytical approach has not changed from the last report, and no changes to the ratings of existing transactions are anticipated as a result of the application of the updated rating criteria.

Fitch has identified three key rating drivers that affect the credit quality of single family program credits:

--Asset Quality and Loss Mitigation: Fitch views a single family (SF) program's asset quality and an issuer's ability to mitigate loan losses as the primary credit component in its analysis of SHFA SF mortgage programs.

--SHFA's Financial Resources: Financial resources are an important credit factor in providing flexibility to SF mortgage bond programs to address both short- and long-term credit issues. Program financial ratios are computed and used to compare SHFA program financial performance with its SHFA peers in the public finance housing industry, and these are utilized in Fitch's credit analysis. The analysis primarily focuses on capital, profitability and leverage.

--SHFA Management Capabilities: Management's capability to design, execute, monitor, and modify SF programs as circumstances in the SHFA's mortgage lending and debt issuance environment change is an important component for a successful SF bond program. The strength of management's capabilities can enhance bondholder security.

The updated criteria report outlines how Fitch evaluates these risk factors in its rating analysis of state housing finance agencies single family mortgage programs. The report further summarizes the key rating drivers that Fitch would expect of an investment-grade transaction as well as the indicative financial performance that Fitch would expect by rating category.
The updated criteria should be read in conjunction with Fitch's 'Revenue-Supported Rating Criteria' report published June 16, 2014, which discusses all of the risks considered in the evaluation of revenue supported public finance transactions as well as the limitations of the methodology.