articles Ratings /ratings/en/research/articles/200414-outlook-revised-to-stable-from-positive-on-eight-affordable-housing-issues-due-to-pandemic-uncertainty-11439193 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List
NEWS

Outlook Revised To Stable From Positive On Eight Affordable Housing Issues Due To Pandemic Uncertainty

COMMENTS

S&P Global Ratings Definitions

COMMENTS

This Time Is Different: An Anemic And Uncertain Passenger Recovery Will Challenge U.S. Airports' Credit Quality

NEWS

U.S. Airport Ratings Placed On CreditWatch Negative On Severe Passenger Declines And Weakening Credit Metrics

COMMENTS

COVID-19 Impact: Key Takeaways From Our Articles


Outlook Revised To Stable From Positive On Eight Affordable Housing Issues Due To Pandemic Uncertainty

NEW YORK (S&P Global Ratings) April 14, 2020--S&P Global Ratings revised the outlooks on 13 long-term ratings associated with eight affordable multifamily housing transactions to stable from positive.

The revised outlooks follow our updated assessment that U.S. unemployment could approach 20 million by May, due to government measures to mitigate the community spread of COVID-19.

We view uncertainty regarding the timing and duration of the spread of the virus throughout the country as a health and safety social risk under our environmental, social, and governance factors.

The outlook revisions also follow our updated overall view of all U.S. public finance sectors (see "All U.S. Public Finance Sector Outlooks Are Now Negative" published April 1, 2020). In our view, affordable rental properties generally will face potential financial stress as a result of the economic fallout, with revenue declines due to eviction moratoriums, an uptick in operating expenses, and extended vacancies that could squeeze debt service coverage ratios. More specific to these ratings, we believe elevated costs related to COVID-19 mitigation and response efforts have the potential to mute financial performance.

The table below lists all issues included in this rating action. For these transactions, the revised outlooks reflect our view that operations are consistent with current rating levels, which range from 'BB+' to 'A+', despite the challenges presented by COVID-19. Six of the eight transactions are supported by military housing properties totaling over 16,600 units, located on various military bases throughout the country. They benefit from strong demand, good asset quality, and rental revenues through federal basic allowance for housing (BAH) payments. BAH is a federally appropriated component of service members' basic pay and has a long history of appropriation by the U.S. Congress, which should support stable revenues even during this period of economic volatility. Similarly, one property benefits from federal support through a project based Section 8 contract which covers 71% of the units--65% of it project-based and 6% tenant-based--providing a stable source of revenues to support debt service payments. The remaining transaction does not have revenue support from the federal government but demonstrates other financial strengths, including strong debt service coverage, very low loan-to-value ratio, and strong occupancy.

Stable outlooks on specific ratings may be returned to positive on a case-by-case basis in the near-to-medium term should evidence, data, and analysis support the revision. We will continue to monitor and evaluate the effects of this fluid and fast-moving situation. Potential rating action could be either broad based or credit specific. We will continue to collect data and have conversations with management teams to properly evaluate information as it becomes available. Therefore, while the outlook period is for one year, further review and rating actions on the issues will occur as timely as possible throughout the outlook period based on market conditions and credit-specific information.

Outlook Revised On Eight Affordable Multifamily Housing Issues
Issue State (borrower) Current rating To From
GMH Military Housing - Navy Northeast Family Housing 2nd Tier PA BBB Stable Positive
HP Communities, LLC 2nd Tier CO A+ Stable Positive
HP Communities, LLC 3rd Tier CO A Stable Positive
Knox Hills LLC - Fort Knox Housing 1st Tier KY BBB+ Stable Positive
Knox Hills LLC - Fort Knox Housing 2nd Tier KY BBB Stable Positive
Los Angeles Hsg Auth - 2009A Pooled Indenture 1st Tier CA A Stable Positive
Midwest Fam Hsg, LLC 1st Tier IL A+ Stable Positive
Midwest Fam Hsg, LLC 2nd Tier IL A Stable Positive
Midwest Fam Hsg, LLC 3rd Tier IL BBB Stable Positive
Midwest Fam Hsg, LLC 4th Tier IL BB+ Stable Positive
Orange Cnty Hsg Fin Auth - 1998C Green Gables Indenture 1st Tier FL A- Stable Positive
Pacific Beacon, LLC - Naval Base San Diego Unaccompanied Housing 3rd Tier CA A- Stable Positive
Southeast Housing, LLC - Navy Southeast Family Housing 1st Tier DE BBB+ Stable Positive

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.

Primary Credit Analyst:Marian Zucker, New York (1) 212-438-2150;
marian.zucker@spglobal.com
Secondary Contact:Daniel P Pulter, Centennial (1) 303-721-4646;
Daniel.Pulter@spglobal.com

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgment at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact S&P Global Ratings, Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to: research_request@spglobal.com.