...Given the many negative credit issues that the broad housing market is currently facing, such as declining mortgage loan performance, home price declines, and a national recession, Fitch Ratings is assigning a negative rating outlook to the tax-exempt housing sector. Fitch also plans to assign rating outlooks for the first time on specific ratings for state housing finance agencies' (SHFAs) general obligation ratings, bond program ratings, and guarantee fund ratings over the next several months. While most SHFA housing credits are expected to be assigned Stable Rating Outlooks, Fitch expects that some housing credits will be assigned Negative Rating Outlooks, driven primarily by pressures from a weakened credit environment, of which aspects include a severe economic recession, constrained access to liquidity, and the credit deterioration of key counterparties. Negative Rating Outlooks indicate that a rating downgrade is likely, although not inevitable, over the next one to two years. Historically,...
