Standard&Poor's Ratings Services affirmed its 'A-' rating on Minneapolis' (Olson Townhouses) Section 8-assisted series 1993 multifamily housing revenue bonds. The outlook is stable. The affirmation reflects our view of the project's: Adequate debt service coverage (DSC) of 1.22x maximum annual debt service (MADS) as of fiscal year-end 2013 (Dec. 31); Full occupancy, coupled with a waiting list of 144 families, indicating strong demand for the units; and A debt service reserve fund (DSRF) sized at 12 months' MADS. The aforementioned strengths are offset by our view of these weaknesses: A decline in net operating income (NOI) due to rising property expenses; and The property's REAC (Real Estate Assessment Center) score of 74 out of a possible 100 points.
