The rating upgrade on Minnesota Housing Finance Agency's (MHFA) debt reflects increasing financial strength and solid overall agency operations. General credit strengths include: Extremely sound financial operations with strong and growing capital adequacy ratios, Excellent overall asset quality with prudent oversight, A stable and strong management team, Clear indications of state support for the agency's operations and mission, and The state's strong economic performance. Credit risks include potential weakening of the agency's section 8 portfolio due to rent freezes by HUD, and slower production in single-family loan production because of bonding considerations, which could limit the agency's financial growth going forward. Simultaneously affirmed is MHFA's top-tier status, reflecting the agency's ability and willingness to provide additional credit strength to all
