The rating on Pennsylvania Housing Finance Agency's bonds reflects: * High-quality mortgage loan collateral that continues to perform well; * Loss coverage provided by the agency's leveraged self-insurance fund covering estimated loan losses at the 'AA' rating level; * Cash flows indicating stable portfolio performance; * Investments commensurate with the rating on the bonds; * The GO pledge of the agency; and * A state continuing to exhibit steady economic growth. Bond proceeds will provide funds to refund in part series J and K bonds and provide funds to make new mortgage loans. The loan portfolio of over 36,900 contains mainly conventional loans (62.77%) and FHA-insured loans (31.63%), with small amounts of VA-guaranteed loans (3.99%), Rural Housing Services loans (1.61%),
