The rating on Washington State Housing Finance Commission's bonds reflects the extremely strong credit enhancement of the mortgage backing the bonds through a Fannie Mae direct pay credit enhancement facility and 'AAA' rated investments. Upon bond closing, Fannie Mae will provide a direct pay credit enhancement facility for bonds financing the property. The credit facility is direct pay as Fannie Mae will make all regularly scheduled payments of principal and interest due on the mortgage. Under this structure, the trustee is instructed to draw on Fannie Mae one-day prior to each bond interest payment date; hence there is no lag in this structure. The credit facility also covers payments necessary to purchase tendered bonds resulting from a failed remarketing. The
