The rating on Washington State Housing Finance Commission's bonds reflects the extremely strong credit enhancement of the mortgages backing the bonds through a Fannie Mae direct-pay credit facility and `AAA'-rated investments. Upon bond closing Fannie Mae will provide a direct-pay credit enhancement facility. Under this structure, the trustee is instructed to draw on Fannie Mae one day prior to each bond interest payment date. Fannie Mae then pays on each interest payment date and hence, there is no lag in this structure. Fannie Mae's obligation under the credit-enhancement facility is absolute and unconditional. The credit facility also covers payments necessary to purchase tendered bonds resulting from a failed remarketing. The credit facility will expire five days following bond maturity unless
