OREANDA-NEWS. Fitch Ratings has affirmed the 'AAA' rating on the following outstanding Indiana Housing and Community Development Authority (the authority) 1980 master indenture Single Family Mortgage Bond Program:

--$19.2 million single family mortgage bonds, 2006B;
--$19 million single family mortgage bonds, 2006C;
--$22.7 million single family mortgage bonds, 2006D;
--$18.4 million single family mortgage bonds, 2007A;
--$54.2 million single family mortgage bonds, 2008A.

The Rating Outlook is Stable.

SECURITY

The bonds are special obligations of the issuer secured solely by the revenues and assets pledged under the 1980 master indenture that primarily consist of Ginnie Mae (GNMA), Fannie Mae (FNMA) and Freddie Mac (FHLMC) known as government sponsored entities (GSEs) mortgage backed securities (MBS) and cash reserves.

KEY RATING DRIVERS

GNMA/FNMA LOAN PORTFOLIO: The 'AAA' affirmation reflects the guarantee of full and timely payments of principal and interest on the GNMA FNMA and FHLMC MBS that are guaranteed by the U.S. government (rated 'AAA'/Outlook Stable) regardless of actual performance of the underlying loans.

ASSET QUALITY: The total mortgage value of the assets in the indenture are MBS. The amount of MBS are 4.4% higher than the bond amount outstanding. GNMA, FNMA and FHLMC MBS are 79%, 9% and 12% of the program assets outstanding, respectively.

ASSET TO DEBT RATIO: The indenture assets exceed the debt amount by 210% at Jan. 1, 2016 when all of the reserves and accounts pledged to the Indenture are included.

PROGRAM OVERSIGHT: Indenture allows surplus fund in excess of 103% to be withdrawn from the indenture. Based on the history of the authority and the program, Fitch considers the likelihood of withdrawals to be remote.

RATING SENSITIVITIES
U.S. SOVERIGN LINK: As the ratings of government sponsored entities (GSEs) are currently linked to the U.S. sovereign rating, any rating action on the U.S. sovereign rating may directly impact the rating on the bonds.

CHANGE IN GSE LINKAGE: Should Fitch's view of the strength of government support for Fannie Mae (FNMA) or Freddie Mac (FHLMC) be reduced or downgraded, the rating of FNMA and FHLMC may be delinked from the U.S. sovereign rating and may result in negative pressure on the bonds.

BANKRUPTCY REMOTE: Fitch considers the authority to be bankruptcy remote based on its public purposes, predominantly limited recourse debt and its inability under current law to commence a voluntary proceeding under Chapter 9 without legislative or executive action. A change in this status could lead to a change to the rating and constrain it to that of the Authority's general obligation debt.

CREDIT PROFILE
The 1980 Indenture's assets are noted to be very strong after analysis of the following: the portfolio assessment (all MBS), mortgage underwriting and loan types, and the legal structure for the bonds (debt profile). MBS certificates do not incur losses as timely payment of principal and interest are guaranteed by the GSEs.

Mortgage Underwriting
The mortgages permitted to be placed into the MBS have strict parameters that loans must be fully documented and follow underwriting requirements to qualify.

Loan Types
All loans packaged into the MBS are for first time homebuyers in the state.

Management Review
There is depth within the management team at IHCDA. IHCDA has a history of providing quality, timely disclosure to Fitch.

Capable management is indirectly factored into this rating analysis. Once the loans in this structure became all MBS (management's decision) the program assets will continue to pay the bonds and create excess spread in the indenture. The MBS has strict underwriting requirements to allow loans to be placed into an MBS.

On the debt side, management can use different types of debt or cross call bonds to reduce interest costs, subject to each series supplemental Indenture, but the bonds are easily covered by the assets left in the indenture.

Financial Resources
Since this indenture's assets are equal to over 210% of the bonds outstanding and the mortgages are guaranteed by the GSEs for timely payment of P & I, Fitch's view is that there is very little downside risk to this indenture. Additionally, per the indenture, any investments of funds must not impact the rating on the bonds. A remarketing of the 2008A bonds is expected in September of 2016. If not remarketed, funds from the indenture are expected to be used for the 2008A bonds on a special mandatory tender date.