NEW YORK Nov 15 Standard & Poor's Ratings
Service said on Thursday that the "fiscal cliff" could have
far-reaching effects on U.S. municipal housing given the
sector's deep links to federal spending.
"The impact of budget sequestration and tax increases on
municipal housing would be multifaceted," the credit rating
agency said in a statement, mentioning operational or rent
subsidies, mortgage insurance, loan purchases, and loan
One of the clearer impacts would come from the proposed
budget sequestration of $154 million in capital fund grants that
the U.S. Department of Housing and Urban Development provides to
public housing authorities (PHAs), S&P said.
S&P rates 37 PHAs issues. Of those, 21 are rated AA-minus,
14 are rated either A-plus or A, and two are rated BBB.
Seventeen have negative outlooks.
"Should sequestration take effect, we would review all
capital fund ratings to determine the impact of an 8.2 percent
reduction in capital grant receipts, in addition to the other
capital grant reductions that we assume," the rating agency