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TEXT-Fitch keeps 2 Fla. Housing Finance project bonds on watch negative
March 1, 2013 / 9:51 PM / 5 years ago

TEXT-Fitch keeps 2 Fla. Housing Finance project bonds on watch negative

March 1 - Fitch Ratings maintains the Rating Watch Negative on the following
two multifamily project bonds supported by Florida Housing Finance Corporation's
affordable housing guarantee fund (Guarantee Fund):

--Florida Housing Finance Corp. (FL) (Logan's Pointe Apartments Project) housing
revenue bonds series 1999F-1 & F-2 'A-';
--Florida Housing Finance Corp. (FL) (Peacock Run Apartments) multifamily
mortgage revenue bonds series 2002 H-1 & H-2 'A-';

RATING SENSITIVITIES

SUFFICIENT ASSET PARITY: The Rating Watch Negative is tied to the potential for
changes in the asset parity ratio for each respective development following
possible upcoming loan amendments and debt restructuring. A typical single asset
multifamily transaction with a mortgage guarantee maintains an asset parity
ratio of no less than 101% throughout the term of the bonds.

The two above-mentioned bond series were placed on Rating Watch Negative in July
2012 because the developments were approved to receive the second round of
funding under the State Apartment Incentive Loan Funding for Extremely
Low-Income (SAIL ELI) program. The intent of the program is to provide funds to
allow recipients to redeem a portion of the bonds and restructure the respective
mortgage note.

The Rating Watch Negative is being maintained on the Logan's Pointe bond series
pending refinancing, anticipated to occur by the end of the first quarter of
2013. Though the development was awarded SAIL ELI funding, at this point Fitch
has not received cash flows demonstrating the loan amendment and bond
restructuring. The development is expected to instead refinance out of the
portfolio through a U.S. Department of Housing and Urban Development (HUD)
refinancing program. If the refinancing does not occur and the loan is amended,
Fitch will review cash flows and the revised asset parity ratio during the
process of restructuring.

The Rating Watch Negative is being maintained on the Peacock Run bond series
because the SAIL ELI loan closing, originally anticipated for the fourth quarter
of 2012, received Florida Housing board approval for an extension until
September 1, 2013. Therefore, the loan and bond amounts are expected to be
amended over the next six months. Fitch will continue to monitor the progress of
the restructuring.

Part of Fitch's surveillance review for single asset multifamily bond issuances
with a mortgage guarantee involves an asset parity test to confirm that
available assets would exceed bond liabilities in the case of a mortgage
default. The asset parity is calculated by dividing the dollar amount of total
program pledged assets (which includes the guaranteed mortgage and amounts on
deposit in reserves) by the total amount of bonds outstanding. As mentioned
above, a typical single asset multifamily transaction with a mortgage guarantee
maintains an asset parity ratio of no less than 101% throughout the term of the
bonds. For more information regarding Fitch's rating analysis for single asset
multifamily transactions backed by a mortgage guarantee, please see the press
release 'Fitch Affirms 51 MF Project Bonds Supported by FL Hsg Guarantee Fund at
'A-'; Outlook Stable' dated July 11, 2012, and available at
www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Revenue-Supported Rating Criteria' (June 12, 2012)

Applicable Criteria and Related Research
Revenue-Supported Rating Criteria

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