managing hfas’ financial health in the face of uncertainty ncsha annual conference october 21,...

Managing HFAs’ Financial Health in the Face of UncertaintyNCSHA Annual Conference

October 21, 2014Ping Hsieh, Vice President – Senior Analyst

2NCSHA, October 2014

Rebounding from the Financial Crisis

• Positive trend continues with strong financial matrices amid deleveraging

• Better positioned to address variable rate risks

• More diversified business model

• Profitability is central to our credit analysis but Mortgage Interest Income to General Expense Ratio is also important

3NCSHA, October 2014

Profitability and Equity Are Growing

Source: Moody’s adjusted audited state HFA financial statements

4NCSHA, October 2014

HFAs Are Better Positioned To Address Potential Variable Rate Challenges

Source: HFA Surveys

5NCSHA, October 2014

Increasing Spread Between Mortgage Income and Bond Costs Increases Profitability

Source: Moody’s adjusted audited state HFA financial statements

6NCSHA, October 2014

Mortgage Funding Shifted From Bonds To TBA

Source: HFA Surveys

7NCSHA, October 2014

Coverage of G&A Expenses by Mortgage Loan Revenues is Declining

Source: Moody’s adjusted audited state HFA financial statements

8NCSHA, October 2014

Ping HsiehVice President – Senior Analyst ping.hsieh@moodys.com (212) 553-4461

Florence ZemanAssociate Managing Director florence.zeman@moodys.com(212) 553-4836

Kendra SmithManaging Director kendra.smith@moodys.com (212) 553-4807

9NCSHA, October 2014