Il. Hous. Dev. Auth., Rev. Bnds -- Moody's assigns Aaa to IL Housing Dev. Auth.'s Rev. Bonds, 2022 Ser. E (Non-AMT) (Social Bonds) and Aaa/VMIG 1 to 2022 Ser. F (Variable Rate) (Social Bonds), outlook stable

Rating Action: Moody's assigns Aaa to IL Housing Dev. Auth.'s Rev. Bonds, 2022 Ser. E (Non-AMT) (Social Bonds) and Aaa/VMIG 1 to 2022 Ser. F (Variable Rate) (Social Bonds), outlook stableGlobal Credit Research - 18 Aug 2022New York, August 18, 2022 -- Moody's Investors Service (Moody's) has assigned Aaa rating to the proposed $100,050,000 Illinois Housing Development Authority's (IHDA) Revenue Bonds, 2022 Series E (Non-AMT) (Social Bonds) (the "2022 Series E Bonds") and Aaa/VMIG 1 to $49,950,000 of Revenue Bonds, 2022 Series F (Non-AMT) (Variable Rate) (Social Bonds) (the "2022 Series F Bonds"), collectively the "Bonds".The Bonds will be issued under the Revenue Bonds General Indenture dated as of March 1, 2016 (General Indenture). Additionally, Moody's maintains Aaa ratings on all outstanding parity Revenue Bonds issued under the General Indenture. The outlook is stable.RATINGS RATIONALEThe Aaa long term ratings, assigned to the 2022 Series E Bonds and the 2022 Series F Bonds, are based on the high-quality collateral comprised mainly of Ginnie Mae and Fannie Mae mortgage-backed securities (MBS), a sound legal structure, cash flow projections that demonstrate sufficient revenues to pay debt service timely, and a good track record of program management and oversight.The short-term VMIG 1 rating assigned to the 2022 Series F is based on the Aaa long-term rating on the parity bonds under the General Indenture as well as the P-1 short term credit risk assessment of the Bank of Montreal (the "Bank"), and the Bank's obligation under the related standby bond purchase agreement (SBPA) to purchase the 2022 Series F Bonds upon optional or mandatory tender in the event of a failed remarketing or certain other events.RATING OUTLOOKThe stable outlook is largely based on the outlook of the US government.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS- N/AFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGSFor the Aaa ratings:- Substantial erosion of the General Indenture's asset-to-debt ratio and profit margins.- Downgrade of the US government's rating or rating of Fannie Mae.For the VMIG 1 rating:- Downgrade of the short term counterparty risk assessment of the Bank and/or multi-notch downgrade of the long-term rating of the General Indenture.LEGAL SECURITYThe Bonds are special limited obligations of IHDA, secured by all revenues and assets pledged under the General Indenture which consists primarily of bond proceeds, MBS, mortgage loans, investments and earnings. While the General Indenture establishes a Debt Service Reserve Fund, so long as bond proceeds are used to acquire MBS solely and no mortgage loans are financed, there will be no required deposit into the Debt Service Reserve Fund.Standby Bond Purchase AgreementThe SBPA provides for purchase by the Bank of 2022 Series F Bonds that are tendered by bondholders and cannot be remarketed. Under certain circumstances the Bank can terminate the SBPA or suspend its obligations without notice and will therefore not be obligated to provide funds. These circumstances include any of the following: (1) any principal of or interest on any bond (including Bonds purchased by the Bank) is not paid when due; (2) certain acts of bankruptcy or insolvency by or involving the Authority; (3) provisions relating to the payment of principal or interest under the SBPA, the indenture, or the 2022 Series D Bonds cease to be valid, binding or fully enforceable on the Authority as determined by a court; (4) the rating on the bonds falls below Baa3.Other events of termination become effective only after the Bank provides sufficient notice to allow for a mandatory tender of the 2022 Series F Bonds before any termination date of the SBPA.USE OF PROCEEDSThe proceeds of the Bonds will be used to purchase and/or reimburse IHDA for its prior purchase of MBS backed by pools of qualifying mortgages made to finance the purchase of affordable single-family residences in the State of Illinois and pay the cost of bonds issuance.PROFILEThe bonds issued under the General Indenture are used to finance IHDA's single-family mortgages and promote affordable housing for moderate-and-low income families in the State of Illinois. As of June 30, 2022, there were approximately $1.17 billion (unaudited) of bonds outstanding under the General Indenture. All bonds under the General Indenture are secured equally by all pledged assets. IHDA has no taxing power.METHODOLOGYThe principal methodology used in the long-term ratings was US Housing Finance Agency Single-Family Housing Methodology published in October 2019 and available at https://ratings.moodys.com/api/rmc-documents/62560. The principal methodology used in the short-term rating was Variable Rate Instruments Supported by Conditional Liquidity Facilities published in March 2017 and available at https://ratings.moodys.com/api/rmc-documents/68283. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of these methodologies.REGULATORY DISCLOSUREFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. 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