Iowa Finance Authority -- Moody's assigns Aaa to Iowa FA's Single Family Mtg. Bds. 2022 Ser. G and I, Aaa/VMIG 1 to 2022 Ser H; outlook stable

Rating Action: Moody's assigns Aaa to Iowa FA's Single Family Mtg. Bds. 2022 Ser. G and I, Aaa/VMIG 1 to 2022 Ser H; outlook stableGlobal Credit Research - 11 Aug 2022New York, August 11, 2022 -- Moody's Investors Service has assigned Aaa ratings to Iowa Finance Authority's proposed $64,400,000 Single Family Mortgage Bonds 2022 Series G (Non AMT) (Social Bonds) (Mortgage-Backed Securities Program) and $12,500,000 Single Family Mortgage Bonds 2022 Series I (Taxable) (Mortgage-Backed Securities Program) and Aaa/VMIG 1 to $20,000,000 Single Family Mortgage Bonds 2022 Series H (Non AMT) (Variable Rate) (Social Bonds) (Mortgage-Backed Securities Program). In addition, we have assigned a Aaa rating to the Single Family Mortgage Bonds 2022 Series H (Non AMT) (Social Bonds) (Bank Bonds). We have also maintained outstanding Aaa ratings in the Single Family Mortgage Bond program (1991 Resolution). The outlook is stable.RATINGS RATIONALEThe Aaa long term rating assigned to the bonds reflects the high-quality collateral comprised of GNMA, Fannie Mae and Freddie Mac Mortgage-Backed Securities (MBS) and the program's strong financial performance.The VMIG 1 rating is based on the Aaa rating on the parity bonds under the 1991 Resolution as well as the P-1(cr) counterparty risk assessment of the liquidity provider (U.S. Bank, National Association (the "Bank")) and the Bank's obligation under the standby bond purchase agreement (SBPA) to purchase the VRDOs upon optional or mandatory tender in the event of a failed remarketing or certain other events.RATING OUTLOOKThe stable outlook on the long term ratings is based on the strong financial position of the 1991 Resolution.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS- Not applicable for long term or short term ratingsFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS- Long term rating: substantial erosion of program financial position along with significant deterioration in risk profile- Short term rating: downgrade of the short-term counterparty risk assessment of the SBPA provider or substantial multi-notch downgrade of the long-term rating of the 1991 ResolutionLEGAL SECURITYThe bonds will be issued under the 1991 Resolution and will be equally and ratably secured with other series of bonds previously issued under the 1991 Resolution. The bonds are secured by the pledged MBS and certain other moneys, assets and revenues pledged, and further secured by the general obligation of the Iowa Finance Authority (Aa2; outlook stable) payable from available moneys, assets or revenues of the Authority.The Bonds will be in the daily rate mode and interest shall be paid on the 1st business day of each month. The Authority may elect to change the interest rate mode on the Bonds to a different interest rate period. The Bonds are subject to mandatory tender upon conversion to a mode other than daily or weekly.Standby Bond Purchase AgreementThe SBPA provides for purchase by the Bank of the 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.The SBPA expires upon the earliest to occur of (i) the mandatory tender date resulting from the expiration of the SBPA, (ii) conversion of the Bonds to an uncovered rate mode or (iii) earlier termination of the SBPA.The SBPA provides for purchase by the Bank of 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, the Bonds, cease to be valid, binding or fully enforceable on the Authority as determined by a court or governmental agency having appropriate jurisdiction in a final non-appealable judgment; (4) a final non-appealable judgment in excess of $5,000,000; or (5) the rating on the Bonds falls below Baa3.USE OF PROCEEDSProceeds will be used finance mortgages under the FirstHome program and the Homes for Iowans program through the purchase of Mortgage Backed Securities (MBS) and finance down payment assistance through the financing of DPA Loans and grants.PROFILEThe 1991 Resolution was adopted in July 1991. Bond proceeds in this program are used to purchase MBS with underlying mortgages made to finance affordable housing to low-and-moderate income persons in the State of Iowa. All the bonds under the resolution are secured equally by all mortgage loans.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. 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