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Texas Dept. of Housing & Community Affairs -- Moody's assigns Aaa to $21,500,000 Texas Department of Housing and Community Affairs, Multifamily Green Tax-Exempt Bonds (GREEN M-TEBS -- Shiloh Village Apartments), Series 2021

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Rating Action: Moody's assigns Aaa to $21,500,000 Texas Department of Housing and Community Affairs, Multifamily Green Tax-Exempt Bonds (GREEN M-TEBS -- Shiloh Village Apartments), Series 2021Global Credit Research - 08 Feb 2021New York, February 08, 2021 -- Moody's Investors Service (Moody's) has assigned a Aaa rating to the proposed $21,500,000 Texas Department of Housing and Community Affairs, Multifamily Green Tax-Exempt Bonds (GREEN M-TEBS -- Shiloh Village Apartments), Series 2021.RATINGS RATIONALEThe Aaa rating of this immediate M-TEB transaction is based on the high credit quality of the Federal National Mortgage Association (Fannie Mae, Aaa stable) mortgage-backed security (MBS) and strong legal structure where principal and interest are passed through to bondholders monthly. Cash flow projections demonstrate sufficient revenues to pay full and timely debt service through maturity. The initial source of funds to pay negative arbitrage until MBS acquisition (expected by April 2021) will be eligible funds.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING• Not applicable.FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING• A downgrade of the credit enhancement (Fannie Mae)• Cash flow projections that demonstrate revenue insufficiencyLEGAL SECURITYThe bonds are special limited obligations of the issuer payable solely from the trust estate. Initially, bondholder security is provided by the mortgage loan provided by Regions Bank (Fannie Mae DUS lender) and a portion of bond proceeds on deposit with the trustee. Upon acquisition of the MBS, bondholder security is provided by Fannie Mae's guarantee to pay regularly scheduled interest and principal regardless of the actual performance of the underlying mortgage loan to Shiloh Village Preservation, L.P. (borrower). All revenues and issuer's rights under the financing agreement are additionally pledged to bondholders.USE OF PROCEEDSThe bonds will finance the acquisition, rehabilitation and equipping of a 168-unit multifamily residential rental (Shiloh Village Apartments located in Dallas, Texas) through the purchase of an MBS.PROFILEThe bonds are expected to be delivered in March 2021 and will bear interest at a fixed rate equal to the pass-through rate on the MBS. If the MBS will not be purchased by the MBS delivery deadline, the bonds are subject to mandatory redemption five calendar days later unless the borrower extends the MBS delivery deadline. Extension of the deadline requires the borrower to deposit preference proof funds sufficient to pay interest until the new delivery deadline.Following the acquisition of the MBS, the trustee will receive monthly MBS payments in an amount sufficient to meet all debt service requirements. Cash flow projections assume that all fees are paid outside of the trust indenture and that funds not invested in US Treasuries earn 0% reinvestment rate. The bond program will have an asset-to-debt ratio of 100% and remain at 100% until maturity due to the pass-through structure of the transaction. Principal and interest earned from the MBS will mirror debt service on the bonds.The principal methodology used in this rating was US Stand-alone Housing Bond Programs Secured by Credit-Enhanced Mortgages Methodology published in July 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1142797. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor 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 at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.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. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Jacqueline McFadyen Asst Vice President - Analyst Public Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 David A. Parsons Asst Vice President - Analyst Public Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 © 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. 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