Colorado Housing and Finance Auth. — Moody’s assigns Aa2(sf)/VMIG 1(sf) to Colorado Housing and Finance Authority’s Class II Adjustable Rate Bonds, 2022 Series C-2 (Social Bonds); outlook stable

Rating Action: Moody’s assigns Aa2(sf)/VMIG 1(sf) to Colorado Housing and Finance Authority’s Class II Adjustable Rate Bonds, 2022 Series C-2 (Social Bonds); outlook stableGlobal Credit Research – 19 Jan 2022New York, January 19, 2022 — Moody’s Investors Service has assigned the ratings of Aa2(sf)/VMIG 1(sf) to the Colorado Housing and Finance Authority (« CHFA » or the « Authority ») $46 million Single Family Mortgage Bonds, Class II Adjustable Rate Bonds, 2022 Series C-2 (Federally Taxable) (Social Bonds) (sf). Moody’s also maintains the Aaa(sf)/Aa2(sf)/A1(sf) ratings with a stable outlook on all outstanding Class I, Class II and Class III bonds, respectively. The outlook is stable.RATINGS RATIONALEThe Aa2(sf) rating on the Class II bonds reflects the bond program’s strong portfolio composition, solid loan performance, significantly strong and growing asset to liability overcollateralization levels (1.12x PADR) as well as skilled program management.The VMIG 1(sf) short term rating is based on the long-term rating on the parity bonds under the program as well as the P-1 short term rating of the liquidity provider (the Federal Home Loan Bank of Topeka (the « Bank »)) and the Bank’s obligation under the related 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 outlook is stable. We expect the portfolio composition, the solid overcollateralization and active management of Colorado Housing to protect the bond program from possible loan losses throughout all but the most severe real estate downturns.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGSFor the long term rating:- Significant increase in PADR and improvement in risk profile, including reduction of the size of variable rate debt and related swaps.For the short term rating:- Not applicableFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGSFor the long term rating:The ratings of the bonds could come under pressure if the Indenture experiences a significant decline in asset-to-debt ratios and/or profitability, substantial downgrades of counterparties and/or other unforeseen events that lead to lower financial performance.For the short term rating:- Downgrade of the short term rating of the Bank and/or of the bond program’s ratingLEGAL SECURITYThe bonds are payable from the revenues and assets pledged under the Single Family Mortgage Bonds Indenture dated October 1, 2001 (Master Indenture), as amended. The 2022 C-2 Bonds are being issued as Class II Obligations pursuant to the Indenture and will be payable and secured by the Trust Estate.Variable RateThe Bonds will be in the weekly rate mode and interest shall be paid on the 1st day of each May and November. The Authority may elect to change the interest rate mode on the Bonds to a different interest rate period. Upon any such change, the Bonds are subject to mandatory tender.Standby Bond Purchase AgreementThe short term rating reflects the SBPA provided by the Bank and expires upon the earliest of to occur of (i) the mandatory tender date resulting from the expiration of the SBPA, (ii) conversion of the Bonds to a uncovered mode, or (iii) earlier termination of the SBPA.The SBPA provides for purchase by the bank of the Bonds that are tendered by bondholders and cannot be remarketed. The Bank can terminate the SBPA or suspend its obligations without notice and will therefore not be obligated to provide funds in the event that 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 Bonds before any termination date of the SBPA.USE OF PROCEEDSProceeds of the 2022 C-2 Offered Bonds (in addition to the separately rated 2022 A, B, and C-1 Bonds), together with other available funds, will be used to: (a) refund certain obligations of the Authority which will make funds available to finance, together with other proceeds of the Offered Bonds, the purchase of certain mortgage backed securities guaranteed by the Government National Mortgage Association and backed by mortgage loans (as further described herein, being referred to as the « 2022ABC GNMA MBS »), (b) finance the purchase of certain Second Mortgage Loans, (c) fund a deposit to the 2022 Series ABC subaccount of the Revenue Fund held under the Indenture, and (d) pay costs of issuance of the Offered Bonds in accordance with the Indenture.PROFILEAll Bonds and Auxiliary Obligations outstanding under the Master Indenture (other than Auxiliary Obligations which are General Obligations of the Authority) will be secured by and payable from all of the Authority’s rights and interests in and to the revenues, assets and moneys pledged under the Master Indenture. In accordance with the Master Indenture, any Bonds or Auxiliary Obligations may be outstanding as Class I, Class II, Class III or Class IV Obligations and may also be designated as General Obligations of the Authority. As of November 30, 2021, Bonds issued under the Master Indenture were outstanding in an aggregate principal amount of $1,389,371,644, including $1,289,496,644 of Class I Bonds, $69,975,000 of Class II Bonds and $29,900,000 of Class III Bonds. No Class IV Bonds were outstanding under the Master Indenture as of such date.METHODOLOGY The principal methodology used in the long-term rating was US Housing Finance Agency Single-Family Housing Methodology published in October 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1154478. 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://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1057134. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies. 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. 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