If you sort through the Tweets, turn down the volume on the evening news and look hard there is some really good news out there. The Public Housing Authority’s capital program received a nearly 42% boost in the FY 2018 federal omnibus spending bill. After years of reduced funding, the Public Housing Capital Program will see spending increase to $2.75B from $1.94B. The increased funding supports a stable outlook on the U.S. Housing and Urban Development’s (HUD) Public Housing Authority Program and specifically the Puerto Rico Affordable Housing Program, a credit that we have written about many times over the years. The Puerto Rico Affordable Housing Program is no different from the other 80 state and local programs throughout the country. More money means less federal funding volatility, less program specific financial operating risk and a stable debt service coverage ratio, which is a major credit driver. The news is a big win for the Puerto Rico Affordable Housing Program.
Sources: S&P Global Ratings, National Council of State Housing Agencies