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CalHFA cites Moody's upgrade as it reviews capital markets and lending outlook
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Summary
CalHFA finance staff reported a recent Moody's upgrade to the agency's issuer rating (presented as Aa1) and said the move strengthens the agency's ability to support planned multifamily commitments; staff also reviewed market dynamics and said long‑term capital costs remain largely unchanged for their lending programs.
CalHFA finance staff briefed the agency's board on Jan. 22 about recent capital markets developments and a ratings upgrade that staff said bolsters the agency's financial position.
A finance presentation reviewed mortgage and municipal bond markets, noting recent short‑lived market reactions to federal mortgage‑backed security announcements. The presentation said CalHFA's borrowing cost for its long‑duration lending (30‑year mortgages and long‑term multifamily loans) has been relatively stable in the recent period.
In the presentation staff announced Moody's Investor Services upgraded CalHFA's issuer rating (presented in materials as "Aa1"). Staff said the upgrade reflects improved financial performance and stronger governance and that it increases the agency's market standing among housing finance agencies. The presentation also noted the agency's fiscal year 2025 audit records roughly $1.39 billion in multifamily loan commitments, underscoring a high level of forward‑looking obligations that the agency expects to fund.
Board members and staff discussed how rating changes and market movements affect programs such as the agency's single‑family My Access program and multifamily permanent financing. Staff said shorter‑term treasury trading and geopolitical news affect taxable bonds that support some homeownership programs, while the agency's longer‑term fixed obligations are less sensitive to near‑term rate moves.
Board members praised the finance team for the work that contributed to the upgrade and discussed how the improved credit profile could be used to expand lending capacity and support the agency's goal of financing more affordable housing.
Staff emphasized that high ratings alone do not replace operational planning: the agency must still align pipeline decisions, program design and outreach to convert credit capacity into homes built and loans closed.
The board received the presentation and asked follow‑up questions; no formal board action was required on the ratings discussion.
