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New York, September 09, 2022 -- Moody's Investors Service has assigned a Aa1 rating to Minnesota Housing Finance Agency's (Minnesota Housing or MHFA) proposed $40 million Residential Housing Finance Bonds, 2022 Series I (Non-AMT) (Social Bonds) and proposed $35 million Residential Housing Finance Bonds, 2022 Series J (Taxable) (Social Bonds). We are also maintaining all Aa1 ratings on approximately $2.24 billion of outstanding Residential Housing Finance Bonds (RHFB or Program) parity debt. The outlook is stable.

The Aa1 rating assignment is based on the general obligation pledge of Minnesota Housing Finance Agency (Aa1/Stable) with further support from the pledged assets, and the financial performance of the RHFB program. The consistently robust financial performance underlying the GO pledge is evidenced by a five-year average profitability of approximately 19% and an asset-to-debt ratio averaging 1.3x, indicating strong overcollateralization of agency debt.

The stable outlook reflects expectations of continued strong operating performance and maintenance of ample balance sheet resources both within the RHFB indenture as well as within the agency's overall general obligation pledge.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS

-     Upgrade of Minnesota Housing's issuer rating

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS

-     Downgrade of Minnesota Housing's issuer rating

The bonds are general obligations of Minnesota Housing. The bonds are further secured by a pledge and a grant of security interest in all bond proceeds, mortgage loans, MBS, investments, revenues and other assets (other than the Alternative Loan Fund) held under the RHFB.

Proceeds of the 2022 Series I and Series J Bonds, along with proceeds from the 2022 Series K Bonds (to be rated in the near future), will be used to purchase MBS (including Uniform Mortgage-Backed Securities) backed by mortgage loans for low-and-moderate income residents of Minnesota.

Minnesota Housing is an agency of the state of Minnesota, created in 1971 and authorized to issue bonds to further affordable housing in the state. The Agency has no taxing power. The Residential Housing Finance Bonds resolution was established in 1995. Bonds were issued to finance single family mortgage loans to moderate-and-low income families in the state.

The principal methodology used in these ratings was US Housing Finance Agency Issuer Ratings Methodology published in October 2019 and available at https://ratings.moodys.com/api/rmc-documents/62559 . Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology

For 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 on https://ratings.moodys.com/rating-definitions .

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 issuer/deal page for the respective issuer on https://ratings.moodys.com .

The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com .

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

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The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com .

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com .

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Jeffrey Kaufmann Lead Analyst Housing Moody's Investors Service, Inc. 7 World Trade Center 250 Greenwich Street New York 10007 JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653

Eva Bogaty MANAGING DIRECTOR PF Healthcare JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653

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