New York, November 08, 2012 --

Moody's Rating

Issue: Multifamily Housing Development Bonds 2012 Series D; Rating: Aaa; Sale Amount: $35,145,000; Expected Sale Date: 11/09/2012; Rating Description: Mortgage: Multi-Family: FHA

Opinion

Moody's Investors Service has assigned a Aaa rating to approximately $35.145 million of Housing Opportunities Commission of Montgomery County (Montgomery County, MD), Multifamily Housing Development Bonds, 2012 Series D (Non-AMT). Moody's maintains the long-term Aaa rating on approximately $282.87 million of outstanding parity debt issued under the Commission's 1996 multifamily indenture. The rating outlook is negative due to the linkages between the loan composition of the indenture and the United States government.

RATINGS RATIONALE

The Aaa rating for the bonds reflects exceptionally high quality security as a result of loans with strong mortgage insurance provisions provided by the Federal Housing Administration (FHA) under Section 542 (c) of the National Housing Act, loans securitized by GNMA into mortgage backed securities and loans credit enhanced by Fannie Mae. The Aaa rating is further enhanced by the program's sound legal provisions, as evidenced by the trust indenture's provisions, and satisfactory financial condition as reflected in a program asset to debt ratio of 1.047, solid portfolio composition and favorable portfolio performance with no delinquencies or foreclosures. Moody's maintains the long term Aaa rating on approximately $282.87 million of outstanding parity debt.

STRENGTHS

-Strong mortgage insurance provisions provided by FHA and sound legal structure of the Risk Sharing Program

-Satisfactory portfolio composition and favorable portfolio performance

CHALLENGES

-While approximately 25% of the currently outstanding debt is in variable rate mode, 93% of which is hedged with an interest rate swap, swaps are not a perfect hedge as each variable rate issue is still subject to elements of basis, certain tax, amortization, counterparty and termination risk.

Outlook

The outlook on this bond program is negative, given the linkage between the FHA mortgage insurance and the rating of the US government.

What could change the rating-UP

-Not applicable

What could change the rating--DOWN

-Changes to legal structure of the trust indenture to permit the origination of loans that are uninsured or insured by lower-rated private mortgage insurers

-Change in rating of the US government

-Deterioration of the program's financial position

RATING METHODOLOGY

The principal methodology used in this rating was Moody's Anticipates Higher Bond Volume Associated With HUD's Risk-Sharing Program as a Result of Recent Congressional Actions published in May 2001. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, 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 has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt 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 relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant 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.

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Dmitriy Plit Analyst Public Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Florence E Zeman Associate Managing Director Public Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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