Markets & EconomyTechnology

Fannie Mae takes step that may fuel single-family rental growth

Fannie Mae agrees to guarantee $1B of debt backed by single-family rentals
  • Fannie Mae has agreed to guarantee up to $1 billion in debt collateralized by single-family rental properties owned by an institutional investor.
  • That sort of backing could fuel the growth of single-family rentals by lowering the cost of buying and holding single-family rentals for institutional investors.

The government has begun subsidizing the institutionalized single-family rental market, signaling an endorsement of Wall Street's buy-to-rent housing bet as homeownership lags. Fannie Mae Fannie Mae -- a government-controlled mortgage guarantor that helps keep mortgage rates low for homebuyers -- has agreed to guarantee up to $1 billion in debt backed by single-family rental homes owned by Invitation Homes, a company operated by private-equity giant Blackstone. If Fannie Mae regularly backstops this sort of debt, it could fuel the conversion of more owner-occupied homes into rental units by making it cheaper for institutional investors to buy or hold such properties. Could FHA be next? "This move means to me that FNMA  acknowledges that homeownership is not the only place to have a positive impact on U.S. housing," said Greg Rand, CEO of OwnAmerica, a platform that institutional investors use to manage single-family rental portfolios. "I expect FHA  to ...