Most landlords of single-family rental homes are small investors and have had few options to finance their properties. Regional lenders, the primary source of financing before the housing crash, have pulled back, and government-backed mortgage companies Fannie Mae and Freddie Mac offer a limited number of loans to non-resident homebuyers.
“Developing this market continues to make more attractive capital available to smaller investors around the country,” Beth O’Brien, chief executive officer of Colony American Finance, said in a telephone interview. “A deal at this time should be positive for the whole space.”
Demand for rentals will increase for at least two years as job growth allows more people to form new households, according to a report this week by Andres Carbacho-Burgos, an economist with Moody’s Analytics in West Chester, Pennsylvania. Many of those people are unable or reluctant to buy a home,
The U.S. homeownership rate fell in the fourth quarter to a 20-year low, and the rental vacancy-rate declined to the lowest level in 21 years, the Census Bureau reported, after more than 5 million homes were lost to foreclosure since the real estate collapse.