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Freddie Mac Follows Fannie Mae To Rental Market, With Affordability As Goal

When the government-controlled mortgage finance giant Fannie Mae agreed this year to guarantee a $1 billion financing deal for one of the biggest private-equity-backed landlords in the United States, the move prompted an outcry.

Now, Freddie Mac, a rival government-controlled mortgage finance company, is gearing up for its own financing deal. But it is targeting a much different slice of the single-family home-rental market.

SFR Rental Investors Turn to New Home Construction

As mortgage standards tighten, prices rise, and the distressed single-family home sale inventory continues to drop nationwide, single-family rental investors are moving to single-family homes built to rent to fill their portfolios. According to Bloomberg, many of these investors are building these rental homes themselves.

While newly-constructed homes often cost more than used or distressed sales, investors stand to save on low early maintenance and repair costs, and newer homes can demand 5% to 8% more rent than older homes.