New programs to provide financing at competitive rates will help investors buy single family rental homes
Mortgage financing giants Fannie Mae and Freddie Mac have announced programs to provide long-term financing at competitive interest rates that could encourage more investors to acquire single-family rental (SFR) properties, the National Real Estate Investor reports.
“Folks who dipped their toes in the market in 2015 or early 2016 and bought one or two single-family rentals are now buying more,” says Daren Blomquist, senior vice president of property data firm ATTOM Data Solutions.
Fannie and Freddie have launched lending programs to help small-portfolio owners find financing with competitive, fixed interest rates and loan terms as long as 10 years. Prior to this, SFR investors often had to rely on bank loans with shorter loan terms and higher interest rates.
“It should help lower mortgage rates for single-family rental operators, helping them to increase their rate of return on current rentals without having to raise the rent, and also opening up more potential rental acquisition opportunities that may not have penciled out previously with higher mortgage rates,” says Blomquist. “Fannie and now Freddie’s backing of the single-family rental market is a game changer.”
Source: “New programs help investors buy single-family homes,” Florida Real Estate