(September 2018) We’re excited to share with you some good policy news out of Washington, D.C. (not a sentence you read very often these days).
On August 21, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac would no longer offer financing to single-family-rental (SFR) investors through their multifamily divisions. Over the previous two years, the GSEs had entered this market for the first time, with Fannie Mae providing Invitation Homes with over a billion dollars of financing and Freddie Mac financing a handful of mid-size investors.
When the GSEs originally got into this market, NCST spoke out against the move, because our experience is that SFR investors have had no trouble accessing private capital markets and did not need taxpayer-backed financing. Providing them access to inexpensive GSE financing only further exacerbated the existing investor advantage over potential homebuyers as well as nonprofits working in affordable homeownership and rental.
Over the past couple of years, institutional owners of single-family rental have come under increased scrutiny, including investigative reports detailing alleged abuses of tenants as well as additional consideration of the role SFR plays in reducing available inventory for first time homebuyers.
NCST recently published a major article on the topic of SFR featured in the summer 2018 edition of Shelterforce Magazine, which focused on rental issues. Despite the victory out of FHFA, SFR continues to pose a threat to homebuyers, tenants, neighborhoods, and the future of homeownership.
We commend FHFA for a responsible decision, and we look forward to continued engagement with the agency and with Fannie Mae and Freddie Mac as they consider options for modernizing their “traditional” program for financing investors through their single family divisions. We will advocate for products that support nonprofits and mission-focused developers in their work to stabilize neighborhoods and provide opportunities for affordable homeownership, as well as for policies that ensure all investors using Fannie Mae and Freddie Mac programs engage in practices that are healthy for both tenants and neighborhoods.
Download a .pdf of the article: Shelterforce – The Dark Side of Single Family Rental