One of this year’s most discussed investment ideas is the conversion of distressed or foreclosed single family homes into rental properties on a mass scale.  With the FHFA’s Real Estate Owned Initiative offering product in bulk sales and major institutions stepping up to develop programs to finance the acquisition of the pools, REO-to-Rental strategies are taking shape.  Still, several questions remain as these deals actualize; most importantly among them, what will the Rating Agencies be looking for beyond their initial assessments, and will securitization develop into a viable exit?  An interdisciplinary team of Dechert attorneys from our Finance and Real Estate Group and Financial Institutions Group partnered to author this Dechert OnPoint on the issue, discussing the structure of a recent offering by the FHFA, keys areas of concern for investors and ratings considerations.  The update can be found here.

By: Matthew Clark