Berkadia Secures Over $500 Million in Financing for 4,700 Single-Family Rental Properties Across 12 States for Front Yard Residential

August 9, 2018

Berkadia Secures Over $500 Million in Financing for 4,700 Single-Family Rental Properties Across 12 States for Front Yard Residential

August 9, 2018

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LOS ANGELES – August 9, 2018 – Berkadia today announced the financing of a single-family rental pool comprised of 4,636 single-family homes, 96 townhomes, 34 duplexes, 3 triplexes and one quadplex, totaling 4,813 rental units across 12 states. Managing Director Anthony Cinquini of Berkadia’s Los Angeles office secured the $508.7 million in financing through Freddie Mac on behalf of Front Yard Residential. The deal closed on August 8.

Over 78 percent of the units financed have rents that are considered affordable for families earning at or below 80 percent of the area median income (AMI). Moreover, 93 percent of the units are affordable for families earning at or below 100 percent AMI.

The 10-year permanent financing was sized using a 69 percent loan-to-value ratio and a 30-year amortization schedule. Since 2013, Front Yard has spent over $125 million—or about $26,000 per home—on maintenance and repairs to rehabilitate the properties being financed in this transaction.

“Though we’ve closed five single-family rental financings with Freddie Mac’s Affordable Single-Family Rental (SFR) Pilot Program totaling over $100 million to date, this is a significant accomplishment for Berkadia and Freddie Mac,” said Cinquini. Berkadia was the first Seller/Servicer to be approved by Freddie Mac to provide SFR financing under its pilot program.

George Ellison, CEO of Front Yard, said, “We greatly appreciate the focus and attention of Berkadia and Freddie Mac bringing this financing to fruition. We pride ourselves on serving the affordable single-family rental sector and being able to obtain a 10-year fixed rate financing provides the financing stability we desire to best serve our tenants.”

“This significant transaction will help keep thousands of quality rental homes available in communities across the country, providing an affordable rental option to many families who do not have the means to purchase a home,” said David Leopold, vice president of Targeted Affordable Sales & Investments at Freddie Mac Multifamily. “Front Yard has invested millions of dollars to rehabilitate these homes, bringing them out of disrepair and putting them back to work providing low-income and working families with a quality, affordable place to call home. We thank our strong partners at Berkadia for continuing to work with us to bring greater affordability to the single-family rental market.”

“The SFR space is continuing to evolve, and this transaction demonstrates that Berkadia and Freddie Mac have the ability to provide thoughtful and diligent underwriting standards to the SFR market with competitive terms,” added Cinquini. “Working with Front Yard Residential, a best-in-class sponsor, facilitates the preservation of quality single-family rentals, which provide an additional housing option for families searching for a home.”