Cerberus Capital Management LP, which initially targeted landlords with multimillion-dollar loans, is financing low-volume deals for small investors through its FirstKey Lending, with looser terms than government-backed mortgages from Fannie Mae and Freddie Mac, said Randy Reiff, the business’s chief executive officer. Blackstone Group LP (BX)’s rental lending arm, B2R Finance LP, is making a similar push to mom-and-pop landlords.
Colony Capital LLC,
About 53 percent of the 14 million U.S. investor-owned or vacation houses were without a mortgage as of last month, based on data from property-research firm RealtyTrac, implying investors in about 7 million homes could get cash-out mortgage financing to buy more real estate or make other investments.
Amundi Smith Breeden, the U.S. subsidiary of global asset-manager Amundi, which oversees more than $1 trillion. “From that perspective, it is easier for investors to underwrite the regulatory and liability risk than with the owner-occupant lending market.”
FirstKey will finance as many as 25 under its latest debt product, Investor Property Express. The company will offer 30-year fixed-rate mortgages to borrowers with minimum credit scores of 620 on loans starting at $100,000 for houses worth a maximum 75 percent of the property value if they are already leased, according to documents obtained by Bloomberg News.