

Fitch Ratings’ moratorium on rating single-family securitizations has ended thanks to the arrival of the first multi-borrower deal.
The rating agency, which had shunned the asset class up until now, assigned a preliminary ‘AAA’ rating to the Class A notes of B2R Finance 2015-1, a $230m securitization.
Multi-borrower deals carry longer historical loan performance data; the smaller landlords have been operating their properties much longer than institutional players, which only entered the SFR space after the recession and make up a tiny slice of total SFR inventory.
“Similar to single borrower SFR, sector and property level operating history are limited,” Fitch said in a pre-sale report. “However, historical investor loan performance provides a reasonable proxy for expected through-the-cycle performance.”
In addition, the loans securitized by the deal are more geographically diverse and carry lower leverage than previous deals. Fitch calculated the debt yield on B2R Finance’s 2015-1 of 8.7%. By comparison, Kroll Bond Rating Agency calculated the debt yield for the most recent single-borrower, single-family rental securitization, Invitation Homes 2015-SFR2, at 4.4%.
The B2R Finance 2015-1 pool consists of 144 loans secured by 3,160 properties; including single-family residential properties, two- to four-unit properties, condominium properties, townhomes, multifamily properties and mixed-use properties.
FirstKey Lending is also in the process of issuing a second multi-borrower SFR securitzation, FirstKey Lending 2015-SFR1. The $241m deal will be collateralized by 16 loans secured by mortgages on 3,628 homes. KBRA awarded $149.9m in ‘AAA’ ratings to its Class A tranche.