Financialization of Rents Gets Taxpayer Guarantees

Financialization of Rents Gets Taxpayer Guarantees
Tue, Jan 24, 2017 - 10:35 PM 

In my opinion this will make it hard for the mom and pop landlords going forward. Wall Street can buy homes at will because any financial purchasing mistakes will not harm them because of the bond guarantee. Thus they will be able to raise tons of money even if the houses do not make any money because the bonds are guaranteed. Essentially almost no risk now for Wall Street to buy more and more homes. This will reduce supply for new home buyers. 

Anyway...looks like the end of the mom and pop landlord could me near. Time to move on to be an Uber driver. LOL 

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http://wolfstreet.com/2017/01/24/us-government-fannie-mae-guarantees-rental-home-mortgage-backed-securities-blackstone-invitation-homes-win/ 

Invitation Homes, the 2012 buy-to-rent creature of private-equity firm Blackstone, and now owner of 48,431 single-family homes, thus the largest landlord of single-family homes in the US, accomplished another feat: it obtained government guarantees for $1 billion in rental-home mortgage backed securities. 

This is the first time ever that a government-sponsored enterprise has guaranteed single-family rental-home mortgage-backed securities, issued by a huge corporate landlord. It’s an essential step forward in financializing rents: taxpayer backing for funding the biggest landlords. 

Government guarantees allow the mega-landlord to sell these securities at a lower yield and thus offer landlords like Blackstone’s entity even cheaper financing for future home purchases, and thus lower costs and greater profit potential.