Salient to Investors:

Regional lenders were the primary source of loans for landlords buying properties before the real estate collapse crash. Since then, at least 475 banks have failed and larger banks have tightened mortgage underwriting standards and are focusing on the biggest investors.

Home prices are 29 percent below the 2006 peak. Millions of homeowners who went through foreclosure and can’t get mortgages have become renters.

Blackstone has invested over $4 billion to buy 24,000 homes. Private-equity firms dominate some foreclosure auctions and complete the biggest bulk purchases.

Goldman Sachs said institutional ownership is less than 1 percent of the $2.8 trillion rental-home market.

Fannie Mae limits landlords to loans on a maximum of 10 properties, and Freddie Mac will lend on 4.

Cerberus loans will typically have a 24-yr term with a 6 percent to 7 percent interest rate and be secured by the real estate.

DataQuick says the median home price in California jumped to $313,000 in March, up 25 percent from a year earlier. CoreLogic said US home prices climbed 10.5 percent in March from a year earlier, the fastest pace in seven years. Increases have been greater in the most popular areas for large-scale landlords – 18.8 percent gains in Phoenix and 14.2 percent gains in Atlanta.

Carl Bell at Smith Breeden said the virtually government-only mortgage finance market means there are very few options for debt investors to invest in the housing recovery, while for tax, regulatory, and operational reasons, financing versus owning within the single-family rental home market is the better fit for many institutional investors.

The homeownership rate in April was the lowest in almost 18 years. Goldman Sachs said as home prices have risen, rental yields have compressed to 5 percent in the most popular cities for investors.

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