Home Partners of America is preparing its first transaction of 2022, with a $952.8 million securitization of first-priority mortgages on single-family rental properties and townhomes.
A single loan, secured by 2,977 mortgages on single-family homes plus 247 townhomes, comprises the collateral. All told, the collateral pool has 3,224 rental properties. RBC Capital Markets, BofA Securities, Wells Fargo and Morgan Stanley are lead managers for the deal, which will issue the notes from a sequential capital structure, according to a pre-sale report from DBRS | Morningstar.
The deal is slated to close on April 6. DBRS expects to assign ‘AAA’ ratings to the $445.3 million class A notes. After that, ratings will range from ‘AA’ on the $179.3 million class B notes to ‘BBB’ on both the class D and class E notes, which will issue $89.6 million and $65.5 million, respectively.
Midland Loan Services, will service the notes, and act as special servicer, DBRS said.
On a discretionary basis, the terms of the transaction allow trust can substitute up to 5.0% of the number of properties in the deal, as long as certain conditions are met. Among the conditions are that each property needs to be an occupied, detached single-family residential property or a condominium or townhome. Condominiums and manufactured housing are excluded from that condition, according to DBRS.
On average, the properties have a broker price option (BPO) of $383,821. By BPO, single-family homes make up virtually the entire portfolio, at 93.7%.
The homes securing the portfolio produce an average monthly rent of $2,405, based on gross potential rent for vacant properties, and an average remaining lease term of 8.7 months, according to DBRS. Lease expirations are concentrated between September 2022 and January 2023, during which 79.7% of the properties by count have a lease expiration, the rating agency said.
The top five states in the portfolio, by BPO, are Georgia, Colorado, Florida, Washington and Arizona, with percentages by BPO of 14.9%, 14.7%, 13.8%, 10.0% and 9.1%, respectively.
Atlanta led the group of MSAs with the highest representation in the portfolio, with 14.8%; followed by Colorado Springs, Colo., with 10.2%. Phoenix, Tampa, and the Minneapolis-St. Paul area followed with 9.1%, 8.1% and 6.2%.
