Colony American Finance CFO Christopher Hoeffel is not a fan of the Federal Housing Finance Agency’s new rule amending its regulation on membership in the Federal Home Loan Banking system.
In a column for RealtyTrac, Hoeffel says the FHFA, by eliminating “captive insurers” from the definition of insurance company, has prohibited many private lending institutions, including mortgage REITs, from being able to compete on equal footing with member banks and insurance companies that make residential mortgage loans.
Unfortunately, very few, if any, FHLBanks are active in lending to investor owners of single-family rental properties. Instead, these institutions focus their lending programs on owner-occupied properties. Therefore, the FHFA is creating another financial incentive for home ownership over renting.
The problem is that 43 million households in the United States are renters. By lowering the cost debt for owner-occupied homes, those who can afford to purchase a home get, indirectly, a financial windfall. Renters, on the other hand, get no such federal assistance.
Hoeffel closes by hoping Congress can pass legislation that may benefit the ever growing number of rental households; many of which can use the help.