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Delinquency rates remained low in July across single-family rental (SFR) securitizations, and for a majority of the deals, the delinquency rates improved, according to data reported by Morningstar Credit Ratings in its August 2015 Single-Family Research: Performance Summary Covering All Morningstar Rated Securitizations released Monday.
The largest drop occurred in the ARP 2014-SRF1 transaction (American Residential Properties), which experienced a drop from a 3.0 percent delinquency rate in June down to 2.2 percent in July. This translated to the lowest number of delinquent properties (2,876) among the 22 transactions as of the end of July, while the IH 2015-SFR3 deal had the most delinquent properties at 7.207. The 8 percentage point drop for ARP 2014-SFR1 occurred after the delinquency rate on the ARP 2014-SRF1 deal climbed from 2.5 percent in May up to 3.0 percent in June, the highest rate among all the transactions.
"Cash flows remain sufficient to cover bond obligations and in general the asset class performance is in line with its recent history."
Even with the decline of 8 percentage points, the ARP 2014-SFR1 securitization remained tied in July for the highest delinquency rate with the recently-closed TAH (Tricon American Homes) 2015-SFR1 transaction, which also posted a 2.2 percent rate for July (down from 2.4 percent in June).
According to Morningstar, the retention rate for month-to-month leases improved for most of the transactions in July after dropping in 15 out of 17 transactions in June. The retention rates of scheduled lease expirations remained within Morningstar's expectations for July, in the mid-70s.
"Vacancy rates remain low, though they may migrate higher as more leases expire," Morningstar said in its report. "Cash flows remain sufficient to cover bond obligations and in general the asset class performance is in line with its recent history."
Included in the report released Monday are the recently-closed CAH 2015-1 transaction (Colony American Homes) and brief summaries of the B2R 2015-1 (B2R Mortgage Trust) and FKL 2015-SFR1 (FirstKey Lending) multiborrower transactions.
Click here to see the complete August 2015 Single-Family Rental Research: Performance Summary Covering All Morningstar-Rated Securitizations.
