Citigroup will lend $65 million to Waypoint Real Estate Group for investments in distressed single-family houses converted to rentals.

"We always believed that banks would begin by making balance sheet loans in the REO-to-rental space as a precursor to executing securitization transactions. said Waypoint Managing Director Gary Beasley in an emailed statement. "This is helpful for the banks to more clearly understand the issues specific to the industry, and to lend credibility to the assertion that they believe in the asset class. Look for several large banks to get more active in our space over the upcoming months."

Beasley said to keep a look out for several large banks to get more active in the REO-to-rental space in the upcoming months.  As of press time, Citigroup did not return a call for comment on its participation in the loan.

Waypoint, one of the bigger players in the space, began acquiring, renovating, and then leasing properties to residents, since 2009. The Oakland, California-based company currently owns more than 2,000 homes worth a total of around $350 million.

Beasley told ASR in an August 2012 interview that it had recently stepped up the pace of acquisitions. In July, for example, Waypoint acquired 270 homes worth a total of about $45 million, compared with a rate of just 60-homes-per-month eight months earlier.

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