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KBRA assigns preliminary ratings to eight classes of Progress Residential 2022-SFR2 (Progress 2022-SFR2) single-family rental pass-through certificates.
Progress 2022-SFR2 is a single-borrower, single-family rental (SFR) securitization that will be collateralized by a $524.4 million loan secured by first priority mortgages on 1,777 income-producing single-family homes. The fixed-rate loan requires interest payments only over its five-year term. The subject transaction will be the 21st KBRA-rated securitization issued by Progress Residential.
The underlying single-family rental properties are located in or near 28 Core Based Statistical Areas (CBSAs) across 12 states. The top-three CBSAs represent 36.3% of the portfolio and include Atlanta (17.0%), Tampa (10.5%), and Orlando (8.8%). The aggregate BPO value of the underlying homes is $552 million, yielding an LTV of 95.0% in line with Progress’ other recent transactions. KBRA adjusted the BPOs, which yielded an aggregate value of $524.4 million, which represents a 5.0% haircut to the nominal BPO value. The resulting LTV based on KBRA’s adjusted BPO value was 95.0%.
Similar to recent transactions issued by Progress, the subject transaction includes provisions for collateral release without corresponding loan paydown (the ECR feature), property releases with premiums, and property substitution, all of which are subject to various conditions.
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