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WASHINGTON, DC–At the start of the year, what will likely be the largest REIT initial public offering for 2017 came to market: the $1.8-billion Invitation Homes, a lessor of single-family homes backed by Blackstone Group.

The wow factor about the size of the IPO — this is the second largest REIT IPO to date — was quickly replaced by even more startling news. As part of the transaction Fannie Mae backed a 10-year, interest-only $1 billion loan originated by Wells Fargo.

There were questions and a bit of outrage as well. The GSE's mission is to support affordable housing — 'how does backing a loan to a private equity company accomplish that?' asked some Congresspeople of the Federal Housing Finance Agency.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.