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46 MERGER COMPLETED BETWEEN SINGLE-FAMILY RENTAL GIANTS e merger between single-family rental giants American Homes 4 Rent (AH4R) and American Residential Properties, Inc. (ARPI), originally announced in early December, has been completed, according to an announcement from AH4R. e merger was approved by the stockholders of ARPI at a meeting on February 26, 2016. e total value of the transaction is approximately $1.3 billion. "We are delighted to announce the completion of our merger with American Residential Properties, further establishing American Homes 4 Rent as the largest publicly traded owner and operator of single-family rental homes," said David Singelyn, CEO of AH4R. "American Residential Properties owned a high- quality portfolio of homes that fit strategically in our markets, offering significant opportunities to capture further operating efficiencies on the combined platform. Moving ahead, we look forward to the rapid integration of the two platforms and to creating additional value for the shareholders of the combined company, while strengthening our position as a premier company in the single-family rental sector." e transaction was completed with a fixed exchange ratio of 1.135 common shares or limited partnership units of AH4R for each share of ARPI, and ARPI merges into AH4R in a tax free exchange. ARPI shareholders will own 12.7 percent of the combined company. Meanwhile, AH4R will retain its corporate headquarters in Agoura Hills, California, while maintaining a presence in the Phoenix, Arizona, market, which was the home base for ARPI. AH4R will continue to trade common shares on the New York Stock Exchange under the ticker symbol AMH, while ARPI common stock will no longer trade on the NYSE, according to the announcement. e merger enhances the size of the largest publicly traded single-family rental company. With the merger, AH4R now owns 47,000 homes in 22 states (the company owned approximately 38,000 single-family rental homes prior to the merger). AH4R now has at least 1,000 homes in each of 17 markets nationwide (representing about 81 percent of the homes in all markets) and at least 2,000 homes in each of eight markets, according to AH4R. e company has a total market capitalization of $8 billion and an aggregate real estate cost basis of approximately $8 billion. e AH4R and ARPI transaction was one of two major mergers of single-family rental companies announced in 2015. In September, Starwood Waypoint Residential and Colony American Homes announced a definitive merger agreement which would combine the two companies in a stock-for-stock transaction. at combined company, which will be managed internationally, is expected to own and manage more than 30,000 single-family homes nationwide and have an asset value of about $7.7 billion when the transaction closes sometime in the first quarter of 2016. LENDERS OPTIMISTIC ABOUT DIVERSE GROWTH OPPORTUNITIES Despite recent reports surrounding the dismal state of the U.S. economy, the housing market remains strong and unbothered by such news, particularly mortgage lenders. Housing market indicators, like home sale and prices, have shown significant amount of growth as the TILA-RESPA Integrated Disclosure rule passes. After suffering a major drop in November 2015 and recovering with the largest monthly increase ever recorded in December, existing-home sales seem to have found their balance to start the new year. e existing-home sales report from the National Association of Realtors (NAR) proves that lenders are well on the path to recovery from TRID delays. e report found that existing- home sales increased 0.4 percentto a seasonally adjusted annual rate of 5.47 million in January from a downwardly revised 5.45 million in December. Existing sales are now 11.0 percent higher than a year ago, the highest annual rate in six months and the largest year-over-year gain since 16.3 percent July 2013. In the midst of tight supply, heightened competition for buyers, and unpredictable financial markets, U.S. home prices continued to rise in the fourth quarter. e Federal Housing Finance Agency's (FHFA) House Price Index (HPI) shows that home prices rose 5.8 percent year-over-year in the fourth quarter of 2015. Prices increased 1.4 percent from the third quarter of 2015, marking the 18 consecutive quarterly price increase in the purchase-only, seasonally adjusted index. Home prices were up 0.4 percent month-over-month for December. A survey of 200 mortgage lending professionals from Lenders One showed that lenders are exuding confidence in the real estate market. In addition, lenders say that millennials, Hispanics, and boomerang buyers will lead the expected gains in business. According to the survey, 62 percent of lenders surveyed said that they expect mortgage purchase production to increase by an average of 11 percent in 2016. Another 87 percent indicated that the mortgage purchase market will be extremely active. "e strong confidence levels we're seeing among lenders highlight the continued bounce back from one of the most challenging real estate and lending environments in U.S. history," Goldman stated. "In an environment where lenders can once again focus on business growth initiatives, it will be more important than ever for mortgage professionals to have access to the tools and ongoing training they need to capitalize on these emerging trends." In an effort to prepare for the expected uptick in activity, 60 percent of lenders noted that they their leading strategies for growth are new marketing techniques to reach new demographics. New product offerings received 42 percent of lenders' votes, hiring staff got 40 percent, and regional expansion got 36 percent. Mortgage lenders in the housing market said that diverse growth opportunities will be the driving force behind the increase in business. Seventy-nine percent of lenders pointed to millennials as their target, as these young prospects enter into the peak age for purchasing a home. Hispanics were named by 71 percent of lenders surveyed, while non-traditional buyers in the rental and vacation home markets were named by 70 percent of lenders. Boomerang buyers, or those that can now qualify for a mortgage after undergoing a short sale, foreclosure, or bankruptcy, will be targeted by 68 percent of lenders.

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