Derivative Instruments

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Note 7—Derivative Instruments

From time to time, we enter into derivative instruments to manage the economic risk of changes in interest rates. We do not enter into derivative transactions for speculative or trading purposes. Designated hedges are derivatives that meet the criteria for hedge accounting and for which we have elected to designate them as hedges. Non-designated hedges are derivatives that do not meet the criteria for hedge accounting or which we did not elect to designate as accounting hedges.

Designated Hedges

We have entered into various interest rate swap agreements, which are used to hedge the variable cash flows associated with variable-rate interest payments. Certain of the Invitation Homes Partnerships and certain Borrower Entities guaranteed the obligations under each of the interest rate swaps from the date the swaps were entered into through the date of the IPO. Each of these swaps was accounted for as a non-designated hedge until January 31, 2017, when the criteria for hedge accounting were met as a result of the Pre-IPO Transactions described inNote 1. At that time, we designated these swaps for hedge accounting purposes. Subsequent to that date, changes in the fair value of these swaps are recorded in other comprehensive income and are subsequently reclassified into earnings in the period in which the hedged forecasted transactions affect earnings.

In addition, in connection with the Mergers, we acquired various interest rate swap instruments, which we designated for hedge accounting purposes. We recorded these interest rate swaps at their aggregate estimated fair value of $21,135 (see Note 15). Over the terms of each swap, an amount equal to the Merger Date fair value will be amortized and recorded as an increase in interest expense and accumulated other comprehensive income.

The table below summarizes our interest rate swap instruments as ofDecember 31, 2017:

Agreement Date	Forward Effective Date	Maturity Date	Strike Rate	Index	Notional Amount
February 23, 2016	March 15, 2017	March 15, 2018	0.85%	One-month LIBOR	$	800,000
February 23, 2016	March 15, 2017	March 15, 2018	0.80%	One-month LIBOR	800,000
February 23, 2016	March 15, 2018	March 15, 2019	1.10%	One-month LIBOR	800,000
February 23, 2016	March 15, 2018	March 15, 2019	1.06%	One-month LIBOR	800,000
June 3, 2016	July 15, 2017	July 15, 2018	0.93%	One-month LIBOR	450,000
June 3, 2016	July 15, 2018	July 15, 2019	1.12%	One-month LIBOR	450,000
June 3, 2016	July 15, 2019	July 15, 2020	1.30%	One-month LIBOR	450,000
June 3, 2016	July 15, 2020	July 15, 2021	1.47%	One-month LIBOR	450,000
December 21, 2016	February 28, 2017	January 31, 2022	1.97%	One-month LIBOR	750,000
December 21, 2016	February 28, 2017	January 31, 2022	1.97%	One-month LIBOR	750,000
January 10, 2017	January 15, 2017	January 15, 2018	1.04%	One-month LIBOR	550,000
January 10, 2017	January 15, 2018	January 15, 2019	1.58%	One-month LIBOR	550,000
January 10, 2017	January 15, 2019	January 15, 2020	1.93%	One-month LIBOR	550,000
January 10, 2017	January 15, 2020	January 15, 2021	2.13%	One-month LIBOR	550,000
January 10, 2017	January 15, 2021	July 15, 2021	2.23%	One-month LIBOR	550,000
January 12, 2017	February 28, 2017	August 7, 2020	1.59%	One-month LIBOR	1,100,000
January 13, 2017	February 28, 2017	June 9, 2020	1.63%	One-month LIBOR	595,000
January 20, 2017	February 28, 2017	March 9, 2020	1.60%	One-month LIBOR	325,000
March 29, 2017	March 15, 2019	March 15, 2022	2.21%	One-month LIBOR	800,000

During the year endedDecember 31, 2017, such derivatives were used to hedge the variable cash flows associated with existing variable-rate interest payments. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the next 12 months, we estimate that$5,324 will be reclassified to earnings as a decrease in interest expense.

There werenointerest rate swap agreements designated as hedges outstanding during the year ended December 31, 2016.

Non-Designated Hedges

Concurrent with entering into certain of the mortgage loan agreements and in connection with the Mergers, we entered into or acquired and maintain interest rate cap agreements with terms and notional amounts equivalent to the terms and amounts of the loans made by the third-party lenders and strike prices ranging from approximately2.63% to 4.43%(collectively, the “Strike Prices”). To the extent that the maturity date of one or more of the mortgage loans is extended through an exercise of one or more of the extension options, replacement or extension interest rate cap agreements must be executed with terms similar to those associated with the initial interest rate cap agreements and strike prices equal to the greater of the Strike Prices and the interest rate at which the debt service coverage ratio (as defined) is not less than1.2 to 1.0. The interest rate cap agreements, including all of our rights to payments owed by the counterparty and all other rights, have been pledged as additional collateral for the loans.

Tabular Disclosure of Fair Values of Derivative Instruments on the Consolidated Balance Sheets

The table below presents the fair value of our derivative financial instruments as well as their classification in the consolidated balance sheets as of December 31, 2017 and 2016:

	Asset Derivatives					Liability Derivatives
		Fair Value as of					Fair Value as of
	Balance Sheet Location	December 31, 2017		December 31, 2016		Balance Sheet Location	December 31, 2017		December 31, 2016
Derivatives designated as hedging instruments:
Interest rate swaps	Other assets	$	57,612	$	—	Other liabilities	$	—	$	—
Derivatives not designated as hedging instruments:
Interest rate caps	Other assets	27		29		Other liabilities	—		—
Interest rate swaps	Other assets	—		—		Other liabilities	—		8,683
Total		$	57,639	$	29		$	—	$	8,683

Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statements of Operations

The tables below present the effect of our derivative financial instruments in the consolidated statements of operations for the years ended December 31, 2017, 2016 and 2015:

	Amount of Gain (Loss) Recognized in OCI on Derivative						Location of Gain (Loss) Reclassified from Accumulated OCI into Net Loss	Amount of Gain (Loss) Reclassified from Accumulated OCI into Net Loss							Total Amount of Interest Expense Presented in the Consolidated Statements of Operations
	Year Ended December 31,							Year Ended December 31,							Year Ended December 31,
	2017		2016		2015			2017			2016		2015		2017		2016		2015
Derivatives in cash flow hedging relationships
Interest rate swaps	$	31,636	$	—	$	—	Interest expense	$	(16,708	)	$	—	$	—	$	256,970	$	286,048	$	273,736

	Location of Gain (Loss) Recognized in Net Loss on Derivative	Amount of Gain (Loss) Recognized in Net Loss on Derivative
		Year Ended December 31,
		2017			2016			2015
Derivatives not designated as hedging instruments:
Interest rate caps	Interest expense	$	(364	)	$	(577	)	$	(2,110	)
Interest rate swaps	Interest expense	(3,674		)	(8,683		)	—
Total		$	(4,038	)	$	(9,260	)	$	(2,110	)

Credit-Risk-Related Contingent Features

We have agreements with certain of our derivative counterparties for our interest rate swap agreements that contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness.

As of December 31, 2017, we had no interest rate swap derivatives with a fair value in a net liability position. As of December 31, 2017, we have posted collateral amounting to $15,120 related to certain of these agreements (see Note 4).