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Derivative Instruments | 3 Months Ended
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Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Note 7—Derivative Instruments From time to time, we enter into Hedging Derivatives 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 we have not elected to designate them as hedges. Designated Hedges We have entered into various interest rate swap agreements, as outlined in the table below. 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 through the date of the IPO. Each of these swaps were accounted for as non-designated hedges until January 31, 2017, when the criteria for hedge accounting were met as a result of the Pre-IPO Transactions described in Note 1. At that time, we designated these swaps for hedge accounting purposes; and the effective portion of changes in the fair value of these swaps is recorded in other comprehensive income subsequent to that date. The table below summarizes our interest rate swap instruments as of March 31, 2017:
Agreement Date |  | Forward Effective Date |  | Maturity Date |  | Strike Rate |  | Index |  | Notional Amount
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 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 |
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income on the condensed consolidated balance sheets and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three months ended March 31, 2017, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Changes in fair value related to the ineffective portion of our Designated Hedges resulted in an unrealized gain of $1 for the three months ended March 31, 2017, which is included in interest expense in our condensed consolidated statements of operations. 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 twelve months, we estimate that an additional $16,003 will be reclassified to earnings as an increase to interest expense. There were no interest rate swap agreements outstanding for the three months ended March 31, 2016. Non-Designated Hedges Concurrent with entering into certain of the mortgage loan agreements, we entered into 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 approximately 2.07% to 3.82% (collectively, the “Strike Prices”). To the extent that the maturity date of one or more of the 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 than 1.2 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. Changes in fair value related to Non-Designated Hedges resulted in unrealized losses of $3,752 for the three months ended March 31, 2017, which are included in interest expense in our condensed consolidated statements of operations. Of the unrealized losses, $3,674 related to changes in value on interest rate swaps prior to their designation on January 31, 2017, and $78 related to the non-designated interest rate caps. Tabular Disclosure of Fair Values of Derivative Instruments on the Condensed Consolidated Balance Sheets The table below presents the fair value of our derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016:
|  | Asset Derivatives |  | Liability Derivatives
|  |  |  | Fair Value at: |  |  |  | Fair Value at:
|  | Balance Sheet Location |  | March 31, 2017 |  | December 31, 2016 |  | Balance Sheet Location |  | March 31, 2017 |  | December 31, 2016
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | Other assets |  | $ | 5,907 |  |  | $ | — |  |  | Other liabilities |  | $ | 4,775 |  |  | $ | — |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | Other assets |  | — |  |  | — |  |  | Other liabilities |  | — |  |  | 8,683 |
Interest rate caps |  | Other assets |  | 11 |  |  | 29 |  |  | Other liabilities |  | — |  |  | — |
Total |  |  |  | $ | 5,918 |  |  | $ | 29 |  |  |  |  | $ | 4,775 |  |  | $ | 8,683 |
Tabular Disclosure of the Effect of Derivative Instruments on the Condensed Consolidated Statements of Operations The tables below present the effect of our derivative financial instruments on the condensed consolidated statements of operations for the three months ended March 31, 2017 and 2016:
|  | Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) |  | Location of (Gain) Loss Reclassified from Accumulated OCI into Net Loss (Effective Portion) |  | Amount of (Gain) Loss Reclassified from Accumulated OCI into Net Loss (Effective Portion) |  | Location of Gain (Loss) Recognized in Net Loss on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |  | Amount of Gain (Loss) Recognized in Net Loss on Derivative (Ineffective Portion and Amounts Excluded from Effectiveness Testing)
|  | For the Three Months Ended March 31, |  |  |  | For the Three Months Ended March 31, |  |  |  | For the Three Months Ended March 31,
|  | 2017 |  | 2016 |  |  |  | 2017 |  | 2016 |  |  |  | 2017 |  | 2016
Derivatives in Cash Flow Hedging Relationships |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | $ | 10,561 |  |  | $ | — |  |  | Interest expense |  | $ | (2,711 | ) |  | $ | — |  |  | Interest expense |  | $ | 1 |  |  | $ | — |
Total |  | $ | 10,561 |  |  | $ | — |  |  |  |  | $ | (2,711 | ) |  | $ | — |  |  |  |  | $ | 1 |  |  | $ | — |
|  | Location of Gain (Loss) Recognized in Net Loss on Derivative |  | Amount of Gain (Loss) Recognized in Net Loss on Derivative
|  |  |  | For the Three Months Ended March 31,
|  |  |  | 2017 |  | 2016
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |
Interest rate swaps |  | Interest expense |  | (3,674 | ) |  | — |
Interest rate caps |  | Interest expense |  | $ | (78 | ) |  | $ | — |
Total |  |  |  | $ | (3,752 | ) |  | $ | — |
Credit-Risk-Related Contingent Features We have agreements with 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 March 31, 2017, the fair value of interest rate swap derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $5,172. As of March 31, 2017, we have not posted any collateral related to these agreements. If we have breached any of these provisions at March 31, 2017, we could have been required to settle its obligations under the agreements at their termination value of $5,172.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41620-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624163-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579240-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624177-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41641-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579245-113959 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624258-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80748-113994 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5708775-113959 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5708773-113959 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5618551-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5580258-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624181-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41638-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 + Details
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