What is a Mortgage REIT?

A Mortgage REIT, or mREIT, is a type of real estate investment trust that primarily focuses on providing financing for income-producing real estate. It does this by originating, acquiring, and managing mortgage loans or mortgage-backed securities. The income generated comes largely from the interest earned on these financial products rather than from the direct ownership of physical properties. This means that mREITs play a crucial role in the real estate market by providing the necessary capital for property owners and developers to finance their projects, helping to facilitate transactions and enhance liquidity within the sector.

In contrast, the other options describe different types of real estate investment strategies or focuses that do not align with the core function of a Mortgage REIT. For instance, investing in foreign real estate markets or focusing on small residential properties do not directly relate to the function of providing financing. Similarly, dealing primarily with real estate renovations indicates an operational focus rather than a financial one, which is also outside the scope of what defines a Mortgage REIT.