SAN FRANCISCO--(BUSINESS WIRE)--LendingHome – the fix-and-flip industry's No. 1 lender – today announced it has completed its first syndicated, revolving securitization of residential transition loans, issuing approximately $208 million of non-rated, asset-backed securities. LendingHome Funding Corporation – a wholly owned subsidiary of LendingHome Corporation – acted as sponsor for the transaction and originated 100% of the loans in the transaction.
The transaction, which totaled approximately $219 million in aggregate, was structured with a two-year revolving period during which principal payoffs can be reinvested in newly originated loans. The revolving structure enables an efficient funding for the asset class, as the underlying residential transition loans typically pay off in approximately seven months. The loans are generally 12 months in term and originated for the purpose of rehabilitation and resale of the underlying residential property.
The securitization is structured as approximately $208 million of senior- and mezzanine-class offered certificates and approximately $11 million of subordinate-class, non-offered certificates for a total deal size of approximately $219 million.
“While we have worked with a number of institutional whole loan partners over the past few years, we are excited to broaden our investor base with the issuance of our first revolver securitization,” said Matt Humphrey, co-founder and CEO of LendingHome. “Our data driven approach, combined with our proprietary technology platform, has enabled us to scale our lending presence in a fragmented asset class with an institutional investor audience in mind. Our unique data sets us apart in identifying and improving our lending practices to deliver strong risk-adjusted returns to our investors. For our company, this securitization means we can lower our cost of capital, diversify our investor base, and provide our borrowers with competitive pricing and service enhancements.”
House flipping is a key component of the U.S. residential real estate industry, providing a significant upgrade to aging homes in need of repair. More than half of all homes are at least 39 years old, according to the U.S. Census Bureau’s American Housing Survey.
In 2018, LendingHome became the No. 1 lender to the U.S. fix and flip industry, by number of loans and by dollar volume.*
Nomura Securities International Inc. (“Nomura”) was the structuring agent of the two-year revolving deal. Advisors to this transaction were Nomura and Barclays Capital Inc. as co-lead managers and Sandler O’Neill as co-manager.
LendingHome-originated residential transition loans were previously securitized and distributed in an issuance sponsored by an affiliate of Nomura in March 2016.
*LendingHome defines a flipper, or property investor, as someone who has completed at least one home purchase and resale in a year or less with at least 10% profit, or someone who has purchased and resold at least two homes in 1,000 days or less.
LendingHome has designed a better way for people to buy a home. Its built-from-scratch technology has transformed a slow, painful, paper-based process into a fast, transparent, online experience. Since it started lending in mid-2014, LendingHome has funded more than $3.5 billion in mortgage loans. The company is headquartered in San Francisco with an office in Pittsburgh, Pa. To learn more, go to www.lendinghome.com or www.lendinghome.com/careers. NMLS ID #1125207