Fix-and-flip lender Kiavi finalizes $218M private-label offering

The deal is the company’s ninth securitization of residential transition loans in three years

Kiavi, formerly LendingHome, recently closed a $218 million private-label securitization of unrated short-term mortgages — described as “residential transition loans” (RTLs) by the lender, which serves the fix-and-flip market.

The deal represents Kiavi‘s ninth such securitization under its LHOME shelf since launching its revolving securitization program in 2019, according to the company. The offering includes a two-year revolving term during which principal payoffs on the underlying loans can be reinvested in purchasing additional newly originated loans.

“The transaction is estimated to provide capital to support approximately $750 million in loan originations over the life of the deal and will help real estate investors revitalize aged homes across the country,” Kiavi said in announcing the deal. “The $218 million total deal size includes $207 million in offered notes in three classes, A1, A2 and M, all of which were sold.”

Nomura Securities International Inc. served as the sole structuring agent of the securitization. Nomura, Barclays Capital Inc. and Performance Trust Capital Partners, LLC acted as the joint bookrunners and co-lead managers. 

“Executing in today’s challenging market environment demonstrates our investors’ continued confidence in our products and performance, and it extends our position as a leading issuer of RTL products,” said Arvind Mohan, chief operating officer at Kiavi. “This enables us to continue to be a dependable partner to real estate investors as they rehabilitate America’s aging housing stock at a time when over two-thirds of U.S. homes are over 30 years old.” 

Kiavi ranked as the top short-term lender in the fix-and-flip space in 2021, with $2.7 billion in originations, up nearly 78% from 2020, according to a recent report by Inside Mortgage Finance (IMF). After a slowdown in lending due to the pandemic, fix-and-flip lenders came roaring back in 2021, boosting originations by more than 73% year over year, to $18.5 billion, according to IMF.

Could renovated foreclosure resales help solve the nation’s increasingly complex affordable housing puzzle?

An estimated 140,000 renovated properties purchased at foreclosure auction or bank-owned auction were resold to owner-occupant buyers between January 2020 and December 2021

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Since it was launched in 2013, Kiavi has funded more than $10 billion in loans to real estate investors, according to the company. This past April, Kiavi completed a $271 million securitization of RTLs — its eighth deal at the time — that also is expected to support some $750 million in loan originations over the life of the deal.

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