Fidelis Investors is sponsoring its second rated securitization of residential transition loans through the FID 2025-RTL2, as it raises $144.5 million.
The pool is composed of 308 residential transition loans, which are short-term bridge loans used to finance home renovations for a sale later, sourced from an array of 24 different lenders, led by according to a statement from the company.
This is the second rated RTL transaction from sponsor Fidelis Investors Mortgage Fund I, according to Morningstar | DBRS, which rated the deal.
FID 2025-RTL2 comes to market a two-year, revolving structure, during which additional loans can be added to the pool, if they meet eligibility criteria, DBRS said. The portfolio consists of first-lien, fixed-rate and interest-only balloon RTLs. They were originated with original terms of six to 24 months to maturity.
Eligible loans have a non-zero, weighted-average (WA) FICO score of 725 and a WA loan-to-cost (LTC) ratio of 85.0%. The pool's as repaired loan-to-value (LTV) ratio of 70.0%.
Some loans might include extension options, which can extend their maturities beyond their original terms, DBRS.
FID 2025-RTL2 will issue notes through six tranches of classes A, M, B and P notes, which have a legal final maturity date of July 2040, DBRS said.
Jefferies is the lead underwriter, and while Fidelis Investors is the servicer, FCI Lender Services and Tandem Servicing are sub-servicers on the deal, according to DBRS.
The transaction includes a funding account, according to the rating agency, which can be used to purchase additional loans during the revolving period. During this period, the deal must retain enough in the funding account, along with mortgage collateral, to limit the effective advance rate to no higher than 96.35%. That, in turn, must maintain minimum credit enhancement of about 3.65%.
An expense account is in place to cover fees and expenses, which will be replenished from the transaction cash flow waterfall, before payment of interest to the notes. Also, an interest reserve account is in place, to help maintain a three-month cushion to cover three months of interest payments to the notes and is funded up to $750,000.
DBRS assigned BBB, A, BBB, BB and B to classes A, A1, A2, M1 and B, respectively.
