A pool of 1,951 first-lien home equity lines of credit draws, or loans, will secure about in mortgage-backed notes representing $242.3 million in unpaid HELOC balances.
The transaction, FIGRE Trust 2025-FL2 Mortgage-Backed Notes, will sell the notes through seven tranches of class A, M and B notes, which have a stated final maturity date of November 2055, according to rating agencies Morningstar DBRS and Moody's Ratings.
The transaction has a closing date of December 18 and will repay noteholders through a senior-subordinate structure.
Notes rated AAA and Aaa from DBRS and Moody's, respectively, are expected to pay a coupon of 5.10%, according to Asset Securitization Report's deal database. Notes rated AA/Aa2; AA/A1; BBB/Baa3; BB/Ba2; and B/B2, by DBRS and Moody's, respectively, might pay coupons of 5.4%, 5.6%, 5.9%, 6.5% and 7.6%, respectively.
The A1 tranche has 18.5% in subordination, which ranges from that to 0.75% on the B2 tranche, Moody's said.
Figure Lending originated most of the HELOC contracts and will service all of them, while Northpointe Bank is on the deal as back-up servicer, according to rating agencies. The underlying portfolio is four months seasoned, on average.
The underlying loans are primarily open HELOCs with draw periods of two, three, four or five years. After the end of the draw period, the amortization begins, during which borrowers have a repayment period ranging from three to 25 years, according to DBRS.
None of the loans are subject to Ability-to-Repay/Qualified Mortgage rules and are all exempt from the Consumer Financial Protection Bureau. Yet the cash-out borrowers in the FIGRE 2025-FL2 pool have prime and near-prime credit quality, DBRS said.
Moody's notes that the performing, fixed-rate HELOCs have an average non-zero FICO score of 748. On a weighted average (WA) basis, the loans have a cumulative loan-to-value (CLTV) ratio of 43.2%, with an average balance of $135,126, and Moody's finds that they are lower than a typical prime jumbo deal.
The sequential repayment order will benefit the senior classes, which receive principal payments pro rata, among the pool's credit strength.
Yet the pool lacks any full appraisals and relies mainly on automated valuation models (AVM). Figure does not require any title insurance, either, according to Moody's.
