FIGRE Trust is preparing to sell securitized bonds secured by recently originated revolving home equity lines of credit (HELOC), with the smallest underlying loan count and a pool balance, $335.7 million, one of the smallest in the program since late July 2025.
The transaction, FIGRE Trust 2026-HF3, will sell the notes through eight tranches of notes, classes A through G, and they will be priced to the Secured Overnight Financing Rate (SOFR), although the estimated spreads were unclear at press time, said Morningstar DBRS.
Slated for a March 19 close, the notes in the deal have a final maturity date of March 2056, DBRS said.
The transaction's notes benefit from credit enhancement levels of 44.5% on the AAA-rated class A1A notes, through 3.25% on the class F notes, DBRS said. The A1A tranche contains the bulk of the issued notes, $164.3 million, DBRS said.
Otherwise, the A1B, B, C, D, E and F tranches of notes benefit from credit enhancement levels of 33.6%, 24.3%, 17.2%, 11.0%, 6.4% and 3.2%, respectively.
FIGRE 2026-HF3 will repay noteholders on a pro rata basis, but this is subject to a trigger provision that requires the deal to repay noteholders sequentially should a credit event occur.
The bonds' principal balances amortize over the life of the transaction, so if a credit event triggers sequential payments, the losses could be applied at a time when FIGRE's credit support has also diminished accordingly.
As for the loan pool, the underlying collateral pool contains 2,879 loans. Figure Lending originated the largest portion of loans, 44.0%, while West Capital Lending accounted for 26.2% of the pool, DBRS said.
Figure Lending also services the loans, while Cornerstone Servicing and Northpointe Bank are subservicer and backup servicer, respectively.
All the HELOCs in the pool are open HELOCs with draw periods of three, four or five years. Borrowers can tap their lines of credit up to the limit, although the ability to make those draws can be temporarily frozen, suspended or terminated, depending on the circumstances.
At origination, the HELOCS are fully drawn, confirmed by the weighted average (WA) utilization rate of about 95.4% after two months of average seasoning
Borrowers, though, are of prime to near-prime quality, with a FICO score of 734, an original cumulative loan-to-value (CLTV) ratio of 63.2%, and a WA 8.4%.
