Archwest Capital, an Irvine, Calif., mortgage lender just raised $300 million from the residential mortgage-backed securities (RMBS) market, in its first rated residential transition loan (RTL) deal.
The transaction, Archwest Mortgage Trust 2025-RTL1, sold notes backed by loans extended to real estate investors to buy residential properties, according to Archwest. After investors renovate and resell the homes, they repay the loans.
Morningstar | DBRS assigns A, BBB, BB and B to the A1, A2, M1 and M2, notes, respectively, which have a legal final maturity date of October 2040.
The deal involves a two-year revolving period, and during that time principal proceeds can be reinvested into newly originated collateral, Archwest said.
Initially, the pool has 318 first-lien, fixed-rate and interest-only balloon mortgages with original terms of nine to 24 months, which can be extended. They had a total principal balance of $274.5 million, DBRS said.
Borrowers are of high quality, according to DBRS. On a weighted-average (WA) basis, the assets have a minimum non-zero FICO score of 730, a loan-to-cost ratio of 82.5%, and a maximum, so-called "as repaired loan-to-value" ratio of 70%.
Notes derive credit protection through subordination, overcollateralization, and excess spread. Also, at closing, Archwest Mortgage Trust had a pre-funding interest account, about $3.1 million, that supports the timely interest payments during the transaction's early months.
The company noted that Resolute provided third-party due diligence on the underlying assets, and FCI Lender Services is on the deal as servicer.
