The impact of tariff policy on the mortgage-backed securities market is likely to surface first in the cost of new housing construction.

Series 2025-SFR2 and 2025-SFR3 are due to close by the end of April and count single-family homes as their primary collateral.

The deal is composed of 11,547 seasoned performing and reperforming loans that are first and second lien. Loan servicing includes a 180-day chargeoff feature.

Leading up to President Donald Trump's April 2 deadline on levies, the options traders prefer to own exposure to US government debt due in five years.

The pass-through certificates are supported by a full pool of amortizing loans, which have no interest-only periods.

Full documentation accounts for a little over a third of the pool, but otherwise FICO scores are high, as are weighted average liquid reserves.

From the Q3 2021 to the early 2024 vintages, cumulative gross loss (CGL) levels had been trending up, likely due to consumer credit normalizing, due to inflationary pressures.

Excess cash flow will pay timely interest and protect against realized losses in the rated certificates before being paid out to the class X notes.

The deal has a step-up coupon feature that calls for the fixed rates on classes A1, A2 and A3 to increase by 100 basis points, subject to the net weighted average coupon (WAC) after four years.

The deal includes a minimum assets test, requiring the issuers to own at least 10 assets at the end of the nine-month delivery period, or seven assets after the delivery period.