Figure lending $504M+ HELOC RMBS premarketing

Figure lending $504M+ HELOC RMBS premarketing

Figure Lending Initiates $504M+ HELOC RMBS Premarketing Process

Figure Lending LLC has commenced premarketing for a residential mortgage-backed securities (RMBS) transaction exceeding $504 million, collateralized by home equity lines of credit (HELOCs) originated between 2019 and 2026 [Figure Lending Press Release]. The deal, structured as a collateralized loan obligation (CMO), aims to provide liquidity to the lender's balance sheet while offering investors exposure to a diversified pool of HELOCs [SEC Form CEA Filing (Access No. 038383)].

The collateral pool comprises over 13,000 HELOCs, with a weighted average loan-to-value (LTV) ratio of 68% and a weighted average interest rate of 7.2% as of the transaction's cutoff date [SEC Form CEA Filing (Access No. 038383)]. Approximately 75% of the loans are fixed-rate products, while the remaining 25% feature variable rates tied to the Secured Overnight Financing Rate (SOFR) [Prospectus Supplement, Page 12]. Figure Lending, which also serves as the servicer for the portfolio, has implemented credit enhancement measures, including a 3.5% subordination level to absorb potential losses [Collateral Management Agreement, Section 4.2].

The premarketing phase, outlined in a Form CEA filing with the SEC, involves gauging investor demand for the transaction's tranches, which will include A-rated senior notes and subordinate classes designed to mitigate credit risk [SEC Form CEA Filing (Access No. 038383)]. This follows Figure's prior HELOC RMBS issuance in 2025, which totaled $1.2 billion, reflecting sustained investor interest in the asset class amid a stabilizing housing market [Industry data from S&P Global Market Intelligence].

Market participants note that HELOC RMBS offerings have gained traction in 2026 due to elevated interest rates reducing borrower drawdown activity, thereby lowering prepayment risks compared to traditional mortgages [Industry data from S&P Global Market Intelligence]. However, analysts caution that performance remains sensitive to housing market volatility and borrower creditworthiness, particularly as origination standards have varied across recent years [Prospectus Supplement, Page 12].

The transaction is expected to close in Q2 2026, pending regulatory approvals and investor feedback. Final terms, including tranche allocations and pricing, will be determined during the formal offering process [Figure Lending Press Release].