Institutional Investors Scooping up Kiavi’s “Fix and Flip” Loans

Key Takeaways:

– Kiavi upsized its 16th securitization to $350 million, bringing total issuance since 2019 to $4 billion
– The securitization includes three classes (A1, A2, and M) that were oversubscribed
– Kiavi is a fix-and-flip bridge loan provider that uses AI and data for performance
– The company offers short-term fix-and-flip bridge loans and longer-term debt service coverage ratio loans
– Kiavi funded a record $4 billion in loans in 2023
– The company has revamped its upper management ranks and added experienced professionals to its team
– Kiavi is licensed in seven states and sponsors 27 mortgage loan originators
– The company aims to serve more real estate investors across the nation with its capital markets programs.

inman:

Kiavi upsizes its 16th securitization to $350 million and says largest deal since November 2021 brings total issuance since 2019 to $4 billion.

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“Fix and flip” bridge loan provider Kiavi announced Monday that it had closed a $350 million securitization of residential transition loans, bringing the company’s total securitizations since 2019 to $4 billion.

Bundling mortgages into securities and selling them to institutional investors like pension funds and insurance companies is the ultimate source of funding for most home loans. But those mortgage-backed securities are typically evaluated by rating agencies and backed by giants Fannie Mae, Freddie Mac and Ginnie Mae.

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Kiavi said all three classes of the unrated securitization — A1, A2, and M — were oversubscribed, with “significant interest from both new and repeat institutional investors.” The upsized deal was Kiavi’s 16th securitization and the largest since November 2021, the company said.

Arvind Mohan

“Kiavi’s platform and unique use of AI, data and machine-learning models are significant contributors to our consistent track record of performance, which has helped us build and grow reliable institutional demand for Kiavi’s RTL assets over the past five years,” Kiavi CEO Arvind Mohan said in a statement. “We aim to build upon our technology and AI capabilities to further serve our customers and drive our performance as we continue to grow.”

Kiavi said the securitization includes a two-year revolving period, during which principal that’s paid off can be reinvested to purchase more new loans.

Founded in 2013 as LendingHome, Kiavi rebranded in 2021 and now claims to be one of the nation’s largest private lenders to residential real estate investors, with $17.5 billion in loans funded to date.

Kiavi makes short-term fix-and-flip bridge loans of up to $2.5 million available to qualified investors in 32 states and Washington, D.C., allowing them to fund up to 95 percent of a home’s purchase price without having to verify their income, employment or assets.

“Forget searching for pay stubs and old W-2s, we do not verify your income or employment,” Kiavi promises on its website. “On top of that our tech-forward platform eliminates time-consuming tasks, speeding up the process to close.”

Kiavi also offers longer-term debt service coverage ratio (DSCR) loans to investors who want to buy and hold one- to four-unit rental properties. Last year, Kiavi announced it was expanding its DSCR loan offerings to include condominium rentals in buildings with a homeowners association.

After laying off employees in 2022, Kiavi’s board of directors revamped the company’s upper management ranks last year, promoting Mohan in February to serve as CEO to “help the company drive continued growth despite challenging market conditions.”

Mohan, who joined Kiavi in 2016, had served as chief operating officer before succeeding Michael Bourque as CEO.

Alex Urmersbach

Mohan proceeded to hire HomeBridge and Bank of America veteran Alex Urmersbach as chief financial officer in April, and in December Kiavi announced the appointment of Samuel Harrity as senior vice president of capital markets.

Harrity’s nearly two decades of experience in real estate finance and capital markets includes stints as head of capital markets for CoreVest Finance and real estate investor platform Mynd.

Samuel Harrity

“Capital execution — paired with our leading technology platform and data-driven approach to lending — are what distinguishes Kiavi as a leader in the private lending market,” Mohan said in announcing Harrity’s addition. “We look forward to applying Sam’s unique background and proven experience to further bolster Kiavi’s leading capital markets programs so we can serve even more real estate investors across the nation.”

In announcing a $300 million unrated securitization of residential transition (RTL) loans in January, Kiavi said it funded a record $4 billion in loans in 2023.

Mohan said at the time that the company’s “consistent track record of performance has allowed us to build and grow reliable institutional demand for Kiavi’s RTL assets, which enables us to support more customers than ever with dependable, competitively priced capital — even through a challenging macroeconomic cycle.”

Kiavi Funding Inc. is licensed in Arizona, California, Florida, Minnesota, Nevada, Oregon and Utah, and sponsors 27 mortgage loan originators who work out of four branch locations, according to records maintained by the Nationwide Mortgage Licensing System and Registry.

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Property Chomp's Take:

Hey there, real estate enthusiasts! Big news in the world of residential transition loans — Kiavi has just upsized its 16th securitization to a whopping $350 million. This marks the largest deal since November 2021 and brings Kiavi's total issuance since 2019 to an impressive $4 billion.

Securitization is the process of bundling mortgages into securities and selling them to institutional investors like pension funds and insurance companies. This is a crucial source of funding for most home loans, and Kiavi has been making waves in this space with their residential transition loans.

Kiavi's CEO, Arvind Mohan, attributes the success of the company to its unique use of AI, data, and machine-learning models. This technology-driven approach has helped Kiavi build a consistent track record of performance, attracting both new and repeat institutional investors.

The recent securitization includes three classes — A1, A2, and M — all of which were oversubscribed due to significant interest from investors. This upsized deal allows Kiavi to reinvest principal payments to purchase more new loans during a two-year revolving period.

Founded in 2013 as LendingHome, Kiavi rebranded in 2021 and has since become one of the nation's largest private lenders to residential real estate investors. They offer short-term fix-and-flip bridge loans of up to $2.5 million in 32 states and Washington, D.C., with a streamlined process that eliminates the need to verify income, employment, or assets.

In addition to fix-and-flip loans, Kiavi also provides longer-term debt service coverage ratio (DSCR) loans for investors looking to buy and hold rental properties. The company has been expanding its offerings, including condominium rentals in buildings with homeowners associations.

After a management shakeup in 2022, Kiavi has been on a growth trajectory, with new hires like CFO Alex Urmersbach and SVP of Capital Markets Samuel Harrity. The company's focus on capital execution, technology, and data-driven lending has set them apart in the private lending market.

With a record $4 billion in loans funded in 2023, Kiavi is poised for continued success in the real estate industry. Their commitment to serving customers with dependable and competitively priced capital, even in challenging market conditions, is what sets them apart as a leader in the field.

So, if you're in the market for residential transition loans or looking to invest in real estate, keep an eye on Kiavi. With their innovative approach and solid track record, they're paving the way for the future of real estate financing. Exciting times ahead!

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