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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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