KBRA assigns preliminary ratings to FIDL 2026-RTL2, a $191.5 million revolving RMBS transaction issued by Fidelis Investors Mortgage Fund I, LP (Fidelis), as seller/sponsor, and backed by Residential Transition Loans (RTLs). The transaction is the sponsor’s fourth rated securitization backed by RTL collateral, and KBRA’s first rated RTL transaction. The collateral consists entirely of RTLs purchased by Fidelis from either its affiliated originator, Unitas Funding LLC (18.2%), or independent third-party originators, the largest of which is Easy Street Capital, LLC, which originated 29.6% of the pool.
The loans will be serviced by Fidelis Investors LLC, with certain servicing functions performed by subservicer FCI Lender Services, Inc. At closing, the collateral pool is comprised of 381 loans with an aggregate balance of $137.0 million and an average loan balance of approximately $360,000. The transaction includes a 24-month revolving period during which additional mortgage loans may be added, subject to compliance with eligible loan and portfolio concentration limits.
The initial pool has a weighted average by balance (WA) non-zero credit score of 735, a WA as-is LTV of 71.9%, a WA after-repair LTV of 66.2% and a WA interest rate of 10.0%. The initial pool is predominantly composed of rehabilitation loans (82.4%), although concentration limits allow up to 25% ground-up construction loans. All loans in the pool are senior-lien, interest-only, fixed-rate RTLs.
KBRA’s rating approach incorporated loan-level analysis of the mortgage pool through its RTL Model, an examination of the results from third-party loan file due diligence, cash flow modeling analysis of the transaction’s payment structure, reviews of key transaction parties and an assessment of the transaction’s legal structure and documentation. This analysis is further described in our U.S. Residential Transition Loan Rating Methodology.
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Related Publication
Methodologies
- RMBS: U.S. Residential Transition Loan Securitization Rating Methodology
- Structured Finance: Global Structured Finance Counterparty Methodology
Disclosures
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.
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