Donna M. Mitchell

The deal is secured by a portfolio dominated by mortgage loans considered non-qualified or exempt from ability to repay rules.

Most of the contracts in Point Securitization Trust, 1,750 (81.64%), are second-lien as of the cut-off date.

The funding round will help Button Finance, which leverages AI to underwrite home equity financing, expand its range of products to more borrowers.

A range of investment residential properties, including single-family homes, condominiums and multi-unit properties, will secure the debt.

Cross 2025-H3 has moderate leverage, according to KBRA, with a weighted average (WA) loan-to-value ratio of 72.3%, and a debt-to-income ratio of 33.5%.

The notes will get credit enhancement from balances on the subordinate bonds, which are permitted to amortize.

Moderate leverage is one example of cleaner credit, as the current collateral pool's original loan-to-value (LTV) ratio is 69.1%, down from 71.7% on the 2024-NQM1 series.

The underlying prime mortgages have an average balance of $358,024, a weighted average (WA) original FICO score of 776, an original cumulative loan-to-value (LTV) ratio of 73.6%.

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.

ACHM 2025-HE1 will repay notes using a pro-rata, sequential pay structure that must satisfy an overcollateralization test, and cumulative loss and delinquency triggers.

Second-lien loans make up virtually the entire pool, which carries some risk of poor recovery rates. Yet 78% of the pool is also considered safe-harbor mortgages.

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.

Investment properties are the primary properties backing the collateral pool, at 80.3%, while second homes account for 19.7% of the pool.

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.

A vast majority of the collateral pool balance, 82.6%, are mortgages used to purchase primary residences, and just 17.4% finance second homes.

Alternative documentation accounts for 37.9% of the pool balance, compared with 24.6% on the 2024-NQM4 deal.

Underwriting methods have been steadily shifting to traditional full documentation, which accounts for 13.3% in the VERUS 2024-9, KBRA said, its largest share since VERUS 2024-6.

The notes benefit from credit enhancement levels of 30.45%, 24.3%, 13.8%, 8.65%, 5.00% and 2.05% on the A1, A2, A3, M1, B1, B2 and B3 tranches, respectively.

Fitch Ratings said Tesla Finance enters the residential solar finance ABS arena with underlying loans that have the highest WA FICO score presented to it for a rating.

The notes receive credit enhancement from overcollateralization, and an initial reserve.