A pool of junior-lien, revolving home equity lines of credit (HELOCs) will secure $321 million in mortgage-backed notes from the sponsor Figure Lending.
The transaction, FIGRE Trust 2026-HF11, is slated to close in September and will issue the mortgage-backed notes through seven tranches of classes A through G notes, which have a stated final payment date of September 2056, according to analysts at Morningstar DBRS.
The notes are also priced against the Secured Overnight Financing Rate, DBRS said.
Noteholders will be repaid through a senior-subordinate structure, and the deal structure also benefits from excess spread, DBRS said. Notes benefit from credit enhancement levels ranging from 32.30% on the class A notes to 1.10% on the class F notes, according to DBRS.
Some 3,169 HELOC contracts are in the pool, originated by Figure Lending and other White Label Partner Originators, according to DBRS. Figure Wholesale accounts for 23.5% of the FIGRE pool, followed by West_Capital_Lending, Figure Wholesale and Loan Depot, which account for 22.3%, 14.5%, and 12.3% of the pool, respectively.
The other lenders in the pool account for less than 10% of the pool each, DBRS said.
All the HELOCs are open HELOCs that have a draw period of three, four or five years. During those windows, borrowers can make draws up to a credit limit.
At the end of the draw term, HELOC borrowers have a repayment period ranging from 10 to 30 years, and customers cannot draw on the HELOCs during the repayment period, DBRS.
Analysts say the contracts in the underlying pool were made mainly to prime or near-prime borrowers, and the draw downs have an average balance of $101,315, DBRS said.
On a weighted average (WA) basis the contracts have a coupon of 8.55%. Borrowers have a FICO score of 740, according to DBRS calculations and they have moderate leverage, with a WA issuer original cumulative loan-to-value (LTV) ratio of 63.0%, DBRS said.
DBRS assigns ratings ranging from (P) AAA (sf) on the class A notes to (P) B (low) (sf) on the class F tranche.
