RMBS

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

The impact of tariff policy on the mortgage-backed securities market is likely to surface first in the cost of new housing construction.

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%.

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.

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.

Servicers—Citadel, NewRez and Selene Finance—will not advance any delinquent principal and interest. Eventually, that should reduce loss severities to the deal.

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

Portfolio enhancements and diversifications cushion the impact of the L.A. wildfires from RMBS losses.

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.