KBRA Assigns Ratings to Angel Oak Mortgage Trust 2025-HB1 (AOMT 2025-HB1)
30 Apr 2025 | New York
KBRA assigns ratings to six classes of mortgage-backed notes from Angel Oak Mortgage Trust 2025-HB1 (AOMT 2025-HB1), a $191.3 million RMBS transaction sponsored by Angel Oak Real Estate Investment Trust III (Angel Oak), consisting of first lien (9.1%) and second lien (86.2%) home equity line of credit (HELOC; 95.2% total HELOC population) loans, as well as 4.8% closed-end second (CES) loans. The underlying pool is seasoned approximately six months and comprises 1,856 loans, with Homebridge Financial Services, Inc. (Homebridge; 87.9%) and Angel Oak Mortgage Solutions LLC (Angel Oak; 11.2%) as the largest contributing originators in the transaction. The HELOC loans are structured as interest-only (IO) adjustable-rate mortgages (ARMs), nearly all of which have initial draw periods of five years. Following the IO period, most loans transition to amortization terms of either 10-years (86.8%) or 15-years (6.9%). The CES loans consist exclusively of fixed-rate mortgages (FRMs), predominantly featuring 30-year amortization terms. As of the April 1, 2025 cut-off date, the HELOC borrowers have drawn $182.2 million from a total credit limit of $227.9, reflecting a utilization rate of 79.9% for the HELOC population. If HELOC borrowers were to fully draw their available credit lines, HELOC loans would represent 96.1% of the aggregate pool.
The AOMT 2025-HB1 deal structure incorporates excess spread along with a sequential interest waterfall and pro-rata/sequential-pay hybrid principal payment waterfall. Losses will be allocated reverse sequentially beginning with the Class B-3 Notes through to the Class A-1 Notes.
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