KBRA Assigns Ratings to ACHM Trust 2025-HE1 (ACHM 2025-HE1)
26 Mar 2025 | New York
KBRA assigns ratings to 3 classes of mortgage-backed notes from ACHM Trust 2025-HE1 (ACHM 2025-HE1), a $210.9 million RMBS transaction sponsored by Lendage, LLC, d/b/a Achieve Home Loans (AHL or Achieve Home Loans) and Sutton Funding LLC (retained sponsor). The transaction consists entirely of first and second lien home equity line of credit (HELOC) loans. The underlying pool is seasoned one month and comprises of 3,307 loans originated by Achieve Home Loans. The HELOC collateral consists of fixed-rate mortgages (FRMs) with 5-year initial draw windows and fully amortizing 10-year (93.2%), 15-year (1.2%) and and 30-year (5.6%) terms. As of the cut-off date, the borrowers in the loan pool have an outstanding aggregate current balance of $210.9 million from the combined credit limit of $213.7 million (a 98.7% current draw percentage, also referred to as the utilization rate).
The ACHM 2025-HE1 deal structure incorporates a pro-rata/sequential-pay hybrid payment waterfall that is subject to the satisfaction of an overcollateralization test and two performance triggers – a Cumulative Loss Trigger and a Delinquency Trigger. If the overcollateralization amount remains above the target and both performance triggers are satisfied, available funds are allocated pro-rata to the Class A, B and C Notes up to the Principal Distribution Amount. However, if either the overcollateralization amount falls to or below the overcollateralization floor or either performance trigger fails, the Class A, B and C Notes will be paid down sequentially. Interest to the Class A, B and C Notes is distributed sequentially but prioritized before paying down any of the Notes. The deal structure also includes a Reserve Account to fund draws and Overcollateralization that are both fully funded and replenished by the waterfall.
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