KBRA Releases Research – Laying the Foundation: The Evolution of RTL Lending
KBRA releases research providing an overview of the residential transition loan (RTL) lending and securitization market. The report covers recent issuance and collateral trends, differences between rated and unrated RTL securitizations, pricing spread performance, transaction structures, eligibility criteria, and performance to date.
RTLs, also known as “fix-and-flip” or residential bridge loans, have expanded as a residential mortgage-backed securities (RMBS) asset class in recent years. While RTLs remain a niche segment of private-label RMBS, representing less than 5% of expected full-year (FY) 2026 private-label securities (PLS) issuance, the market has scaled meaningfully from its infancy in 2018. Total RTL securitization volume increased sharply in 2024 and has remained elevated, reflecting the continued expansion of RTL originations, supported by demand for capital to renovate or add residential inventory and the broader use of securitization as a funding channel.
Key Takeaways
RTL securitization has scaled meaningfully, with total annual issuance rising to $6.2 billion in 2024 and $5.5 billion in 2025, approximately 3x the 2023 levels. We project FY 2026 issuance to total approximately $4.8 billion, down 12% year-over-year, and rated issuance to reach approximately $3.5 billion, representing approximately 73% of projected 2026 RTL securitization volume.
