Redwood Trust announced plans to expand the scope of its home equity investment business with the addition of lending products, while also updating branding of its jumbo issuance platform.
The real estate investment trust will offer specialized alternative loans through its consumer-facing Aspire division, it announced this week. The addition of loan products aims to serve consumers who might rely on nontraditional means of income calculation, such as bank statements or accountant review. Aspire had previously focused primarily on home equity sharing agreements since its launch in 2023.
“The market for alternative loan products continues to grow but remains poised for disruption through technology and common-sense underwriting practices,” Redwood CEO Christopher Abate said in a press release.
Aspire’s expansion comes in response to growing demand for more flexible financing options amid a challenging housing market and interest rate environment, he added. Loan amounts range from $100,000 to a maximum of $3 million.
Aspire will source loans through origination partners, who in turn, will have access to various Redwood products. The company has traditionally provided housing credit and secondary market investments to support liquidity in segments federal programs do not serve.
“Leveraging our proven track record in the non-agency market and our extensive network of loan sellers, we are positioned to play a pivotal role in strengthening this vital part of the housing sector,” Abate said.
Also included among Aspire’s new products are debt-service coverage ratio loans, which will complement offerings available through Corevest, a different Redwood Trust subsidiary. The maximum amount available for DSCR borrowers tops out at $2.5 million.
Alongside the Aspire announcement, Mill Valley, California-based Redwood also laid out a branding update affecting its Sequoia correspondent platform, which going forward, will include its jumbo investment operations. In the third quarter of 2024, Redwood distributed $1.5 billion worth of jumbo loans in three different securitizations.
Since launching in 1997, the Sequoia unit has issued more than $66 billion worth in transactions, including 135 securitizations.
“The Sequoia name carries substantial weight with our bond investors, including the world’s largest money managers and insurance companies, and we have ambitious plans for its continued growth in 2025,” Abate said.
“While Sequoia has always been intertwined with Redwood’s brand and reputation, we believe it is time for this business to stand on its own.”
In its most recent earnings call Redwood reported $13.1 million in net income in third quarter 2024. The bottom line improved year over year from a $32.6 million loss 12 months earlier.
