Real estate investment trust Redwood has expanded its home equity platform, Aspire, to include alternative loan products amid affordability challenges in the housing market, the company announced Tuesday.
The move is part of a repositioning that includes branding of its jumbo loan platform, which will continue to operate under the Sequoia umbrella going forward.
Through Aspire, launched in September 2023, Redwood directly originates home equity investments (HEIs). This product permits customers to sell a share of their home’s future value in exchange for a lump-sum payment today.
But Redwood also said it recognizes that higher interest rates and constrained housing supply have been headwinds to affordability, increasing the need for nontraditional solutions. At HousingWire’s Mortgage Rates Center on Wednesday, the 30-year fixed rate averaged 7.11%, clouding the housing market outlook for 2025.
The platform’s new offerings include loans underwritten by bank statements and CPA-prepared profit-and-loss statements, as well as debt-service-coverage ratio (DSCR) loans for real estate investors that complement CoreVest’s direct lending capabilities. CoreVest was acquired by Redwood in 2019 and is the REIT’s business-purpose lending division that specializes in loans for residential investment properties.
“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 statement.
Redwood, founded in the early 1990s as the need for more private investors in the mortgage market grew, intends to provide liquidity for these new loan types to its origination partners.
As part of repositioning its residential consumer operating platforms, Redwood is also branding its jumbo loan platform as Sequoia, a securitization shelf under which it has issued more than 130 transactions.
Abate said that despite “muted housing activity” in 2024, the company grew its “relevance by significantly expanding our network of loan seller partners, meeting the market share goals we set with our investors.”
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