Residential Transition Loans.

A Residential Transition Loan is a short-term bridge loan provided to professional real estate developers.

Developers use RTLs to acquire, renovate, construct, or stabilize residential properties before selling or refinancing them.

Unlike traditional mortgages, RTLs are business-purpose loans designed for professional operators rather than individual homeowners.

Borrowers are experienced residential developers and investment firms that specialize in:

• Fix-and-Flip projects
• Ground-up residential construction
• Build-to-Sell developments
• Fix-to-Rent strategies
• Residential bridge financing

Each borrower is underwritten by Housd's approved lending partners before receiving financing.

Developers require flexible capital to acquire and improve properties without committing all of their own equity.

Residential Transition Loans allow developers to:

• Acquire properties quickly
• Finance construction and renovations
• Increase project scale
• Preserve working capital
• Recycle capital across multiple projects

Once construction is completed or the property is sold, the loan is repaid in full.

Every Residential Transition Loan follows a similar process.

1. 1A developer identifies a residential project.
2. 2An approved originator underwrites the loan.
3. 3Capital is advanced to the developer.
4. 4Construction or renovation begins.
5. 5The property is completed and sold or refinanced.
6. 6Principal and interest are repaid to the lender.
7. 7Repayments flow back into the Housd vault.

Every loan financed through Housd is secured by a first-position mortgage over the underlying residential property.

A first-lien lender has the primary legal claim over the collateral if a borrower defaults.

This provides investors with strong downside protection compared to unsecured lending.

Loan-to-Value (LTV) measures the size of a loan relative to the value of the underlying property.

For example:

• Property Value: $1,000,000
• Loan Amount: $650,000
• LTV: 65%

Lower LTVs provide a larger equity cushion, helping protect lenders if property values decline. Most Housd loans are originated between 65–70% LTV.

After Repair Value (ARV) is the estimated market value of a property once construction or renovations have been completed.

Originators use ARV to evaluate project feasibility, determine loan sizing, and assess collateral coverage.

Many Residential Transition Loans are structured using both current property value and projected ARV to ensure conservative underwriting.

Although Residential Transition Loans have historically experienced low default rates, defaults can occur.

When a borrower defaults:

1. 1The lender enforces its first-lien security.
2. 2The property is recovered through legal proceedings.
3. 3The asset is sold or refinanced.
4. 4Recovery proceeds are returned to investors.

Because loans are secured by residential real estate, investors benefit from tangible collateral that helps reduce potential losses.

Residential Transition Loans have become a preferred private credit strategy because they combine attractive yields with strong collateral protection.

Key advantages include:

• Short loan duration
• First-lien security
• Residential real estate collateral
• Conservative underwriting
• Frequent capital recycling
• Historically low correlation to public markets

These characteristics have made RTLs a core allocation for banks, private credit funds, family offices, and institutional investors.

Residential Transition Loans represent one of the fastest-growing segments of U.S. private credit.

Today, the U.S. RTL market is estimated to originate approximately $60–85 billion of new loans annually, supporting professional residential developers across the country.

The broader U.S. real estate private credit market exceeds $700 billion in assets and continues to expand as demand for private lending increases.

Residential Transition Loans have historically delivered stable, asset-backed returns across multiple market cycles.

Typical portfolio characteristics include:

• Target Net Yield: 8–10% APR
• Average LTV: 65–70%
• Average Duration: 6–18 months
• First-Lien Security
• Monthly Interest Payments
• Residential Real Estate Collateral

While past performance does not guarantee future results, Residential Transition Loans have remained one of the most established and resilient sectors within U.S. private credit.