Figure Technology Solutions completed its acquisition of Kiavi Tuesday, bringing one of the country’s largest residential real estate investor lenders onto Figure’s capital marketplace as competition intensifies across debt-service coverage ratio lending.
Figure acquired Kiavi’s technology, operating platform, and certain other assets under the $717 million transaction announced in June. A joint venture between Figure and global investment firm Sixth Street also purchased loans from Kiavi’s balance sheet.
The Kiavi brand, platform, and technology will be integrated across Figure’s network of more than 480 active partners. Figure said the combination will give those partners access to Kiavi’s residential transition loan and DSCR lending technology through Figure Connect, its blockchain-based loan marketplace.
Kiavi CEO Arvind Mohan will become Figure’s chief business officer and oversee the platform’s rollout across the combined network.
“Adding Kiavi’s talent, platform, and technology to Figure greatly accelerates our roadmap by expanding our marketplace,” Figure CEO Michael Tannenbaum said. “Ever since we announced the deal, we have observed a groundswell of excitement from our partners as we collectively look to standardize and grow within the $35 trillion home equity market.”
The acquisition gives Figure an established investor-loan origination platform at a time when DSCR lending is attracting more capital, more lenders, and increasingly aggressive competition.
Charles Goodwin, vice president and head of bridge and DSCR lending at Kiavi, told NMP that the competition has narrowed the pricing difference between DSCR loans and conventional mortgages while pushing lenders to compete more heavily on credit terms, service, and closing speed.
DSCR Rate Gap Narrows
Data tracked by private-lending providers Lightning Docs and SFR Analytics indicates DSCR rates are now approximately 50 basis points above 30-year conventional mortgage rates, Goodwin said. A year ago, that spread was closer to 75 to 100 basis points.
That compression could make DSCR financing more competitive for real estate investors who might qualify for a conventional investment-property mortgage but prefer a business-purpose loan underwritten primarily against a property’s rental income rather than the borrower’s personal income.
It also changes the calculation for originators. With less separation among rate sheets, winning an investor loan can depend increasingly on which lender can structure the transaction, clear conditions, and reach the closing table fastest.
“Outside of pricing, lenders are differentiating themselves on speed and service,” Goodwin said. “Many DSCR lenders now say they can close loans in as little as 10 days, which was previously uncommon in the market.”
The tighter spread follows a broader influx of capital into investor lending. DSCR has developed from a specialized Non-QM product into a larger source of mortgage production, supported by wholesalers, warehouse lenders, securitization markets, and institutional investors.
Rocket Pro introduced its DSCR product in November 2025, making the program available through its retail, broker, and correspondent channels. United Wholesale Mortgage has offered its Investor Flex DSCR product since 2022. Other large lenders, including Pennymac, have also added DSCR programs as part of broader Non-QM strategies.
“These large lenders generally have the pricing power and established infrastructure to grow DSCR volume,” Goodwin said. “That increases competition and has forced other lenders in the space to evolve.”
Pressure Reaches The Credit Box
Greater competition is not affecting pricing alone. Goodwin said some lenders are accepting more risk or sacrificing margin to win production.
“The fierce competition in DSCR lending has caused some lenders to stretch on credit quality or margin,” he said.
Asked what that looks like, Goodwin pointed to higher loan-to-value ratios, lower DSCR thresholds, reduced reserve requirements, and more aggressive rent calculations.
“Primarily, we’ve seen lenders offer more generous LTVs on lower-DSCR deals,” he said. “However, those lenders may look for additional compensating factors to justify making the loan.”
Those factors can include stronger borrower credit, additional reserves, greater investor experience, or other characteristics that help offset weaker property cash flow.
The loan data tapes Goodwin reviews typically carry LTV ratios between 70% and 75%, credit scores ranging from approximately 740 to 750, and DSCRs between 1.00 and 1.25, he said.
A DSCR of 1.00 generally indicates that a property’s qualifying rental income is sufficient to cover its monthly housing obligation. A ratio below 1.00 indicates a projected shortfall, while a higher ratio provides a larger cash-flow cushion.
More Production Moves Toward The Midwest
Elevated property prices and borrowing costs are also influencing where DSCR transactions work.
Goodwin identified Cuyahoga County, Ohio; Wayne County, Michigan; Philadelphia County, Pennsylvania; and Cook County, Illinois, as active DSCR markets where relatively affordable properties can generate stronger rental yields. Properties in those areas can often reach DSCRs of 1.50 or higher, he said.
Kiavi’s own production has shifted modestly toward the Midwest. The region accounts for approximately 30% of the lender’s DSCR volume in 2026, up from about 25% in 2025, according to Goodwin.
That five-percentage-point increase reflects the search for markets where rents remain better aligned with property prices and financing costs. For originators working with investors, location and projected yield may matter more than whether a property’s purchase price appears inexpensive by itself.
Property taxes, insurance, maintenance expenses, vacancy assumptions, and achievable market rent can all alter the economics. But lower acquisition costs can give investors more room to meet lenders’ coverage requirements.
Credit Performance Will Test Today’s Decisions
Goodwin said Kiavi’s DSCR delinquency rates have remained steady, although the company did not provide current or year-over-year figures.
“Many industry leaders I speak with across the private lending market are reporting similar trends,” he said.
Goodwin attributed the performance partly to a resilient labor market that has helped renters remain current, allowing property owners to continue making loan payments.
Credit performance will ultimately determine whether the more aggressive terms emerging today prove sustainable.
Goodwin expects DSCR lending to remain steady over the next 12 months, but said some lenders could emerge from the crowded field while others withdraw. The difference may come down to whether lenders have sacrificed too much margin or loosened their credit standards too far in pursuit of volume.
“Lenders who invest in strong credit quality and efficient processes will continue to have demand,” he said.
Figure Adds Distribution And Capital
Figure expects Kiavi to add more than $7 billion in annual first-lien volume to its marketplace. The acquisition also gives Kiavi access to Figure’s partner distribution, technology stack, and capital infrastructure.
“We’ll look to capitalize on the combined company’s distribution, technology stack, and capital advantages,” Goodwin said.
Figure’s existing third-quarter Consumer Loan Marketplace guidance does not include Kiavi’s contribution. The company said it plans to update its outlook and reconcile the combined results with its previous guidance when it reports third-quarter earnings.
The completion of the deal brings Figure into the competitive pressure Goodwin described. The opportunity is substantial, but the next phase of DSCR lending may be determined less by which companies offer the product and more by which can price it sustainably, maintain credit discipline, and deliver the faster execution investors and originators now expect.
