Redwood Trust is targeting approximately 10% of the Non-QM market by the end of 2026 or early 2027, accelerating an Aspire expansion plan that has progressed rapidly since the beginning of the year.
The company estimates Aspire currently accounts for 5% to 6% of the market on a run-rate basis, up from an estimated 2% share in 2025. Reaching the new target would nearly double its current position in a market Redwood expects will continue growing despite elevated mortgage rates and weak overall home sales.
Aspire locked a record $2.1 billion in loans during the second quarter, up 31% from the first quarter. The platform also finalized a joint venture with Crayhill Capital Management that could eventually purchase as much as $8 billion in loans.
The latest developments move Aspire beyond the expansion plans Redwood outlined earlier this year.
In February, NMP reported that Redwood was preparing Aspire’s inaugural Non-QM securitization while holding advanced discussions with outside capital partners. Management described those initiatives as a way to expand the platform beyond Redwood’s corporate balance sheet and improve execution as production increased.
Five months later, Aspire has completed three securitizations, expanded its seller network, improved margins, and identified the institutional partner that could help fund its next stage of growth.
Crayhill Partnership Adds Purchasing Power
Redwood executed definitive documentation for an Aspire-dedicated joint venture with Crayhill after the second quarter ended June 30.
The vehicle has the potential to purchase up to $8 billion in loans over time, according to Redwood. That figure represents potential purchasing capacity, not loans already acquired or capital immediately committed for deployment.
The partnership is expected to provide Redwood with recurring revenue and potential performance fees when specified return thresholds are reached. It also allows the company to fund substantially more production without providing all of the equity itself.
Redwood President Dashiell Robinson said its institutional partners typically contribute more than 80% to 90% of the equity in the company’s joint ventures. Those partnerships can allow Redwood to leverage its internal capital by 10 to 20 times, he said.
“Our dollar goes a lot further and at higher ROEs when you combine the certainty of those economics, the fees we earn,” Robinson said during Redwood’s second-quarter earnings call.
Redwood now has dedicated joint ventures supporting each of its mortgage banking platforms: Aspire, its Sequoia prime jumbo business, and investor lender CoreVest. Combined potential purchasing power across the partnerships totals approximately $18 billion.
For Non-QM originators, the Crayhill agreement signals that Aspire is preparing to compete for substantially more loans and seller relationships.
Existing Sellers Fuel Aspire’s Expansion
Approximately two-thirds of Aspire’s production comes from mortgage companies that already sell prime jumbo loans through Redwood’s Sequoia platform.
Robinson said some longtime Sequoia sellers have begun bringing expanded-credit products in-house as higher rates push lenders to diversify their offerings and serve borrowers who fall outside conventional underwriting parameters.
Those lenders are also using Non-QM products to attract and retain loan officers, he said.
That gives Aspire a built-in distribution advantage. Redwood can introduce its Non-QM products to mortgage companies with which it already has established relationships, technology connections, and training programs.
Aspire had more than 150 active loan sellers on June 30, up from 136 at the end of March. The platform also has approved sellers that are not yet delivering Non-QM loans, giving Redwood another possible source of production as it pursues its market-share goal.
“When you think about the growth to $2 billion a quarter, some of that runway is what underpins our goal,” Robinson said.
Management initially described that goal as reaching 10% by year-end 2026. During the question-and-answer portion of the earnings call, Robinson characterized the timing more broadly as the end of this year or early next year.
Redwood said borrowers with alternative income sources, particularly self-employed consumers who do not rely on traditional W-2 earnings, continue to drive the expansion of Non-QM. Management also credited greater consumer awareness of alternative mortgage products.
The company cited market expectations that Non-QM originations will reach $150 billion in 2026, approximately 20% higher than last year. Redwood did not identify the outside forecast used for that estimate.
Three Securitizations Mark Rapid Progress
Aspire distributed approximately $1.3 billion in loans during the second quarter, including $920 million through securitizations and $393 million through whole-loan sales.
The platform completed its second and third transactions through the SPIRE shelf during the quarter. Its inaugural securitization, completed in March, included approximately $391 million in Non-QM loans.
That inaugural transaction gave Aspire an execution channel beyond whole-loan sales, which had previously accounted for most of the platform’s distribution.
When Redwood previewed the transaction in February, Robinson said securitization could produce better economics than whole-loan sales while giving Aspire another way to handle greater production. The company has now used the SPIRE shelf three times within approximately four months.
Redwood said it profitably syndicated the risk-retention and supporting bond tranches from Aspire’s second-quarter securitizations to third-party investors.
Loans at least 60 days delinquent represented less than 10 basis points of Aspire’s securitized population on June 30, according to management.
Aspire’s Margins Rebound
Aspire’s gain-on-sale margin increased to 101 basis points during the second quarter, up from 73 basis points in the first quarter. Redwood attributed the improvement to normalized securitization spreads and stronger hedge performance.
The company expects Aspire’s longer-term margin to remain in a range of 75 to 100 basis points.
Aspire generated $7.3 million in second-quarter GAAP net income, more than triple the $2.3 million reported during the first quarter. Its annualized return on capital reached 33%.
Redwood achieved that growth while continuing to invest in proprietary tools for Non-QM pricing and guideline comparisons across its bulk and flow channels. Management expects the technology to help Aspire process additional volume without increasing expenses at the same rate.
The pricing and guideline tools are part of Redwood’s broader effort to operate what CEO Christopher Abate called an “AI-native housing finance platform.” Redwood said its AI-enabled initiatives produced approximately 23,600 hours in annualized time savings during the first half of 2026.
For Aspire, however, the more immediate test will be whether the combination of technology, securitization, and outside capital can translate into greater loan purchases without eroding margins or credit performance.
Institutional Capital Moves Deeper Into Non-QM
Aspire’s growth illustrates how quickly institutional capital is moving into Non-QM lending.
Products once treated as a specialized portfolio offering are increasingly being funded and distributed through repeat securitizations, whole-loan sales, and dedicated partnerships with private-credit investors.
Redwood completed more than 20 securitizations across Aspire, Sequoia, and CoreVest during the first half of 2026. In one week late in the second quarter, it priced a separate transaction for each platform, a first in the company’s 32-year history.
Total mortgage banking production exceeded $8 billion for the second consecutive quarter. That amount includes Sequoia prime jumbo locks and CoreVest investor-loan fundings in addition to Aspire’s Non-QM volume.
Redwood reported a consolidated GAAP net loss of $2.9 million for the quarter, reflecting continued losses and valuation changes within its legacy investment portfolio. Its three mortgage banking platforms generated a combined $40.1 million in GAAP net income, up 9% from the first quarter.
The company is working to release capital from its legacy holdings for deployment into its operating businesses, including Aspire.
Redwood still faces an aggressive climb. Moving from an estimated 5% to 6% share to approximately 10% within six to nine months would require continued production growth and seller adoption without a significant deterioration in execution.
But the story has changed since February. Aspire’s securitization program is no longer pending, and its capital-partner discussions are no longer preliminary. Redwood now has three completed Aspire securitizations, a named institutional partner, and an $8 billion vehicle supporting its effort to become one of the country’s largest Non-QM aggregators.
For competing buyers, that means a better-capitalized rival pursuing their loans. For lenders and LOs, it could mean another deep source of liquidity as Non-QM moves closer to the center of the mortgage product shelf.
