The American Home Opportunities Mortgage Fund (“AHOMe”)
The American Home Opportunities Mortgage Fund (“AHOMe”) is a Fund designed for the needs of institutional investors seeking attractive yields from a portfolio of residential mortgage loans made to a deserving, yet underbanked community of borrowers.
The Fund will buy and hold Individual Taxpayer Identification Number “ITIN” residential mortgages made to individual mortgage borrowers.
The AHOMe Fund’s investment objectives are:
- To provide current income from a pool of residential mortgage loans
- To maintain a well-diversified portfolio of loans to qualified borrowers
- Provide for low income and/or minority credit where available
- To allow investors to benefit from owning a pool of residential ITIN loans in an attractive vehicle that offers high levels of interest income, economies of scale and quarterly liquidity
The ITIN Mortgage Fund
The ITIN Mortgage Fund seeks to provide a high level of income by purchasing and holding a pool of residential ITIN loans. The Fund seeks to invest at least 90% of its assets in ITIN loans and may also hold cash or other agency or non-agency first lien mortgage loans or mortgage bonds.
Investors are seeking yield in an ultra-low interest rate environment. ITIN residential first-lien mortgage loans are high yielding, with credit performance that generally exceeds conventional mortgage loans with similar income and credit score characteristics. ITIN loans are not as easy to find and originate as conventional mortgages, AHOMe has cultivated significant origination capacity in these loans.
The AHOMe fund structure helps investors access ITIN loans efficiently, provides for better credit and geographic diversification and has economies of scale.
The Fund can help investors meet low-income, underbanked, minority borrower goals and meets several criteria of an ESG investment.
Investment Considerations
Shares in the Fund are not deposits with, obligations of, or endorsed or guaranteed by any other bank or thrift, nor are they insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, the Small Business Administration, or any other govern-ment entity, agency or instrumentality.
There can be no guarantee that any strategy (risk management or otherwise) will be successful. All investing involves risk, including loss of principal. Liquidity Risk. ITIN Mortgage Loans are not readily marketable. Illiquid ITIN Mortgage Loans may impair the Fund’s ability to realize the full value of its assets in the event of a voluntary or involuntary liquidation of such assets and thus may cause a decline in the Fund’s NAV. Shareholders will not have the right to redeem their shares. However, in order to provide some liquidity to shareholders, the Fund will conduct periodic repurchase offers for a portion of its outstanding shares. Liquidity Risk. Even though the Fund will make periodic repurchase offers to repurchase a portion of the shares to provide some liquidity to shareholders, you should consider the shares to be an illiquid investment. An investment in the Fund is suitable only for long-term investors who can bear the risks as-sociated with the limited liquidity of the shares. The Fund is not an appropriate investment for investors who desire the ability to reduce their investments to cash on a timely basis.
An investor should consider the Fund’s objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the Fund’s PPM. For more information, please call 484-588-2887. Please read the PPM carefully before investing.
About ESG Investing
Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria consider how a company performs as a steward of nature. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
Portfolio Characteristics as of October 31, 2021
| Average Loan Characteristics |
| Average Loan Amount $165,711 |
| Average LTV 74.964 |
| Average Term 25 |
| Average Rate 7.427 |
| Average Units per Month 7.8 |
| Average FICO (excluding 0 FICO) 713 |
| Average FICO (counting 0 FICO as 620) 697 |
Portfolio Characteristics
CRA Regulations favor mortgage lending to borrowers with low- to moderate incomes (LMI), as well as LMI census tracts.
- Low Income is less than 50% of median family income
- Moderate income is between 50% and 80% of median family income
- Middle income is between 80% and 120% of median family income
- Upper income is greater than 120% of median family income
| Example Borrower Statistics | ||
| Census Tract Income Level | Borrower Income ($) | Borrower Income Level |
| Low 3% | Average 76,514 | Low 4% |
| Moderate 27% | Median 64,410 | Moderate 33% |
| Middle 52% | Minimum 34,340 | Middle 40% |
| Upper 18% | Maximum 273,838 | Upper 23% |
