The home improvement loan market is expanding, fueled by elevated mortgage rates dissuading moves and prompting homeowners to renovate instead. U.S. homeowners have $11.6 trillion in tappable equity with a 20% average equity cushion, making it an attractive environment for second-lien loans. Rithm's acquisition of Upgrade will enhance its ability to manage a quality pool of loans and diversify its offerings beyond traditional mortgage services. Upgrade has originated over $2 billion in loans since 2017, and Rithm reported substantial net income growth despite market volatility.
Home improvement loans are a rapidly growing segment of the consumer market, and one where our established capabilities can be particularly valuable. U.S. homeowners now hold $11.6 trillion in tappable equity while maintaining an average 20% equity cushion, creating an attractive backdrop for second-lien products.
The Upgrade deal will allow Rithm to underwrite and manage a high-quality pool of loans, bolstering its asset-based finance platform and diversifying beyond traditional mortgage and servicing operations.
Rithm has remained profitable amid broader mortgage market volatility. It reported $318 million in net income in the second quarter of 2025, up significantly from $80.7 million in the previous quarter.
Founded in 2017, Upgrade has originated more than 100,000 home improvement loans totaling $2 billion, providing a digital lending platform and operating a nationwide merchant partner network.
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