Redwood Trust (RWT) 2026: DSCR Loans, Dividend and Debt Filings

What Redwood Trust is, by segment

Redwood is a Maryland corporation based in Mill Valley, California that must distribute at least 90% of the taxable income it earns at its REIT, according to its 10-K. In 2026 it reports five operating segments, and only one of them lends to people who buy rental property.

The point most search results miss: the three platforms earn $40.1 million between them (Q2 2026) and the segments that do not originate loans give most of it back. Redwood says the Legacy segment is down to under 10% of total capital after Q3 activity to date, from 15% at March 31, 2026. For a borrower, the practical reading is that CoreVest is a $128 million allocation of capital inside a larger company (June 30, 2026, against $200 million for Aspire), so its funding depends on Redwood's ability to sell loans, not on a pool of deposits.

Two doors for a DSCR loan

Redwood's 10-K defines the product: its “smaller balance term loans are referred to as DSCR loans,” underwritten “primarily on the basis of the property's debt service coverage ratio, rather than the borrower's personal income.” That description sits in the CoreVest section. Aspire's DSCR loans arrive a different way. Aspire launched in the first quarter of 2025, years after the October 2019 CoreVest acquisition, so Aspire is not part of CoreVest's lineage, whatever the shared parent.

Two caveats on that table. The Aspire acquisition figure ($1,298.0 million, 2,417 loans in Q2) counts loans bought, which is lower than locks (loans identified for purchase, before fallout). And “DSCR loan” on the Aspire side is Redwood's grouping: it tells you nothing about what a seller charged you. For rates by loan size, see our bank statement loans page, which uses the same Aspire volumes, and the CoreVest Finance review for its federal HMDA data and the 90-day delinquency table.

DSCR loans are sold, not kept

The DSCR line on Redwood's balance sheet is tiny against what flows through. In its note on residential investor loans, Redwood lists $44.4 million of unsecuritized DSCR loans and $0.3 million of securitized ones at June 30, 2026, $56.7 million and none at December 31, 2025. That is $44.7 million in all (our arithmetic), against $150 million funded in 2025 alone. The bucket that holds them, unsecuritized term loans of $84.7 million with an average loan of $0.81 million, carried a weighted average coupon of 7.02% and 19 years of remaining term at June 30, 2026, against 5.27% on the older securitized term loans. Treat 7.02% as a clue to what recent small term loans carry, not as a DSCR rate: the bucket also holds $6.2 million of single-family rental loans and $34.1 million of multifamily loans.

Two details matter if you are a borrower or a bondholder. First, CoreVest's joint-venture transfers were $253.1 million in Q2 and $387.0 million in Q1; across the company, Redwood says purchasing power under its joint ventures is now about $18 billion. Second, in Aspire's securitizations Redwood says: “We did not retain the subordinate and residual interests in these transactions, which were retained by our securitization co-sponsor.” Redwood kept IO securities worth $10 million. Whoever holds those subordinate bonds takes the first losses on your loan pool, and it is not Redwood's balance sheet.

How the loans are financed before they are sold

A DSCR loan has to be funded between the closing and the sale. Redwood says its CoreVest inventory sits on warehouse lines that are “non-marginable”, so a lender cannot call margin on a performing loan just because its price moved. The figures at June 30, 2026:

Redwood says loans stay on its balance sheet for an average of 26 days (June 2026). It also warns that it has “no assurance of our ability to renew our other facilities maturing in the next year,” which it expects to extend in the normal course. For a borrower the risk is not default of your lender; it is a delay or a re-price if the secondary market for your loan type closes. Redwood's Q2 release blames “higher rate environment impacting the term loan pipeline” for CoreVest's 5% quarterly drop.

Shareholders: dividend, book value and what the numbers cover

The dividend is the number most readers search for. Redwood declared $0.18 per common share for Q3 2026 (payable September 30, 2026), its 109th consecutive quarterly common dividend, and a $0.625 per share Series A preferred dividend payable October 15, 2026. In 2025 it paid about $93 million in cash, $0.72 a share, and its 10-K warns that “Dividend distributions on our stock may not be declared or paid or dividends on our common stock may decrease over time.”

Redwood reports two profit measures. GAAP income was negative in two of the last three quarters. Earnings available for distribution (EAD), which Redwood defines to exclude some valuation changes, was $0.15 in Q2, 83% of the dividend (our arithmetic), after $0.21 and $0.20 in the two quarters before. Over the three quarters EAD adds to $0.56 and dividends to $0.54 (our arithmetic). Book value fell from $7.36 to $6.90 over two quarters, or 6.3% (our arithmetic), and the 10-Q cover shows 125,612,432 common shares outstanding on August 5, 2026. The Legacy segment, still losing $23.3 million in Q2, is the largest single drag in the segment table above.

Debt: the 7.00% notes of September 2026

On September 15, 2026 Redwood issued $205 million of 7.00% Convertible Senior Notes due 2030, including $20 million from the full exercise of the initial purchasers' option. The 8-K sets the initial conversion price at about $4.90 per share, a premium of about 35.00% over the September 10, 2026 closing price. Redwood said it would use about $129.29 million of proceeds to repurchase about $123.79 million of its 7.75% convertible notes due 2027, and $20.00 million to buy back 5,509,641 shares, which works out to about $3.63 a share (our arithmetic) against a book value of $6.90 at June 30, 2026.

On October 13, 2026 Redwood filed an 8-K saying it would report Q3 results on Tuesday, November 3, 2026, and quoting its CEO: “distributing more than $8 billion of mortgage loans through securitizations and whole loan sales during the third quarter,” ending September with about $190 million of cash. The same release says Q3 saw the “sharpest quarterly selloff in the 10-year Treasury yield in 32 years” and that Redwood intends to keep repurchasing debt opportunistically. There are no Q3 CoreVest or Aspire numbers yet.

Credit and risk, in one place

The full delinquency table is on our CoreVest Finance review: at June 30, 2026, $366.4 million of Redwood's $3,260.9 million of residential investor loans were 90 or more days delinquent, 11.2% (our arithmetic), split between securitized term loans ($180.5 million) and bridge loans ($146.4 million, our arithmetic), with no breakout for DSCR. Two sentences from Redwood's 10-K explain the lens: “A significant share of our residential-investor exposure is short-term bridge lending on non-income-producing renovation/construction properties,” and “Since 2023, delinquencies in this portfolio have risen.” It also modified loans with about $129 million of unpaid principal in 2025. Redwood does not publish a delinquency rate for the DSCR loans CoreVest writes today, and none for Aspire's loans, so neither door has a track record in the filing. For the other public DSCR lender, see our Velocity Financial review; for the product itself, what is a DSCR loan.

What a borrower or a shareholder can do with this

• If you want a DSCR loan, ask who funds and who services it. A lender may sell to Redwood's Aspire (the filings do not name its 150-plus sellers) or hold or sell elsewhere. The term sheet, not Redwood's 10-Q, tells you the prepayment penalty, the rate and the servicer.
• Do not read Redwood's size as a guarantee. CoreVest funds $410 million a quarter and sells almost everything. If bond or JV buyers pause, closings and pricing can move; Redwood's own disclosure says its warehouse lines are renewed yearly.
• Compare at least one other lender on the same file. Our best DSCR lender page compares public terms, and the DSCR vs Velocity vs Kiavi comparison looks at three more.
• If you hold RWT, check three things on November 3, 2026: whether EAD covers the $0.18 dividend again, where book value lands against $6.90, and how many of the 2027 convertible notes were actually retired.
• If you are weighing a sale or a trade, the decision turns on your own tax and portfolio facts, which this page does not have.

Redwood Trust (CIK 930236) files 10-Qs, 10-Ks and 8-Ks on EDGAR, and its most recent was the 8-K of October 13, 2026. The alert below emails you when it files a new one.

FAQ

Sources, read and saved on October 14, 2026: Redwood Trust, Inc. (CIK 930236) Form 10-K for 2025 (accession 0000930236-26-000007); Forms 10-Q for March 31 and June 30, 2026 (0000930236-26-000020, 0000930236-26-000027); earnings releases and shareholder materials for Q4 2025, Q1 and Q2 2026 (8-K exhibits 0000930236-26-000003, -000016 and -000024); Forms 8-K of July 7, September 10, September 15 and October 13, 2026 (0001104659-26-081027, -106539, -107919 and -115585). Figures marked “our arithmetic” are our calculations from the cited rows. This is analysis of public documents, not investment, legal or tax advice.