Risk Management

Investment risk can never be totally eliminated. Risk is the reason some investments yield higher returns than others. There are however prudent steps that a manager can take to help mitigate some risks. As with all investments, there are inherent risks in USAHF’s strategy including non-payment by borrowers or depreciation of collateral (the homes that secure the investment).

Following is a table which outlines some of the risk management strategies which USAHF employs. These strategies are subject to change without notice and should not be construed as a contractual obligation. These are instead provided as a guide for experienced and accredited investors who understand the nature of investment risk.

 

RiskManagement Strategy
CurrencyAll transactions are conducted in US dollars. There is no exposure to other currencies.
Early RepaymentWe align, to the extent possible, investment in-flow with availability of home finance contracts. In other words, we only take in investor money as home finance contracts are available to support that investment
LegalAll home finance contracts are written with applicable US law. There is thus legal recourse in the United States.
Loan DefaultWe employ a variety of underwriting criteria to help minimize loan default. We believe one of the most effective is the requirement for a 30% minimum down payment (20% for contracts before Jan 1, 2018) on all home finance contracts USAHF purchases. As a result, the average LTV (Loan-to-Value) ratio of the entire USAHF portfolio is approximately 0.6. This means that on average all contracts in the portfolio are about 40% paid-off. This of course provides a very strong incentive for the borrower NOT to default.