How Often Do DSCR and Fix-and-Flip Loans Actually Default?

Question

I’ve financed investment properties for more than 20 years, but I realized how difficult it is to find a straight answer to a basic question:

How often do DSCR and fix-and-flip loans actually default?

I dug into the available data and found:

• Just under 2% of securitized DSCR loans were seriously delinquent.

• There is no reliable nationwide default rate covering only fix-and-flip loans.

• Actual realized losses were below 0.30% for most transition-loan vintages studied.

The biggest takeaway: delinquency, default, foreclosure, and actual lender loss are not the same thing.

I published the complete research and sources here:

https://elevrion.com/research/dscr-fix-and-flip-default-rates/

Do these numbers match what you’re seeing in the market?

Tim Maloney · Answer

Hey Travis,  No.  I will dive deeper SFR/TMO Analytics next.  I citedf these sources:

• 1. Urban Institute, April 2026: The Evolution of Residential Transition Lending. Market size, securitization volume, data limitations, and cumulative RTL losses.2. Business Insider, December 3, 2025, reporting Cotality data: Inside the DSCR Real Estate Loan Boom. Securitized DSCR serious-delinquency trend, peak, and risk factors.3. Cotality, February 26, 2026: U.S. Mortgage Delinquency Rate Finishes 2025 Flat. Broader first-lien mortgage benchmark and definitions.4. Morningstar DBRS, May 19, 2026: U.S. RMBS RTL Data Brief: April 2026. Direction of newer RTL delinquencies and projected performance.5. ATTOM, June 18, 2026: Q1 2026 U.S. Home Flipping Report. Home-flip activity, gross profit, and gross return before expenses.

Travis Main · Answer

Interesting research. Have you looked at the SFR Analytics/TMO Analytics data as another source for this?

They’re now tracking performance across hundreds of thousands of active RTL and DSCR loans, including 30, 60 and 90-day delinquencies. I’m on the lending side and that was the first dataset that came to mind when I read your point about there not being a reliable nationwide fix-and-flip default rate.

I agree with your bigger point though. Delinquency, default, foreclosure and an actual lender loss are four very different things. I’d be curious whether the TMO data can take it a step further and isolate RTL/fix-and-flip loans that ultimately resulted in a realized loss, rather than just showing delinquency.

How Often Do DSCR and Fix-and-Flip Loans Actually Default?

2 Replies