Portfolio Construction
How Manifest builds a diversified HEI portfolio
Investment Philosophy
Manifest constructs its HEI portfolio with a focus on risk-adjusted returns and geographic diversification. Every HEI must meet strict underwriting criteria designed to protect investors while serving homeowner needs. The portfolio targets stable, owner-occupied properties across metropolitan areas, avoiding speculative markets and high-risk profiles.
The "Buy-Box"
Property Requirements
Manifest's property criteria ensure quality collateral:
Type: Single-family homes (no condos)
Occupancy: Owner-occupied primary residences
Location: Metropolitan Statistical Areas (MSAs) only
Flood Zones: Not permitted (except X-rated or unrated zones where flood risk is 'minimal', the lowest government classification)
Maximum Value: $4,000,000
Minimum Equity: 25% after all liens including the HEI
Borrower Qualifications
The underwriting standards balance accessibility with risk management:
Low Credit Concentration: Maximum 10% with FICO below 540; maximum 2.5% with FICO below 500
Prior Ownership: Cannot be purchase financing
Homeowner Type: Individual consumers, not commercial entities
Investment Parameters
Each HEI must meet specific structural requirements:
Investment Size: Maximum $175,000 per HEI
Equity Multiple: Minimum 2.0x
Safety Cap: Minimum 19.99% (21.93% APY)
Maximum Share: 50% of property value (via 2x multiplier)
Term: 10-30 years, matching the term of any first mortgage
Loan-to-Value Guidelines
Maximum Combined Loan-to-Value (CLTV) limits vary by property value:
Property Value
Maximum CLTV
Under $3,000,000
75%
$3,000,000 - $4,000,000
60%
Over $4,000,000
Exception only
Additional CLTV restrictions apply for:
High-rate first mortgages (Prime + 4%): Maximum 60% CLTV
Hard money loans: Maximum 60% CLTV
Third lien position: Reduced to 65% CLTV
Geographic Diversification
Manifest enforces strict concentration limits to prevent geographic risk:
Per Zip Code: Maximum 5% of portfolio
Per MSA: Maximum 10% of portfolio
Per State: Maximum 30% of portfolio
Initial operations focus on 14 states where our initial origination partner operates: CA, FL, WA, NJ, CO, OH, PA, VA, TN, AZ, OR, UT, SC, NV
Portfolio Monitoring
Continuous Oversight
The portfolio undergoes daily monitoring for:
Performance Metrics: Settlement rates, returns, defaults
Geographic Balance: Ensuring diversification limits
Risk Indicators: Credit quality, CLTV drift, market conditions
Opportunity Analysis: Identifying optimal deployment regions
Dynamic Adjustments
The buy-box parameters can be adjusted based on:
Market conditions and home price trends
Origination partner performance
Risk-adjusted return analysis
Regulatory changes
Quality Control
Origination Partner Management
While Manifest currently works with a single origination partner, the framework supports multiple partners:
Strict adherence to buy-box parameters
Right to reject non-conforming HEIs
Regular audits of underwriting quality
Performance-based partnership terms
Risk Mitigation Strategies
Structural Protections
The portfolio design incorporates multiple risk buffers:
2x Multiplier: Provides cushion against home price declines
Diversification: Strict concentration risk parameters
Senior Position: Secured ahead of homeowner equity
Quality Standards: Filters out high-risk properties
Understanding these protections helps explain HEI mechanics and why the portfolio generates consistent returns.
Market Risk Management
Geographic and temporal diversification strategies:
Avoiding concentration in volatile markets
Staggered acquisition timing
Mix of property values and homeowner profiles
Balance across economic regions
These strategies ensure robust performance across market scenarios.
Expected Portfolio Composition
Based on current origination patterns, a typical asset in the Manifest portfolio would have the following characteristics:
Metric
Average Value
Investment Size
$135,000
Home Value
$835,000
Investment as % of Value
16%
Owner FICO Score
660-670
HEI + Loan to Value Ratio
62%
This composition reflects the balance between homeowner needs and investor protection.
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