Rithm Capital Corp. has closed a deal to acquire $1 billion in home improvement loans through a one-year flow agreement with fintech company Upgrade, the companies announced on Tuesday. 

“Home improvement loans are a rapidly growing segment of the consumer market, and one where our established capabilities can be particularly valuable,” said Michael Nierenberg, Rithm’s chairman, CEO and president, in a statement. 

The deal comes as elevated mortgage rates continue to discourage homeowners from moving. Instead, many are opting to renovate properties financed during the low-rate COVID era. According to ICE Mortgage Technology’s Andy Walden, U.S. homeowners now hold $11.6 trillion in tappable equity while maintaining an average 20% equity cushion — an attractive backdrop for second-lien products. 

Rithm, which owns multichannel mortgage lender Newrez, said the Upgrade deal will allow it to underwrite and manage a “high-quality pool of loans,” bolstering its asset-based finance platform. The acquisition also fits into Rithm’s broader strategy to diversify beyond traditional mortgage and servicing operations.

In July, the asset manager announced a separate partnership with an institutional investor to potentially acquire up to $1.5 billion in residential transitional loans (RTLs).

Founded in 2017, Upgrade says it has originated more than 100,000 home improvement loans totaling $2 billion. The company provides a digital lending platform and operates a nationwide merchant partner network to distribute its loan products.

Renaud Laplanche, Upgrade co-founder and CEO, said Rithm’s capital will provide scale to meet the demand for its growing home improvement product. 

Rithm has remained profitable amid broader mortgage market volatility. In the second quarter of 2025, the company reported $318 million in net income — up significantly from $80.7 million in the previous quarter.

It has also been active on the M&A front. In 2023, it acquired $1.4 billion in consumer loans from Goldman Sachs, completed a $720 million purchase of Sculptor Capital Management and struck a deal for Computershare Mortgage Services and its subsidiary, Specialized Loan Servicing.

“On the M&A front, our pipelines are robust. We are working on scaling up our credit business, our origination business lines and other opportunistic situations, where we can create value for both shareholders and LPs (limited partners),” Nierenberg said in an earnings call. 

The company sees additional growth opportunities in direct lending, insurance, private equity and infrastructure. 

More: