Velocity Financial, Inc. reported its financial results for the second quarter of 2026, revealing a net income of $25.2 million, a slight decrease from $26.2 million in the same period last year. For the six months ending June 30, 2026, net income reached $47.5 million, compared to $44.9 million in the prior year. The company’s total interest income increased by 18.8% to $161.0 million for the quarter, driven by higher average loan portfolio balances, while interest expense rose to $112.1 million, resulting in a net interest income of $48.9 million.
The company’s total loans held for investment increased to $7.0 billion as of June 30, 2026, up from $6.5 billion at the end of 2025. This growth was supported by a significant rise in loans held for investment at fair value, which reached $5.5 billion, compared to $4.7 billion at the end of the previous fiscal year. The weighted average loan-to-value ratio for the portfolio was reported at 64.6%, indicating a conservative lending approach. Nonperforming loans represented 9.6% of the total portfolio, a decrease from 10.1% in the previous quarter, attributed to the securitization of nonperforming loans.
In terms of strategic developments, Velocity Financial completed a securitization of nonperforming loans in June 2026, which allowed for a reduction in nonperforming loans on its balance sheet. The company also issued $500 million in unsecured senior notes in January 2026, which were used to pay off a previous secured debt. This move reflects a shift towards unsecured financing, which may provide more flexibility in capital management.
Operationally, the company reported an increase in total operating expenses to $59.8 million for the quarter, up from $51.9 million a year earlier. This rise was primarily due to higher compensation and employee benefits, as well as increased loan servicing costs. The company’s employee headcount has also grown to support its expanding operations. As of June 30, 2026, Velocity Financial had approximately 39.5 million shares of common stock outstanding.
Looking ahead, Velocity Financial remains focused on maintaining its position in the investor real estate loan market, which is characterized by high demand and limited supply. The company plans to continue leveraging its extensive network of mortgage brokers and direct borrower relationships to drive growth. However, it acknowledges potential risks from macroeconomic conditions, including interest rate fluctuations and geopolitical uncertainties, which could impact its operational performance and financial results in the future.
About Velocity Financial, Inc.
Velocity Financial, Inc. is a vertically integrated real estate finance company specializing in originating, securitizing, and managing loans secured by residential and commercial properties. Its core focus is on investor loans for 1-4 unit rental homes and small commercial properties, serving a fragmented market with a network of mortgage brokers. The company leverages proprietary data, technology, and long-term securitizations to generate attractive risk-adjusted returns.
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