Lone Star Raises $1B for Latest Non-Agency Mortgage Fund

Lone Star Funds has closed Lone Star Residential Mortgage Fund IV (LSRMF IV) with more than $1 billion in commitments, giving the strategy capacity to invest in over $10 billion of mortgage loans.  

The vehicle will focus on newly originated, performing U.S. non-agency mortgages, targeting borrowers such as self-employed individuals and small business owners who often lack access to traditional agency or government-backed loans despite “strong credit profiles,” the firm said. Since its initial close in March 2025, LSRMF IV has already committed roughly 33% of its capital. 

“We are pleased to reach this milestone for LSRMF IV and believe it directly reflects the clear need for private capital to fund mortgages to borrowers in this segment of the market,” said Donald Quintin, Chief Executive Officer of Lone Star. “We believe the tailwinds for this market will continue to drive growth opportunity for the platform.” 

Launched in 2014, Lone Star’s standalone Residential Mortgage Fund series has acquired more than $20 billion in unpaid principal balance across 40,000-plus newly originated mortgages nationwide. The firm finances these assets through its COLT securitization platform, which has achieved several post-crisis firsts, including the first securitization of newly originated non-agency loans and the first such deal to earn a AAA rating.  

To date, Lone Star has issued 68 COLT securitizations with participation from more than 200 bond investors. In 2026, the platform has already priced COLT 2026-1, a $385 million non-QM deal, and COLT 2026-2, a $328 million transaction, bringing cumulative COLT issuance since 2015 to $21 billion.