Significant Accounting Policies (Policies) |
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Consolidation, Policy [Policy Text Block] | Basis of Presentation and Consolidation
The accompanying financial statements have been prepared in accordance with principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company. In the opinion of management, all normal and recurring adjustments necessary to present fairly the financial condition of the Company at June 30, 2026 and results of operations for all periods presented have been made.
The consolidated statement of operations and consolidated statement of cash flows are not comparative due to minimal activity prior to the initial closing for Class E and Class FA shares on January 29, 2026. There was no activity for the quarter and six months ended June 30, 2025 in the consolidated statement of operations. The only activity for the six months ended June 30, 2025 in the consolidated statement of cash flows was the financing cash inflow relating to the initial capitalization of the Company of $100,000 by the Advisor and $100,000 by an affiliate of the Sub-Advisor.
The consolidated financial statements of the Company include the direct wholly owned subsidiaries that were formed to facilitate the Company’s investment strategy. All intercompany accounts and transactions have been eliminated. In addition, the Company consolidates entities established to facilitate transactions related to the acquisition and securitization of residential whole loans.
The Company consolidates all entities in which it has a controlling financial interest through majority ownership or voting rights and variable interest entities for which it is the primary beneficiary. In determining whether the Company has a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, it considers whether the entity is a variable interest entity (“VIE”) and whether the Company is the primary beneficiary. The Company is the primary beneficiary of a VIE when it has (i) the power to direct the most significant activities impacting the economic performance of the VIE and (ii) the obligation to absorb losses or receive benefits significant to the VIE. Entities that do not qualify as VIEs are generally considered voting interest entities (“VOEs”) and are evaluated for consolidation under the voting interest model. VOEs are consolidated when the Company controls the entity through a majority voting interest or other means.
As of June 30, 2026, the Company has consolidated one VIE of which the Company is the primary beneficiary, see Note 8, Variable Interest Entity.
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| Use of Estimates, Policy [Policy Text Block] | Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, the reported amounts of revenues and expenses during the reporting periods and the disclosure of contingent liabilities.
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| Cash and Cash Equivalents, Policy [Policy Text Block] | Cash
Cash consists of cash on deposit with financial institutions. The Company deposits its cash with highly-rated banking corporations and, at times, cash deposits may exceed the insured limits under applicable law.
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| Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements
The Company reports various investments at fair value in accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurement. A fair value measurement represents the price at which an orderly transaction would occur between willing market participants at the measurement date. This definition of fair value focuses on exit price and prioritizes the use of market‑based inputs over entity‑specific inputs when determining fair value. In addition, the framework for measuring fair value establishes a three‑level hierarchy for fair value measurements based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. See Note 6, Fair Value Measurements, for further discussion on fair value measurements.
The Company accounts for any purchases or sales of investments on a trade date basis. At the time of disposition, realized gains or losses on sales of investments are determined based on a specific identification basis and will be recorded as a component of “Realized gain on residential mortgage loans” in the consolidated statements of operations.
Residential Mortgage Loans and Mortgage Servicing Rights Investments at Fair Value
The Company’s investments in residential mortgage loans and mortgage servicing rights investments are recorded using the fair value option in ASC Topic 825 - Financial Instruments and therefore recorded at fair value in the consolidated balance sheets. Changes in fair value are reported in “Unrealized gain on residential mortgage loans, mortgage servicing rights investments and derivatives” in the consolidated statements of operations. See Note 7, Related Party Arrangements, for additional information on the mortgage servicing rights investments.
The residential mortgage loans are actively managed and monitored and, as appropriate, certain interest rate risks of the loans may be mitigated through the use of derivatives and mortgage servicing rights investments. The Company has elected not to designate the derivatives as qualifying accounting hedges, and therefore, they are carried at fair value. The changes in fair value of the loans are largely offset by changes in the fair value of the derivatives and mortgage servicing rights investments. The fair value option allows the Company to reduce the accounting volatility that would otherwise result from the asymmetry created by accounting for the financial instruments at the lower of cost or fair value and the derivatives at fair value.
Derivative Financial Instruments, at Fair Value
The Company uses interest rate futures derivative instruments to economically hedge a portion of its exposure to market risks, including interest rate risk. Derivatives are accounted for in accordance with ASC 815, Derivatives and Hedging, which requires recognition of all derivatives as either assets or liabilities at fair value on the consolidated balance sheets. These derivative financial instrument contracts are not designated as hedges for GAAP purposes; therefore, all changes in fair value are reported in “Unrealized loss on residential mortgage loans, mortgage servicing rights investments and derivatives” in the consolidated statements of operations. See Note 5, Derivative Financial Instruments, for further information.
Unrealized Gain (Loss)
The following table summarizes components of unrealized gain on residential mortgage loans, mortgage servicing rights investments and derivatives for the six months ended June 30, 2026:
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| Revenue [Policy Text Block] | Revenue Recognition
Income from Residential Mortgage Loans
Interest income on residential mortgage loans is recognized using the effective interest method over the life of the loans. Interest income recognition is suspended when residential mortgage loans are placed on non-accrual status. Generally, residential mortgage loans and commercial mortgage loans are placed on non-accrual status when delinquent for more than ninety (90) days or when determined not to be probable of full collection. Interest accrued, but not collected, at the date residential mortgage loans are placed on non-accrual status is reversed against interest income and subsequently recognized only to the extent it is received in cash or until it qualifies for return to accrual status. Interest received after the loan becomes past due or impaired is applied to outstanding interest receivable, if applicable, and subsequently recognized as interest income as received.
Income from Mortgage Servicing Rights Investments
Income from mortgage servicing rights investments is recognized monthly based on the available cash in the special-purpose entities, which is based on cash receipts for certain MSR participation interests. Distributions that represent returns of capital in excess of profits and losses are credited to the investment cost rather than income. See Note 7, Related Party Arrangements, for further information.
Interest income on Cash
Interest income on money market and Insured Cash Sweep accounts is recognized on an accrual basis to the extent that the Company earns interest on cash deposited.
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| Accounts Receivable [Policy Text Block] | Accounts Receivable
The following table summarizes components of accounts receivable at June 30, 2026 and December 31, 2025:
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| Organization and Offering Expenses [Policy Text Block] | Organization and Offering Expenses
The Advisor and Sub-Advisor have agreed to advance organization and offering expenses associated with one or more of the Company’s offerings, including its Private Offering (including legal, accounting, and other expenses attributable to the organization, but excluding upfront selling commissions, dealer manager fees and shareholder servicing fees). Organization and offering expenses are recorded to the accompanying balance sheets only to the extent the Company receives gross proceeds and they do not exceed 1.5% of the cumulative gross proceeds from its offerings unless otherwise waived by the Advisor.
When recorded by the Company, organizational expenses are expensed as incurred, and offering expenses are charged to shareholders’ equity as incurred. Recognized amounts due to the Advisor but not paid are recognized as a liability on the balance sheet.
See Note 7, Related Party Arrangements for further information.
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| Repurchase and Resale Agreements Policy [Policy Text Block] | Repurchase Agreements
At times, the Company finances purchases of residential mortgage loans through the use of a repurchase agreement. The repurchase agreements are treated as collateralized financing transactions, which expire within approximately two years or less and are carried at their contractual amounts. Interest paid and accrued in accordance with repurchase agreements is recorded as interest expense.
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| Deferred Charges, Policy [Policy Text Block] | Deferred Financing Costs
Financing costs, including upfront fees, commitment fees and legal fees related to borrowings (as further described in Note 4, Financing Arrangements) are deferred and amortized over the life of the related financing arrangement using the effective yield method. The amortization of deferred financing costs is included in interest expense in the Company’s consolidated statements of operations.
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| Earnings Per Share, Policy [Policy Text Block] | Earnings Per Share
Earnings per common share is determined by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.
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| Stockholders' Equity, Policy [Policy Text Block] | Distributions
The Company’s board of directors has declared and intends to continue to declare distributions based on monthly record dates. The Company’s distributions are paid in the same month as the declared record date. Distributions are made on all classes of the Company’s shares at the same time.
The Company has adopted a distribution reinvestment plan that provides for reinvestment of distributions on behalf of stockholders at the stockholders’ election for all share classes except for Class E.
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| Income Tax, Policy [Policy Text Block] | Income Taxes
Prior to January 1, 2026, the Company was subject to U.S. federal and state income taxes as a taxable corporation. The Company intends to elect to be taxed as a REIT under the Internal Revenue Code commencing with its taxable year ending December 31, 2026 and generally will not be subject to U.S. federal corporate income taxes on its taxable income to the extent it annually distributes its net taxable income to its stockholders and maintains its qualification as a REIT.
In connection with that election, RCRED TRS Holding, Inc. ("TRS"), a wholly owned corporate subsidiary organized in 2025, elected taxable REIT subsidiary status effective January 1, 2026. TRS is subject to U.S. federal, state and local income taxes. Accordingly, beginning in 2026, the Company’s income tax provision will primarily relate to taxes incurred by TRS and certain state and local taxes.
The Company has not yet filed its initial tax return.
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| Concentration Risk, Credit Risk, Policy [Policy Text Block] | Risks and Uncertainties
The Company’s investment activities expose it to various types of risks that are associated with the financial instruments in which it invests. The significant types of financial risks to which the Company is exposed include, but are not limited to, credit risk, interest rate risk, liquidity risk and prepayment risk. Certain aspects of those risks are addressed below.
Credit Risk
Investment portfolios with debt instruments are subject to credit risk. Financial strength and solvency of a debtor influence credit risk. In addition, lack or inadequacy of collateral or credit enhancement for a debt instrument may affect its credit risk. Credit risk may change over the life of an instrument.
Interest Rate Risk
The Company is subject to interest rate risk, and typically the value of interest bearing securities (e.g., residential mortgage loans) will change inversely with changes in interest rates. As interest rates rise, the market value of fixed income securities tends to decrease and vice versa.
Subject to maintaining its qualification as a REIT and maintaining its exclusion from regulation as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”), the Company may utilize various derivative instruments and other hedging instruments to mitigate interest rate risk.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities or contingent liabilities. Among other things, liquidity could be impaired by an inability to access secured and unsecured sources of financing or to sell assets.
The Company has a financing facility that is structured as a repurchase agreement with a financial institution to finance the residential whole loans which are pledged as collateral. Amounts available to be borrowed under the repurchase agreement are dependent upon the fair value of the securities pledged as collateral, which fluctuates with changes in interest rates, type of security and liquidity conditions within the bank, mortgage finance and real estate industries. If the fair value of the pledged securities declines, lenders will typically require the Partnership to post additional collateral or pay down borrowings to re-establish agreed upon collateral requirements (“margin calls”).
If the fair value of the pledged securities increases, lenders may release collateral back to the Company. The repurchase agreement includes various financial and liquidity covenants for which the failure to comply would constitute an event of default. As of June 30, 2026, the Company was in compliance with all covenants.
Prepayment Risk
The frequency at which prepayments occur on residential mortgage loans will be affected by a variety of factors including the prevailing level of interest rates as well as economic, demographic, tax, social, legal, and other factors. Generally, mortgage obligors tend to prepay their mortgages when prevailing mortgage rates fall below the interest rates on their mortgage loans. The adverse effects of prepayments may impact the Company in two ways. First, particular investments may experience outright losses, as in the case of an interest‑only security in an environment of faster actual or anticipated prepayments. Second, particular investments may underperform relative to the financial instruments that the Company may have constructed to reduce specific financial risks for these investments, resulting in a loss to the Company.
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| Segment Reporting, Policy [Policy Text Block] | Segment Reporting
An operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. The Company’s CODM is its Chief Financial Officer. The Company has determined it currently operates in a single operating segment and has one reportable segment, which is to acquire, invest in, and finance mortgage-related assets. The CODM reviews net income on the Company's portfolio of residential mortgage loans, residential mortgage loans in securitization trusts, RMBS, and other assets as presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Net income as used by the CODM in this context is consistent with that presented within the Company’s consolidated financial statements. Segment assets are reflected on the accompanying Balance Sheet as “total assets” and significant segment expenses are consistent with the accompanying statement of operations.
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| New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Standards Updates
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (or “ASU 2024-03”). The amendments in ASU 2024-03 primarily require entities to disclose additional details regarding certain expenses on both an annual and interim basis. ASU 2024-03 is effective for public business entities for fiscal years beginning after December 15, 2026. Early adoption is permitted. The Company has not completed an analysis of the impact of ASU 2024-03 but does not expect that the adoption of ASU 2024-03 will have a significant impact on its consolidated financial statement disclosures.
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