v3.25.2
Related Party Transactions
 6 Months Ended
Jun. 30, 2025
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
Residential Mortgage Loan Purchases

The Company has residential mortgage loan purchase agreements with various affiliates of the Company. The purchase price of the loans is generally equal to the outstanding principal of the mortgage, adjusted by a premium or discount, depending on market conditions. The Company purchases the mortgage loans on a servicing retained basis. The residential mortgage loans are on residences located in various states with a concentration in California and Florida.

The following table sets forth certain financial information pertaining to whole loan activity purchased from affiliates during the period and year ended as of June 30, 2025 and December 31, 2024, respectively:

As of and for the Year-to-Date/Year Ended:Amount of Loans Purchased from Affiliates during the Year-to-Date/Year Ended (in thousands)Number of Loans Purchased from Affiliates during the Year-to-Date/Year Ended
Number of Loans Purchased from Affiliates, Owned and Held as of Year-to-Date/Year Ended (1):
June 30, 2025$82,757 194 31 
December 31, 2024$255,368 558 83 

(1)     Excludes loans held in consolidated securitizations.

Securitization Transactions and Majority-Owned Affiliate

From time to time, the Company participates in securitization transactions with other affiliates of Angel Oak Capital. See Note 2 — Variable Interest Entities, “VIEs for Which the Company is Not the Primary Beneficiary” and Note 13 — Other Assets.

Management Fee

The Company and the Operating Partnership have entered into an Amended and Restated Management Agreement with the Manager, dated as of May 1, 2024 (the “Management Agreement”). Per the Management Agreement, on a quarterly basis in arrears, the Company shall pay its Manager an aggregate, fixed management fee equal to 1.5% per annum of the Company’s Equity (as defined in the Management Agreement).

Incentive Fee

Under the Management Agreement, the Manager is also entitled to an incentive fee, which is calculated and payable in cash with respect to each calendar quarter (or part thereof that the Management Agreement is in effect) in arrears in an amount, not less than zero, equal to the excess of (1) the product of (a) 15% and (b) the excess of (i) the Company’s Distributable Earnings (as defined in the Management Agreement) for the previous 12-month period, over (ii) the product of (A) the Company’s Equity in the previous 12-month period, and (B)
8% per annum, over (2) the sum of any incentive fee earned by the Manager with respect to the first three calendar quarters of such previous 12-month period. To date, the incentive fee has not been earned.

Operating Expense Reimbursements

The Company is also required to pay the Manager reimbursements for certain general and administrative expenses pursuant to the Management Agreement. Accrued expenses payable to affiliate and operating expenses incurred with affiliate are substantially comprised of payroll reimbursements.