v3.26.1
Secured Financing Agreements
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Secured Financing Agreements Secured Financing Agreements
To finance its loans held-for-investment, loans held-for-sale and REO, the Company has a variety of secured financing arrangements with several counterparties, including repurchase facilities, a secured credit facility and a mortgage loan payable.
The Company’s repurchase facilities are typically collateralized by loans held-for-investment, loans held-for-sale, REO assets and certain cash balances. Although the transactions under the Company’s existing repurchase facilities represent committed borrowings until maturity of each facility, the facility lenders retain the right to mark the underlying collateral to fair value. A reduction in the value of pledged assets due to collateral-specific credit events, or, with respect to a limited number of the Company’s repurchase facilities, capital market events, would require the Company to fund margin calls. The Company does not typically retain similar rights for the Company to make margin calls on its underlying borrowers as a result of a determination by the Company and/or its financing counterparty that there has been a decrease in the market value of the underlying pledged collateral.
The Company’s secured credit facility is typically collateralized by loans held-for-investment, loans held-for-sale, REO assets and certain cash balances and is non-mark-to-market.
The Company’s mortgage loan payable is typically collateralized by REO assets and certain cash balances and is non-mark-to-market.
The following tables summarize details of the Company’s borrowings outstanding on its secured financing arrangements as of March 31, 2026, and December 31, 2025:
March 31, 2026
(dollars in thousands)
Maturity Date(1)
Amount Outstanding
Unused Capacity(2)
Total CapacityCarrying Value of CollateralWeighted Average Borrowing Rate
Repurchase facilities:
Morgan Stanley Bank(3)
June 28, 2026$52,325 $197,675 $250,000 $117,125 6.4%
JPMorgan Chase Bank
July 28, 2026222,679 202,321 425,000 346,383 6.3%
Citibank(4)
April 27, 202672,487 177,513 250,000 103,121 5.4%
Total$347,491 $577,509 $925,000 $566,629 
Secured credit facility December 21, 2026$71,774 $28,226 $100,000 $99,819 9.4%
Mortgage loan payable(5)
October 3, 2030$18,000 $— $18,000 $36,278 6.7%
December 31, 2025
(dollars in thousands)
Maturity Date(1)
Amount Outstanding
Unused Capacity(2)
Total CapacityCarrying Value of CollateralWeighted Average Borrowing Rate
Repurchase facilities:
Morgan Stanley Bank(3)
June 28, 2026$52,444 $197,556 $250,000 $119,715 6.5%
JPMorgan Chase BankJuly 28, 2026314,242 147,574 461,816 446,849 7.2%
Citibank(4)
April 27, 202672,487 177,513 250,000 102,471 5.4%
Total$439,173 $522,643 $961,816 $669,035 
Secured credit facility December 21, 2026$71,774 $28,226 $100,000 $98,772 9.5 %
Mortgage loan payable(5)
October 3, 2030$18,000 $— $18,000 $35,060 6.8 %
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(1)The facilities are set to mature on the stated maturity date, unless extended pursuant to their terms.
(2)Unused capacity is not committed as of March 31, 2026, and December 31, 2025.
(3)Collateral value includes real estate owned with a carrying value of $61.9 million as of March 31, 2026, and $62.9 million as of December 31, 2025.
(4)Subsequent to March 31, 2026, the Company exercised an option to extend the maturity date to April 26, 2027.
(5)Mortgage loan payable balance net of unamortized debt issuance costs is $17.6 million as of March 31, 2026, and $17.5 million as of December 31, 2025.
The following table summarizes certain characteristics of the Company’s repurchase facilities and counterparty concentration at March 31, 2026, and December 31, 2025:
March 31, 2026December 31, 2025
(dollars in thousands)Amount Outstanding
Net Counterparty Exposure(1)
Percent of EquityWeighted Average Years to MaturityAmount Outstanding
Net Counterparty Exposure(1)
Percent of EquityWeighted Average Years to Maturity
Morgan Stanley Bank$52,325 $65,498 12%0.24$52,444 $69,097 12%0.49
JPMorgan Chase Bank222,679 135,821 25%0.33314,242 149,946 27%0.57
Citibank72,487 32,327 6%0.0772,487 32,657 6%0.32
Total$347,491 $233,646 $439,173 $251,700 
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(1)Represents the excess of the carrying amount or market value of the loans held-for-investment pledged as collateral for repurchase facilities, including accrued interest plus any cash on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest.
The Company does not anticipate any defaults by its financing counterparties, although there can be no assurance that one or more defaults will not occur.
Financial Covenants
The Company is subject to a variety of financial covenants under its secured financing arrangements. The following represent the most restrictive financial covenants to which the Company is subject across its secured financing arrangements:
•Unrestricted cash cannot be less than the greater of $30.0 million and 5.0% of recourse indebtedness. As of March 31, 2026, the Company’s unrestricted cash was $43.6 million, while 5.0% of the Company’s recourse indebtedness was $4.9 million.
•Tangible net worth must be greater than the sum of (i) $600.0 million and (ii) 75.0% of net cash proceeds of the Company’s equity issuances after September 30, 2024. As the Company has not had any equity issuances after September 30, 2024, tangible net worth must be greater than $600.0 million. As of March 31, 2026, the Company’s tangible net worth was $692.3 million.
•Target asset leverage ratio cannot exceed 77.5% and total leverage ratio cannot exceed 80.0%. As of March 31, 2026, the Company’s target asset leverage ratio was 63.2% and the Company’s total leverage ratio was 59.0%.
•Minimum interest coverage of no less than 1.3:1.0. As of March 31, 2026, the Company’s interest coverage ratio was 1.4:1.0.
As of March 31, 2026, and December 31, 2025, the Company was in compliance with its financial covenants.