7.         Related Party Arrangements

Equity Transactions

On March 26, 2025, the Company was capitalized through the purchase by the Advisor of 4,000 Class E shares for an aggregate purchase price of $100,000 and by Balbec Capital Holdings, L.P. (“Balbec”), an affiliate of the Company’s Sub-Advisor, of 4,000 Class E shares for an aggregate purchase price of $100,000. On January 29, 2026, the Company held an initial closing for its Private Offering. The initial closing included purchases of 96,000 Class E shares for an aggregate purchase price of $2,400,000 from each of the Advisor and Balbec.

When recorded by the Company, operational expenses are expensed as incurred. Any amounts due to the Advisor and Sub-Advisor but not paid are recognized as a liability on the balance sheet.

Mortgage Servicing Rights Investments Purchases

During 2026, the Company invested $6,749,861 in two special-purpose entities managed by Bungalow Residential, LLC or Bungalow Funding, LLC that acquire MSR participation interests for Federal Home Loan Mortgage Corporation mortgage loans for specified Servicing Concentration Risk (“SCR”) pools in exchange for an upfront cash payment. During 2026, RCRED NES acquired $2,473,784 in MSR participation interests for Federal Home Loan Mortgage Corporation mortgage loans for specified SCR pools in exchange for an upfront cash payment. Bungalow Residential, LLC and Bungalow Funding, LLC are affiliates of Balbec.

Organizational and Offering Expenses Waiver

In order to maximize cash available for investment during the launch of the Company, the Advisor and Sub-Advisor have provided written notice to the Company of their agreement to waive the organization and offering reimbursement related to January 2026 cumulative gross proceeds of $367,589 to which they are entitled under the Advisory Agreement and Sub-Advisory Agreement, respectively.

Distributions

Individuals and entities affiliated with the Advisor and Sub-Advisor owned approximately 236,000 shares as of  June 30, 2026. These individuals and entities received distributions from the Company of approximately $118,000 and $196,667 during the quarter and six months ended June 30, 2026.

Summary of Related Party Fees and Expenses

Organization and Offering Reimbursement

The Company will reimburse the Advisor and the Sub-Advisor, along with their respective affiliates, for the organization and offering costs (other than selling commissions and dealer manager fees) they have incurred on the Company’s behalf only to the extent that such expenses do not exceed 1.5% of the cumulative gross proceeds from the Private Offering.

As of  June 30, 2026, the Advisor has incurred organization and offering expenses on the Company’s behalf of approximately $196,249 and $1,554,010, respectively. As of  June 30, 2026, the Sub-Advisor has incurred organization and offering expenses on the Company’s behalf of approximately $85,430 and $5,206, respectively. These organization and offering expenses are not recorded on the accompanying consolidated balance sheets because of the limit of 1.5% of the cumulative gross proceeds from the Private Offering.

Base Management Fees

The Company pays each of the Advisor and the Sub-Advisor 50% of the total base management fee for their services under the Advisory Agreement and Sub-Advisory Agreement subject to any reduction or deferral of any such fees pursuant to the expense support and conditional reimbursement agreement between the Company, the Advisor and the Sub-Advisor, as amended (the “Expense Support and Conditional Reimbursement Agreement”). The management fee shall be calculated for each share class at an annual rate of (i) 1.25% of NAV for Class A common stock (the “Class A shares”), Class I common stock (the “Class I shares”), Class D common stock (the “Class D shares”) and Class T common stock (the “Class T shares”) (collectively, the “Non-Founder Shares”), and (ii) 1.00% of NAV for the Class FA shares (collectively, the “Founder Shares”) in each case, per annum and payable monthly in arrears and before giving effect to any accruals for the management fee, stockholder servicing fees and total return incentive fee. No management fee will be payable with respect to Class E shares.

Total Return Incentive Fees

The Company also pays each of the Advisor and the Sub-Advisor 50% of the total return incentive fee for their services under the Advisory Agreement and the Sub-Advisory Agreement.

The total return incentive fee is based on the Total Return to Stockholders (as defined below) for each share class in any calendar year, payable annually in arrears. The Company will accrue (but not pay) the total return incentive fee on a monthly basis, to the extent that it is earned on an annualized basis. The Company will perform a final reconciliation of the total return incentive fee calculation at the completion of each calendar year and the total return incentive fee shall be due and payable to the Advisor no later than ninety (90) calendar days following the end of the applicable calendar year. The total return incentive fee may be reduced or deferred by the Advisor and the Sub-Advisor under the Advisory Agreement, Sub-Advisory Agreement and the Expense Support and Conditional Reimbursement Agreement described below.

For purposes of this calculation, “Total Return to Stockholders” for each annualized period is calculated for each share class as (i) the change in the net asset value for such share class over such applicable period plus (ii) total distributions for such share class over such applicable period. The terms “Total Return to Non-Founder Stockholders” and “Total Return to Founder Stockholders” mean the Total Return to Stockholders specifically attributable to each particular share class of Non-Founder Shares or Founder Shares, as applicable.

The total return incentive fee for each share class is calculated as follows:

Expense Support and Conditional Reimbursement

The Company entered into the Expense Support and Conditional Reimbursement Agreement with the Advisor and Sub-Advisor, which became effective on May 6, 2025, pursuant to which each of the Advisor and the Sub-Advisor agrees to reduce the payment of base management fees, total return incentive fees and the reimbursements of reimbursable expenses due to the Advisor and the Sub-Advisor under the Advisory Agreement and the Sub-Advisory Agreement, as applicable, to the extent that the Company’s annual regular cash distributions exceed its annual net income (with certain adjustments). The amount of such expense support is equal to the annual (calendar year) excess, if any, of (a) the distributions (as defined in the Expense Support and Conditional Reimbursement Agreement) declared and paid (net of the Company’s distribution reinvestment plan) to shareholders minus (b) the available operating funds, as defined in the Expense Support and Conditional Reimbursement Agreement (the “Expense Support”). For the calendar year ending December 31, 2026, the Expense Support amount may be equal to any negative available operating funds.

The Expense Support amount is borne equally by the Advisor and the Sub-Advisor and is calculated as of the last business day of the calendar year. Until the Expense Support and Conditional Reimbursement Agreement is terminated, the Advisor and Sub-Advisor shall equally conditionally reduce the payment of fees and reimbursements of reimbursable expenses in an amount equal to the conditional waiver amount (as defined in and subject to limitations described in the Expense Support and Conditional Reimbursement Agreement). The term of the Expense Support and Conditional Reimbursement Agreement includes an initial term of three years and will automatically renew for successive one-year terms. Expense support is paid by the Advisor and Sub-Advisor annually in arrears.

If, on the last business day of the calendar year, the annual (calendar year) year-to-date available operating funds exceed the sum of the annual (calendar year) year-to-date distributions paid per share class (the “Excess Operating Funds”), the Company uses such Excess Operating Funds to pay the Advisor and the Sub-Advisor all or a portion of the outstanding unreimbursed Expense Support amounts for each share class, as applicable, subject to certain conditions (the “Conditional Reimbursements”) as described further in the Expense Support and Conditional Reimbursement Agreement. The Company’s obligation to make Conditional Reimbursements shall automatically terminate and be of no further effect three years following the date on which the Expense Support amount was provided and to which such Conditional Reimbursement relates, as described further in the Expense Support and Conditional Reimbursement Agreement.

Administrative Services Fees

The Company pays the Advisor administrative services fees at an annual rate of 0.25% per annum of the NAV for each share class of the Company’s common stock. Administrative services fees are payable monthly in arrears.

Master Servicing Fees

PRP Advisors LLC, an affiliate of Balbec, is the master servicer for the Company’s residential mortgage loans and receives a fee for its services. The Company pays the Sub-Advisor for these fees at an annual rate of 0.25% per annum, calculated monthly based on the prior month’s fair value of residential mortgage loans, paid quarterly in arrears.

Related party fees and expenses incurred for the six months ended June 30, 2026, are summarized below:

FOOTNOTE:

The following table presents amounts due (to) from related parties net as of  June 30, 2026: