Finance of America Companies Inc.: Form 10-Q for the period ended Sep 30, 2025

The following discussion of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes. This discussion and analysis contains forward-looking statements that involve risk, uncertainties, and assumptions. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of many factors. Also, see “Forward-Looking Statements” in this Quarterly Report on Form 10-Q (the “Form 10-Q”). Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” “FOA,” or the “Company” refer to Finance of America Companies Inc. and its consolidated subsidiaries. References to “FOA Equity” are to Finance of America Equity Capital LLC, a Delaware limited liability company, that the Company controls in an “UP-C” structure.

Overview

Finance of America Companies Inc. is a financial services holding company which, through its operating subsidiaries, is a leading provider of home equity-based financing solutions for a modern retirement. In addition, FOA offers capital markets and portfolio management capabilities primarily to optimize the distribution of its originated loans to investors.

FOA was incorporated in Delaware on October 9, 2020 and became a publicly-traded company on the New York Stock Exchange (“NYSE”) in April 2021, with trading beginning on April 5, 2021. On August 15, 2025, the Company’s Class A Common Stock also began trading on NYSE Texas, Inc. The Company continues to maintain its primary listing on the NYSE and trades with the same “FOA” ticker symbol on both exchanges.

FOA has a controlling financial interest in FOA Equity. FOA Equity owns all of the outstanding equity interests in Finance of America Funding LLC (“FOAF”). FOAF wholly owns Finance of America Holdings LLC (“FAH”) and Incenter LLC (“Incenter” and collectively, with FOA Equity, FOAF, and FAH, known as “holding company subsidiaries”). FAH is the parent of a lending company, Finance of America Reverse LLC (“FAR”), while Incenter is the parent of operating service companies that provide capital markets and portfolio management capabilities.

Our strategy and long-term growth initiatives are built upon a few key fundamental factors:

• We are focused on growing our core retirement solutions business, which benefits from demographic and economic tailwinds. We believe we can continue to enhance, expand, and more effectively dispatch our innovative suite of home equity-based financing solutions to help senior homeowners achieve their retirement goals.
• We distribute our products through multiple channels and utilize flexible technology platforms in order to scale our business and manage costs efficiently.
• We connect borrowers with investors. Our consumer-facing business leaders interface directly with the investor-facing professionals in our Portfolio Management segment, facilitating the development of attractive lending solutions for our customers with the confidence that the loans we generate can be efficiently and profitably sold to a deep pool of investors, either directly via whole-loan sales or indirectly via the issuance and sale of mortgage-backed securities. We seek to programmatically and profitably monetize our loans through sale or securitization, which minimizes capital at risk, while often retaining a future performance-based participation interest in the underlying cash flows of our monetized loans.

Through FAR, the Company originates, purchases, sells, securitizes, and services (in partnership with third-party subservicers) home equity conversion mortgage (“HECM”) loans, which are originated pursuant to the Federal Housing Administration (the “FHA”) HECM program and are insured by the FHA, and non-agency reverse mortgage loans, which are not insured by the FHA. We have launched several non-agency reverse mortgage loan products to serve the United States of America (the “U.S.”) senior population and have plans for additional innovative products to satisfy this vast and largely underserved market. For example, we launched a non-agency second lien reverse mortgage loan product, second in priority behind the first lien of an existing traditional forward mortgage loan or home equity line of credit collateralized by the same mortgaged property. In 2024 and continuing in 2025, we invested more capital and resources into the second lien product, including marketing and digital efforts, in order to expand its reach through a leading broker-facing platform and expansion of the product to additional states. The launch and expansion of the second lien product has enabled us to serve borrowers who already have and desire to maintain a low-rate primary mortgage but want the convenience of a flexible second lien with no required monthly principal and interest payments. Additionally, in October 2025, we announced a strategic partnership with Better Home & Finance Holding Company (“Better.com”), an artificial intelligence (“AI”) powered mortgage lender, to launch home equity lines of credit (“HELOCs”) and home equity loans (“HELOANs”) through

Better.com’s AI platform. This collaboration marks the first time that the Company will originate HELOCs and HELOANs and enables the Company to serve potential borrowers who need higher loan-to-value solutions than those provided by the Company’s suite of reverse mortgage loan products. These efforts exemplify our commitment to meet and serve new kinds of borrowers. We are a leader in this market and we are focused on developing and offering products for borrowers with interest in using our loan products as retirement planning tools, which we believe will continue to increase our addressable customer base and ultimately raise our origination volumes, to further our purpose of helping homeowners unlock the joy that comes from realizing the full potential of their retirement.

We originate loans through a retail channel (consisting primarily of a centralized retail platform) and a third-party originator (“TPO”) channel (consisting primarily of a network of mortgage-brokers). In 2024 and continuing in 2025, we took steps to streamline and enhance our marketing and originations operations and digital capabilities. We transitioned our sales teams onto one loan origination system, making our origination operations more efficient, and unified under the single brand name “Finance of America,” creating a recognizable identity that clarifies the Company’s offerings in the market. This unification also included our recently introduced new brand platform, “A Better Way with FOA,” along with a national advertising campaign. Additionally, we recently launched our digital borrower experience for certain products that empowers customers with the ability to obtain credit pre-qualification on their own terms and at their own pace. Further, pursuant to our strategic partnership with Better.com, we will serve as Better.com’s reverse mortgage partner, and our goal for this collaboration is to allow us to integrate our reverse mortgage products into a unified digital experience. Our digital innovation strategy is designed to deliver financial services to seniors in a way that is both modern and user friendly. We will continue building a digital channel that supplements our existing lines of business and leverages automated digital tools to improve efficiency and the overall ease of transacting. We are similarly engaging in efforts to refine the systems used by our mortgage-broker partners to improve the efficiency and ease of originations via our TPO channel. We believe these efforts will increase brand and product recognition and awareness within the addressable market of U.S. seniors and among mortgage-brokers, make our marketing efforts and originations processes more efficient and less costly, improve the originations experience for borrowers and mortgage-broker partners, expand the number and depth of our relationships with borrowers and mortgage-broker partners, and ultimately raise our origination volumes.

Our Portfolio Management segment provides structuring and product development expertise as well as broker/dealer and institutional asset management capabilities, which facilitates innovation and the successful monetization of our loans. We securitize HECM loans into Home Equity Conversion Mortgage-Backed Securities (“HMBS”), which the Government National Mortgage Association (“Ginnie Mae”) guarantees, and sell the HMBS in the secondary market while retaining the rights to service the HECM loans. When HECM loans are not eligible for securitization into HMBS or are required to be bought out of a pool of HECM loans previously securitized into an HMBS, we convey the HECM loan to the United States Department of Housing and Urban Development (“HUD”) or liquidate them in accordance with program requirements, securitize them into privately placed mortgage-backed securities, or hold them for investment. In November 2024, Ginnie Mae announced the finalized term sheet for its HMBS 2.0 program expected to be implemented in 2026. Once implemented, the HMBS 2.0 program will enable us to securitize into HMBS additional HECM loans that are required to be bought out of pools of HECM loans securitized pursuant to Ginnie Mae’s existing HMBS program or otherwise not eligible for securitization pursuant to Ginnie Mae’s existing HMBS program (subject to expanded eligibility parameters applicable to the HMBS 2.0 program), increasing the HECM loans that we are able to securitize into HMBS. We both securitize non-agency reverse mortgage loans into mortgage-backed securities sold to investors and sell them as whole loans to investors. We may also decide to strategically hold certain non-agency reverse mortgage loans for investment. The capabilities provided by the Portfolio Management segment allowed us to complete several issuances and sales of mortgage-backed securities backed by our loan products in 2024 and through three quarters of 2025, demonstrating the high quality and liquidity of the loan products we originate, the deep relationships we have with our investors, and the resilience of our business model in many economic environments.

Repurchase Agreement

On August 4, 2025, the Company entered into a repurchase agreement (the “Repurchase Agreement”) with FOA Equity, Blackstone Tactical Opportunities Associates - NQ L.L.C., BTO Urban Holdings L.L.C., Blackstone Family Tactical Opportunities Investment Partnership - NQ ESC L.P., and BTO Urban Holdings II L.P. (collectively, the “Blackstone Investor”), which are deemed affiliates of the Company. Pursuant to the Repurchase Agreement, the Company will purchase (the “Repurchase”) all of the Blackstone Investor’s shares of Class A Common Stock of the

Company, Class B Common Stock of the Company, Class A LLC units of FOA Equity (“Class A LLC Units”), and rights to receive shares of Class A Common Stock and Class A LLC Units pursuant to the Transaction Agreement, dated as of October 12, 2020 (the “Earnout Rights” and, together with such shares of Class A Common Stock, shares of Class B Common Stock, and Class A LLC Units, the “Sold Equity”), and the tax receivable agreements (“TRA”) dated April 1, 2021 between the Company and the Blackstone Investor will be terminated. Each share of Class A Common Stock and each Class A LLC Unit will be purchased for $10.00 per share or Class A LLC Unit, and the shares of Class B Common Stock and Earnout Rights will be purchased for no consideration, for total consideration of $80,298,170. The closing of the Repurchase is subject to, among other customary conditions, the receipt of a customary opinion and, absent the Company’s prior written consent, may not occur prior to the date that is 105 days after the entry into the Repurchase Agreement.

The Repurchase Agreement includes certain interim operating covenants during the pendency of the Repurchase Agreement. The Repurchase Agreement also contains certain termination rights for the Company and the Blackstone Investor, including the right of the Blackstone Investor to terminate the Repurchase Agreement if the Repurchase has not been consummated prior to December 6, 2025 and the right of the Company to terminate the Repurchase Agreement if the Repurchase has not been consummated prior to February 28, 2026. In addition, if the Repurchase has not been consummated prior to December 6, 2025, the Blackstone Investor will have the right to transfer its Sold Equity to unaffiliated third parties, and any Sold Equity so transferred will reduce the amount repurchased by the Company under the Repurchase Agreement.

In accordance with Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, this obligation is recorded as Repurchase agreement obligation in the Condensed Consolidated Statements of Financial Condition, and equity is reduced by the treasury stock and noncontrolling interest as presented in the Condensed Consolidated Statements of Equity.

As described in further detail in Note 18 - Subsequent Events in the Notes to Condensed Consolidated Financial Statements, the Repurchase Agreement was amended and restated on November 13, 2025 to provide for the consummation of the Repurchase across two closings, potential increases in the purchase price, and certain other changes to the terms set forth in the Repurchase Agreement.

Business Trends and Conditions

There are several key factors and trends affecting our results of operations. A summary of key factors impacting our revenues include:

• prevailing interest rates which impact loan origination volume, with declining interest rates generally leading to increases in volume, and an increasing interest rate environment generally leading to decreases in volume;
• housing market trends which also impact loan origination volume, with an appreciating housing market typically leading to higher loan origination volume, and a housing market with decreasing values typically leading to lower loan origination volume;
• demographic and housing stock trends which impact the addressable market size;
• movement of market interest rates and yields required by investors, with the increasing of market interest rates and yields generally having negative impacts on the fair value of our financial assets, and the decreasing of market interest rates and yields generally having positive impacts on the fair value of our financial assets;
• increases or decreases in default status of loans and prepayment speeds; and
• broad economic factors such as the strength and stability of the overall economy, including sustained higher or lower interest rates, inflation, the unemployment level, real estate values, and trade and tax policies.

Other factors that may affect our cost base include trends in salaries and benefits costs, sales commissions, loan production and servicing costs, marketing and advertising, technology, rent, legal, compliance, and other general and administrative costs. Management continually monitors these costs through operating plans.

Other Recent Events

The U.S. Federal Reserve’s monetary policies and the federal government’s recent tariff policies may have an impact on economic conditions relevant to our business, including real estate values and prevailing mortgage rates, however, the extent of the impact remains uncertain. Higher interest rates generally lead to lower mortgage transaction volumes, increased competition, and lower profit margins. Volatility in market conditions resulting from the foregoing policies may cause credit spreads to widen, which reduces, among other things, availability of credit to our Company on favorable terms, liquidity in the market, the fair value of assets on our balance sheet, and price transparency of real estate-related or asset-backed assets.

Our Company is actively monitoring these events and their effects on the Company’s financial condition, liquidity, operations, industry, and workforce. These continuing economic impacts may cause additional volatility in the financial markets and may have an adverse effect on the Company’s results of future operations, financial condition, and liquidity in 2025 and beyond. See the Results of Operations section below.

For further discussion on the potential impacts of the Federal Reserve’s monetary policies and macroeconomic conditions, see “Risks Related to the Business of the Company” and “Our business is significantly impacted by changes in interest rates. Changes in prevailing interest rates due to U.S. monetary policies or other macroeconomic conditions that affect interest rates may have a detrimental effect on our operations, financial performance, and earnings,” as well as “Risks Related to Our Lending Business” and “Our loan origination and servicing revenues are highly dependent on macroeconomic and U.S. residential real estate market conditions” under the section entitled “Item 1A. Risk Factors” in our Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 14, 2025, as amended by Amendment No. 1 to our Annual Report on Form 10-K/A, filed with the SEC on May 20, 2025. Such risk factors may be amended or updated in our subsequent periodic reports filed with the SEC.

Results of Operations

Consolidated Results

The following table summarizes our consolidated operating results from continuing operations (in thousands):

Net interest income

All of our financial instruments, with the exception of certain notes payable, are either recorded at fair value or the carrying value approximated fair value. The interest recognized on these financial instruments is recorded in Interest income or Interest expense in the Condensed Consolidated Statements of Operations. The interest on our notes payable is recorded in Non-funding interest expense, net, in the Condensed Consolidated Statements of Operations. We evaluate net interest income through an evaluation of all components of interest income and interest expense.

The following table provides an analysis of all components of net interest income (in thousands):

(1) Interest expense on HMBS and nonrecourse obligations includes gains or losses on extinguishment of debt related to the purchase of securities that were previously issued by consolidated trusts.

For the three months ended September 30, 2025 versus the three months ended September 30, 2024

Net income (loss) from continuing operations before income taxes decreased $236.7 million primarily as a result of the following:

• Fair value changes from market inputs or model assumptions decreased $226.0 million primarily due to changes in interest rates, yields, home price appreciation, and other inputs, which generated net fair value losses during the three months ended September 30, 2025 compared to net fair value gains in the 2024 period. Refer to Note 5 - Fair Value in the Notes to Condensed Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques impacting the value of our loans and related obligations.
• Net portfolio interest income increased $15.0 million due to gains on extinguishment of debt related to the purchase of securities that were previously issued by consolidated trusts, which was partially offset by a higher cost of funds within our securitized financing portfolio. Fair value changes from model amortization improved $2.5 million primarily due to a higher modeled yield on a larger portfolio during the three months ended September 30, 2025 compared to the 2024 period.
• Net origination gains increased $2.7 million as a result of higher reverse mortgage loan origination volumes, partially offset by lower margins relative to historically high margins in the comparable 2024 period. We recognized $59.9 million in net origination gains on loan originations of $602.9 million for the three months ended September 30, 2025 compared to $57.2 million in net origination gains on loan originations of $513.4 million for the comparable 2024 period.
• Non-funding interest expense, net, increased $5.3 million during the three months ended September 30, 2025 compared to the 2024 period primarily due to the discount amortization expense related to the exchange of our senior notes that occurred on October 31, 2024, which was partially offset by decreased cost of funds on our working capital promissory notes.
• Total expenses increased $24.3 million primarily due to an increase in loan portfolio related expenses as a result of increased securitization expenses, and an increase in salaries, benefits, and related expenses as a result of increased variable compensation due to higher loan production and increases in technology resources during the three months ended September 30, 2025 compared to the 2024 period. This was partially offset by decreases in general and administrative expenses due to continued cost-cutting initiatives that align expenses with our unified modern retirement solutions platform.
• Other, net, changed $3.2 million primarily due to valuation changes in the convertible notes and deferred purchase price liabilities.

For the nine months ended September 30, 2025 versus the nine months ended September 30, 2024

Net income from continuing operations before income taxes decreased $53.5 million primarily as a result of the following:

• Fair value changes from market inputs or model assumptions decreased $67.6 million primarily due to changes in interest rates, yields, home price appreciation, and other inputs, which generated lower net fair value gains during the nine months ended September 30, 2025 compared to the 2024 period. Refer to Note 5 - Fair Value in the Notes to Condensed Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques impacting the value of our loans and related obligations.
• Fair value changes from model amortization improved $31.5 million primarily due to a higher modeled yield on a larger portfolio during the nine months ended September 30, 2025 compared to the 2024 period. Net portfolio interest income increased $9.3 million due to gains on extinguishment of debt related to the purchases of securities that were previously issued by consolidated trusts, which was partially offset by a higher cost of funds within our securitized financing portfolio.
• Net origination gains increased $24.9 million as a result of higher reverse mortgage loan origination volumes, partially offset by lower margins due to changes in channel mix. We recognized $162.0 million in net origination gains on loan originations of $1.8 billion for the nine months ended September 30, 2025 compared to $137.1 million in net origination gains on loan originations of $1.4 billion for the comparable 2024 period.
• Non-funding interest expense, net, increased $18.0 million during the nine months ended September 30, 2025 compared to the 2024 period primarily due to the discount amortization expense related to the exchange of our senior notes that occurred on October 31, 2024, which was partially offset by decreased cost of funds on our working capital promissory notes.
• Total expenses increased $23.4 million primarily due to an increase in loan portfolio related expenses as a result of increased securitization expenses, an increase in marketing and advertising expenses related to brand marketing and our digital innovation strategy, and an increase in salaries, benefits, and related expenses as a result of increased variable compensation due to higher loan production and increases in technology resources. These increases were partially offset by decreases in average headcount and in general and administrative expenses due to continued cost-cutting initiatives that align expenses with our unified modern retirement solutions platform.
• Other, net, changed $10.9 million primarily due to valuation changes in certain non-operating assets, the convertible notes, and deferred purchase price liabilities.

Our Segments

Our business operates through two reportable segments: Retirement Solutions and Portfolio Management. A description of the business conducted by each of these segments is provided below.

Retirement Solutions

Our Retirement Solutions segment conducts all of our Company’s loan origination activity, including the origination and acquisition of HECM and non-agency reverse mortgage loans through both the retail and TPO channels. The Retirement Solutions segment generates revenue from fees earned at the time of loan origination as well as from the initial estimate of net origination gains, with all originated loans accounted for at fair value. Once originated, the loans are transferred to our Portfolio Management segment, and any future fair value adjustments, including interest earned, on these originated loans are reflected in the revenues of our Portfolio Management segment until final disposition.

Portfolio Management

Our Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services to the Company. Our Portfolio Management team acts as the connector between borrowers and investors. The direct connections to investors, provided primarily by our Financial Industry Regulatory Authority registered broker-dealer, allow us to innovate and manage risk through better price and product discovery. Given our scale, we are able to work directly with investors and, where appropriate, retain assets on the balance sheet for attractive return opportunities. These retained investments are a source of growing and recurring interest and other servicing-related income. The Portfolio Management segment primarily generates revenue from the net interest income and fair value changes on portfolio assets, monetized through securitization, sale, or other financing of those assets.

See the Segment Results section below and Note 14 - Business Segment Reporting in the Notes to Condensed Consolidated Financial Statements for additional financial information about our segments.

Segment Results

Revenues and fees are directly attributed to their respective segments at the time services are performed. Revenues generated on inter-segment services performed are valued based on estimated market value. Expenses directly attributable to the operating segments are expensed as incurred. Other expenses are allocated to individual segments based on the estimated value of services performed, total revenue contributions, personnel headcount, or the equity invested in each segment based on the type of expense allocated. The allocation methodology is reviewed annually. There were no changes to methodology during the three and nine months ended September 30, 2025 and 2024. Expenses for enterprise-level general overhead, such as executive administration, are not allocated to the business segments.

Retirement Solutions Segment

The following table summarizes our Retirement Solutions segment’s results (in thousands):

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Key Metrics

The following table provides a summary of our Retirement Solutions segment’s key metrics (in thousands, except units):

(1) Loan origination volumes consist of initial reverse mortgage loan borrowing amounts.

(2) Tails consist of subsequent borrower draws, mortgage insurance premiums, service fees, and other advances, which we are able to subsequently securitize.

Revenues

The following table provides a summary of the components of our Retirement Solutions segment’s total revenues (in thousands):

For the three months ended September 30, 2025 versus the three months ended September 30, 2024

Total revenues increased $3.7 million or 5.7% as a result of the following:

• Net origination gains increased $2.7 million or 4.7% as a result of higher reverse mortgage loan origination volumes, partially offset by lower margins relative to historically high margins in the comparable 2024 period. We originated $602.9 million of reverse mortgage loans during the three months ended September 30, 2025, an increase of 17.4%, compared to $513.4 million for the comparable 2024 period. During the three months ended September 30, 2025, the weighted average margin on reverse mortgage loan production was 9.94% compared to 11.15% in 2024, a decrease of 1.21%.

For the nine months ended September 30, 2025 versus the nine months ended September 30, 2024

Total revenues increased $24.9 million or 15.8% as a result of the following:

• Net origination gains increased $24.9 million or 18.2% as a result of higher reverse mortgage loan origination volumes, partially offset by lower margins due to changes in channel mix. We originated $1.8 billion of reverse mortgage loans during the nine months ended September 30, 2025, an increase of

27.6%, compared to $1.4 billion for the comparable 2024 period. During the nine months ended September 30, 2025, the weighted average margin on reverse mortgage loan production was 9.18% compared to 9.91% in 2024, a decrease of 0.73%.

Expenses

The following table provides a summary of the components of our Retirement Solutions segment’s total expenses (in thousands):

For the three months ended September 30, 2025 versus the three months ended September 30, 2024

Total expenses increased $2.3 million or 4.6% as a result of the following:

• Total salaries, benefits, and related expenses increased $2.8 million or 14.0% primarily due to increases in variable compensation as a result of higher loan production and increases in technology resources, partially offset by a decrease in average headcount during the three months ended September 30, 2025 when compared to the 2024 period.
• Marketing and advertising expenses increased $0.9 million related to brand marketing and our digital innovation strategy, which was partially offset by a decrease in General and administrative expenses of $0.8 million primarily due to continued cost-cutting measures during the three months ended September 30, 2025 when compared to the 2024 period.

For the nine months ended September 30, 2025 versus the nine months ended September 30, 2024

Total expenses increased $4.4 million or 3.0% as a result of the following:

• Total salaries, benefits, and related expenses increased $5.9 million or 9.5% primarily due to increases in variable compensation as a result of higher loan production and increases in technology resources, partially offset by a decrease in average headcount during the nine months ended September 30, 2025 when compared to the 2024 period.
• Marketing and advertising expenses increased $4.8 million related to brand marketing and our digital innovation strategy, which was partially offset by a decrease in General and administrative expenses of $3.9 million primarily due to continued cost-cutting measures during the nine months ended September 30, 2025 when compared to the 2024 period.

Portfolio Management Segment

The following table summarizes our Portfolio Management segment’s results (in thousands):

The following table provides a summary of the assets and liabilities in our Portfolio Management segment (in thousands):

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Key Metrics

The following tables provide a summary of our Portfolio Management segment’s key metrics (dollars in thousands):

Revenues

The following table provides a summary of the components of our Portfolio Management segment’s total revenues (in thousands):

The majority of our financial instruments are valued utilizing a process that combines the use of a discounted cash flow (“DCF”) model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment and repayment assumptions used in the model are based on various factors, with the key assumptions being prepayment and repayment speeds, credit loss frequencies and severity, and discount rate assumptions. The changes in fair value due to portfolio runoff and realization of modeled income and expenses are recorded in Fair value changes from model amortization in the Condensed Consolidated Statements of Operations, and other fair value changes are recorded in Fair value changes from market inputs or model assumptions in the Condensed Consolidated Statements of Operations. The interest recognized on these financial instruments is recorded in Interest income or Interest expense in the Condensed Consolidated Statements of Operations.

The following table provides an analysis of all components of net portfolio interest income (in thousands):

(1) Interest expense on HMBS and nonrecourse obligations includes gains or losses on extinguishment of debt related to the purchase of securities that were previously issued by consolidated trusts.

For the three months ended September 30, 2025 versus the three months ended September 30, 2024

Total revenues decreased $207.6 million as a result of the following:

• Fair value changes from market inputs or model assumptions decreased $226.0 million primarily due to changes in interest rates, yields, home price appreciation, and other inputs, which generated net fair value losses during the three months ended September 30, 2025 compared to net fair value gains in the 2024 period. Refer to Note 5 - Fair Value in the Notes to Condensed Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques impacting the value of our loans and related obligations.
• Net portfolio interest income increased $15.0 million due to gains on extinguishment of debt related to the purchase of securities that were previously issued by consolidated trusts, which was partially offset by a higher cost of funds within our securitized financing portfolio. Fair value changes from model amortization improved $2.5 million primarily due to a higher modeled yield on a larger portfolio during the three months ended September 30, 2025 compared to the 2024 period.

For the nine months ended September 30, 2025 versus the nine months ended September 30, 2024

Total revenues decreased $26.8 million as a result of the following:

• Fair value changes from market inputs or model assumptions decreased $67.6 million primarily due to changes in interest rates, yields, home price appreciation, and other inputs, which generated lower net fair value gains during the nine months ended September 30, 2025 compared to the 2024 period. Refer to Note 5 - Fair Value in the Notes to Condensed Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques impacting the value of our loans and related obligations.
• Fair value changes from model amortization improved $31.5 million primarily due to a higher modeled yield on a larger portfolio during the nine months ended September 30, 2025 compared to the 2024 period. Net portfolio interest income increased $9.3 million due to gains on extinguishment of debt related to the purchases of securities that were previously issued by consolidated trusts, which was partially offset by a higher cost of funds within our securitized financing portfolio.

Expenses

The following table provides a summary of the components of our Portfolio Management segment’s total expenses (in thousands):

For the three months ended September 30, 2025 versus the three months ended September 30, 2024

Total expenses increased $19.9 million as a result of the following:

• Loan portfolio related expenses increased $19.2 million due to increased securitization expenses during the three months ended September 30, 2025 compared to the 2024 period. We issued $3.2 billion of notes during the three months ended September 30, 2025 compared to $0.8 billion for the 2024 period.

For the nine months ended September 30, 2025 versus the nine months ended September 30, 2024

Total expenses increased $23.4 million or 38.4% as a result of the following:

• Loan portfolio related expenses increased $27.1 million due to increased securitization expenses during the nine months ended September 30, 2025 compared to the 2024 period. We issued $4.9 billion of notes during the nine months ended September 30, 2025 compared to $2.1 billion for the 2024 period.
• General and administrative expenses decreased $2.5 million or 23.9% primarily due to continued cost-cutting initiatives that align expenses with our unified modern retirement solutions platform during the nine months ended September 30, 2025 when compared to the 2024 period.
• Salaries, benefits, and related expenses decreased $1.1 million or 8.7% primarily due to a decrease in average headcount and continued cost-cutting initiatives that align expenses with our unified modern retirement solutions platform during the nine months ended September 30, 2025 when compared to the 2024 period. Average headcount was 60 for the nine months ended September 30, 2025 compared to 64 for the 2024 period.

Corporate and Other

Corporate and Other consists of our corporate services groups. These groups support our operating segments, and the cost of services directly supporting the operating segments are allocated to those operating segments on a cost-of-service basis. Enterprise-focused Corporate and Other expenses that are not incurred in direct support of the operating segments are kept unallocated within Corporate and Other.

The following table summarizes Corporate and Other results (in thousands):

The following table provides a summary of the components of Corporate and Other total expenses (in thousands):

For the three months ended September 30, 2025 versus the three months ended September 30, 2024

Total revenues worsened by $5.3 million as a result of the following:

• Non-funding interest expense, net, increased $5.3 million during the three months ended September 30, 2025 compared to the 2024 period primarily due to the discount amortization expense related to the exchange of our senior notes that occurred on October 31, 2024, which was partially offset by decreased cost of funds on our working capital promissory notes.

Total expenses increased $2.2 million or 16.0% as a result of the following:

• Salaries, benefits, and related expenses, net of shared services allocations, increased $2.8 million or 35.4% for the three months ended September 30, 2025 when compared to the 2024 period primarily due to increases in incentive compensation.
• General and administrative expenses, net of shared services allocations, decreased $0.6 million or 10.4% primarily due to continued cost-cutting initiatives that align expenses with our unified modern retirement solutions platform during the three months ended September 30, 2025 when compared to the 2024 period.

Other, net, changed $3.2 million primarily due to valuation changes in the convertible notes and deferred purchase price liabilities.

For the nine months ended September 30, 2025 versus the nine months ended September 30, 2024

Total revenues worsened by $18.0 million as a result of the following:

• Non-funding interest expense, net, increased $18.0 million during the nine months ended September 30, 2025 compared to the 2024 period primarily due to the discount amortization expense related to the exchange of our senior notes that occurred on October 31, 2024, which was partially offset by decreased cost of funds on our working capital promissory notes.

Total expenses decreased $4.4 million or 9.0% as a result of the following:

• General and administrative expenses, net of shared services allocations, decreased $2.6 million or 14.9% primarily due to continued cost-cutting initiatives that align expenses with our unified modern retirement solutions platform during the nine months ended September 30, 2025 when compared to the 2024 period.
• Salaries, benefits, and related expenses, net of shared services allocations, decreased $1.9 million or 6.2% for the nine months ended September 30, 2025 when compared to the 2024 period as the Company continued our focus on cost-cutting initiatives that align expenses with our unified modern retirement solutions platform. Average onshore headcount declined from 258 for the nine months ended September 30, 2024 to 242 for the nine months ended September 30, 2025.

Other, net, changed $11.1 million primarily due to valuation changes in certain non-operating assets, the convertible notes, and deferred purchase price liabilities.

Non-GAAP Financial Measures

The Company’s management evaluates performance of the Company through the use of certain financial measures that are not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), including adjusted net income, adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”), adjusted earnings per share, and tangible equity.

The presentation of non-GAAP measures is used to enhance investors’ understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP. Management believes these key financial measures provide an additional view of our performance over the long-term and provide useful information that we use in order to maintain and grow our business.

These non-GAAP financial measures should not be considered as an alternative to net income (loss), operating cash flows, or any other performance measures determined in accordance with U.S. GAAP. Adjusted net income, adjusted EBITDA, adjusted earnings per share, and tangible equity have important limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of the limitations of these metrics are: (i) cash expenditures for future contractual commitments; (ii) cash requirements for working capital needs; (iii) cash requirements for certain tax payments; and (iv) all non-cash income/expense items.

Because of these limitations, adjusted net income, adjusted EBITDA, adjusted earnings per share, and tangible equity should not be considered as measures of discretionary cash available to us to invest in the growth of our business or distribute to shareholders. We compensate for these limitations by relying primarily on our U.S. GAAP results and using our non-GAAP financial measures only as a supplement. Users of our condensed consolidated financial statements are cautioned not to place undue reliance on our non-GAAP financial measures.

Adjusted Net Income

We define adjusted net income as net income (loss) from continuing operations adjusted for:

1. Income taxes

2. Changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions, deferred purchase price liabilities, warrant liability, convertible notes, and the exchange of our senior notes.

3. Amortization or impairment of intangibles and impairment of certain other long-lived assets.

4. Equity-based compensation, excluding forfeitures and accelerations associated with restructuring activities, which are included in certain non-recurring costs.

5. Certain non-recurring costs and adjustments that management believes should be excluded as these do not relate to a recurring part of the core business operations. These items include amounts recognized for settlement of legal and regulatory matters, acquisition or divestiture-related expenses, and other one-time charges.

6. Income tax provision adjustments to apply an effective combined corporate tax rate to adjusted net income before income taxes.

Management considers adjusted net income important in evaluating our Company as a whole. This supplemental metric is utilized by our management team to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use this measure when analyzing our operating performance and comparability to peers. Adjusted net income is not a presentation made in accordance with U.S. GAAP, and our definition and use of this measure may vary from other companies in our industry.

Adjusted net income provides visibility to the underlying operating performance by excluding the impact of certain items that management does not believe are representative of our core earnings. Adjusted net income may also include other adjustments, as applicable, based upon facts and circumstances, consistent with our intent of providing a supplemental means of evaluating our operating performance.

Adjusted EBITDA

We define adjusted EBITDA as net income (loss) from continuing operations adjusted for:

1. Income taxes

2. Changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions, deferred purchase price liabilities, warrant liability, convertible notes, and the exchange of our senior notes.

3. Amortization or impairment of intangibles and impairment of certain other long-lived assets.

4. Equity-based compensation, excluding forfeitures and accelerations associated with restructuring activities, which are included in certain non-recurring costs.

5. Certain non-recurring costs and adjustments that management believes should be excluded as these do not relate to a recurring part of the core business operations. These items include amounts recognized for settlement of legal and regulatory matters, acquisition or divestiture-related expenses, and other one-time charges.

6. Depreciation

7. Interest expense on non-funding debt, excluding amortization of the discount related to our senior notes.

Management considers adjusted EBITDA important in evaluating the Company as a whole. This supplemental metric is utilized by our management team to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use this measure when analyzing our operating performance and comparability to peers. Adjusted EBITDA is not a presentation made in accordance with U.S. GAAP, and our definition and use of this measure may vary from other companies in our industry.

Adjusted EBITDA provides visibility to the underlying operating performance by excluding the impact of certain items that management does not believe are representative of our core earnings. Adjusted EBITDA may also include other adjustments, as applicable, based upon facts and circumstances, consistent with our intent of providing a supplemental means of evaluating our operating performance.

Adjusted Earnings Per Share

We define adjusted earnings per share as adjusted net income (defined above) plus interest expense on the exchangeable senior secured notes, net of a tax effect, if dilutive for adjusted earnings per share, divided by the weighted average shares outstanding, which includes outstanding Class A Common Stock plus the Class A LLC Units owned by the noncontrolling interest on an if-converted basis, the exchange of the exchangeable senior secured notes on an if-converted basis if they are dilutive for adjusted earnings per share, the conversion of the convertible notes on an if-converted basis, and any shares under the treasury stock method.

Management considers adjusted earnings per share important in evaluating the Company as a whole. This supplemental metric is utilized by our management team to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use this measure when analyzing our operating performance and comparability to peers. Adjusted earnings per share is not a presentation made in accordance with U.S. GAAP, and our definition and use of this measure may vary from other companies in our industry.

Tangible Equity

We define tangible equity as total equity less intangible assets, net. Management uses this metric to evaluate the Company’s capital strength exclusive of intangible assets. We believe this measure is useful to analysts, investors, and creditors as it provides additional insight into the underlying equity position of the business. Tangible equity is not a presentation made in accordance with U.S. GAAP, and our definition and use of this measure may vary from other companies in our industry.

Tangible equity provides visibility to the underlying capital position by excluding the impact of certain items that management does not believe are representative of our core equity base. Tangible equity may also include other adjustments, as applicable, based upon facts and circumstances, consistent with our intent of providing a supplemental means of evaluating our financial strength.

Reconciliation to GAAP

The following table provides a reconciliation of net income (loss) from continuing operations to adjusted net income and adjusted EBITDA, as well as adjusted earnings per share and tangible equity (in thousands, except for share data):

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(1) Changes in fair value - The adjustment for changes in fair value includes changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions, deferred purchase price liabilities, warrant liability, convertible notes, and the exchange of our senior notes.

Changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions - This adjustment relates to changes in the significant market or model input components of the fair value for loans and securities held for investment and related obligations. We include an adjustment for the significant market or model input components of the change in fair value because, while based on real observable and/or predicted changes in drivers of the valuation of assets, they may be mismatched in any given period with the actual change in the underlying economics or when they will be realized in actual cash flows. Changes in fair value of loans and securities held for investment and related obligations include changes in fair value and related hedge gains and losses for the following:

1. Loans held for investment, subject to HMBS related obligations, at fair value;

2. Loans held for investment, subject to nonrecourse debt, at fair value;

3. Loans held for investment, at fair value;

4. Retained bonds, at fair value;

5. HMBS related obligations, at fair value; and

6. Nonrecourse debt, at fair value.

The adjustment for changes in fair value of loans and securities held for investment and related obligations due to market inputs or model assumptions is calculated based on changes in fair value associated with the above assets and liabilities calculated in accordance with U.S. GAAP, excluding the estimated impact of the change in fair value attributable to net origination gains and the change in fair value attributable to post-origination loan advances, accretion, and model amortization (i.e., portfolio run-off), net of hedge gains and losses, and any securitization expenses incurred in securitizing our mortgage loans held for investment, subject to nonrecourse debt. This adjustment represents changes in accounting estimates that are measured in accordance with U.S. GAAP. Actual results may differ from those estimates and assumptions due to factors such as changes in the economy, interest rates, secondary market pricing, prepayment assumptions, home prices, or discrete events affecting specific borrowers, and such differences could be material. Accordingly, this number should be understood as an estimate, and the actual adjustment could vary if our modeling is incorrect.

Change in fair value of deferred purchase price liabilities - We are obligated to pay contingent consideration to sellers of acquired businesses based on future performance of acquired businesses, as well as realization of tax benefits from certain exchanges of Class A LLC Units into Class A Common Stock (TRA obligation). The change in fair value of deferred purchase price liabilities represents gains or losses as a result of changes in various assumptions, including future performance, FOA stock price, timing and realization of tax benefits, and discount rates.

Change in fair value of the warrant liability - The adjustment to the warrant liability is based on the change in its measured fair value. Although the change in fair value of the warrant liability is a recurring part of our business, the change in fair value is unrealized, and we believe the adjustment is appropriate as the fair value fluctuations from period to period may make it difficult to analyze core-operating trends.

Change in fair value related to the exchange of our senior notes - We accounted for the exchange of our senior notes as an extinguishment of the senior unsecured notes and the issuance of the senior secured notes and exchangeable senior secured notes (collectively, the “Secured Notes”). The Secured Notes were initially recorded at fair value and this adjustment is the amortization of the Secured Notes discount.

Change in fair value of convertible notes - We elected to account for the convertible notes at fair value under the fair value option. The change in fair value of convertible notes represents gains or losses as a result of changes in FOA stock price compared to the conversion price of the notes.

(2) Exchangeable senior secured notes interest expense - The adjustment for exchangeable senior secured notes interest expense includes interest expense on our exchangeable senior secured notes, excluding amortization of the discount related to the notes, net of an income tax benefit adjustment to apply an effective combined corporate tax rate to the expense, if dilutive for adjusted earnings per share.

Liquidity and Capital Resources

FOA is a holding company and has no material assets other than its direct and indirect ownership of Class A LLC Units. FOA has no independent means of generating revenue. FOA Equity may make distributions to its holders of Class A LLC Units, including FOA, in an amount sufficient to cover all applicable taxes at assumed tax rates, payments under the TRA obligation, and dividends, if any, declared by FOA. Deterioration in the financial condition, earnings, or cash flow of FOA Equity and its subsidiaries for any reason could limit or impair FOA Equity’s ability to make such distributions. In addition, FOA Equity is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of FOA Equity (with certain exceptions) exceed the fair value of its assets. Subsidiaries of FOA Equity are generally subject to similar legal limitations on their ability to make distributions to FOA Equity. Further, our existing financing arrangements include, and any financing arrangement that we enter into in the future may include, restrictions that impact FOA Equity’s ability to make distributions to FOA.

Our cash flows from operations, borrowing availability, and overall liquidity are subject to risks and uncertainties. We may not be able to obtain additional liquidity on reasonable terms, or at all. Additionally, our liquidity and our ability to meet our obligations and fund our capital requirements are dependent on our future financial performance, which is subject to general economic, financial, and other factors that are beyond our control. Accordingly, our business may not generate sufficient cash flow from operations and future borrowings may not be available from additional indebtedness or otherwise to meet our liquidity needs. If we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity to finance such acquisitions, which would result in additional expenses or dilution.

Sources and Uses of Cash

Our primary sources of funds for liquidity include: (i) payments received from the sale or securitization of loans; (ii) proceeds from payments on our outstanding participating interests in loans; and (iii) advances on warehouse facilities, other secured borrowings, and our various notes.

Our primary uses of funds for liquidity include: (i) originations of loans; (ii) funding of borrower advances and draws on outstanding loans; (iii) payment of operating expenses; and (iv) repayment of borrowings and repurchases or redemptions of outstanding indebtedness.

Our cash flow from operating activities when combined with net proceeds from our portfolio financing activities, as well as capacity through existing facilities, provide adequate resources to fund our anticipated ongoing cash requirements. We rely on these facilities to fund operating activities. As the facilities mature, management believes it will either renew existing facilities or obtain sufficient additional lines of credit. Future debt maturities will be funded with cash and cash equivalents, cash flow from operating activities including portfolio investing and financing activities, and, if necessary, future access to capital markets. We continue to optimize the use of balance sheet cash to avoid unnecessary interest carrying costs.

Cash Flows

The following table presents amounts from our Condensed Consolidated Statements of Cash Flows (in thousands):

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Our cash and cash equivalents and restricted cash increased by $100.4 million for the nine months ended September 30, 2025 compared to a decrease of $4.4 million during the comparable period in 2024. Our cash and cash equivalents, excluding restricted cash, increased $62.4 million for the nine months ended September 30, 2025 compared to a decrease of $2.2 million during the comparable period in 2024.

Operating Cash Flow

Cash flows from operating activities decreased by $20.7 million for the nine months ended September 30, 2025 compared to the corresponding 2024 period, which was primarily attributable to an increase in cash used for originations of loans held for sale, partially offset by changes in payables and other liabilities.

Investing Cash Flow

The increase of $171.5 million in cash flows from our investing activities during the nine months ended September 30, 2025 compared to the 2024 period was primarily attributable to a $135.0 million increase in proceeds/payments on loans held for investment, net of cash used for purchases and originations, and a $48.8 million increase in proceeds/payments on loans held for investment, subject to nonrecourse debt, net of cash used for purchases and originations. This was partially offset by a decrease of $5.5 million in proceeds on the sale of mortgage servicing rights (“MSR”).

Financing Cash Flow

The decrease of $45.9 million in cash flows from our financing activities during the nine months ended September 30, 2025 compared to the 2024 period was primarily driven by a $348.5 million increase in payments on HMBS related obligations, net of proceeds, a $235.0 million decrease in proceeds from other financing lines of credit, net of payments, and a $72.0 million increase in payments on notes payable, net of proceeds. This was partially offset by a $609.3 million increase in proceeds from issuance of nonrecourse debt, net of payments.

Financial Covenants

Our credit facilities contain various financial covenants, which primarily relate to required tangible net worth amounts, liquidity reserves, leverage ratios, and profitability. These covenants are measured at FAH or FAR. The Company was in compliance with the financial covenants as of September 30, 2025. Refer to Note 9 - Other Financing Lines of Credit in the Notes to Condensed Consolidated Financial Statements for additional information.

Compliance Requirements

As an issuer of HMBS, FAR is subject to minimum net worth, liquidity, and leverage requirements as well as minimum insurance coverage established and defined by Ginnie Mae as follows:

Minimum Net Worth

• $5.0 million plus 1% of FAR’s outstanding HMBS and unused commitment authority from Ginnie Mae.
• Adjusted net worth is defined as total equity less certain unacceptable assets, including affiliate receivables.

Minimum Liquidity

• Maintain liquid assets equal to at least 20% of the minimum net worth required for a HMBS issuer.

Minimum Leverage Ratio

• Maintain a ratio of adjusted net worth to total assets of at least 6%.

As of September 30, 2025, FAR was in compliance with the minimum net worth, liquidity, capitalization levels, and insurance requirements of Ginnie Mae. FAR’s actual ratio of adjusted net worth to total assets was below the Ginnie Mae requirement due to the Company’s determination that HECM loans transferred into HMBS as well as its HECM buyout and non-agency reverse mortgage loan securitizations do not meet the requirements of sale accounting and are not derecognized upon date of transfer. As a result, the Company accounts for HECM loans transferred into HMBS as well as its HECM buyout and non-agency reverse mortgage loan securitizations as secured borrowings and continues to recognize the loans as held for investment, subject to HMBS related obligations or nonrecourse debt, along with the corresponding liability for the HMBS related obligations or nonrecourse debt. Based on this, FAR requested and received a waiver for the minimum outstanding capital requirements from Ginnie Mae. Therefore, FAR was in compliance with all Ginnie Mae requirements.

In addition, FAR is required to maintain both fidelity bond and errors and omissions insurance coverage at tiered levels based on the aggregate UPB of the loans serviced by FAR throughout the year. FAR is required to conduct compliance testing at least quarterly to ensure compliance with the foregoing requirements. As of September 30, 2025, FAR was in compliance with applicable requirements.

Refer to Note 15 - Liquidity and Capital Requirements in the Notes to Condensed Consolidated Financial Statements for additional information.

Summary of Certain Indebtedness

The following description is a summary of certain material provisions of our outstanding indebtedness. As of September 30, 2025, our debt obligations were $30.1 billion. This summary does not restate the terms of our outstanding indebtedness in its entirety, nor does it describe all of the material terms of our indebtedness.

HMBS Related Obligations

FAR is an approved issuer of HMBS that are guaranteed by Ginnie Mae and collateralized by participation interests in HECM loans insured by the FHA. We originate HECM loans insured by the FHA. Participations in the HECM loans are pooled into HMBS, which are sold into the secondary market with servicing rights retained. We have determined that loan transfers in the HMBS program do not meet the participating interest requirements because of the servicing requirements in the product that require the issuer/servicer to absorb some level of interest rate risk, cash flow timing risk, and incidental credit risk due to the buyout of HECM assets as discussed below. As a result, the transfers of the HECM loans do not qualify for sale accounting, and therefore, we account for these transfers as secured financings. Holders of participating interests in the HMBS have no recourse against assets other than the underlying HECM loans, remittances, or collateral on those loans while they are in the securitization pools, except for standard representations and warranties and our contractual obligation to service the HECM loans and the HMBS.

Remittances received on the reverse mortgage loans, proceeds received from the sale of real estate owned, and our funds used to repurchase reverse mortgage loans are used to reduce the HMBS related obligations by making payments to the securitization pools, which then remit the payments to the beneficial interest holders of the HMBS. The maturity of the HMBS related obligations is directly affected by the liquidation of the reverse mortgage loans or liquidation of real estate owned properties and events of default as stipulated in the reverse mortgage loan agreements with borrowers. As an HMBS issuer, FAR assumes certain obligations related to each security it issues. The most significant obligation is the requirement to purchase loans out of the Ginnie Mae securitization pools once they reach certain limits set at loan origination for the maximum UPB allowed. Performing repurchased loans are generally conveyed to HUD, and nonperforming repurchased loans are generally liquidated in accordance with program requirements.

As of September 30, 2025, we had HMBS related obligations of $18.8 billion and HECM loans pledged as collateral to the pools of $19.0 billion, both recorded at fair value.

Additionally, as the servicer of reverse mortgage loans, we are obligated to fund additional borrowing capacity primarily in the form of undrawn lines of credit on floating rate reverse mortgage loans. We rely upon certain of our secured financing arrangements and our operating cash flows to fund these additional borrowings on a short-term basis prior to securitization. The additional borrowings are generally securitized within 30 days after funding. The obligation to fund these additional borrowings could have a significant impact on our liquidity.

Nonrecourse Debt

We securitize and issue interests in pools of loans that are not eligible for the Ginnie Mae securitization program, which include non-agency reverse mortgage loans and HECM buyouts. The transactions provide investors with the ability to invest in these pools of assets. The transactions provide us with access to liquidity for these assets, ongoing servicing fees, and potential residual returns for the residual securities we retain at the time of securitization. The transactions are structured as secured borrowings with the loan assets and liabilities, respectively, included in the Condensed Consolidated Statements of Financial Condition as Loans held for investment, subject to nonrecourse debt, at fair value, and Nonrecourse debt, at fair value. As of September 30, 2025, we had nonrecourse debt-related borrowings of $10.2 billion and loans held for investment pledged as collateral for the nonrecourse debt of $10.5 billion, both recorded at fair value.

Refer to Note 8 - Nonrecourse Debt, at Fair Value, in the Notes to Condensed Consolidated Financial Statements for additional information.

Other Financing Lines of Credit

Reverse Mortgage Warehouse Facilities

As of September 30, 2025, we had $1.2 billion in warehouse lines of credit capacity collateralized by first and second lien mortgages with a $335.7 million aggregate principal amount drawn through nine funding facility arrangements with eight active lenders. These facilities are generally structured as master repurchase agreements under which ownership of the related eligible loans is temporarily transferred to a lender, as participation arrangements pursuant to which the lender acquires a participation interest in the related eligible loans, or as loan and security agreements under which eligible loans are pledged to the lender as collateral. The funds advanced to us are generally repaid using the proceeds from the sale or securitization of the loans to, or pursuant to, programs sponsored by Ginnie Mae or private secondary market investors, although prior payment may be required based on, among other things, certain breaches of representations and warranties or other events of default.

When we draw on these facilities, we generally must transfer and/or pledge eligible loans to the lender and comply with various financial and other covenants. The facilities generally have one-year terms and expire at various times during 2025 and 2026. Under the facilities, loans are generally transferred and/or pledged at an advance rate less than the principal balance of the loans (the “haircut”), which serves as the primary credit enhancement for the lender. Since the advances to us are generally for less than 100% of the principal balance of the loans, we are required to use working capital to fund the remaining portion of the principal balance of the loans. Upon expiration, management believes it will either renew its existing facilities or obtain sufficient additional lines of credit. The interest rate on all outstanding facilities is the Secured Overnight Financing Rate, plus applicable margin.

The following table presents additional information about our warehouse facilities as of September 30, 2025 (in thousands):

(1) The warehouse lines of credit with a maturity date in October 2025 have been renewed or paid off subsequent to September 30, 2025.

With respect to each of our warehouse facilities, we pay certain up-front and/or ongoing fees which can be based on our utilization of the facility. In some instances, loans held by a lender for a contractual period exceeding 45 to 60 calendar days after we originate such loans are subject to additional fees and interest rates.

Certain of our warehouse facilities contain sub-limits for “wet” loans, which allow us to finance loans for a minimal period of time prior to delivery of the note collateral to the lender. “Wet” loans are loans for which the collateral custodian has not yet received the related loan documentation. “Dry” loans are loans for which all the loan documentation has been delivered to the collateral custodian. “Wet” loans are held by a lender for a contractual period, typically between five and ten business days, and are subject to a reduction in the advance amount.

Interest is generally payable at the time the loan is settled off the line or monthly in arrears, and the principal is payable upon receipt of loan sale or securitization proceeds or transfer of a loan to another line of credit, and upon maturity of the facility. The facilities may also require the outstanding principal to be repaid if a loan remains on the line longer than a contractual period of time, which generally ranges from 45 to 365 calendar days.

Loans financed under certain of our warehouse facilities are subject to changes in fair value and margin calls. The fair value of our loans depends on a variety of economic conditions, including interest rates and market demand for loans. Under certain facilities, if the fair value of the underlying loans declines below the outstanding asset balance on such loans or if the UPB of such loans falls below a threshold related to the repurchase price for such loans, we could be required to (i) repay cash in an amount that cures the margin deficit or (ii) supply additional eligible assets or rights as collateral for the underlying loans to compensate for the margin deficit. Certain warehouse facilities allow for the remittance of cash back to us if the value of the loan exceeds the principal balance.

Our warehouse facilities require our borrowing subsidiaries to comply with various customary operating and financial covenants, including, without limitation, the following tests:

• minimum tangible or adjusted tangible net worth;
• minimum liquidity or minimum liquid assets;
• maximum leverage ratio of total liabilities (which may include off-balance sheet liabilities) or indebtedness to tangible or adjusted tangible net worth; and
• minimum profitability.

In the event we fail to comply with the covenants contained in any of our warehouse lines of credit, or otherwise were to default under the terms of such agreements, we may be restricted from paying dividends, reducing or retiring our equity interests, making investments, or incurring more debt.

Other Secured Lines of Credit

As of September 30, 2025, we collectively had $524.1 million in additional secured facilities with $473.7 million aggregate principal amount drawn through credit agreements or master repurchase agreements with six funding facility arrangements and five active lenders. These facilities are secured by, among other things, eligible asset-backed securities, HECM MSR, and unsecuritized tails. In certain instances, these assets are subject to existing first lien warehouse financing, in which case these facilities (i.e., mezzanine facilities) are secured by the equity in these assets exceeding first lien warehouse financing. These facilities are generally structured as master repurchase agreements under which ownership of the related eligible assets is temporarily transferred to a lender. The funds advanced to us are generally repaid using the proceeds from the sale or securitization of the underlying assets or distribution from underlying securities, although prior payment may be required based on, among other things, certain breaches of representations and warranties or other events of default.

When we draw on these facilities, we generally must transfer and pledge eligible assets to the lender and comply with various financial and other covenants. Under the facilities, we generally transfer the assets at a haircut, which serves as the primary credit enhancement for the lender.

The following table presents additional information about our other secured lines of credit as of September 30, 2025 (in thousands):

(1) These lines of credit are tied to the maturity date of the underlying mortgage related assets or HECM MSR that have been pledged as collateral.

(2) The line of credit with a maturity date in October 2025 has been renewed subsequent to September 30, 2025.

We pay certain up-front and ongoing fees based on our utilization with respect to many of these facilities. We pay commitment fees based upon the limit of the facility and unused fees are paid if utilization falls below a certain amount.

Interest is generally payable at the time the loan or securities are settled off the line or monthly in arrears, and the principal is payable upon receipt of asset sale or securitization proceeds, principal distributions on the underlying pledged securities, or transfer of assets to another line of credit, and upon maturity of the facility.

Under these facilities, we are generally required to comply with various customary operating and financial covenants. The financial covenants are similar to those under the warehouse lines of credit. The Company was in compliance with all financial covenants as of September 30, 2025.

Refer to Note 9 - Other Financing Lines of Credit in the Notes to Condensed Consolidated Financial Statements for additional information.

Notes Payable

Senior Notes Exchange

On November 5, 2020, FOAF issued $350 million aggregate principal amount of senior unsecured notes due November 15, 2025 (the “2025 Unsecured Notes”). On October 31, 2024, FOAF completed an exchange with certain existing noteholders of the 2025 Unsecured Notes. Existing noteholders, representing 97.892% of the aggregate principal amount outstanding of the 2025 Unsecured Notes, exchanged their respective 2025 Unsecured Notes in consideration for (i) the issuance of (a) $195,783,947 of FOAF’s new 7.875% Senior Secured Notes due

November 30, 2026 (the “Senior Secured Notes”), with FOAF’s option to extend until November 30, 2027, (b) $146,793,000 of FOAF’s new 10.000% Exchangeable Senior Secured Notes due November 30, 2029 (the “Exchangeable Secured Notes”), and (ii) cash consideration of $856,555.

The Exchangeable Secured Notes are exchangeable into shares of the Company’s Class A Common Stock. The exchange rate is initially 36.36364 shares of Class A Common Stock per $1,000 principal amount of Exchangeable Secured Notes, which is equivalent to an initial exchange price of $27.50 per share of Class A Common Stock.

FOAF is required to partially prepay in cash, by means of a redemption, a portion of the outstanding principal amount of the Senior Secured Notes on November 15, 2025 in an amount equal to $0.23 per $1.00 principal amount of Senior Secured Notes outstanding.

Consent Support Agreement and Amendment to Pledge and Security Agreement

In order to permit the transactions under the Repurchase Agreement, on August 4, 2025, FOA Equity, FOAF, certain of their direct and indirect subsidiaries who act as guarantors, and a requisite majority of holders of FOAF’s Senior Secured Notes and the Exchangeable Secured Notes entered into a consent support agreement to support and achieve the consummation of certain amendments which, once effective, will provide that $60 million of the principal amount of the Senior Secured Notes will mature on the stated maturity date of November 30, 2026, with FOAF retaining the option to extend the remaining principal balance to the extended maturity date of November 30, 2027, and to provide for required uses of net proceeds from certain of the Additional Collateral (as defined below).

Concurrently, on August 4, 2025, FOA Equity, FOAF, and certain of their direct and indirect subsidiaries who act as guarantors, together with U.S. Bank Trust Company, National Association, as collateral trustee, entered into the first amendment to the Pledge and Security Agreement, dated October 31, 2024, to provide for liens on certain additional collateral to secure the Senior Secured Notes and the Exchangeable Secured Notes, including certain residual proceeds, equity interests, and call rights related to securitizations of the MSR of FAR or any of its affiliates relating to home equity conversion mortgages pooled in Ginnie Mae HECM securities (the “Additional Collateral”). The Additional Collateral will be automatically released on the earlier of February 28, 2026, if the intended supplemental indentures governing the Senior Secured Notes and Exchangeable Secured Notes have not been executed, or at payment in full of the non-extendable Senior Secured Notes on November 30, 2026.

On October 21, 2025, the supplemental indentures governing the Senior Secured Notes and Exchangeable Secured Notes were executed.

Convertible Notes

On August 4, 2025, the Company entered into convertible note purchase agreements with certain existing institutional investors, providing for the purchase of an aggregate of $40 million of a new series of unsecured convertible promissory notes (the “Convertible Notes”). The Convertible Notes, funded and issued on August 4, 2025, mature on August 4, 2028, have a 0% coupon rate, and are convertible, in whole or in part, at the option of the Company or the holder into shares of Class A Common Stock at $18.00 per share for the first year following the issuance date or $19.00 per share starting one year from the issuance date, in each case, subject to customary adjustments. If neither the Company nor the holder elects to convert the Convertible Notes into shares of Class A Common Stock, the $40 million will be payable on the maturity date. The Company has elected to account for the Convertible Notes at fair value under the fair value option.

Other Promissory Notes

On August 4, 2025, the Company’s two outstanding working capital promissory notes with BTO Urban Holdings L.L.C. and Libman Family Holdings, LLC (“LFH”), which are deemed affiliates of the Company, were repaid and terminated in full.

Additionally, on August 4, 2025, FAR entered into an unsecured revolving working capital promissory note with LFH (the “LFH Promissory Note”), which provides for an uncommitted revolving facility of up to $20.0 million. The LFH Promissory Note accrues interest monthly at a rate of 10% per annum and matures on August 4, 2026.

As of September 30, 2025, the Company was in compliance with all required covenants of our notes payable.

Refer to Note 10 - Notes Payable and Note 16 - Related Party Transactions in the Notes to Condensed Consolidated Financial Statements for additional information.

Contractual Obligations and Commitments

The following table provides a summary of contractual obligations as of September 30, 2025 (in thousands):

(1) Amounts exclude the unamortized debt discount and issuance costs and the fair value adjustments for the Convertible Notes.

In addition to the above contractual obligations, we have also been involved with securitizations of HECM loans, which were structured as secured borrowings. These structures resulted in us recording the securitized loans in the Condensed Consolidated Statements of Financial Condition and recognizing the asset-backed certificates acquired by third parties as HMBS related obligations. The timing of the principal payments on this nonrecourse debt is dependent on the payments received on the underlying mortgage loans and liquidation of real estate owned properties. The outstanding principal balance of loans held for investment, subject to HMBS related obligations, was $17.9 billion as of September 30, 2025.

The Company’s TRA obligation will require payments to be made that may be significant and are not reflected in the contractual obligations table above.

We are also required to fund borrower draws on certain loans. These unfunded commitments are not included in the table above. Refer to Note 12 - Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements for additional information.

Critical Accounting Estimates

For a description of our critical accounting estimates, see the Form 10-K filed with the SEC on March 14, 2025, as amended by the Form 10-K/A filed with the SEC on May 20, 2025.

Our principal market risk is interest rate risk, primarily to changes in long-term U.S. Treasury rates and mortgage interest rates due to their impact on mortgage-related assets. Changes in short-term interest rates will also have an impact on our financing lines of credit.

Interest Rate Risk

Changes in interest rates will, in general, impact our operating segments as follows:

Retirement Solutions

• an increase in prevailing interest rates could adversely affect our loan origination volume as new loans or refinancing an existing loan will be less attractive to borrowers.

Portfolio Management

• an increase in interest rates could generate an increase in delinquency, default, and foreclosure rates resulting in an increase in both servicing costs and interest expense on our outstanding debt.
• an increase in interest rates will lead to a higher cost of funds on our financing lines of credit.
• an increase in interest rates and market spreads may cause a reduction in the fair value of our long-term assets.
• a decrease in interest rates may increase prepayment speeds of our long-term assets which could lead to a reduction in the fair value of our long-term assets.

Earnings on our held for investment assets depend largely on our interest rate spread, represented by the relationship between the yield on our interest-earning assets, primarily securitized assets, and the cost of our interest-bearing liabilities, primarily securitized borrowings. Interest rate spreads are impacted by several factors, including forward interest rates, general economic factors, and the quality of the loans in our portfolio.

Sensitivity Analysis

We utilize a sensitivity analysis to assess our market risk associated with changes in interest rates. This sensitivity analysis attempts to assess the potential impact to earnings based on hypothetical changes in interest rates.

We estimate the fair value of the outstanding mortgage loans and related liabilities using a process that combines the use of a DCF model and analysis of current market data. The cash flow assumptions used in the model are based on various factors. Refer to Note 5 - Fair Value in the Notes to Condensed Consolidated Financial Statements for additional information regarding the key inputs, assumptions, and valuation techniques utilized to measure fair value.

Our total market risk is impacted by a variety of other factors including market spreads and the liquidity of the markets. There are certain limitations inherent in the sensitivity analysis presented, including the necessity to conduct the analysis based on a single point in time.

The sensitivities presented are hypothetical and should be evaluated with care. The effect on fair value of a 25 bps variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the hypothetical effects.

The following table summarizes the estimated change in the fair value of our significant assets and liabilities sensitive to interest rates as of September 30, 2025 (in thousands):

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all of our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2025, our disclosure controls and procedures were not effective due to the material weakness in internal control over financial reporting discussed below.

Material Weakness in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements could not be prevented or detected on a timely basis.

As previously reported, in May 2025, errors were identified in the classification and presentation of amounts associated with certain nonrecourse securitization transactions in the Company’s Consolidated Statements of Cash Flows and the related disclosures within the Notes to Consolidated Financial Statements for the year ended December 31, 2024, and quarterly unaudited condensed consolidated financial statements for the quarterly periods ended September 30, 2024, June 30, 2024, and March 31, 2024. Due to the material errors in the classification and presentation of the Company’s Consolidated Statements of Cash Flows and the related disclosures within the Notes to Consolidated Financial Statements, management concluded that a material weakness in our internal control over financial reporting existed as of December 31, 2024.

We identified the control over the preparation and review of the consolidated cash flow statements did not operate effectively in order to prevent or detect the material errors in the classification and presentation of cash flow activities with respect to nonrecourse securitization transactions. As described below, management has made progress towards remediating the material weakness, but the enhanced control will need a period of continued operating effectiveness execution to demonstrate remediation. As such, management has concluded that the material weakness continued to exist as of September 30, 2025.

Notwithstanding this material weakness, based on the additional analysis and other post-closing procedures performed, the Company believes the interim unaudited condensed consolidated financial statements and other financial information included in this Form 10-Q, are fairly presented, in all material respects, in conformity with GAAP.

Plan of Remediation of Material Weakness in Internal Control Over Financial Reporting

As previously described in Item 9A of our Annual Report on Form 10-K/A for the year ended December 31, 2024, we developed a plan to remediate the material weakness which includes the following activities:

a. Enhance control documentation to strengthen the control operating effectiveness and execution consistency of the control over cash flow statement presentation related to nonrecourse debt securitization transactions.

b. Enhance understanding of requirements of ASC 230, Cash Flows, through additional training of accounting and financial reporting personnel responsible for preparing and reviewing the consolidated statement of cash flows.

Management is committed to remediating the material weakness in a timely fashion. Management believes it has made substantial progress towards remediating the material weakness, subject to continuous management testing of the operating effectiveness of this internal control. Given the steps outlined above, management believes such efforts will effectively remediate the material weakness, however, these actions are subject to ongoing management evaluation, and the Company will need a period of execution to demonstrate remediation. Management will continually assess the effectiveness of the remediation efforts and may determine to take additional measures to address control deficiencies or modify the remediation plan described above. The Company is committed to the continuous improvement of its internal control over financial reporting and will continue to diligently review its internal control over financial reporting.

Changes in Internal Control Over Financial Reporting

Other than the remediation efforts described above in this Item 4, there has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information included in this Form 10-Q, you should carefully consider the factors discussed in “Part I, Item 1A. Risk Factors” included in the Form 10-K/A, as well as the factors identified under “Forward-Looking Statements” prior to the beginning of Part I, Item 1 of this Form 10-Q and the items identified in “Other Recent Events” within Part I, Item 2 of this Form 10-Q and as may be updated in subsequent filings with the SEC, which could materially affect the Company’s business, financial condition, or future results. The risks described in the Form 10-K/A and this Form 10-Q are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, or operating results. Except as set forth below, there have been no material changes to the risk factors included in the Form 10-K/A.

The Repurchase may not be completed on the terms or timeline currently contemplated or at all, which could adversely affect our stock price, business, financial condition, and results of operations.

On November 13, 2025, the Company entered into an amended and restated version of the Repurchase Agreement with FOA Equity and the Blackstone Investor (the “Amended and Restated Repurchase Agreement”), filed as Exhibit 10.1 to this Form 10-Q. Pursuant to the Amended and Restated Repurchase Agreement, the consummation of the Repurchase is expected to occur across two closings, referred to as the “First Closing” and the “Second Closing” (each, a “Closing”). At the First Closing, the Company will repurchase at least 50% of the Sold Equity (the “First Closing Sold Equity”) on the earlier of (i) December 4, 2025 (the “Initial Outside Date”) and (ii) the third business day following the satisfaction or waiver of conditions precedent set forth in the Amended and Restated Repurchase Agreement. At the Second Closing, the Company will repurchase the remaining Sold Equity not repurchased at the First Closing (the “Second Closing Sold Equity”) no later than February 27, 2026. Each share of Class A Common Stock and each Class A LLC Unit will be purchased for $10.00 per share or Class A LLC Unit, and the shares of Class B Common Stock and Earnout Rights will be purchased for no consideration. However, such price for the Class A Common Stock and Class A LLC Units will, for the Second Closing Sold Equity (and if the First Closing has not occurred on or prior to the Initial Outside Date, for all Sold Equity) increase by a fixed per annum rate equal to 15.00% accruing monthly. Further, if the First Closing does not occur on or prior to the Initial Outside Date, the purchase price will automatically increase by a premium of $10,037,271.20, which amount will be immediately due and payable upon the First Closing (or at the first time any Sold Equity is repurchased under the Amended and Restated Repurchase Agreement). Each Closing is subject to the satisfaction of various conditions, including, among other things: (i) in the case of the First Closing, the receipt of a customary opinion; (ii) the accuracy of the other party’s representations and warranties (subject to certain materiality qualifiers); (iii) the other party’s compliance in all material respects with its pre-Closing covenants; and (iv) the absence of any law that enjoins, restrains, or otherwise prohibits or makes illegal the consummation of the Repurchase. While it is currently anticipated that the First Closing will occur on or prior to the Initial Outside Date and the Second Closing will occur on or prior to February 27, 2026, there can be no assurance that the foregoing conditions will be satisfied in a timely manner or at all, or that an effect, event, development, or change will not transpire that could delay or prevent these conditions from being satisfied.

If the Repurchase is not consummated for any reason, the trading price of our common stock may decline to the extent that the market price of the common stock reflects positive market assumptions that the Repurchase will be consummated and the related benefits will be realized. We may also be subject to additional risks if the Repurchase is not completed, including incurring substantial costs related to the Repurchase, such as legal, accounting, valuation advisory, and other professional services fees that have already been incurred or will continue to be incurred until closing, and reputational harm including relationships with investors, customers, and business partners due to the adverse perception of any failure to successfully complete the Repurchase.

Further, the Blackstone Investor may terminate the Amended and Restated Repurchase Agreement if the First Closing has not occurred on or prior to the Initial Outside Date or if the Second Closing has not occurred on or prior to February 27, 2026. In addition, the parties may terminate the Repurchase Agreement (i) by mutual written consent; (ii) if any governmental entity has issued a final and non-appealable order, decree or ruling, or taken any other final and non-appealable action restraining, enjoining, or otherwise prohibiting the Repurchase; or (iii) if the other party has breached its representations or warranties or covenants or agreements in a way that would prevent satisfaction of a closing condition and such breach cannot be cured (if capable of being cured) within 30 days following the receipt of written notice of such breach. In addition, if the First Closing has not occurred on or prior to the Initial Outside Date or if the Second Closing has not occurred on or prior to February 27, 2026, the Blackstone Investor will have the right to transfer its Sold Equity to unaffiliated third parties, in which case the Company would not be able to purchase the Sold Equity sold to such third parties. As a result, the occurrence of the aforementioned items could adversely affect our stock price, business, financial condition, and results of operations.