Company: MFAN
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001055160-25-000004
Chunk: 244

Company: MFA FINANCIAL, INC.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 1A
Chunk 244
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 designed to stabilize or reform the mortgage finance markets may not achieve their intended effect or otherwise benefit our business, and could materially affect our business.

Regulatory Risks and Risks Related to the Investment Company Act of 1940

•Our business is subject to extensive regulation.

•Certain jurisdictions require licenses to purchase, hold, enforce or sell residential mortgage loans.

•Maintaining our exemption from registration under the Investment Company Act significantly limits our operations.

Risks Related to Our Use of Hedging Strategies

•Our use of hedging strategies to mitigate our interest rate exposure may not be effective.

•We may enter into hedging instruments that could expose us to contingent liabilities in the future.

•The characteristics of hedging instruments present various concerns, including illiquidity, enforceability, and counterparty risks. 

Risks Related to Our Taxation as a REIT and the Taxation of Our Assets

•If we fail to remain qualified as a REIT, we will be subject to tax as a regular corporation and could face a substantial tax liability.

•If our foreign TRS is subject to U.S. federal income tax at the entity level, it would greatly reduce the amounts those entities would have available to pay its creditors and distribute to us.

•Our use of TRSs may cause us to fail to qualify as a REIT.

•We have not established a minimum dividend payment level.

•Our reported GAAP net income may differ from the amount of REIT taxable income and dividend distribution requirements.

•The failure of assets subject to repurchase agreements to qualify as real estate assets could adversely affect our ability to remain qualified as a REIT.

•Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.

•We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them.

•The interest apportionment rules may affect our ability to comply with the REIT asset and gross income tests. 

•Dividends paid by REITs do not qualify for the reduced tax rates available for “qualified dividend income.”

Risks Related to Our Corporate Structure

•Provisions of Maryland law and other provisions of our organizational documents may limit the ability of a third-party to acquire control of the Company.

•Future offerings of debt securities and equity securities may adversely affect the market price of our common stock.

Other Business Risks

•We are dependent on our executive officers and other key personnel for our success.

•We operate in a highly competitive