Company: MFAN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001055160-25-000018
Chunk: 109

Company: MFA FINANCIAL, INC.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 109
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Table of ContentsMFA FINANCIAL, INC.NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSSEPTEMBER 30, 2025

(c) Capital Contributions Made to Loan Origination Partners The Company has made investments in several loan originators as part of its strategy to be a reliable source of capital to select partners from whom the Company sources residential mortgage loans through both flow arrangements and bulk purchases.  At September 30, 2025, the carrying value of these investments (including adjustments for impairments or mark-to-market changes) was $20.2 million, including $5.1 million of common equity (including partnership interests) and $15.1 million of preferred equity.During the nine months ended September 30, 2025 and 2024, there were no impairment charges recorded by the Company on its investments in loan origination partners.  Prior to December 31, 2024, the Company had elected to account for certain of these investments pursuant to the fair value option, where changes in estimated fair value were recorded on the statement of operations. Such changes in estimated fair value resulted in gains (losses) being recorded of $0.0 million and $3.4 million during the three and nine months ended September 30, 2025, and $(1.5) million and $(3.0) million during the three and nine months ended September 30, 2024.For certain of the Company’s investments, the interests acquired to date by the Company generally do not have a readily determinable fair value.  Consequently, the Company accounts for these interests (including any acquired options and warrants) in loan originators initially at cost.  The carrying value of these investments will be adjusted if it is determined that an impairment has occurred or if there has been a subsequent observable transaction in either the investee company’s equity securities or a similar security that provides evidence to support an adjustment to the carrying value.  In addition, for certain partners, options or warrants have also been acquired that provide the Company the ability to increase the level of its investment if certain conditions are met.  At the end of each reporting period, or earlier if circumstances warrant, the Company evaluates whether the nature of its interests and other involvement with the investee entity requires the Company to apply equity method accounting or consolidate the results of the investee entity with the Company’s financial results. 

(d) Commercial Mortgage LoansThe Company owns two participations in commercial mortgage bridge loans,