Company: FOACW
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001828937-25-000033
Chunk: 126

Company: Finance of America Companies Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Item 2
Chunk 126
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63

Operating Cash Flow

Cash flows from operating activities improved by $40.2 million for the three months ended March 31, 2025 compared to the corresponding 2024 period. The improvement was primarily attributable to changes in payables and other liabilities.

Investing Cash Flow (As Restated)

The decrease of $39.7 million in cash flows from our investing activities during the three months ended March 31, 2025 compared to the 2024 period was primarily attributable to a $56.9 million increase in cash used for purchases and originations of loans held for investment, net of proceeds/payments, and a decrease of $4.7 million in proceeds on the sale of mortgage servicing rights (“MSR”). This was partially offset by an increase of $22.3 million in proceeds/payments on loans held for investment, subject to nonrecourse debt, net of cash used for purchases and originations.

Financing Cash Flow (As Restated)

The decrease of $69.4 million in cash flows from our financing activities during the three months ended March 31, 2025 compared to the 2024 period was primarily driven by a $135.5 million increase in payments on HMBS related obligations, net of proceeds, a $52.1 million decrease in proceeds from other financing lines of credit, net of payments, and a $26.3 million decrease in proceeds related to our notes payable. This was partially offset by a $145.0 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 March 31, 2025. Refer to Note 10 - 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