Company: FOACW
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001828937-25-000061
Chunk: 30

Company: Finance of America Companies Inc.
Filing Date: 2025-08-11
Form: 10-Q
Item: Item 2
Chunk 30
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.6 million increase in payments on HMBS related obligations, net of proceeds, and a $27.0 million decrease in proceeds related to our notes payable. This was partially offset by a $224.8 million increase in proceeds from issuance of nonrecourse debt, net of payments, and a $5.8 million increase in proceeds from other financing lines of credit, 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 June 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.

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Minimum Leverage Ratio

•Maintain a ratio of adjusted net worth to total assets greater than 6%.

As of June 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