Company: FOACW
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001828937-25-000009
Chunk: 31

Company: Finance of America Companies Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 7
Chunk 31
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 of $80.1 million in proceeds on the sale of MSR, and a decrease in net proceeds from the sale of businesses of $68.2 million. This was partially offset by a $351.5 million decrease in cash used for purchases and originations of loans held for investment, net of proceeds/payments, and a $140.9 million cash outlay for the AAG Transaction in the 2023 period.

Financing Cash Flow

The increase of $525.4 million in cash provided by our financing activities during the year ended December 31, 2024 compared to the 2023 period was primarily driven by a $516.7 million increase in proceeds on other financing lines of credit, net of payments, and a $499.9 million decrease in payments on nonrecourse debt, net of proceeds. This was partially offset by a $467.0 million increase in payments on HMBS related obligations, net of proceeds.

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 our holding company subsidiary or our operating subsidiaries. The Company was in compliance with or obtained waivers to the terms of the financial covenants as of December 31, 2024. Refer to Note 14 - Other Financing Lines of Credit in the Notes to Consolidated Financial Statements for additional information. 

Compliance Requirements

As an issuer of HMBS, FAR is subject to net worth, liquidity, and leverage requirements as 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.

•Tangible net worth is defined as total equity less goodwill, intangible assets, affiliate receivables, and certain pledged assets.

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 tangible net worth to total assets greater than 6%.

As of December 31, 2024 and December 31, 2023, FAR was in compliance with the net worth and liquidity requirements. FAR’s actual ratio of tangible net worth to total assets was below the Ginnie Mae requirement due to the Company’s determination that HECM loans transferred into HMBS securitizations as well as its HECM buyout