Company: MFAN
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001055160-25-000007
Chunk: 100

Company: MFA FINANCIAL, INC.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 1
Chunk 100
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 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 $0.8 million during the three months ended March 31, 2025, and $0.0 million during the three months ended March 31, 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. 

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Table of ContentsMFA FINANCIAL, INC.NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTSMARCH 31, 2025

(d) Commercial Mortgage LoansThe Company owns two participations in commercial mortgage bridge loans, which are accounted for at fair value under the fair value option, and are classified as Level 3 fair value measurements in the fair value hierarchy.  Each of the participations is 75% of the total UPB of the related loans and the remaining interest in each loan was retained by the originator of such loan. The commercial mortgage loans are collateralized by one multifamily property and one office property.  The commercial mortgage loans are first liens and bear variable interest rates.  The Company has received interests in two of the previously underlying properties, as further described above under “Commercial REO.”The following table presents certain additional information about the Company’s commercial mortgage loans as of March 31, 2025 and December 31, 2024:(Dollars In