Finance of America Companies Inc.FOA
Finance of America Companies Inc. Debt Disclosure
13. Notes Payable
Senior Notes
Exchange
On November 5, 2020, FOAF issued $350 million aggregate principal amount of senior unsecured notes due November 15, 2025 (the “2025 Unsecured Notes”). On October 31, 2024 (the “Issue Date”), FOAF completed an exchange with certain existing noteholders of the 2025 Unsecured Notes. Existing noteholders, representing 97.892% of the aggregate principal amount outstanding of the 2025 Unsecured Notes, exchanged their respective 2025 Unsecured Notes in consideration for (i) the issuance of (a) $195,783,947 of FOAF’s new 7.875% Senior Secured Notes due November 30, 2026 (the “Senior Secured Notes”), with FOAF’s option to extend until November 30, 2027 (subsequently amended as described below), (b) $146,793,000 of FOAF’s new 10.000% Exchangeable Senior Secured Notes due November 30, 2029 (the “Exchangeable Secured Notes”) (collectively, the “Secured Notes”), and (ii) cash consideration of $856,555.
We concluded that the exchanged 2025 Unsecured Notes and Secured Notes had substantially different terms, and accordingly, we accounted for the exchange as an extinguishment of the 2025 Unsecured Notes and the issuance of the Secured Notes. As a result, the Company initially recorded the Secured Notes at fair value and recognized an extinguishment gain of $56.2 million for the year ended December 31, 2024, which is included in Non-funding interest income (expense), net, in the Consolidated Statements of Operations. The Secured Notes are subsequently being carried at amortized cost.
Senior Secured Notes
FOAF issued the Senior Secured Notes pursuant to an indenture (the “Senior Secured Notes Indenture”) among FOAF, FOA Equity and certain of its respective direct and indirect subsidiaries who act as guarantors (the “Guarantors”), and the Company and U.S. Bank Trust Company, National Association, as trustee (the “Senior Secured Notes Trustee”) and collateral trustee (the “Collateral Trustee”). The Senior Secured Notes are fully and unconditionally guaranteed on a senior basis by the Guarantors and are secured by the collateral as described below.
In accordance with the amendments as described below, the Senior Secured Notes will mature on November 30, 2026 (the “Scheduled Maturity Date”), provided that such Scheduled Maturity Date may be extended at the election of FOAF until November 30, 2027 (the “Extended Maturity Date”), subject to an increase in the applicable interest rate as described below, payment of a fee to the holders of the Senior Secured Notes equal to 0.25% of the principal amount of the Senior Secured Notes prior to the effectiveness of any such extension, and other customary provisions as described in the Senior Secured Notes Indenture.
In order to permit the transactions under the Repurchase Agreement (as defined in Note 23 - Related Party Transactions), FOA Equity, FOAF, certain of their direct and indirect subsidiaries who act as guarantors, and a requisite majority of holders of FOAF’s Secured Notes entered into certain amendments which provide that $60 million of the principal amount of the Senior Secured Notes will mature on the Scheduled Maturity Date, with FOAF retaining the option to extend the remaining principal balance to the Extended Maturity Date, and to provide for required uses of net proceeds from certain of the Additional Collateral (as defined below).
Pursuant to the Senior Secured Notes Indenture, FOAF was required to partially prepay in cash, by means of a redemption, a portion of the outstanding principal amount of the Senior Secured Notes in November 2025, in an amount equal to $0.23 per $1.00 principal amount of Senior Secured Notes outstanding, or $45.0 million.
The Senior Secured Notes bore interest at a rate of 7.875% per year until the first anniversary of the Issue Date and bear interest at a rate of 8.875% per year from the first anniversary of the Issue Date to the Scheduled Maturity Date. If FOAF elects the extension, the Senior Secured Notes will bear interest at a rate of 9.875% per year from the Scheduled Maturity Date until the Extended Maturity Date. FOAF pays interest semi-annually in arrears on May 30 and November 30 of each year, beginning on November 30, 2024.
In accordance with the Senior Secured Notes Indenture, as the two Revolving Working Capital Promissory Note Agreements (the “Working Capital Promissory Notes”) were paid off and terminated in August 2025 (refer to Note 23 - Related Party Transactions for additional information), FOAF is required to partially or fully redeem the Senior Secured Notes at a redemption price of par plus accrued and unpaid interest, upon the occurrence of certain specified events including, but not limited to (i) if amounts on deposit in a specified controlled account at month end and certain other additional determination dates, exceed, by at least $10.0 million, the amount of interest expected to be due and payable on the Secured Notes on the next two scheduled interest payment dates (based on the then
outstanding principal amount of the Secured Notes and the then applicable interest rate) and (ii) there are excess net cash proceeds from certain collateral dispositions to the extent not applied in accordance with the collateral disposition requirements of the Senior Secured Notes Indenture, in an amount equal to such net cash proceeds. The Senior Secured Notes will not be redeemable at FOAF’s option at any time.
If certain events constituting a Change of Control occur, as defined in the Senior Secured Notes Indenture, FOAF will be required to make an offer to repurchase all of the Senior Secured Notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest.
The Senior Secured Notes Indenture contains restrictive covenants that limit, among other things, the ability of FOAF and certain of its subsidiaries, including the Guarantors, to incur additional indebtedness, repay indebtedness before its respective stated maturity, make restricted payments (including investments), sell or dispose of assets, incur liens, and enter into certain transactions with affiliates. These incurrence-based covenants are subject to exceptions and qualifications. The Company was in compliance with all required covenants related to the Senior Secured Notes as of December 31, 2025.
Exchangeable Secured Notes
FOAF issued the Exchangeable Secured Notes pursuant to an indenture (the “Exchangeable Secured Notes Indenture”) among FOAF, the Company, the Guarantors, and U.S. Bank Trust Company, National Association, as trustee (the “Exchangeable Notes Trustee”) and Collateral Trustee. The Exchangeable Secured Notes are fully and unconditionally guaranteed on a senior basis by the Guarantors and are secured by the collateral as described below.
The Exchangeable Secured Notes will mature on November 30, 2029 and bear interest at a rate of 10.000% per year, payable semi-annually in arrears on May 30 and November 30 of each year, beginning on November 30, 2024.
The Exchangeable Secured Notes are exchangeable on the terms set forth in the Exchangeable Secured Notes Indenture into shares of the Company’s Class A Common Stock. The exchange rate is initially 36.36364 shares of Class A Common Stock per $1,000 principal amount of Exchangeable Secured Notes (the “Exchange Rate”), which is equivalent to an initial exchange price of $27.50 per share of Class A Common Stock. The Exchange Rate will be subject to adjustment as provided in the Exchangeable Secured Notes Indenture. Holders of the Exchangeable Secured Notes have the right to exchange all or any portion of their Exchangeable Secured Notes at their option, at any time prior to the close of business on the second scheduled trading day immediately preceding November 30, 2029, subject to certain limitations as further described in the Exchangeable Secured Notes Indenture. To the extent that the Company, however, determines in good faith that it would be in the best interest of the Company to do so in order to preserve the benefit of tax attributes of the Company and/or its subsidiaries, including net operating losses, FOAF, in its discretion, may elect to settle any exchange in part or in whole by delivering the cash value of the shares of Class A Common Stock otherwise deliverable upon such exchange.
The Exchangeable Secured Notes will not be redeemable at FOAF’s option at any time, except in certain limited circumstances as provided for in the Exchangeable Secured Notes Indenture. In certain circumstances, FOAF may be required to offer to repurchase, partially or fully, the Exchangeable Secured Notes. If the Company or FOAF undergoes a Fundamental Change (as defined in the Exchangeable Secured Notes Indenture), subject to certain conditions, holders of the Exchangeable Secured Notes may require FOAF to repurchase all or part of their Exchangeable Secured Notes at a repurchase price equal to 101% of the principal amount of the Exchangeable Secured Notes to be repurchased, plus the applicable premium and accrued and unpaid interest.
The Exchangeable Secured Notes Indenture contains certain covenants and events of default similar to, but less restrictive than, those contained in the Senior Secured Notes Indenture. The Company was in compliance with all required covenants related to the Exchangeable Secured Notes as of December 31, 2025.
Collateral for the Secured Notes
In connection with the issuance of the Secured Notes, FOAF entered into a pledge and security agreement (the “Pledge and Security Agreement”) with the Collateral Trustee (appointed as such thereunder for purposes of the holding and perfecting the liens securing the Secured Notes) and the grantors party thereto, pursuant to which the collateral securing the Secured Notes’ obligations was granted.
In accordance with the Pledge and Security Agreement, as the Working Capital Promissory Notes were paid off and terminated in August 2025 (refer to Note 23 - Related Party Transactions for additional information), the Secured Notes are secured on a pari passu basis, pursuant to a collateral trust agreement among the grantors party thereto, the Senior Secured Notes Trustee, the Exchangeable Notes Trustee, and the Collateral Trustee (which governs the
relative rights among the holders of the Senior Secured Notes and the Exchangeable Secured Notes), by a first priority lien granted by the grantors in the Permanent Collateral (as defined below). The Permanent Collateral includes, subject to permitted liens, the equity instruments required to be retained by a subsidiary of FOA Equity (presently and in the future) in connection with the issuance of non-agency reverse mortgage loan asset-backed securitizations, and the equity interests in certain subsidiaries of FOA Equity (the “Permanent Collateral”).
FOAF and the Guarantors, as applicable, are required to enter into certain deposit account and securities account control agreements with respect to the Permanent Collateral, including under certain circumstances and threshold amounts with respect to unrestricted cash, subject to certain permitted uses.
On August 4, 2025, FOA Equity, FOAF, and certain of their direct and indirect subsidiaries who act as guarantors, together with the Collateral Trustee, entered into the first amendment to the Pledge and Security Agreement to provide for liens on certain additional collateral to secure the Senior Secured Notes and the Exchangeable Secured Notes, including certain residual proceeds, equity interests, and call rights related to securitizations of the MSR of FAR or any of its affiliates relating to HECM loans pooled in Ginnie Mae HMBS (the “Additional Collateral”). The Additional Collateral will be automatically released once the non-extendable Senior Secured Notes are paid in full on November 30, 2026.
2025 Unsecured Notes
The 2025 Unsecured Notes bore interest at a rate of 7.875% per year, payable semi-annually in arrears on May 15 and November 15. The 2025 Unsecured Notes were repaid and terminated in full in November 2025. As of December 31, 2024, the effective interest rate for our 2025 Unsecured Notes was 7.7%.
Convertible Notes
On August 4, 2025, the Company entered into convertible note purchase agreements with certain existing institutional investors, providing for the purchase of an aggregate of $40 million of a new series of unsecured convertible promissory notes (the “Convertible Notes”). The Convertible Notes, funded and issued on August 4, 2025, mature on August 4, 2028, have a 0% coupon rate, and are convertible, in whole or in part, at the option of the Company or the holder into shares of Class A Common Stock at $18.00 per share for the first year following the issuance date or $19.00 per share starting one year from the issuance date, in each case, subject to customary adjustments. If neither the Company nor the holder elects to convert the Convertible Notes into shares of Class A Common Stock, the $40 million will be payable on the maturity date. The Company has elected to account for the Convertible Notes at fair value under the fair value option.
Other Promissory Notes
The Company has an unsecured revolving working capital promissory note with Libman Family Holdings, LLC, a related party (the “LFH Promissory Note”), and previously had the related party Working Capital Promissory Notes. Refer to Note 23 - Related Party Transactions for additional information.
Notes payable consisted of the following (in thousands):
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Maturity Date | Interest Rate | Principal Amount | Unamortized Debt Discount and Issuance Costs | Carrying Value | Principal Amount | Unamortized Debt Discount and Issuance Costs | Carrying Value | ||||||||||||||||||||||||||||||||||||||||||
| Senior Secured Notes | November 2026(1) | 8.875% | $ | 150,754 | $ | (24,665) | $ | 126,089 | $ | 195,784 | $ | (39,710) | $ | 156,074 | ||||||||||||||||||||||||||||||||||||
| Exchangeable Secured Notes | November 2029 | 10.000% | 146,793 | (16,753) | 130,040 | 146,793 | (20,734) | 126,059 | ||||||||||||||||||||||||||||||||||||||||||
| LFH Promissory Note | August 2026 | 10.000% | 20,000 | — | 20,000 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| 2025 Unsecured Notes | N/A | N/A | — | — | — | 7,378 | — | 7,378 | ||||||||||||||||||||||||||||||||||||||||||
| Working Capital Promissory Notes | N/A | N/A | — | — | — | 85,000 | — | 85,000 | ||||||||||||||||||||||||||||||||||||||||||
| Total notes recorded at amortized cost | 317,547 | $ | (41,418) | 276,129 | 434,955 | $ | (60,444) | 374,511 | ||||||||||||||||||||||||||||||||||||||||||
| Convertible Notes, recorded at fair value | August 2028 | 0.000% | 40,000 | 53,800 | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable | $ | 357,547 | $ | 329,929 | $ | 434,955 | $ | 374,511 | ||||||||||||||||||||||||||||||||||||||||||
(1) As discussed in the Senior Secured Notes section above, the Company has the option to extend a portion of the principal balance to the extended maturity date of November 30, 2027.
Interest expense on our notes payable consisted of the following (in thousands):
| Year ended | |||||||||||
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Senior Secured Notes | |||||||||||
| Contractually stated | $ | 16,169 | $ | 2,543 | |||||||
| Amortization of debt discount and issuance costs | 15,045 | 2,360 | |||||||||
| Total Senior Secured Notes | 31,214 | 4,903 | |||||||||
| Exchangeable Secured Notes | |||||||||||
| Contractually stated | 13,897 | 2,231 | |||||||||
| Amortization of debt discount and issuance costs | 3,981 | 639 | |||||||||
| Total Exchangeable Secured Notes | 17,878 | 2,870 | |||||||||
| Working Capital Promissory Notes | 7,509 | 11,319 | |||||||||
| LFH Promissory Note | 444 | — | |||||||||
| 2025 Unsecured Notes | 510 | 22,319 | |||||||||
Total interest expense (Note 17 - Interest Income and Interest Expense) | $ | 57,555 | $ | 41,411 | |||||||
As of December 31, 2025 and 2024, the effective interest rate for our Senior Secured Notes was 21.5% and 19.1%, respectively, and the effective interest rate for our Exchangeable Secured Notes was 13.7% for both years, inclusive of amortization of debt discount and issuance costs.
As of December 31, 2025, the maturities of notes payable are as follows (in thousands):
| Year Ending December 31, | Amount | |||||||
| 2026 | $ 170,754(1) | |||||||
| 2027 | — | |||||||
| 2028 | 40,000 | |||||||
| 2029 | 146,793 | |||||||
| Total notes payable | $ | 357,547 | ||||||
(1) As discussed in the Senior Secured Notes section above, the Company has the option to extend a portion of the principal balance to the extended maturity date of November 30, 2027.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 15, 2022 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.