
						Weighted Average
Loan Type	Unpaid Principal Balance		Carrying Value(1)		Loan Count	Floating Rate Loan %		Coupon(2)		Term (Years)(3)
June 30, 2025
Loans held-for-investment
Senior secured loans(4)	$	924,227,644	$	919,672,180	56	100.0	%	7.9	%	1.5
Allowance for credit losses	N/A		(14,252,268)
	924,227,644		905,419,912		56	100.0	%	7.9	%	1.5


						Weighted Average
Loan Type	Unpaid Principal Balance		Carrying Value(1)		Loan Count	Floating Rate Loan %		Coupon(2)		Term (Years)(3)
December 31, 2024
Loans held-for-investment
Senior secured loans(4)	$	1,065,563,646	$	1,060,123,298	65	100.0	%	8.1	%	2.1
Allowance for credit losses	N/A		(11,320,220)
	1,065,563,646		1,048,803,078		65	100.0	%	8.1	%	2.1

(2) Weighted average coupon assumes applicable 30-day term Secured Overnight Financing Rate ("SOFR") of 4.31% and 4.51% as of June 30, 2025 and December 31, 2024, respectively, inclusive of weighted average interest rate floor of 0.97% and 0.63%, respectively. As of June 30, 2025 and December 31, 2024, 100.0% of the investments by total investment exposure earned a floating rate indexed to 30-day term SOFR.

(4) As of June 30, 2025, $902,921,404 of the outstanding senior secured loans were held in VIEs and $2,498,492 of the outstanding senior secured loans were held outside of VIEs. As of December 31, 2024, $1,049,886,009 of the outstanding senior secured loans were held in VIEs and $(1,082,931) of the outstanding senior secured loans were held outside of VIEs.


	Commercial Mortgage Loans Held-for-Investment



Balance at December 31, 2024	$	1,048,803,078
Purchases, advances and originations	3,605,000
Principal payments	(118,376,467)
Transfer to Real Estate Owned	(26,867,505)
Charge-offs	2,910,385
Origination and other loan fees	(1,186,611)
Accretion of purchase discount	1,181,563
Accretion of deferred loan fees	1,192,902
Provision for credit losses	(5,842,433)
Balance at June 30, 2025	$	905,419,912

Loan Risk Ratings: As further described in Note 2, the Company evaluates the commercial mortgage loan portfolio on a quarterly basis and assigns a risk rating based on a variety of factors. The following table presents the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of June 30, 2025 and December 31, 2024:


	June 30, 2025
				Amortized Cost by Year of Origination
Risk Rating	Number of Loans	Outstanding Principal		2025		2024		2023		2022		2021
1	—	$	—	$	—	$	—	$	—	$	—	$	—
2	6	80,365,000		3,574,551		27,056,641		—		49,470,843		—
3	28	495,516,994		—		31,046,957		17,931,720		178,773,996		262,310,309
4	14	224,238,863		—		—		—		159,662,031		59,283,424
5	8	124,106,787		—		—		—		35,730,051		80,579,389
	56	$	924,227,644	$	3,574,551	$	58,103,598	$	17,931,720	$	423,636,921	$	402,173,122


	December 31, 2024
				Amortized Cost by Year of Origination
Risk Rating	Number of Loans	Outstanding Principal		2024		2023		2022		2021
1	—	$	—	$	—	$	—	$	—	$	—
2	3	57,840,000		27,048,495		—		30,416,761		—
3	40	616,637,103		31,019,735		17,973,555		266,895,843		294,277,177
4	16	292,826,616		—		—		140,183,307		147,641,857
5	6	98,259,927		—		—		74,158,849		19,187,499
	65	$	1,065,563,646	$	58,068,230	$	17,973,555	$	511,654,760	$	461,106,533

As of June 30, 2025, the average risk rating of the commercial mortgage loan portfolio was 3.5 (Moderate Risk), weighted by investment carrying value, with 63.0% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager.

As of December 31, 2024, the average risk rating of the commercial mortgage loan portfolio was 3.5 (Moderate Risk), weighted by investment carrying value, with 63.7% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager.

The average risk rating of the portfolio remained consistent during the six months ended June 30, 2025. The change in underlying risk rating consisted of loans that paid off with a risk rating of "3" of $94.6 million, a risk rating of "4" of $21.5 million and a risk rating of "5" of $2.0 million during the six months ended June 30, 2025, partially offset by funding of loans with a risk rating of "2" of $3.6 million. Additionally, $18.9 million of loans with a risk rating of "3" transitioned to a risk rating of "2," $75.9 million of loans with a risk rating of "3" transitioned to a risk rating of "4", $49.4 million of loans with a risk rating of "3" transitioned to a risk rating of "5," $88.1 million of loans with a risk rating of "4" transitioned to a risk rating of "3", $44.6 million of loans with a risk rating of "4" transitioned to a risk rating of "5", $29.6 million of loans with a risk rating of "5" transitioned to a risk rating of "3" and $21.1 million of loans with a risk rating of "5" transitioned to a risk rating of "4". Further, $11.5 million of loans with a risk rating of "4" and $15.4 million of loans with a risk rating of "5" were foreclosed and moved to REO.

Concentration of Credit Risk: The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of June 30, 2025 and December 31, 2024:


	Three months ended				Six months ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Allowance for credit losses at beginning of period	$	17,060,194	$	7,816,462	$	11,320,220	$	6,059,006

Provision for credit losses	102,459		1,376,712		5,842,433		3,134,168
Charge offs	(2,910,385)		—		(2,910,385)		—
Allowance for credit losses at end of period	$	14,252,268	$	9,193,174	$	14,252,268	$	9,193,174


	Three months ended				Six months ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Allowance for credit losses at beginning of period	$	15,241	$	63,064	$	57,554	$	43,647

(Release of) provision for credit losses	(7,691)		22,991		(50,004)		42,408

Allowance for credit losses at end of period	$	7,550	$	86,055	$	7,550	$	86,055


	June 30, 2025
	General Reserve		Specific Reserve		Total Reserve
Allowance for credit losses:
Loans held for investment	$	6,607,320	$	7,644,948	$	14,252,268
Unfunded loan commitments	7,550		—		7,550
Total allowance for credit losses	$	6,614,870	$	7,644,948	$	14,259,818
Total unpaid principal balance	$	800,120,857	$	124,106,787	$	924,227,644


	December 31, 2024
	General Reserve		Specific Reserve		Total Reserve
Allowance for credit losses:
Loans held for investment	$	7,544,969	$	3,775,251	$	11,320,220
Unfunded loan commitments	57,554		—		57,554
Total allowance for credit losses	$	7,602,523	$	3,775,251	$	11,377,774
Total unpaid principal balance	$	967,303,719	$	98,259,927	$	1,065,563,646

During the three months ended June 30, 2025, the Company recorded a decrease of $2.8 million in the allowance for credit losses, bringing the total allowance for credit losses to $14.3 million as of June 30, 2025. For the three months ended June 30, 2025, the Company's estimate of expected credit losses decreased primarily due to charge-off of specific reserves related to two loans foreclosed on in the period.

During the period ended June 30, 2025, management identified a loan, collateralized by a multifamily property in Orlando, FL, with an unpaid principal balance of $19.6 million as requiring individual evaluation for a specific allowance for credit losses due to maturity default, and a resulting risk rating of "5"; however, no specific allowance for credit losses were required after analysis of the underlying collateral.

During the period ended June 30, 2025, management identified a loan, collateralized by a multifamily property in Colorado Springs, CO, with an unpaid principal value of $10.5 million as requiring individual evaluation for a specific allowance for credit losses due to monetary default, and a resulting risk rating of "5"; a specific allowance of $0.8 million for credit losses was required after analysis of the underlying collateral value. This loan has been on non-accrual status since December 31, 2024 as a result of the monetary default, with interest recorded as income on a cash basis. During the three and six months ended June 30, 2025, the Company recognized $0.1 million of interest on this loan.

During the period ended June 30, 2025, management identified a loan, collateralized by a multifamily property in Clarkston, GA, with an unpaid principal value of $24.5 million as requiring individual evaluation for a specific allowance for credit losses due to monetary default, and a resulting risk rating of "5"; a specific allowance of $3.8 million for credit losses was required after analysis of the underlying collateral value.

During the period ended June 30, 2025, management identified a loan, collateralized by a multifamily property in Ypsilanti, MI, with an unpaid principal value of $11.9 million as requiring individual evaluation for a specific allowance for credit losses due to monetary default, and a resulting risk rating of "5"; a specific allowance of $2.9 million for credit losses was required after analysis of the underlying collateral value. This loan has been on non-accrual status since March 31, 2025 as a result of the monetary default, with interest recorded as income on a cash basis. During the three months ended June 30, 2025, the Company has not recognized interest on this loan.

During the period ended June 30, 2025, management identified a loan, collateralized by a multifamily property in Cedar Park, TX, with an unpaid principal value of $13.7 million as requiring individual evaluation for a specific allowance for credit losses due to monetary default, and a resulting risk rating of "5"; however, no specific allowance for credit losses was required after analysis of the underlying collateral value. This loan was placed on non-accrual status as of June 30, 2025, as a result of the monetary default, with interest recorded as income on a cash basis. During the three months ended June 30, 2025, the Company recognized $0.1 million of interest on this loan.

During the period ended June 30, 2025, management identified a loan, collateralized by a multifamily property in San Antonio, TX, with an unpaid principal value of $26.6 million as requiring individual evaluation for a specific allowance for credit losses due to monetary default, and a resulting risk rating of "5"; however, no specific allowance for credit losses was required after analysis of the underlying collateral value.

During the period ended June 30, 2025, management identified a loan, collateralized by a multifamily property in Des Moines, IA, with an unpaid principal value of $8.2 million as requiring individual evaluation for a specific allowance for credit losses due to monetary default, and a resulting risk rating of "5"; however, no specific allowance for credit losses was required after analysis of the underlying collateral value. This loan was placed on non-accrual status as of June 30, 2025, as a result of the monetary default, with interest recorded as income on a cash basis. During the three months ended June 30, 2025, the Company recognized $0.0 million of interest on this loan.

During the period ended June 30, 2025, management identified a loan, collateralized by a multifamily property in San Antonio, TX, with an unpaid principal value of $9.1 million as requiring individual evaluation for a specific allowance for credit losses due to monetary default, and a resulting risk rating of "5"; a specific allowance of 0.2 million for credit losses was required after analysis of the underlying collateral value.

During the period ended December 31, 2024, management identified a loan, collateralized by a multifamily property in Dallas, TX, with an unpaid principal value of $31.6 million as requiring individual evaluation for a specific allowance for credit losses due to technical default, and a resulting risk rating of "5"; however, no specific allowance for credit losses was required after analysis of the underlying collateral value. In the first quarter of 2025, this loan was modified as discussed below and transitioned to a risk rating of "3".

During the period ended December 31, 2024, management identified a loan, collateralized by two healthcare properties in Polk County, FL, with an unpaid aggregate principal value of $6.1 million as requiring individual evaluation for a specific allowance for credit losses due to monetary default, and a resulting risk rating of "5"; a specific allowance of $0.6 million for credit losses was required after analysis of the underlying collateral value. This loan was placed on non-accrual as of December 31, 2024 as a result of the monetary default, with interest recorded as income on a cash basis. In the first quarter of 2025, this loan transitioned to a risk rating of "4", is performing on its interest payments and was returned to accrual status.

During the period ended December 31, 2024, management identified a loan, collateralized by two multifamily properties in Philadelphia, PA, with an unpaid aggregate principal value of $15.0 million as requiring individual evaluation for a specific allowance for credit losses due to monetary default, and a resulting risk rating of "5"; a specific allowance of $0.1 million for credit losses was required after analysis of the underlying collateral value. This loan was placed on non-accrual status as of June 30, 2024, as a result of the monetary default, with interest collections accounted for under the cost recovery method. In the second quarter of 2025, this loan transitioned to a risk rating of "4", is performing on its interest payments and was returned to accrual status.

During the period ended December 31, 2024, management identified a loan, collateralized by a multifamily property in San Antonio, TX, with an unpaid principal value of $15.4 million as requiring individual evaluation for a specific allowance for credit losses due to technical default, and a resulting risk rating of "5"; a specific allowance of $2.4 million for credit losses was required after analysis of the underlying collateral value. This loan was placed on non-accrual status as of December 31, 2024 as a result of the technical default, with interest recognized as income on a cash basis. In the second quarter of 2025, this loan was foreclosed on, with ownership and deed to the property being taken by a newly formed subsidiary of 2021-FL1 CLO.

During the period ended March 31, 2025, management identified a loan, collateralized by a multifamily property in Houston, TX, with an unpaid principal value of $11.5 million as requiring individual evaluation for a specific allowance for credit losses due to monetary default, and a resulting risk rating of "5"; a specific allowance of $0.5 million for credit losses was required after analysis of the underlying collateral value. In the second quarter of 2025, this loan was foreclosed on, with ownership and deed to the property being taken by a newly formed subsidiary of LMF 2023-1 Financing.

Our Manager's asset management team pro-actively manages the Company's investment portfolio. The asset management team, together with our Manager's underwriting and servicing teams, monitors the credit performance of the investment portfolio, working closely with borrowers to manage all of our positions and monitor financial performance of our collateral assets, including execution of business plans and daily activities within our investment portfolio.

The Company has elected to apply a practical expedient for collateral dependent assets in which the allowance for credit losses is calculated as the difference between the estimated fair value of the underlying collateral, less estimated costs to sell, and the amortized cost basis of the loan. As such, these loans receivable are measured at fair value on a nonrecurring basis using significant unobservable inputs and are classified as Level 3 assets in the fair value hierarchy. The fair value of the underlying collateral is determined using the income approach, market approach, or a combination thereof. The significant unobservable input for the income capitalization approach is the overall capitalization rate assumption, used in the direct capitalization method, which ranged from 5.50%-7.40%. The significant unobservable input used for the market approach is the price per unit from a broker opinion of value and third-party offers. As of June 30, 2025, the unpaid principal balance of default risk loans was $104.5 million, amortized cost of $96.7 million and fair value of $96.8 million.

The Company may amend or modify a loan depending on the loan's specific facts and circumstances. These loan modifications typically include additional time for a borrower to refinance or sell their property, adjustment or waiver of performance tests that are prerequisite to the extension of a loan maturity, modification of terms of interest rate cap agreements, and/or deferral of scheduled principal payments. In exchange for a modification, we often receive a partial repayment of principal, a cash infusion to replenish interest or capital improvement reserves, termination of all or a portion of the remaining unfunded loan commitment, additional call protection and/or an increase in the loan coupon or additional fees.

In March 2025, in connection with a loan assumption, the Company modified a risk-rated 5 multifamily loan located in Dallas, TX, with an outstanding principal balance of $31.9 million. The terms of the modification included, among other things, a $2.0 million principal repayment, a term extension of two years, a reduction in credit spread from 3.9% to 3.4% and a purchase of a replacement interest rate cap.