Borrowings

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Borrowings

4. Borrowings

In December 2022, the Company entered into a $50 million Master Repurchase Agreement (the "NexBank Line") with NexBank, as the buyer. The Company used the proceeds from the NexBank Line to fund the acquisition and origination of business purpose loans (the "Loans") secured by residential, multifamily and certain commercial properties. Each draw on the NexBank Line could be outstanding up to 180 days. NexBank had a security interest in the Loans subject to a transaction under the NexBank Line. The NexBank Line's maturity was 364 days from the execution date.

The NexBank Line accrued interest at a rate equal to the greater of (a) the 1 month Term SOFR rate plus three and one-half percent (3.50%) or (b) four and one-quarter (4.25%). Interest was payable at 90 days. The carrying value of the NexBank Line approximated fair value as of December 31, 2022 due to its short-term nature and floating interest rate terms. NexBank Line’s outstanding balance was $9.2 million at December 31, 2022 and was collateralized by $10.4 million in loans. The NexBank line was paid off and terminated on November 7, 2023.

In August 2022, the Company entered into a $50 million Master Repurchase Agreement (the “Flagstar Line”) with Flagstar Bank FSB (“Flagstar”), a federal savings bank, as a buyer and administrative agent. The Company used the proceeds from the Flagstar Line to fund the acquisition and origination of Loans secured by residential, multifamily and certain commercial properties. Each draw on the Flagstar Line could be outstanding up to 180 days. Flagstar had a security interest in the Loans subject to a transaction under the Flagstar Line and requires the Company to maintain restricted cash of $2 million in a Flagstar deposit account. The Flagstar Line's maturity was 364 days from the execution date.

The Flagstar Line accrued interest at a base 1-Month Term SOFR rate plus a spread dependent upon the type of Loan subject to a transaction. Interest was payable at 90 days. The Company also incurred a fee on the unused portion of the $50 million if the average outstanding balance of the Flagstar Line is less than a threshold level of the total commitment. The carrying value of the Flagstar Line approximated fair value as of December 31, 2022 due to its short-term nature and floating interest rate terms. The Flagstar Line’s outstanding balance was $42.5 million at December 31, 2022 and was collateralized by $57.4 million in loans. The Flagstar line was paid off and terminated on September 7, 2023.