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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2025

The accompanying consolidated financial statements comprise the financial statements of FOA and its controlled subsidiaries. The consolidated financial statements have been prepared in accordance with United States of America (the “U.S.”) generally accepted accounting principles (“GAAP”) pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). In the opinion of management, such financial information reflects all normal and recurring adjustments necessary for a fair presentation of the consolidated financial statements in accordance with U.S. GAAP.

The significant accounting policies, together with the other Notes to Consolidated Financial Statements, are an integral part of the consolidated financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates regarding loans held for investment, HMBS related obligations, and nonrecourse debt are particularly subject to change. Actual results may differ from those estimates and assumptions due to factors such as changes in the economy, interest rates, secondary market pricing, prepayment assumptions, home prices, or discrete events affecting specific borrowers, and such differences could be material.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its controlled subsidiaries, and certain VIEs where the Company is the primary beneficiary. The Company is deemed to be the primary beneficiary of a VIE when it has both (1) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (2) exposure to benefits and/or losses that could potentially be significant to the entity. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that the Company became the primary beneficiary through the date that the Company ceases to be the primary beneficiary.

Asset Acquisitions and Business Combinations

As of the acquisition date, the Company evaluates acquisitions to determine whether the Company has acquired a business or a group of assets. The evaluation includes a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. The

results of this evaluation impact whether the Company accounts for an acquisition under business combination or asset acquisition guidance.

If the screen test is met, the acquisition is not considered to be a business, and is instead accounted for as an asset acquisition. Asset acquisitions are measured following a cost accumulation and allocation model, whereby the costs to acquire the assets, including transaction costs, are accumulated and then allocated to the individual assets and liabilities acquired based upon their estimated fair values. No goodwill or bargain purchase gain is recognized in an asset acquisition.

Discontinued Operations and Assets Held for Sale

The Company classifies assets and liabilities as held for sale when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable within one year, and the disposal group is available for immediate sale in its present condition. We also consider whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate it is unlikely significant changes to the plan will be made or the plan will be withdrawn.

We classify operations as discontinued when they meet all the criteria to be classified as held for sale and when the sale represents a strategic shift that has had or will have a major effect on our operations and financial results. The Company considers a component of the entity that is being exited to be discontinued operations when all operations, including wind-down operations, cease.

VIEs

The Company has been the transferor in connection with securitizations or asset-backed financing arrangements with special purpose entities (“SPEs”), in which the Company has continuing involvement with the underlying transferred financial assets. The Company’s continuing involvement includes acting as servicer for the mortgage loans transferred and retaining beneficial interests in the SPE to which the assets were transferred.

The Company evaluates its interests in each SPE for classification as a VIE. When an SPE meets the definition of a VIE and the Company determines that it is the VIE’s primary beneficiary, the Company includes the SPE in its consolidated financial statements.

The beneficial interests held consist of residual securities that were retained at the time of securitization. These beneficial interests may obligate the Company to absorb losses of the VIE that could potentially be significant to the VIE, or affords the Company the right to receive benefits from the VIE that could potentially be significant to the VIE. In addition, when the Company acts as servicer of the transferred assets, the Company retains the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE. When it is determined that the Company has both the power to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, the assets and liabilities of these VIEs are included in the consolidated financial statements of the Company. The Company reassesses its evaluation of an entity as a VIE upon the occurrence of certain reconsideration events as the primary beneficiary determination may change over time as interest in the VIE changes.

From time to time, the Company may purchase securities that were previously issued by consolidated trusts. Under these circumstances, we extinguish the outstanding debt and recognize gains or losses for the difference between the consideration paid and the carrying value of the debt. For the year ended December 31, 2025, the Company recognized gains of $38.8 million on extinguishment of debt related to these purchases. There were no such gains or losses recognized for the year ended December 31, 2024. The gains or losses are recorded in Interest expense in the Consolidated Statements of Operations.

The Company elected the fair value option, which was applied to the nonrecourse debt issued by the consolidated VIE and to the loans that serve as collateral for the nonrecourse debt.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. These investments are with high quality financial, governmental, or corporate institutions and potentially subject the Company to concentrations of credit risk.

Restricted Cash

Restricted cash includes amounts specifically designated to repay debt and provide over-collateralization within lines of credit and securitized nonrecourse debt obligations, custodial accounts related to the Company’s portfolio of mortgage loans serviced for investors, and funds deposited from prospective borrowers to cover out-of-pocket expenses incurred by the Company in connection with due diligence activities performed during the loan approval process. Certain funds deposited with the Company may be returned to the borrower at the time the loan funds or if the loan does not close. The Company records a liability for these amounts until the loan has closed or a cost has been incurred.

Loans Held for Investment, Subject to HMBS Related Obligations, at Fair Value

A HECM loan is a reverse mortgage loan available to homeowners aged 62 and over that allows conversion of a portion of the home’s equity into cash. The HECM loan terms do not have a defined maturity date or a scheduled repayment of principal and interest. Variable interest rates are tied to an index plus a margin that typically ranges up to three percentage points. Interest compounds over the life of the loan and is not paid by the borrower until the loan is repaid. HECM loans include a monthly mortgage insurance premium (“MIP”) that is payable to the FHA. The MIP amount is typically calculated as 1.25% of the mortgage balance for loans originated prior to October 2, 2017 and 0.5% for loans originated after October 2, 2017 and accretes to the borrower’s loan balance over the life of the loan. As the issuer, the Company is responsible for remitting the MIP to the FHA.

A maturity event will cause the loan to become due and payable. Maturity events include: borrower has passed away and the property is not the principal residence of at least one surviving borrower; borrower has sold or conveyed title of the property to a third-party; the property is no longer the principal residence of at least one borrower for reasons other than death; the borrower does not maintain the property as principal residence for a period exceeding 12 months; the borrower fails to pay property taxes and/or insurance and all attempts to rectify the situation have been exhausted; and the property is in disrepair and the borrower has refused or is unable to repair the property.

Once a loan has become due and payable, unsecuritized borrower advances cannot be placed into a Government National Mortgage Association (“Ginnie Mae”) HMBS. Generally, the Company recovers such advances (referred to as unpoolable tails) from borrowers, from proceeds of liquidation of collateral, or ultimate disposition of the loan, including conveyance of claims to the FHA.

If the loan is not paid within six months of the maturity event, the Company may proceed with foreclosure on the property. A loan may be satisfied by borrower repayment, sales or appraisal-based claim submissions to the U.S. Department of Housing and Urban Development (“HUD”), and/or foreclosure sale proceeds. If the Company sells the property within six months, it may file a sales-based claim with HUD to recover any shortfall between the sales price of the property and the outstanding loan balance. If the property is not sold within six months, the Company may file an appraisal-based claim with HUD to recover any shortfall between the appraised value and the outstanding loan balance. Once the appraisal-based claim is paid by HUD, any subsequent expenses or loss in the property’s value exposes the Company to additional losses that may not be eligible to be recouped through the filing of an additional HUD claim.

The Company has determined that HECM loans transferred under the current Ginnie Mae HMBS program do not meet the requirements for sale accounting and are not derecognized upon date of transfer. The Ginnie Mae HMBS program includes certain terms that do not meet the participating interest requirements and require or provide an option for the Company to reacquire the loans prior to maturity. Due to these terms, the transfer of the loans does not meet the requirements of sale accounting. As a result, the Company accounts for HECM loans transferred into HMBS as secured borrowings and continues to recognize the loans as held for investment, subject to HMBS related obligations, along with the corresponding liability for the HMBS related obligations. No gains or losses are recognized on these transfers of HECM loans into HMBS.

Loans are considered nonperforming upon events such as, but not limited to, the death of the mortgagor, the mortgagor no longer occupying the property as their principal residence, or the property taxes or insurance not being paid. In addition to having to fund repurchase of these loans out of Ginnie Mae HMBS, the Company also typically earns a lower interest rate and incurs certain non-reimbursable costs during the process of liquidating nonperforming loans. Loans purchased out of Ginnie Mae HMBS are recorded in Loans held for investment or Loans held for investment, subject to nonrecourse debt, in the Consolidated Statements of Financial Condition at their fair value reflective of proceeds of liquidation of collateral or ultimate disposition of the loan.

Loans held for investment, subject to HMBS related obligations, also include claims receivable that have been submitted to HUD awaiting reimbursement. These are recorded based on amounts that the Company expects to recover through outstanding claims.

The yield recognized on loans held for investment, subject to HMBS related obligations, is based on the stated interest rates of the loans and is recorded in Interest income in the Consolidated Statements of Operations. Through the servicing of HECM loans, the Company generates tails. Tails consist of subsequent borrower draws, mortgage insurance premiums, service fees, and other advances, which the Company is able to subsequently securitize. The fair value gains recognized on the securitization of tails are recorded in Gains on securitization of HECM tails, net, in the Consolidated Statements of Operations. The changes in fair value due to portfolio runoff and realization of modeled income and expenses are recorded in Fair value changes from model amortization in the Consolidated Statements of Operations, and other fair value changes are recorded in Fair value changes from market inputs or model assumptions in the Consolidated Statements of Operations.

The Company elected the fair value option for all loans held for investment, subject to HMBS obligations.

Loans Held for Investment, Subject to Nonrecourse Debt, at Fair Value

Loans held for investment, subject to nonrecourse debt, at fair value, primarily consists of reverse mortgage loans that were securitized and serve as collateral for the issued nonrecourse debt, including non-agency reverse mortgages and HECM buyouts that were securitized into trusts that meet the definition of a VIE and were consolidated or did not qualify for true sale accounting. The Company has determined that it has both the power to direct the activities that most significantly impact the economic performance of the VIE, and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

Non-agency reverse mortgage loans are designated for homeowners aged 55 and over, depending on the loan product and state that the homeowner resides in. The maximum non-agency loan amount is $4 million. Non-agency reverse mortgage loans are not insured by the FHA and will not be placed into a Ginnie Mae HMBS; however, the Company may transfer or pledge these assets as collateral for securitized nonrecourse debt obligations and other financing lines of credit.

The yield recognized on loans held for investment, subject to nonrecourse debt, is based on the stated interest rates of the loans and is recorded in Interest income in the Consolidated Statements of Operations. The changes in fair value due to portfolio runoff and realization of modeled income and expenses are recorded in Fair value changes from model amortization in the Consolidated Statements of Operations, and other fair value changes are recorded in Fair value changes from market inputs or model assumptions in the Consolidated Statements of Operations.

The Company elected the fair value option for all loans held for investment, subject to nonrecourse debt.

Loans Held for Investment, at Fair Value

Loans held for investment, at fair value, primarily consists of certain reverse mortgage loans that the Company intends to hold to maturity. Reverse mortgage loans held for investment consists of originated or purchased HECM and non-agency reverse mortgage loans not yet securitized, unsecuritized tails, and certain HECM loans purchased out of Ginnie Mae HMBS.

HECM loans and tails that have not yet been securitized into HMBS consist primarily of newly-issued HECM loans that the Company has either originated or purchased, subsequent borrower draws, and amounts paid by the Company on the borrower’s behalf for MIP that have not yet been transferred to a Ginnie Mae securitization.

The Company, as an issuer of HMBS, is required to repurchase reverse mortgage loans out of the Ginnie Mae securitization pools once the outstanding principal balance of the related HECM loan is equal to or greater than 98% of the maximum claim amount (“MCA”) (referred to as HECM buyouts). The majority of performing loans are conveyed to HUD prior to the Company needing to finance the HECM buyouts. Nonperforming repurchased loans are generally liquidated through foreclosure, subsequent sale of the real estate owned, and claim submissions to HUD.

The yield recognized on loans held for investment is based on the stated interest rates of the loans and is recorded in Interest income in the Consolidated Statements of Operations. The difference between the cost basis of loans and their estimated fair value is recognized at time of origination in Net origination gains in the Consolidated Statements

of Operations. The changes in fair value due to portfolio runoff and realization of modeled income and expenses are recorded in Fair value changes from model amortization in the Consolidated Statements of Operations, and other fair value changes are recorded in Fair value changes from market inputs or model assumptions in the Consolidated Statements of Operations.

The Company elected the fair value option for all loans held for investment. Refer to Note 5 - Fair Value for further discussion of the valuation of loans held for investment.

Loan origination fees represent an up-front fee charged to a borrower for processing the HECM loan or non-agency reverse mortgage loan application and are recorded in Fee income in the Consolidated Statements of Operations when received, which occurs upon the successful funding of the loan. Costs to originate loans are recognized as incurred and recorded in Loan production and portfolio related expenses in the Consolidated Statements of Operations.

Certain HECM and non-agency reverse mortgage loans originated or acquired by the Company include broker compensation or correspondent fees. These amounts are remitted to the mortgage broker or correspondent lender that acted as the intermediary for the reverse mortgage loan. Broker compensation and correspondent fees are recorded as part of Net origination gains in the Consolidated Statements of Operations.

Intangible Assets, Net

Intangible assets, net, consist of trade names and broker/customer relationships acquired through various asset acquisitions and business combinations and are recorded at their estimated fair value on the date of acquisition. Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives and are evaluated for potential impairment whenever events or changes in circumstances suggest that the carrying value of an asset may not be fully recoverable. Amortization expense of definite-lived intangibles is included in Amortization and depreciation in the Consolidated Statements of Operations.

Intangible assets deemed to have an indefinite life are not amortized but are instead reviewed annually for potential impairment or when indicators of a potential impairment are present. In the course of our evaluation of the potential impairment of such indefinite-lived assets, we may elect either a qualitative or a quantitative assessment. After assessing the events or circumstances, if we determine it is more likely than not that the fair value is greater than its carrying amount, we are not required to perform a quantitative impairment analysis. However, if we conclude otherwise, we then perform a quantitative impairment analysis. The Company performs its annual impairment testing as of October 1 and monitors for interim triggering events on an ongoing basis as events occur or circumstances change.

Other Assets, Net

Other assets, net, primarily consists of government guaranteed receivables, retained bonds, at fair value, loans held for sale, at fair value, receivables, net of allowance, right-of-use (“ROU”) assets, prepaid expenses, fixed assets, net, and other. Refer to Note 8 - Other Assets, Net, for additional information related to continuing operations.

Government Guaranteed Receivables

The Company accounts for foreclosed mortgage loans guaranteed by the government as a separate receivable. These are recorded at amounts the Company expects to receive from the liquidation of the underlying property and any expected claim proceeds from HUD for shortfall on liquidation proceeds.

Outstanding HUD claims associated with HECM loans that are collateral for issued and outstanding HMBS may be retained inside the HMBS while the associated HECM loan remains insured by HUD or a HUD claim is outstanding and the HECM loan has not yet reached 98% of the loan’s MCA. Subsequent to reaching 98% of the MCA, the Company must purchase the loan out of the HMBS.

Retained Bonds, at Fair Value

We have a residual interest that we retain in certain securitizations related to our unconsolidated VIEs. The yield recognized on retained bonds is based on the stated interest rates of the bonds and is recorded in Interest income in the Consolidated Statements of Operations. The changes in fair value due to portfolio runoff and realization of modeled income and expenses are recorded in Fair value changes from model amortization in the Consolidated Statements of Operations, and other fair value changes are recorded in Fair value changes from market inputs or model assumptions in the Consolidated Statements of Operations.

Loans Held for Sale, at Fair Value

Loans held for sale, at fair value, primarily represents reverse mortgage loans originated and held by the Company until sold to the secondary market. The difference between the cost basis of loans and their expected margin on sale is recognized at time of origination in Net origination gains in the Consolidated Statements of Operations. Fair value changes after loan origination, but before loan sale, are recorded in Fair value changes from market inputs or model assumptions in the Consolidated Statements of Operations.

Loans held for sale, at fair value, also include residential mortgage loans originated and held by the Company until sold to the secondary market. Residential mortgage loans had a fair value of $1.3 million and $3.5 million as of December 31, 2025 and 2024, respectively, and an unpaid principal balance (“UPB”) of $1.8 million and $4.3 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, there were $0.7 million and $1.6 million, respectively, in UPB of residential mortgage loans that were 90 days or more past due and on non-accrual status.

The Company elected the fair value option for all loans held for sale. Refer to Note 5 - Fair Value for further discussion of the valuation of loans held for sale.

Receivables, Net of Allowance

Receivables, net of allowance, are represented by amounts due from investors and other parties and are stated at amounts that the Company expects to collect. If the Company expects to collect less than 100% of the recorded receivable balances, an allowance for doubtful accounts is recorded based on the current expected credit loss methodology, which includes a combination of historical experience, aging analysis, information on specific balances, and reasonable and supportable forecasts.

Fixed Assets, Net

Fixed assets primarily consist of computer hardware and software, furniture and fixtures, and leasehold improvements. Fixed assets are depreciated or amortized on a straight-line basis over their estimated useful lives of three to seven years, or the term of the related office lease for leasehold improvements, if shorter. The Company capitalizes certain costs associated with the acquisition of internal-use software and amortizes the software over its estimated useful life, commencing at the time the software is placed in service.

The gross carrying value of fixed assets was $8.7 million and $14.5 million as of December 31, 2025 and 2024, respectively, with accumulated depreciation and amortization of $4.3 million and $10.7 million as of December 31, 2025 and 2024, respectively. Fixed assets, net, were $4.4 million and $3.8 million as of December 31, 2025 and 2024, respectively. Depreciation and amortization expense was $1.4 million and $1.7 million for the years ended December 31, 2025 and 2024, respectively.

The Company evaluates fixed assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Impairment related to fixed assets is recorded in Impairment of other assets in the Consolidated Statements of Operations.

During 2024, certain operating losses of the Company triggered an impairment analysis and the Company recognized an impairment charge of $0.5 million for fixed assets in the year ended December 31, 2024.

Leases

The Company evaluates all leases at inception and classifies the lease as either an operating lease or a finance lease. The Company’s lease portfolio is comprised primarily of real estate and equipment agreements. Operating leases in which the Company is the lessee are recorded as operating lease ROU assets and operating lease liabilities, included in Other assets, net, and Payables and other liabilities, respectively, in the Consolidated Statements of Financial Condition. The Company does not currently have any finance leases.

Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term. ROU assets are further adjusted for lease incentives. Operating lease expense is recognized on a straight-line basis over the lease term and is recorded in General and administrative expenses in the Consolidated Statements of Operations. The Company recognizes variable lease payments associated with the Company’s leases when the variability is resolved. Variable lease payments are recorded in General and administrative expenses in the Consolidated Statements of Operations along with expenses arising from fixed lease payments.

The ROU asset in an operating lease is subject to impairment similar to other long-lived assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by that asset. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company estimates the fair value using a discounted cash flow (“DCF”) model with the discount rate being the significant assumption. Impairment related to ROU assets is recorded in Impairment of other assets in the Consolidated Statements of Operations. During 2024, certain operating losses of the Company triggered an impairment analysis and the Company recognized an impairment charge of $0.4 million for the ROU asset in the year ended December 31, 2024.

Operating lease liabilities represent the Company’s obligation to make lease payments arising from the terms of the lease. The lease liabilities are initially recognized based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate as of the lease commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available as of the lease commencement date in determining the present value of the lease payments. This incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment and given similar credit risk. The lease term for all of the Company’s leases includes the noncancellable period of the lease plus any additional periods covered by the option to extend (or not to terminate) the lease. The Company includes these options in the lease term when it is reasonably certain of exercising them.

The Company elected not to recognize lease assets and lease liabilities for leases with a term of 12 months or less and not to separate lease components from non-lease components.

HMBS Related Obligations, at Fair Value

HMBS related obligations, at fair value, represent the issuance of HMBS, which are guaranteed by Ginnie Mae, to third-party security holders. As the securitizations do not meet the criteria for sale accounting treatment, the Company accounts for the transfers of these advances in the related HECM loans as secured borrowings, retaining the initial HECM loans in the Consolidated Statements of Financial Condition as Loans held for investment, subject to HMBS related obligations, at fair value, and recording the HMBS as HMBS related obligations, at fair value. This liability includes the Company’s obligation to repay the secured borrowing from the FHA-insured HECM cash flows and the obligations as issuer and servicer of the HECM loans and HMBS. Monthly cash flows generated from the HECM loans are used to service the outstanding HMBS.

As an issuer of HMBS, the Company is obligated to service the HECM loan and associated HMBS, which includes funding the repurchase of the HECM loans or pass through of cash due to the holder of the beneficial interests in the Ginnie Mae HMBS upon maturity events and certain funding obligations related to monthly guarantee fees, mortgage insurance proceeds, and partial month interest.

As an issuer, the Company is required to repurchase reverse mortgage loans out of the Ginnie Mae securitization pools once the outstanding principal balance of the related HECM loan is equal to or greater than 98% of the MCA. The Company is also required to pay off the outstanding remaining principal balance of secured borrowings if certain triggering events are reached prior to the 98% of MCA limit, such as death of borrower and completion of foreclosure. The majority of performing loans are conveyed to HUD prior to the Company needing to finance the HECM buyouts. Nonperforming repurchased loans are generally liquidated through foreclosure, subsequent sale of real estate owned, and claim submissions to HUD. Loans are considered nonperforming upon events such as, but not limited to, the death of the mortgagor, the mortgagor no longer occupying the property as their principal residence, or the property taxes or insurance not being paid. The Company relies upon its secured financing facilities (refer to Note 10 - Other Financing Lines of Credit for additional information) and operating cash flows, to the extent necessary, to repurchase loans. The timing and amount of the Company’s obligation to repurchase HECM loans is uncertain as repurchase is predicated on certain factors such as whether or not a borrower event of default occurs prior to the HECM loan reaching the mandatory repurchase threshold under which the Company is obligated to repurchase the loan.

In addition to having to fund repurchases, the Company may sustain losses during the process of liquidating the loans. The issuer is also required to fund guarantee fees to Ginnie Mae, MIP to the FHA, and is obligated to fund partial month interest resulting from shortfalls in interest received from borrower payoffs to the holders of the

HMBS beneficial interests. Estimated cash flows associated with these obligations are included in the HMBS related obligations, at fair value, in the Consolidated Statements of Financial Condition.

The interest on HMBS related obligations is based on the stated interest rates of the obligations and is recorded in Interest expense in the Consolidated Statements of Operations. The changes in fair value due to portfolio runoff and realization of modeled income and expenses are recorded in Fair value changes from model amortization in the Consolidated Statements of Operations, and other fair value changes are recorded in Fair value changes from market inputs or model assumptions in the Consolidated Statements of Operations.

The Company elected the fair value option for all HMBS related obligations.

Nonrecourse Debt, at Fair Value

Nonrecourse debt, at fair value, is debt of consolidated VIE securitization trusts or unconsolidated funds that provide nonrecourse financing. The consolidated VIE loans initially transferred to the securitization trust and the assets designated to unconsolidated funds serve as collateral for the nonrecourse debt, and the principal and interest cash flows from these loans serve as the source of repayment.

The interest on nonrecourse debt is based on the stated interest rates of the debt and is recorded in Interest expense in the Consolidated Statements of Operations. Discounts are amortized to Interest expense in the Consolidated Statements of Operations over the expected life of the note using the effective interest method. The changes in fair value due to portfolio runoff and realization of modeled income and expenses are recorded in Fair value changes from model amortization in the Consolidated Statements of Operations, and other fair value changes are recorded in Fair value changes from market inputs or model assumptions in the Consolidated Statements of Operations.

The Company elected the fair value option for all nonrecourse debt.

Other Financing Lines of Credit

Other financing lines of credit principally consist of variable-rate, asset-backed warehouse facilities and other secured lines of credit that support the origination of mortgage loans and operations of the Company. These lines of credit provide creditors with a collateralized interest in specific mortgage loans and other Company assets that meet the eligibility requirements under the terms of the facility. The source of repayment of the facilities is typically from the sale or securitization of the underlying loans into the secondary mortgage market. The Company evaluates its capacity needs for lines of credit and adjusts the amount of available capacity under these facilities in response to the current mortgage environment and origination needs. Refer to Note 10 - Other Financing Lines of Credit for additional information.

Interest expense from these financings is recorded in Interest expense in the Consolidated Statements of Operations. Costs incurred in connection with obtaining financing lines of credit are capitalized to Other assets, net, within the Consolidated Statements of Financial Condition and amortized over the term of the related financing as Interest expense within the Consolidated Statements of Operations.

Notes Payable

Notes payable, with the exception of the Convertible Notes (as defined in Note 13 - Notes Payable), are recorded at amortized cost. The interest recognized on notes payable is based on the stated interest rates of the debt and is recorded in Non-funding interest income (expense), net, in the Consolidated Statements of Operations.

For notes payable recorded at amortized cost, the issuance costs and discounts are initially capitalized as part of the notes payable balance and are amortized over the expected life of the note using the effective interest method. These expenses are recorded in Non-funding interest income (expense), net, in the Consolidated Statements of Operations.

The Company has elected the fair value option for the Convertible Notes. Refer to Note 5 - Fair Value for additional information. Issuance costs related to notes payable recorded at fair value are expensed as incurred and recorded in General and administrative expenses in the Consolidated Statements of Operations. The changes in fair value of the Convertible Notes are recorded in Other, net, in the Consolidated Statements of Operations.

Payables and Other Liabilities

Payables and other liabilities primarily consist of accrued and other liabilities, lease liabilities, accrued compensation expense, Ginnie Mae reverse mortgage buyout payable, and deferred purchase price liabilities. Refer to Note 11 - Payables and Other Liabilities for additional information related to continuing operations.

Ginnie Mae Reverse Mortgage Buyout Payable

As an issuer of HMBS, the Company is required to repurchase reverse mortgage loans out of the Ginnie Mae securitization pools once the outstanding principal balance of the related HECM loan is equal to or greater than 98% of the MCA. The Company is also required to pay off the outstanding remaining principal balance of secured borrowings if certain triggering events are reached prior to the 98% of MCA limit, such as death of borrower and completion of foreclosure.

Deferred Purchase Price Liabilities

As a result of the March 31, 2023 acquisition of certain assets and liabilities from American Advisors Group, now known as Bloom Retirement Holdings Inc. (“AAG/Bloom”), the Company recorded contingent liabilities based on expected future payouts. The Company measures any contingent consideration at fair value and adjusts the reported amount each period with the change in fair value recorded in Other, net, in the Consolidated Statements of Operations. The Company also has other deferred purchase price liabilities related to this acquisition.

The Company has entered into a Tax Receivable Agreement (“TRA”) with certain owners of FOA Equity. Initial measurement of the obligations was at fair value, and they are remeasured at fair value each reporting period, with any changes in fair value recognized in Other, net, in the Consolidated Statements of Operations. The Company records obligations under the TRA resulting from applicable future exchanges as they occur, at the gross undiscounted amount of the expected future payments as an increase to the liability along with the deferred tax asset and valuation allowance (if any) with an offset to additional paid-in capital. If the Company determines that it is no longer probable that a related contingent payment will be required based on expected future cash flows, a reversal of the liability is recorded through Other, net, in the Consolidated Statements of Operations.

Comprehensive Income

Foreign currency translation adjustments are reported as a separate component in the Consolidated Statements of Equity and, together with net income, comprise the Company’s comprehensive income.

Revenue Recognition

The majority of revenues generated by the Company in connection with originations and servicing are not within the scope of the accounting guidance for revenue from contracts with customers.

Loan origination fees are the primary component of Fee income in the Consolidated Statements of Operations. These origination fees represent up-front amounts charged to borrowers for processing HECM or non-agency reverse mortgage loan applications and are recorded when received, which occurs upon the successful funding of the loan.

The Company collects certain fees from the borrower, including underwriting fees, credit reporting fees, loan administration fees, and appraisal fees. The Company has determined that it is primarily responsible for the fulfillment and acceptability of these services and has discretion in establishing the price charged to the borrower. Therefore, these fees are recognized on a gross basis, as the Company is the principal for the specified goods and services performed.

In addition to the fees above, the Company also acts as an agent for certain services provided to its customers. These services include obtaining flood certifications and inspections. In these transactions, the Company facilitates the provision of the goods or services to prospective borrowers and collects the related amounts from the borrower prior to the services being performed. As the Company is an agent in these arrangements, the related fees are recognized on a net basis.

Loan origination fees were $27.5 million and $28.5 million for the years ended December 31, 2025 and 2024, respectively.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (i) the assets have been isolated from the Company, put

presumptively beyond the reach of the entity, even in bankruptcy, (ii) the transferee (or if the transferee is an entity whose sole purpose is to engage in securitization and that entity is constrained from pledging or exchanging the assets it receives, each third-party holder of its beneficial interests) has the right to pledge or exchange the transferred financial assets, and (iii) the Company or its agents does not maintain effective control over the transferred financial assets or third-party beneficial interest related to those transferred assets through an agreement to repurchase them before their maturity.

When the Company determines that control over the transfer of financial assets has been surrendered, the transaction will be accounted for as a sale in which the underlying mortgage loans are derecognized. When the requirements for sale treatment have not been met due to control over the transferred financial assets not being surrendered, the Company accounts for the transferred loans as secured borrowings and continues to recognize the loans as held for investment, subject to HMBS related obligations or nonrecourse debt, along with the corresponding liability for the HMBS obligations or nonrecourse debt.

Equity Based Compensation

Equity-Based Compensation

RSUs with service conditions and options granted to employees are measured based on the grant date fair value of the awards and recognized as compensation expense over the period during which the recipient is required to perform services in exchange for the award (the requisite service period). The Company has elected to use a straight-line attribution method for recognizing compensation costs relating to these awards. Forfeitures are recorded as they occur.

For RSUs where there are market conditions as well as service conditions to vesting, the grant date fair value of the awards is recognized as compensation expense using the graded-vesting method over the requisite service period for each separately vesting tranche of the award as if they were multiple awards.

All RSUs and options are classified as equity. Equity-based compensation expense is recorded in Salaries, benefits, and related expenses in the Consolidated Statements of Operations.

Defined Contribution Plan

The Company sponsors a qualified defined contribution plan and matches certain employee contributions on a discretionary basis. The Company’s expenses for matching contributions to the defined contribution plan were $2.2 million and $2.1 million for the years ended December 31, 2025 and 2024, respectively. These expenses are included in Salaries, benefits, and related expenses in the Consolidated Statements of Operations.

Marketing and Advertising

Marketing and advertising costs are expensed as incurred and primarily relate to brand marketing and providing loan product information to our customers.

Income Taxes

The computation of the effective tax rate and provision at each period requires the use of certain estimates and significant judgments including, but not limited to, the expected operating income for the year, projections of the proportion of income that is subject to tax, permanent differences between the Company’s U.S. GAAP earnings and taxable income, and the likelihood of recovering deferred tax assets existing as of the statement of financial condition date. The estimates used to compute the provision for income taxes may change throughout the year as new events occur, additional information is obtained, or as tax laws and regulations change. Accordingly, the effective tax rate for future periods may vary materially.

The Company accounts for income taxes pursuant to the asset and liability method, which requires it to recognize current tax liabilities or receivables for the amount of taxes it estimates are payable or refundable for the current year, deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities, and the expected benefits of net operating loss (“NOL”) and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.

The benefit of tax positions taken or expected to be taken in the Company’s income tax returns is recognized in the financial statements if such positions are more likely than not of being sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized tax benefits.” A liability is recognized (or amount of NOL carryover or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents a potential future obligation to the taxing authority for a tax position that was not recognized. Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable. Interest costs and related penalties associated with tax matters are included in General and administrative expenses in the Consolidated Statements of Operations.

Contingencies

The Company evaluates contingencies based on information currently available and will establish accruals for those matters when a loss contingency is considered probable and the related amount is reasonably estimable. For matters where a loss is believed to be reasonably possible but not probable, no accrual is established, but the nature of the loss contingency and an estimate of the reasonably possible range of loss in excess of amounts accrued, when such estimate can be made, is disclosed. In deriving an estimate, the Company is required to make assumptions about matters that are, by their nature, highly uncertain. The assessment of loss contingencies, including legal contingencies, involves the use of critical estimates, assumptions, and judgments. Whenever practicable, the Company consults with outside experts, including legal counsel and consultants, to assist with the gathering and evaluation of information related to contingent liabilities. It is not possible to predict or determine the outcome of all loss contingencies. Accruals are periodically reviewed and may be adjusted as circumstances change.

Seller Earnout

Certain equity owners of FOA Equity are entitled to receive an earnout exchangeable for Class A Common Stock. If, at any time through April 1, 2027, the volume-weighted average price (the “VWAP”) of Class A Common Stock for a trading day is greater than or equal to $125 for any 20 trading days within a consecutive 30-trading-day period (“First Earnout Achievement Date”), 50% of the earnout units (in conjunction with the Sponsor Earnout below, the “Earnout Securities”) will be issued. If, at any time through April 1, 2027, the VWAP is greater than or equal to $150 for any 20 trading days within a consecutive 30-trading-day period (“Second Earnout Achievement Date”), the remaining 50% of the Earnout Securities will be issued.

The seller earnout is accounted for as contingent consideration and is classified as equity. The seller earnout was measured at fair value upon the date of issuance and it is not subsequently remeasured. The settlement of the seller earnout will be accounted for within equity if and when the First Earnout Achievement Date or Second Earnout Achievement Date occurs.

Sponsor Earnout

The Company classified a sponsor earnout agreement with certain equity holders (the “Sponsor Earnout”) as an equity transaction measured at fair value upon the date of issuance, and it is not subsequently remeasured. Additionally, the settlement of the Sponsor Earnout will be accounted for within equity if and when the First Earnout Achievement Date or Second Earnout Achievement Date occurs.

Noncontrolling Interest

Noncontrolling interest represents the Company’s noncontrolling interest in consolidated subsidiaries which are not attributable, directly or indirectly, to the controlling Class A Common Stock ownership of the Company. When calculating basic earnings per share, net income is reduced by the portion of net income that is attributable to the noncontrolling interest.

Earnings Per Share

Basic earnings per share is computed by dividing net income attributable to holders of Class A Common Stock by the weighted average number of shares of Class A Common Stock outstanding during the period. Net income attributable to holders of Class A Common Stock is calculated as the Company’s net income adjusted for net income attributable to noncontrolling interest and preferred stock dividends. Diluted earnings per share is computed by dividing net income attributable to holders of Class A Common Stock by the weighted average number of shares of Class A Common Stock outstanding, plus the effect of all dilutive securities as calculated using the if-converted and

treasury stock methods, as appropriate. The Company applies the two-class method for participating securities in its earnings per share calculations.

Reclassifications

Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year financial presentation, including the items below.

For the year ended December 31, 2024, $0.3 million of previously reported Gain on sale and other income from loans held for sale, net, was combined with Fee income in the Consolidated Statements of Operations due to minimal activity related to the wind-down of business lines that were not part of our focus on providing home equity-based financing solutions for a modern retirement. Additionally, $56.2 million of previously reported Gain on extinguishment of debt related to the exchange of the Company’s senior notes was combined with Non-funding interest income (expense), net, in the Consolidated Statements of Operations (refer to Note 13 - Notes Payable for additional information).

Recently Adopted Accounting Guidance and Recently Issued Accounting Guidance, Not Yet Adopted

Recently Adopted Accounting Guidance

Standard

Description

Effective Date

Effect on Consolidated Financial Statements

Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09 that enhances annual income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and by requiring disclosure of the amount of income taxes paid disaggregated by federal, state, and foreign taxes, as well as disaggregated by material individual jurisdictions.

January 1, 2025

This ASU resulted in additional income tax disclosures, but did not have a material impact on our consolidated financial statements. The Company adopted this ASU on a retrospective basis. Refer to Note 19 - Income Taxes for additional information.

Recently Issued Accounting Guidance, Not Yet Adopted as of December 31, 2025

Standard

Description

Date of Planned Adoption

Effect on Consolidated Financial Statements

ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03 which is intended to improve disclosures by providing more detailed information about the types of expenses in commonly presented expense captions in the income statement.

For the year ending December 31, 2027 and interim periods beginning in 2028.

This ASU will result in additional expense disclosures, but the Company does not expect it will have a material impact on our consolidated financial statements.

Adoption of this ASU should be applied on a prospective basis, but retrospective application is permitted.

ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments

In November 2024, the FASB issued ASU 2024-04 which is intended to clarify the requirements for determining whether to account for certain early settlements of convertible debt instruments as induced conversions or extinguishments.

For the year ending December 31, 2026 and interim reporting periods beginning in 2026.

The Company does not expect this ASU will have a material impact on our consolidated financial statements.

Adoption of this ASU can be applied on a prospective or a retrospective basis.

ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05 which is intended to provide a practical expedient to measure credit losses on accounts receivable and contract assets.

For the year ending December 31, 2026 and interim reporting periods beginning in 2026.

The Company does not expect this ASU will have a material impact on our consolidated financial statements.

Adoption of this ASU should be applied on a prospective basis.

ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU 2025-06 which amends guidance related to accounting for the development costs of internal-use software.

The Company plans to early adopt on January 1, 2026, using a prospective transition approach.

The Company does not expect this ASU will have a material impact on our consolidated financial statements.

Business Segment Reporting

The Company has identified two reportable segments: Retirement Solutions and Portfolio Management. The Chief Operating Decision Maker (“CODM”) are certain officers of the Company, which include the Chief Executive Officer, Chief Financial Officer, and Chief Investment Officer. The CODM evaluates the performance of the Company’s segments based on net income (loss) before taxes. The CODM uses this reported measure along with periodic reviews of results and overall market activity to allocate resources to segments in the planning and forecasting process.

Retirement Solutions

Our Retirement Solutions segment conducts all of our Company’s loan origination activity, including the origination and acquisition of HECM loans and non-agency reverse mortgage loans through both the retail and third-party originator channels. The Retirement Solutions segment generates revenue from fees earned at the time of loan origination as well as from the initial estimate of net origination gains, with all originated loans accounted for at fair value. Once originated, the loans are transferred to our Portfolio Management segment, and any future fair value adjustments, including interest earned, on these originated loans are reflected in the revenues of our Portfolio Management segment until final disposition.

Portfolio Management

Our Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services to the Company. Our Portfolio Management team acts as the connector between borrowers and investors. The direct connections to investors, provided primarily by our Financial Industry Regulatory Authority (“FINRA”) registered broker-dealer, allow us to innovate and manage risk through better price and product discovery. Given our scale, we are able to work directly with investors and, where appropriate, retain assets on the balance sheet for attractive return opportunities. These retained investments are a source of growing and recurring interest and other servicing-related income. The Portfolio Management segment primarily generates revenue from the net interest income and fair value changes on portfolio assets, monetized through securitization, sale, or other financing of those assets.

Corporate and Other

Corporate and Other consists of our corporate services groups, which support the operations of our Company.

The Company’s segments are based upon the Company’s organizational structure which focuses primarily on the services offered. Corporate functional expenses are allocated to individual segments based on actual cost of services performed based on a direct resource utilization, estimate of percentage use for shared services, or headcount percentage for certain functions. Non-allocated corporate expenses include administrative costs of executive management and other corporate functions that are not directly attributable to the Company’s reportable segments. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties. To reconcile the Company’s consolidated results, certain inter-segment revenues and expenses are eliminated in the “Eliminations” column in the previous tables.