Mortgage Loans Held for Sale and Warehouse Lines of Credit

3 Months Ended

Mar. 31, 2026

Mortgage Loans Held For Sale And Warehouse Agreement Borrowings [Abstract]

Mortgage Loans Held for Sale and Warehouse Lines of Credit

5. Mortgage Loans Held for Sale and Warehouse Lines of Credit

The Company has the following outstanding warehouse lines of credit:


(Amounts in thousands)	Maturity	Facility Size		March 31, 2026		December 31, 2025

Funding Facility 1 (1)	March 2, 2027	$	150,000	$	117,767	$	81,423
Funding Facility 2 (2)	January 21, 2027	350,000		200,722		117,499
Funding Facility 3 (3)	April 5, 2026	250,000		189,092		212,940
Total warehouse lines of credit		$	750,000	$	507,581	$	411,862

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(1)Interest charged under the facility is at the 30-day term SOFR plus 1.75% - 2.25%. Cash collateral deposit of $3.8 million is maintained and included in restricted cash.

(2)Interest charged under the facility is at the 30-day term SOFR plus 1.75% - 2.75%. A compensating balance of $7.0 million is maintained and included in cash and cash equivalents. This amount represents a compensating balance arrangement and is not legally restricted. Failure to maintain the required balance may limit the Company’s ability to obtain future advances under the facility. As of March 31, 2026, the Company was in compliance with this requirement.

(3)Interest charged under the facility is at the daily simple SOFR plus 1.75% - 2.50%. There is no cash collateral deposit maintained as of March 31, 2026. Subsequent to March 31, 2026 , the Company extended the maturity to April 6, 2027 and increased the total capacity to $350.0 million of which $100.0 million is committed.

The unpaid principal amounts of the Company’s LHFS are also pledged as collateral under the relevant warehouse funding facilities. The Company’s LHFS are summarized below by those pledged as collateral and those fully funded by the Company:


(Amounts in thousands)	March 31, 2026		December 31, 2025

Funding Facility 1	$	124,112	$	89,483
Funding Facility 2	214,877		129,515
Funding Facility 3	205,047		226,822
Total LHFS pledged as collateral	544,036		445,820
Company-funded LHFS	6,474		6,197
Company-funded HELOC	7,621		7,308
Total LHFS	558,131		459,325
Fair value adjustment	4,905		7,356
Total LHFS at fair value	$	563,036	$	466,681

For the three months ended March 31, 2026 and 2025, the Company recognized net gains of $4.9 million and $5.3 million, respectively, related to changes in the fair value of mortgage loans held for sale, which are included within gain on loans, net in the condensed consolidated statements of operations and comprehensive loss. Average days loans held for sale, other than Company-funded LHFS and Company-funded HELOC, for the three months ended March 31, 2026 and 2025, were approximately 37 days and 21 days, respectively. This is defined as the average days between funding and sale for loans funded during each period. As of March 31, 2026 and December 31, 2025, the unpaid principal balance of loans that were either 90 days past due or non-performing was $3.5 million and $2.4 million, respectively. As of March 31, 2026 and December 31, 2025, loans on non-accrual status were immaterial.

For the three months ended March 31, 2026 and 2025, the weighted average interest rate for the warehouse lines of credit was 5.43% and 6.46%, respectively. The warehouse lines of credit contain certain restrictive covenants that require the Company to maintain certain minimum net worth, liquid assets, liquidity ratios, and leverage ratios, and earnings. In addition, these warehouse lines also require the Company to maintain compensating cash balances. As of March 31, 2026 and December 31, 2025, the Company maintained $3.8 million of cash collateral deposits included in restricted cash and $7.0 million of compensating balances included in cash and cash equivalents on the accompanying consolidated balance sheets. The Company was in compliance with all financial covenants under the warehouse lines as of March 31, 2026.

Better Home & Finance Holding Co 10-Q