Quarterly report pursuant to Section 13 or 15(d)

Other Financing Lines of Credit

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Other Financing Lines of Credit
 3 Months Ended
Mar. 31, 2024
Debt Disclosure [Abstract]  
Other Financing Lines Of Credit
11. Other Financing Lines of Credit
The following summarizes the components of other financing lines of credit (in thousands):
Outstanding borrowings at
Maturity Date Interest Rate Collateral Pledged
Total Capacity(1)
March 31, 2024 December 31, 2023
Reverse Lines:
June 2024 - October 2026 Bloomberg short-term
bank yield (“BSBY”) index/Secured Overnight Financing Rate (“SOFR”) + applicable margin		 First Lien Mortgages $ 932,500  $ 433,829  $ 432,918 
Various(2)
Bond accrual rate/SOFR + applicable margin Mortgage Related Assets 498,228  482,228  344,367 
October 2027 SOFR + applicable margin MSR 70,000  69,231  69,231 
October 2024 BSBY + applicable margin Unsecuritized Tails 30,000  28,750  23,620 
Subtotal reverse lines of credit $ 1,530,728  $ 1,014,038  $ 870,136 
Mortgage Lines:
October 2024 BSBY + applicable margin First Lien Mortgages $ 12,500  $ 1,446  $ 2,135 
Various(2)
Bond accrual rate + applicable margin Mortgage Related Assets 35,707  35,707  36,208 
Subtotal mortgage lines of credit $ 48,207  $ 37,153  $ 38,343 
Commercial Lines:
July 2024 SOFR + applicable margin Mortgage Related Assets $ 20,000  $ 20,000  $ 20,000 
Total other financing lines of credit $ 1,598,935  $ 1,071,191  $ 928,479 
(1)Capacity is dependent upon maintaining compliance with, or obtaining waivers of, the terms, conditions, and covenants of the respective agreements, including asset-eligibility requirements. Capacity amounts presented are as of March 31, 2024.
(2)These lines of credit are tied to the maturity date of the underlying mortgage related assets that have been pledged as collateral.

As of March 31, 2024 and December 31, 2023, the weighted average outstanding interest rates on outstanding financing lines of credit of the Company were 6.54% and 6.90%, respectively.
The Company’s financing arrangements and credit facilities contain various financial covenants, which primarily relate to required tangible net worth amounts, liquidity reserves, leverage ratios, and profitability.
As of March 31, 2024, the Company was in compliance with all of its financial covenants related to required liquidity reserves, debt service coverage ratio, tangible net worth amounts, and required profitability.
The terms of the Company’s financing arrangements and credit facilities contain covenants, and the terms of the Company’s government sponsored entities (“GSE”)/seller servicer contracts contain requirements that may restrict FoA Equity and its subsidiaries from paying distributions to its members. These restrictions include restrictions on paying distributions whenever the payment of such distributions would cause FoA Equity or its subsidiaries to no longer be in compliance with any of its financial covenants or GSE requirements. Further, FoA Equity is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of FoA Equity (with certain exceptions) exceed the fair value of its assets. Subsidiaries of FoA Equity are generally subject to similar legal limitations on their ability to make distributions to FoA Equity.
As of March 31, 2024, the maximum allowable distributions available to the Company based on the most restrictive of such financial covenant ratios is presented in the table below (in thousands, except for ratios):
Financial Covenants  Requirement March 31, 2024
Maximum Allowable Distribution(1)
FAM
Adjusted Tangible Net Worth $ 10,000  $ 10,667  $ 667 
Liquidity 1,000  2,300  1,300 
FAR
Adjusted Tangible Net Worth $ 250,000  $ 474,156  $ 224,156 
Liquidity 40,000  42,731  2,731 
Leverage Ratio
6:1
3.2:1
 219,827 
FAH
Adjusted Tangible Net Worth $ 220,000  $ 456,467  $ 236,467 
Liquidity 40,000  45,763  5,763 
Leverage Ratio
10:1
3.7:1
 288,165 
(1) The Maximum Allowable Distribution for any of the originations subsidiaries is the lowest of the amounts shown for the particular originations subsidiary.

As of December 31, 2023, the maximum allowable distributions available to the Company based on the most restrictive of such financial covenant ratios is presented in the table below (in thousands, except for ratios):
Financial Covenants  Requirement December 31, 2023
Maximum Allowable Distribution(1)
FAM
Adjusted Tangible Net Worth $ 10,000  $ 15,264  $ 5,264 
Liquidity 1,000  2,254  1,254 
FAR
Adjusted Tangible Net Worth $ 250,000  $ 447,571  $ 197,571 
Liquidity 40,000  41,656  1,656 
Leverage Ratio
6:1
3.0:1
 223,460 
FAH
Adjusted Tangible Net Worth $ 220,000  $ 446,321  $ 226,321 
Liquidity 40,000  45,282  5,282 
Leverage Ratio
10:1
3.3:1
 297,445 
(1) The Maximum Allowable Distribution for any of the originations subsidiaries is the lowest of the amounts shown for the particular originations subsidiary.