Quarterly report pursuant to Section 13 or 15(d)

Other Financing Lines of Credit

v3.22.2.2
Other Financing Lines of Credit
9 Months Ended
Sep. 30, 2022
Debt Disclosure [Abstract]  
Other Financing Lines Of Credit
16. 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)
September 30, 2022 December 31, 2021
Mortgage Lines:
October 2022 -August 2023 SOFR + applicable margin First Lien Mortgages $ 2,000,000  $ 601,635  $ 1,802,348 
March 2026 Ameribor + applicable margin MSRs 50,000  10,227  138,524 
November 2022 - December 2022 SOFR + applicable margin Mortgage Related Assets 39,065  39,065  50,559 
November 2022 SOFR + applicable margin HI Consumer Loans 50,000  11,770  5,107 
Subtotal mortgage lines of credit $ 2,139,065  $ 662,697  $ 1,996,538 
Reverse Lines:
November 2022 - September 2023 LIBOR + applicable margin First Lien Mortgages $ 1,475,000  $ 935,434  $ 714,013 
October 2022 Bond accrual rate + applicable margin Mortgage Related Assets 345,000  292,524  297,893 
N/A LIBOR + applicable margin MSRs —  —  78,952 
May 2023
Prime + .50%; 6% floor
Unsecuritized Tails 50,000  40,000  38,544 
Subtotal reverse lines of credit $ 1,870,000  $ 1,267,958  $ 1,129,402 
Commercial Lines:
August 2023
2.50% / 3.25%
Encumbered Agricultural Loans $ 75,000  $ 27,310  $ 25,127 
April 2023 - November 2023 Ameribor + applicable margin First Lien Mortgages 309,000  290,534  167,159 
February 2023 15% Second Lien Mortgages 45,000  45,000  24,175 
January 2024 SOFR + applicable margin Mortgage Related Assets 12,500  12,500  5,041 
Subtotal commercial lines of credit $ 441,500  $ 375,344  $ 221,502 
Total other financing lines of credit $ 4,450,565  $ 2,305,999  $ 3,347,442 
(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 September 30, 2022.

As of September 30, 2022 and December 31, 2021, the weighted average outstanding interest rates on outstanding financing lines of credit of the Company were 5.66% and 2.75%, 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 September 30, 2022, the Company was in compliance with its financial covenants related to required liquidity reserves. With respect to certain financial covenants related to required profitability, debt service coverage ratio and tangible net worth amounts, the Company obtained financial covenant waivers, amendments to such financial covenants effective as of September 30, 2022, or paid off the line of credit, in order to avoid breaching such financial covenants.
The terms of the Company's financing arrangements and credit facilities contain covenants, and the terms of the Company's GSE/seller servicer contracts contain requirements that may restrict the Company 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 or its subsidiaries to no longer be in compliance with any of its financial covenants or GSE requirements. Further, the Company 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 the Company (with certain exceptions) exceed the fair value of its assets. Subsidiaries of the Company are generally subject to similar legal limitations on their ability to make distributions to FoA.
As of September 30, 2022, 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 September 30, 2022
Maximum Allowable Distribution(1)
FAM
Adjusted Tangible Net Worth(2)
$ 150,000  $ 174,785  $ 24,785 
Liquidity 55,000  66,098  11,098 
Leverage Ratio
13:1
8.9:1
55,118 
Material Decline in Lender Adjusted Net Worth:
Lender Adjusted Tangible Net Worth (Quarterly requirement)(3)
$ 170,459  $ 174,785  $ 4,326 
Lender Adjusted Tangible Net Worth (Two-Consecutive Quarterly requirement)(3)
174,734  174,785  51 
FAR
Adjusted Tangible Net Worth(2)
$ 250,000  $ 250,750  $ 750 
Liquidity 20,000  69,951  49,951 
Leverage Ratio
7:1
6.2:1
30,765 
(1) The Maximum Allowable Distribution for any of the originations subsidiaries is the lowest of the amounts shown for the particular originations subsidiary.
(2) This amount is based on the most restrictive financing line of credit covenant.
(3) This amount is the covenant calculation specific to FNMA.
As of December 31, 2021, 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, 2021
Maximum Allowable Distribution(1)
FAM
Adjusted Tangible Net Worth(2)
$ 150,000  $ 180,032  $ 30,032 
Liquidity 40,000  43,734  3,734 
Leverage Ratio
15:1
13.9:1
12,154 
Material Decline in Lender Adjusted Net Worth:
Lender Adjusted Tangible Net Worth (Quarterly requirement)(3)
$ 150,539  $ 214,979  $ 64,440 
Lender Adjusted Tangible Net Worth (Two-Consecutive Quarterly requirement)(3)
114,830  214,979  100,149 
FACo
Adjusted Tangible Net Worth $ 85,000  $ 87,350  $ 2,350 
Liquidity 20,000  32,728  12,728 
Leverage Ratio
6:1
2.8:1
46,895 
FAR
Adjusted Tangible Net Worth $ 417,826  $ 527,443  $ 109,617 
Liquidity 20,000  23,845  3,845 
Leverage Ratio
6:1
2.9:1
264,134 
(1) The Maximum Allowable Distribution for any of the originations subsidiaries is the lowest of the amounts shown for the particular originations subsidiary.
(2) This amount is based on the most restrictive financing line of credit covenant.
(3) This amount is the covenant calculation specific to FNMA.