v3.25.3
Fannie Mae and Other Secured Debt
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
Fannie Mae and Other Secured Debt Fannie Mae and Other Secured Debt
    The Company had the following Fannie Mae and other secured debt outstanding as of September 30, 2025 and December 31, 2024:
Outstanding Facility
Amount as of
Effective Interest Rate (2) (3)
Fannie Mae Secured Debt
Encumbered Properties (1)
September 30,
2025		December 31, 2024September 30,
2025		December 31, 2024Interest RateMaturity
Formerly known as:
(In thousands)(In thousands)
Secured Fannie Mae Loan 1 due 2026
11$200,751 $203,405 6.98 %7.29 %VariableNov. 2026
Capital One Facility
Secured Fannie Mae Loan 2 due 2026
10135,430 137,103 7.03 %7.34 %VariableNov. 2026
KeyBank Facility
Total Fannie Mae Secured Debt
21$336,181 $340,508 7.00 %7.31 %
OMF Warehouse Facility(4)
—— 21,708 — %7.66 %VariableDec. 2026
Total Fannie Mae and Other Secured Debt
21$336,181 $362,216 7.00 %7.33 %
________
(1)Encumbered properties are as of September 30, 2025.
(2)Calculated on a weighted average basis over 365 days for all outstanding amount as of September 30, 2025 and December 31, 2024, respectively.
(3)The Company has six active non-designated interest rate cap agreements with an aggregate notional amount of $342.8 million which limited one-month SOFR to 3.50%.The Company did not designate these derivatives as hedges and, accordingly, the changes in value and any cash received from these derivatives are presented within gain (loss) on derivative instruments in the consolidated statements of operations and comprehensive loss (see Note 7 — Derivatives and Hedging Activities for additional details). Inclusive of the impact of these non-designated derivatives, the economic interest rates on the Fannie Mae and other secured debt were 6.00% and 5.99%, as of September 30, 2025 and December 31, 2024, respectively.
(4)The Company repaid in full and terminated the OMF Warehouse Facility in April 2025.
As of September 30, 2025, the Company had pledged $625.0 million in total real estate investments, at cost as collateral under its Fannie Mae and other secured debt. All of the real estate assets pledged to secure borrowings under the Company’s Fannie Mae and other secured debt are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, unless, as applicable, the existing indebtedness associated with the property is satisfied or the property is removed from the pledged collateral.
Unencumbered real estate investments, at cost as of September 30, 2025 were $418.9 million, although there can be no assurance as to the amount of liquidity the Company would be able to generate from using these unencumbered assets as collateral for future mortgage loans, future advances under the Fannie Mae and other secured debt or other future financings.
Fannie Mae Secured Debt
On October 31, 2016, the Company, through wholly-owned subsidiaries of the OP, entered into a master secured debt agreement with KeyBank (the “KeyBank Secured Debt”) and a master secured debt agreement with Capital One Multifamily Finance LLC, an affiliate of Capital One (the “Capital One Secured Debt” and, together with the KeyBank Secured Debt, “Fannie Mae Secured Debt”). Advances made under these agreements were assigned by Capital One and KeyBank to Fannie Mae at closing for inclusion in Fannie Mae’s Multifamily MBS program.
The Company may request future advances under the Fannie Mae Secured Debt by adding eligible properties to the collateral pool subject to customary conditions, including satisfaction of minimum debt service coverage and maximum loan-to-value tests. Borrowings under the Fannie Mae Secured Debt bore monthly interest equal to the sum of the current SOFR for one-month denominated deposits and a spread of 2.41% and 2.46% for the Capital One Secured Debt and the KeyBank Secured Debt, respectively. The Fannie Mae Secured Debt matures on November 1, 2026.
Through September 30, 2025, the Company had provided cash deposits totaling $12.1 million to Fannie Mae because the debt service coverage ratios of the underlying properties of each facility were below the minimum required amounts per the debt agreements. These deposits are recorded as restricted cash on the Company’s consolidated balance sheets and are pledged as additional collateral for the Fannie Mae Secured Debt. These deposits will be refunded upon the earlier of the Company’s achievement of a debt service coverage ratio above the minimum required amount of 1.40 or the maturity of the Fannie Mae Secured Debt.
OMF Warehouse Facility
On December 22, 2023, the Company, through wholly-owned subsidiaries of the OP, entered into a loan agreement with Capital One to provide up to $50.0 million of variable-rate financing. In April 2025, the Company repaid in full and terminated the facility.
Non-Designated Interest Rate Caps
As of September 30, 2025 the Company had six non-designated interest rate cap agreements with an aggregate notional amount of $342.8 million which caps SOFR at 3.50% with terms through November 2026. The Company does not apply hedge accounting to these non-designated interest cap agreements, and changes in value as well as any cash received are presented within (loss) gain on non-designated derivatives in the Company’s consolidated statements of comprehensive loss. See Note 7 — Derivatives and Hedging Activities for additional information regarding the Company’s derivatives.
In connection with the Fannie Mae Secured Debt, the Company was required to enter into interest rate cap agreements which the Company periodically renews upon their expiration.
In April 2025, the Company terminated two interest rate caps with a notional of $21.7 million related to the OMF Warehouse Facility upon the facility’s full repayment.
In June 2025, the Company purchased three interest rate caps with a notional of $133.8 million for $1.1 million that limit one-month SOFR to 3.50% and mature in November 2026 related to the Fannie Mae Secured Debt. These interest rate caps were purchased in advance of interest rate caps set to expire.
Future Principal Payments
The following table summarizes the scheduled aggregate principal payments for the five years subsequent to September 30, 2025 and thereafter, on all of the Company’s outstanding mortgage notes payable and other secured debt:
Future Principal Payments
(In thousands)Mortgage Notes Payable
Fannie Mae Secured Debt
Total
2025 (remainder)$219 $1,442 $1,661 
2026331,141 334,739 665,880 
2027922 — 922 
202886,722 — 86,722 
2029982 — 982 
Thereafter285,962 — 285,962 
Total$705,948 $336,181 $1,042,129 
The Company’s existing principal demands for cash are to fund acquisitions, capital expenditures, the payment of its operating and administrative expenses, debt service obligations (including principal repayment) and distributions to holders of its Series A Preferred Stock and Series B Preferred Stock. The Company closely monitors its current and anticipated liquidity position relative to its current and anticipated demands for cash and believes that it has sufficient current liquidity to meet its financial obligations for at least the next twelve months. The Company expects to fund its future short-term operating liquidity requirements, including distributions to holders of Series A Preferred Stock and Series B Preferred Stock, through a combination of current cash on hand, net cash provided by its operating activities, net cash provided by its property dispositions and potential new financings utilizing certain of its currently unencumbered properties.