Derivatives and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

As of December 31, 2025, the Company had 10 interest rate swaps, designated as cash flow hedge(s) of interest rate risk (dollars in thousands):

Notional Amount

Index

Pay Rate

Effective Date

Maturity Date

Fair value as of

December 31, 2025

Derivative liabilities, at fair value:

Interest rate “pay-fixed” swaps

$150,000

USD-SOFR with -5 Day Lookback

3.34%

12/11/2025

12/11/2028

(188)

Schedule of Derivatives Included in AOCI

The table below details the location in the financial statements of the gain (loss) recognized on interest rate derivatives designated as cash flow hedges for the periods presented (dollars in thousands):


	Year ended December 31,
	2025		2024		2023
(Loss) gain recognized in accumulated other comprehensive income on interest rate derivatives	$	(665)	$	8,716	$	5,324
Gain (loss) reclassified from accumulated other comprehensive income into earnings as reductions to (increases in) interest expense	$	10,371	$	15,540	$	18,770
Total interest expense presented in the consolidated statements of operations and comprehensive loss	$	61,281	$	69,447	$	66,078

Schedule of Derivative Instruments

The Company had the following derivatives that were not designated as hedges in qualifying hedging relationships as of December 31, 2025 and 2024 (dollars in thousands):


	December 31, 2025					December 31, 2024
	Number of Instruments	Notional Amount (1)		Fair Value		Number of Instruments	Notional Amount (1)		Fair Value
Interest rate caps (2)	6	$	337,999	$	569	8	$	369,218	$	2,554

__________

(1)Notional amount represents active interest rate cap contracts.

(2)Recorded at fair value in derivative assets, at fair value on the consolidated balance sheets. All of the Company’s interest rate cap agreements limited one-month SOFR to 3.50% with terms through November 2026. The actual one-month SOFR rates during the year ended December 31, 2025 exceeded the strike price rate of 3.50% and the Company received payments under these agreements. While the Company does not apply hedge accounting for these interest rate caps, they are economically hedging the Fannie Mae Secured Debt and other secured debt. Changes in the fair value of, and any cash received from, derivatives not designated as hedges under a qualifying hedging relationship are recorded directly to earnings and are presented within gain (loss) on non-designated derivatives in the consolidated statements of operations and comprehensive loss.