NexPoint Real Estate Finance, Inc.
For the period ended Sep 30, 2025. Filed Nov 13, 2025.
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Sep 30, 2025 · Filed Nov 13, 2025
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Item 4.
- Loans Held for Investment, Net
The Company’s investments in mortgage loans, mezzanine loans, preferred equity, promissory notes and revolving credit facilities are accounted for as loans held for investment. The mortgage loans are presented as “Mortgage loans, held-for-investment, net” and the mezzanine loans, preferred equity, promissory notes and revolving credit facilities are presented as “Loans, held-for-investment, net” on the Consolidated Balance Sheets. The following tables summarize our loans held-for-investment as of September 30, 2025 and December 31, 2024, respectively (dollars in thousands):
| Weighted Average | ||||||
|---|---|---|---|---|---|---|
| Loan Type | OutstandingFace Amount | Carrying Value (1) | Loan Count | Fixed Rate (2) | Coupon (3) | Life (years) (4) |
| Mortgage loans, held-for-investment | $119,243 | $122,176 | 9 | 100.00% | 5.32% | 2.0 |
| Mezzanine loans, held-for-investment | 230,490 | 222,494 | 22 | 43.25% | 10.23% | 2.7 |
| Preferred equity, held-for-investment | 224,468 | 207,932 | 18 | 46.13% | 10.32% | 2.2 |
| Promissory notes, held-for-investment | 15,500 | 15,494 | 2 | 100.00% | 13.65% | 0.8 |
| Revolving credit facility, held-for-investment | 148,600 | 137,726 | 1 | 100.00% | 13.50% | 2.3 |
| $738,301 | $705,822 | 52 | 65.90% | 10.20% | 2.3 | |
| Loan Type · Outstanding Face Amount · Carrying Value (1) · Loan Count · Weighted Average | ||||||
|---|---|---|---|---|---|---|
| Fixed Rate (2) · Coupon (3) · Life (years) (4) | ||||||
| Mortgage loans, held-for-investment | $260,901 | $263,395 | 10 | 46.23% | 9.99% | 2.4 |
| Mezzanine loans, held-for-investment | 133,207 | 134,870 | 22 | 78.31% | 9.41% | 4.4 |
| Preferred equity, held-for-investment | 224,423 | 223,653 | 16 | 42.43% | 11.92% | 2.3 |
| Promissory notes, held-for-investment | 4,000 | 3,992 | 2 | 100.00% | 14.69% | 0.5 |
| Revolving credit facility, held-for-investment | 148,600 | 135,029 | 1 | 100.00% | 13.50% | 3.0 |
| $771,131 | $760,939 | 51 | 61.31% | 11.15% | 2.8 | |
(1)Carrying value includes the outstanding face amount plus unamortized purchase premiums/discounts and any allowance for loan losses.
(2)The weighted-average of loans paying a fixed rate is weighted on current principal balance.
(3)The weighted-average coupon is weighted on outstanding face amount.
(4)The weighted-average life is weighted on outstanding face amount and assumes no prepayments. The maturity date for preferred equity investments represents the maturity date of the senior mortgage, as the preferred equity investments require repayment upon the sale or refinancing of the asset.
For the nine months ended September 30, 2025 and 2024, the loans held for investment, net and preferred equity portfolio activity was as follows (in thousands):
| For the Nine Months Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Balances, December 31, | $760,939 | $1,004,880 |
| Originations | 75,476 | 250,088 |
| Proceeds from principal repayments | (117,922) | (551,570) |
| PIK distribution reinvested in Preferred Units | 9,376 | 11,033 |
| Amortization of loan premium, net (1) | 2,542 | (21,319) |
| (Provision for) reversal of credit losses | (24,589) | 720 |
| Balance at September 30, | $705,822 | $693,832 |
(1)Includes net amortization of loan purchase premiums.
As of September 30, 2025 and December 31, 2024, there were $6.5 million and $8.8 million of unamortized premiums on loans, held-for-investment, net, respectively, on the Consolidated Balance Sheets.
As discussed in Note 2, the Company evaluates loans classified as held-for-investment on a loan-by-loan basis every quarter. In conjunction with the review of the portfolio, the Company assesses the risk factors of each loan and assign a risk rating based on a variety of factors. Loans are rated “1” through “5,” from least risk to greatest risk, respectively. See Note 2 for a more detailed discussion of the risk factors and ratings. The following tables allocate the principal balance and net book value of the loan portfolio based on our internal risk ratings (dollars in thousands):
| Risk Rating | Number of Loans | Carrying Value | % of Loan Portfolio |
|---|---|---|---|
| 1 | — | $— | — |
| 2 | — | — | — |
| 3 | 47 | 689,063 | 97.63% |
| 4 | 2 | 5,713 | 0.81% |
| 5 | 3 | 11,046 | 1.56% |
| 52 | $705,822 | 100.00% |
| Risk Rating · December 31, 2024 | |||
|---|---|---|---|
| Number of Loans · Carrying Value · % of Loan Portfolio | |||
| 1 | — | $— | — |
| 2 | — | — | — |
| 3 | 49 | 739,960 | 97.24% |
| 4 | 2 | 20,979 | 2.76% |
| 5 | — | — | — |
| 51 | $760,939 | 100.00% | |
Our loan portfolio had a weighted-average risk rating of 3.0 as of September 30, 2025, and 3.0 as of December 31, 2024.
The following tables present the carrying value of the loan portfolio by the Company's internal risk rating and year of origination as of September 30, 2025 and December 31, 2024 (dollars in thousands):
| September 30, 2025 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Carrying Value by Year of Origination (1) | |||||||||
| Risk Rating | Number ofLoans | Outstanding Face Amount | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total Carrying Value |
| 1 | — | $— | $— | $— | $— | $— | $— | $— | $— |
| 2 | — | — | — | — | — | — | — | — | — |
| 3 | 47 | 702,201 | 9,516 | 259,628 | 82,294 | 65,526 | 41,100 | 230,999 | 689,063 |
| 4 | 2 | 6,000 | — | — | — | 4,268 | — | 1,445 | 5,713 |
| 5 | 3 | 30,100 | — | — | — | 4,811 | 6,235 | — | 11,046 |
| 52 | $738,301 | $9,516 | $259,628 | $82,294 | $74,605 | $47,335 | $232,444 | $705,822 | |
(1)Represents the date a loan was originated or acquired.
| December 31, 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Carrying Value by Year of Origination (1) | |||||||||
| Risk Rating | Number ofLoans | Outstanding Face Amount | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Total Carrying Value |
| 1 | — | $— | $— | $— | $— | $— | $— | $— | $— |
| 2 | — | — | — | — | — | — | — | — | — |
| 3 | 49 | 750,031 | 284,958 | 94,446 | 74,658 | 38,067 | 19,812 | 228,019 | 739,960 |
| 4 | 2 | 21,100 | — | — | 8,479 | 12,500 | — | — | 20,979 |
| 5 | — | — | — | — | — | — | — | — | — |
| 51 | $771,131 | $284,958 | $94,446 | $83,137 | $50,567 | $19,812 | $228,019 | $760,939 | |
(1)Represents the date a loan was originated or acquired.
The following tables present the geographies and property types of collateral underlying the Company’s loans held-for-investment as a percentage of the loans’ face amounts.
| Geography | September 30, 2025 | December 31, 2024 |
|---|---|---|
| Massachusetts | 17.66% | 22.68% |
| Texas | 17.54% | 16.39% |
| Georgia | 11.09% | 8.68% |
| Maryland | 8.22% | 8.61% |
| California | 6.09% | 8.55% |
| Virginia | 5.89% | 5.15% |
| Florida | 4.28% | 5.15% |
| Other (21 and 21 states each at <4%) | 29.23% | 24.79% |
| 100.00% | 100.00% |
| Collateral Property Type | September 30, 2025 | December 31, 2024 |
|---|---|---|
| Multifamily | 36.31% | 34.57% |
| Single Family Rental | 29.36% | 26.57% |
| Life Science | 28.29% | 34.98% |
| Self-Storage | 3.80% | 2.73% |
| Marina | 2.24% | 1.15% |
| 100.00% | 100.00% |
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