MFA FINANCIAL, INC.

Additionally, in December 2024, Lima One executed a new office lease for its headquarters in Greenville, South Carolina. Lima One moved into the new office space on July 15, 2025. For the year ended December 31, 2025, the Company recorded an expense in connection with this lease of approximately $2.1 million. The original term specified in this lease is approximately nine years with a termination date of December 2033 and two options to renew for an additional four years for the first extension and an additional five years for the second extension.

At December 31, 2025, we expected our approximate future rent expense, for all lease commitments, exclusive of possible rent escalation charges and normal recurring charges for maintenance, insurance and taxes, to be $7.5 million in 2026 through 2031, $8.0 million in 2032 and 2033 and $5.4 million in 2034 through 2036.

In February 2026, we entered into an agreement with the landlord for our current corporate headquarters to accelerate the contractual expiration of our lease to November 30, 2026. In addition, we have reached an agreement in principle to enter into a ten-year lease for new corporate headquarters space located in New York City. While we are still evaluating the financial statement impact of these agreements, we currently expect to modify the right-of-use assets and lease obligations, recognize a gain of approximately $1-2 million, and recognize accelerated depreciation expense in 2026 related to the remaining undepreciated tenant improvements at our current corporate headquarters totaling approximately $7 million. Additionally, we expect to recognize a new right-of-use asset and lease liability and recognize lower rental expense at the expected new corporate headquarters. We expect that in the aggregate, once complete, these actions will result in run-rate annual expense savings of approximately $4 million per year over the next ten years.

• Our investments in residential whole loans (including BPLs), residential mortgage securities and commercial mortgage loans involve credit risk, which could materially adversely affect our results of operations.
• We may change our investment strategy, operating policies and/or asset allocations without stockholder consent, which could materially adversely affect our results of operations.
• Our investments are subject to changes in credit spreads and other risks.
• We may be adversely affected by risks affecting borrowers or the asset or property types in which certain of our investments may be concentrated at any given time, as well as from unfavorable changes in the related geographic regions.
• A significant portion of our residential whole loans and residential mortgage securities are secured by properties in a small number of geographic areas and may be disproportionately affected by economic or housing downturns, our competition, natural disasters, terrorist events, pandemics, regulatory changes, adverse climate changes or other adverse events specific to those markets.
• We are subject to counterparty risk and may be unable to seek indemnity or require counterparties to repurchase residential whole loans if they breach representations and warranties, which could cause us to suffer losses.
• The due diligence we undertake on potential investments may be limited and/or not reveal all of the risks associated with such investments and may not reveal other weaknesses in such assets, which could lead to losses.
• We have experienced and may experience in the future increased volatility in our GAAP results of operations due in part to the increasing contribution to financial results of assets and liabilities accounted for under the fair value option.
• The use of models in connection with the valuation and credit losses of our assets subjects us to potential risks in the event that such models are incorrect, misleading or based on incomplete information.
• Valuations of some of our assets are subject to inherent uncertainty, may be based on estimates, may fluctuate over short periods of time and may differ from the values that would have been used if a ready market for these assets existed.
• Our investments in residential whole loans are difficult to value and are dependent upon the borrower’s ability to service or refinance their debt. The inability of the borrower to do so could materially and adversely affect our liquidity and results of operations.
• Mortgage loan modification and refinancing programs and future legislative action may materially adversely affect the value of, and the returns on, our MBS and residential whole loan investments.
• Our investments in residential whole loans subject us to servicing-related risks, including those associated with foreclosure and liquidation.
• The expanding body of federal, state and local regulations and investigations of mortgage loan originators and servicers may increase costs of compliance and the risks of noncompliance, and may adversely affect servicers’ ability to perform their servicing obligations.
• Our ability to sell REO on terms acceptable to us or at all may be limited.
• We have experienced, and may in the future experience, declines in the market value of certain of our investment securities resulting in our recording impairments, which have had, and may in the future have, an adverse effect on our results of operations and financial condition.
• Our ownership of Lima One and investments in mortgage loan originators expose us to additional risks.
• Business purpose loans involve a high degree of business and financial risk.
• Prepayment rates on the mortgage loans underlying certain of our residential mortgage assets may materially adversely affect our profitability or could require us to sell assets in unfavorable market conditions.
• Our business strategy involves the use of leverage, and we may not achieve what we believe to be optimal levels of leverage or we may become overleveraged, which may materially adversely affect our liquidity, results of operations or financial condition.
• •Adverse developments involving major financial institutions or involving one of our lenders could result in a rapid reduction in our ability to borrow and materially adversely affect our liquidity and profitability.
• •If a counterparty to our repurchase transactions defaults on its obligation to resell the underlying security back to us at the end of the transaction term or if we default on our obligations under the repurchase agreement, we could incur losses.
• An increase in our borrowing costs relative to the interest we receive on our investments may materially adversely affect our profitability.
• The impact of inflation may adversely affect our financial performance.
• Certain of our current lenders require, and future lenders may require, that we enter into restrictive covenants relating to our operations.
• Reliance on certain types of financing structures expose us to risks, which could result in losses to us.
• Maintaining cybersecurity and data security is important to our business and a cybersecurity incident could result in serious harm to our reputation and have a material adverse impact on our business and financial results.
• We are dependent on information systems and their failure (including in connection with cybersecurity incidents) could significantly disrupt our business.
• We may utilize artificial intelligence, which exposes us to liability and affects our business.
• Market conditions for mortgages and mortgage-related assets as well as the broader financial markets may materially adversely affect the value of the assets in which we invest.
• A lack of liquidity in our investments may materially adversely affect our business.
• Actions and regulations by the U.S. Government designed to stabilize or reform the mortgage finance markets may not achieve their intended effect or otherwise benefit our business, and could materially adversely affect our business.
• Regulatory Risk and Risks Related to the Investment Company Act of 1940
• Certain jurisdictions require licenses to purchase, hold, enforce or sell residential mortgage loans. In the event that any such licensing requirement is applicable and we are not able to obtain such licenses in a timely manner or at all, our ability to implement our business strategy could be adversely affected, which could materially and adversely affect our business.
• Maintaining our exemption from registration under the Investment Company Act imposes significant limits on our operations.
• Our use of hedging strategies to mitigate our interest rate exposure may not be effective.
• We may enter into hedging instruments that could expose us to contingent liabilities in the future, which could materially adversely affect our results of operations.
• The characteristics of hedging instruments present various concerns, including illiquidity, enforceability, and counterparty risks, which could adversely affect our business and results of operations.
• Clearing facilities or exchanges upon which our hedging instruments are traded may increase margin requirements on our hedging instruments in the event of adverse economic developments.
• If we fail to remain qualified as a REIT, we will be subject to tax as a regular corporation and could face a substantial tax liability, which would reduce the amount of cash available for distribution to our stockholders.
• Our failure to maintain our qualification as a REIT would cause our stock to be delisted from the New York Stock Exchange (or NYSE).
• REIT distribution requirements could adversely affect our ability to execute our business plan.
• Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow.
• If our foreign TRS is subject to U.S. federal income tax at the entity level, it would greatly reduce the amounts those entities would have available to pay its creditors and distribute to us.
• Complying with REIT requirements may cause us to forgo otherwise attractive opportunities.
• Our use of TRSs may cause us to fail to qualify as a REIT.
• We may generate taxable income that differs from our GAAP income on our Non-Agency MBS and residential whole loan investments purchased at a discount to par value, which may result in significant timing variances in the recognition of income and losses.
• The tax on prohibited transactions may limit our ability to engage in transactions, including certain methods of securitizing mortgage loans, that would be treated as sales for U.S. federal income tax purposes.
• The “taxable mortgage pool” rules may increase the taxes that we or our stockholders may incur and may limit the manner in which we effect future securitizations.
• We have not established a minimum dividend payment level, and there is no guarantee that we will maintain current dividend payment levels or pay dividends in the future.
• Our reported GAAP net income may differ from the amount of REIT taxable income and dividend distribution requirements and, therefore, our GAAP results may not be an accurate indicator of future taxable income and dividend distributions.
• Over time, accounting principles, conventions, rules, and interpretations may change, which could affect our reported GAAP and taxable earnings, and stockholders’ equity.
• The failure of assets subject to repurchase agreements to qualify as real estate assets could adversely affect our ability to remain qualified as a REIT.
• Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
• We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them.
• The interest apportionment rules may affect our ability to comply with the REIT asset and gross income tests.
• Dividends paid by REITs do not qualify for the reduced tax rates available for “qualified dividend income.”
• We may in the future choose to make distributions in our own stock, in which case you could be required to pay income taxes in excess of any cash distributions you receive.
• New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to remain qualified as a REIT.
• Our ownership limitations may restrict business combination opportunities.
• Provisions of Maryland law and other provisions of our organizational documents may limit the ability of a third-party to acquire us.
• Future offerings of debt securities, which would rank senior to our common stock upon liquidation, and future offerings of equity securities, which would dilute our existing stockholders and may be senior to our common stock for the purposes of dividend and liquidating distributions, may adversely affect the market price of our common stock.
• Our Board may approve the issuance of capital stock with terms that may discourage a third-party from acquiring us.
• Future issuances or sales of shares could cause our share price to decline.
• The authorization, amount and payment of future cash dividends on shares of our common stock are subject to uncertainty due to disruption in the mortgage, housing or related sectors.
• We are dependent on our executive officers and other key personnel for our success, the loss of any of whom may materially adversely affect our business.
• We operate in a highly competitive market for investment opportunities and competition may limit our ability to acquire desirable investments, which could materially adversely affect our results of operations.
• Litigation may adversely affect our business and financial results.