About MFA Financial

MFA Financial, Inc., a specialty finance company, invests in and finances residential mortgage assets. The company's targeted investments include principally the following: Residential whole loans, including Purchased Performing Loans, Purchased Credit Deteriorated and Purchased Non-performing Loans, which the company acquires and holds through certain trusts. Through its wholly-owned subsidiary, Lima One Capital, LLC (or Lima One), a leading nationwide originator and servicer of business purpose loans (or BPLs), the company originates and services BPLs for real estate investors. The company also owns real estate (or REO), which is typically acquired as a result of the foreclosure or other liquidation of delinquent whole loans in connection with its loan investment activities. Residential mortgage securities, including Agency MBS, Non-Agency MBS, CRT securities and MSR-related assets, which include term notes backed directly or indirectly by MSRs. The company selectively invests in residential mortgage assets with a focus on credit analysis, projected prepayment rates, interest rate sensitivity and expected return. The company is an internally-managed real estate investment trust (or REIT). Residential Whole Loans During 2023, the company continued to acquire residential whole loans, primarily Purchased Performing Loans, with approximately two-thirds of acquisitions reflecting loans originated by Lima One. The company's Purchased Performing Loan portfolio includes loans to finance (or refinance) one-to-four family residential properties that are not considered to meet the definition of a Qualified Mortgage in accordance with guidelines adopted by the Consumer Financial Protection Bureau (Non-QM loans); short-term business purpose loans collateralized by residential and multi-family properties made to non-occupant borrowers that intend to rehabilitate and refinance or sell the properties (Transitional loans); business purpose loans to finance (or refinance) non-owner occupied one-to-four family residential properties that are rented to one or more tenants (Single-family rental loans); loans on investor properties that conform to the standards for purchase by a federally chartered corporation, such as the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) (Agency eligible investor loans); and previously originated loans secured by residential real estate that is generally owner occupied (Seasoned performing loans). The company acquires and holds its non-business purpose loans and certain of its Transitional loans and Single-family rental loans. In addition, during 2023, the company continued to manage its Purchased Non-performing residential whole loan and Purchased Credit Deteriorated Loan portfolios. Purchased Credit Deteriorated Loans are typically characterized by borrowers who had previously experienced payment delinquencies and the amount owed may have exceeded the value of the property pledged as collateral at the time of acquisition. The company also owns REO property as a result of managing the resolution of non-performing loans. Securities, at Fair Value The company invested in residential mortgage securities, including Agency MBS, Non-Agency MBS, CRT securities and MSR-related assets, which include term notes backed directly or indirectly by MSRs. Going forward, the company may continue to invest selectively in a range of residential mortgage securities as market opportunities arise. Tax Status The company has elected to be treated as a REIT for the U.S. federal income tax purposes. To maintain its qualification as a REIT, it must comply with various requirements under federal tax law, including that it must distribute approximately 90% of its annual REIT taxable income to its stockholders. Regulatory Matters The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) and the regulations promulgated thereunder are likely to continue to increase the economic and compliance costs for participants in the mortgage and securitization industries, including the company. f The company relies on the exemption from registration provided by Section 3(c)(5)(C) of the Investment Company Act of 1940, as amended (the Investment Company Act). In conjunction with the company's legal department, it monitors its compliance with Section 3(c)(5)(C) within its risk management program. History MFA Financial, Inc. was incorporated in Maryland in 1997.