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What changed in Better Home & Finance Holding Co's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Better Home & Finance Holding Co's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+525 added−735 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-19)

Top changes in Better Home & Finance Holding Co's 2025 10-K

525 paragraphs added · 735 removed · 357 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

52 edited+38 added−126 removed17 unchanged
Biggest changeFederal Lending and Servicing Laws and Regulations Numerous U.S. federal regulatory consumer protection laws impact our business, including but not limited to the Real Estate Settlement Procedures Act (“RESPA”) and Regulation X, the Truth in Lending Act (“TILA”), the the Home Ownership and Equity Protection Act of 1994 (“HOEPA”), Regulation Z, the TILA-RESPA Integrated Disclosure (“TRID”) rules, the Fair Credit Reporting Act (the “FCRA”) and Regulation V, the Equal Credit Opportunity Act and Regulation B, the Homeowners Protection Act, the Home Mortgage Disclosure Act (“HMDA”) and Regulation C, the Fair Housing Act, the Fair Debt Collection Practices Act, the Gramm-Leach-Bliley Act (the “GLBA”) and Regulation P, the Bank Secrecy Act (“BSA”) and related regulations, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act, the SAFE Act, the Electronic Signatures in Global and National Commerce Act and similar state laws, particularly the Uniform Electronic Transactions Act, the Electronic Fund Transfer Act of 1978 and Regulation E, the Servicemembers Civil Relief Act, the Federal Trade Commission Act, the FTC Credit Practices Rules and the FTC Telemarketing Sales Rule, the Telephone Consumer Protection Act (“TCPA”), the Mortgage Acts and Practices Advertising Rule, Regulation N, the Controlling the Assault of Non-Solicited Pornography and Marketing Act (the “CAN-SPAM Act”), the Consumer Financial Protection Act, the final rule promulgated by the CFPB, FHFA and other regulators concerning automated property valuation models, the Bankruptcy Code and bankruptcy injunctions and stays, and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
Biggest changeFederal Laws and Regulations We are subject to a several U.S. federal regulatory consumer protection laws including, but not limited to, RESPA and Regulation X, TILA, the Home Ownership and Equity Protection Act of 1994 (“HOEPA”), Regulation Z, the TILA-RESPA Integrated Disclosure (“TRID”) rules, the FCRA and Regulation V, the Equal Credit Opportunity Act and Regulation B, the Homeowners Protection Act, the Home Mortgage Disclosure Act (“HMDA”) and Regulation C, the Fair Housing Act, the FDCPA, the Gramm-Leach-Bliley Act (the “GLBA”) and Regulation P, the Bank Secrecy Act (“BSA”) and related regulations, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act, the SAFE Act, the Electronic Signatures in Global and National Commerce Act and similar state laws, particularly the Uniform Electronic Transactions Act, the Electronic Fund Transfer Act of 1978 and Regulation E, the Servicemembers Civil Relief Act, the Federal Trade Commission Act, the FTC Credit Practices Rules and the FTC Telemarketing Sales Rule, the Telephone Consumer Protection Act (“TCPA”), the Mortgage Acts and Practices Advertising Rule, Regulation N, the Controlling the Assault of Non-Solicited Pornography and Marketing Act (the “CAN-SPAM Act”), the Consumer Financial Protection Act. 9 Tab l e of Contents State Laws and Regulations Because we are not a depository institution, we must comply with state licensing requirements to conduct our business.
Our goal is to surface to our customers the most updated interest rates, and our tools provide them with flexibility to evaluate Home Finance and Better Plus products in real time as they move through our customer workflow. • Highly Scalable Platform in Breadth and Depth.
Our goal is to surface the most updated interest rates to our customers , and our tools provide them with flexibility to evaluate Home Finance and Better Plus products in real time as they move through our customer workflow. • Highly Scalable Platform in Breadth and Depth.
Unless otherwise indicated, references to “Better,” “Better Home & Finance,” the “Company,” “we,” “us,” “our” and other similar terms refer to (i) Pre-Business Combination Better and its consolidated subsidiaries prior to the Closing and (ii) Better Home & Finance and its consolidated subsidiaries following the Closing.
Unless otherwise indicated, references to “Better,” “Better Home & Finance,” the “Company,” “we,” “us,” “our” and other similar terms refer to (i) Pre-Business Combination Better and its consolidated subsidiaries prior to the closing of the Business Combination and (ii) Better Home & Finance and its consolidated subsidiaries following the closing of the Business Combination.
This team also takes an active role in the onboarding and ongoing monitoring of B2B partners, third-party providers in our Better Plus marketplace, and new loan purchasers on our platform by assessing risk and reviewing applicable documentation. Through our internal compliance team, we proactively monitor the reporting and revision of these processes and procedures to mitigate risk.
This team also takes an active role in the onboarding and ongoing monitoring of strategic partners, third-party providers in our Better Plus marketplace, and new loan purchasers on our platform by assessing risk and reviewing applicable documentation. Through our internal compliance team, we proactively monitor the reporting and revision of these processes and procedures to mitigate risk.
Our capital markets team helps mitigate interest rate risk in our loan production business by executing appropriate hedging trades between the time of interest rate lock and loan commitment to an investor. We institute different strategies depending on market conditions to provide our customers with attractive rates and ensure the stability of our loan production pipeline and our liquidity.
Our capital markets team helps mitigate interest rate risk in our loan production business by executing appropriate hedging trades between the time of interest rate lock and loan commitment to an investor. We institute different strategies depending on market conditions to provide our customers with attractive rates and promote the stability of our loan production pipeline and our liquidity.
Item 1. Business The Business Combination On August 22, 2023, we consummated the transactions contemplated by the Agreement and Plan of Merger (as amended, the “Merger Agreement”), by and among Aurora Acquisition Corp. (“Aurora”), Better Holdco, Inc. (“Pre-Business Combination Better”), and Aurora Merger Sub I, Inc., formerly a wholly owned subsidiary of Aurora (“Merger Sub”).
Item 1. Business The Business Combination On August 22, 2023, we consummated the transactions contemplated by the Agreement and Plan of Merger (as amended, the “Merger Agreement”), by and among Aurora Acquisition Corp. (“Aurora”), Better Holdco, Inc. (“Pre-Business Combination Better”), and Aurora Merger Sub I, Inc., formerly a wholly owned subsidiary of Aurora (“Business Combination”).
We make available free of charge through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, registration statements and amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (“Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish them to the Securities and Exchange Commission (“SEC”).
We make available free of charge through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, registration statements and 10 Tab l e of Contents amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (“Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish them to the Securities and Exchange Commission (“SEC”).
This advanced technology stack, which we call Tinman, allows us to deliver on what we believe is most important for our customers: a seamless experience, time saved, and higher certainty on the single biggest financial decision of their lives.
Our advanced technology stack, which we call Tinman®, enables us to deliver on what we believe is most important for our customers: a seamless experience, time saved, and higher certainty on the single biggest financial decision of their lives.
Our sources of liquidity include loan funding warehouse facilities, the loans we produce in conformity with GSE-guaranteed takeout, as well as cash on hand. As of December 31, 2024, we had three warehouse lines of credit in different amounts and with various maturities, with an aggregate available amount of $425.0 million.
Our sources of liquidity include loan funding warehouse facilities, the loans we produce in conformity with GSE-guaranteed takeout, as well as cash on hand. As of December 31, 2025, we had three warehouse lines of credit in different amounts and with various maturities, with an aggregate available amount of $575.0 million.
We also are subject to a variety of regulatory and contractual obligations imposed by credit owners, insurers and guarantors of the loans we produce or facilitate and/or service. This includes, but is not limited to, Fannie Mae, Freddie Mac, Federal Housing Finance Agency (“FHFA”) , the U.S.
We also are subject to a variety of regulatory and contractual obligations imposed by credit owners, insurers and guarantors of the loans we produce or facilitate and/or service. This includes, but is not limited to, Fannie Mae, Freddie Mac, the Federal Housing Finance Agency (“FHFA”) , the U.S. Department of Housing and Urban Development (“HUD”), the FHA and the VA.
We prioritize strategic thinking about how best to protect the interests of the consumer, particularly since we are building a digitally native system in an industry that has traditionally been analog. 11 Table of Contents We believe our integrated platform contributes to our ability to mitigate exposure to risk.
We prioritize strategic thinking about how best to protect the interests of the consumer, particularly since we are building a digitally native system in an industry that has traditionally been analog. 7 Tab l e of Contents We believe our integrated platform contributes to our ability to mitigate exposure to risk.
We see growth opportunities to reach customers by further penetrating both existing and new performance marketing (pay-per-click) and digital media channels. Additionally, growth in organic traffic and maintaining and contacting our existing network of customers who may be eligible to transact are significant opportunities.
We see growth opportunities to reach customers by further penetrating both existing and new performance marketing (pay-per-click) and digital media channels. Additionally, growth in organic traffic and maintaining and contacting our existing network of customers who may be eligible to transact are significant opportunities. • Broadening U.S. Geographic and Product Coverage.
We incur significant ongoing costs to comply with the licensing and other legal requirements under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“the SAFE Act”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), among other federal statutes. The Dodd-Frank Act established the Consumer Financial Protection Bureau (“CFPB”).
We incur significant ongoing costs to comply with the licensing and other legal requirements under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the” SAFE Act”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), among other federal statutes.
None of the information or data included on our websites or accessible at these links is incorporated into, and will not be deemed to be a part of, this Annual Report or any of our other filings with the SEC. 16 Table of Contents
None of the information or data included on our websites or accessible at these links is incorporated into, and will not be deemed to be a part of, this Annual Report or any of our other filings with the SEC. 11 Tab l e of Contents
In addition, as a result of our international expansion in the United Kingdom, we are subject to increased regulation over parts of our business including by the Prudential Regulatory Authority of the Bank of England and the Financial Conduct Authority.
In addition, as a result of our operations in the United Kingdom, we are subject to additional regulation over parts of our business including by the Prudential Regulatory Authority of the Bank of England and the Financial Conduct Authority.
Unauthorized use of our intellectual property by third parties, and the expenses incurred in protecting our intellectual property rights, may materially and adversely affect our business. Government Regulations Affecting Mortgage Loan Production, Servicing and Ancillary Services We operate in a heavily regulated industry that is highly focused on consumer protection.
Unauthorized use of our intellectual property by third parties, and the expenses incurred in protecting our intellectual property rights, may materially and adversely affect our business. Government Regulations We operate in a heavily regulated industry that is highly focused on consumer protection.
We believe that lowering loan manufacturing costs, integrating additional homeownership products onto our platform, and scaling our ecosystem will, if we are successful, enable us to deliver increased value to our customers and contribute to our mission. • Superior Customer Experience. Our customers use our integrated platform to seamlessly navigate the homeownership journey.
We believe that lowering loan manufacturing costs and scaling our ecosystem will enable us to deliver increased value to our customers and contribute to our mission. • Superior Customer Experience. Our customers use our integrated platform to seamlessly navigate the homeownership journey.
Our Intellectual Property We use a combination of proprietary and third-party intellectual property. We rely on a combination of trade secrets, trademarks, Internet domain names and other forms of intellectual property, and on contractual agreements, to establish, maintain and protect our intellectual property rights and technology. We also license certain third-party technology for use in conjunction with our products.
Our Intellectual Property We use a combination of proprietary and third-party intellectual property. We rely on a combination of trade secrets, trademarks, Internet domain names and other forms of intellectual property, and on contractual agreements, to establish, maintain and protect our intellectual property rights and technology.
We are able to save our customers time and money by removing friction from manual re-entry of personal details and details on their home captured through the loan origination and appraisal process, reducing fatigue from dealing with numerous providers, offering them the best combination of tailored products through our expanding 9 Table of Contents homeownership platform.
This enables us to save customers time and money by removing friction from manual re-entry of personal details and details on their home captured through the loan origination and appraisal process, reducing fatigue from dealing with numerous providers, offering them a combination of tailored products through our expanding homeownership platform. • Limited Credit Exposure.
The SEC maintains a website that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC. These materials may be obtained electronically by accessing the SEC’s website at www.sec.gov. References to our website or other links to our publications or other information are provided for the convenience of our stockholders.
The SEC maintains a website that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC. These materials may be obtained electronically by accessing the SEC’s website at www.sec.gov.
Our Team Members and Human Capital Management As of December 31, 2024, we had approximately 1,250 team members, of which approximately 690 were located in the United States, approximately 410 were located in India and approximately 150 were located in the United Kingdom.
Our Team Members and Human Capital Management As of December 31, 2025, we had approximately 1,329 team members, of which approximately 869 were located in the United States, approximately 426 were located in India and approximately 34 were located in the United Kingdom.
These laws have required most lenders to devote considerable resources to building and maintaining automated systems to perform loan-by-loan analysis of points, fees and other factors set forth in the laws, which often vary depending on the location of the mortgaged property. Many of these laws are vague and subject to differing interpretations, which exposes us to risk.
State laws often include fee limitations and disclosure and other requirements. These laws have required us to devote considerable resources to building and maintaining automated systems to perform loan-by-loan analysis of points, fees and other factors set forth in the laws, which often vary depending on the location of the mortgaged property.
We will continue to invest to remove points of customer friction, making our platform more efficient and scalable as we continue to grow and add new products, further driving down our labor costs through automation.
We will continue to invest to remove points of customer friction, making our technology more efficient and scalable as we continue to grow and add new products, further driving down our labor costs through automation. • Customer Acquisition. We believe we have ample room to reach additional customers through data-driven marketing.
State attorneys general, state mortgage and real estate licensing regulators, state insurance departments, and state and local consumer protection offices have authority to investigate consumer complaints and to commence investigations and other formal and informal proceedings regarding our operations and activities. We are mindful that these state regulators may become more active should the CFPB’s priorities change.
State attorneys general, state mortgage and real estate licensing regulators, state insurance departments, and state and local consumer protection offices have authority to investigate consumer complaints and to commence investigations and other formal and informal proceedings regarding our operations and activities.
The company employs dedicated associates within the compliance team that manage regulatory reporting and examinations to ensure timely submissions and responses. Additionally, the compliance team proactively audits and monitors various aspects of our origination process and initiates any necessary coaching and remediation measures.
The company employs dedicated associates within the compliance team that manage regulatory reporting and examination, helping us meet submission deadlines and respond to regulators in a timely manner. Additionally, the compliance team proactively audits and monitors various aspects of our origination process and initiates any necessary coaching and remediation measures.
Approximately 90 team members worked in technology and product development, of which the majority were located in the United States. None of our team members are represented by a labor union or covered by a collective bargaining agreement.
Approximately 77 team members worked in technology and product development, of which the majority were located in the United States. None of our employees are represented by a labor union or covered by collective bargaining agreements. We have made efforts to promote an inclusive and respectful culture.
We aim to provide our customers with a superior customer experience and a wide selection of products to navigate their homeownership journey.
Our Competitive Strengths We believe we have a number of competitive advantages that contribute to our success. We aim to provide our customers with superior experience and a wide selection of products to navigate their homeownership journey.
Department of Housing and Urban Development (“HUD”), FHA and the Department of Veterans Affairs (“VA”). Regulatory standards set by these entities may change in ways that impact our business. In addition, we are subject to periodic reviews and audits by the GSEs, the FHA, the Federal Trade Commission (“FTC”), non-agency securitization trustees and others.
Regulatory standards set by these entities may change in ways that impact our business. In addition, we are subject to periodic reviews and audits by the GSEs, the FHA, the Federal Trade Commission (“FTC”), non-agency securitization trustees and others. This broad and extensive supervisory and enforcement oversight will continue to occur in the future.
Since Tinman tracks thousands of data points across each loan file, we are able to ensure that each transaction is auditable and that our loan production process is compliant with applicable state-specific and federal regulations across customer contact, pricing, underwriting and quality control.
Since Tinman tracks thousands of data points across each loan file, we are able to maintain a robust audit trail and support compliance with applicable state-specific and federal regulations across customer contact, pricing, underwriting and quality control.
This broad and extensive supervisory and 13 Table of Contents enforcement oversight will continue to occur in the future. We also may be subject to judicial and administrative decisions that impose requirements and restrictions on our business. As a highly regulated business, the regulatory and legal requirements we face can change and may even become more restrictive.
We also may be subject to judicial and administrative decisions that impose requirements and restrictions on our business. As a highly regulated business, the regulatory and legal requirements we face can change and may even become more restrictive. In turn, this could make our compliance responsibilities more complex.
We sell the loans that we originate to a network of loan purchasers, including government-sponsored enterprises (“GSEs”), banks, insurance companies, asset managers, and mortgage real estate investment trusts, through our proprietary matching engine, and we earn revenue on the sale of each loan.
We sell the mortgage loans we originate into a network of loan purchasers, including GSEs, banks, insurance companies, asset managers, and mortgage real estate investment trusts, and we earn revenue upon the sale of each loan.
We operate in a fully digital environment allowing us to track and analyze all workflows to optimize customer experience and operational efficiency. We frequently use data to improve our customer experience and maximize conversion. On the customer side, we capture up to 10,000 data points per customer during the loan transaction process.
We frequently use data to improve our customer experience and maximize conversion. On the customer side, we capture up to 10,000 data points per customer during the loan transaction process.
We operate under hedging policies designed to mitigate the effects of any fluctuations in interest rates, and analyze our “pull-through” rates along the loan life cycle, to ensure that we are adjusting our hedging activity across market conditions.
We operate under hedging policies designed to mitigate the effects of any fluctuations in interest rates, and analyze our pull-through rates along the loan lifecycle and calibrate our hedging activity as market conditions change.
Our revenue was $108.5 million for the year ended December 31, 2024 compared to $72.3 million for the year ended December 31, 2023, representing a year-over-year increase of approximately 50%. We recorded a net loss of $206.3 million for the year ended December 31, 2024, compared to a net loss of $536.4 million for the year ended December 31, 2023.
Our revenue was $164.9 million for the year ended December 31, 2025, compared to $108.5 million for the year ended December 31, 2024, representing a year-over-year increase of approximately 52%.
State Lending Laws and Regulations Because we are not a depository institution, we must comply with state licensing requirements to conduct our business. We incur significant ongoing costs to comply with these licensing requirements. To conduct our residential mortgage lending and servicing operations in the United States, we are licensed in all 50 states and the District of Columbia.
We incur significant ongoing costs to comply with these licensing requirements. To conduct our residential mortgage lending and servicing operations in the United States, we are licensed in all 50 states and the District of Columbia. Our real estate brokerage, title agency, and homeowners insurance agency also maintain licenses to operate in certain of these states.
We are able to surface highly relevant and suitable products for each customer based on their personalized financial and property circumstances. • Limited Credit Exposure. Our business model is to manufacture loans to sell to our marketplace of secondary investors and partners, and we do not seek to retain assets for long periods of time.
Our business model is to manufacture loans to sell to our marketplace of secondary investors and partners, and we do not seek to retain assets for long periods of time.
We believe that our success depends on hiring and retaining highly capable and innovative team members, especially as it relates to our engineering base.
We also license certain third-party technology for use in conjunction with our products. 8 Tab l e of Contents We believe that our success depends on hiring and retaining highly capable and innovative team members, especially as it relates to our engineering base.
With every loan we produce, we aim to sell the loan and associated mortgage servicing rights (“MSRs”) into our network of purchasers, and not permanently retain loans or MSRs on our balance sheet as part of our business model. We retained loans on our balance sheet for approximately 22 days, on average, over the course of 2024.
With every loan we produce, we aim to sell the loan and associated MSRs into our network of purchasers and not permanently retain loans or 6 Tab l e of Contents MSRs on our balance sheet as part of our business model. As of December 31, 2025, we had no material MSRs on our balance sheet.
For jumbo loans, which are not GSE eligible, we enter into sale agreements with purchasers prior to lock, thereby enabling us to take minimal balance sheet exposure for non-conforming loans, limiting our credit risk and supporting our model. • Integrated Platform.
Substantially all of the loans we produced, excluding home equity lines of credit, were conforming with GSE-guaranteed takeout, providing access to liquidity for our loans across market cycles. For jumbo loans, which are not GSE eligible, we enter into sale agreements with purchasers prior to lock, thereby limiting balance sheet exposure and credit risk for non-conforming loans.
Cyclicality and Seasonality The consumer lending market and the associated loan origination volumes for mortgage loans are influenced by general economic conditions, including the prevailing interest rate environment, unemployment rates, home price appreciation and consumer confidence, as well as seasonality, as home sales typically rise in the second and third quarters, with reduced activity in the first and fourth quarters, as home buyers tend to purchase their homes during the spring and summer in order to move to a new home before the start of the school year.
Seasonality also has an influence, as home sales typically rise in the second and third quarters, with reduced activity in the first and fourth quarters, as home buyers tend to purchase their homes during the spring and summer in order to move to a new home before the start of the school year.
We believe we can complete many of our transactions at a lower production labor cost per unit, seeking to pass savings on to our customers and offer them lower rates and prices across our suite of products. • Data Advantage.
We believe we can complete many of our transactions at a lower production labor cost per unit, seeking to pass savings on to our customers. • Data Advantage. We operate in a fully-digital environment allowing us to track and analyze all workflows to optimize customer experience and operational efficiency.
Our technology infrastructure allows us to address our partners’ requirements by combining existing solutions and customizing functionality. • Target Reduced Labor Cost. We are working to re-engineer traditionally complex, manual and highly specialized loan workflows into simple tasks that can be partially completed through automation or with unspecialized lower-cost labor.
Our platform is modular in nature and new products and partners can be added seamlessly using the same core code and systems architecture. • Labor Cost. We are working to re-engineer traditionally complex, manual and highly specialized loan workflows into simple tasks that can be partially completed through automation or with unspecialized lower-cost labor.
Our real estate brokerage, title agency, and homeowners insurance agency also maintain licenses to operate in certain of these states. Generally speaking, the licensing process includes the submission and approval of an application to the applicable state agency, a character and fitness review of key individuals, and an administrative review of our business operations.
Generally, the licensing process includes the submission and approval of an application to the applicable state agency, a character and fitness review of key individuals, and an administrative review of our business operations. Such requirements occur at the initial stage of license acquisition and throughout the period of licensure.
Such requirements occur at the initial stage of license acquisition and throughout the period of licensure. Under the SAFE Act, all states have laws that require mortgage loan originators employed by non-depository institutions to be individually licensed to offer mortgage loan products.
Under the SAFE Act, all states have laws that require mortgage loan originators employed by non-depository institutions to be individually licensed to offer mortgage loan products. In addition to applicable federal laws and regulations governing our operations, our ability to produce and service loans in any particular state is subject to that state’s laws, regulations and licensing requirements.
The human labor required in our loan production process is one component that requires us to incur higher mortgage platform expenses if our origination volume grows. For the year ended December 31, 2024, our Funded Loan Volume was $3.6 billion, compared to $3.0 billion for the year ended December 31, 2023, representing a year-over-year increase of approximately 19%.
For the year ended December 31, 2025, our Funded Loan Volume was $4.7 billion, compared to $3.6 billion for the year ended December 31, 2024, representing a year-over-year increase of approximately 32%.
At such time, approximately 790 Better Home & Finance team members worked in U.S. mortgage production roles, of which approximately 510 were located in the United States and approximately 280 in India. Additionally, approximately 80 team members worked in Better Plus business lines, primarily as real estate and insurance agents and support professionals.
At such time, approximately 845 Better Home & Finance team members worked in U.S. mortgage production roles, of which approximately 591 were located in the United States and approximately 254 in India. Our intention remains to scale our India based team to avail ourselves of the large mortgage talent pool and favorable labor cost arbitrage.
Together, these state laws impact our communication and data processing practices and policies, which, in turn, results in substantial compliance-related costs and expenses. Certain of these state laws also provide for civil penalties for violations, as well as a private right of action, including with respect to data breaches, which come with ever-increasing risks, including the risk of private litigation.
Our business is also subject to state laws, related to mobile-and internet-based businesses, data privacy, disclosures and advertising laws. Together, these state laws impact our communication and data processing practices and policies, which, in turn, results in substantial compliance-related costs and expenses.
The homeownership experience is unnecessarily slow, convoluted, and analog; in sum, we believe it is broken. We think it is inevitable that the homeownership journey will be digitized. With that, we believe there will come tremendous benefits to the consumer.
High transaction costs, regulatory complexity, and sprawling intermediary stack come at the expense of the consumer, leading to frustration and impeding digital adoption. The homeownership experience is unnecessarily slow, convoluted, and analog; in sum, we believe it is broken.
In addition, by further automating steps of the loan manufacturing process, we believe we can improve the customer experience and decrease the time they spend in the process, which may improve conversion. • Enhance Technology Innovation.
We are focused on supporting customers earlier in the homeownership journey through improved customer engagement and technology-enabled workflows. In addition, by further automating elements of the loan manufacturing process, we aim to reduce friction and processing time, which may support improved customer outcomes and conversion rates. • Enhance Technology Innovation.
For our loan products offered through Home Finance, as of December 31, 2024, we are licensed to operate in all 50 states and the District of Columbia across various credit and income profiles.
The majority of the loans we originate conform to the underwriting standards of Fannie Mae and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). 4 Tab l e of Contents As of December 31, 2025, we were licensed to originate mortgage loans in all 50 states and the District of Columbia across a range of credit and income profiles.
The MECC is comprised of members of the senior leadership team and manages ethics and compliance issues at the Company, reporting directly to the Board. We have also implemented a company-wide training program on ensuring a respectful workplace and have conducted multiple anonymous engagement surveys .
Paula Tuffin, our General Counsel, Chief Compliance Officer and Secretary, leads the Management, Ethics & Compliance Committee (the “MECC”). The MECC is comprised of members of the senior leadership team and manages ethics and compliance issues at the Company, reporting directly to the Company’s Board of Directors (the “Board”).
However, we do not necessarily offer all products and services in all states in which we are licensed. Accordingly, we aim to increase our addressable market by providing all of our products across the United States. Additionally, we continue to invest in infrastructure to diversify and scale our loan product portfolio (FHA, VA, Non-Agency Jumbo and Non-QM) to meet demand.
We seek to expand our addressable market by increasing the availability of our products and services across the United States, subject to applicable licensing and regulatory requirements. While we are licensed in many jurisdictions, we do not currently offer all products in all locations.
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Overview Our mission is to build a homeownership platform that revolutionizes the consumer experience of finding, financing, insuring and selling a home. The home is among the world’s largest, oldest, and most tangible asset classes—with annual spend across the residential housing market accounting for approximately $4.5 trillion in 2023 in the U.S., and approximately 15-18% of annual U.S.
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Overview We are a technology-enabled homeownership company that offers mortgage, home equity, and other homeownership products through a digital platform. Our services are designed to support customers across key stages of the homeownership cycle including purchase, ownership, refinance, and sale. Founded in 2015, we built our business with a technology-first approach.
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GDP since 2001, according to the National Association of Home Builders. And yet, while numerous adjacent industries—from auto to health to travel to food—are undergoing end-to-end digital transformations, the homeownership journey remains mired in legacy inefficiencies. High transaction costs, regulatory complexity, and many middlemen come at the expense of the consumer, leading to frustration and impeding digital adoption.
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Our proprietary platform supports both consumer-facing offerings and offerings provided to third-party strategic partners and is designed to scale across products, channels, and market conditions. The home is among the world’s largest, oldest, and most tangible asset classes and yet, while other industries are undergoing end-to-end digital transformations, the homeownership journey remains mired in legacy inefficiencies.
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Seamless online experiences driven by automation, and efficient technology infrastructure will make buying a home faster, more cost-efficient, more transparent, and more accessible. We believe we are positioned to be at the forefront of this digital revolution. We see a future in which every consumer can seamlessly buy, sell, refinance, and insure their home digitally.
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We recorded a net loss of $165.9 million for the year ended December 31, 2025, compared to a net loss of $206.3 million for the year ended December 31, 2024, representing a 20% year-over-year decrease. Our Products and Services We offer a range of products and services designed to support the homeownership lifecycle.
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We were born digital in 2015, and since the beginning, we have been relentlessly digitizing and automating the home finance workflow, adding new homeownership products tailored specifically to our customers’ needs, and striving to improve every aspect of the customer experience.
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These include consumer-facing mortgage and related homeownership products, as well as technology-enabled offerings provided to third-party strategic partners. Our offerings are supported by our proprietary technology platform, Tinman, which enables digital delivery, automation, and integration across these activities.
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We have built a data processing engine that ingests thousands of data points on each customer and property in our system, as well as a workflow engine that provides customers with personalized home finance, real estate, and insurance product selections.
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Home Finance Home Finance offers a range of residential mortgage loan products for home purchase and refinance, including cash-out refinance and debt consolidation, and home equity, across various maturities and interest rate structures. Our offerings include GSE-conforming loans, Federal Housing Administration (“FHA”) insured loans, Department of Veterans Affairs (“VA”) guaranteed loans, and jumbo loans.
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We started by building a refinance offering, which we had the opportunity to lean into and rapidly scale during 2020 and the first half of 2021, benefiting from the tailwind of a COVID-driven low interest rate environment.
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In addition to first-lien mortgage products, we offer home equity lines of credit and closed-end second-lien loans to enable customers to access equity in their homes. Tinman AI Platform The Tinman AI Platform (“Tinman”) includes access to our proprietary technology in connection with mortgage origination activities, including technology-enabled underwriting, loan processing, compliance support, capital markets connectivity, and related back-office functionality.
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While the interest rate-driven macroeconomic environment has since changed and we have scaled back substantially to preserve capital and seek to mitigate losses, we believe the customer value proposition of digital, transparent homeownership products has strong consumer demand through all cycles and we continue to invest in this mission.
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In certain arrangements, partners integrate Tinman into their existing internal digital operations to support mortgage origination activities and pay fees to the Company based on funded loans processed through the platform. In other arrangements, Tinman is integrated into a strategic partner’s customer-facing application or workflow, and we originate mortgage loans directly using our Home Finance products for the partner’s customers.
Removed
We also continue to invest in our automated processes and seek to grow our purchase business, as well as improve the cross-sell of non-mortgage products across our homeownership platform. We believe the digital-first nature of our business positions us to build the next generation homeownership platform.
Added
The scope, pricing structure and responsibilities under these arrangements vary by partner. Better Plus We complement our residential mortgage loan products through Better Plus, which includes a set of non-mortgage homeownership products and services offered primarily through third-party strategic partners.
Removed
Tinman allows us to reduce origination costs and friction associated with the legacy homeownership process, shifting the model from one built on decades-old legacy systems to one leveraging automation and AI to streamline the mortgage process on behalf of customers.
Added
These offerings include referrals to real estate agents, title insurance and settlement services provided through third-party providers, and access to homeowners insurance policies through a digital marketplace of insurance partners. In these arrangements, we generally act as an agent or referral source and receive fees from third-party providers.
Removed
Because we are digitally native, we have been able to re-architect the problematic aspects of traditional industry processes in favor of the consumer, delivering them value through our streamlined digital process, faster turnaround times, and greater certainty relative to industry averages.
Added
Better Plus products are integrated into our platform to support customers throughout the homeownership process. International Lending & Services Through our U.K. subsidiary, Birmingham Bank, and related U.K. homeownership businesses, we offer residential mortgage and related financial products to customers in the United Kingdom.
Removed
For example, traditional industry processes include the manual transfer of paper-based or e-mail documents that can be costly and time intensive, as well as static loan pricing, where if a piece of data changes in the loan file it can take multiple days to get refreshed pricing, causing delays 4 Table of Contents for the customer.
Added
Our U.K. operations utilize a technology-first approach to address a market we believe is similarly encumbered by legacy inefficiencies. We are in the process of exiting our non-core international operations. Our Technology Our products and services are supported by Tinman and our voice-based AI assistant, Betsy.
Removed
Tinman allows customers to see their rate options in as little as three seconds, get pre-approved in as little as three minutes, lock in rates and get connected to a real estate agent in as little as 30 minutes, get a commitment letter for their mortgage in as little as one day through One Day Mortgage and close their loan in as little as three weeks.
Added
Tinman is a digital loan origination and workflow platform that uses AI and automation to integrate customer-facing applications, internal operational tools, and third-party systems to support mortgage origination and related homeownership services.
Removed
Our “One Day Mortgage” program, which was launched in January 2023, allows eligible customers to receive an underwriting determination on their mortgage loan application, in the form of a commitment letter, within 24 hours after locking in their interest rate.
Added
Betsy assists customers with mortgage application inquiries and the collection of required application information and is designed to interact directly with customers as part of the loan origination process and to support more efficient completion of application workflows. Tinman serves as the system of record for our Home Finance, Platform Services, and Better Plus offerings.
Removed
The commitment letter confirms that the customer qualifies for the mortgage loan terms based on a comprehensive review of their creditworthiness, including verification of income, assets, debts, and other forms of credit evaluation, as well as confirms our commitment to lend, subject to certain customary terms.
Added
The platform aggregates customer and property data from direct user input and third-party sources through application programming interfaces (“APIs”), applies automated decisioning and rules-based logic, and orchestrates workflows across underwriting, processing, and closing activities. Tinman also supports pricing, document generation, task assignment, and connectivity with loan purchasers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur recent financial performance has been adversely affected as a result of numerous factors, including: • persistent elevated interest rates, which have the effect of reducing industry mortgage origination volume, increasing competition for customers, and reducing revenue; • continued investments in our business (including investments to expand our product offerings); and • outsized costs relative to our Funded Loan Volume and revenue resulting from changes in the macroeconomic environment and our business (as described elsewhere in this Annual Report), including sales and operations compensation expense to support higher Purchase Loan Volumes, expenses associated with non-mortgage business lines including Better Real Estate, legal and professional service expenses associated with our litigation, and technology and product development expenses resulting from continued investment in our platform.
Biggest changeOur recent financial performance has been adversely affected because of numerous factors, including persistent elevated interest rates and outsized costs relative to our Funded Loan Volume and revenue resulting from changes in the macroeconomic environment and our business.
It is possible that advances in computer capabilities, new discoveries, undetected fraud, inadvertent violations of our policies or procedures or other developments could result in a compromise of information or a breach of the technology and security processes that are used to protect consumer transaction data.
It is possible that advances in computer capabilities, new discoveries, undetected fraud, inadvertent violations of our policies or procedures or other developments could result in a compromise of information or a breach of the technology and security processes that are used to protect consumer transaction and other data.
If loan applicant, customer or team member information is inappropriately accessed or acquired and used by a third party or a team member for illegal purposes, such as identity theft, we may be responsible to the affected applicant or customer for any losses he, she or they may have incurred as a result of misappropriation or other improper use.
If loan applicant, customer or team member or other information is inappropriately accessed or acquired and used by a third party or a team member for illegal purposes, such as identity theft, we may be responsible to the affected applicant or customer for any losses he, she or they may have incurred as a result of misappropriation or other improper use.
Our ability to sell and the prices we receive for our loans vary from time to time and may be materially adversely affected by several factors, including, without limitation: (i) an increase in the number of similar loans available for sale; (ii) conditions in the loan securitization market or in the secondary market for loans in general or for our loans in particular, which could make our loans less desirable to potential purchasers; (iii) defaults under loans in general; (iv) loan-level pricing adjustments imposed by Fannie Mae and Freddie Mac, including adjustments for the purchase of loans in forbearance or refinancing loans; (v) the types and volume of loans being originated or sold by us; (vi) the level and volatility of interest rates; and (vii) unease in the banking industry caused by, among other things, recent bank failures.
Our ability to sell and the prices we receive for our loans vary from time to time and may be materially adversely affected by several factors, including, without limitation: (i) an increase in the number of similar loans available for sale; (ii) conditions in the loan securitization market or in the secondary market for loans in general or for our loans in particular, which could make our loans less desirable to potential purchasers; (iii) defaults under loans in general; (iv) loan-level pricing adjustments imposed by Fannie Mae and Freddie Mac, including adjustments for the purchase of loans in forbearance or refinancing loans; (v) the types and volume of loans being originated or sold by us; (vi) the level and volatility of interest rates; and (vii) unease in the banking industry caused by, among other things, bank failures.
In such an instance, we may also be subject to regulatory action, investigation or be liable to a governmental authority for fines or penalties associated with a lapse in the integrity and security of our loan applicants’, customers’ or team members’ information.
In such an instance, we may also be subject to regulatory action, investigation, litigation, or be liable to a governmental authority for fines or penalties associated with a lapse in the integrity and security of our loan applicants’, customers’ or team members’ information.
The risk factors described below should be read together with the other information set forth in this Annual Report, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC.
The risk factors described below should also be read together with the other information set forth in this Annual Report, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC.
Additionally, as our CEO Mr. Garg has significant control over the day-to-day management and the implementation of our major strategic decisions, subject to authorization and oversight by the Board including our Executive Chairman, Harit Talwar. As a board member and officer, Mr.
Additionally, as our CEO Mr. Garg has significant control over the day-to-day management and the implementation of our major strategic decisions, subject to authorization and oversight by the Board including our Chairman, Harit Talwar. As a board member and officer, Mr.
The NYDFS has brought enforcement actions, which involve civil monetary penalties. In the event of a cybersecurity incident, Better Mortgage Corporation could be subject to potentially significant monetary penalties and required to undertake expensive remediation actions.
The NYDFS has brought enforcement actions, which involve civil monetary penalties. Accordingly, in the event of a cybersecurity incident, Better Mortgage Corporation could be subject to potentially significant monetary penalties and required to undertake expensive remediation actions.
Our failure to comply with applicable U.S. federal, state and local telecommunications, data protection, privacy and consumer protection laws could lead to: • loss of our licenses and approvals to engage in our lending, servicing and brokering businesses; • damage to our reputation in the industry; • governmental investigations and enforcement actions, which also could involve allegations that such compliance failures demonstrate weaknesses in our CMS; • administrative fines and penalties and litigation; 46 Table of Contents • civil and criminal liability, including class action lawsuits and defenses to foreclosure; • diminished ability to sell loans that we produce or purchase, requirements to sell such loans at a discount compared to other loans or repurchase or address indemnification claims from purchasers of such loans, including the GSEs; • inability to raise capital; and • inability to execute on our business strategy, including our growth plans.
Our failure to comply with applicable U.S. federal, state and local telecommunications, data protection, privacy and consumer protection laws could lead to: • loss of our licenses and approvals to engage in our lending, servicing and brokering businesses; • damage to our reputation in the industry; • governmental investigations and enforcement actions, which also could involve allegations that such compliance failures demonstrate weaknesses in our CMS; • administrative fines and penalties and litigation; • civil and criminal liability, including class action lawsuits and defenses to foreclosure; • diminished ability to sell loans that we produce or purchase, requirements to sell such loans at a discount compared to other loans or repurchase or address indemnification claims from purchasers of such loans, including the GSEs; • inability to raise capital; and • inability to execute on our business strategy, including our growth plans.
Other factors that could materially and adversely affect our ability to grow our customer base include: • elevated interest rates decrease the propensity of customers to obtain home finance products; • we fail to purchase, or maintain eligibility to purchase, leads from third-party sites, or effectively use search engines, social media platforms, content-based online marketing and other online sources for generating traffic to our website; • potential customers in a particular market generally do not meet our underwriting guidelines; • competitors offer similar or more attractive platforms and products than we have or offer better pricing than we do; • our platform experiences disruptions; • we suffer reputational harm to our brand resulting from negative publicity, whether accurate or inaccurate; • we fail to offer new and competitive product offerings; • customers have difficulty accessing our website on mobile devices or web browsers as a result of actions by us or third parties; • technical or other problems frustrate the customer experience, particularly if those problems prevent us from generating quotes or paying claims in a fast and reliable manner; • we are unable to address customer concerns regarding the content, privacy, and security of our platform; or • we are unable to obtain or maintain required licenses to operate in certain jurisdictions.
Other factors that could materially and adversely affect our ability to grow our customer base include: • elevated interest rates decrease the propensity of customers to obtain home finance products; • we fail to purchase, or maintain eligibility to purchase, leads from third-party sites, or effectively use search engines, social media platforms, content-based online marketing and other online sources for generating traffic to our website; • potential customers in a particular market generally do not meet our underwriting guidelines; • competitors offer similar or more attractive platforms and products than we have or offer better pricing than we do; • our platform experiences disruptions; 23 Tab l e of Contents • we suffer reputational harm to our brand resulting from negative publicity, whether accurate or inaccurate; • we fail to offer new and competitive product offerings; • customers have difficulty accessing our website on mobile devices or web browsers as a result of actions by us or third parties; • technical or other problems frustrate the customer experience, particularly if those problems prevent us from generating quotes or paying claims in a fast and reliable manner; • we are unable to address customer concerns regarding the content, privacy, and security of our platform; or • we are unable to obtain or maintain required licenses to operate in certain jurisdictions.
If, in delivering those mortgage loan applications, we provide insufficient application information, provide the applicant non-compliant federal or state disclosures, do not meet applicable registration, licensing, or other applicable federal or state law requirements, or otherwise fail to comply with our agreements with the applicants or the lender, or if we are deemed to be the “true lender” of the loans based on our involvement in the origination and fulfillment of the loans and our secondary market purchase of certain of the loans, we 24 Table of Contents can be held financially responsible for such issues and be subject to potential regulatory enforcement risk or litigation.
If, in delivering those mortgage loan applications, we provide insufficient application information, provide the applicant non-compliant federal or state disclosures, do not meet applicable registration, licensing, or other applicable federal or state law requirements, or otherwise fail to comply with our agreements with the applicants or the lender, or if we are deemed to be the “true lender” of the loans based on our involvement in the origination and fulfillment of the loans and our secondary market purchase of certain of the loans, we can be held financially responsible for such issues and be subject to potential regulatory enforcement risk or litigation.
Garg or our management team, which could in turn materially and adversely affect our business, financial condition and results of operations. For more information, see “ Note 16, Related Party Transactions ,” to our consolidated financial statements included in this Annual Report. This continued relationship exposes us to particular risks and uncertainties regarding Mr.
Garg or our management team, which could in turn materially and adversely affect our business, financial condition and results of operations. For more information, see “ Note 14, Related Party Transactions ,” to our consolidated financial statements included in this Annual Report. This continued relationship exposes us to particular risks and uncertainties regarding Mr.
We will not have any control over these analysts, and the analysts who publish information about us may have relatively little experience with the Company or its industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates.
We do not have any control over these analysts, and the analysts who publish information about us may have relatively little experience with the Company or its industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates.
For example, these obligations could: • require us to use a large portion of our cash flow to pay principal and interest on debt, which will reduce the amount of cash flow available to fund mortgage loan originations, working capital, capital expenditures, acquisitions, research and development (“R&D”), expenditures and other business activities; • result in certain of our debt instruments being accelerated to be immediately due and payable or being deemed to be in default if certain terms of default are triggered, such as applicable cross-default and/or cross-acceleration provisions; • limit our future ability to raise funds for working capital, mortgage loans, capital expenditures, strategic acquisitions or business opportunities, R&D and other general corporate requirements; • restrict our ability to incur specified indebtedness, create or incur certain liens and enter into sale-leaseback financing transactions; • increase our vulnerability to adverse economic and industry conditions; and • increase our exposure to interest rate risk from variable rate indebtedness.
For example, these obligations could: 31 Tab l e of Contents • require us to use a large portion of our cash flow to pay principal and interest on debt, which will reduce the amount of cash flow available to fund mortgage loan originations, working capital, capital expenditures, acquisitions, research and development (“R&D”), expenditures and other business activities; • result in certain of our debt instruments being accelerated to be immediately due and payable or being deemed to be in default if certain terms of default are triggered, such as applicable cross-default and/or cross-acceleration provisions; • limit our future ability to raise funds for working capital, mortgage loans, capital expenditures, strategic acquisitions or business opportunities, R&D and other general corporate requirements; • restrict our ability to incur specified indebtedness, create or incur certain liens and enter into sale-leaseback financing transactions; • increase our vulnerability to adverse economic and industry conditions; and • increase our exposure to interest rate risk from variable rate indebtedness.
The market price of Class A Common Stock has demonstrated significant weakness and fluctuates in response to various factors and events, including: • our ability to integrate operations, products, and services; • our ability to execute our business plan and achieve operating results consistent with expectations; • our issuance of additional securities, including debt or equity or a combination thereof, which will be necessary to fund our operating expenses; 54 Table of Contents • announcements of new or similar products by us or our competitors; • loss of any strategic relationship; • period-to-period fluctuations in our financial results; • developments concerning intellectual property rights; • repurchases of debt or equity securities or refinancing of outstanding indebtedness; • the addition or departure of key personnel; • continued negative publicity about us (and adverse reactions from our customers, current and potential commercial partners, investors, lenders, and current and potential team members); • announcements by us or our competitors of acquisitions, investments, or strategic alliances; • actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry; • the failure of securities analysts to publish research about us, negative analyst reports regarding our securities or shortfalls in our results of operations compared to levels forecast by securities analysts; and • economic and other external factors, including the general state of the securities market.
The market price of Class A common stock has demonstrated significant weakness and fluctuates in response to various factors and events, including: • our ability to integrate operations, products, and services; • our ability to execute our business plan and achieve operating results consistent with expectations; • our issuance of additional securities, including debt or equity or a combination thereof, which will be necessary to fund our operating expenses; • announcements of new or similar products by us or our competitors; 40 Tab l e of Contents • loss of any strategic relationship; • period-to-period fluctuations in our financial results; • developments concerning intellectual property rights; • repurchases of debt or equity securities or refinancing of outstanding indebtedness; • the addition or departure of key personnel; • continued negative publicity about us (and adverse reactions from our customers, current and potential commercial partners, investors, lenders, and current and potential team members); • announcements by us or our competitors of acquisitions, investments, or strategic alliances; • actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry; • the failure of securities analysts to publish research about us, negative analyst reports regarding our securities or shortfalls in our results of operations compared to levels forecast by securities analysts; and • economic and other external factors, including the general state of the securities market.
We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” In this regard, we will remain an “emerging growth company” until the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period, the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, or for up to five years after the first sale of our common equity securities under an effective registration statement, although if the market value of our Common Stock that is held by non-affiliates exceeds $700.0 million as of the last day of the second quarter before that time, we would cease to be an “emerging growth company” as of the next following December 31.
We may take advantage of these reporting exemptions until we are no longer an “emerging growth company.” In this regard, we will remain an “emerging growth company” until the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period, the last day of the fiscal year in which we have 44 Tab l e of Contents total annual gross revenue of at least $1.235 billion, or for up to five years after the first sale of our common equity securities under an effective registration statement, although if the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last day of the second quarter before that time, we would cease to be an “emerging growth company” as of the next following December 31.
In the event that a number of our warehouse lines are terminated or are not renewed, if such counterparties to any of these agreements fail to perform or if the principal amount that may be drawn under our funding agreements that provide for immediate funding at closing were to significantly decrease, we may be unable to find replacement financing on 44 Table of Contents commercially favorable terms, or at all, which could materially and adversely affect our business.
In the event that a number of our warehouse lines are terminated or are not renewed, if such counterparties to any of these agreements fail to perform or if the principal amount that may be drawn under our funding agreements that provide for immediate funding at closing were to significantly decrease, we may be unable to find replacement financing on commercially favorable terms, or at all, which could materially and adversely affect our business.
We have, and may in the future, experience service disruptions and failures caused by system or software failure, fire, power loss, telecommunications failures, including those of internet service providers, team member misconduct, human error, denial of service or information, cyberattacks, including computer hackers, computer viruses and disabling devices, malicious or destructive code, as well as natural disasters, health pandemics and other similar events.
We have, and may in the future, experience service disruptions and failures caused by system or software failure, fire, power loss, telecommunications failures, including those of internet service providers, team member misconduct, human error, denial of service or information, cybersecurity incidents, including computer hackers, computer viruses and disabling devices and malicious or destructive code, as well as natural disasters, health pandemics and other similar events.
Such measures may in the future fail to prevent or detect unauthorized access to our team member, customer and loan applicant information, and our disaster recovery planning may not be sufficient to address all technology-related risks, which are constantly evolving. 39 Table of Contents All of our products utilize resources and services provided by third parties, in particular, providers of cloud-based services.
Such measures may in the future fail to prevent or detect unauthorized access to our team member, customer and loan applicant information, and our disaster recovery planning may not be sufficient to address all technology-related risks, which are constantly evolving. All of our products utilize resources and services provided by third parties, in particular, providers of cloud-based services.
Any loss of the right to use, or increase in cost of, any such software, hardware or services could result in decreased functionality of our products until equivalent technology is either developed by us or, if available from another provider, is identified, obtained and integrated, which could materially and 40 Table of Contents adversely affect our business, financial condition, results of operations, and prospects.
Any loss of the right to use, or increase in cost of, any such software, hardware or services could result in decreased functionality of our products until equivalent technology is either developed by us or, if available from another provider, is identified, obtained and integrated, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
Department of Justice and the CFPB, take the position that these laws apply not only to intentional discrimination, but also to neutral practices that have a disparate impact on a group that shares a characteristic that a creditor is not permitted to consider in making credit decisions (i.e., creditor or servicing practices that have a disproportionate negative affect on a protected class of individuals).
Department of Justice and the CFPB, haven taken the position that these laws apply not only to intentional discrimination, but also to neutral practices that have a disparate impact on a group that shares a characteristic that a creditor is not permitted to consider in making credit decisions (i.e., creditor or servicing practices that have a disproportionate negative affect on a protected class of individuals).
Garg’s motion for partial summary judgment was granted on April 13, 2023, resulting in the dismissal of certain breach of fiduciary duty claims, among others, including claims that he misappropriated intellectual property and trade secrets for use in his other companies, as well as a judgment against plaintiff for conversion.
Garg’s motion for partial summary judgment was granted on April 13, 2023, resulting in the dismissal of certain breach of fiduciary duty claims, among others, including claims that he misappropriated intellectual property and trade secrets for use in his other companies, as well as a judgment against plaintiff for conversion. That dismissal and judgment were upheld on appeal.
Although we have undertaken measures intended to protect the safety and security of our information systems and the information systems of our third-party providers and the data therein, there can be no assurance that disruptions, failures and cyberattacks will not occur or, if they do occur, that they will be adequately addressed in a timely manner.
Although we have undertaken measures intended to protect the safety and security of our information systems and the information systems of our third-party providers and the data therein, there can be no assurance that disruptions, failures and cybersecurity incidents will not occur or, if they do occur, that they will be adequately addressed in a timely manner.
This type of risk is inherent in the relationships between regulated entities and their regulators. 48 Table of Contents Similarly, due to the geographic scope of our operations and the nature of the services our Better Real Estate business provides, we may be required to obtain and maintain additional real estate brokerage licenses in certain states where we operate.
This type of risk is inherent in the relationships between regulated entities and their regulators. Similarly, due to the geographic scope of our operations and the nature of the services our Better Real Estate business provides, we may be required to obtain and maintain additional real estate brokerage licenses in certain states where we operate.
Our hedging strategies could be improperly executed or poorly designed and not have their desired effect, any of which could actually increase our risk of losses, or result in margin calls that materially and adversely affect our cash reserves, or our ability to fund 28 Table of Contents additional loans or otherwise operate our business.
Our hedging strategies could be improperly executed or poorly designed and not have their desired effect, any of which could actually increase our risk of losses, or result in margin calls that materially and adversely affect our cash reserves, or our ability to fund additional loans or otherwise operate our business.
For these non-conforming loans, a customer’s ability to repay their non-conforming loan may be adversely impacted by numerous factors, including a healthcare event of the 35 Table of Contents borrower, a change in the borrower’s employment or other negative local or more general economic conditions.
For these non-conforming loans, a customer’s ability to repay their non-conforming loan may be adversely impacted by numerous factors, including a healthcare event of the borrower, a change in the borrower’s employment or other negative local or more general economic conditions.
For further discussion, see “ —Risks Related to Our Operating History, Business Model, Growth and Financial Condition—We depend on our ability to sell loans and MSRs in the secondary market to a limited number of investors and 30 Table of Contents to the GSEs and other secondary market participants.
For further discussion, see “ -Risks Related to Our Operating History, Business Model, Growth and Financial Condition-We depend on our ability to sell loans and MSRs in the secondary market to a limited number of investors and to the GSEs and other secondary market participants.
Adding to these difficulties, laws may conflict with each other and, if we comply with the laws of one jurisdiction, we may find that we are violating laws of another jurisdiction. These difficulties potentially increase our 47 Table of Contents exposure to the risks of noncompliance with these laws and regulations, which could materially and adversely affect our business.
Adding to these difficulties, laws may conflict with each other and, if we comply with the laws of one jurisdiction, we may find that we are violating laws of another jurisdiction. These difficulties potentially increase our exposure to the risks of noncompliance with these laws and regulations, which could materially and adversely affect our business.
Accordingly, were 52 Table of Contents such a class certified or if we are unable to successfully defend such a suit, as we have in the past, then TCPA damages could materially and adversely affect our business, financial condition, results of operations, and prospects.
Accordingly, were such a class certified or if we are unable to successfully defend such a suit, as we have in the past, then TCPA damages could materially and adversely affect our business, financial condition, results of operations, and prospects.
In addition, even if legislation or regulation does not expand in a manner that affects our business directly, changing consumer attitudes or the perception of the use of personal information also could materially and adversely affect our business, financial condition, results of operations and prospects.
In addition, even if legislation or regulation does not expand in a manner that affects our business directly, changing consumer attitudes or the perception of the use of PI also could materially and adversely affect our business, financial condition, results of operations and prospects.
Our directors and management team may not successfully or effectively manage our transition to a public company, which will be subject to significant 56 Table of Contents regulatory oversight and reporting obligations under federal securities laws and the continuous scrutiny of securities analysis and investors.
Our directors and management team may not successfully or effectively manage our transition to a public company, which will be subject to significant regulatory oversight and reporting obligations under federal securities laws and the continuous scrutiny of securities analysis and investors.
The Amended and Restated Charter and our bylaws (“Bylaws”) contain provisions that could depress the market price of our Common Stock by acting to discourage, delay or prevent a change in control of our Company or changes in our management that the stockholders of our Company may deem advantageous.
The Amended and Restated Certificate of Incorporation and our bylaws (“Bylaws”) contain provisions that could depress the market price of our common stock by acting to discourage, delay or prevent a change in control of our Company or changes in our management that the stockholders of our Company may deem advantageous.
Specifically, a loan purchaser can require us to repurchase a defective loan up to three years after sale, and therefore even if the percentage of loans requiring repurchase remains steady, they make up a larger portion of current loans held for sale given the volume decline.
A loan purchaser could require us to repurchase a defective loan up to three years after sale, and therefore even if the percentage of loans requiring repurchase remains steady, they make up a larger portion of current loans held for sale given the volume decline.
We have reserved approximately $6.6 million as of December 31, 2024, for potential refunds due to consumers for TRID tolerance errors for loans produced from 2018 through 2024, and we conducted a detailed review of all loan files from that time period with a third-party service provider and continue to use this third-party service provider for ongoing review and remediation.
We have reserved approximately $5.1 million as of December 31, 2025, for potential refunds due to consumers for TRID tolerance errors for loans produced from 2018 through 2024, and we conducted a detailed review of all loan files from that time period with a third-party service provider and continue to use this third-party service provider for ongoing review and remediation.
We also market the Better Home Improvement Line of Credit to our customers through special offers and rewards for customers and pay Notable an administrative fee per each Home Improvement Line of Credit loan originated. • Various members of our management team and legal department previously had, presently have, and may in the future may have additional, ownership interests in, employment by and contractual obligations to other entities affiliated with 1/0 Capital, Mr.
We also market the Better Home Improvement Line of Credit to our customers through special offers and rewards for customers and pay Notable an administrative fee per each Home Improvement Line of Credit loan originated. 41 Tab l e of Contents • Various members of our management team and legal department previously had, presently have, and may in the future may have additional, ownership interests in, employment by and contractual obligations to other entities affiliated with 1/0 Capital, Mr.
We believe Mr. Garg has been critical to our operations and key to setting our vision, strategic direction, and execution priorities. The experience of our other senior management, including Mr. Ryan and Mr. Smith, is a valuable asset to us and would be difficult to replace.
We believe Mr. Garg has been critical to our operations and key to setting our vision, strategic direction, and execution priorities. The experience of our other senior management is a valuable asset to us and would be difficult to replace.
The 22 Table of Contents severity of the impact would be most significant to the extent we were unable to sell conforming home loans to the GSEs or sell MSRs to private purchasers. The vast majority of the loans we produce are sold servicing released (with associated MSRs).
The severity of the impact would be most significant to the extent we were unable to sell conforming home loans to the GSEs or sell MSRs to private purchasers. The vast majority of the loans we produce are sold servicing released (with associated MSRs).
We are 26 Table of Contents also subject to repurchase liabilities for loans sold into the secondary market to the extent the loans are non-compliant, which require us to remediate the loans once repurchased and incur additional costs through remediation. These repurchase liabilities can create more risk on our balance sheet and increase our exposure to losses.
We are also subject to repurchase liabilities for loans sold into the secondary market to the extent the loans are non-compliant, which require us to remediate the loans once repurchased and incur additional costs through remediation. These repurchase liabilities can create more risk on our balance sheet and increase our exposure to losses.
We could be materially and adversely affected if legislation or regulations are expanded to require changes in business 37 Table of Contents practices or privacy policies (particularly to the extent such changes would affect the manner in which we store, share, use, disclose, process and protect such data), or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, financial condition, results of operations, and prospects.
We could be materially and adversely affected if existing or new legislation or regulations are expanded to require changes in business practices or privacy policies (particularly to the extent such changes would affect the manner in which we store, share, use, disclose, process and protect such data), or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, financial condition, results of operations, and prospects.
If analysts do not publish research about our business or if they publish inaccurate or unfavorable research, the price and trading volume of the Company’s securities could decline. The trading market for the Company’s securities will depend in part on the research and reports that analysts publish about our business.
If analysts do not publish research about our business or if they publish inaccurate or unfavorable research, the price and trading volume of the Company’s securities could decline. The trading market for the Company’s securities depends in part on the research and reports that analysts publish about our business.
Our business operations in the United Kingdom subjects us to laws and regulations with which we have limited experience, which could increase our costs associated with compliance and individually or in the aggregate adversely affect our business.
Risks Related to Our Global Operations Our business operations in the United Kingdom subjects us to laws and regulations with which we have limited experience, which could increase our costs associated with compliance and individually or in the aggregate adversely affect our business.
Market cycles and unpredictability may impact the mix and quantity of loans and other products that our customers demand, and as a result our results of operations may be adversely impacted. National or global events, including, but not limited to, rising interest rates and volatility in financial markets, can affect all such macroeconomic conditions.
Market cycles and unpredictability may impact the mix and quantity of loans and other products that our customers demand, and as a result our results of operations may be adversely impacted. National or global events, including, but not 18 Tab l e of Contents limited to, rising interest rates and volatility in financial markets, can affect all such macroeconomic conditions.
In addition, our current work-from-home policy may increase the risk of security breaches, which could result in the misappropriation or misuse of PI. As a result, our current security measures may not prevent all security breaches.
In addition, our current work-from-home policy may further increase the risk of security breaches, which could result in the misappropriation or misuse of PI. As a result, our current security measures may not prevent all cybersecurity incidents.
Provisions in the Amended and Restated Charter and the Bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our Common Stock.
Provisions in the Amended and Restated Certificate of Incorporation and the Bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our common stock.
We are responsible for any violations by our employees, contractors and agents, whether based within or outside of the United States, for violations of the FCPA. In many countries, particularly in those with developing economies, it may be common to engage in business practices that are prohibited by laws and regulations applicable to us. The U.S.
We are responsible for any violations by our employees, contractors and agents, whether based within or outside of the United States, for violations of the U.S. Foreign Corrupt Practices Act (“FCPA”). In many countries, particularly in those with developing economies, it may be common to engage in business practices that are prohibited by laws and regulations applicable to us.
Additionally, there is a risk that, following the date of the credit report that we obtain and review, a borrower may have become delinquent in the payment of an outstanding obligation, defaulted on a pre-existing debt obligation, taken on additional debt, lost his or her job or other sources of income, or sustained other adverse financial events.
Additionally, there is a risk that, following the date of the credit report that we obtain and review, a borrower may have become delinquent in the payment of an outstanding obligation, defaulted on a 25 Tab l e of Contents pre-existing debt obligation, taken on additional debt, lost his or her job or other sources of income, or sustained other adverse financial events.
In addition, 57 Table of Contents Section 107 of the JOBS Act provides that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would apply to private companies.
In addition, Section 107 of the JOBS Act provides that an “emerging growth company” can delay the adoption of certain accounting standards until those standards would apply to private companies.
If we are found to have violated GSE underwriting guidelines, we could face regulatory penalties and damages in litigation, suffer reputational damage and we could incur losses due to an inability to collect on such insurance, any of which could materially and adversely impact our business, financial condition, results of operations, or prospects.
If we are found to have violated GSE underwriting guidelines, we could face 20 Tab l e of Contents regulatory penalties and damages in litigation, suffer reputational damage and we could incur losses due to an inability to collect on such insurance, any of which could materially and adversely impact our business, financial condition, results of operations, or prospects.
These claims could also result in litigation (which may require us to expend significant resources and attention), require us to purchase a costly license or require us to devote additional research and development resources to change our software in order to replace software subject to such claims, any of which could materially and adversely affect our business, financial condition, results of operations, and prospects.
These claims could also result in litigation (which may 29 Tab l e of Contents require us to expend significant resources and attention), require us to purchase a costly license or require us to devote additional research and development resources to change our software in order to replace software subject to such claims, any of which could materially and adversely affect our business, financial condition, results of operations, and prospects.
See “—Risks Related to Our Operating History, Business Model, Growth and Financial Condition—We have been and may in the future be required to repurchase or substitute loans or MSRs that we have sold or indemnify purchasers of our loans or MSRs if we breach representations and warranties.” The geographic concentration of our loan production and factors adversely affecting those geographic areas may adversely affect our financial condition and results of operations. or our loan products offered through Home Finance, as of March 1, 2025, we are licensed to operate in all 50 states and the District of Columbia across various credit and income profiles.
See “ -Risks Related to Our Operating History, Business Model, Growth and Financial Condition-We have been and may in the future be required to repurchase or substitute loans or MSRs that we have sold or indemnify purchasers of our loans or MSRs if we breach representations and warranties.” The geographic concentration of our loan production and factors adversely affecting those geographic areas may adversely affect our financial condition and results of operations. 24 Tab l e of Contents For our loan products offered through Home Finance, as of March 1, 2026, we are licensed to operate in all 50 states and the District of Columbia across various credit and income profiles.
Claims could also be made against us for other misuse of PI, such as the use of personal information for unauthorized purposes or identity theft, which could result in litigation and financial liabilities, and information security incidents also could involve investigations and enforcement from governmental authorities.
Claims could also be made against us for other misuse of PI, such as the use of PI for unauthorized purposes or identity theft, which could result in litigation and financial liabilities, and cybersecurity incidents also could involve investigations and enforcement from governmental authorities.
We may incur significant costs to resolve any such disruptions in services or the loss of commercial partnerships and this could materially and adversely affect our business, financial condition, and results of operations. We depend on a number of strategic relationships to allow us to attract additional customers to our products.
We may incur significant costs to 13 Tab l e of Contents resolve any such disruptions in services or the loss of commercial partnerships and this could materially and adversely affect our business, financial condition, and results of operations. We depend on a number of strategic relationships to allow us to attract additional customers to our products.
We have periodically experienced service disruptions in the past, and we cannot be sure that we will not experience interruptions or delays in our service, or cyberattacks and similar security breaches, in the future.
We have periodically experienced service disruptions in the past, and we cannot be sure that we will not experience interruptions or delays in our service, or cybersecurity incidents and similar security breaches, in the future.
In addition, we cannot guarantee that we have entered into confidentiality agreements with all team members, partners, independent contractors, consultants or other third parties that 41 Table of Contents have or may have had access to our trade secrets or other proprietary or confidential information.
In addition, we cannot guarantee that we have entered into confidentiality agreements with all team members, partners, independent contractors, consultants or other third parties that have or may have had access to our trade secrets or other proprietary or confidential information.
Accordingly, realization of a gain on your investment will depend on the appreciation of the price of the shares of Common Stock, which may never occur. Investors seeking cash dividends in the foreseeable future should not invest in Common Stock. Our directors and management team have limited experience in overseeing a public company.
Accordingly, realization of a gain on your investment will depend on the appreciation of the price of the shares of common stock, which may never occur. Investors seeking cash dividends in the foreseeable future should not invest in common stock. 43 Tab l e of Contents Our directors and management team have limited experience in overseeing a public company.
In another action, plaintiff-investors in a prior business venture alleged that they did not receive required accounting documentation, that the Better Founder and CEO misappropriated funds that should have been distributed to the plaintiff-investors, and that such funds could have been invested in Better. An New York state appeals court recently dismissed all claims against Mr.
In another action, plaintiff-investors in a prior business venture alleged that they did not receive required accounting documentation, that the Better Founder and CEO misappropriated funds that should have been distributed to the plaintiff-investors. A New York state appeals court dismissed all claims against Mr.
Our business is subject to the risks of catastrophic events such as earthquakes, fires, floods and other natural catastrophic events, interruption by man-made issues such as strikes and terrorist attacks. Our systems and operations are vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, strikes, health pandemics, terrorist attacks, and similar events.
Our business is subject to the risks of catastrophic events such as earthquakes, fires, floods and other natural catastrophic events, interruption by man-made issues such as strikes and terrorist attacks. 21 Tab l e of Contents Our systems and operations are vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, strikes, health pandemics, terrorist attacks, and similar events.
Any publicized security problems affecting our businesses and/or those of third parties, whether actual or perceived, may discourage consumers from doing business with us, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
Any publicized cybersecurity incidents affecting our businesses and/or those of third parties, whether actual or perceived, may discourage consumers from doing business with us, which could materially and adversely affect our business, financial condition, results of operations, and prospects.
Any service disruption affecting our platform could damage our reputation with current and potential customers, expose us to liability, cause us to lose customers, or otherwise materially and adversely affect our business, financial condition, results of operations, and prospects.
Any service disruption affecting our platform or other technology assets or systems could damage our reputation with current and potential customers, expose us to liability, cause us to lose customers, or otherwise materially and adversely affect our business, financial condition, results of operations, and prospects.
Any such license may not be available on reasonable terms, if at all, and there can be no 42 Table of Contents assurance that we would be able to redesign our product offerings in a way that would avoid any such limitation.
Any such license may not be available on reasonable terms, if at all, and there can be no assurance that we would be able to redesign our product offerings in a way that would avoid any such limitation.
The CCPA also includes a statutory damages framework for violations of the CCPA and a private right of action against businesses that fail to implement and maintain reasonable security procedures and practices appropriate to the nature of the information to prevent data breaches.
The CCPA also includes a statutory damages framework for violations of the CCPA and a private right of action against businesses that fail to implement and maintain reasonable security procedures and practices appropriate to the nature of the information to prevent cybersecurity incidents.
Such interests could divert the attention of our management from our business or create conflicts of interests, including litigation or investigations that could materially and adversely affect the reputation and perception among our consumers or potential team members of Mr.
Garg’s investment management firm, and Mr. Garg. Such interests could divert the attention of our management from our business or create conflicts of interests, including litigation or investigations that could materially and adversely affect the reputation and perception among our consumers or potential team members of Mr.
In addition, we face risks resulting from unaffiliated third parties who attempt to defraud, and obtain personal information directly from, our customers by imitating us.
In addition, we face risks resulting from unaffiliated third parties who attempt to defraud, and obtain PI directly from, our customers by imitating us.
If this occurs, we may have to bear any associated losses directly, as repurchased loans typically can only be sold at a steep discount to their purchase price. As of December 31, 2024, we had accrued $7.5 million in connection with our reserve for repurchase and indemnification obligations.
If this occurs, we may have to bear any associated losses directly, as repurchased loans typically can only be sold at a steep discount to their purchase price. As of December 31, 2025, we had accrued $4.3 million in connection with our reserve for repurchase and indemnification obligations.
If internet search engines modify their search algorithms in ways that are detrimental to us, if financial services sites increase their prices or refuse to include our product offerings in their product-offering comparison tools, or if our competitors’ marketing or promotional efforts are more successful than ours, overall growth in our customer base could slow or our customer base could decline.
If internet search 15 Tab l e of Contents engines modify their search algorithms in ways that are detrimental to us, if financial services sites increase their prices or refuse to include our product offerings in their product-offering comparison tools, or if our competitors’ marketing or promotional efforts are more successful than ours, overall growth in our customer base could slow or our customer base could decline.
Loan production for refinancing customers’ existing loans is almost entirely driven by interest rates and our ability to maintain or further develop that portion of our business is primarily dependent on the interest rates we offer relative to market interest rates and customers’ current interest rates.
Loan production for refinancing customers’ existing loans is almost entirely driven by interest rates and our ability to maintain or further develop that portion of our business is primarily dependent on the interest rates we offer 12 Tab l e of Contents relative to market interest rates and customers’ current interest rates.
Some third-party intellectual property rights may be broad, and it may not be possible for us to conduct our operations in such a way as to avoid all alleged infringements, misappropriations or other violations of such intellectual property rights.
Some third-party intellectual property rights may be broad, and it may not be possible for us to conduct our operations in such a way as to avoid all alleged infringements, misappropriations or other violations 30 Tab l e of Contents of such intellectual property rights.
Item 1A. Risk Factors We are subject to numerous risks and uncertainties that you should be aware of in evaluating our business. If any such risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks described below are not the only risks that we face.
Item 1A. Risk Factors We are subject to numerous risks and uncertainties that you should be aware of in evaluating our business. If any such risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially and adversely affected.
Like other companies that rely on telephone and text communications, we are regularly subject to putative class action suits alleging violations of the TCPA. To date, no such class has been certified.
Like other companies that rely on telephone and text communications, we are regularly 39 Tab l e of Contents subject to putative class action suits alleging violations of the TCPA. To date, no such class has been certified.
Garg and other senior leadership of Better Home & Finance, including Nicholas Calamari, our Chief Administrative Officer and Senior Counsel, have various commercial arrangements with us and our affiliates, including (i) administration of the 55 Table of Contents Better Home Improvement Line of Credit, a closed-end, unsecured line of credit issued on a debit card to be used for home-related spending, (ii) providing a private label consumer lending program agreement and (iii) purchasing from Notable funded Home Improvement Line of Credit loans.
Garg and other senior leadership of Better Home & Finance, have various commercial arrangements with us and our affiliates, including (i) administration of the Better Home Improvement Line of Credit, a closed-end, unsecured line of credit issued on a debit card to be used for home-related spending, (ii) providing a private label consumer lending program agreement and (iii) purchasing from Notable funded Home Improvement Line of Credit loans.
Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws in other jurisdictions, including the Corruption of Foreign Public Officials Act and the UK Bribery Act 2010, prohibit corporations and individuals, including 32 Table of Contents us and our employees, from engaging in certain activities to obtain or retain business or to influence a person working in an official capacity.
The FCPA and similar anti-bribery laws in other jurisdictions, including the Corruption of Foreign Public Officials Act and the UK Bribery Act 2010, prohibit corporations and individuals, including us and our employees, from engaging in certain activities to obtain or retain business or to influence a person working in an official capacity.
Our access to, and our ability to renew, our existing warehouse lines has suffered and could continue to suffer in the event of: (i) the deterioration in the performance of the loans underlying the warehouse lines; (ii) our failure to maintain sufficient levels of eligible assets; (iii) our inability to collect and maintain all records relating to the mortgage loans underlying the warehouse lines; (iv) our inability to access the secondary market for mortgage loans; or (v) perceived reputational concerns by warehouse lenders.
Our access to, and our ability to renew, our existing warehouse lines and could suffer in the event of: (i) the deterioration in the performance of the loans underlying the warehouse lines; (ii) our failure to maintain sufficient levels of eligible assets; (iii) our inability to collect and maintain all records relating to the mortgage loans underlying the warehouse lines; (iv) our inability to access the secondary market for mortgage loans; (v) perceived reputational concerns by warehouse lenders; or (vi) the deterioration of our credit worthiness and financial condition.
For the fiscal year ended December 31, 2024, approximately 30% of our Funded Loan Volume was secured by properties concentrated in three states: California (approximately 12%), Texas (approximately 9%) and Florida (approximately 9%). No other state represented more than 6% of our Funded Loan Volume for the period presented.
For the fiscal year ended December 31, 2025, approximately 34% of our Funded Loan Volume was secured by properties concentrated in three states: California (approximately 17%), Texas (approximately 9%) and Florida (approximately 7%). No other state represented more than 6% of our Funded Loan Volume for the period presented.
We are currently subject to a variety of, and may in the future become subject to additional U.S. federal, state and local laws and regulations that are continuously evolving and developing, including laws on advertising, as well as privacy laws and regulations, such as the TCPA, the Telemarketing Sales Rule, the the CAN-SPAM Act, the GLBA, and, at the state level, the CCPA, the VCDPA, the CPA, and the Connecticut Data Privacy Act.
We are currently subject to a variety of, and may in the future become subject to additional U.S. federal, state and local laws and regulations that are continuously evolving and developing, including laws on advertising, as well as privacy laws and regulations, such as the TCPA, the Telemarketing Sales Rule, the CAN-SPAM Act, the GLBA, and, at the state level, the CCPA (and numerous other comprehensive stat privacy laws) and state-level AI laws and regulations.
This ability, to some extent, is subject to market, economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control. 43 Table of Contents Our ability to refinance existing debt and borrow additional funds is affected by a variety of factors, including: • limitations imposed on us under existing and future debt facilities that contain restrictive covenants and borrowing conditions that may limit our ability to raise additional debt; • a decline in liquidity in the credit markets, or elevated interest rates; • volatility in our mortgage loan sales secondary market; • the financial strength of the lenders from whom we borrow; • the decision of lenders from whom we borrow to reduce their exposure to mortgage loans due to global economic conditions, or a change in such lenders’ strategic plan, future lines of business, the COVID-19 pandemic, or otherwise; • the larger portion of our warehouse lines that is uncommitted, versus what is committed; • more stringent financial covenants in such refinanced facilities, which we may not be able to achieve; and • accounting changes that impact calculations of covenants in our debt facilities.
Our ability to refinance existing debt and borrow additional funds is affected by a variety of factors, including: • limitations imposed on us under existing and future debt facilities that contain restrictive covenants and borrowing conditions that may limit our ability to raise additional debt; • a decline in liquidity in the credit markets, or elevated interest rates volatility in our mortgage loan sales secondary market; • the financial strength of the lenders from whom we borrow; • the decision of lenders from whom we borrow to reduce their exposure to mortgage loans due to global economic conditions, or a change in such lenders’ strategic plan, future lines of business, or otherwise; • the larger portion of our warehouse lines that is uncommitted, versus what is committed; • more stringent financial covenants in such refinanced facilities, which we may not be able to achieve; and • accounting changes that impact calculations of covenants in our debt facilities.
Our research and development of such technology remains ongoing, and our ability to develop effective and ethical AI technology will be critical to our financial performance and long-term success.
Our research and development of such technology remains ongoing, and our ability to develop effective and ethical AI 28 Tab l e of Contents technology will be critical to our financial performance and long-term success.
Security breaches (including ransomware attacks) could also materially and adversely affect our reputation with consumers and third parties with whom we do business, as well as expose us to regulatory and litigation risk, which could be exacerbated if it is determined that known security issues were not addressed adequately prior to any such breach.
Cybersecurity incidents (including ransomware attacks) could also materially and adversely affect our reputation with consumers and third parties with whom we do business, as well as expose us to regulatory and litigation risk, which could be exacerbated if it is determined that known security issues were 26 Tab l e of Contents not addressed adequately prior to any such incident.
Any penetration of network security or other misappropriation or misuse of PI or personal consumer information, including through ransomware attacks, could cause interruptions in our business operations and subject us to increased costs, litigation, and other liabilities.
Any penetration of network security or other misappropriation or misuse of PI or personal consumer information, including through ransomware attacks, other cyber attacks, or technology or process failures or the like, could cause interruptions in our business operations and subject us to increased costs, litigation, reputational harm, and other liabilities.
If investors were to find our securities less attractive as a result of our election, we may have difficulty raising in this offering and future offerings and the market price of our securities may be more volatile.
We cannot predict if investors will find our securities less attractive due to our reliance on these exemptions. If investors were to find our securities less attractive as a result of our election, we may have difficulty raising in this offering and future offerings and the market price of our securities may be more volatile.
Vishal Garg, our CEO, owns shares of our Class B Common Stock that, as of March 10, 2025, entitled him to approximately 20% of the voting power of our outstanding common stock. Mr.
Vishal Garg, our CEO, owns shares of our Class B common stock that, as of March 2, 2026, entitled him to approximately 19% of the voting power of our outstanding common stock. Mr.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThere is also a communication process in place to question third party vendors around specific or emerging vulnerabilities and zero days outside the annual review. • Security Operations Center (SOC): Staffed by full time employees and supplemented by a MSSP, 24/7 monitoring, investigating, and responding to potential incidents, threats, or breaches. • Education & Awareness: Information training programs for all employees and contractors to inform and educate, with built in quantitative testing for effectiveness. • Risk Management Framework: A third party risk management framework, designed to identify, monitor, remediate and respond to third party cybersecurity risks and incidents.
Biggest changeOur cybersecurity risk management policies and procedures include: • Third-party and internal risk assessments designed to help identify material cybersecurity risks to critical systems, data, services and general information technology environment. • An annual review of third-party service providers critical to the operation of the Company. • A third-party risk management framework designed to identify, monitor, remediate and respond to third-party cybersecurity risks and incidents. • Cybersecurity awareness training program for all employees and contractors to inform and educate, with built in quantitative testing for effectiveness. • A security team staffed with full-time employees and supplemented by a third party managed security service provider responsible for monitoring, investigating, and responding to potential incidents, threats, or breaches.
Our cybersecurity risk management function is a component of our overall approach to risk management, which is implemented and overseen by our Enterprise Risk Management Committee. Cybersecurity Governance The Company’s information technology security team, led by our Chief Information Security Officer (“CISO”), is responsible for identifying, assessing, mitigating, and reporting on material cybersecurity risks to the Company’s senior management.
Cybersecurity Governance The Company’s information technology security team, led by our Chief Information Officer and Chief Information Security Officer (“CISO”), is responsible for identifying, assessing, mitigating, and reporting on material cybersecurity risks to the Company’s senior management.
The Company implements security policies throughout its operations, and utilizes the enterprise risk management process designed to quantify, report, and plan to remediate identified cybersecurity risks. Cybersecurity Risks and Threats Although we have designed our cybersecurity governance and policies and procedures described above to mitigate cybersecurity risks, we face unknown cybersecurity risks, threats and attacks.
The Company implements security policies throughout its operations and utilizes the enterprise risk management process designed to quantify, report, and plan to remediate identified cybersecurity risks.
To date, these risks, threats or attacks have not had a material impact on our operations, business strategy or financial results, but we cannot provide assurance that they will not have a material impact in the future. See the section entitled “ Risk Factors ” included elsewhere in this Annual Report for further information.
To date, these risks, threats or attacks have not had a material impact on our operations, business strategy or financial results, but we cannot provide assurance that they will not have a material impact in the future. 46 Tab l e of Contents
The Board of Directors oversees the Company’s cybersecurity policies and procedures through the Audit Committee, and also receives periodic briefings from senior management as well.
The Board of Directors oversees the Company’s cybersecurity policies and procedures through the Audit Committee and also receives periodic briefings from senior management as well. Cybersecurity Risks and Threats Although we have designed our cybersecurity governance and policies and procedures described above to mitigate cybersecurity risks, we face unknown cybersecurity risks, threats and attacks.
Cybersecurity Policies and Procedures Under the direction of the Company’s CISO, the Company’s cybersecurity policies and procedures are designed to support the Company in identifying, protecting, detecting, responding to, and recovering from cybersecurity threats and incidents.
The Company’s cybersecurity risk management policies and procedures, which are based upon the CIS v8 Framework, portions of the NIST Framework, ISO 27001, are designed to support the Company in identifying, protecting, detecting, responding to, and recovering from cybersecurity threats and incidents.
Removed
Such policies and procedures are based upon the CIS v8 Framework, portions of the NIST Framework, ISO 27001, and industry practices, with key areas outlined below: 59 Table of Contents • Risk Management: Third party and internal risk assessments designed to help identify material cybersecurity risks to critical systems, data, services and general information technology environment, as well as regular testing to measure effectiveness of the risk assessments and controls.
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Our 45 Tab l e of Contents cybersecurity risk management function is a component of our overall approach to risk management, which is implemented and overseen by our Enterprise Risk Management Committee.
Removed
Reviews and testing of various controls are done on an annual basis within the Company. Third party vendors critical or material to the operation of the company are reviewed on an annual basis to ensure they continue to meet our security criteria.
Added
Cybersecurity Risk Management and Strategy Our cybersecurity risk management function is a component of our overall approach to risk management, which is implemented and overseen by our Enterprise Risk Management Committee.
Removed
This framework includes a due diligence process that occurs before and during the engagements with third parties, and through the use of third party threat intelligence reports and feeds to monitor breaches and incidents. • Incident Response & Recovery (IRR): Established, tested incident response and recovery policies and procedures utilized by the SOC and other key members of the IRR team to effectively respond to threats in a timely consistent manner. • Technical Controls: Technical and administrative checks and balances to safeguard information and systems, including firewalls, XDR, logging, and access controls.
Added
Although we have designed our cybersecurity risk management policies and procedures described above to mitigate cybersecurity risks, there can be no assurance that such policies and procedures will be fully implemented, complied with, or effective in protecting our systems and information.
Removed
We continuously work to enhance our cybersecurity risk management program.
Added
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters are located in New York, New York. We also have offices in Charlotte, North Carolina, Irvine, California, Troy, Michigan, Irving, Texas, Gurgaon, India, London, United Kingdom, and Birmingham, United Kingdom. We do not own any material real property.
Biggest changeItem 2. Properties Our corporate headquarters are located in New York, New York. We also have offices in Charlotte, North Carolina, Irvine, California, Troy, Michigan, Irving, Texas, Gurgaon, India, London, United Kingdom, and Birmingham, United Kingdom (included in our “Banking” segment). We do not own any material real property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs part of the disputes and other legal matters, the Company included an estimated liability of $8.3 million as of both December 31, 2024 and 2023 on the 60 Table of Contents consolidated balance sheets. In June 2024, the Company settled a California action alleging violations of the California Private Attorneys General Act (PAGA) for a non-material amount.
Biggest changeAs part of the disputes and other legal matters, the Company included an estimated liability of $6.7 million and $8.3 million as of December 31, 2025 and 2024, respectively, on the consolidated balance sheets.
For more information, see “ Risk Factors—Risks Related to Our Operating History, Business Model, Growth and Financial Condition—Our CEO is involved in litigation that could have a material adverse effect on our revenues, financial condition, cash flows and results of operations. ” In addition, we refer to Note 17 to our audited consolidated financial statements included elsewhere in this Annual Report which contains a general description of additional legal proceedings to which we are a party.
For more information, see “Risk Factors—Risks Related to Our Operating History, Business Model, Growth and Financial Condition—Our CEO is involved in litigation that could have a material adverse effect on our revenues, financial condition, cash flows and results of operations.” In addition, we refer to Note 15 to our audited consolidated financial statements included elsewhere in this Annual Report which contains a general description of additional legal proceedings to which we are a party.
For example, we are currently party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020.
For example, we are currently party to pending legal claims and proceedings regarding an employee related labor dispute brought forth during the third quarter of 2020. The disputes allege that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California.
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The disputes allege that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California and the State of Florida.
Removed
Item 4. Mine Safety Disclosures Not applicable. 61 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers In January 2025, we announced that our board of directors authorized the repurchase of up to $25 million of our outstanding Class A common stock through December 31, 2025.
Biggest changePurchases of Equity Securities by the Issuer or Affiliated Purchasers We did not repurchase any shares of our Class A common stock during the year ended December 31, 2025.
The number of holders of record presented here also does not include holders whose shares or Warrants may be held in trust by other entities. Performance Graph We are a “smaller reporting company,” as defined by Item 10(f)(1) of Regulation S-K, and therefore are not required to provide the information required by paragraph (e) of Item 201 of Regulation S-K.
The number of holders of record presented here also does not include holders whose shares may be held in trust by other entities. Performance Graph We are a “smaller reporting company,” as defined by Item 10(f)(1) of Regulation S-K, and therefore are not required to provide the information required by paragraph (e) of Item 201 of Regulation S-K.
Recent Sales of Unregistered Securities There were no sales of unregistered securities by the Company during the fiscal year ended December 31, 2024 that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K.
Sales of Unregistered Securities There were no sales of unregistered securities by the Company during the fiscal year ended December 31, 2025 that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K.
The actual number of holders of our Common Stock and Public Warrants is greater than the number of record holders and includes stockholders and warrant holders who are beneficial owners, but whose shares of Common Stock or Warrants are held in street name by brokers or other nominees.
The actual number of holders of our common stock is greater than the number of record holders and includes stockholders who are beneficial owners, but whose shares of common stock are held in street name by brokers or other nominees.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Class A Common Stock and public warrants to purchase shares of Class A Common Stock at an exercise price of $11.50 per share (“Public Warrants”) are listed on the Nasdaq Capital Market under the ticker symbols “BETR” and “BETRW,” respectively.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Class A common stock and public warrants to purchase shares of Class A common stock (“Public Warrants”) are listed on the Nasdaq Capital Market under the ticker symbols “BETR” and “BETRW,” respectively.
Removed
As of March 10, 2025 , there were approximately 9,211,349 holders of record of Class A Common Stock, 4,521,127 holders of record of Class B Common Stock, 1,437,545 holders of record of our Class C Common Stock, 6,075,047 holder of record of Public Warrants and 3,687,558 holders of record of private warrants (“Private Warrants” and together with the Public Warrants, the “Warrants”).
Added
As of March 2, 2026, there were approximately 907 holders of record of Class A common stock, 1,920 holders of record of Class B common stock, 2 holders of record of our Class C common stock.
Removed
Equity Compensation Plan Information The information required by Item 5 with respect to securities authorized for issuance under equity compensation plans is incorporated by reference to Part III, Item 12 (Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters) of this Annual Report.
Removed
We did not repurchase any shares of our Class A common stock during the year ended December 31, 2024, other than the shares repurchased pursuant to net settlement by employees in satisfaction of income tax withholding obligations incurred through the vesting of stock awards. Item 6. [Reserved] 62 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

103 edited+67 added−51 removed78 unchanged
Biggest changeOther Changes in Financial Condition The following table sets forth material changes to our summary balance sheet between December 31, 2024 and December 31, 2023: 74 Table of Contents (Amounts in thousands, except share and per share amounts) December 31, 2024 December 31, 2023 Increase/ (Decrease) Assets Cash and cash equivalents $ 211,101 $ 503,591 $ (292,490) Short-term investments 53,774 25,597 28,177 Mortgage loans held for sale, at fair value 399,241 170,150 229,091 Loans held for investment 111,477 4,793 106,684 Right-of-use assets 1,387 19,988 (18,601) Other combined assets 136,077 181,435 (45,358) Total Assets $ 913,057 $ 905,554 $ 7,503 Liabilities and Stockholders’ (Deficit)/Equity Liabilities Warehouse lines of credit $ 244,070 $ 126,218 $ 117,852 Convertible Note 519,749 514,644 5,105 Customer Deposits 134,130 11,839 122,291 Lease liabilities 4,081 31,202 (27,121) Other combined liabilities 69,197 99,051 (29,854) Total Liabilities 971,227 782,954 188,273 Stockholders’ (Deficit) /Equity Additional paid-in capital 1 1,863,288 1,838,499 24,789 Accumulated deficit (1,910,366) (1,704,076) (206,290) Other combined equity (11,092) (11,823) 731 Total Stockholders’ Equity (Deficit) (58,170) 122,600 (180,770) Total Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit) $ 913,057 $ 905,554 $ 7,503 1.
Biggest changeOther Changes in Financial Condition The following table sets forth material changes to our summary balance sheet between December 31, 2025 and December 31, 2024: 60 Tab l e of Contents (Amounts in thousands, except share and per share amounts) December 31, 2025 December 31, 2024 Increase/ (Decrease) Assets Cash and cash equivalents $ 99,827 $ 211,101 $ (111,274) Short-term investments 103,607 53,774 49,833 Mortgage loans held for sale, at fair value 466,681 399,241 67,440 Loans held for investment 723,333 111,477 611,856 Right-of-use assets 4,678 1,387 3,291 Other combined assets 107,308 136,077 (28,769) Total Assets $ 1,505,434 $ 913,057 $ 592,377 Liabilities and Stockholders’ Equity/(Deficit) Liabilities Warehouse lines of credit $ 411,862 $ 244,070 $ 167,792 Convertible note — 519,749 (519,749) Senior notes 198,802 — 198,802 Customer deposits 762,984 134,130 628,854 Lease liabilities 4,629 4,081 548 Other combined liabilities 89,974 69,197 20,777 Total Liabilities 1,468,251 971,227 497,024 Stockholders’ Equity/(Deficit) Additional paid-in capital 2,109,762 1,863,288 246,474 Accumulated deficit (2,076,238) (1,910,366) (165,872) Other combined equity 3,659 (11,092) 14,751 Total Stockholders’ Equity/(Deficit) 37,183 (58,170) 95,353 Total Liabilities, Convertible Preferred Stock, and Stockholders’ Equity/(Deficit) $ 1,505,434 $ 913,057 $ 592,377 Total Cash and cash equivalents decreased $111.3 million or 53%, to $99.8 million as of December 31, 2025 compared to $211.1 million as of December 31, 2024.
Some of these limitations are, or may in the future be, as follows: • Although depreciation and amortization expense is a non-cash charge, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted Net Loss and Adjusted EBITDA exclude stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA does not reflect (i) interest expense, or the cash requirements necessary to service interest or principal payments on our Convertible Note, which reduces cash available to us; or (ii) tax accruals or tax payments that represent a reduction in cash available to us; and • The expenses and other items that we exclude in our calculations of Adjusted Net Loss and Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from similarly titled non-GAAP measures when they report their operating results, and we may, in the future, exclude other significant, unusual or non-recurring expenses or other items from these financial measures.
Some of these limitations are, or may in the future be, as follows: • Although depreciation and amortization expense is a non-cash charge, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted Net Loss and Adjusted EBITDA exclude stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; • Adjusted EBITDA does not reflect (i) interest expense, or the cash requirements necessary to service interest or principal payments on our Convertible Notes, which reduces cash available to us; or (ii) tax accruals or tax payments that represent a reduction in cash available to us; and • The expenses and other items that we exclude in our calculations of Adjusted Net Loss and Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from similarly titled non-GAAP measures when they report their operating results, and we may, in the future, exclude other significant, unusual or non-recurring expenses or other items from these financial measures.
As a result, we expect the demand for loan technology solutions will continue to grow and support our ecosystem growth across B2B partners, market participants and loan purchaser networks. Expanding our Technological Innovation Our proprietary technology is built to optimize our customers’ experiences, increase speed, decrease loan manufacturing cost, and enhance loan production quality.
As a result, we expect the demand for loan technology solutions will continue to grow and support our ecosystem growth across our partners, market participants and loan purchaser networks. Expanding our Technological Innovation Our proprietary technology is built to optimize our customers’ experiences, increase speed, decrease loan manufacturing cost, and enhance loan production quality.
Interest rate lock commitments and forward sale commitments We enter into IRLCs to produce loans at specified interest rates and within a specified period of time with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria.
Interest rate lock commitments, forward sale commitments and interest rate swaps We enter into IRLCs to produce loans at specified interest rates and within a specified period of time with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria.
For Better Real Estate, we generate revenues from fees related to real estate agent services, mainly cooperative brokerage fees from our network of third-party real estate agents, to assist our customers in the purchase or sale of a home.
For real estate services, we generate revenues from fees related to real estate agent services, mainly cooperative brokerage fees from our network of third-party real estate agents, to assist our customers in the purchase or sale of a home.
We calculate Adjusted EBITDA as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants and equity related liabilities, change in fair value of convertible preferred stock warrants, change in the fair value of bifurcated derivative, and restructuring, impairment, and other expenses, as well as interest and amortization on non-funding debt (which includes interest on the Convertible Note), depreciation and amortization expense, and income tax expense.
We calculate Adjusted EBITDA as net income (loss) adjusted for the impact of stock-based compensation expense, change in the fair value of warrants and equity related liabilities, change in fair value of convertible preferred stock warrants, change in the fair value of bifurcated derivative, and restructuring, impairment, and other expenses, as well as interest and amortization on non-funding debt (which includes interest on the Convertible Notes), depreciation and amortization expense, and income tax expense.
Purchase loan origination volumes are generally affected by a broad range of economic factors, including interest rate fluctuations, the overall strength of the economy, unemployment rates and home prices, as well as seasonality, as home sales typically rise in the second and third quarters. Mortgage loan refinancing volumes are primarily driven by fluctuations in mortgage loan interest rates.
Purchase loan origination volumes are generally affected by a broad range of economic factors, including prevailing interest rates, the overall strength of the economy, unemployment rates and home prices, as well as seasonality, as home sales typically rise in the second and third quarters. Mortgage loan refinancing volumes are primarily driven by fluctuations in mortgage loan interest rates.
We believe these non-GAAP financial measures are useful to investors for supplemental period-to-period comparisons of our business and understanding and evaluating our operating results for the following reasons: • We use Adjusted Net Loss to assess our overall performance, without regard to items that are considered to be unique or non-recurring in nature or otherwise unrelated to our ongoing revenue-generating operations; • Adjusted EBITDA is widely used by investors and securities analysts to measure a company's operating performance without regard to items such as stock-based compensation expense, depreciation and amortization expense, interest and amortization on non-funding debt, income tax expense, and costs that are unique or non-recurring in nature or otherwise unrelated to our ongoing revenue-generating operations, all of which can vary substantially from company to company depending upon their financing and capital structures; 76 Table of Contents • We use Adjusted Net Loss and Adjusted EBITDA in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance; and • Adjusted Net Loss and Adjusted EBITDA provide consistency and comparability with our past financial performance, facilitate period-to-period comparisons of our core operating results, and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.
We believe these non-GAAP financial measures are useful to investors for supplemental period-to-period comparisons of our business and understanding and evaluating our operating results for the following reasons: • We use Adjusted Net Loss to assess our overall performance, without regard to items that are considered to be unique or non-recurring in nature or otherwise unrelated to our ongoing revenue-generating operations; • Adjusted EBITDA is widely used by investors and securities analysts to measure a company's operating performance without regard to items such as stock-based compensation expense, depreciation and amortization expense, interest and amortization on non-funding debt, income tax expense, and costs that are unique or non-recurring in nature or otherwise unrelated to our ongoing revenue-generating operations, all of which can vary substantially from company to company depending upon their financing and capital structures; 62 Tab l e of Contents • We use Adjusted Net Loss and Adjusted EBITDA in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance; and • Adjusted Net Loss and Adjusted EBITDA provide consistency and comparability with our past financial performance, facilitate period-to-period comparisons of our core operating results, and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.
The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023, in each case, together with related notes thereto, included elsewhere in this Annual Report.
The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024, in each case, together with related notes thereto, included elsewhere in this Annual Report.
Conversely, in an increasing interest rate environment, mortgage loan refinancing volumes and home purchase volumes typically decline, with mortgage loan refinancing volumes being particularly sensitive to increasing interest rates as customers are no longer incentivized to refinance their current mortgage loans at lower interest rates.
Conversely, in an increasing interest rate environment, mortgage loan refinancing volumes and home purchase volumes typically decline, with mortgage loan refinancing volumes being particularly sensitive to increasing interest rates as customers are no longer incentivized to refinance their current mortgage loans at higher interest rates.
Total Market Share represents Funded Loan Volume in a period divided by total value of loans funded in the industry for the same period, as presented by FNMA. Our Total Market Share of 0.2% for the year ended December 31, 2024 remained substantially the same as 0.2% for the year ended December 31, 2023.
Total Market Share represents Funded Loan Volume in a period divided by total value of loans funded in the industry for the same period, as presented by FNMA. Our Total Market Share of 0.2% for the year ended December 31, 2025 remained substantially the same as 0.2% for the year ended December 31, 2024.
(6) Interest and amortization on non-funding debt represents interest and amortization on a corporate line of credit as well as the Convertible Note, both of which are included within net interest income in our Consolidated Statements of Operations and Comprehensive Loss.
(5) Interest and amortization on non-funding debt represents interest and amortization on a corporate line of credit as well as the Convertible Note, both of which are included within net interest income in our Consolidated Statements of Operations and Comprehensive Loss.
While borrower demand for consumer credit has typically remained strong in most economic environments, potential borrowers could defer seeking financing during periods with elevated or unstable interest rates or poor economic conditions. As a result, our revenues can vary significantly from quarter to quarter, and recent increases to interest rates and inflationary macroeconomic conditions significantly affect our financial performance.
While borrower demand for consumer credit has typically remained strong in most economic environments, potential borrowers could defer seeking financing during periods with elevated or unstable interest rates or poor economic conditions. As a result, our revenues can vary significantly from quarter to quarter, and changes to interest rates and inflationary macroeconomic conditions significantly affect our financial performance.
Loans financed under these facilities are generally financed at approximately 95% to 98% of the principal 78 Table of Contents balance of the loan (although certain types of loans are financed at lower percentages of the principal balance of the loan), which requires us to fund the balance from cash generated from our operations.
Loans financed under these facilities are generally financed at approximately 95% to 98% of the principal balance of the loan (although certain types of loans are financed at lower percentages of the principal balance of the loan), which requires us to fund the balance from cash generated from our operations.
Through our investment in proprietary technology, we are automating and streamlining tasks within the origination process for our consumers, employees and partners. Our customized user interfaces replace paper applications and human interaction, allowing our customers and partners to 65 Table of Contents quickly and efficiently identify, price, apply for and execute mortgage loans.
Through our investment in proprietary technology, we are automating and streamlining tasks within the origination process for our consumers, employees and partners. Our customized user interfaces replace paper applications and human interaction, allowing our customers and partners to quickly and efficiently identify, price, apply for and execute mortgage loans.
Better Plus, International Lending Revenue, and Other (Other Revenue) We generate other revenue through our Better Plus offerings, which includes Better Real Estate (real estate services), Better Cover (insurance), and international lending revenue.
Better Plus, International Lending Revenue, and Other (Other Revenue) We generate other revenue through our Better Plus offerings, which includes real estate services, insurance, settlement services, and international lending revenue.
As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of the Company’s financials to those of other public companies more difficult.
As a result, the Company’s financial statements may not be comparable to the financial 69 Tab l e of Contents statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of the Company’s financials to those of other public companies more difficult.
Non-GAAP Financial Measures We report Adjusted Net Loss and Adjusted EBITDA, which are financial measures not prepared in accordance with generally accepted accounting principles (“non-GAAP”) that we use to supplement our financial results presented in accordance with GAAP.
Non-GAAP Financial Measures We report Adjusted Net Loss and Adjusted EBITDA, which are financial measures not prepared in accordance with generally accepted accounting principles (“non-GAAP”) that we use to supplement our financial results presented in accordance with GAAP in the evaluation of our performance.
Gain on sale of loans, net includes unrealized changes in the fair value of mortgage loans held for sale (“LHFS”), which are recognized on a loan-by-loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data.
Gain on sale of loans, net includes unrealized changes in the fair value of LFHS, which are recognized on a loan-by-loan basis as part of current period earnings until the loan is sold on the secondary market. The fair value of LHFS is measured based on observable market data.
Emerging Growth Company and Smaller Reporting Company Status We are an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act.
Emerging Growth Company and Smaller Reporting Company Status We are an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups (JOBS) Act.
B2B Loan Volume represents the aggregate dollar amount of loans funded in a given period based on the principal amount of the loan at funding that have been generated through one of our B2B partner relationships.
B2B Loan Volume represents the aggregate dollar amount of loans funded in a given period based on the principal amount of the loan at funding that have been generated through our B2B partner relationship with Ally.
Gain on Sale Margin represents gain on loans, net, as presented on our consolidated statements of operations and comprehensive loss, divided by Funded Loan Volume. Gain on Sale Margin increased by approximately 11% year-over-year to 2.17% for the year ended December 31, 2024 from 1.95% for the year ended December 31, 2023.
Gain on Sale Margin represents gain on loans, net, as presented on our consolidated statements of operations and comprehensive loss, divided by Funded Loan Volume. Gain on Sale Margin increased by approximately 32% year-over-year to 2.87% for the year ended December 31, 2025 from 2.17% for the year ended December 31, 2024.
We believe that our success will depend on many factors, including our ability to drive customers to our platform, and convert them once they come to us, through both our direct-to-consumer (“D2C”) channel and our partner relationship (“B2B”) channel, achieve leverage on our operational expenses, execute on our strategy to fund more purchase loans and diversify our revenue by expanding and enhancing our offerings.
We believe that our success will depend on many factors, including our ability to drive customers to our platform, and convert them once they come to us, achieve leverage on our operational expenses, execute on our strategy to fund more purchase loans and diversify our revenue by expanding and enhancing our offerings.
Material Cash Requirements Operating lease commitments While we have many small offices across the country for licensing purposes, we lease significant office space under operating leases with various expiration dates through June 2030 in New York, California, North Carolina, Texas, Michigan, India, and in the U.K.
Material Cash Requirements Operating lease commitments While we have many small offices across the country for licensing purposes, we lease significant office space under operating leases with various expiration dates through June 2030 in New York, North Carolina, Texas, Michigan, Oklahoma, Vermont, Washington, Colorado, and Florida.
We saw an increase in our Gain on Sale Margin for the year ended December 31, 2024 compared to the year ended December 31, 2024, as a result of improved pricing on loans funded.
We saw an increase in our Gain on Sale Margin for the year ended December 31, 2025 compared to the year ended December 31, 2024, as a result of improved pricing on loans funded and an increased mix of higher margin products and channels.
Our Funded Loan Volume of $3,594 million for the year ended December 31, 2024 increased by approximately 19% from $3,015 million for the year ended December 31, 2023. Beginning in 2023, we also include HELOC and closed-end second lien loans in our Funded Loan Volume.
Our Funded Loan Volume of $4,744 million for the year ended December 31, 2025 increased by approximately 32% from $3,594 million for the year ended December 31, 2024. We also include HELOC and closed-end second lien loans in our Funded Loan Volume.
Our Purchase Loan Volume of $2,652 million for the year ended December 31, 2024 decreased by approximately 3% from $2,745 million for the year ended December 31, 2023. HELOC Loan Volume represents the aggregate dollar amount of HELOC and closed-end second lien loans funded in a given period based on the principal amount of the loan at funding.
Our Purchase Loan Volume of $2,875 million for the year ended December 31, 2025 increased by approximately 8% fr om $2,652 million for the year ended December 31, 2024. HELOC Loan Volume represents the aggregate dollar amount of HELOC and closed-end second lien loans funded in a given period based on the principal amount of the loan at funding.
Accumulated deficit increased $206.3 million, or 12%, to $1,910.4 million as of December 31, 2024 compared to $1,704.1 million as of December 31, 2023. The increase in accumulated deficit was driven by the net loss of $206.3 million incurred for the year ended December 31, 2024 as discussed in our results of operations in the section above.
Accumulated deficit increased $165.9 million, or 9%, to $2,076.2 million as of December 31, 2025 compared to $1,910.4 million as of December 31, 2024 . The increase in accumulated deficit was driven by the net loss of $165.9 million incurred for the year ended December 31, 2025 as discussed in our results of operations in the section above.
The revenue and mix of revenue as a percentage of total revenue attributable to our sale of loan production (Gain on loans, net) and Better Plus (Other revenue) and net interest income for the years ended December 31, 2024 and 2023 is as follows: Year Ended Ended December 31, 2024 2023 (Amounts in thousands, except percentage amounts) Amounts Percentages Amounts Percentages Gain on loans, net $ 78,098 72 % $ 58,796 81 % Other revenue 12,888 12 % 16,109 22 % Net interest income/(loss) 17,502 16 % (2,565) (4) % Total net revenues $ 108,488 $ 72,340 Home Finance Mortgage Model—Gain on loans, net We produce a wide selection of mortgage loans and leverage our platform to quickly sell these loans and related mortgage servicing rights (“MSRs”) to our loan purchaser network.
The revenue and mix of revenue as a percentage of total revenue attributable to our sale of loan production (Gain on loans, net) and Better Plus (Other revenue) and net interest income for the years ended December 31, 2025 and 2024 is as follows: Year Ended December 31, 2025 2024 (Amounts in thousands, except percentage amounts) Amounts Percentages Amounts Percentages Gain on loans, net $ 136,148 82 % $ 78,098 72 % Other revenue 11,299 7 % 12,888 12 % Net interest income 17,425 11 % 17,502 16 % Total net revenues $ 164,872 $ 108,488 Home Finance—Gain on loans, net We produce a wide selection of mortgage loans and leverage our platform to quickly sell these loans and related mortgage servicing rights (“MSRs”) to our loan purchaser network.
Key measures that we use in assessing our business include the following ($ in millions, except percentage data or as otherwise noted): Key Business Metric Year Ended December 31, 2024 Year Ended December 31, 2023 Home Finance Funded Loan Volume $ 3,594 $ 3,015 Refinance Loan Volume $ 463 $ 203 Purchase Loan Volume $ 2,652 $ 2,745 HELOC Volume $ 479 $ 67 D2C Loan Volume $ 2,562 $ 1,649 B2B Loan Volume $ 1,032 $ 1,366 Total Loans (number of loans, not millions) 11,755 8,569 Average Loan Amount ($ value, not millions) $ 305,757 $ 351,877 Gain on Sale Margin 2.17 % 1.95 % Total Market Share 0.2 % 0.2 % Better Plus Better Real Estate Transaction Volume $ 367 $ 503 Insurance Coverage Written $ 4,321 $ 4,956 Home Finance Funded Loan Volume represents the aggregate dollar amount of all loans funded in a given period based on the principal amount of the loan at funding.
Key measures that we use in assessing our business include the following ($ in millions, except percentage data or as otherwise noted): Key Business Metric Year Ended December 31, 2025 Year Ended December 31, 2024 Home Finance Refinance Loan Volume $ 1,015 $ 463 Purchase Loan Volume 2,875 2,652 HELOC Volume 854 479 Funded Loan Volume $ 4,744 $ 3,594 D2C Loan Volume $ 2,928 $ 2,562 B2B Loan Volume 95 1,032 Platform Loan Volume 1,721 — Funded Loan Volume $ 4,744 $ 3,594 Total Loans (number of loans, not millions) 15,386 11,755 Average Loan Amount ($ value, not millions) $ 308,321 $ 305,757 Gain on Sale Margin 2.87 % 2.17 % Total Market Share 0.2 % 0.2 % Better Plus Better Real Estate Transaction Volume $ 276 $ 367 Insurance Coverage Written $ 4,110 $ 4,321 Home Finance Refinance Loan Volume represents the aggregate dollar amount of refinance loans funded in a given period based on the principal amount of the loan at refinancing date.
Customer deposits increased $122.3 million, or 1033%, to $134.1 million, as of December 31, 2024 compared to $11.8 million as of December 31, 2023. The increase is primarily due to growth efforts at our banking entity in the U.K., which customer deposits are used to fund loans held for investment.
Customer deposits increased $628.9 million , or 469%, to $763.0 million, as of December 31, 2025 compared to $134.1 million as of December 31, 2024. The increase is primarily due to growth efforts at our banking entity in the U.K., which customer deposits are used to fund loans held for investment.
For settlement services, we generate revenues from fees on services, such as policy preparation, title search, wire, and other services, required to close a loan, which were provided by third parties through our platform.
For settlement services, we generate revenues from fees on services, such as policy preparation, title search, wire, and other services, required to close a loan, which were provided by third parties through our platform. We recognize revenues from fees on settlement services upon the completion of the performance obligation, which was when the loan transaction closes.
We continue to focus on originating the most profitable business available to us and seek to avoid growing through highly unprofitable channels.. 67 Table of Contents Better Plus Better Real Estate Transaction Volume represents the aggregate dollar amount of real estate volume transacted in a given period across both in-house agents and third-party network agents.
We continue to focus on originating the most profitable business available to us. 53 Tab l e of Contents Better Plus Better Real Estate Transaction Volume represents the aggregate dollar amount of real estate volume transacted in a given period across both in-house agents and third-party network agents.
Our Refinance Loan Volume of $463 million for the year ended December 31, 2024 increased by approximately 128% from $203 million for the year ended December 31, 2023. Purchase Loan Volume represents the aggregate dollar amount of purchase loans funded in a given period based on the principal amount of the loan at purchase date.
Our Refinance Loan Volume of $1,015 million for the year ended December 31, 2025 increased by approximately 119% from $463 million for the year ended December 31, 2024. 52 Tab l e of Contents Purchase Loan Volume represents the aggregate dollar amount of purchase loans funded in a given period based on the principal amount of the loan at purchase date.
Our D2C Loan Volume of $2,562 million for the year ended December 31, 2024 increased by approximately 55% from $1,649 million for the year ended December 31, 2023.
Our D2C Loan Volume of $2,928 million for the year ended December 31, 2025 increased by approximately 14% from $2,562 million for the year ended December 31, 2024.
As of December 31, 2024 and 2023, we had lease liabilities of $4.1 million and $31.2 million, respectively. Other Cash Requirements We also have contractual obligations that are short-term, including: Repurchase and indemnification obligations In the ordinary course of business, we are exposed to liability under representations and warranties made to purchasers of loans or MSRs.
Other Cash Requirements We also have contractual obligations that are short-term, including: Repurchase and indemnification obligations In the ordinary course of business, we are exposed to liability under representations and warranties made to purchasers of loans or MSRs.
Also contributing to cash used by operating activities were net losses over the period. 80 Table of Contents Investing Activities Net cash used in investing activities was $144 million for the year ended December 31, 2024, an increase in cash used of $105 million, or 269%, compared to net cash used in investing activities of $39 million for the year ended December 31, 2023.
Also contributing to cash used in operating activities were net losses over the period. Investing Activities Net cash used in investing activities was $662 million for the year ended December 31, 2025, an increase in cash used of $518 million, or 360%, compared to net cash used in investing activities of $144 million for the year ended December 31, 2024.
Cash collateral deposit of $15.0 million is maintained and included in restricted cash. (2) Interest charged under the facility is at the 30-day term SOFR plus 2.10%-2.25%. Cash collateral deposit of $3.8 million is maintained and included in restricted cash. Subsequent to December 31, 2024, the Company extended the maturity to March 6, 2026.
During the second quarter of 2025, Funding Facility 1 was terminated prior to maturity. (2) Interest charged under the facility is at the 30-day term SOFR plus 2.10% - 2.25%. Cash collateral deposit of $3.8 million is maintained and included in restricted cash. Subsequent to December 31, 2025, the Company extended the maturity to March 2, 2027.
In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and elsewhere in this Annual Report.
Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” and elsewhere in this Annual Report.
These contracts are loan sale agreements in which we commit to deliver a mortgage loan of a specified principal amount and quality to a loan purchaser. 81 Table of Contents Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements as described in Item 303 of Regulation S-K that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements as described in Item 303 of Regulation S-K that are reasonably likely to have a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
The increase in international lending revenue was primarily driven by increased operations in the U.K. brokerage businesses. Insurance services increased $0.4 million, or 15% to $3.5 million for the year ended December 31, 2024 compared to $3.0 million for the year ended December 31, 2023.
The increase in international lending revenue was primarily driven by increased activity in the U.K. lending business. Insurance services decreased $0.9 million, or 27% to $2.5 million for the year ended December 31, 2025 compared to $3.5 million for the year ended December 31, 2024.
Financing Activities Net cash provided by financing activities was $239 million for the year ended December 31, 2024, an decrease of $142 million, or 37%, compared to net cash provided by financing activities of $381 million for the year ended December 31, 2023.
Financing Activities Net cash provided by financing activities was $714 million for the year ended December 31, 2025, an increase of $475 million, or 199%, compared to net cash provided by financing activities of $239 million for the year ended December 31, 2024.
Other expenses/(income) was an expense of $17.4 million for the year ended December 31, 2024, a decrease of $236.1 million or 93%, as compared with expenses of $253.6 million in the year ended December 31, 2023.
The increase in loan origination expenses was driven by an increase in origination volume. Other expenses/(income) was an expense of $16.3 million for the year ended December 31, 2025, a decrease of $1.1 million or 6%, as compared with expenses of $17.4 million for the year ended December 31, 2024.
Loans held for investment are funded from our cash on hand as well as growth in customer deposits held by our U.K. banking entity.
The increase in cash used in investing activities primarily consists of originations of loans held for investment, namely through our U.K. banking entity. Loans held for investment are funded from our cash on hand as well as growth in customer deposits held by our U.K. banking entity.
(3) Interest charged under the facility is at the 30-day term SOFR plus 1.75% - 3.75%. There is no cash collateral deposit maintained as of December 31, 2024.
(4) Interest charged under the facility is at the daily simple SOFR plus 1.75% - 2.50%. There is no cash collateral deposit maintained as of December 31, 2025.
Other Revenue The components of other revenue for the period were: Year Ended December 31, (Amounts in thousands) 2024 2023 International lending revenue $ 3,999 $ 3,410 Insurance Services 3,466 3,026 Real estate services 2,470 7,396 Other revenue $ 2,953 $ 2,277 Total other revenue $ 12,888 $ 16,109 International lending revenue increased $0.6 million, or 17% to $4.0 million for the year ended December 31, 2024 compared to $3.4 million for the year ended December 31, 2023.
Other Revenue The components of other revenue for the period were: Year Ended December 31, (Amounts in thousands) 2025 2024 International lending revenue $ 5,185 $ 3,999 Insurance services 2,536 3,466 Real estate services 1,896 2,470 Other revenue $ 1,682 $ 2,953 Total other revenue $ 11,299 $ 12,888 International lending revenue increased $1.2 million, or 30% to $5.2 million for the year ended December 31, 2025 compared to $4.0 million for the year ended December 31, 2024.
Our B2B Loan Volume of $1,032 million for the year ended December 31, 2024 decreased by approximately 24% from $1,366 million for the year ended December 31, 2023. Total Loans represents the total number of loans funded in a given period, including purchase loans, refinance loans, HELOC loans and closed-end second lien loans.
Total Loans represents the total number of loans funded in a given period, including purchase loans, refinance loans, HELOC loans and closed-end second lien loans. Our Total Loans of 15,386 for the year ended December 31, 2025 increased by approximately 31% from 11,755 for the year ended December 31, 2024.
The following table presents a reconciliation of net income (loss) to Adjusted Net Loss and Adjusted EBITDA for the years indicated: 77 Table of Contents Year Ended December 31, (Amounts in thousands) 2024 2023 Adjusted Net Loss Net (loss) income $ (206,290) $ (536,420) Stock-based compensation expense (1) 26,753 54,160 Change in fair value of warrants and equity related liabilities (2) (924) 507 Change in fair value of convertible preferred stock warrants (2) — (266) Change in fair value of bifurcated derivative (3) — 236,603 Restructuring, impairment, and other expenses (4) 17,659 17,459 Adjusted Net Loss $ (162,802) $ (227,957) Adjusted EBITDA Net (loss) income $ (206,290) $ (536,420) Income tax expense / (benefit) 850 1,998 Depreciation and amortization expense (5) 33,227 42,891 Stock-based compensation expense (1) 26,753 54,160 Interest and amortization on non-funding debt (6) 7,722 19,916 Restructuring, impairment, and other expenses (4) 17,659 17,459 Change in fair value of warrants and equity related liabilities (2) (924) 507 Change in fair value of convertible preferred stock warrants (2) — (266) Change in fair value of bifurcated derivative (3) — 236,603 Adjusted EBITDA $ (121,003) $ (163,152) __________________ (1) Stock-based compensation represents the non-cash grant date fair value of stock-based instruments utilized to incentivize employees and consultants recognized over the applicable vesting period.
The following table presents a reconciliation of net income (loss) to Adjusted Net Loss and Adjusted EBITDA for the years indicated: 63 Tab l e of Contents Year Ended December 31, (Amounts in thousands) 2025 2024 Adjusted Net Loss Net loss $ (165,872) $ (206,290) Stock-based compensation expense (1) 20,432 26,753 Change in fair value of warrants and equity related liabilities (2) 69 (924) Restructuring, impairment, and other expenses (3) 13,708 17,659 Adjusted Net Loss $ (131,663) $ (162,802) Adjusted EBITDA Net loss $ (165,872) $ (206,290) Income tax expense 53 850 Depreciation and amortization expense (4) 14,069 33,227 Stock-based compensation expense (1) 20,432 26,753 Interest and amortization on non-funding debt (5) 1,714 7,722 Restructuring, impairment, and other expenses (3) 13,708 17,659 Change in fair value of warrants and equity related liabilities (2) 69 (924) Adjusted EBITDA $ (115,827) $ (121,003) __________________ (1) Stock-based compensation represents the non-cash grant date fair value of stock-based instruments utilized to incentivize employees and consultants recognized over the applicable vesting period.
As of each such reporting date, we had an immaterial amount of loans either 90 days past due or non-performing, as Better Home & Finance generally aims to sell loans shortly after production. Average Loan Amount represents Funded Loan Volume divided by Total Loans in a period.
This is defined as the average days between funding and sale for loans funded during each period. As of each such reporting date, we had an immaterial amount of loans either 90 days past due or non-performing, as Better Home & Finance generally aims to sell loans shortly after production.
Our goal is to do our part in lowering the hurdles to homeownership by offering the lowest prices and the best experience to our customers. We are a technology-driven organization. We are seeking to disrupt a business model by leveraging our proprietary platform, Tinman, to enhance the automation of the home finance process.
Our goal is to do our part in lowering the hurdles to homeownership by offering the lowest prices and the best experience to our customers. We are a technology-driven organization.
See the liquidity and capital resources section below for further details on cash flows from operating, investing, and financing activities. Short-term investments increased $28.2 million, or 110%, to $53.8 million as of December 31, 2024 compared to $25.6 million as of December 31, 2023.
See the liquidity and capital resources section below for further details on cash flows from operating, investing, and financing activities. Short-term investments increased $49.8 million, or 93%, to $103.6 million as of December 31, 2025 compared to $53.8 million as of December 31, 2024. The increase in short-term investments was driven by our cash management strategies in our U.K. business.
See “Cautionary Statement Regarding Forward-Looking Statements.” Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. Certain amounts may not foot due to rounding. Company Overview We are building a next-generation platform that we believe can revolutionize the world’s largest, oldest and most tangible asset class, the home.
See “Cautionary Statement Regarding Forward-Looking Statements.” Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. Certain amounts may not foot due to rounding. Company Overview We are a technology-enabled homeownership company that offers mortgage, home equity, and other homeownership products through a digital platform.
As of December 31, 2024 and 2023, we had the following outstanding warehouse lines of credit: (Amounts in thousands) Maturity Facility Size Amount Outstanding December 31, 2024 Amount Outstanding December 31, 2023 Funding Facility 1 (1) September 30, 2025 100,000 60,747 61,709 Funding Facility 2 (2) March 6, 2025 150,000 74,472 40,088 Funding Facility 3 (3) August 1, 2025 175,000 108,851 24,421 Total warehouse lines of credit $ 425,000 $ 244,070 $ 126,218 __________________ (1) Interest charged under the facility is at the 30-day term SOFR plus 2.125%.
As of December 31, 2025 and 2024, we had the following outstanding warehouse lines of credit: (Amounts in thousands) Maturity Facility Size Amount Outstanding December 31, 2025 Amount Outstanding December 31, 2024 Funding Facility 1 (1) May 13, 2025 $ — $ — $ 60,747 Funding Facility 2 (2) March 6, 2026 150,000 81,423 74,472 Funding Facility 3 (3) June 30, 2026 175,000 117,499 108,851 Funding Facility 4 (4) April 5, 2026 250,000 212,940 — Total warehouse lines of credit $ 575,000 $ 411,862 $ 244,070 __________________ (1) Interest charged under the facility is at the 30-day term SOFR plus 2.125%.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (in thousands) 2024 2023 Net cash (used in) provided by operating activities $ (379,971) $ (159,720) Net cash (used in) provided by investing activities $ (143,810) $ (38,594) Net cash provided by (used in) financing activities $ 239,131 $ 381,402 Year Ended December 31, 2024 as Compared to Year Ended December 31, 2023 Operating Activities Net cash used by operating activities was $380 million for the year ended December 31, 2024, an increase of $220 million, or 138%, compared to net cash used by operating activities of $160 million for the year ended December 31, 2023.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, (in thousands) 2025 2024 Net cash used in operating activities $ (166,575) $ (379,971) Net cash used in investing activities $ (661,507) $ (143,810) Net cash provided by financing activities $ 714,336 $ 239,131 Year Ended December 31, 2025 as Compared to Year Ended December 31, 2024 Operating Activities Net cash used in operating activities was $167 million for the year ended December 31, 2025, a decrease of $213 million, or 56%, compared to net cash used in operating activities of $380 million for the year ended December 31, 2024.
Warehouse interest expense increased $2.1 million, or 18% to $13.8 million for the year ended December 31, 2024 compared to $11.7 million for the year ended December 31, 2023. The increase in warehouse interest expense was primarily driven by carrying a higher average warehouse balance over the year ended December 31, 2024 compared to year ended December 31, 2023.
The increase in warehouse interest expense was primarily driven by carrying a higher average warehouse balance over the year ended December 31, 2025 compared to year ended December 31, 2024. The increase for the year was driven by higher funded loan volume.
Loans held for investment increased $106.7 million, or 2226%, to $111.5 million as of December 31, 2024 compared to $4.8 million as of December 31, 2023. The increase in loans held for investment was driven by our growth efforts in the U.K., namely our banking entity.
The increase in loans held for investment was driven by our growth efforts in the U.K., namely our banking entity. The majority of the Loans Held for Investment portfolio consists of property - buy to let loans, which increased $625.2 million, or 560%, to $736.8 million as of December 31, 2025 compared to $111.6 million as of December 31, 2024.
Our management evaluates our estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Our significant accounting policies are described in “Note 2. Summary of Significant Accounting Policies” to our consolidated financial statements included elsewhere in this Annual Report. Recent Accounting Pronouncements See “ Note 2.
Our management evaluates our estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. While our significant accounting policies are described in “Note 2.
For title insurance, we generate revenues from agent fees on title policies written by third parties and sold to our customers in loan transactions. We recognize revenues from agent fees on title policies upon the completion of the performance obligation, which is when the loan transaction closes.
We recognize revenues from agent fees on title policies upon the completion of the performance obligation, which is when the loan transaction closes.
Other expenses are expensed as incurred. 70 Table of Contents Results of Operations The following table sets forth certain consolidated financial data for each of the periods indicated: Year Ended December 31, (Amounts in thousands, except per share amounts) 2024 2023 Revenues: Gain on loans, net $ 78,098 $ 58,796 Other revenue 12,888 16,109 Net interest income Interest income 38,990 29,031 Interest expense (21,488) (31,596) Net interest income/(loss) 17,502 (2,565) Total net revenues 108,488 72,340 Expenses: Compensation and benefits 141,089 181,735 General and administrative 52,230 60,150 Technology 26,110 39,431 Marketing and advertising 33,984 19,523 Loan origination expense 9,864 9,476 Depreciation and amortization 33,227 42,891 Other expenses/(Income) 17,424 253,556 Total Expenses 313,928 606,762 Loss before income tax (benefit)/expense (205,440) (534,422) Income tax expense (benefit) 850 1,998 Net loss $ (206,290) $ (536,420) Earnings (loss) per share attributable to common stockholders (Basic) $ (13.65) $ (58.09) Earnings (loss) per share attributable to common stockholders (Diluted) $ (13.65) $ (58.09) Year Ended December 31, 2024 as Compared to Year Ended December 31, 2023 Revenues The components of our revenues for the period were: Year Ended December 31, (Amounts in thousands) 2024 2023 Revenues: Gain on loans, net $ 78,098 $ 58,796 Other revenue 12,888 16,109 Net interest income Interest income 38,990 29,031 Interest expense (21,488) (31,596) Net interest income/(loss) 17,502 (2,565) Total net revenues 108,488 72,340 71 Table of Contents Gain on loans, net The components of our gain on loans, net for the period were: Year Ended December 31, (Amounts in thousands) 2024 2023 Gain on sale of loans, net $ 59,242 $ 46,678 Integrated partnership fees 8,933 10,295 Loan repurchase reserve recovery/(provision) 9,923 1,823 Total gain on loans, net $ 78,098 $ 58,796 Gain on sale of loans, net increased $12.6 million or 27% to $59,242 for the year ended December 31, 2024 compared to $46,678 for the year ended December 31, 2023.
Other expenses are expensed as incurred. 56 Tab l e of Contents Results of Operations The following table sets forth certain consolidated financial data for each of the periods indicated: Year Ended December 31, (Amounts in thousands, except per share amounts) 2025 2024 Revenues: Gain on loans, net $ 136,148 $ 78,098 Other revenue 11,299 12,888 Net interest income Interest income 60,269 38,990 Interest expense (42,844) (21,488) Net interest income 17,425 17,502 Total net revenues 164,872 108,488 Expenses: Compensation and benefits 174,226 141,089 General and administrative 45,323 52,230 Technology 27,874 26,110 Marketing and advertising 38,356 33,984 Loan origination expense 14,499 9,864 Depreciation and amortization 14,069 33,227 Other expenses/(income) 16,344 17,424 Total Expenses 330,691 313,928 Loss before income tax expense (165,819) (205,440) Income tax expense 53 850 Net loss $ (165,872) $ (206,290) Earnings (loss) per share attributable to common stockholders (Basic) $ (10.80) $ (13.65) Earnings (loss) per share attributable to common stockholders (Diluted) $ (10.80) $ (13.65) Year Ended December 31, 2025 as Compared to Year Ended December 31, 2024 Revenues The components of our revenues for the period were: Year Ended December 31, (Amounts in thousands) 2025 2024 Revenues: Gain on loans, net $ 136,148 $ 78,098 Other revenue 11,299 12,888 Net interest income Interest income 60,269 38,990 Interest expense (42,844) (21,488) Net interest income 17,425 17,502 Total net revenues 164,872 108,488 57 Tab l e of Contents Gain on loans, net The components of our gain on loans, net for the period were: Year Ended December 31, (Amounts in thousands) 2025 2024 Gain on sale of loans, net $ 128,209 $ 59,242 Broker revenue 7,118 8,933 Loan repurchase reserve recovery 821 9,923 Total gain on loans, net $ 136,148 $ 78,098 Gain on sale of loans, net increased $69.0 million or 116% to $128.2 million for the year ended December 31, 2025 compared to $59.2 million for the year ended December 31, 2024 .
Stock-based compensation includes expenses associated with restricted stock unit grants, performance stock unit grants, and stock option grants under our stock plans. We recognize compensation expense for the stock-based payments based on the fair value of the awards on the grant date. The expense is recorded on a straight-line basis over the requisite service period.
We recognize compensation expense for the stock-based payments based on the fair value of the awards on the grant date. The expense is recorded on a straight-line basis over the requisite service period. Compensation and benefits excludes amounts capitalized for internal developed software.
The increase in loans outstanding under our warehouse lines of credit was commensurate with the increase in mortgage loans held for sale at fair value, excluding HELOC as those loans are funded with our operations. The Convertible Note increased $5.1 million to $519.7 million as of December 31, 2024 compared to $514.6 million as of December 31, 2023.
The increase in loans outstanding under our warehouse lines of credit was commensurate with the increase in mortgage loans held for sale at fair value. The Convertible Note was extinguished as part of the Exchange in April 2025 and the $519.7 million carrying value as December 31, 2024 was reduced to zero as of December 31, 2025.
We reduced our headcount between the two periods, which lead to a decrease in compensation and benefits.
We increased our headcount between the two periods, and increased incentive compensation as a result of increased production volume, which lead to an increase in compensation and benefits.
For customer acquisition expenses, we primarily generate loan origination leads through third-party financial service websites for which we incur “pay-per-click” expenses. A majority of our marketing expenses are incurred from leads that we purchase from these third-party financial service websites.
Technology and product development expenses are generally expensed as incurred. Marketing and Advertising Expenses Marketing and advertising expenses consist of customer acquisition expenses, brand costs, and paid marketing. For customer acquisition expenses, we primarily generate loan origination leads through third-party financial service websites for which we incur “pay-per-click” expenses.
During the fourth quarter of 2024, management enacted a plan to sell several entities in the U.K., which management expects to complete the sales within one year, as such the revenue from our international lending activities is winding down.
During 2024, management enacted a plan to sell several entities in the U.K., one of those sales completing in Q3 2025, with the remaining expected to be completed in 2026. As such the revenue from our non-core international operations is winding down.
In general, HELOC and closed-end second lien loans have lower average loan amounts than purchase or refinance loans, and therefore Average Loan Amount has decreased as a result of the growth of HELOC and closed-end second lien growth as a percentage of our fundings.
In general, average loan amount remained flat as the increase in HELOC and closed-end second lien loans, which have lower average loan amounts, was offset by the increase of purchase and refinance loans, which have higher average loan amounts than HELOC and closed-end second lien loans.
Marketing expenses are generally expensed as incurred. 69 Table of Contents Loan Origination Expenses Loan origination expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, and servicing costs. These expenses are expensed as incurred.
A majority of our marketing expenses are incurred from leads that we purchase from these third-party financial service websites. Marketing expenses are generally expensed as incurred. 55 Tab l e of Contents Loan Origination Expenses Loan origination expenses consist primarily of origination expenses, appraisal fees, processing expenses, underwriting, closing fees, and servicing costs. These expenses are expensed as incurred.
Expenses The components of our expenses for the period were: Year Ended December 31, (Amounts in thousands) 2024 2023 Compensation and benefits 141,089 181,735 General and administrative 52,230 60,150 Technology 26,110 39,431 Marketing and advertising 33,984 19,523 Loan origination expense 9,864 9,476 Depreciation and amortization 33,227 42,891 Other expenses/(Income) 17,424 253,556 Total operating expenses $ 313,928 $ 606,762 Compensation and benefits expenses were $141.1 million for the year ended December 31, 2024, a decrease of $40.6 million or 22% as compared with $181.7 million for the year ended December 31, 2023.
Expenses The components of our expenses for the period were: 59 Tab l e of Contents Year Ended December 31, (Amounts in thousands) 2025 2024 Compensation and benefits 174,226 141,089 General and administrative 45,323 52,230 Technology 27,874 26,110 Marketing and advertising 38,356 33,984 Loan origination expense 14,499 9,864 Depreciation and amortization 14,069 33,227 Other expenses/(income) 16,344 17,424 Total operating expenses $ 330,691 $ 313,928 Compensation and benefits expenses were $174.2 million for the year ended December 31, 2025, an increase of $33.1 million or 23% as compared with $141.1 million for the year ended December 31, 2024.
General and administrative expenses were $52.2 million for the year ended December 31, 2024, a decrease of $8.0 million or 13% as compared with $60.2 million in the year ended December 31, 2023.
General and administrative exp enses were $45.3 million for the year ended December 31, 2025, a decrease of $6.9 million or 13% as compared with $52.2 million in the year ended December 31, 2024. The decrease in general and administrative expenses was driven primarily by decreases in rent and occupancy expenses and reductions in insurance premiums.
We source our customers through two channels: our D2C channel and our B2B channel. Through our D2C channel, we generate gain on loans, net by selling loans and MSRs to our loan purchaser network, recognizing D2C revenue per loan. Through our B2B channel, we generate revenue from integrated relationships and advertising relationships.
We source our customers through two channels: our D2C channel and our Platform channel. In 2025, we wound down our Ally Partnership, previously referred to as “B2B channel,” which concluded as of December 31, 2025. Through our D2C channel, we generate gain on loans, net by selling loans and MSRs to our loan purchaser network, recognizing D2C revenue per loan.
This recovery is a component of the loan repurchase reserve liability, which decreased because of the reduction in our estimate of loss exposure during the periods when we had a significantly higher funded loan volume. The reduction in the loan repurchase reserve liability is recognized as a recovery within gain on loans, net.
The reduction in potential loss exposure results in a reduction in the loan repurchase reserve liability which is recognized as a recovery within gain on loans, net.
Right-of-use assets decreased $18.6 million, or 93%, to $1.4 million as of December 31, 2024 compared to $20.0 million as of December 31, 2023, while lease liabilities decreased $27.1 million, or 87%, to $4.1 million as of 75 Table of Contents December 31, 2024 compared to $31.2 million as of December 31, 2023.
Right-of-use assets increased $3.3 million, or 237%, to $4.7 million as of December 31, 2025 compared to $1.4 million as of December 31, 2024, while lease liabilities increased $0.5 million, or 13%, to $4.6 million as of December 31, 2025 compared to $4.1 million as of December 31, 2024.
Technology Expenses Technology expenses consist of expenses related to vendors engaged in product management, design, development and testing of our websites and products. Technology and product development expenses are generally expensed as incurred. Marketing and Advertising Expenses Marketing and advertising expenses consist of customer acquisition expenses, brand costs, and paid marketing.
General and Administrative Expenses General and administrative expenses include rent and occupancy expenses, travel and entertainment expenses, insurance expenses, and external legal, tax and accounting services. General and administrative expenses are expensed as incurred. Technology Expenses Technology expenses consist of expenses related to vendors engaged in product management, design, development and testing of our websites and products.
As of December 31, 2024, we had 3 warehouse lines of credit in different amounts and with various maturities, with an aggregate available amount of $425 million. On August 22, 2023, the Company consummated the Business Combination.
As of December 31, 2025, we had three warehouse lines of credit in different amounts and with various maturities, with an aggregate available amount of $575.0 million. As of December 31, 2025 and 2024, we had loans held for investment of $723.3 million and $111.5 million, respectively.
For the year ended December 31, 66 Table of Contents 2024, purchase and refinance loans comprised $3,115 million and HELOC and closed-end second lien loans comprised $479 million of Funded Loan Volume. Refinance Loan Volume represents the aggregate dollar amount of refinance loans funded in a given period based on the principal amount of the loan at refinancing date.
Our HELOC Loan volume increased by approximately 78% to $854 million for the year ended December 31, 2025 fro m $479 million for the year ended December 31, 2024. Funded Loan Volume represents the aggregate dollar amount of all loans funded in a given period based on the principal amount of the loan at funding.
Our integrated relationship is in the process of winding down due to a shift in strategic direction for the integrated partner. Loan repurchase reserve recovery increased $8.1 million or 444%, to $9.9 million for the year ended December 31, 2024, compared to a recovery of $1.8 million for the year ended December 31, 2023.
Loan repurchase reserve recovery decreased $9.1 million or 92%, to $0.8 million for the year ended December 31, 2025, compared to a recovery of $9.9 million for the year ended December 31, 2024 .
Components of Our Expenses Our expenses consist of compensation and benefits, general and administrative, technology expenses, marketing and advertising expenses, loan origination expenses, depreciation and amortization, and other expenses. Compensation and Benefits Expenses Compensation and benefits expenses includes salaries, wages, and incentive pay as well as stock compensation, employee health benefits, 401(k) plan benefits, and social security and unemployment taxes.
Compensation and Benefits Expenses Compensation and benefits expenses includes salaries, wages, and incentive pay as well as stock-based compensation, employee health benefits, 401(k) plan benefits, and social security and unemployment taxes. Stock-based compensation includes expenses associated with restricted stock unit grants, performance stock unit grants, and stock option grants under our stock plans.
Expanding Homeownership Product Offerings We expect to continue to add new types of Home Finance mortgage loans and integrated Better Plus marketplace offerings to our platform over time, providing our customers with a one-stop shop for all of their homeownership needs.
We expect to continue to invest in developing technology, tools and features that further automate the loan manufacturing process, reducing our manufacturing and customer acquisition costs and improving our customer experience. 51 Tab l e of Contents Expanding Homeownership Product Offerings We expect to continue to add new types of Home Finance mortgage loans, providing our customers with a one-stop shop for all of their homeownership needs.
Additional paid-in capital increased $24.8 million, or 1%, to $1,863.3 million as of December 31, 2024 compared to $1,838.5 million as of December 31, 2023. The increase in additional paid-in capital was primarily driven by stock-based compensation that was generated over the period.
Additional paid-in capital increased $246.5 million, or 13%, to $2,109.8 million as of December 31, 2025 compared to $1,863.3 million as of December 31, 2024 .
Our Average Loan Amount decreased by approximately 13% to $305,757 for the year ended December 31, 2024 from $351,877 for the year ended December 31, 2023.
Average Loan Amount represents Funded Loan Volume divided by Total Loans in a period. Our Average Loan Amount increased by approximately 1% to $308,321 for the year ended December 31, 2025 from $305,757 for the year ended December 31, 2024.
We recognize revenues from fees on settlement services upon the completion of the performance obligation, which was when the loan transaction closes. 68 Table of Contents For Better Cover, we generate revenues from agent fees on homeowners insurance policies obtained by our customers through our marketplace of third-party insurance carriers.
For insurance services, we generate revenues from agent fees on homeowners insurance policies obtained by our customers through our marketplace of third-party insurance carriers. For title insurance, we generate revenues from agent 54 Tab l e of Contents fees on title policies written by third parties and sold to our customers in loan transactions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs interest rates rise, the population of customers who can save money by refinancing, because their existing mortgage rate is higher than current mortgage rates, declines. This creates a supply-demand imbalance where mortgage lenders are competing for fewer customers and become increasingly price competitive to win customers, thereby accepting lower potential gain on sale margin.
Biggest changeThis creates a supply-demand imbalance where mortgage lenders are competing for fewer customers and become increasingly price competitive to win customers, thereby accepting lower potential gain on sale margin. This competition manifests in industry-wide gain on sale margin compression. Additionally, we see our Gain on Sale Margin compress further at marginally higher volumes.
Foreign Currency Exchange Risk Through December 31, 2024, the majority of our revenue from customer arrangements has been denominated in U.S. dollars as we have limited revenue generating operations outside the United States.
Foreign Currency Exchange Risk Through December 31, 2025, the majority of our revenue from customer arrangements has been denominated in U.S. dollars as we have limited revenue generating operations outside the United States.
Better Home & Finance's origination volume largely conforms to GSE standards, specifically those of Fannie Mae and Freddie Mac, which have specific loan to value requirements. Freddie Mac's guidelines provide that the maximum loan to 83 Table of Contents value for a conforming purchase in non-cash out refinance mortgages is 95% for a one-unit primary residence.
Better Home & Finance's origination volume largely conforms to GSE standards, specifically those of Fannie Mae and Freddie Mac, which have specific loan to value requirements. Freddie Mac's guidelines provide that the maximum loan to value for a conforming purchase in non-cash out refinance mortgages is 95% for a one-unit primary residence.
Accordingly, we are exposed to interest rate risk and related price risk during the period from the date of the lock commitment through (i) the lock commitment cancellation or expiration date or (ii) the date of sale into the secondary mortgage market. Our average holding period of the loan from funding to sale was approximately 21 days in 2024.
Accordingly, we are exposed to interest rate risk and related price risk during the period from the date of the lock commitment through (i) the lock commitment cancellation or expiration date or (ii) the date of sale into the secondary mortgage market. Our average holding period of the loan from funding to sale was approximately 30 days in 2025.
In the future however, we expect our exposure to foreign currency exchange risk to increase in relation to the British pound sterling as we have decided to focus growth on specific entities in the United Kingdom, as mentioned elsewhere in this Annual Report. 84 Table of Contents
In the future however, we expect our exposure to foreign currency exchange risk to increase in relation to the British pound sterling as we have decided to focus growth on specific entities in the United Kingdom, as mentioned elsewhere in this Annual Report.
For the year ended December 31, 2024 and the year ended December 31, 2023, 92% and 96%, respectively, of Better Home & Finance's loans, excluding HELOC loans, conformed to GSE standards. Generally, all loans sold into the secondary market are sold with limited recourse.
For the year ended December 31, 2025 and the year ended December 31, 2024, 77% and 92%, respectively, of Better Home & Finance's loans, excluding HELOC loans, conformed to GSE standards. Generally, all loans sold into the secondary market are sold with limited recourse.
As of December 31, 2024, a hypothetical increase in interest rates by 25 basis points, 50 basis points, and 100 basis points would result in a $1.6 million, $3.3 million, and $7.3 million decrease, respectively, in the combined fair value of our LHFS and IRLCs.
As of December 31, 2025, a hypothetical decrease in interest rates by 25 basis points, 50 basis points, and 100 basis points would result in a $2.6 million, $2.3 million, and $6.6 million increase, respectively, in the combined fair value of our LHFS and IRLCs.
As of December 31, 2024 and December 31, 2023 we were exposed to interest rate risk on $399.2 million and $170.2 million, respectively, of LHFS as well as $1.2 million and $1.6 million, respectively, of net IRLCs in our consolidated balance sheets.
As of December 31, 2025 and December 31, 2024 we were exposed to interest rate risk on $466.7 million and $399.2 million, respectively, of LHFS as well as $4.0 million and $1.2 million, respectively, of net IRLCs in our consolidated balance sheets.
As of December 31, 2024, a hypothetical decrease in interest rates by 25 basis points, 50 basis points, and 100 basis points would result in a $1.4 million, $2.6 million, and $4.5 million increase, respectively, in the combined fair value of our LHFS and IRLCs.
As of December 31, 2025, a hypothetical increase in interest rates by 25 basis points, 50 70 Tab l e of Contents basis points, and 100 basis points would result in a $1.8 million, $4.5 million, and $10.8 million decrease, respectively, in the combined fair value of our LHFS and IRLCs.
Accordingly, we believe we do not currently have a material exposure to foreign currency exchange risk.
Accordingly, we believe we do not currently 71 Tab l e of Contents have a material exposure to foreign currency exchange risk.
As interest rates decline, our LHFS and IRLCs generally increase in value while our hedging instruments utilized to hedge against interest rate risk decrease in value, and vice versa.
In addition, changes in interest rates affect our assets and liabilities measured at fair value, including LHFS, IRLCs, and hedging arrangements. As interest rates decline, our LHFS and IRLCs generally increase in value while our hedging instruments utilized to hedge against interest rate risk decrease in value, and vice versa.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk In the normal course of business, we are subject to a variety of risks which can affect our operations and potential to again achieve profitability.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk In the normal course of business, we are subject to a variety of risks which can affect our operations and potential to again achieve profitability. We broadly define these areas of risk as interest rate risk, credit risk, prepayment risk, inflation risk, counterparty risk, and foreign currency exchange risk.
For the year ended December 31, 2024, our average customer had, approximately, an average loan balance of $305,757, age of 43, FICO score of 754, and annual household income of $192,195.
For the year ended December 31, 2025, our average customer had, approximately, an average loan balance of $308,321, age of 44, FICO score of 747, and annual household income of $205,028.
We broadly define these areas of risk as interest rate risk, credit risk, prepayment risk, inflation risk, counterparty risk, and foreign currency exchange risk. 82 Table of Contents Interest Rate Risk We are subject to interest rate risk, which impacts our production volume and associated revenue, IRLCs and LHFS valuations, and the net interest margin derived from our funding facilities.
Interest Rate Risk We are subject to interest rate risk, which impacts our production volume and associated revenue, IRLCs and LHFS valuations, and the net interest margin derived from our funding facilities. We anticipate that interest rates will remain our primary market risk for the foreseeable future.
We anticipate that interest rates will remain our primary market risk for the foreseeable future. More specifically, similar to other mortgage companies, our business performance, Funded Loan Volume and Gain on Sale Margin are negatively correlated with changes in interest rates.
More specifically, similar to other mortgage companies, our business performance, Funded Loan Volume and Gain on Sale Margin are negatively correlated with changes in interest rates. As interest rates rise, the population of customers who can save money by refinancing, because their existing mortgage rate is higher than current mortgage rates, declines.
Removed
This competition manifests in industry-wide gain on sale margin compression. Additionally, we see our Gain on Sale Margin compress further at marginally higher volumes. In addition, changes in interest rates affect our assets and liabilities measured at fair value, including LHFS, IRLCs, and hedging arrangements.
Added
In order to manage interest rate risk on our Loans Held for Investment portfolio, we have entered into pay-fixed, receive-floating interest rate swap contracts to hedge against exposure to changes in the fair value of Loans Held for Investment resulting from changes in interest rates.

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