What changed in NexPoint Real Estate Finance, Inc.'s 2024 10-K compared to 2023?

Across the narrative sections we track, NexPoint Real Estate Finance, Inc. (NREF) added 347 paragraphs, removed 315, and edited 252 between the 2023 and 2024 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+174/−132), Item 1A. Risk Factors (+125/−108), Item 1. Business (+38/−66).

Did NexPoint Real Estate Finance, Inc. add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 125 new/edited paragraphs and 108 removed paragraphs versus the 2023 10-K.

What changed in NexPoint Real Estate Finance, Inc.'s MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 174 new/edited paragraphs and 132 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did NexPoint Real Estate Finance, Inc. update its Cybersecurity disclosure (Item 1C) in 2024?

Item 1C Cybersecurity has 6 paragraph-level changes between the 2023 and 2024 filings.

Where does this NREF 10-K diff come from?

The source filings are NexPoint Real Estate Finance, Inc.'s official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in NexPoint Real Estate Finance, Inc.'s 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of NexPoint Real Estate Finance, Inc.'s 2023 and 2024 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 2024 report.

+347 added−315 removedSource: 10-K (2025-03-27) vs 10-K (2024-03-22)

Top changes in NexPoint Real Estate Finance, Inc.'s 2024 10-K

347 paragraphs added · 315 removed · 252 edited across 6 sections

Item 7. Management's Discussion & Analysis+174 / −132 · 107 edited
Item 1A. Risk Factors+125 / −108 · 101 edited
Item 1. Business+38 / −66 · 35 edited
Item 1C. Cybersecurity+6 / −6 · 6 edited
Item 2. Properties+3 / −2 · 2 edited

Item 1. Business

Business — how the company describes what it does

35 edited+3 added−31 removed83 unchanged

2023 filing

2024 filing

Biggest changeThe amounts in the table below are as of the purchase or investment date unless otherwise specified: Investment Property Type Investment Date Outstanding Principal Amount Cost (% of Par Value) Coupon (1) Current Yield (1) Maturity Date Interest Rate Type Preferred Equity Multifamily 1/9/2023 $ 1,166,000 100.0 % 11.00 % 11.00 % 5/1/2030 Fixed Rate Preferred Equity Life Science 1/12/2023 1,005,025 99.8 % 10.00 % 10.02 % 9/29/2023 Fixed Rate Preferred Equity Multifamily 2/10/2023 14,000,000 99.0 % 11.00 % 11.11 % 2/10/2025 Fixed Rate Common Stock Multifamily 2/10/2023 500,000 100.0 % N/A N/A N/A N/A Preferred Equity Multifamily 2/24/2023 11,200,000 99.0 % 11.00 % 11.11 % 2/10/2025 Fixed Rate Common Stock Multifamily 2/24/2023 500,000 100.0 % N/A N/A N/A N/A Preferred Equity Life Science 3/3/2023 1,710,553 100.0 % 10.00 % 10.00 % 9/29/2023 Fixed Rate FREMF 2018-KF44 Multifamily 3/10/2023 5,746,955 99.8 % 13.07 % 13.10 % 2/25/2025 Floating Rate Preferred Equity Life Science 4/6/2023 21,105,528 100.0 % 10.00 % 17.50 % 9/29/2023 Fixed Rate Preferred Equity Multifamily 5/25/2023 228,365 100.0 % 11.00 % 11.00 % 5/1/2030 Fixed Rate Preferred Equity Single-family 6/12/2023 1,200,000 99.0 % 13.25 % 13.38 % 4/28/2027 Floating Rate Preferred Equity Life Science 6/14/2023 3,950,391 99.0 % 13.00 % 13.13 % 8/17/2024 Fixed Rate Preferred Equity Life Science 7/11/2023 241,528 99.0 % 13.00 % 13.13 % 6/1/2026 Fixed Rate Preferred Equity Single-family 7/14/2023 2,720,000 99.0 % 13.50 % 13.64 % 4/28/2027 Floating Rate Preferred Equity Multifamily 7/27/2023 6,900,000 99.0 % 11.00 % 11.11 % 2/10/2025 Floating Rate Preferred Equity Multifamily 8/16/2023 303,841 100.0 % 11.00 % 11.00 % 5/1/2030 Fixed Rate Preferred Equity Multifamily 8/24/2023 3,000,000 99.0 % 11.00 % 11.11 % 2/10/2025 Floating Rate Common Equity Multifamily 8/28/2023 500,000 100.0 % N/A N/A N/A N/A Common Equity Multifamily 8/28/2023 500,000 100.0 % N/A N/A N/A N/A Common Equity Multifamily 9/8/2023 846,511 66.7 % N/A N/A N/A N/A Preferred Equity Life Science 9/27/2023 3,173,932 99.5 % 10.00 % 10.05 % 9/29/2024 Fixed Rate Promissory Note Self-Storage 9/29/2023 5,000,000 100.0 % 11.00 % 11.00 % 9/29/2024 Fixed Rate Real Estate Multifamily 12/31/2021 590,817 (2) 100.0 % N/A N/A N/A N/A Preferred Equity Multifamily 1/14/2022 552,764 99.5 % 10.00 % 10.05 % 9/29/2024 Fixed Rate Preferred Equity Single-family 5/16/2023 3,230,000 (3) 99.0 % 13.50 % 13.64 % 4/28/2027 Floating Rate Preferred Stock Multifamily 11/9/2023 15,273,841 (4) 95.0 % 11.00 % 11.58 % N/A Fixed Rate Preferred Equity Multifamily 2/24/2023 5,000,000 (5) 99.0 % 11.00 % 11.11 % 2/10/2025 Fixed Rate Preferred Equity Multifamily 2/10/2023 6,000,000 (5) 99.0 % 11.00 % 11.11 % 2/10/2025 Fixed Rate Preferred Equity Life Science 10/19/2022 1,733,668 99.5 % 10.00 % 10.05 % 9/29/2024 Fixed Rate $ 117,879,719 (1) Current yield and coupon as of December 31, 2023.

“EAD” means the net income (loss) attributable to our common stockholders computed in accordance with generally accepted accounting principles it the United States (“GAAP”), including realized gains and losses not otherwise included in net income (loss), excluding any unrealized gains or losses or other similar non-cash items that are included in net income (loss) for the applicable reporting period, regardless of whether such items are included in other comprehensive income (loss), or in net income (loss) and adding back amortization of stock-based compensation.

“EAD” means the net income (loss) attributable to our common stockholders computed in accordance with generally accepted accounting principles in the United States (“GAAP”), including realized gains and losses not otherwise included in net income (loss), excluding any unrealized gains or losses or other similar non-cash items that are included in net income (loss) for the applicable reporting period, regardless of whether such items are included in other comprehensive income (loss), or in net income (loss) and adding back amortization of stock-based compensation.

Item 1. Business General NexPoint Real Estate Finance, Inc. (the “Company”, “we”, “our”) is a commercial mortgage REIT incorporated in Maryland on June 7, 2019 that has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”).

Item 1. Business General NexPoint Real Estate Finance, Inc. (the “Company”, “we”, “our”, "NREF") is a commercial mortgage REIT incorporated in Maryland on June 7, 2019 that has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”).

Under the terms of this agreement, our Manager will, among other things: • identify, evaluate and negotiate the structure of our investments (including performing due diligence); • find, present and recommend investment opportunities consistent with our investment policies and objectives; • structure the terms and conditions of our investments; • review and analyze financial information for each investment in our overall portfolio; 8 Table of Contents • close, monitor and administer our investments; and • identify debt and equity capital needs and procure the necessary capital.

Under the terms of this agreement, our Manager will, among other things: • identify, evaluate and negotiate the structure of our investments (including performing due diligence); • find, present and recommend investment opportunities consistent with our investment policies and objectives; • structure the terms and conditions of our investments; • review and analyze financial information for each investment in our overall portfolio; 7 Table of Contents • close, monitor and administer our investments; and • identify debt and equity capital needs and procure the necessary capital.

We primarily focus on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage, life science, hospitality and office sectors predominantly in the top 50 metropolitan statistical areas (“MSAs”). Substantially all of the Company’s business is conducted through NexPoint Real Estate Finance Operating Partnership, L.P. (the “OP”), the Company’s operating partnership.

We primarily focus on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage and life science sectors predominantly in the top 50 metropolitan statistical areas (“MSAs”). Substantially all of the Company’s business is conducted through NexPoint Real Estate Finance Operating Partnership, L.P. (the “OP”), the Company’s operating partnership.

To qualify as a REIT, we must meet on a continuing basis, through our organization and actual investment and operating results, various requirements under the Code relating to, among other things, the sources of our gross income, the 10 Table of Contents composition and values of our assets, our distribution levels and the diversity of ownership of shares of our stock.

To qualify as a REIT, we must meet on a continuing basis, through our organization and actual investment and operating results, various requirements under the Code relating to, among other things, the sources of our gross income, the 9 Table of Contents composition and values of our assets, our distribution levels and the diversity of ownership of shares of our stock.

As of December 31, 2023, the Company held approximately 83.82% of the common limited partnership units in the OP (“OP Units”) which represents 100% of the Class A OP Units, and the OP owned all of the common limited partnership units (“SubOP Units”) of its three subsidiary partnerships (collectively, the “Subsidiary OPs”) (see Note 13 to our consolidated financial statements).

As of December 31, 2024, the Company held approximately 83.82% of the common limited partnership units in the OP (“OP Units”) which represents 100% of the Class A OP Units, and the OP owned all of the common limited partnership units (“SubOP Units”) of its three subsidiary partnerships (collectively, the “Subsidiary OPs”) (see Note 13 to our consolidated financial statements).

We may be a smaller reporting company even after we are no longer an “emerging growth company.” 11 Table of Contents Human Capital Disclosure We are externally managed by our Manager pursuant to the Management Agreement between us and our Manager. All of our executive officers are employees of our Manager or its affiliates.

We may be a smaller reporting company even after we are no longer an “emerging growth company.” 10 Table of Contents Human Capital Disclosure We are externally managed by our Manager pursuant to the Management Agreement between us and our Manager. All of our executive officers are employees of our Manager or its affiliates.

The Company is externally managed through a management agreement dated February 6, 2020 and amended as of July 17, 2020 and November 3, 2021, that renewed on February 6, 2024 for a one-year term and is automatically renewed for successive one-year terms thereafter unless earlier terminated (as amended, the “Management Agreement”), by and between the Company and the Manager.

The Company is externally managed through a management agreement dated February 6, 2020 and amended as of July 17, 2020 and November 3, 2021, that renewed on February 6, 2025 for a one-year term and is automatically renewed for successive one-year terms thereafter unless earlier terminated (as amended, the “Management Agreement”), by and between the Company and the Manager.

We intend to achieve this objective primarily by originating, structuring and investing in our target assets. We concentrate on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage, life science, hospitality and office sectors predominantly in the top 50 MSAs.

We intend to achieve this objective primarily by originating, structuring and investing in our target assets. We concentrate on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage and life science sectors predominantly in the top 50 MSAs.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” 7 Table of Contents Our Structure The following chart shows our ownership structure as of the date hereof: Our Manager We are externally managed by our Manager through the Management Agreement dated February 6, 2020 and amended as of July 17, 2020 and November 3, 2021, that renewed on February 6, 2024 for a one-year term and is automatically renewed for successive one-year terms thereafter unless earlier terminated.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” 6 Table of Contents Our Structure The following chart shows our ownership structure as of the date hereof: Our Manager We are externally managed by our Manager through the Management Agreement dated February 6, 2020 and amended as of July 17, 2020 and November 3, 2021, that renewed on February 6, 2025 for a one-year term and is automatically renewed for successive one-year terms thereafter unless earlier terminated.

The Management Agreement was renewed on February 6, 2024 for a one-year term and is automatically renewed for successive one-year terms thereafter unless earlier terminated. We have the right to terminate the Management Agreement on 30 days’ written notice upon the occurrence of a cause event (as defined in the Management Agreement).

The Management Agreement was renewed on February 6, 2025 for a one-year term and is automatically renewed for successive one-year terms thereafter unless earlier terminated. We have the right to terminate the Management Agreement on 30 days’ written notice upon the occurrence of a cause event (as defined in the Management Agreement).

These investments are not secured by the underlying real estate, but upon the occurrence of a default, the preferred equity provider typically has the right to effect a change of control with respect to the ownership of the property. • CMBS B-Pieces: We make investments in the junior-most bonds comprising some or all of the BB-rated, B-rated and unrated tranches of CMBS securitization pools.

These investments are not secured by the underlying real estate, but upon 5 Table of Contents the occurrence of a default, the preferred equity provider typically has the right to effect a change of control with respect to the ownership of the property. • CMBS B-Pieces: We make investments in the junior-most bonds comprising some or all of the BB-rated, B-rated and unrated tranches of CMBS securitization pools.

These investment types are discussed below: • First-Lien Mortgage Loans: We make investments in senior loans that are secured by first priority mortgage liens on real estate properties. The loans may vary in duration, bear interest at a fixed or floating rate and amortize, 6 Table of Contents typically with a balloon payment of principal at maturity.

These investment types are discussed below: • First-Lien Mortgage Loans: We make investments in senior loans that are secured by first priority mortgage liens on real estate properties. The loans may vary in duration, bear interest at a fixed or floating rate and amortize, typically with a balloon payment of principal at maturity.

In addition, the Management Agreement will automatically 9 Table of Contents terminate in the event of an Advisers Act Assignment (as defined in the Management Agreement) unless we provide written consent.

In addition, the Management Agreement will automatically 8 Table of Contents terminate in the event of an Advisers Act Assignment (as defined in the Management Agreement) unless we provide written consent.

Through active portfolio management we seek to take advantage of market opportunities to achieve a superior portfolio risk-mix that delivers attractive total returns. 1 Table of Contents 2023 Highlights Key highlights and transactions completed in 2023 include the following: Acquisitions and Originations The Company acquired or originated the following investments through the Subsidiary OPs in the year ended December 31, 2023.

Through active portfolio management we seek to take advantage of market opportunities to achieve a superior portfolio risk-mix that delivers attractive total returns. 1 Table of Contents 2024 Highlights Key highlights and transactions completed in 2024 include the following: Acquisitions and Originations The Company acquired or originated the following investments in the year ended December 31, 2024.

As of December 31, 2023, we had one employee whose salary is 50% allocated to us for reimbursement to our Manager. This employee is an accounting employee.

As of December 31, 2024, we had one employee whose salary is 50% allocated to us for reimbursement to our Manager. This employee is an accounting employee.

Our Manager is wholly owned by our Sponsor. The members of our Manager’s investment committee are James Dondero, Matt McGraner and Brian Mitts. Our Management Agreement We pay our Manager an annual management fee. We do not pay any incentive fees to our Manager. We also reimburse our Manager for expenses it incurs on our behalf.

Our Manager is wholly owned by our Sponsor. The members of our Manager’s investment committee are James Dondero, Matt McGraner and Paul Richards. Our Management Agreement We pay our Manager an annual management fee. We do not pay any incentive fees to our Manager. We also reimburse our Manager for expenses it incurs on our behalf.

In addition to OP Units, the Company holds all 2,000,000 of the issued and outstanding 8.50% Series A Cumulative Redeemable Preferred Units (liquidation preference $25.00 per unit) in our OP (the “Series A Preferred Units”) and all 427,218 of the issued and outstanding 9.00% Series B Cumulative Redeemable Preferred Units (liquidation preference $25.00 per unit) in our OP (the “Series B Preferred Units”) as of December 31, 2023.

In addition to OP Units, the Company holds all 2,000,000 of the issued and outstanding 8.50% Series A Cumulative Redeemable Preferred Units (liquidation preference $25.00 per unit) in our OP (the “Series A Preferred Units”) and all 6,695,715 of the issued and outstanding 9.00% Series B Cumulative Redeemable Preferred Units (liquidation preference $25.00 per unit) in our OP (the “Series B Preferred Units”) as of December 31, 2024.

These metrics do not reflect our common equity investments in NSP and a private ground lease REIT (the "Private REIT"), our preferred stock investments in IQHQ Inc. or our multifamily properties, shown as real estate investments, net on the Consolidated Balance Sheets, at December 31, 2023.

These metrics do not reflect our common equity investments in NexPoint Storage Partners, Inc. ("NSP") and a private ground lease REIT (the "Private REIT"), our preferred stock investments in IQHQ, Inc. or our multifamily properties, shown as real estate investments, net on the Consolidated Balance Sheets, as of December 31, 2024.

The Company is focused on originating, structuring and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common equity investments, as well as multifamily and single-family rental ("SFR") commercial mortgage backed securities securitizations (“CMBS securitizations”), multifamily structured credit risk notes (“MSCR Notes”) and mortgage backed securities, or our target assets.

The Company is focused on originating, structuring and investing in first-lien mortgage loans ("senior loans"), mezzanine loans, preferred equity, convertible notes, multifamily properties and common equity investments, as well as multifamily and single-family rental ("SFR") commercial mortgage backed securities securitizations (“CMBS securitizations”), promissory notes, revolving credit facilities and stock warrants, or our target assets.

As a whole, we believe our portfolio of investments have a relatively low risk profile: 89.9% of the underlying properties in our portfolio are stabilized and have a weighted average occupancy of 91.4%; the portfolio-wide weighted average debt service coverage ratio (“DSCR”) is 1.72; the weighted average loan to value (“LTV”) of our investments is 68.8%; and the weighted average maturity is 5.2 years as of December 31, 2023.

As a whole, we believe our portfolio of investments have a relatively low risk profile: 76.5% of the underlying properties in our portfolio are stabilized and have a weighted average occupancy of 92.8%; the portfolio-wide weighted average debt service coverage ratio (“DSCR”) is 1.32x; the weighted average loan to value (“LTV”) of our investments is 59.2%; and the weighted average maturity is 4.5 years as of December 31, 2024.

Target Investments We invest primarily in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common equity investments, as well as multifamily and SFR CMBS securitizations (including CMBS B-Pieces and CMBS I/O Strips), MSCR Notes and mortgage backed securities, with a focus on lending or investing in properties that are stabilized or have a light transitional business plan primarily in the multifamily, SFR, self-storage, life science, hospitality and office real estate sectors predominantly in the top 50 MSAs.

Target Investments We invest primarily in first-lien mortgage loans, mezzanine loans, preferred equity, multifamily properties and common equity investments, as well as multifamily and SFR CMBS securitizations (including CMBS B-Pieces and CMBS I/O Strips), promissory notes, revolving credit facilities and stock warrants with a focus on lending or investing in properties that are stabilized or have a light transitional business plan primarily in the multifamily, SFR, self-storage, and life science sectors predominantly in the top 50 MSAs.

Information contained on, or accessible through, our website is not incorporated by reference into and does not constitute a part of this Annual Report or any other report or documents we file with or furnish to the SEC. From time to time, we may use our website as a distribution channel for material company information.

The table below provides additional details regarding borrowings under the master repurchase agreement as of December 31, 2023 (dollars in thousands): 3 Table of Contents December 31, 2023 Facility Collateral Date issued Outstanding face amount Carrying value Final stated maturity Weighted average interest rate (1) Weighted average life (years) (2) Outstanding face amount Amortized cost basis Carrying value (3) Weighted average life (years) (2) Master Repurchase Agreements CMBS Mizuho (4) 4/15/2020 303,514 303,514 N/A (5) 7.26 % 0.0 931,296 470,761 464,888 6.4 (1) Weighted-average interest rate using unpaid principal balances.

The table below provides additional details regarding borrowings under the master repurchase agreement as of December 31, 2024 (dollars in thousands): 3 Table of Contents December 31, 2024 Facility Collateral Date issued Outstanding face amount Carrying value Final stated maturity Weighted average interest rate (1) Weighted average life (years) (2) Outstanding face amount Amortized cost basis Carrying value (3) Weighted average life (years) (2) Master Repurchase Agreements CMBS Mizuho(4) 4/15/2020 243,454 243,454 N/A (5) 6.49 % 0.0 740,022 360,427 350,379 4.7 (1) Weighted-average interest rate using unpaid principal balances.

Our Portfolio Our portfolio consists of SFR Loans, CMBS B-Pieces, CMBS I/O Strips, mezzanine loans, preferred equity investments, common equity investments, multifamily properties, MSCR Notes and mortgage backed securities with a combined unpaid principal balance of $1.9 billion at December 31, 2023 and assumes the assets and liabilities of the ten 5 Table of Contents Freddie Mac K-Series securitization entities (the “CMBS Entities”) are not consolidated.

Our Portfolio Our portfolio consists of senior loans, including SFR Loans, CMBS B-Pieces, CMBS I/O Strips, mezzanine loans, preferred equity investments, common equity investments, multifamily properties, preferred stock investments, promissory notes, revolving credit facilities and stock warrants, with a combined unpaid principal balance of $1.5 billion as of December 31, 2024 and assumes the assets and liabilities of the nine Freddie Mac K-Series securitization entities (the “CMBS Entities”) are not consolidated.

Total liabilities, including the consolidation of the CMBS B-Pieces, with respect to each of the aforementioned investment structures in our portfolio are approximately $590.3 million, approximately $5.3 billion, approximately $27.5 million, approximately $59.3 million, approximately $0.0 million, approximately $0.0 million and approximately $0.0 million, respectively.

Total liabilities, including the consolidation of the CMBS B-Pieces, with respect to each of the aforementioned investment structures in our portfolio are approximately $110.1 million related to our senior loans, which include the SFR Loans, approximately $4.0 billion related to our multifamily CMBS B-Pieces, approximately $24.5 million related to our CMBS I/O Strips and approximately $59.3 million related to our mezzanine loans, respectively.

Our portfolio, based on net equity as of December 31, 2023, is approximately 13.5% SFR Loans, approximately 21.4% multifamily CMBS B-Pieces, approximately 2.1% CMBS I/O Strips, approximately 11.9% mezzanine loans, approximately 30.5% preferred equity investments, approximately 9.6% common equity investments, approximately 2.3% preferred stock investments, approximately 4.8% multifamily property real estate, approximately 0.8% MSCR Notes, and approximately 2.9% mortgage backed securities.

Our portfolio, based on net equity as of December 31, 2024, is approximately 18.6% senior loans, which includes the SFR Loans, approximately 11.1% multifamily CMBS B-Pieces, approximately 1.3% CMBS I/O Strips, approximately 9.2% mezzanine loans, approximately 27.0% preferred equity investments, approximately 7.1% common equity investments, approximately 2.3% preferred stock investments, approximately 3.5% multifamily property real estate, approximately 0.5% promissory notes, approximately 16.3% of revolving credit facilities and approximately 3.3% stock warrants.

Total liabilities, excluding the consolidation of the CMBS B-Pieces, with respect to each of the aforementioned investment structures in our portfolio are approximately $590.3 million, approximately $251.1 million, approximately $27.5 million, approximately $59.3 million, approximately $0.0 million, approximately $0.0 million and approximately $0.0 million, respectively.

Total liabilities, excluding the consolidation of the CMBS B-Pieces, with respect to each of the aforementioned investment structures in our portfolio are approximately $110.1 million related to our senior loans, which includes the SFR Loans, approximately $180.0 million related to our multifamily CMBS B-Pieces, approximately $24.5 million related to our CMBS I/O Strips and approximately $59.3 million related to our mezzanine loans.

As of December 31, 2023, the Company had not made any purchases under the Share Repurchase Program. Freddie Mac Credit Facility During 2023, the Company made payments under a Credit Facility (defined below) assumed by the Company as part of the Formation Transaction in the amount of $38.3 million.

Freddie Mac Credit Facility During 2024, the Company made payments under a Credit Facility (defined below) assumed by the Company as part of the Formation Transaction in the amount of $534.2 million.

Our portfolio, based on total unpaid principal balance as of December 31, 2023, excluding the consolidation of the CMBS B-Pieces, as described further below, is approximately 41.6% SFR Loans, approximately 31.4% multifamily CMBS B-Pieces, approximately 2.7% CMBS I/O Strips, approximately 8.6% mezzanine loans, approximately 12.6% preferred equity investments, approximately 0.7% MSCR Notes, and approximately 2.6% mortgage backed securities.

Our portfolio, based on total unpaid principal balance as of December 31, 2024, excluding the consolidation of the CMBS B-Pieces, as described further below, and common equity investments, preferred stock investments, stock warrants and multifamily property, is approximately 22.8% senior loans, which includes the SFR Loans, approximately 29.5% multifamily CMBS B-Pieces, approximately 3.1% CMBS I/O Strips, approximately 11.6% mezzanine loans, approximately 19.6% preferred equity investments, approximately 0.3% promissory notes and approximately 13.0% of revolving credit facilities.

Our CMBS B-Piece investments as a percentage of total assets, excluding the consolidation of the CMBS B-Pieces, reflects the assets that we actually own. However, in accordance with the applicable accounting standards, we consolidate all of the assets and liabilities of the trusts that issued the CMBS B-Pieces that we own which we are deemed to control.

Our CMBS B-Piece investments as a percentage of total assets, excluding the consolidation of the CMBS B-Pieces, reflects the assets that we actually own.

These notes are subordinate to any first mortgage and can be converted into common equity or preferred equity of the borrower. • Common Stock: We acquire common stock in the real estate sector, including through convertible notes that can provide a stable source of income through dividends, opportunities for capital appreciation, and a level of diversification to our Portfolio. • Multifamily Property: We make investments in multifamily properties with a value-add component in large cities and suburban submarkets of large cities primarily in the Southeastern and Southwestern United States.

CMBS B-Pieces have been a successful and sought-after securitization program offering a wide-range of residential and multifamily products. • CMBS I/O Strips: We make investments in CMBS I/O Strips, which are interest only and inverse interest only CMBS securitization that represent the right to the interest component of the cash flow from a pool of mortgage loans of CMBS structured pass-through certificates. • Common Equity: We acquire common equity in the real estate sector, and convertible notes and stock warrants that may convert or be exercisable for common stock, that can provide a stable source of income through dividends, opportunities for capital appreciation, and a level of diversification to our portfolio. • Multifamily Property: We make investments in multifamily properties with a value-add component in large cities and suburban submarkets of large cities primarily in the Southeastern and Southwestern United States. • Promissory Notes: We originate or acquire promissory notes that may be senior or subordinate to the debt of the borrower. • Revolving Credit Facilities: We originate or acquire revolving credit facilities that allow borrowers to borrow up to a specified amount at their option.

Our portfolio, based on total unpaid principal balance as of December 31, 2023, including the consolidation of the CMBS B-Pieces, is approximately 9.6% SFR Loans, approximately 84.2% multifamily CMBS B-Pieces, approximately 0.6% CMBS I/O Strips, approximately 2.0% mezzanine loans, approximately 2.9% preferred equity investments, approximately 0.2% MSCR Notes, and approximately 0.6% mortgage backed securities.

However, in accordance with the applicable accounting standards, we consolidate all of the assets and liabilities of the trusts that issued the CMBS B-Pieces that we own which we are deemed to control. 4 Table of Contents Our portfolio, based on total unpaid principal balance as of December 31, 2024, including the consolidation of the CMBS B-Pieces, is approximately 5.1% senior loans, which includes the SFR Loans, approximately 84.3% multifamily CMBS B-Pieces, approximately 0.7% CMBS I/O Strips, approximately 2.6% mezzanine loans, approximately 4.4% preferred equity investments, approximately 0.1% of promissory notes and approximately 2.9% revolving credit facilities.

The Board may elect to terminate this offering at any time. As of December 31, 2023, the Company has issued 427,218 shares of Series B Preferred Stock for gross proceeds of $10.5 million in this offering.

Series B Preferred Stock Offering During the year ended December 31, 2024, the Company issued 6,270,243 shares of Series B Preferred Stock in its continuous public offering for gross proceeds of $153.3 million in this offering.

Removed

(2) Includes additional investments made on October 2, 2023 (3) Includes additional investments made on October 10, 2023, November 27, 2023, and December 28, 2023. (4) Includes investments made on November 9, 2023, and December 27, 2023.

Added

(2) On December 31, 2024, the $148.6 million principal amount of the Promissory Note was substituted and exchanged for 49.533% deemed borrowings under a $300 million revolving credit facility. For more information, see Note 15 to our consolidated financial statements.

Removed

(5) Includes additional investments made on October 13, 2023, November 15, 2023, and December 12, 2023. 2 Table of Contents We exercised our right to replace the manager of one property in the year ended December 31, 2023, and due to our preferred equity and common equity interests in the property, we are required to consolidate the property in our consolidated financial statements herein.

Added

Redemptions and Sales 2 Table of Contents The following investments were redeemed or sold during the year ended December 31, 2024: Investment Property Type Investment Date Disposition Date Amortized Cost Basis Redemption/Sales Proceeds Prepayment Penalties Net Gain (Loss) on Repayment (1) Senior Loan Single-family 2/11/2020 1/25/2024 $ 533,717,586 $ 508,700,000 $ 8,936,484 $ (16,081,102) Mortgage Backed Security Single-family 6/1/2022 2/1/2024 9,789,293 9,608,078 — (181,215) Mortgage Backed Security Multifamily 9/12/2022 3/25/2024 3,934,375 3,903,460 — (30,915) Mortgage Backed Security Single-family 7/28/2022 3/28/2024 923,951 907,699 — (16,252) Mortgage Backed Security Single-family 7/28/2022 3/28/2024 567,300 557,750 — (9,550) Mortgage Backed Security Single-family 6/1/2022 4/19/2024 10,143,368 10,111,429 — (31,939) Mortgage Backed Security Single-family 2/29/2024 5/8/2024 28,456,443 28,082,109 — (374,334) Mortgage Backed Security Multifamily 3/26/2018 5/17/2024 5,740,852 5,691,784 — (49,068) MSCR Note Multifamily 5/25/2022 5/20/2024 4,000,000 4,281,195 — 281,195 MSCR Note Multifamily 5/25/2022 5/20/2024 5,000,000 5,541,076 — 541,076 MSCR Note Multifamily 9/23/2022 5/20/2024 1,365,014 1,332,688 — (32,326) Mortgage Backed Security Self Storage 9/29/2022 6/12/2024 7,985,891 8,029,034 — 43,143 CMBS B-Piece Multifamily 12/30/2020 6/18/2024 55,836,041 61,960,691 — 6,124,650 CMBS B-Piece Multifamily 4/23/2020 7/26/2024 57,922,700 62,430,951 — 4,508,251 Senior Loan Single-family 2/11/2020 8/23/2024 10,137,684 9,708,780 334,981 (93,923) Preferred Equity Multifamily 2/10/2023 9/4/2024 7,750,000 7,750,000 — — Preferred Equity Multifamily 2/24/2023 9/4/2024 7,750,000 7,750,000 — — Preferred Equity Life Sciences 4/6/2023 9/21/2024 7,637,000 7,637,000 — — Mortgage Backed Security Single-family 2/29/2024 9/27/2024 6,685,380 6,725,998 — 40,618 Mortgage Backed Security Single-family 2/29/2024 11/14/2024 9,599,130 9,476,500 — (122,630) Preferred Equity Life Sciences 10/19/2022 12/18/2024 7,591,282 7,591,282 — — Preferred Equity Self Storage 4/30/2022 12/27/2024 96,879 96,879 — — $ 782,630,169 $ 767,874,383 $ 9,271,465 $ (5,484,321) (1) Net Gains (Losses) on repayment are generally attributable to acceleration of premiums and discounts net of any prepayment penalties assessed.

Removed

Details of the property are in the table below (dollars in thousands): Property Name Location Date of Takeover Fair Value of Real Estate Fair Value of Mortgage Debt # Units Effective Ownership Alexander at the District Atlanta, GA 10/10/2023 $68,840 $ 63,500 280 100 % Redemptions and Sales The following investments were redeemed or sold during the year ended December 31, 2023: Investment Property Type Investment Date Disposition Date Amortized Cost Basis Redemption/Sales Proceeds Prepayment Penalties Net Gain (Loss) on Repayment (1) Preferred Equity Multifamily 12/28/2021 1/13/2023 $ 6,758,707 $ 6,758,707 $ — $ — Preferred Equity Multifamily 12/28/2021 2/16/2023 1,490,000 1,490,000 — — Preferred Equity Multifamily 12/28/2021 3/24/2023 3,206,618 3,206,618 — — Mezzanine Loan Multifamily 1/21/2021 3/24/2023 24,681,963 24,844,117 — 162,154 Preferred Equity Multifamily 12/28/2021 4/25/2023 1,292,054 1,292,054 — — Preferred Equity Multifamily 12/28/2021 5/17/2023 1,915,695 1,915,695 — — SFR Loan Single-family 2/11/2020 5/25/2023 5,543,934 5,148,347 457,889 62,302 SFR Loan Single-family 2/11/2020 6/25/2023 5,545,153 5,356,022 — (189,131) Preferred Equity Multifamily 12/28/2021 6/26/2023 3,000,000 3,000,000 — — Preferred Equity Multifamily 12/28/2021 8/4/2023 3,470,504 3,470,504 — — Preferred Equity Multifamily 12/28/2021 9/12/2023 64,635 64,635 — — CMBS B-Piece Multifamily 12/9/2021 9/27/2023 45,411,874 44,787,461 — (624,413) Preferred Equity Multifamily 12/28/2021 10/4/2023 977,895 977,895 — — Preferred Equity Multifamily 11/28/2021 10/10/2023 9,712,723 5,210,723 — (4,502,000) Preferred Equity Multifamily 12/28/2021 10/17/2023 238,781 238,781 — — Promissory Note Self-Storage 9/29/2023 10/27/2023 5,000,000 5,044,306 — 44,306 Preferred Equity Multifamily 12/28/2021 11/7/2023 1,749,667 1,749,667 — — Senior loan Single-family 2/11/2020 11/25/2023 6,091,460 6,093,723 — 2,263 Preferred Equity Multifamily 12/28/2021 12/6/2023 480,000 480,000 — — Senior loan Single-family 2/11/2020 12/26/2023 7,104,762 7,106,558 369,144 370,940 Senior loan Single-family 2/11/2020 12/26/2023 15,977,554 16,337,130 163,371 522,947 $ 149,713,980 $ 144,572,944 $ 990,404 $ (4,150,633) (1) Net Gains (Losses) on repayment are generally attributable to acceleration of premiums net of any prepayment penalties assessed.

Added

As of December 31, 2024, the outstanding balance on the Credit Facility was $110.1 million.

Removed

Series B Preferred Stock Offering On November 2, 2023, the Company announced the launch of a continuous public offering of up to 16,000,000 shares of its newly designated Series B Preferred Stock at a price to the public of $25.00 per share, for gross proceeds of $400.0 million.

Removed

Beginning on the first day of the calendar month following the date of original issuance, the Series B Preferred Stock are redeemable at the option of the Holder at a redemption price per share equal to the liquidation preference of $25.00 per share, plus all accrued but unpaid cash dividends and less certain redemption fees.

Removed

After the first day of the calendar month following the second anniversary of the original issue date, the Company also has the option to redeem, in whole or in part, subject to certain restrictions in the Company’s charter and the articles supplementary setting forth the terms of the Series B Preferred Stock, at a redemption price per share equal to the liquidation preference of $25.00 per share, plus any accrued but unpaid cash dividends.

Removed

In all optional redemptions, the Company has the right, in its sole discretion, to pay the redemption in cash or in equal value of shares of the Company’s common stock for so long as the common stock is listed or admitted to trading on the New York Stock Exchange (“NYSE”) or another national securities exchange or automated quotation system.

Removed

NexPoint Securities, Inc., an affiliate of the Manager, serves as the Company’s dealer manager (the "Dealer Manager") in connection with the offering.

Removed

The Dealer Manager uses its reasonable best efforts to sell the shares of Series B Preferred Stock offered in the offering, and the Company pays the Dealer Manager, subject to the discounts and other special circumstances described or referenced therein, (i) selling commissions of 7.0% of the aggregate gross proceeds from sales of Series B Preferred Stock in the offering (“Selling Commissions”) and (ii) a dealer manager fee of 3.0% of the gross proceeds from sales of Series B Preferred Stock in the offering (the “Dealer Manager Fee”).

Removed

The Dealer Manager, subject to federal and state securities laws, will reallow all or any portion of the Selling Commissions and may reallow a portion of the Dealer Manager Fee to other securities dealers that the Dealer Manager may retain who sold the shares of Series B Preferred Stock as is described more fully in the agreements between such dealers and the Dealer Manager.

Removed

The Company expects that the offering will terminate on the earlier of the date the Company sells all 16,000,000 shares of the Series B Preferred Stock in the offering or March 14, 2025 (which is the third anniversary of the effective date of the Company’s registration statement), which may be extended by Board in its sole discretion.

Removed

Notes Offering On November 15, 2023, the Company issued an additional $15.0 million in aggregate principal amount of its 5.75% Senior Unsecured Notes (the “5.75% Notes”) at a price equal to 92.0% par value, including accrued interest, for proceeds of approximately $13.6 million after original issue discount and underwriting fees.

Removed

As of December 31, 2023, there was $180.0 million in aggregate principal amount of the 5.75% Notes outstanding. At-the-Market-Program On March 15, 2022, the Company, the OP and the Manager entered into separate equity distribution agreements (the “2022 Equity Distribution Agreements”) with each of Raymond James & Associates, Inc. ('Raymond James'), Keefe, Bruyette & Woods, Inc., Robert W.

Removed

Baird & Co. Incorporated and Virtu Americas LLC (collectively, the “Sales Agents”), 4 Table of Contents pursuant to which the Company could issue and sell from time to time shares of the Company's common stock and Series A Preferred Stock having an aggregate sales price of up to $100.0 million (the “2022 ATM Program”).

Removed

The 2022 Equity Distribution Agreements provide for the issuance and sale of common stock or Series A Preferred Stock by the Company through a Sales Agent acting as a Sales Agent or directly to the Sales Agent acting as principal for its own account at a price agreed upon at the time of sale.

Removed

As of December 31, 2023, pursuant to the 2022 Equity Distribution Agreements, the Company had sold 531,728 shares of its common stock and zero shares of Series A Preferred Stock for total gross sales of $12.6 million. For additional information about the 2022 ATM Program, see Note 11 to our consolidated financial statements.

Removed

Share Repurchase Program On March 9, 2020, the Board authorized a share repurchase program (the “Prior Share Repurchase Program”) through which the Company could repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $10.0 million in shares of its common stock, par value $0.01 per share (the "common stock"), during a two-year period that expired on March 9, 2022.

Removed

On September 28, 2020, the Board authorized the expansion of the Prior Share Repurchase Program to include the Company’s Series A Preferred Stock with the same period and repurchase limit.

Removed

The Company could utilize various methods to affect the repurchases, and the timing and extent of the repurchases will depend upon several factors, including market and business conditions, regulatory requirements and other corporate considerations, including whether the Company’s common stock is trading at a significant discount to net asset value (“NAV”) per share.

Removed

Repurchases under this program could be discontinued at any time. From inception through expiration, the Company repurchased 327,422 shares of its common stock, at a total cost of approximately $4.8 million, or $14.61 per share.

Removed

These repurchased shares of common stock are classified as treasury stock and reduce the number of shares of the Company’s common stock outstanding and, accordingly, are considered in the weighted-average number of shares outstanding during the period in which the repurchases were made.

Removed

On March 3, 2021, the Company cancelled 40,435 shares of common stock, reducing the total classified as treasury stock to 286,987.

Removed

On February 22, 2023, the Board authorized a share repurchase program (the “Share Repurchase Program”) through which the Company may repurchase an indeterminate number of shares of our common stock and Series A Preferred Stock at an aggregate market value of up to $20.0 million in shares of its common stock during a two-year period set to expire on February 22, 2025.

Removed

The Company may utilize various methods to affect the repurchases, and the timing and extent of the repurchases will depend upon several factors, including market and business conditions, regulatory requirements and other corporate considerations, including whether the Company’s common stock is trading at a significant discount to NAV per share. Repurchases under this program may be discontinued at any time.

Removed

As of December 31, 2023, the outstanding balance on the Credit Facility was $590.3 million. Convertible Promissory Note On October 18, 2022, the Company, through a subsidiary, borrowed $6.5 million from NFRO REIT Sub, LLC (the “Holder”) and issued $6.5 million aggregate amount of a 7.50% note to the Holder maturing on October 18, 2027.

Removed

Beginning on January 1, 2023 through June 30, 2027, the Holder may elect to convert all or any part of the outstanding principal and accrued but unpaid interest due, and all other amounts due and payable to the Holder thereunder or in connection therewith, into equity interests of an affiliate of the borrower.

Removed

As of the date hereof, the Holder has not elected to convert all or any part of the outstanding principal and accrued but unpaid interest or other amounts due and payable to Holder thereunder into equity interests of an affiliate of the borrower.

Removed

CMBS B-Pieces have been a successful and sought-after securitization program offering a wide-range of residential and multifamily products.

Removed

As of December 31, 2023, there have been 510 Freddie Mac K-deal issuances for a combined $557.5 billion and 26,246 loans originated and securitized since 2009. • CMBS I/O Strips: We make investments in CMBS I/O Strips, which are interest only and inverse interest only CMBS securitization that represent the right to the interest component of the cash flow from a pool of mortgage loans of CMBS structured pass-through certificates. • MSCR Notes: We make investments in MSCR Notes, which are unguaranteed securities designed to transfer to investors a portion of the credit risk associated with eligible multifamily mortgages linked to a reference pool.

Removed

MSCR Notes provide an innovative way to add U.S. multifamily housing market exposure while benefiting from Freddie Mac’s industry leading underwriting and credit risk management standards. • Mortgage Backed Securities: We make investments in mortgage backed securities. Each mortgage backed security consists of a bundle of home loans and other real estate debt bought from issuers.

Removed

We receive periodic payments similar to bond coupon payments. • Convertible Notes: We originate or acquire convertible notes.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

101 edited+24 added−7 removed547 unchanged

2023 filing

2024 filing

Biggest change“Control shares” are voting shares of stock that, if aggregated with all other such shares of stock owned by the acquirer, or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power: • one-tenth or more but less than one-third; • one-third or more but less than a majority; or • a majority or more of all voting power. 37 Table of Contents Control shares do not include shares that the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval, shares acquired directly from the corporation or shares acquired in a merger, consolidation or statutory share exchange if the corporation is a party to the transaction or acquisitions approved or exempted by the charter or bylaws of the corporation.

The war in Ukraine and the Israel-Hamas war add, and other international tensions or escalations of conflict may add, instability to the uncertainty driving socioeconomic forces, which may continue to have an impact on global trade and result in inflation or economic instability.

The war in Ukraine and the Israel-Hamas war, and other international tensions or escalations of conflict may add, instability to the uncertainty driving socioeconomic forces, which may continue to have an impact on global trade and result in inflation or economic instability.

You should read this summary together with the more detailed description of each risk factor contained below. • unfavorable changes in economic conditions and their effects on the real estate industry generally and our operations and financial condition, including inflation, high interest rates, tightening monetary policy or recession, which may limit our ability to access funding and generate returns for our stockholders, as well as the risk we make significant changes to our strategies in a market downturn, or fail to do so; • risks associated with ownership of real estate, including properties in transition, subjectivity of valuation, environmental matters and lack of liquidity in certain asset classes; • the exposure of our loans and investments to risks similar to debt-oriented real estate investments generally, including the risk of delinquency, foreclosure and loss in any of our commercial real estate-related investments that are secured, directly or indirectly, by real property; • fluctuations in interest rate and credit spreads that could reduce our ability to generate income on our loans and investments; • competition for desirable loans and investments; • the concentration of our loans and investments in terms of type of interest, geography, asset types and sponsors; • the risk of downgrade of any credit ratings assigned to our loans and investments; • the risk that any distressed loans or investments we may make may subject us to bankruptcy risks; • risks associated with CMBS securitizations and with investments in synthetic form; • our dependence on information systems and risks associated with breaches of our data security; • costs associated with being a public company, including compliance with securities laws; • the risk of adverse impact to our business if there are deficiencies in our disclosure controls and procedures or internal control over financial reporting; 12 Table of Contents • risks associated with pandemics, including the future outbreak of other highly infectious or contagious diseases; • risks associated with our substantial current indebtedness and indebtedness we may incur in the future; • risks associated with insurance, derivatives or hedging activity, including counterparty risk; • risks associated with our limited operating history and the possibility that we may not replicate the historical results achieved by other entities managed or sponsored by affiliates of our Sponsor, members of our Manager’s management team or their affiliates; • our dependence on our Manager, its affiliates and personnel to conduct our day-to-day operations and identify and realize returns on our loans and investments within very broad investment guidelines and without fiduciary duties to us or a requirement to seek Board approval; • risks associated with the Manager’s ability to terminate the Management Agreement (as defined below) and risks associated with any potential internalization of our management functions; • conflicts of interest and competing demands for time faced by our Manager, our Sponsor and their respective affiliates, officers and employees, and other significant potential conflicts of interest including in connection with (i) substantial fees and expenses we pay to our Manager and its affiliates which may increase the risk that you will not earn a profit on your investment and (ii) competition with entities affiliated with our Manager and our Sponsor for investments; • the risk of failure to maintain our status as a REIT and make required distributions to maintain such status, failure of which may materially limit our cash available for distribution to our stockholders and the risk of failure to maintain our status if values of our real estate investments rapidly change; • the risk of failure of our OP to be taxable as a partnership for U.S. federal income tax purposes, possibly causing us to fail to qualify for or to maintain REIT status; • compliance with REIT requirements, which may limit our ability to hedge our liabilities effectively and cause us to forgo otherwise attractive opportunities, liquidate certain of our investments or incur tax liabilities; • the risk that certain of our business activities are potentially subject to the prohibited transaction tax and that even if we qualify as a REIT we may be subject to other tax liabilities that may reduce our tax flows and distributions on our capital stock; • the ineligibility of dividends payable by REITs for the reduced tax rates available for some dividends; • the ability of our Board to revoke our REIT qualification without stockholder approval; • our ability to change our major policies, operations and targeted investments without stockholder consent and our Board’s issuance of and ability to further issue debt securities or equity securities that may adversely impact the value or priority of or have dilutive effect on shares of our capital stock or discourage a third-party acquisition; • risks associated with (i) provisions in our governing documents that may limit stockholders’ choice of forum for disputes with us or discourage an acquisition of our securities or a change in control, including stock ownership restrictions and limits and (ii) provisions of Maryland law, including the Maryland General Corporation Law (the “MGCL”), that may limit the ability for a third-party acquisition; • recent and potential legislative or regulatory changes or other actions with respect to tax, securitization, financial or other matters affecting REITs, the mortgage industry or debt-oriented real estate investments generally; • the general volatility of the capital and credit markets and the impact on the market for our capital stock; • the risk that we may not realize gains or income from our investments, that the repayments of our loans and investments may cause our financial performance and returns to investors to suffer or that we may experience a decline in the fair value of our assets; • risks associated with the Highland Bankruptcy (as defined below), including possible materially adverse consequences on our business, financial condition and results of operations; 13 Table of Contents • risks associated with holding shares of the Series A Preferred Stock, including limited voting rights, possible volatility in price and trading volume, subordination to our debt, dilution upon future issuances, possible lack of conversion rights on a change of control and the lack of a rating on the Series A Preferred Stock; • risks associated with holding shares of the Series B Preferred Stock, including limited voting rights, subordination to our debt and dilution upon future issuances; • risk of failure to generate sufficient cash flows to service outstanding indebtedness or pay distributions on our capital stock at expected levels, and the risk that we may borrow funds or use funds from other sources to pay distributions; and • risks associated with the concentration of our share ownership.

You should read this summary together with the more detailed description of each risk factor contained below. • unfavorable changes in economic conditions and their effects on the real estate industry generally and our operations and financial condition, including inflation, high interest rates, tightening monetary policy or recession, which may limit our ability to access funding and generate returns for our stockholders, as well as the risk we make significant changes to our strategies in a market downturn, or fail to do so; • risks associated with ownership of real estate, including properties in transition, subjectivity of valuation, environmental matters and lack of liquidity in certain asset classes; • the exposure of our loans and investments to risks similar to debt-oriented real estate investments generally, including the risk of delinquency, foreclosure and loss in any of our commercial real estate-related investments that are secured, directly or indirectly, by real property; • fluctuations in interest rate and credit spreads that could reduce our ability to generate income on our loans and investments; • competition for desirable loans and investments; • the concentration of our loans and investments in terms of type of interest, geography, asset types and sponsors; • the risk of downgrade of any credit ratings assigned to our loans and investments; • the risk that any distressed loans or investments we may make may subject us to bankruptcy risks; • risks associated with CMBS securitizations and with investments in synthetic form; • our dependence on information systems and risks associated with breaches of our data security or our use of artificial intelligence; • costs associated with being a public company, including compliance with securities laws; 11 Table of Contents • the risk of adverse impact to our business if there are deficiencies in our disclosure controls and procedures or internal control over financial reporting; • risks associated with pandemics, including the future outbreak of other highly infectious or contagious diseases; • risks associated with our substantial current indebtedness and indebtedness we may incur in the future; • risks associated with insurance, derivatives or hedging activity, including counterparty risk; • risks associated with our limited operating history and the possibility that we may not replicate the historical results achieved by other entities managed or sponsored by affiliates of our Sponsor, members of our Manager’s management team or their affiliates; • our dependence on our Manager, its affiliates and personnel to conduct our day-to-day operations and identify and realize returns on our loans and investments within very broad investment guidelines and without fiduciary duties to us or a requirement to seek Board approval; • risks associated with the Manager’s ability to terminate the Management Agreement (as defined below) and risks associated with any potential internalization of our management functions; • conflicts of interest and competing demands for time faced by our Manager, our Sponsor and their respective affiliates, officers and employees, and other significant potential conflicts of interest including in connection with (i) substantial fees and expenses we pay to our Manager and its affiliates which may increase the risk that you will not earn a profit on your investment and (ii) competition with entities affiliated with our Manager and our Sponsor for investments; • the risk of failure to maintain our status as a REIT and make required distributions to maintain such status, failure of which may materially limit our cash available for distribution to our stockholders and the risk of failure to maintain our status if values of our real estate investments rapidly change; • the risk of failure of our OP to be taxable as a partnership for U.S. federal income tax purposes, possibly causing us to fail to qualify for or to maintain REIT status; • compliance with REIT requirements, which may limit our ability to hedge our liabilities effectively and cause us to forgo otherwise attractive opportunities, liquidate certain of our investments or incur tax liabilities; • the risk that certain of our business activities are potentially subject to the prohibited transaction tax and that even if we qualify as a REIT we may be subject to other tax liabilities that may reduce our tax flows and distributions on our capital stock; • the ineligibility of dividends payable by REITs for the reduced tax rates available for some dividends; • the ability of our Board to revoke our REIT qualification without stockholder approval; • our ability to change our major policies, operations and targeted investments without stockholder consent and our Board’s issuance of and ability to further issue debt securities or equity securities that may adversely impact the value or priority of or have dilutive effect on shares of our capital stock or discourage a third-party acquisition; • risks associated with (i) provisions in our governing documents that may limit stockholders’ choice of forum for disputes with us or discourage an acquisition of our securities or a change in control, including stock ownership restrictions and limits and (ii) provisions of Maryland law, including the Maryland General Corporation Law (the “MGCL”), that may limit the ability for a third-party acquisition; • recent and potential legislative or regulatory changes or other actions with respect to tax, securitization, financial or other matters affecting REITs, the mortgage industry or debt-oriented real estate investments generally; • the general volatility of the capital and credit markets and the impact on the market for our capital stock; • the risk that we may not realize gains or income from our investments, that the repayments of our loans and investments may cause our financial performance and returns to investors to suffer or that we may experience a decline in the fair value of our assets; 12 Table of Contents • risks associated with the Highland Bankruptcy (as defined below), including possible materially adverse consequences on our business, financial condition and results of operations; • risks associated with holding shares of the Series A Preferred Stock, including limited voting rights, possible volatility in price and trading volume, subordination to our debt, dilution upon future issuances, possible lack of conversion rights on a change of control and the lack of a rating on the Series A Preferred Stock; • risks associated with holding shares of the Series B Preferred Stock, including limited voting rights, subordination to our debt, lack of a rating on the Series B Preferred Stock and dilution upon future issuances; • risk of failure to generate sufficient cash flows to service outstanding indebtedness or pay distributions on our capital stock at expected levels, and the risk that we may borrow funds or use funds from other sources to pay distributions; and • risks associated with the concentration of our share ownership.

These rights are more fully set forth in the articles supplementary setting forth the terms of the Series A Preferred Stock and in the articles supplementary setting forth the terms of the Series B Preferred Stock, and include, but are not limited to: (i) the right to receive a liquidation preference, prior to any distribution of our assets to the holders of our common stock; and (ii) for the Series A Preferred Stock, the right to convert into shares of our common stock upon the occurrence of a Change of Control (as defined in the articles supplementary setting forth the terms of the Series A Preferred Stock), which may be adjusted as set forth therein.

Some of the factors that could affect our stock price or result in fluctuations in the price or trading volume of our common stock include: • actual or anticipated variations in our quarterly operating results, financial condition, cash flow and liquidity, or changes in investment strategy or prospects; • changes in our operations or earnings estimates or publication of research reports about us or the real estate industry; • loss of a major funding source or inability to obtain new favorable funding sources in the future; • our financing strategy and leverage; • actual or anticipated accounting problems; • changes in market valuations of similar companies; • increases in interest rates that lead purchasers of our shares to demand a higher yield; • adverse market reaction to any increased indebtedness we incur in the future; • additions or departures of key management personnel; • actions by institutional stockholders; 45 Table of Contents • speculation in the press or investment community; • the realization of any of the other risk factors presented in this Annual Report; • the extent of investor interest in our securities; • the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; • our underlying asset value; • investor confidence and price and volume fluctuations in the stock and bond markets, generally; • changes in laws, regulatory policies or tax guidelines, or interpretations thereof, particularly with respect to REITs; • future equity issuances by us, or share resales by our stockholders, or the perception that such issuances or resales may occur; • failure to meet income estimates; • failure to meet and maintain REIT qualifications or exclusion from Investment Company Act regulations or listing on the NYSE; and • general market and economic conditions.

Some of the factors that could affect our stock price or result in fluctuations in the price or trading volume of our common stock include: • actual or anticipated variations in our quarterly operating results, financial condition, cash flow and liquidity, or changes in investment strategy or prospects; • changes in our operations or earnings estimates or publication of research reports about us or the real estate industry; • loss of a major funding source or inability to obtain new favorable funding sources in the future; • our financing strategy and leverage; • actual or anticipated accounting problems; • changes in market valuations of similar companies; • increases in interest rates that lead purchasers of our shares to demand a higher yield; • adverse market reaction to any increased indebtedness we incur in the future; • additions or departures of key management personnel; • actions by institutional stockholders; • speculation in the press or investment community; • the realization of any of the other risk factors presented in this Annual Report; • the extent of investor interest in our securities; • the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; • our underlying asset value; • investor confidence and price and volume fluctuations in the stock and bond markets, generally; • changes in laws, regulatory policies or tax guidelines, or interpretations thereof, particularly with respect to REITs; • future equity issuances by us, or share resales by our stockholders, or the perception that such issuances or resales may occur; • failure to meet income estimates; • failure to meet and maintain REIT qualifications or exclusion from Investment Company Act regulations or listing on the NYSE; and • general market and economic conditions.

These events have and could in the future have an adverse effect on our business, results of operations, financial condition and liquidity in a number of ways, including, but not limited to: • the deterioration of global economic conditions as a result of such a crisis could ultimately decrease occupancy levels and pricing across our portfolio and/or increase concessions, reduce or defer our residents’ spending, result in changes in resident preferences (including changes resulting from increased employer flexibility to work from home) or negatively impact our residents’ ability to pay their rent on time or at all; • local and national authorities expanding or extending certain measures that impose restrictions on our ability to enforce residents’ contractual rental obligations (such as eviction moratoriums or rental forgiveness) and limit our ability to raise rents or charge certain fees; • the risk of a prolonged outbreak and/or multiple waves of an outbreak could cause long-term damage to economic conditions, which in turn could diminish our access to capital at attractive terms and/or cause material declines in the fair value of our assets, leading to asset impairment charges; and • the potential inability to maintain adequate staffing at our properties and corporate offices due to an outbreak and/or changes in employee preferences causing them to leave their jobs.

These events have and could in the future have an adverse effect on our business, results of operations, financial condition and liquidity in a number of ways, including, but not limited to: 50 Table of Contents • the deterioration of global economic conditions as a result of such a crisis could ultimately decrease occupancy levels and pricing across our portfolio and/or increase concessions, reduce or defer our residents’ spending, result in changes in resident preferences (including changes resulting from increased employer flexibility to work from home) or negatively impact our residents’ ability to pay their rent on time or at all; • local and national authorities expanding or extending certain measures that impose restrictions on our ability to enforce residents’ contractual rental obligations (such as eviction moratoriums or rental forgiveness) and limit our ability to raise rents or charge certain fees; • the risk of a prolonged outbreak and/or multiple waves of an outbreak could cause long-term damage to economic conditions, which in turn could diminish our access to capital at attractive terms and/or cause material declines in the fair value of our assets, leading to asset impairment charges; and • the potential inability to maintain adequate staffing at our properties and corporate offices due to an outbreak and/or changes in employee preferences causing them to leave their jobs.

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have subject matter jurisdiction, any state court located within the state 36 Table of Contents of Maryland, or, if all such state courts do not have subject matter jurisdiction, the United States District Court for the District of Maryland, will be the sole and exclusive forum for (a) any Internal Corporate Claim, as such term is defined in the MGCL, or any successor provision thereof, (b) any derivative action or proceeding brought on behalf of the Company, (c) any action asserting a claim of breach of any duty owed by any director or officer or other employee of the Company to the Company or to the stockholders of the Company, (d) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the MGCL, the charter or the bylaws, (e) any action or proceeding to interpret, apply, enforce or determine the validity of the charter or the bylaws of the Company (including any right, obligation, or remedy thereunder), (f) any action or proceeding as to which the MGCL confers jurisdiction on the Circuit Court for Baltimore City, Maryland, or (g) any action asserting a claim against the Company or any director or officer or other employee of the Company that is governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants, except that the foregoing does not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have subject matter jurisdiction, any state court located within the state of Maryland, or, if all such state courts do not have subject matter jurisdiction, the United States District Court for the District of Maryland, will be the sole and exclusive forum for (a) any Internal Corporate Claim, as such term is defined in the MGCL, or any successor provision thereof, (b) any derivative action or proceeding brought on behalf of the Company, (c) any action asserting a claim of breach of any duty owed by any director or officer or other employee of the Company to the Company or to the stockholders of the Company, (d) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the MGCL, the charter or the bylaws, (e) any action or proceeding to interpret, apply, enforce or determine the validity of the charter or the bylaws of the Company (including any right, obligation, or remedy thereunder), (f) any action or proceeding as to which the MGCL confers jurisdiction on the Circuit Court for Baltimore City, Maryland, or (g) any action asserting a claim against the Company or any director or officer or other employee of the Company that is governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants, except that the foregoing does not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

Interest rate and currency hedging may fail to protect or could adversely affect us because, among other things: • interest rate and/or credit hedging can be expensive and may result in us generating less net income; • available interest rate hedges may not correspond directly with the interest rate for which protection is sought; • due to a credit loss, prepayment or asset sale, the duration of the hedge may not match the duration of the related asset or liability; • the amount of income that a REIT may earn from hedging transactions (other than hedging transactions that satisfy certain requirements of the Code or that are done through a TRS) to offset interest rate losses is limited by U.S. federal income tax provisions governing REITs; 29 Table of Contents • the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; • the hedging counterparty owing money in the hedging transaction may default on its obligation to pay; • we may fail to recalculate, readjust and execute hedges in an efficient manner; and • legal, tax and regulatory changes could occur and may adversely affect our ability to pursue our hedging strategies and/or increase the costs of implementing such strategies.

Interest rate and currency hedging may fail to protect or could adversely affect us because, among other things: • interest rate and/or credit hedging can be expensive and may result in us generating less net income; • available interest rate hedges may not correspond directly with the interest rate for which protection is sought; • due to a credit loss, prepayment or asset sale, the duration of the hedge may not match the duration of the related asset or liability; • the amount of income that a REIT may earn from hedging transactions (other than hedging transactions that satisfy certain requirements of the Code or that are done through a TRS) to offset interest rate losses is limited by U.S. federal income tax provisions governing REITs; • the credit quality of the hedging counterparty owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; • the hedging counterparty owing money in the hedging transaction may default on its obligation to pay; • we may fail to recalculate, readjust and execute hedges in an efficient manner; and • legal, tax and regulatory changes could occur and may adversely affect our ability to pursue our hedging strategies and/or increase the costs of implementing such strategies.

Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following: • require us to dedicate a substantial portion of cash flow from operations to the payment of principal, and interest on, indebtedness, thereby reducing the funds available for other purposes; • make it more difficult for us to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to meet operational needs; • force us to dispose of one or more of our investments, possibly on unfavorable terms or in violation of certain covenants to which we may be subject; • subject us to increased sensitivity to interest rate increases; • make us more vulnerable to economic downturns, adverse industry conditions or catastrophic external events; • limit our ability to withstand competitive pressures; • limit our ability to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness; • reduce our flexibility in planning for or responding to changing business, industry and economic conditions; and/or • place us at a competitive disadvantage to competitors that have relatively less debt than we have.

Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following: • require us to dedicate a substantial portion of cash flow from operations to the payment of principal, and interest on, indebtedness, thereby reducing the funds available for other purposes; • make it more difficult for us to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to meet operational needs; • force us to dispose of one or more of our investments, possibly on unfavorable terms or in violation of certain covenants to which we may be subject; 27 Table of Contents • subject us to increased sensitivity to interest rate increases; • make us more vulnerable to economic downturns, adverse industry conditions or catastrophic external events; • limit our ability to withstand competitive pressures; • limit our ability to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our original indebtedness; • reduce our flexibility in planning for or responding to changing business, industry and economic conditions; and/or • place us at a competitive disadvantage to competitors that have relatively less debt than we have.

We will depend to a significant degree on the diligence, skill and network of business contacts of the management team and other key personnel of our Manager, including Messrs. Dondero, Mitts, McGraner, Sauter, Richards and Willmore, all of whom may be difficult to replace.

We will depend to a significant degree on the diligence, skill and network of business contacts of the management team and other key personnel of our Manager, including Messrs. Dondero, McGraner, Sauter, Richards and Willmore, all of whom may be difficult to replace.

In addition, these actions by the Federal Reserve, as well as efforts by other central banks globally to combat inflation and restore price stability and other global events, may raise the prospect or severity of a recession.

In addition, actions by the Federal Reserve, as well as efforts by other central banks globally to combat inflation and restore price stability and other global events, may raise the prospect or severity of a recession.

Under the JOBS Act, emerging growth companies are not required to, among other 26 Table of Contents things, (1) provide an auditor’s attestation report on management’s assessment of the effectiveness of internal control over financial reporting, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), (2) provide certain disclosures relating to executive compensation generally required for larger public companies or (3) hold stockholder advisory votes on executive compensation.

Under the JOBS Act, emerging growth companies are not required to, among other 25 Table of Contents things, (1) provide an auditor’s attestation report on management’s assessment of the effectiveness of internal control over financial reporting, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), (2) provide certain disclosures relating to executive compensation generally required for larger public companies or (3) hold stockholder advisory votes on executive compensation.

In certain situations, we may: • acquire investments subject to rights of senior classes and servicers under intercreditor or servicing agreements; 19 Table of Contents • acquire only a minority and/or a non-controlling participation in an underlying investment; • co-invest with others through partnerships, joint ventures or other entities, thereby acquiring non-controlling interests; or • rely on independent third-party management or servicing with respect to the management of an asset.

In certain situations, we may: • acquire investments subject to rights of senior classes and servicers under intercreditor or servicing agreements; 18 Table of Contents • acquire only a minority and/or a non-controlling participation in an underlying investment; • co-invest with others through partnerships, joint ventures or other entities, thereby acquiring non-controlling interests; or • rely on independent third-party management or servicing with respect to the management of an asset.

In addition, a prolonged economic slowdown, a recession or declining real estate values, including, among other things, as a result of pandemics, inflation or high interest rates, could impair the performance of our investments and harm our financial 22 Table of Contents condition and results of operations, increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.

In addition, a prolonged economic slowdown, a recession or declining real estate values, including, among other things, as a result of pandemics, inflation or high interest rates, could impair the performance of our investments and harm our financial 21 Table of Contents condition and results of operations, increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.

Such OTC derivatives are also typically not subject to the same type of investor protections or governmental regulation as exchange-traded instruments. 25 Table of Contents In addition, we may invest in derivative instruments that are neither presently contemplated nor currently available, but which may be developed in the future, to the extent such opportunities are both consistent with our investment objectives and legally permissible.

Such OTC derivatives are also typically not subject to the same type of investor protections or governmental regulation as exchange-traded instruments. 24 Table of Contents In addition, we may invest in derivative instruments that are neither presently contemplated nor currently available, but which may be developed in the future, to the extent such opportunities are both consistent with our investment objectives and legally permissible.

Under the MGCL, certain “business combinations” (including a merger, consolidation, statutory share exchange or, in certain circumstances, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and an “interested stockholder” (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of our outstanding shares of voting stock or an affiliate or associate of the corporation who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding stock of the corporation), or an affiliate of any such interested stockholder, are prohibited for five years after the most recent date on which such interested stockholder becomes an interested stockholder.

Under the MGCL, certain “business combinations” (including a merger, consolidation, statutory share exchange or, in certain circumstances, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and an “interested stockholder” (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of the voting power of our outstanding shares of voting stock or an affiliate or associate of the corporation who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding stock of the corporation), or an affiliate of any such interested 36 Table of Contents stockholder, are prohibited for five years after the most recent date on which such interested stockholder becomes an interested stockholder.

Our operating results are dependent upon the availability of attractive loans and investments, as well as our Manager’s ability to identify, structure, consummate, leverage, manage and realize returns on our loans and investments.

We cannot assure prospective investors that such claims will not arise or that we will not be subject to significant liability if a claim of this type did arise. 24 Table of Contents Our ability to generate returns for our stockholders through our investment, finance and operating strategies is subject to then-existing market conditions, and we may make significant changes to these strategies in response to changing market conditions.

We cannot assure prospective investors that such claims will not arise or that we will not be subject to significant liability if a claim of this type did arise. 23 Table of Contents Our ability to generate returns for our stockholders through our investment, finance and operating strategies is subject to then-existing market conditions, and we may make significant changes to these strategies in response to changing market conditions.

Therefore, our investments in our target assets are and could in the future be, secured by properties concentrated in a limited number of geographic locations or concentrated in certain property types that are subject to higher risk of default or foreclosure. 17 Table of Contents Asset concentration may cause even modest changes in the value of the underlying real estate assets to significantly impact the value of our investments.

Therefore, our investments in our target assets are and could in the future be, secured by properties concentrated in a limited number of geographic locations or concentrated in certain property types that are subject to higher risk of default or foreclosure. 16 Table of Contents Asset concentration may cause even modest changes in the value of the underlying real estate assets to significantly impact the value of our investments.

Under the terms of the Management Agreement, our Manager and its affiliates and their respective partners, members, officers, directors, employees and agents will not be liable to us (including but not limited to (1) any act or omission in connection with the conduct of our business that is determined in good faith to be in or not opposed to our best interest, (2) any act or omission based on the suggestions of certain professional advisors, (3) any act or omission by us, or (4) any mistake, negligence, misconduct or bad faith of certain brokers or other agents), unless any act or omission constitutes bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of duties.

Under the terms of the Management Agreement, our Manager and its affiliates and their respective partners, members, officers, directors, 32 Table of Contents employees and agents will not be liable to us (including but not limited to (1) any act or omission in connection with the conduct of our business that is determined in good faith to be in or not opposed to our best interest, (2) any act or omission based on the suggestions of certain professional advisors, (3) any act or omission by us, or (4) any mistake, negligence, misconduct or bad faith of certain brokers or other agents), unless any act or omission constitutes bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of duties.

Our success depends on the availability of attractive loans and investments and our Manager ’ s ability to identify, structure, consummate, leverage, manage and realize returns on our loans and investments.

Our success depends on the availability of attractive loans and investments and our Manager ’ s ability to identify, structure, consummate, leverage, manage, realize and redeploy returns on our loans and investments.

Through provisions in our charter and bylaws unrelated to Subtitle 8, we already, subject to the terms of any class or series of preferred stock, (a) vest in our Board the exclusive power to fix the number of directorships, (b) require a vacancy on our Board to be filled only by the remaining directors in office, even if the remaining directors do not constitute a quorum and (c) require, unless called by our chairman of our Board, our chief executive officer, our president or our Board, the written request of stockholders entitled to cast a majority of all of the votes entitled to be cast at such a meeting to call a special meeting.

Through provisions in our charter and bylaws unrelated to Subtitle 8, we already, subject to the terms of any class or series of preferred stock, (a) vest in our Board the exclusive power to fix the number of directorships, (b) require a vacancy on our Board to be filled only by the remaining directors in office, even if the remaining directors do not constitute a quorum and (c) require, unless called by our chairman of our Board, our chief executive officer, our president or our Board, the written request of stockholders entitled to cast a majority 37 Table of Contents of all of the votes entitled to be cast at such a meeting to call a special meeting.

Other than the conversion right afforded to holders of Series A Preferred Stock that may become exercisable in connection with certain changes of control as described in the articles supplementary setting forth the terms of the Series A Preferred Stock and the redemption right afforded to holders of Series B Preferred Stock, none of the provisions relating to the Series A Preferred Stock or Series B Preferred Stock contain any terms relating to or limiting our indebtedness or affording the holders of Series A Preferred Stock or Series B Preferred Stock protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets, that might 49 Table of Contents adversely affect the holders of Series A Preferred Stock and Series B Preferred Stock, so long as the rights of the holders of Series A Preferred Stock and Series B Preferred Stock are not materially and adversely affected.

Other than the conversion right afforded to holders of Series A Preferred Stock that may become exercisable in connection with certain changes of control as described in the articles supplementary setting forth the terms of the Series A Preferred Stock and the redemption right afforded to holders of Series B Preferred Stock, none of the provisions relating to the Series A Preferred Stock or Series B Preferred Stock contain any terms relating to or limiting our indebtedness or affording the holders of Series A Preferred Stock or Series B Preferred Stock protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets, that might adversely affect the holders of Series A Preferred Stock and Series B Preferred Stock, so long as the rights of the holders of Series A Preferred Stock and Series B Preferred Stock are not materially and adversely affected.

As a result, we may lose all or a significant part of our investment, which could result in significant losses. 20 Table of Contents In addition, our investments in senior loans may be effectively subordinated to the extent we borrow under a warehouse loan (which can be in the form of a repurchase agreement) or similar facility and pledge the senior loan as collateral.

As a result, we may lose all or a significant part of our investment, which could result in significant losses. 19 Table of Contents In addition, our investments in senior loans may be effectively subordinated to the extent we borrow under a warehouse loan (which can be in the form of a repurchase agreement) or similar facility and pledge the senior loan as collateral.

The valuation of real estate, and therefore the valuation of any underlying security relating to loans and/or investments made by us, is inherently subjective due to, among other factors, the individual nature of each property, its 21 Table of Contents location, the expected future rental revenues from that particular property and the valuation methodology adopted.

The valuation of real estate, and therefore the valuation of any underlying security relating to loans and/or investments made by us, is inherently subjective due to, among other factors, the individual nature of each property, its 20 Table of Contents location, the expected future rental revenues from that particular property and the valuation methodology adopted.

Under rules implemented by the CFTC, operators of certain entities (including many mortgage REITs) may fall within the statutory definition of commodity pool operator (“CPO”), and, absent an applicable exemption or other relief from the CFTC, may 23 Table of Contents be required to register with the CFTC as a CPO.

Under rules implemented by the CFTC, operators of certain entities (including many mortgage REITs) may fall within the statutory definition of commodity pool operator (“CPO”), and, absent an applicable exemption or other relief from the CFTC, may 22 Table of Contents be required to register with the CFTC as a CPO.

Kirschner, as litigation trustee of a litigation subtrust formed pursuant to the Plan, filed a lawsuit (the “Bankruptcy Trust Lawsuit”) against various persons and entities, including our Sponsor and James Dondero. On March 27, 2023, Marc S. Kirschner filed a motion seeking to voluntarily stay the Bankruptcy Trust Lawsuit, which motion was granted on April 4, 2023.

Kirschner, as litigation trustee of a litigation subtrust formed pursuant to the Plan, filed a lawsuit (the “Bankruptcy Trust Lawsuit”) against various persons and entities, including our Sponsor and James Dondero. On March 24, 2023, Marc S. Kirschner filed a motion seeking to voluntarily stay the Bankruptcy Trust Lawsuit, which motion was granted on April 4, 2023.

Voting rights for holders of Series A Preferred Stock exist primarily with respect to the ability to elect, together with holders of our capital stock having similar voting rights, two additional directors to our Board in the event that six quarterly dividends (whether or not consecutive) payable on the Series A Preferred Stock are in arrears, and with respect to voting on amendments to our charter or articles supplementary relating to the Series A Preferred Stock that materially and adversely affect the rights of the holders of Series A Preferred Stock or create 47 Table of Contents additional classes or series of our capital stock expressly designated as ranking senior to the Series A Preferred Stock as to distribution rights and rights upon our liquidation, dissolution or winding up.

Voting rights for holders of Series A Preferred Stock exist primarily with respect to the ability to elect, together with holders of our capital stock having similar voting rights, two additional directors to our Board in the event that six quarterly dividends (whether or not consecutive) payable on the Series A Preferred Stock are in arrears, and with respect to voting on amendments to our charter or articles supplementary relating to the Series A Preferred Stock that materially and adversely affect the rights of the holders of Series A Preferred Stock or create additional classes or series of our capital stock expressly designated as ranking senior to the Series A Preferred Stock as to distribution rights and rights upon our liquidation, dissolution or winding up.

Moreover, many of the loans and securities we invest in will not be registered under the relevant securities laws, resulting in prohibitions against their transfer, sale, pledge or their disposition except in transactions that are exempt from registration requirements or are 18 Table of Contents otherwise in accordance with such laws.

Moreover, many of the loans and securities we invest in will not be registered under the relevant securities laws, resulting in prohibitions against their transfer, sale, pledge or their disposition except in transactions that are exempt from registration requirements or are 17 Table of Contents otherwise in accordance with such laws.

Further, the Series A Preferred Stock may trade at prices lower than the public offering price, and the market price of the Series A Preferred Stock depends on many factors, including, but not limited to: • prevailing interest rates; • the market for similar securities; • general economic and financial market conditions; • our issuance, as well as the issuance by our subsidiaries, of additional preferred equity or debt securities; and • our financial condition, cash flows, liquidity, results of operations, funds from operations and prospects.

Further, the Series A Preferred Stock may trade at prices lower than the public offering price, and the market price of the Series A Preferred Stock depends on many factors, including, but not limited to: • prevailing interest rates; • the market for similar securities; • general economic and financial market conditions; • our issuance, as well as the issuance by our subsidiaries, of additional preferred equity or debt securities; and 47 Table of Contents • our financial condition, cash flows, liquidity, results of operations, funds from operations and prospects.

Distributions declared by us will be authorized by our Board in its sole discretion out of assets legally available for distribution and will depend upon a number of factors, including our earnings, our financial condition, the requirements for qualification as a REIT, restrictions under applicable law, our need to comply with the terms of our existing financing arrangements, the capital requirements of the Company and other factors as our Board 48 Table of Contents may deem relevant from time to time.

On December 30, 2021, the Company, through a subsidiary, entered into a $32.5 million interest rate cap agreement at a strike rate of 2.29% to hedge the variable cash flows associated with the Company's floating rate debt. The interest rate cap terminates on June 1, 2024.

On October 10, 2023, the Company, through a subsidiary, entered into a $63.5 million interest rate cap agreement at a strike rate of 1.50% to hedge the variable cash flows associated with the Company's floating rate debt. The interest rate cap terminates on November 6, 2024.

If the Common Stock Price (as defined in the articles supplementary setting forth the terms of the Series A Preferred Stock) is less than $7.58 (which is approximately 50% of the per-share closing sale price of our common stock on July 17, 2020), subject to adjustment, each holder will receive a maximum of 3.2982 shares of our common stock per share of Series A Preferred Stock, which may result in a holder receiving value that is less than the liquidation preference of the Series A Preferred Stock.

If the Common Stock Price (as defined in the articles supplementary setting forth the terms of the Series A Preferred Stock) is less than $7.58 (which is approximately 50% of the per-share closing sale price of our common stock on July 17, 2020), subject to adjustment, each holder will receive a maximum of 3.2982 shares of our common stock per share of Series A Preferred Stock, which may result in a 48 Table of Contents holder receiving value that is less than the liquidation preference of the Series A Preferred Stock.

Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disrupt our operations, disrupt our trading activities, or damage our reputation, which could have a material adverse effect on our financial results and negatively affect the market price of our securities and our ability to pay dividends to stockholders.

Any such access, disclosure or other loss of information, including accidental or unauthorized disclosure of information, could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disrupt our operations, disrupt our trading activities, or damage our reputation, which could have a material adverse effect on our financial results and negatively affect the market price of our securities and our ability to pay dividends to stockholders.

The limitations described in the preceding two sentences will not apply, however, to the extent such damages are determined in a final binding non-appealable court or arbitration proceeding to result from the bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of our Manager’s duties. 33 Table of Contents We may change our targeted investments without stockholder consent.

The limitations described in the preceding two sentences will not apply, however, to the extent such damages are determined in a final binding non-appealable court or arbitration proceeding to result from the bad faith, fraud, willful misfeasance, intentional misconduct, gross negligence or reckless disregard of our Manager’s duties. We may change our targeted investments without stockholder consent.

Because our decision to issue debt securities or shares of our capital stock expressly designated as ranking senior to the Series A Preferred Stock and Series B Preferred Stock as to distribution rights and rights upon our liquidation, dissolution or winding up in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.

Because our decision to issue debt securities or shares of our capital stock expressly designated as ranking senior to the Series A Preferred Stock and Series B Preferred Stock as to distribution rights and rights upon our liquidation, dissolution or winding up in any future offering will depend 49 Table of Contents on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.

To maintain our REIT qualification, we may be forced to borrow funds during unfavorable market conditions, and the unavailability of such capital on favorable terms at the desired times, or at all, may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, which could adversely affect our financial condition, results of operations, cash flow and value of our securities.

To maintain our REIT qualification, we may be forced to borrow funds during unfavorable market conditions, and the unavailability of such capital on favorable terms at the desired times, or at all, may cause us to curtail our investment 38 Table of Contents activities and/or to dispose of assets at inopportune times, which could adversely affect our financial condition, results of operations, cash flow and value of our securities.

Certain target assets such as first-lien mortgage loans, common equity investments, CMBS B-Pieces, CMBS I/O Strips, MSCR Notes, mortgage backed securities, mezzanine and other loans (including participations) and preferred equity, in particular, are relatively illiquid investments.

Certain target assets such as first-lien mortgage loans, common equity investments, CMBS B-Pieces, CMBS I/O Strips, promissory notes, mortgage backed securities, mezzanine and other loans (including participations) and preferred equity, in particular, are relatively illiquid investments.

We are subject to credit risk with respect to the counterparties failing to meet their obligations to us under derivative contracts (whether a clearing corporation in the case of exchange-traded instruments or another third party in the case of OTC instruments), which may occur due to numerous causes, including bankruptcy, lack of liquidity, or operational failure, among others.

We are subject to credit risk with respect to the counterparties failing to meet their obligations to us under derivative contracts (whether a clearing corporation in the case of exchange-traded instruments or another third party in the case of 29 Table of Contents OTC instruments), which may occur due to numerous causes, including bankruptcy, lack of liquidity, or operational failure, among others.

Therefore, we may fail to qualify as a REIT if dividends from our TRSs, when aggregated with all other non-real estate income with respect to any one year, are more than 25% of our gross income with respect to such year. 41 Table of Contents Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends.

Therefore, we may fail to qualify as a REIT if dividends from our TRSs, when aggregated with all other non-real estate income with respect to any one year, are more than 25% of our gross income with respect to such year. Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends.

We cannot assure you that we will be able to timely remediate 27 Table of Contents any material weaknesses that may be identified in future periods or maintain all of the controls necessary for continued compliance.

We cannot assure you that we will be able to timely remediate 26 Table of Contents any material weaknesses that may be identified in future periods or maintain all of the controls necessary for continued compliance.

The liquidation proceeds upon sale of such real estate may not be sufficient to recover our cost basis in the loan, and any costs or delays involved in the foreclosure or liquidation process may increase losses. 15 Table of Contents Many of the loans we own or seek to acquire have been purchased by us at a discount to par value.

The liquidation proceeds upon sale of such real estate may not be sufficient to recover our cost basis in the loan, and any costs or delays involved in the foreclosure or liquidation process may increase losses. Many of the loans we own or seek to acquire have been purchased by us at a discount to par value.

We currently concentrate on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage, life science, hospitality and office sectors predominantly in the top 50 MSAs.

We currently concentrate on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage and life science sectors predominantly in the top 50 MSAs.

In addition, to the extent that our stock is owned by tax-exempt “disqualified organizations,” such as certain government-related entities and charitable remainder trusts that are not subject to tax on unrelated business taxable income, we may incur a corporate level tax on a portion of any excess inclusion income.

In addition, to the extent that our stock is owned by tax-exempt “disqualified organizations,” such as certain government-related entities and charitable remainder 39 Table of Contents trusts that are not subject to tax on unrelated business taxable income, we may incur a corporate level tax on a portion of any excess inclusion income.

These ownership limits could also delay or prevent a transaction or a change in control that might involve a premium price for our securities or otherwise be in the best interest of the stockholders. 42 Table of Contents Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities.

These ownership limits could also delay or prevent a transaction or a change in control that might involve a premium price for our securities or otherwise be in the best interest of the stockholders. Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities.

In addition, as regulatory capital requirements imposed on our lenders are increased, they may be required to limit, or increase the cost of, financing they provide to us. In general, this could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or price.

In addition, as regulatory capital requirements imposed on our lenders are increased, they may be 28 Table of Contents required to limit, or increase the cost of, financing they provide to us. In general, this could potentially increase our financing costs and reduce our liquidity or require us to sell assets at an inopportune time or price.

Litigation against James Dondero and others may have materially adverse consequences on our business, financial condition and results of operations. On February 8, 2023, UBS Securities LLC and its affiliate (collectively, “UBS”) filed a lawsuit in the Supreme Court of the State of New York, County of New York against Mr.

Litigation against James Dondero and others may have materially adverse consequences on our business, financial condition and results of operations. 34 Table of Contents On February 8, 2023, UBS Securities LLC and its affiliate (collectively, “UBS”) filed a lawsuit in the Supreme Court of the State of New York, County of New York against Mr.

Gain recognized by a non-U.S. stockholder upon the sale or exchange of our common stock generally will not be subject to U.S. federal income taxation unless such stock constitutes a USRPI under FIRPTA. Our common stock will not 44 Table of Contents constitute a USRPI so long as we are a “domestically-controlled” REIT.

Gain recognized by a non-U.S. stockholder upon the sale or exchange of our common stock generally will not be subject to U.S. federal income taxation unless such stock constitutes a USRPI under FIRPTA. Our common stock will not constitute a USRPI so long as we are a “domestically-controlled” REIT.

As of December 31, 2023, we had $180.0 million of our 5.75% Notes outstanding and our OP had $36.5 million of its 7.50% Senior Unsecured Notes due 2025 (the “OP Notes”) outstanding.

As of December 31, 2024, we had $180.0 million of our 5.75% Senior Unsecured Notes ("5.75% Notes") outstanding and our OP had $36.5 million of its 7.50% Senior Unsecured Notes due 2025 (the “OP Notes”) outstanding.

As cyber-security threats and government and regulatory oversight of associated risks continue to evolve, we may be required to expend additional 50 Table of Contents resources to enhance or expand upon the security measures we currently maintain. Any such actions may adversely impact our results of operations and financial condition.

As cyber-security threats and government and regulatory oversight of associated risks continue to evolve, we may be required to expend additional resources to enhance or expand upon the security measures we currently maintain. Any such actions may adversely impact our results of operations and financial condition.

With regard to our multifamily properties, inflationary pressures have increased or may have the effect of increasing our costs related to property management, third-party contractors and vendors, insurance, transportation and taxes, and our residents may also be adversely impacted by higher cost of living expenses, including food, energy and transportation, which may increase our rate of tenant defaults and harm our operating results. 16 Table of Contents The U.S.

With regard to our multifamily properties, inflationary pressures have increased or may have the effect of increasing our costs related to property 15 Table of Contents management, third-party contractors and vendors, insurance, transportation and taxes, and our residents may also be adversely impacted by higher cost of living expenses, including food, energy and transportation, which may increase our rate of tenant defaults and harm our operating results.

If such CMBS turns out not to be fully collectible, an offsetting loss deduction will become available only in the later year that uncollectibility is provable.

If such CMBS turns out not to be fully collectible, an offsetting loss deduction will become available only in the later year that uncollectability is provable.

Furthermore, if some of our or our Manager’s employees are required to work remotely in the future due to the COVID-19 pandemic or other pandemics or infectious diseases, or if we or our Manager allow permanent or significant remote work by any of our or its employees, there may be an increased risk of disruption to our operations because they may be utilizing residential networks and infrastructure which may not be as secure as in our office environment.

Furthermore, if some of our or our Manager’s employees are required to work remotely in the future due to pandemics or infectious diseases, or if we or our Manager allow permanent or significant remote work by any of our or its employees, there may be an increased risk of disruption to our operations because they may be utilizing residential networks and infrastructure which may not be as secure as in our office environment.

As a result, those individuals may face conflicts in the allocation of investment opportunities among us and other investment funds or accounts advised by or affiliated with our Manager 34 Table of Contents and its affiliates. Our Manager will seek to allocate investment opportunities among eligible accounts in a manner consistent with its allocation policy.

As a result, those individuals may face conflicts in the allocation of investment opportunities among us and other investment funds or accounts advised by or affiliated with our Manager and its affiliates. Our Manager will seek to allocate investment opportunities among eligible accounts in a manner consistent with its allocation policy.

Maryland law provides that a director has no liability in the capacity as a director if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interest and with the care that an ordinarily prudent person in a like position would use under similar circumstances.

Maryland law provides that a director has no liability in the capacity as a director if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interest and with the care that an ordinarily 35 Table of Contents prudent person in a like position would use under similar circumstances.

These actions could have the effect of reducing our income and amounts available for distribution to our stockholders. 40 Table of Contents If our OP failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT.

These actions could have the effect of reducing our income and amounts available for distribution to our stockholders. If our OP failed to qualify as a partnership for U.S. federal income tax purposes, we would cease to qualify as a REIT.

In addition, sales of significant amounts of shares beneficially held by our Sponsor or other holders of our common stock with whom Mr. Dondero has relationships, or the prospect of these sales, could adversely affect the market price of our common stock.

Therefore, additional 46 Table of Contents common stock issuances, directly or through convertible or exchangeable securities (including common stock and convertible preferred stock), warrants or options, will dilute the holdings of our existing common stockholders and such issuances or the perception of such issuances may reduce the market price of shares of our common stock.

Therefore, additional common stock issuances, directly or through convertible or exchangeable securities (including common stock and convertible preferred stock), warrants or options, will dilute the holdings of our existing common stockholders and such issuances or the perception of such issuances may reduce the market price of shares of our common stock.

Therefore, the value of the underlying property, the creditworthiness and financial position of the borrower and the priority and enforceability of the lien will significantly impact the value of such mortgage. In the event of a foreclosure, we may assume direct ownership of the underlying real estate.

We may also be subject to cross-default and acceleration rights in our other debt arrangements. Further, 28 Table of Contents this could also make it difficult for us to satisfy the distribution requirements necessary to maintain our qualification as a REIT for U.S. federal income tax purposes.

We may also be subject to cross-default and acceleration rights in our other debt arrangements. Further, this could also make it difficult for us to satisfy the distribution requirements necessary to maintain our qualification as a REIT for U.S. federal income tax purposes.

Because these persons have competing demands on their time and resources, they may have 35 Table of Contents conflicts of interest in allocating their time between our business and these other activities. If this occurs, the returns on our investments may suffer.

Because these persons have competing demands on their time and resources, they may have conflicts of interest in allocating their time between our business and these other activities. If this occurs, the returns on our investments may suffer.

Redetermined deductions and excess interest generally represent amounts that are deducted by a TRS of ours for amounts paid to us that are in excess of the amounts that would have been deducted based on arm’s-length negotiations.

Redetermined deductions and excess interest generally 40 Table of Contents represent amounts that are deducted by a TRS of ours for amounts paid to us that are in excess of the amounts that would have been deducted based on arm’s-length negotiations.

Congress has considered a substantial number of bills that include comprehensive or incremental approaches to ending the conservatorship, winding down Fannie Mae and Freddie Mac or changing their purposes, businesses or operations. U.S. government departments and agencies, including the U.S Treasury and FHFA, have also published proposals which could lead to a release or exit from conservatorship.

Congress has considered a substantial number of bills that include comprehensive or incremental approaches to ending the conservatorship, winding down Fannie Mae and Freddie Mac or changing their purposes, businesses or operations. U.S. government departments and agencies, including the U.S Treasury and Federal Housing Finance Agency, have also published proposals which could lead to a release or exit from conservatorship.

Risks Related to the Ownership of Our Common Stock The concentration of our share ownership may limit your ability to influence corporate matters. Our Sponsor is the ultimate parent of our Manager and may be deemed to beneficially own approximately 16.8% of our outstanding voting securities as of December 31, 2023.

Risks Related to the Ownership of Our Common Stock The concentration of our share ownership may limit your ability to influence corporate matters. Our Sponsor is the ultimate parent of our Manager and may be deemed to beneficially own approximately 16.4% of our outstanding voting securities as of December 31, 2024.

Our ability to provide attractive risk-adjusted returns to our stockholders over the long term depends on our ability both to generate sufficient cash flow to pay an attractive dividend and to achieve capital appreciation, and we may not be able to do 31 Table of Contents either.

Currently, the maximum tax rate applicable to qualified dividend income payable to U.S. stockholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, generally are not eligible for this reduced rate.

Income from "qualified dividends" payable to U.S. stockholders that are individuals, trusts and estates is generally subject to tax at reduced rates. Currently, the maximum tax rate applicable to qualified dividend income payable to U.S. stockholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, generally are not eligible for this reduced rate.

Also, the law relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT.

Also, the law 43 Table of Contents relating to the tax treatment of other entities, or an investment in other entities, could change, making an investment in such other entities more attractive relative to an investment in a REIT.

A REIT is “domestically controlled” if less than 50% of the REIT’s stock, by value, has been owned directly or indirectly by persons who are not qualifying U.S. persons during a continuous five-year period ending on the date of disposition or, if shorter, during the entire period of the REIT’s existence.

A REIT is “domestically controlled” if less than 50% of the REIT’s stock, by value, has been owned directly or indirectly by persons who are not qualifying U.S. persons, including through a foreign-controlled domestic corporation, during a continuous five-year period ending on the date of disposition or, if shorter, during the entire period of the REIT’s existence.

An acquisition of our Manager could result in dilution of your interest as a stockholder and could reduce earnings per share.

An 33 Table of Contents acquisition of our Manager could result in dilution of your interest as a stockholder and could reduce earnings per share.

All of our investment decisions are made by our Manager, subject to general oversight by our Manager’s investment committee and our Board.

All of our investment decisions are made by our Manager, subject to general oversight by our 31 Table of Contents Manager’s investment committee and our Board.

These restrictions may reduce our liquidity and could potentially reduce our returns on such investments. To the extent we utilize the securitization market and retain this risk of loss through subordinate interests or CMBS B-Pieces in our securitized debt transactions, these requirements could reduce our returns on these transactions.

To the extent we utilize the securitization market and retain this risk of loss through subordinate interests or CMBS B-Pieces in our securitized debt transactions, these requirements could reduce our returns on these transactions.

However, we cannot assure you that we have qualified as a REIT, or that we will remain qualified as a REIT in the future. 38 Table of Contents If we fail to qualify as a REIT in any taxable year, we will face serious tax consequences that will substantially reduce the funds available for distributions to our stockholders because: • we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to U.S. federal income tax at the corporate tax rate; • we could be subject to increased state and local taxes; and • unless we are entitled to relief under certain U.S. federal income tax laws, we could not re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT.

If we fail to qualify as a REIT in any taxable year, we will face serious tax consequences that will substantially reduce the funds available for distributions to our stockholders because: • we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to U.S. federal income tax at the corporate tax rate; • we could be subject to increased state and local taxes; and • unless we are entitled to relief under certain U.S. federal income tax laws, we could not re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT.

As of December 31, 2023, we had approximately $1.3 billion of indebtedness outstanding related to our portfolio, excluding indebtedness relating to the portion of the CMBS that we do not own, but are required to consolidate pursuant to applicable accounting standards.

As of December 31, 2024, we had approximately $795.7 million of indebtedness outstanding related to our portfolio, excluding indebtedness relating to the portion of the CMBS that we do not own, but are required to consolidate pursuant to applicable accounting standards.

Macroeconomic trends including inflation, high interest rates or recession may adversely affect our financial condition and results of operations. Macroeconomic trends, including high inflation and high interest rates, may adversely impact our business, financial condition and results of operations.

Macroeconomic trends including inflation, high interest rates, recession, major bank failures or sustained financial market illiquidity may adversely affect our financial condition and results of operations. Macroeconomic trends, including high inflation and high interest rates, may adversely impact our business, financial condition and results of operations.

Similarly, our Manager or its affiliates may have other clients with similar, different or competing investment objectives, including, among others, NexPoint Residential Trust, Inc. (“NXRT”), a publicly traded multifamily REIT, VineBrook Homes Trust, Inc. (“VineBrook”), an SFR REIT, NexPoint Diversified Real Estate Trust (“NXDT”), a publicly traded diversified REIT, and NexPoint Hospitality Trust, Inc.

Real estate investments are subject to various risks, including: • acts of nature, including extreme weather, earthquakes, floods and other natural disasters, as result of climate change or otherwise, which may result in uninsured losses; • acts of war, terrorism, social unrest or civil disturbances, including the consequences of such acts; • adverse changes in national and local economic and market conditions; • changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations and ordinances; • costs of remediation and liabilities associated with environmental conditions including, but not limited to, indoor mold; and • the potential for uninsured or under-insured property losses.

Our loans and investments are concentrated in terms of type of interest, geography, asset types and sponsors and may continue to be so in the future. Approximately 41.6% of our portfolio is in the SFR asset class and approximately 48.9% of the unpaid principal balance in our portfolio is located in Florida and Georgia.

Our loans and investments are concentrated in terms of type of interest, geography, asset types and sponsors and may continue to be so in the future. Approximately 22.8% of our portfolio is in the SFR asset class and approximately 25.1% of the unpaid principal balance in our portfolio is located in Georgia and Texas.

Dondero being deemed to have aggregate beneficial ownership of approximately 8,867,206 shares (or 51.5% of our common stock) and shared voting and dispositive power over approximately 8,765,545 shares (or 50.9% of our common stock) as of December 31, 2023. The concentration of our share ownership may limit your ability to influence corporate matters. Mr.

Dondero being deemed to have aggregate beneficial ownership of approximately 9,004,336 shares (or 51.6% of our common stock) and shared voting and dispositive power over approximately 8,798,896 shares (or 50.4% of our common stock) as of December 31, 2024. The concentration of our share ownership may limit your ability to influence corporate matters. Mr.

No assurance can be given that any particular asset that we own or hold an interest in, directly or through any subsidiary entity, including our OP, but generally excluding TRSs, will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business. 42 Table of Contents The 100% tax described above may limit our ability to enter into transactions that would otherwise be beneficial to us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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2023 filing

2024 filing

Biggest changeCombined, our Manager’s information technology team has over 50 years of experience covering all major aspects of network architecture and management. 52 Table of Contents Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition.

Biggest changeCombined, our Manager’s information technology team has over 50 years of experience covering all major aspects of network architecture and management. Risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected, and we do not believe are reasonably likely to materially affect, us, including our business strategy, results of operations or financial condition.

Our Manager engages in the periodic assessment and testing of our Manager’s policies, standards, processes and practices that are designed to address the Company’s cybersecurity threats and incidents. These efforts include a wide range of activities, including annual penetration and third-party compliance testing and ongoing internal testing and creation and modification of polices and procedures.

Third-Party Risk Management: Our Manager maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including key vendors, service providers and other external users of the Company’s and the Manager’s systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.

Third-Party Risk Management: Our Manager maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including key vendors, service providers and other external 51 Table of Contents users of the Company’s and the Manager’s systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.

As one of the critical elements of the Company’s overall risk management, our Manager’s cybersecurity program is focused on the following key areas: Governance: The Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board (the “Audit Committee”), which interacts with our Manager’s Director of Information Technology and Chief Compliance Officer and other members of management of our Manager that implement and oversee our Manager’s cybersecurity program.

As one of the critical elements of the Company’s overall risk management, our cybersecurity program is focused on the following key areas: Governance: The Board’s oversight of cybersecurity risk management is supported by the Audit Committee of the Board (the “Audit Committee”), which interacts with our Manager’s Director of Information Technology and other members of management of our Manager that implement and oversee our Manager’s cybersecurity program.

The assessment includes, among other things, evaluating the nature, sensitivity and location of information the Company collects, processes 51 Table of Contents and stores and the resiliency of the underlying technologies, the validity and effectiveness of the Company’s security policies, controls and processes and the cybersecurity preparedness of the third-party vendors used by the Company and our Manager.

The assessment includes, among other things, evaluating the nature, sensitivity and location of information the Company collects, processes and stores and the resiliency of the underlying technologies, the validity and effectiveness of the Company’s security policies, controls and processes and the cybersecurity preparedness of the third-party vendors used by the Company and our Manager.

Incident Response and Recovery Planning: Our Manager has established and maintains comprehensive business continuity plans that address potential impacts should the information or technology systems become compromised, and such plans are tested and evaluated on a regular basis.

Incident Response and Recovery Planning: Our Manager has established and maintains comprehensive business continuity plans that address potential impacts should the information or technology systems become compromised, and the technological components of such plans are tested and evaluated on a regular basis.

Item 2. Properties

Properties — owned and leased real estate

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2024 filing

Biggest changeThe Company consolidated ownership of Alexander at the District, which is a 280-unit multifamily property in Atlanta, Georgia, as of December 31, 2023. The Company’s ownership is subject to mortgage debt with an outstanding principal balance of approximately $63.5 million as of December 31, 2023. For additional information regarding these properties, see Note 8 to our consolidated financial statements.

Biggest changeThe Company’s ownership is subject to mortgage debt with an outstanding principal balance of approximately $63.5 million as of December 31, 2024. 52 Table of Contents For additional information regarding these properties, see Note 8 to our consolidated financial statements.

Item 2. Properties The Company owns the Hudson Montford, which is a 204-unit multifamily property in Charlotte, North Carolina. The Company’s ownership is subject to mortgage debt with an outstanding principal balance of approximately $32.4 million as of December 31, 2023. The Company owns the Hudson Montford indirectly through wholly owned subsidiaries.

Item 2. Properties The Company owns the Hudson Montford, which is a 204-unit multifamily property in Charlotte, North Carolina. The Company’s ownership is subject to mortgage debt with an outstanding principal balance of approximately $32.5 million as of December 31, 2024. The Company owns the Hudson Montford indirectly through wholly owned subsidiaries.

Added

The Company consolidated ownership of Alexander at the District, which is a 280-unit multifamily property in Atlanta, Georgia, as of December 31, 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+0 added−0 removed3 unchanged

2023 filing

2024 filing

Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stockholder Information On March 20, 2024, we had 17,593,244 shares of common stock outstanding held by a total of eight record holders.

Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stockholder Information On March 26, 2025, we had 17,643,526 shares of common stock outstanding held by a total of eight record holders.

Item 7. Management's Discussion & Analysis

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

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2024 filing

Biggest changeThe following table sets forth additional information relating to our portfolio as of December 31, 2023 (dollars in thousands): Investment (1) Investment Date Current Principal Amount Net Equity (2) Location Property Type Coupon Current Yield (3) Remaining Term (4) (years) SFR Loans 1 Senior loan 2/11/2020 $ 508,700 $ 68,452 Various Single-family 4.65 % 4.43 % 4.67 2 Senior loan 2/11/2020 9,316 1,374 Various Single-family 5.35 % 5.25 % 4.09 3 Senior loan 2/11/2020 10,015 1,345 Various Single-family 5.30 % 5.05 % 4.67 4 Senior loan 2/11/2020 5,361 720 Various Single-family 5.24 % 4.98 % 4.76 5 Senior loan 2/11/2020 34,967 4,331 Various Single-family 4.74 % 4.64 % 1.75 6 Senior loan 2/11/2020 9,473 1,254 Various Single-family 6.10 % 5.75 % 4.76 7 Senior loan 2/11/2020 36,164 4,649 Various Single-family 5.55 % 5.20 % 4.84 8 Senior loan 2/11/2020 5,645 751 Various Single-family 5.99 % 5.64 % 4.92 9 Senior loan 2/11/2020 8,641 1,199 Various Single-family 5.88 % 5.60 % 5.01 10 Senior loan 2/11/2020 6,473 911 Various Single-family 5.46 % 5.23 % 5.17 11 Senior loan 2/11/2020 10,522 1,430 Various Single-family 4.72 % 4.64 % 2.17 Total 645,277 86,416 4.79 % 4.57 % 4.49 CMBS B-Piece 1 CMBS B-Piece 2/11/2020 21,024 (5) 6,611 Various Multifamily 9.76 % 9.76 % 2.16 2 CMBS B-Piece 2/11/2020 28,581 (5) 9,585 Various Multifamily 10.59 % 10.58 % 2.90 3 CMBS B-Piece 4/23/2020 81,999 (5) 26,582 Various Multifamily 3.50 % 5.11 % 6.16 64 Table of Contents 4 CMBS B-Piece 7/30/2020 16,349 (5) 5,536 Various Multifamily 14.43 % 14.43 % 3.48 5 CMBS B-Piece 8/6/2020 108,643 (5) 21,877 Various Multifamily — % 9.12 % 6.49 6 CMBS B-Piece 4/20/2021 25,751 (5) 6,435 Various Multifamily 11.57 % 11.57 % 7.16 7 CMBS B-Piece 6/30/2021 108,305 (5) 27,358 Various Multifamily 0.00 % 10.19 % 3.00 8 CMBS B-Piece 5/2/2022 32,556 (5) 10,708 Various Multifamily 4.43 % 4.76 % 14.91 9 CMBS B-Piece 7/28/2022 63,397 (5) 21,945 Various Multifamily 10.57 % 10.57 % 5.57 Total 486,605 136,637 4.40 % 9.00 % 5.64 CMBS I/O Strips 1 CMBS I/O Strip 5/18/2020 17,590 (6) 504 Various Multifamily 2.02 % 14.64 % 22.75 2 CMBS I/O Strip 8/6/2020 108,643 (6) 5,538 Various Multifamily 2.98 % 17.98 % 6.49 3 CMBS I/O Strip 4/28/2021 (7) 64,550 (6) 1,382 Various Multifamily 1.59 % 17.68 % 6.07 4 CMBS I/O Strip 5/27/2021 20,000 (6) 1,172 Various Multifamily 3.39 % 17.79 % 6.40 5 CMBS I/O Strip 6/7/2021 4,266 (6) 122 Various Multifamily 2.31 % 22.31 % 4.91 6 CMBS I/O Strip 6/11/2021 (8) 104,471 (6) 1,335 Various Multifamily 1.18 % 14.57 % 5.40 7 CMBS I/O Strip 6/24/2021 25,387 (6) 296 Various Multifamily 1.17 % 18.07 % 6.40 8 CMBS I/O Strip 8/10/2021 25,000 (6) 721 Various Multifamily 1.89 % 17.98 % 6.32 9 CMBS I/O Strip 8/11/2021 6,942 (6) 421 Various Multifamily 3.10 % 15.24 % 7.57 10 CMBS I/O Strip 8/24/2021 1,625 (6) 70 Various Multifamily 2.61 % 16.15 % 7.07 11 CMBS I/O Strip 9/1/2021 34,625 (6) 1,015 Various Multifamily 1.92 % 17.01 % 6.49 12 CMBS I/O Strip 9/11/2021 20,902 (6) 1,113 Various Multifamily 2.95 % 15.14 % 7.74 Total 434,001 13,689 2.06 % 16.75 % 6.87 Mezzanine Loans 1 Mezzanine 6/12/2020 7,500 7,500 Houston, TX Multifamily 11.00 % 11.00 % 1.50 2 Mezzanine 10/20/2020 5,470 2,249 Wilmington, DE Multifamily 7.50 % 7.33 % 5.34 3 Mezzanine 10/20/2020 10,380 4,294 White Marsh, MD Multifamily 7.42 % 7.23 % 7.50 4 Mezzanine 10/20/2020 14,253 5,879 Philadelphia, PA Multifamily 7.59 % 7.41 % 5.42 5 Mezzanine 10/20/2020 3,700 1,518 Daytona Beach, FL Multifamily 7.83 % 7.66 % 4.76 6 Mezzanine 10/20/2020 12,000 4,963 Laurel, MD Multifamily 7.71 % 7.52 % 7.25 7 Mezzanine 10/20/2020 3,000 1,241 Temple Hills, MD Multifamily 7.32 % 7.14 % 7.59 8 Mezzanine 10/20/2020 1,500 621 Temple Hills, MD Multifamily 7.22 % 7.04 % 7.59 9 Mezzanine 10/20/2020 5,540 2,277 Lakewood, NJ Multifamily 7.33 % 7.17 % 5.34 10 Mezzanine 10/20/2020 6,829 2,804 Rosedale, MD Multifamily 7.53 % 7.36 % 5.01 11 Mezzanine 10/20/2020 3,620 1,498 North Aurora, IL Multifamily 7.42 % 7.23 % 7.50 12 Mezzanine 10/20/2020 9,610 3,976 Cockeysville, MD Multifamily 7.42 % 7.23 % 7.50 13 Mezzanine 10/20/2020 7,390 3,057 Laurel, MD Multifamily 7.42 % 7.23 % 7.50 14 Mezzanine 10/20/2020 2,135 876 Tyler, TX Multifamily 7.74 % 7.57 % 4.76 15 Mezzanine 10/20/2020 1,190 489 Las Vegas, NV Multifamily 7.71 % 7.54 % 5.17 16 Mezzanine 10/20/2020 3,310 1,361 Atlanta, GA Multifamily 6.91 % 6.75 % 5.50 17 Mezzanine 10/20/2020 2,880 1,182 Des Moines, IA Multifamily 7.89 % 7.72 % 4.84 18 Mezzanine 10/20/2020 4,010 1,646 Urbandale, IA Multifamily 7.89 % 7.72 % 4.84 19 Mezzanine 11/18/2021 12,600 12,506 Irving, TX Multifamily 16.33 % 16.45 % 4.92 20 Mezzanine 12/29/2021 7,760 7,749 Rogers, AR Multifamily 16.33 % 16.35 % 1.03 21 Mezzanine 6/9/2022 4,500 4,477 Rogers, AR Multifamily 16.03 % 16.11 % 1.44 22 Mezzanine 10/5/2022 (9) 4,030 3,998 Kirkland, WA Multifamily 16.03 % 16.16 % 4.01 Total 133,207 76,161 9.61 % 9.50 % 5.36 Preferred Equity 1 Preferred Equity 5/29/2020 (10) 11,698 11,698 Houston, TX Multifamily 11.00 % 11.00 % 6.34 2 Preferred Equity 9/29/2021 9,505 9,492 Holly Springs, NC Life Science 10.00 % 10.01 % 0.75 3 Preferred Equity 12/28/2021 (11) 11,377 11,377 Las Vegas, NV Multifamily 10.50 % 10.50 % 8.17 4 Preferred Equity 1/14/2022 23,956 23,955 Vacaville, CA Life Science 10.00 % 10.00 % 0.75 65 Table of Contents 5 Preferred Equity 4/7/2022 (12) 4,000 3,967 Beaumont, TX Self-Storage 15.33 % 15.46 % 6.67 6 Preferred Equity 6/8/2022 4,000 3,967 Temple, TX Self-Storage 14.61 % 14.73 % 6.67 7 Preferred Equity 7/1/2022 (13) 9,000 8,935 Medley, FL Self-Storage 11.00 % 11.08 % 3.50 8 Preferred Equity 8/10/2022 8,500 8,450 Plano, TX Multifamily 16.12 % 16.22 % 1.69 9 Preferred Equity 9/30/2022 9,000 8,943 Fort Worth, TX Multifamily 15.03 % 15.13 % 1.75 10 Preferred Equity 10/19/2022 19,908 19,923 Woodbury, MN Life Science 10.00 % 9.99 % 0.75 11 Preferred Equity 2/10/2023 28,685 28,562 Forney, TX Multifamily 11.00 % 11.05 % 1.12 12 Preferred Equity 2/24/2023 20,464 20,373 Richmond, VA Multifamily 11.00 % 11.05 % 1.12 13 Preferred Equity 4/6/2023 23,957 23,971 Temecula, CA Life Science 17.50 % 17.49 % 0.75 14 Preferred Equity 5/16/2023 (14) 7,150 7,083 Phoenix, AZ Single-family 13.50 % 13.63 % 3.33 15 Preferred Equity 5/17/2023 (15) 4,192 4,151 Houston, TX Life Science 13.00 % 13.13 % 2.98 Total 195,392 194,847 12.20 % 12.24 % 2.21 Common Equity 1 Common Stock 11/6/2020 N/A 33,129 N/A Self-Storage N/A N/A N/A 2 Common Stock 4/14/2022 N/A 28,400 N/A Ground Lease N/A N/A N/A 3 Common Equity 2/10/2023 N/A — Forney, TX Multifamily N/A N/A N/A 4 Common Equity 2/24/2023 N/A — Richmond, VA Multifamily N/A N/A N/A 5 Common Equity 9/8/2023 N/A — Atlanta, GA Multifamily N/A N/A N/A Total 61,529 Preferred Stock 1 Preferred Stock 11/9/2023 N/A 14,776 Various Life Science 10.50 % N/A 5.00 Real Estate 1 Real Estate 12/31/2021 (16) N/A 25,989 Charlotte, NC Multifamily N/A N/A N/A 2 Real Estate 10/10/2023 (17) N/A 4,905 Atlanta, GA Multifamily N/A N/A N/A Total 30,894 MSCR Notes 1 MSCR Note 5/25/2022 4,000 2,020 Various Multifamily 14.83 % 14.83 % 28.42 2 MSCR Note 5/25/2022 5,000 2,248 Various Multifamily 11.83 % 11.83 % 28.42 3 MSCR Note 9/23/2022 1,500 676 Various Multifamily 12.18 % 13.38 % 27.92 Total 10,500 4,944 13.02 % 13.19 % 28.35 Mortgage Backed Securities 1 Mortgage Backed Securities 6/1/2022 10,074 3,410 Various Single-family 4.87 % 5.01 % 1.89 2 Mortgage Backed Securities 6/1/2022 10,419 3,524 Various Single-family 8.64 % 8.91 % 2.30 3 Mortgage Backed Securities 7/28/2022 575 275 Various Single-family 6.23 % 6.31 % 3.80 4 Mortgage Backed Securities 7/28/2022 1,057 361 Various Single-family 3.60 % 4.12 % 4.47 5 Mortgage Backed Securities 9/12/2022 3,927 1,325 Various Multifamily 11.57 % 11.55 % 7.07 6 Mortgage Backed Securities 9/29/2022 8,000 7,960 Various Self-Storage 11.10 % 11.12 % 3.71 7 Mortgage Backed Securities 3/10/2023 5,747 1,987 Various Multifamily 13.93 % 13.95 % 1.16 Total 39,799 18,842 9.06 % 9.19 % 2.86 (1) Our total portfolio represents the current principal amount of the consolidated SFR Loans, CMBS I/O Strips, mezzanine loans, preferred equity, multifamily properties, MSCR Notes and mortgage backed securities as well as the net equity of our CMBS B-Piece investments.

Biggest changeThe following table sets forth additional information relating to our portfolio as of December 31, 2024 (dollars in thousands): Investment (1) Investment Date Current Principal Amount Net Equity (2) Location Property Type Coupon Current Yield (3) Remaining Term (4) (years) Senior Loans 1 Senior Loan 2/11/2020 $ 8,164 $ 1,174 Various Single-family 5.35 % 5.27 % 3.09 2 Senior Loan 2/11/2020 5,135 638 Various Single-family 5.24 % 5.02 % 3.75 3 Senior Loan 2/11/2020 31,793 3,558 Various Single-family 4.74 % 4.69 % 0.75 4 Senior Loan 2/11/2020 9,336 1,133 Various Single-family 6.10 % 5.82 % 3.75 5 Senior Loan 2/11/2020 35,316 4,090 Various Single-family 5.55 % 5.26 % 3.84 6 Senior Loan 2/11/2020 5,496 670 Various Single-family 5.99 % 5.70 % 3.92 7 Senior Loan 2/11/2020 8,496 1,102 Various Single-family 5.88 % 5.64 % 4.01 8 Senior Loan 2/11/2020 6,359 846 Various Single-family 5.46 % 5.27 % 4.17 9 Senior Loan 2/11/2020 10,523 1,347 Various Single-family 4.72 % 4.67 % 1.16 10 Senior Loan 1/26/2024 140,283 (5) 139,324 Cambridge, MA Life Sciences 14.00 % 14.10 % 2.11 Total 260,901 153,882 9.99 % 9.96 % 2.41 CMBS B-Pieces 64 Table of Contents 1 CMBS B-Piece 2/11/2020 13,319 (6) 3,681 Various Multifamily 9.25 % 9.25 % 1.15 2 CMBS B-Piece 2/11/2020 28,581 (6) 7,965 Various Multifamily 7.00 % 7.00 % 1.90 3 CMBS B-Piece 7/30/2020 16,310 (6) 4,905 Various Multifamily 8.02 % 8.02 % 2.48 4 CMBS B-Piece 4/20/2021 16,900 (6) 5,045 Various Multifamily 11.10 % 11.10 % 6.16 5 CMBS B-Piece 6/30/2021 108,303 (6) 27,562 Various Multifamily — % 8.84 % 2.00 6 CMBS B-Piece 5/2/2022 29,248 (6) 7,869 Various Multifamily 5.12 % 5.48 % 13.91 7 CMBS B-Piece 7/28/2022 61,891 (6) 18,281 Various Multifamily 10.10 % 10.10 % 4.57 8 CMBS B-Piece 2/22/2024 30,869 (6) 7,817 Various Multifamily 5.90 % 6.74 % 4.07 9 CMBS B-Piece 4/24/2024 31,931 (6) 8,785 Various Multifamily 5.59 % 6.44 % 4.23 Total 337,352 91,910 5.27 % 8.30 % 4.09 CMBS I/O Strips 1 CMBS I/O Strip 5/18/2020 17,590 (7) 422 Various Multifamily 2.02 % 16.62 % 5.07 2 CMBS I/O Strip 8/6/2020 108,643 (7) 4,302 Various Multifamily 2.98 % 20.73 % 5.48 3 CMBS I/O Strip 4/28/2021 63,736 (7) 1,063 Various Multifamily 1.59 % 20.52 % 5.07 4 CMBS I/O Strip 5/27/2021 20,000 (7) 952 Various Multifamily 3.38 % 20.56 % 5.40 5 CMBS I/O Strip 6/7/2021 4,266 (7) 100 Various Multifamily 2.31 % 27.43 % 3.90 6 CMBS I/O Strip 6/11/2021 92,986 (7) 365 Various Multifamily 0.61 % 9.13 % 4.40 7 CMBS I/O Strip 6/24/2021 24,418 (7) 526 Various Multifamily 1.15 % 19.71 % 5.40 8 CMBS I/O Strip 8/10/2021 25,000 (7) 575 Various Multifamily 1.89 % 20.89 % 5.32 9 CMBS I/O Strip 8/11/2021 6,942 (7) 353 Various Multifamily 3.10 % 17.20 % 6.57 10 CMBS I/O Strip 8/24/2021 1,625 (7) 57 Various Multifamily 2.61 % 18.42 % 6.07 11 CMBS I/O Strip 9/1/2021 34,625 (7) 866 Various Multifamily 1.92 % 19.72 % 5.48 12 CMBS I/O Strip 9/11/2021 20,902 (7) 927 Various Multifamily 2.95 % 17.01 % 6.74 Total 420,733 10,508 1.96 % 17.64 % 5.21 Mezzanine Loans 1 Mezzanine 6/12/2020 7,500 7,500 Houston, TX Multifamily 11.00 % 11.00 % 0.50 2 Mezzanine 10/20/2020 5,470 2,229 Wilmington, DE Multifamily 7.50 % 7.36 % 4.33 3 Mezzanine 10/20/2020 10,380 4,267 White Marsh, MD Multifamily 7.42 % 7.25 % 6.50 4 Mezzanine 10/20/2020 14,253 5,826 Philadelphia, PA Multifamily 7.59 % 7.44 % 4.42 5 Mezzanine 10/20/2020 3,700 1,503 Daytona Beach, FL Multifamily 7.83 % 7.69 % 3.75 6 Mezzanine 10/20/2020 12,000 4,930 Laurel, MD Multifamily 7.71 % 7.54 % 6.25 7 Mezzanine 10/20/2020 3,000 1,233 Temple Hills, MD Multifamily 7.32 % 7.15 % 6.59 8 Mezzanine 10/20/2020 1,500 617 Temple Hills, MD Multifamily 7.22 % 7.06 % 6.59 9 Mezzanine 10/20/2020 5,540 2,257 Lakewood, NJ Multifamily 7.33 % 7.19 % 4.33 10 Mezzanine 10/20/2020 6,829 2,778 North Aurora, IL Multifamily 7.53 % 7.39 % 4.01 11 Mezzanine 10/20/2020 3,620 1,488 Rosedale, MD Multifamily 7.42 % 7.25 % 6.50 12 Mezzanine 10/20/2020 9,610 3,950 Cockeysville, MD Multifamily 7.42 % 7.25 % 6.50 13 Mezzanine 10/20/2020 7,390 3,038 Laurel, MD Multifamily 7.42 % 7.25 % 6.50 14 Mezzanine 10/20/2020 2,135 867 Tyler, TX Multifamily 7.74 % 7.60 % 3.75 15 Mezzanine 10/20/2020 1,190 485 Las Vegas, NV Multifamily 7.71 % 7.56 % 4.17 16 Mezzanine 10/20/2020 3,310 1,349 Atlanta, GA Multifamily 6.91 % 6.78 % 4.50 17 Mezzanine 10/20/2020 2,880 1,171 Des Moines, IA Multifamily 7.89 % 7.75 % 3.84 18 Mezzanine 10/20/2020 4,010 1,630 Urbandale, IA Multifamily 7.89 % 7.75 % 3.84 19 Mezzanine 11/18/2021 12,600 12,523 Irving, TX Multifamily 15.32 % 15.41 % 3.92 20 Mezzanine 12/29/2021 (8) 7,760 7,752 Rogers, AR Multifamily 15.32 % 15.33 % 0.30 21 Mezzanine 6/9/2022 4,500 4,493 Rogers, AR Multifamily 15.37 % 15.39 % 0.44 65 Table of Contents 22 Mezzanine 10/5/2022 4,030 4,005 Kirkland, WA Multifamily 15.37 % 15.47 % 3.00 Total 133,207 75,891 9.41 % 9.31 % 4.35 Preferred Equity 1 Preferred Equity 5/29/2020 (9) 12,735 12,735 Houston, TX Multifamily 11.00 % 11.00 % 5.33 2 Preferred Equity 9/29/2021 19,011 18,980 Holly Springs, NC Life Science 10.00 % 10.02 % 0.75 3 Preferred Equity 12/28/2021 11,377 11,377 Las Vegas, NV Multifamily 10.50 % 10.50 % 7.17 4 Preferred Equity 1/14/2022 32,676 32,656 Vacaville, CA Life Science 10.00 % 10.01 % 0.75 5 Preferred Equity 4/7/2022 3,903 3,876 Beaumont, TX Self-Storage 14.32 % 14.42 % 5.67 6 Preferred Equity 6/8/2022 4,000 3,971 Temple, TX Self-Storage 13.60 % 13.70 % 5.67 7 Preferred Equity 7/1/2022 9,000 8,952 Medley, FL Self-Storage 11.00 % 11.06 % 2.50 8 Preferred Equity 8/10/2022 8,500 8,479 Plano, TX Multifamily 14.46 % 14.50 % 0.69 9 Preferred Equity 9/30/2022 9,000 8,973 Fort Worth, TX Multifamily 14.37 % 14.41 % 0.75 10 Preferred Equity 10/19/2022 12,316 12,331 Woodbury, MN Life Science 10.00 % 9.99 % 0.75 11 Preferred Equity 2/10/2023 27,595 27,585 Forney, TX Multifamily 11.00 % 11.00 % 3.25 12 Preferred Equity 2/24/2023 26,704 26,677 Richmond, VA Multifamily 11.00 % 11.01 % 2.22 13 Preferred Equity 4/6/2023 20,188 20,244 Temecula, CA Life Science 17.50 % 17.45 % 0.75 14 Preferred Equity 5/16/2023 16,126 16,001 Phoenix, AZ Single-family 13.50 % 13.61 % 2.32 15 Preferred Equity 5/17/2023 4,192 4,152 Houston, TX Life Science 13.00 % 13.12 % 0.98 16 Preferred Equity 6/28/2024 7,100 7,067 Knoxville, TN Marina 13.00 % 13.06 % 3.83 Total 224,423 224,056 11.92 % 11.94 % 2.27 Common Equity 1 Common Stock 11/6/2020 N/A 30,467 N/A Self-Storage N/A N/A N/A 2 Common Stock 4/14/2022 N/A 26,922 N/A Ground Lease N/A N/A N/A 3 Common Equity 2/10/2023 N/A — Forney, TX Multifamily N/A N/A N/A 4 Common Equity 2/24/2023 N/A — Richmond, VA Multifamily N/A N/A N/A 5 Common Equity 9/8/2023 N/A — Atlanta, GA Multifamily N/A N/A N/A 6 Common Equity 5/8/2024 N/A — Kirkland, WA Multifamily N/A N/A N/A 7 Membership Interest 4/9/2024 N/A 1,504 Various Multifamily N/A N/A N/A Total 58,893 Preferred Stock 1 Preferred Stock 11/9/2023 N/A 18,949 Various Life Science 10.50 % N/A N/A Real Estate 1 Real Estate 12/31/2021 (10) N/A 26,909 Charlotte, NC Multifamily N/A N/A N/A 2 Real Estate 10/10/2023 (11) N/A 1,728 Atlanta, GA Multifamily N/A N/A N/A Total 28,637 Promissory Notes 1 Promissory Note 3/28/2024 500 500 Various Single-family 12.50 % 12.50 % 0.24 2 Promissory Note 7/10/2024 3,500 3,500 Various Single-family 15.00 % 15.00 % 0.52 Total 4,000 4,000 14.69 % 14.69 % 0.49 Revolving Credit Facility 1 Revolving Credit Facility 12/31/2024 148,600 135,136 Various Life Science 13.50 % 13.50 % 3.00 66 Table of Contents Stock Warrants 1 Stock Warrant 5/23/2024 N/A 27,400 Various Life Sciences N/A N/A N/A (1) Our total portfolio represents the current principal amount of the consolidated senior loans, CMBS I/O Strips, mezzanine loans, preferred equity, multifamily properties, promissory notes, revolving credit facilities and stock warrants as well as the net equity of our CMBS B-Piece investments.

We intend to make regular quarterly dividend payments of all or substantially all of our taxable income, which is not used to pay a dividend on the Series A Preferred Stock and Series B Preferred Stock, to holders of our common stock out of assets legally available for this purpose, if and to the extent authorized by our Board.

We intend to make regular quarterly dividend payments of all or substantially all of our taxable income, which is not used to pay dividends on the Series A Preferred Stock and Series B Preferred Stock, to holders of our common stock out of assets legally available for this purpose, if and to the extent authorized by our Board.

On February 15, 2023, NSP paid down approximately $15.0 million of these promissory notes, resulting in an aggregate principal amount of approximately $49.2 million. On December 8, 2023, NSP paid down the remaining principal balance of $49.2 million. The NSP Series D preferred stock remains outstanding as of December 31, 2023.

The 2022 Equity Distribution Agreements provide for the issuance and sale of common stock or Series A Preferred Stock by the Company through a sales agent acting as a sales agent or directly to the sales agent acting as principal for its own account at a price agreed upon at the time of sale.

The Equity Distribution Agreements provide for the issuance and sale of common stock or Series A Preferred Stock by the Company through a sales agent acting as a sales agent or directly to the sales agent acting as principal for its own account at a price agreed upon at the time of sale.

Company Notes Offering In 2022 and 2023, the Company issued a total of $35 million and $15 million in aggregate principal amount, respectively, of its 5.75% Notes for proceeds of approximately $35.1 million and $13.6 million, respectively, after original issue discount and underwriting fees.

Company Notes Offering In 2022 and 2023, the Company issued a total of $35.0 million and $15.0 million in aggregate principal amount, respectively, of its 5.75% Notes for proceeds of approximately $35.1 million and $13.6 million, respectively, after original issue discount and underwriting fees.

The year ended December 31, 2023 as compared to the year ended December 31, 2022 The following table presents the components of net interest income for the years ended December 31, 2023 and 2022 (dollars in thousands): For the Year Ended December 31, $ Change % Change 2023 2022 Interest income/ (expense) Average Balance (1) Yield (2) Interest income/ (expense) Average Balance (1) Yield (2) Interest income SFR Loans, held-for-investment $ 27,259 $ 712,592 3.83 % $ 43,946 $ 746,111 5.89 % $ (16,687) (38.0) % Mezzanine loans, held-for-investment 14,191 144,536 9.82 % 15,464 157,789 9.80 % (1,273) (8.2) % Preferred equity, held-for-investment 19,641 165,674 11.86 % 9,263 102,471 9.04 % 10,378 112.0 % Convertible notes, held-for-investment — N/A N/A 2,545 47,821 5.32 % (2,545) (100.0) % CMBS structured pass-through certificates, at fair value 2,218 43,824 5.06 % 4,682 66,442 7.05 % (2,464) (52.6) % Bridge loan — N/A N/A 346 6,787 5.10 % (346) (100.0) % MSCR notes 1,341 10,267 13.06 % 590 4,385 13.45 % 751 127.3 % Mortgage backed securities 3,708 32,450 11.43 % 1,152 11,025 10.45 % 2,556 221.9 % Total interest income $ 68,358 $ 1,109,343 6.16 % $ 77,988 $ 1,142,831 6.82 % $ (9,630) (12.3) % Interest expense Master repurchase agreements, net $ (22,576) $ (323,443) 6.98 % $ (11,280) $ (147,850) 7.63 % $ (11,296) 100.1 % Long-term seller financing, net (15,032) (678,245) 2.22 % (15,817) (822,820) 1.92 % 785 (5.0) % Unsecured notes, net (13,952) (207,697) 6.72 % (13,158) (201,697) 6.52 % (794) 6.0 % Total interest expense $ (51,560) $ (1,209,384) 4.26 % $ (40,255) $ (1,172,367) 3.43 % $ (11,305) 28.1 % Net interest income (3) $ 16,798 $ 37,733 $ (20,935) (55.5) % (1) Average balances for the SFR Loans, the mezzanine loan and preferred equity are calculated based upon carrying values.

(4) Net interest income is calculated as the difference between total interest income and total interest expense. 56 Table of Contents The year ended December 31, 2023 as compared to the year ended December 31, 2022 The following table presents the components of net interest income for the years ended December 31, 2023 and 2022 (dollars in thousands): For the Year Ended December 31, 2023 2022 Interest income/ (expense) Average Balance (1) Yield (2) Interest income/ (expense) Average Balance (1) Yield (2) $ Change % Change Interest income SFR Loans, held-for-investment $ 27,259 $ 712,592 3.83 % $ 43,946 $ 746,111 5.89 % $ (16,687) (38.0) % Mezzanine loans, held-for-investment 14,191 144,536 9.82 % 15,464 157,789 9.80 % (1,273) (8.2) % Preferred equity, held-for-investment 19,641 165,674 11.86 % 9,263 102,471 9.04 % 10,378 112.0 % Convertible bond, held-for-investment — N/A N/A 2,545 47,821 5.32 % (2,545) -100.0 % CMBS structured pass through certificates, at fair value 2,218 43,824 5.06 % 4,682 66,442 7.05 % (2,464) -52.6 % Bridge loan — N/A N/A 346 6,787 5.10 % (346) (100.0) % MSCR notes 1,341 10,267 13.06 % 590 4,385 13.45 % 751 127.3 % Mortgage backed securities 3,708 32,450 11.43 % 1,152 11,025 10.45 % 2,556 221.9 % Total interest income $ 68,358 $ 1,109,343 6.16 % $ 77,988 $ 1,142,831 6.82 % $ (9,630) (12.3) % Interest expense Repurchase agreements (22,576) (323,443) 6.98 % (11,280) (147,850) 7.63 % (11,296) 100.1 % Long-term seller financing (15,032) (678,245) 2.22 % (15,817) (822,820) 1.92 % 785 (5.0) % Unsecured Notes (13,952) (207,697) 6.72 % (13,158) (201,697) 6.52 % (794) 6.0 % Total interest expense $ (51,560) $ (1,209,384) 4.26 % $ (40,255) $ (1,172,367) 3.43 % $ (11,305) 28.1 % Net interest income (3) $ 16,798 $ 37,733 $ (20,935) (55.5) % (1) Average balances for the SFR Loans, the mezzanine loans and preferred equity are calculated based upon carrying values.

Asset Metrics Debt Metrics Investment Fixed/Floating Rate Interest Rate Maturity Date Fixed/Floating Rate Interest Rate Maturity Date Net Spread SFR Loans Senior loan Fixed 4.65% 9/1/2028 Fixed 2.24% 9/1/2028 2.41% Senior loan Fixed 5.35% 2/1/2028 Fixed 3.51% 2/1/2028 1.84% Senior loan Fixed 5.30% 9/1/2028 Fixed 2.79% 9/1/2028 2.51% Senior loan Fixed 5.24% 10/1/2028 Fixed 2.64% 10/1/2028 2.60% Senior loan Fixed 4.74% 10/1/2025 Fixed 2.14% 10/1/2025 2.60% Senior loan Fixed 6.10% 10/1/2028 Fixed 3.30% 10/1/2028 2.80% Senior loan Fixed 5.55% 11/1/2028 Fixed 2.70% 11/1/2028 2.85% Senior loan Fixed 5.99% 12/1/2028 Fixed 3.14% 12/1/2028 2.85% Senior loan Fixed 5.88% 1/1/2029 Fixed 3.14% 1/1/2029 2.74% Senior loan Fixed 5.46% 3/1/2029 Fixed 2.99% 3/1/2029 2.47% Senior loan Fixed 4.72% 3/1/2026 Fixed 2.45% 3/1/2026 2.27% Mezzanine Loans Mezzanine Fixed 7.50% 5/1/2029 Fixed 0.30% 5/1/2029 7.20% Mezzanine Fixed 7.42% 7/1/2031 Fixed 0.30% 7/1/2031 7.12% Mezzanine Fixed 7.59% 6/1/2029 Fixed 0.30% 6/1/2029 7.29% Mezzanine Fixed 7.83% 10/1/2028 Fixed 0.30% 10/1/2028 7.53% Mezzanine Fixed 7.71% 4/1/2031 Fixed 0.30% 4/1/2031 7.41% Mezzanine Fixed 7.32% 8/1/2031 Fixed 0.30% 8/1/2031 7.02% Mezzanine Fixed 7.22% 8/1/2031 Fixed 0.30% 8/1/2031 6.92% Mezzanine Fixed 7.33% 5/1/2029 Fixed 0.30% 5/1/2029 7.03% Mezzanine Fixed 7.53% 7/1/2031 Fixed 0.30% 7/1/2031 7.23% Mezzanine Fixed 7.42% 1/1/2029 Fixed 0.30% 1/1/2029 7.12% Mezzanine Fixed 7.42% 7/1/2031 Fixed 0.30% 7/1/2031 7.12% Mezzanine Fixed 7.42% 4/1/2031 Fixed 0.30% 4/1/2031 7.12% Mezzanine Fixed 7.74% 10/1/2028 Fixed 0.30% 10/1/2028 7.44% Mezzanine Fixed 7.71% 3/1/2029 Fixed 0.30% 3/1/2029 7.41% Mezzanine Fixed 6.91% 7/1/2029 Fixed 0.30% 7/1/2029 6.61% Mezzanine Fixed 7.89% 11/1/2028 Fixed 0.30% 11/1/2028 7.59% Mezzanine Fixed 7.89% 11/1/2028 Fixed 0.30% 11/1/2028 7.59% Our primary sources of liquidity and capital resources to date consist of cash generated from our operating results and the following: Freddie Mac Credit Facilities Prior to the Formation Transaction, two of our subsidiaries entered into a loan and security agreement, dated July 12, 2019, with Freddie Mac (the “Credit Facility”).

Asset Metrics Debt Metrics Investment Fixed/Floating Rate Interest Rate Maturity Date Fixed/Floating Rate Interest Rate Maturity Date Net Spread Senior Loans Senior loan Fixed 5.35% 2/1/2028 Fixed 3.51% 2/1/2028 1.84% Senior loan Fixed 5.24% 10/1/2028 Fixed 2.64% 10/1/2028 2.60% Senior loan Fixed 4.74% 10/1/2025 Fixed 2.14% 10/1/2025 2.60% Senior loan Fixed 6.10% 10/1/2028 Fixed 3.30% 10/1/2028 2.80% Senior loan Fixed 5.55% 11/1/2028 Fixed 2.70% 11/1/2028 2.85% Senior loan Fixed 5.99% 12/1/2028 Fixed 3.14% 12/1/2028 2.85% Senior loan Fixed 5.88% 1/1/2029 Fixed 3.14% 1/1/2029 2.74% Senior loan Fixed 5.46% 3/1/2029 Fixed 2.99% 3/1/2029 2.47% Senior loan Fixed 4.72% 3/1/2026 Fixed 2.45% 3/1/2026 2.27% Mezzanine Loans Mezzanine Fixed 7.50% 5/1/2029 Fixed 0.30% 5/1/2029 7.20% Mezzanine Fixed 7.42% 7/1/2031 Fixed 0.30% 7/1/2031 7.12% Mezzanine Fixed 7.59% 6/1/2029 Fixed 0.30% 6/1/2029 7.29% Mezzanine Fixed 7.83% 10/1/2028 Fixed 0.30% 10/1/2028 7.53% Mezzanine Fixed 7.71% 4/1/2031 Fixed 0.30% 4/1/2031 7.41% Mezzanine Fixed 7.32% 8/1/2031 Fixed 0.30% 8/1/2031 7.02% Mezzanine Fixed 7.22% 8/1/2031 Fixed 0.30% 8/1/2031 6.92% Mezzanine Fixed 7.33% 5/1/2029 Fixed 0.30% 5/1/2029 7.03% Mezzanine Fixed 7.53% 1/1/2029 Fixed 0.30% 1/1/2029 7.23% Mezzanine Fixed 7.42% 7/1/2031 Fixed 0.30% 7/1/2031 7.12% Mezzanine Fixed 7.42% 7/1/2031 Fixed 0.30% 7/1/2031 7.12% Mezzanine Fixed 7.42% 7/1/2031 Fixed 0.30% 7/1/2031 7.12% Mezzanine Fixed 7.74% 10/1/2028 Fixed 0.30% 10/1/2028 7.44% Mezzanine Fixed 7.71% 3/1/2029 Fixed 0.30% 3/1/2029 7.41% Mezzanine Fixed 6.91% 7/1/2029 Fixed 0.30% 7/1/2029 6.61% Mezzanine Fixed 7.89% 11/1/2028 Fixed 0.30% 11/1/2028 7.59% Mezzanine Fixed 7.89% 11/1/2028 Fixed 0.30% 11/1/2028 7.59% Our primary sources of liquidity and capital resources to date consist of cash generated from our operating results and the following: Freddie Mac Credit Facilities Prior to the Formation Transaction, two of our subsidiaries entered into a loan and security agreement, dated July 12, 2019, with Freddie Mac (the “Credit Facility”).

However, our Manager is responsible, and we will not reimburse our Manager or its affiliates, for the salaries or benefits to be paid to personnel of our Manager or its affiliates who serve as our officers, except that 50% of the salary of our VP of Finance is allocated to us and we may grant equity awards to our officers under the NexPoint Real Estate Finance, Inc. 2020 Long Term Incentive Plan (as amended and restated, the “LTIP”).

However, our Manager is responsible, and we will not reimburse our Manager or its affiliates, for the salaries or benefits to be paid to personnel of our Manager or its affiliates who serve as our officers, except that 50% of the salary of our VP of Finance is allocated to us and we may grant equity awards to our officers under the Amended and Restated NexPoint Real Estate Finance, Inc. 2020 Long Term Incentive Plan (the "Amended and Restated LTIP").

In 2022, the Company purchased a total of $5 million aggregate principal amount of its 5.75% Notes for approximately $4.9 million. The purchased 5.75% notes were cancelled upon settlement.

In 2022, the Company purchased a total of $5.0 million aggregate principal amount of its 5.75% Notes for approximately $4.9 million. The purchased 5.75% notes were cancelled upon settlement.

As a REIT, we will be subject to federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years.

As a REIT, we will be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years.

We primarily focus on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage, life science, hospitality and office sectors predominantly in the top 50 MSAs. In addition, we target lending or investing in properties that are stabilized or have a light-transitional business plan.

We primarily focus on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage and life science sectors predominantly in the top 50 MSAs. In addition, we target lending or investing in properties that are stabilized or have a light-transitional business plan.

See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the valuation of the Private REIT. As of December 31, 2023, the Company owns approximately 98.0% of the total outstanding common equity of each of Resmark Forney Gateway Holdings, LLC ("RFGH") and Resmark the Brook, LLC ("RTB").

See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the valuation of the Private REIT. As of December 31, 2024, the Company owns approximately 98.0% of the total outstanding common equity of each of Resmark Forney Gateway Holdings, LLC ("RFGH") and Resmark The Brook, LLC ("RTB").

We may be a smaller reporting company even after we are no longer an “emerging growth company.” Income Taxes We elected to be treated as a REIT for U.S. federal income tax purposes, beginning with our taxable year ended December 31, 2020.

We may be a smaller reporting company even after we are no longer an “emerging growth company.” REIT Tax Election and Income Taxes We elected to be treated as a REIT for U.S. federal income tax purposes, beginning with our taxable year ended December 31, 2020.

After the first day of the calendar month following the second anniversary of the original issue date, the Company also has the option to redeem, in whole or in part, subject to certain restrictions in the Company's charter and the articles supplementary setting forth the terms of the Series B Preferred Stock, at a redemption price per share equal to the liquidation preference of $25.00 per share, plus any accrued but unpaid cash dividends.

After the first day of the calendar month following the second anniversary of the original issue date, the Company also has the option to redeem, in whole or in part, subject to certain restrictions in the Company's charter and the articles supplementary setting forth the terms of the Series B 69 Table of Contents Preferred Stock, at a redemption price per share equal to the liquidation preference of $25.00 per share, plus any accrued but unpaid cash dividends.

This model applies to trade and other receivables, loans, debt securities, net investments in leases and off-balance sheet credit exposures (such as loan 74 Table of Contents commitments, standby letters of credit and financial guarantees not accounted for as insurance) and requires entities to estimate the lifetime expected credit loss on such instruments and record an allowance that represents the portion of the amortized cost basis that the entity does not expect to collect.

This model applies to trade and other receivables, loans, debt securities, net investments in leases and off-balance sheet credit exposures (such as loan commitments, standby letters of credit and financial guarantees not accounted for as insurance) and requires entities to estimate the lifetime expected credit loss on such instruments and record an allowance that represents the portion of the amortized cost basis that the entity does not expect to collect.

We believe that our various sources of capital, which may include future debt or equity issuances, net cash provided by operations and other secured and unsecured borrowings, will provide sufficient funds for our operations, anticipated debt service payments, potential obligations to purchase investments under the Company's commitments noted in Note 15 to our consolidated financial statements and dividend requirements for the long-term.

We believe that our various sources of capital, which may include future debt or equity issuances, net cash provided by operations and other secured and unsecured borrowings, will provide sufficient funds for our operations, anticipated debt service payments, potential obligations to purchase investments under the Company's commitments noted 67 Table of Contents in Note 15 to our consolidated financial statements and dividend requirements for the long-term.

As of December 31, 2023, the Company owns 9.5% of the total outstanding shares of the Series D-1 preferred stock in IQHQ, Inc. See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the equity security investment in IQHQ, Inc.

As of December 31, 2024, the Company owns 9.5% of the total outstanding shares of the Series D-1 preferred stock in IQHQ, Inc. See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the equity security investment in IQHQ, Inc.

EAD is defined as the net income (loss) attributable to our common stockholders computed in accordance with GAAP, including realized gains and losses not otherwise included in net income (loss), excluding any unrealized gains or losses or other similar non-cash items that are included in net income (loss) for the applicable reporting period, regardless of whether such items are included in other comprehensive income (loss), or in net income (loss) and adding back provision for (reversal of) credit losses and amortization of stock-based compensation.

Taxable income from certain non-REIT activities is managed through a TRS and is subject to applicable federal, state, and local income and margin taxes. We had no significant taxes associated with our TRS for the year ended December 31, 2023.

See Off-Balance Sheet Arrangements above for further details. On March 14, 2023, the Company, through one of the Subsidiary OPs, committed to fund $24.0 million of preferred equity with respect to a ground up construction horizontal single-family property located in Phoenix, Arizona, of which $16.9 million was unfunded as of December 31, 2023.

See Off Balance Sheet Arrangements above for further details. On March 14, 2023, the Company, through one of the Subsidiary OPs, committed to fund $24.0 million of preferred equity with respect to a ground up construction horizontal single-family property located in Phoenix, Arizona, of which 7.9 million was unfunded as of December 31, 2024.

The decrease between the periods is primarily due to a decrease in SFR Loans and mezzanine loans in the portfolio compared to the prior period. As of December 31, 2023 we own 87 discrete investments compared to 83 as of December 31, 2022. Other income (loss).

The decrease between the periods is primarily due to a decrease in SFR Loans and mezzanine loans in the portfolio compared to the prior period. As of December 31, 2023 we owned 87 discrete investments compared to 83 as of December 31, 2022. Other income (loss).

The common interest allows the Company to receive a 10% profit share once aggregate distributions exceed the 20% internal rate of return ("IRR") hurdle as shown below. There was no value ascribed to the common interest as of December 31, 2023.

However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, including the state of overall equity and credit markets, our degree of leverage, 67 Table of Contents borrowing restrictions imposed by lenders, general market conditions for REITs and our operating performance and liquidity.

However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, including the state of overall equity and credit markets, our degree of leverage, borrowing restrictions imposed by lenders, general market conditions for REITs and our operating performance and liquidity.

Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Our management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which include federal and certain states.

Tax positions not deemed to meet the more-likely-than-not threshold would 71 Table of Contents be recorded as a tax benefit or expense in the current year. Our management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which include federal and certain states.

As of December 31, 2023, pursuant to the 2022 Equity Distribution Agreements, the Company has sold 531,728 shares of its common stock and zero shares of Series A Preferred Stock for total gross sales of $12.6 million. For additional information about the 2022 ATM Program, see Note 11 to our consolidated financial statements.

As of December 31, 2024, pursuant to the Equity Distribution Agreements, the Company has sold 531,728 shares of its common stock and zero shares of Series A Preferred Stock for total gross sales of $12.6 million. For additional information about the ATM Program, see Note 11 to our consolidated financial statements.

Under the Credit Facility, these entities borrowed approximately $788.8 million in connection with their acquisition of senior pooled mortgage loans backed by SFR properties (the “Underlying Loans”). No additional borrowings can be made under the Credit Facility, and our obligations will be secured by the 68 Table of Contents Underlying Loans.

On December 12, 2023, our Board declared a Series A Preferred Stock dividend to Series A Preferred stockholders of $0.53125 per share, which was paid on January 25, 2024, to Series A Preferred stockholders of record as of January 12, 2024.

On December 12, 2024, our Board declared a Series A Preferred Stock dividend to Series A Preferred stockholders of $0.53125 per share, which was paid on January 25, 2025, to Series A Preferred stockholders of record as of January 12, 2025.

Cash flows from investing activities. During the year ended December 31, 2023, net cash provided by investing activities was $741.3 million, compared to net cash provided by operating activities of $950.6 million for the year ended December 31, 2022. This decrease was primarily driven by the increase in proceeds from payments on mortgage loans held in VIEs.

During the year ended December 31, 2023, net cash provided by investing activities was $741.3 million compared to net cash provided by investing activities of $950.6 million for the year ended December 31, 2022. This decrease was primarily driven by the decrease in proceeds from payments on mortgage loans held in VIEs. Cash flows from financing activities.

The guaranties by 72 Table of Contents REIT Sub and the Co-Guarantors are capped at $97.6 million, and each of REIT Sub and the Co-Guarantors generally guaranteed the foregoing obligations of NSP up to the cap amount on a pro rata basis with respect to its percentage ownership of NSP’s common stock.

The guaranties by REIT Sub and the Co-Guarantors are capped at $97.6 million, and each of REIT Sub and the Co-Guarantors generally guaranteed the foregoing obligations of NSP up to the cap amount on a pro rata basis with respect to its percentage ownership of NSP’s common stock.

Significant judgment is required in determining impairment and in estimating the resulting loss allowance, and actual losses, if any, could materially differ from those estimates. Purchase Price Allocation The Company considers the acquisition of real estate investments as asset acquisitions.

Significant judgment is required in determining impairment and in estimating the resulting loss allowance, and actual losses, if any, could materially differ from those estimates. Purchase Price Allocation 76 Table of Contents The Company considers the acquisition of real estate investments as asset acquisitions.

Includes unrealized gain (loss) based on changes in the fair value of our mortgage backed securities. See Note 7 to our consolidated financial statements for additional information. 57 Table of Contents Provision for (reversal of) credit losses, net. Provision for (reversal of) credit losses, net represents the change in our allowance for loan losses.

Includes unrealized gain (loss) based on changes in the fair value of our mortgage backed securities. See Note 7 to our consolidated financial statements for additional information. Provision for (reversal of) credit losses, net. Provision for (reversal of) credit losses, net represents the change in our allowance for loan losses.

See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the valuation of NSP. As of December 31, 2023, the Company owns approximately 6.36% of the total outstanding common equity of the Private REIT. The Company records the Private REIT at fair value in accordance with ASC 321. The valuation is determined using a market approach.

See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the valuation of NSP. As of December 31, 2024, the Company owns approximately 6.3% of the total outstanding common equity of the Private REIT. The Company records the Private REIT at fair value in accordance with ASC 321. The valuation is determined using a market approach.

(2) Net equity represents the carrying value less borrowings collateralized by the investment. (3) Current yield is the annualized income earned divided by the cost basis of the investment. 66 Table of Contents (4) The weighted-average life is weighted on current principal balance and assumes no prepayments.

(2) Net equity represents the carrying value less borrowings collateralized by the investment. (3) Current yield is the annualized income earned divided by the cost basis of the investment. (4) The weighted-average life is weighted on current principal balance and assumes no prepayments.

Cash flows from financing activities. During the year ended December 31, 2023, net cash used in financing activities was $776.6 million, compared to net cash used in financing activities of $1.0 billion for the year ended December 31, 2022. This decrease was primarily driven by the increase in distributions to bondholders of VIEs.

During the year ended December 31, 2023, net cash used in financing activities was $776.6 million compared to net cash used in financing activities of $1.0 billion for the year ended December 31, 2022. This decrease was primarily driven by the decrease in distributions to bondholders of VIEs.

Further, once the Company's preferred equity and accrued interest has been repaid, any additional cash flow and net sale proceeds shall be distributed as follows: • 0% to the Company and 100% to issuer up to a 20.0% IRR • 10% to the Company and 90% to issuer thereafter On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in Forney, Texas, of which $3.4 million was unfunded as of December 31, 2023.

Further, once the Company's preferred equity and accrued interest has been repaid, any additional cash flow and net sale proceeds shall be distributed as follows: • 0% to the Company and 100% to issuer up to a 20.0% IRR • 10% to the Company and 90% to issuer thereafter On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in Forney, Texas, which has been fully funded as of December 31, 2024.

The preparation of these financial statements requires our management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate these judgments, assumptions and estimates for changes that would affect the reported amounts.

The preparation of these financial 75 Table of Contents statements requires our management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate these judgments, assumptions and estimates for changes that would affect the reported amounts.

The necessary input for the valuation includes the yield of the Private REIT. As a result, the determination of fair value is uncertain because it involves subjective judgments and estimates that are unobservable. For the year ended December 31, 2023, the unrealized loss related to the change in fair value estimate is $0.5 million.

The necessary input for the valuation includes the yield of the Private REIT. As a result, the determination of fair value is uncertain because it involves subjective judgments and estimates that are unobservable. For the year ended December 31, 2024, the unrealized loss related to the change in fair value estimate is $1.5 million.

See Note 2 to our consolidated financial statements for additional information. Realized losses. Realized losses include the excess, or deficiency, of net proceeds received, less the carrying value of such investments, as realized losses.

See Note 2 to our consolidated financial statements for additional information. 57 Table of Contents Realized losses. Realized losses include the excess, or deficiency, of net proceeds received, less the carrying value of such investments, as realized losses.

Series B Preferred Stock Offering 69 Table of Contents On November 2, 2023, the Company announced the launch of a continuous public offering of up to 16,000,000 shares of its Series B Preferred Stock at a price to the public of $25.00 per share, for gross proceeds of $400 million.

Series B Preferred Stock Offering On November 2, 2023, the Company announced the launch of a continuous public offering of up to 16,000,000 shares of its Series B Preferred Stock at a price to the public of $25.00 per share, for gross proceeds of $400.0 million.

The increase between the periods was primarily due to a $1.3 million increase in stock compensation expense and a $0.7 million increase in legal fees compared to the prior period. Loan servicing fees.

The increase between the periods was primarily due to a $1.7 million increase in stock compensation expense, a $1.2 million increase in legal fees, and a $0.2 million increase in tax fees compared to the prior period. Loan servicing fees.

Unless we were entitled to relief under certain Code 71 Table of Contents provisions, we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed as a REIT.

Unless we were entitled to relief under certain Code provisions, we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed as a REIT.

These inputs are reflective of public company comparables, but are assumptions and estimates. As a result, the determination of fair value involves significant estimation uncertainty because it involves subjective judgments and estimates that are based on unobservable inputs. For the year ended December 31, 2023, the unrealized loss related to the change in fair value estimate is $17.3 million.

These inputs are reflective of public company comparables, but are assumptions and estimates. As a result, the determination of fair value involves significant estimation uncertainty because it involves subjective judgments and estimates that are based on unobservable inputs. For the year ended December 31, 2024, the unrealized loss related to the change in fair value estimate is $2.7 million.

Further, the Company committed to purchase $4.3 million of common equity with respect to the same property, of which $3.3 million was unfunded as of December 31, 2023.

Further, the Company committed to purchase $4.3 million of common equity with respect to the same property, of which $1.3 million was unfunded as of December 31, 2024.

The Company holds RFGH and RTB based on the Company's proportionate share of income (losses) for the year ended December 31, 2023. See Notes 5 and 6 to our consolidated financial statements for additional disclosures regarding the equity method investments RFGH and RTB.

The Company holds RFGH and RTB based on the Company's proportionate share of income (losses) for the year ended December 31, 2024. 77 Table of Contents See Notes 5 and 6 to our consolidated financial statements for additional disclosures regarding the equity method investments RFGH and RTB.

In addition, our Sponsor, together with its affiliates, including NexBank, is one of the most experienced global alternative credit managers managing approximately $26.0 billion of loans and debt or credit related investments as of December 31, 2023 and has managed credit investments for over 25 years.

In addition, our Sponsor, together with its affiliates, including NexBank, is one of the most experienced global alternative credit managers managing approximately $13.9 billion of loans and debt or credit related investments as of December 31, 2024 and has managed credit investments for over 25 years.

The Company expects that the offering will terminate on the earlier of the date the Company sells all 16,000,000 shares of the Series B Preferred Stock in the offering or December 29, 2026 (which is the third anniversary of the effective date of the Company’s registration statement), which may be extended by the Board in its sole discretion.

The Company elected the fair-value option in accordance with ASC 825-10-10. On a quarterly basis, the Company, with the assistance of an independent third-party valuation firm, determines the fair value for subsequent measurement absent a readily available market price. The valuation is determined using widely accepted valuation techniques consistent with the principles of ASC 820.

On a quarterly basis, the Company, with the assistance of an independent third-party valuation firm, determines the fair value for subsequent measurement absent a readily available market price. The valuation is determined using widely accepted valuation techniques consistent with the principles of ASC 820.

Direct payment of operating expenses by us, which includes compensation expense relating to equity awards granted under the LTIP, together with reimbursement of operating expenses to our Manager, plus the Annual Fee, may not exceed 2.5% of equity book value determined in accordance with GAAP, for any calendar year or portion thereof, provided, however, that this limitation will not apply to Offering Expenses, legal, accounting, financial, due diligence and other service fees incurred in connection with extraordinary litigation and mergers and acquisitions and other events outside the ordinary course of our business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of certain real estate related investments.

Direct payment of operating expenses by us, which includes compensation expense relating to equity awards granted under the Amended and Restated LTIP or the NexPoint Real Estate Finance, Inc. 2020 Long Term Incentive Plan (the “Original LTIP” as amended and restated by the Amended and Restated LTIP, the “LTIP”), together with reimbursement of operating expenses to our Manager, plus the Annual Fee, may not exceed 2.5% of equity book value determined in accordance with GAAP, for any calendar year or portion thereof, provided, however, that this limitation will not apply to Offering Expenses, legal, accounting, financial, due diligence and other service fees incurred in connection with extraordinary litigation and mergers and acquisitions and other events outside the ordinary course of our business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of certain real estate related investments.

We are externally managed by our Manager, a subsidiary of our Sponsor, an SEC-registered investment advisor, which has extensive real estate experience, having completed as of December 31, 2023 approximately $21.7 billion of gross real estate transactions since the beginning of 2012.

We are externally managed by our Manager, a subsidiary of our Sponsor, an SEC-registered investment advisor, which has extensive real estate experience, having completed as of December 31, 2024 approximately $20.1 billion of gross real estate transactions since the beginning of 2012.

The Company has an ownership interest in the Series D-1 preferred stock in IQHQ, Inc., who is the limited partner in IQHQ, LP; however, the Company has no controlling financial interest nor significant influence in IQHQ, LP. The loan is secured by a first mortgage with a first lien position and other security interests.

The Company has an ownership interest in the Series D-1 preferred stock in IQHQ, Inc., who 73 Table of Contents is the limited partner in IQHQ, L.P.; however, the Company has no controlling financial interest nor significant influence in IQHQ, L.P. The loan is secured by a first mortgage with a first lien position and other security interests.

The CMBS B-Pieces, CMBS I/O Strips, MSCR Notes and mortgage backed securities held as collateral are illiquid and irreplaceable in nature. These assets are restricted solely to satisfy the interest and principal balances owed to the lender.

The CMBS B-Pieces and CMBS I/O Strips held as collateral are illiquid and irreplaceable in nature. These assets are restricted solely to satisfy the interest and principal balances owed to the lender.

The year ended December 31, 2022 as compared to the year ended December 31, 2021 Cash flows from operating activities. During the year ended December 31, 2022, net cash provided by operating activities was $65.8 million compared to net cash provided by operating activities of $49.3 million for the year ended December 31, 2021.

The year ended December 31, 2023 as compared to the year ended December 31, 2022 Cash flows from operating activities. During the year ended December 31, 2023, net cash provided by operating activities was $31.6 million compared to net cash provided by operating activities of $65.8 million for the year ended December 31, 2022.

Dondero and a number of other persons and entities. Neither the Bankruptcy Trust Lawsuit nor the UBS Lawsuit include claims related to our business or our assets or operations. Our Sponsor and Mr. Dondero have informed us they believe the Bankruptcy Trust Lawsuit has no merit, and Mr.

Neither the Bankruptcy Trust Lawsuit nor the UBS Lawsuit include claims related to our business or our assets or operations. Our Sponsor and Mr. Dondero have informed us they believe the Bankruptcy Trust Lawsuit has no merit, and Mr.

The provision for credit losses of $4.3 million for the year ended December 31, 2023 is included in other income on the accompanying Consolidated Statements of Operations, resulting in a December 31, 2023 ending allowance for credit loss of $2.1 million.

The reversal of credit losses for the year ended December 31, 2024 is included in other income on the accompanying Consolidated Statements of Operations, resulting in a December 31, 2024 ending allowance for credit loss of $1.4 million.

This increase was primarily driven by distributions to bondholders of VIEs. Emerging Growth Company and Smaller Reporting Company Status Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Exchange Act, for complying with new or revised accounting standards applicable to public companies.

Emerging Growth Company and Smaller Reporting Company Status Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Exchange Act, for complying with new or revised accounting standards applicable to public companies.

Commitments and Contingencies Except as otherwise disclosed below, the Company is not aware of any contractual obligations, legal proceedings or any other contingent obligations incurred in the normal course of business that would have a material adverse effect on our consolidated financial statements.

Considerations Related to Tightening Monetary Policy The macroeconomic environment remains challenging as central banks have held interest rates high to combat inflation. The high rate environment, coupled with large bank failures in early 2023 and ongoing economic uncertainty, has limited credit availability to commercial real estate.

Considerations Related to Tightening Monetary Policy The macroeconomic environment remains challenging as central banks have held interest rates high to combat inflation. The high rate environment and ongoing economic uncertainty, has limited credit availability to commercial real estate.

On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in Richmond, Virginia, of which $11.1 million was unfunded as of December 31, 2023.

On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in Richmond, Virginia, which has been fully funded as of December 31, 2024.

On November 30, 2023, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875 per share, which was paid on January 5, 2024, to Series B Preferred stockholders of record as of December 22, 2023.

On October 16, 2024 our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875 per share, which was paid on December 5, 2024 to stockholders of record as of November 25, 2024.

Management fees were $3.2 million for the year ended December 31, 2022 compared to $2.3 million for the year ended December 31, 2021 which was an increase of approximately $0.9 million.

Management fees were $3.9 million for the year ended December 31, 2024 compared to $3.3 million for the year ended December 31, 2023 which was an increase of approximately $0.6 million.

Expenses include interest, real estate taxes and insurance, operating, general and administrative, management fees, depreciation and amortization, rate cap (income) expense, and debt service bridge expenses of the multifamily properties. 58 Table of Contents Results of Operations for the Years Ended December 31, 2023 and 2022 The following table sets forth a summary of our operating results for the years ended December 31, 2023 and 2022 (in thousands): For the Year Ended December 31, $ Change % Change 2023 2022 Net interest income $16,798 $37,733 $(20,935) (55.5) % Other income (loss) 25,292 2,661 22,631 850.5 % Operating expenses (23,350) (26,180) 2,830 (10.8) % Net income 18,740 14,214 4,526 31.8 % Net (income) attributable to Series A Preferred shareholders (3,496) (3,512) 16 (0.5) % Net (income) attributable to Series B Preferred shareholders (80) — (80) N/A Net (income) attributable to redeemable noncontrolling interests (4,765) (4,969) 204 (4.1) % Net (income) attributable to redeemable noncontrolling interests in subsidiaries — (2,499) 2,499 N/A Net income attributable to common stockholders $ 10,399 $ 3,234 $ 7,165 221.6 % The change in our net income for the year ended December 31, 2023 as compared to the net income for the year ended December 31, 2022 primarily relates to an decrease in operating expenses and a decrease in other income including changes in net assets related to consolidated CMBS VIEs.

The increase between the periods was primarily due to an increase in Equity as defined by the Management Agreement. 59 Table of Contents Results of Operations for the Years Ended December 31, 2023 and 2022 The following table sets forth a summary of our operating results for the years ended December 31, 2023 and 2022 (in thousands): For the Year Ended December 31, $ Change % Change 2023 2022 Net interest income $ 16,798 $ 37,733 $ (20,935) (55.5) % Other income 25,292 2,661 22,631 850.5 % Operating expenses (23,350) (26,180) 2,830 (10.8) % Net income 18,740 14,214 4,526 31.8 % Net (income) attributable to Series A Preferred shareholders (3,496) (3,512) 16 (0.5) % Net (income) attributable to Series B Preferred shareholders (80) — (80) N/A Net (income) attributable to redeemable noncontrolling interests (4,765) (4,969) 204 (4.1) % Net (income) attributable to redeemable noncontrolling interests in subsidiaries — (2,499) 2,499 N/A Net income attributable to common stockholders $ 10,399 $ 3,234 $ 7,165 221.6 % The change in our net income for the year ended December 31, 2023 as compared to the net income for the year ended December 31, 2022 primarily relates to a decrease in operating expenses and an increase in other income including changes in net assets related to consolidated CMBS VIEs.

Our strategy is to originate, structure and invest in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common equity investments, as well as multifamily and SFR CMBS securitizations, MSCR Notes and mortgage backed securities, or our target assets.

Our strategy is to originate, structure and invest in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common equity investments, as well as multifamily and SFR CMBS securitizations, promissory notes, revolving credit facilities and stock warrants, or our target assets.

As discussed in Note 9 to our consolidated financial statements, in connection with our CMBS acquisitions, we, through the OP and the Subsidiary OPs, have borrowed approximately $303.5 million under our repurchase agreements and posted approximately $931.3 million par value of our CMBS B-Piece, CMBS I/O Strip, MSCR Notes and mortgage backed security investments as collateral.

As discussed in Note 9 to our consolidated financial statements, in connection with our CMBS acquisitions, we, through the OP and the Subsidiary OPs, have borrowed approximately $243.5 million under our repurchase agreements and posted approximately $740.0 million par value of our CMBS B-Piece and CMBS I/O Strip as collateral.

Repurchase Agreements From time to time, we may enter into repurchase agreements to finance the acquisition of our target assets. Repurchase agreements will effectively allow us to borrow against loans and securities that we own in an amount equal to (1) the market value of such loans and/or securities multiplied by (2) the applicable advance rate.

Repurchase agreements will effectively allow us to borrow against loans and securities that we own in an amount equal to (1) the market value of such loans and/or securities multiplied by (2) the applicable advance rate.

The table below shows the Company's unfunded commitments by investment type as of December 31, 2023 and December 31, 2022 (in thousands): Investment Type December 31, 2023 December 31, 2022 Unfunded Commitments Unfunded Commitments Preferred Equity $ 34,966 $ 33,704 Common Equity 6,600 — $ 41,566 $ 33,704 Critical Accounting Policies and Estimates Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP.

The table below shows the Company's unfunded commitments by investment type as of December 31, 2024 and December 31, 2023 (in thousands): Investment Type December 31, 2024 December 31, 2023 Unfunded Commitments Unfunded Commitments Loans $ 64,217 $ — Preferred Equity 7,874 34,966 Common Equity 2,536 6,600 Preferred Stock 150,000 — $ 224,627 $ 41,566 Critical Accounting Policies and Estimates Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP.

We believe that our available cash, expected operating cash flows, and potential debt or equity financings will provide sufficient funds for our operations, anticipated scheduled debt service payments, potential obligations to purchase up to $3.6 million of the Preferred Units (defined below) and dividend requirements for the twelve-month period following December 31, 2023.

We believe that our available cash, expected operating cash flows, and potential debt or equity financings will provide sufficient funds for our operations, anticipated scheduled debt service payments, any potential obligations to purchase up to $150 million of the Series E preferred stock of IQHQ, Inc. (described below) and dividend requirements for the twelve-month period following December 31, 2024.

Cash Flows The following table presents selected data from our Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021 (in thousands): For the Year Ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 31,556 $ 65,801 $ 49,298 Net cash provided by investing activities 741,342 950,578 517,878 Net cash (used in) financing activities (776,596) (1,029,264) (567,415) Net increase (decrease) in cash, cash equivalents, and restricted cash (3,698) (12,885) (239) Cash, cash equivalents and restricted cash, beginning of year 20,347 33,232 33,471 Cash, cash equivalents and restricted cash, end of year $ 16,649 $ 20,347 $ 33,232 The year ended December 31, 2023 as compared to the year ended December 31, 2022 70 Table of Contents Cash flows from operating activities.

Cash Flows The following table presents selected data from our Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022 (in thousands): For the Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 29,284 $ 31,556 $ 65,801 Net cash provided by investing activities 956,537 741,342 950,578 Net cash (used in) financing activities (995,417) (776,596) (1,029,264) Net increase (decrease) in cash, cash equivalents, and restricted cash (9,596) (3,698) (12,885) Cash, cash equivalents and restricted cash, beginning of year 16,649 20,347 33,232 Cash, cash equivalents and restricted cash, end of year $ 7,053 $ 16,649 $ 20,347 The year ended December 31, 2024 as compared to the year ended December 31, 2023 Cash flows from operating activities.

Our borrowings under the Credit Facility will mature on July 12, 2029; however, if an Underlying Loan matures prior to July 12, 2029, we will be required to repay the portion of the Credit Facility that is allocated to that loan. As of December 31, 2023, the outstanding balance on the Credit Facility was $590.3 million.

The table below provides additional details regarding recent borrowings under the master repurchase agreements (dollars in thousands): December 31, 2023 Facility Collateral Date issued Outstanding face amount Carrying value Final stated maturity Weighted average interest rate (1) Weighted average life (years) (2) Outstanding face amount Amortized cost basis Carrying value (3) Weighted average life (years) (2) Master Repurchase Agreements CMBS Mizuho (4) 4/15/2020 303,514 303,514 N/A (5) 7.26 % 0.0 931,296 470,761 464,888 6.4 (1) Weighted-average interest rate using unpaid principal balances.

The table below provides additional details regarding recent borrowings under the master repurchase agreements (dollars in thousands): December 31, 2024 Facility Collateral Date issued Outstanding face amount Carrying value Final stated maturity Weighted average interest rate (1) Weighted average life (years) (2) Outstanding face amount Amortized cost basis Carrying value (3) Weighted average life (years) (2) Master Repurchase Agreements CMBS Mizuho(4) 4/15/2020 243,454 243,454 N/A (5) 6.49 % 0.0 740,022 360,427 350,379 4.7 (1) Weighted-average interest rate using unpaid principal balances.

On October 15, 2021, a lawsuit (the “Bankruptcy Trust Lawsuit”) was filed by a litigation subtrust formed in connection with Highland’s bankruptcy against various persons and entities, including our Sponsor and James Dondero. In addition, on February 8, 2023, a lawsuit (the “UBS Lawsuit”) was filed by UBS Securities LLC and its affiliate against Mr.

Second, we will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement. We had no material unrecognized tax benefit or expense, accrued interest or penalties as of December 31, 2023 . Dividends We intend to make regular quarterly dividend payments to holders of our common stock.

Our net income attributable to common stockholders for the year ended December 31, 2022 was approximately $3.2 million.

Our net income attributable to common stockholders for the year ended December 31, 2024 was approximately $17.7 million.

Less available and more expensive debt capital has had pronounced effects on the capital markets, making property acquisitions and other investments harder to finance. Similar factors also impact the timing of and proceeds generated from asset sales and our ability to obtain debt capital.

Our Board declared the fourth regular quarterly dividend to common stockholders of $0.50 per share on October 30, 2023, which was paid on December 29, 2023, to stockholders of record as of December 15, 2023.

Our Board declared the fourth quarterly dividend to common stockholders of $0.50 per share on October 28, 2024, which was paid on December 31, 2024, to common stockholders of record as of December 13, 2024.

The Board may elect to terminate this offering at any time. As of December 31, 2023, the Company has sold 427,218 shares of Series B Preferred Stock for total gross proceeds of $10.5 million.

The Board may elect to terminate this offering at any time. As of December 31, 2024, the Company has sold 6,697,461 shares of Series B Preferred Stock for total gross proceeds of $163.8 million.

Loan servicing fees were $4.4 million for the year ended December 31, 2022 compared to $5.2 million for the year ended December 31, 2021 which was a decrease of approximately $0.8 million. The decrease between the periods was primarily due to a decrease in SFR Loans and mezzanine loans in the portfolio compared to the prior period. Management fees.

Loan servicing fees were $1.6 million for the year ended December 31, 2024 compared to $4.2 million for the year ended December 31, 2023 which was a decrease of approximately $2.6 million. The decrease between the periods was primarily due to a decrease in SFR Loans and mortgage backed securities in the portfolio compared to the prior period. Management fees.

(2) Unrealized gains are the net change in unrealized loss on investments held at fair value applicable to common stockholders. 63 Table of Contents Book Value per Share / Unit The following table calculates our book value per share (in thousands, except per share data): December 31, 2023 December 31, 2022 Common stockholders' equity $ 309,832 $ 346,474 Shares of common stock outstanding at period end 17,232 17,080 Book value per share of common stock $ 17.98 $ 20.29 Due to the large noncontrolling interest in the OP (see Note 13 to our consolidated financial statements for more information), we believe it is useful to also look at book value on a combined basis as shown in the table below (in thousands, except per share data): December 31, 2023 December 31, 2022 Common stockholders' equity $ 309,832 $ 346,474 Redeemable noncontrolling interests in the OP 89,471 96,501 Total equity $ 399,303 $ 442,975 Redeemable OP Units at period end 5,038 5,038 Shares of common stock outstanding at period end 17,232 17,080 Combined shares of common stock and redeemable OP Units 22,270 22,118 Combined book value per share / unit $ 17.93 $ 20.03 Our Portfolio Our portfolio consists of SFR Loans, CMBS B-Pieces, CMBS I/O Strips, mezzanine loans, preferred equity investments, common equity investments, multifamily properties, MSCR Notes and mortgage backed securities with a combined unpaid principal balance of $1.6 billion as of December 31, 2023 and assumes the CMBS Entities’ assets and liabilities are not consolidated.

Book Value per Share / Unit The following table calculates our book value per share (in thousands, except per share data): December 31, 2024 December 31, 2023 Common stockholders' equity $ 295,624 $ 309,832 Shares of common stock outstanding at period end 17,461 17,232 Book value per share of common stock $ 16.93 $ 17.98 Due to the large noncontrolling interest in the OP (see Note 13 to our consolidated financial statements for more information), we believe it is useful to also look at book value on a combined basis as shown in the table below (in thousands, except per share data): December 31, 2024 December 31, 2023 Common stockholders' equity $ 295,624 $ 309,832 Redeemable noncontrolling interests in the OP 86,164 89,471 Total equity $ 381,788 $ 399,303 Redeemable OP Units at period end 5,038 5,038 Shares of common stock outstanding at period end 17,461 17,232 Combined shares of common stock and redeemable OP Units 22,499 22,270 Combined book value per share / unit $ 16.97 $ 17.93 Our Portfolio Our portfolio consists of senior loans, CMBS B-Pieces, CMBS I/O Strips, mezzanine loans, preferred equity investments, common equity investments, preferred stock, multifamily properties, promissory notes, revolving credit facilities and stock warrants with a combined unpaid principal balance of $1.2 billion as of December 31, 2024 and assumes the CMBS Entities’ assets and liabilities are not consolidated.

G&A expenses were $7.2 million for the year ended December 31, 2022 compared to $6.4 million for the year ended December 31, 2021 which was an increase of approximately $0.8 million.

G&A expenses were $12.8 million for the year ended December 31, 2024 compared to $9.2 million for the year ended December 31, 2023 which was an increase of approximately $3.6 million.

(6) The number shown represents the notional value on which interest is calculated for the CMBS I/O Strips. CMBS I/O Strips receive no principal payments and the notional value decreases as the underlying loans are paid off.

(7) The number shown represents the notional value on which interest is calculated for the CMBS I/O Strips. CMBS I/O Strips receive no principal payments and the notional value decreases as the underlying loans are paid off. (8) On January 9, 2025, the mezzanine loan term was extended to April 9, 2025.

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Top changes in NexPoint Real Estate Finance, Inc.'s 2024 10-K

Item 1. Business

Item 1A. Risk Factors

Item 1C. Cybersecurity

Item 2. Properties

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Other NREF 10-K year-over-year comparisons