UWM Holdings Corporation

11/06/2026 | Press release | Distributed by Public on 11/06/2026 14:35

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following management's discussion and analysis of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by reference to, our condensed consolidated financial statements and the related notes and other information included elsewhere in this Quarterly Report on Form 10-Q (the "Form 10-Q"). This discussion and analysis contains forward-looking statements that involve risks and uncertainties which could cause our actual results to differ materially from those anticipated in these forward-looking statements, including, but not limited to, risks and uncertainties discussed under the heading "Cautionary Note Regarding Forward-Looking Statements," in this report and in Part I. Item 1A. "Risk Factors" included in our Form 10-K filed with the SEC on February 25, 2026. Unless otherwise indicated or the context otherwise requires, when used in this Form 10-Q, the term "UWM" means United Wholesale Mortgage, LLC and "we," "our" and "us" refer to UWM Holdings Corporation and our subsidiaries.
Business Overview
For the last eleven years, including the year ended December 31, 2025, we have been the largest wholesale mortgage lender in the U.S. by closed loan volume. With a culture of continuous innovation of technology and enhanced client experience, we lead our market by building upon our proprietary and exclusively licensed technology platforms, superior service and focused partnership with the Independent Mortgage Broker community. We originate primarily conforming and government loans across all 50 states and the District of Columbia.
Our mortgage origination business derives revenue from originating, processing and underwriting primarily GSE conforming mortgage loans, along with FHA, USDA and VA mortgage loans, which are subsequently pooled and sold in the secondary market. For the three and nine months ended September 30, 2026, 91% and 93%, respectively, of the loans we originated were sold to Fannie Mae or Freddie Mac, or were transferred to Ginnie Mae pools in the secondary market, while the remainder primarily include non-agency jumbo loans (underwritten to the same "Qualified Mortgage" underwriting standards and have a similar risk profile but are sold to third party investors primarily due to loan size), construction loans, and non-qualified mortgage products, including home equity loans and lines of credit (which in many instances are second liens).
The mortgage origination process generally begins with a borrower entering into an IRLC with us that is arranged by an Independent Mortgage Broker, pursuant to which we have committed to enter into a mortgage at specified interest rates and terms within a specified period of time with a borrower who has applied for a loan and met certain credit and underwriting criteria. As we have committed to providing a mortgage loan at a specific interest rate, we generally hedge that risk by selling forward-settling mortgage-backed securities and FLSCs in the To Be Announced market. When the mortgage loan is closed, we fund the loan with approximately 2-3%, on average, of our own funds and the remainder with funds drawn under one of our warehouse facilities (except when we opt to "self-warehouse" in which case we use our cash to fund the entire loan). At that point, the mortgage loan is legally owned by our warehouse facility lender and is subject to our repurchase right (other than when we self-warehouse). When we have identified a pool of mortgage loans to sell to the agencies, non-governmental entities, other investors, or through our private label securitization transactions, we repurchase loans not already owned by us from our warehouse lender and sell the pool of mortgage loans into the secondary market, but in most instances retain the MSRs associated with those loans. We currently retain the MSRs associated with the majority of our production, but we have, and intend to continue to opportunistically sell MSRs depending on market conditions. This nimble approach has provided us funding flexibility, and reduced legacy MSR asset exposure. When we sell MSRs, we typically sell them in the bulk MSR secondary market.
Our unique model, focusing exclusively on the wholesale channel, results in what we believe to be complete alignment with our clients and superior customer service arising from our investments in people and technology that has driven demand for our services from our clients.
New Accounting Pronouncements
See Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies to the condensed consolidated financial statements for details of recently issued accounting pronouncements and their expected impact on our condensed consolidated financial statements.
Components of Revenue
We generate revenue from the following three components of the loan origination business: (i) loan production income, (ii) loan servicing income, and (iii) interest income.
Loan production income. Loan production income includes all components related to the origination and sale of mortgage loans, including:
• primary gain (loss), which includes the following:
◦the difference between the estimated fair value or sale price of newly originated loans when sold in the secondary market and the purchase price of such originated loans. The purchase price of originated loans includes the loan principal amount, as well as any compensation paid by us to our clients (i.e., the Independent Mortgage Brokers) and any lender credits provided by us to borrowers, offset by discount points (if any) paid by borrowers to us to reduce their interest rate. Primary gain (loss) also includes changes in the estimated fair value of loans from the origination date to the sale date, and any difference between proceeds received upon sale (net of certain fees charged by investors) and the current fair value of a loan when sold into the secondary market;
◦the change in fair value of IRLCs and FLSCs (used to economically hedge IRLCs and loans at fair value from the origination to the sale date) due to changes in estimated fair value, driven primarily by interest rates but also influenced by other valuation assumptions;
• loan origination and certain other fees related to the origination of a loan, which generally represent flat, per-loan fee amounts;
• provision for representation and warranty obligations, which represent the reserves initially established at the time of sale for our estimated liabilities associated with the potential repurchase or indemnity of purchasers of loans previously sold due to representation and warranty claims by investors. Included within these reserves are amounts for estimated liabilities for requirements to repay a portion of any premium received from investors on the sale of certain loans if such loans are repaid in their entirety within a specified time period after the sale of the loans; and
•capitalization of MSRs, representing the estimated fair value of newly originated MSRs when loans are sold and the associated servicing rights are retained.
Loan servicing income. Loan servicing income consists of the contractual fees earned for servicing the loans and includes ancillary revenue such as late fees and modification incentives. Loan servicing income is recognized upon collection of payments from borrowers.
Interest income. Interest income represents interest earned on mortgage loans at fair value.
Components of Operating Expenses
Our operating expenses include salaries, commissions and benefits, direct loan production costs, marketing, travel and entertainment, depreciation and amortization, servicing costs, general and administrative (including professional services, occupancy and equipment), interest expense, and other expense (income) (primarily related to the increase or decrease, respectively, in the fair value of the liability for the Public and Private Warrants (all unexercised Public and Private Warrants expired on January 21, 2026), the increase or decrease, respectively, in the Tax Receivable Agreement liability (other than from Exchange Transactions), and the decrease or increase, respectively, in the fair value of retained investment securities).
Three and Nine Months Ended September 30, 2026 and 2025 Summary
For the three months ended September 30, 2026, we originated $33.4 billion in loans, which was a decrease of $8.3 billion, or 20.0%, from the $41.7 billion of originations during the three months ended September 30, 2025. We reported net income of $212.6 million for the three months ended September 30, 2026, which was an increase of $200.5 million, compared to net income of $12.1 million for the three months ended September 30, 2025. Adjusted EBITDA for the three months ended September 30, 2026 was $178.3 million as compared to $211.1 million for the three months ended September 30, 2025. Refer to the "Non-GAAP Financial Measures" section below for a detailed discussion of how we define and calculate Adjusted EBITDA.
For the nine months ended September 30, 2026, we originated $118.1 billion in loans, which was an increase of $4.2 billion, or 3.7%, from the $113.8 billion of originations during the nine months ended September 30, 2025. We reported a net loss of $69.0 million for the nine months ended September 30, 2026, which was a decrease of $148.5 million, compared to net income of $79.5 million for the nine months ended September 30, 2025. Adjusted EBITDA for the nine months ended September 30, 2026 was $525.0 million as compared to $464.6 million for the nine months ended September 30, 2025. Refer to the "Non-GAAP Financial Measures" section below for a detailed discussion of how we define and calculate Adjusted EBITDA.
Non-GAAP Financial Measures
To provide investors with information in addition to our results as determined by U.S. GAAP, we disclose Adjusted EBITDA as a non-GAAP measure, which our management believes provides useful information on our performance to investors. This measure is not a measurement of our financial performance under U.S. GAAP, and it may not be comparable to a similarly titled measure reported by other companies. Adjusted EBITDA has limitations as an analytical tool, and it should not be considered in isolation or as an alternative to revenue, net income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity.
We define Adjusted EBITDA as earnings before interest expense on non-funding debt, provision for income taxes, depreciation and amortization, adjusted to exclude stock-based compensation expense, the change in fair value of MSRs due to valuation inputs or assumptions, gains or losses on other interest rate derivatives, the impact of non-cash deferred compensation expense, the change in fair value of the Public and Private Warrants, the non-cash income/expense impact of the change in the Tax Receivable Agreement liability, the change in fair value of retained investment securities, and acquisition-related expenses (net of recoveries) as we believe these adjustments are not indicative of our performance or results of operations. Adjusted EBITDA includes interest expense on funding facilities, which are recorded as a component of interest expense, as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA. Non-funding debt includes the Company's senior notes, lines of credit, borrowings against investment securities, and finance leases.
We use Adjusted EBITDA to evaluate our operating performance, and it is one of the measures used by our management for planning and forecasting future periods. We believe the presentation of Adjusted EBITDA is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by our management and may make it easier to compare our results with other companies that have different financing and capital structures.
The following table presents a reconciliation of net income (loss), the most directly comparable U.S. GAAP financial measure, to Adjusted EBITDA:
For the three months ended September 30, For the nine months ended September 30,
($ in thousands) 2026 2025 2026 2025
Net income (loss) $ 212,570 $ 12,088 $ (68,958) $ 79,539
Interest expense on non-funding debt 84,981 51,828 242,518 152,683
Provision (benefit) for income taxes 11,131 582 (2,762) 1,733
Depreciation and amortization 14,611 12,747 43,651 36,287
Stock-based compensation expense 10,188 14,732 35,844 34,771
Change in fair value of MSRs due to valuation inputs or assumptions, net (1)
(632,858) 158,842 (945,811) 406,509
(Gain) loss on other interest rate derivatives
481,537 (27,813) 1,222,926 (236,717)
Deferred compensation, net(2)
(10,064) (11,117) (5,714) (8,430)
Change in fair value of Public and Private Warrants (3)
- 770 - (1,224)
Change in Tax Receivable Agreement liability (4)
- 41 2,515 3,156
Change in fair value of investment securities (5)
5,824 (1,627) 6,685 (3,750)
Acquisition-related expenses (net of recoveries) (6)
341 - (5,846) -
Adjusted EBITDA $ 178,261 $ 211,073 $ 525,048 $ 464,558
(1)Reflects the change ((increase)/decrease) in fair value of MSRs due to changes in valuation inputs or assumptions. Refer to Note 5 - Mortgage Servicing Rights to the condensed consolidated financial statements.
(2)Reflects management incentive bonuses under our long-term incentive plan that are accrued when earned, net of cash payments.
(3)Reflects the change (increase/(decrease)) in the fair value of the Public and Private Warrants. All unexercised warrants expired in January 2026.
(4)Reflects the non-cash (income) expense impact of the change in the Tax Receivable Agreement liability. Refer to Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies to the condensed consolidated financial statements for additional information related to the Tax Receivable Agreement. See Note 16 - Income Taxes for further information.
(5)Reflects the change ((increase)/decrease) in the fair value of the retained investment securities.
(6)Reflects expenses related to the proposed acquisition of Two Harbors Investment Corp. ("Two Harbors"), net of the fee associated with the termination of the merger agreement with Two Harbors received in the first quarter of 2026.
In connection with the finalization of the Company's quarter-end financial reporting processes, the Company corrected the adjusted tax provision that was used in the calculation of the non-GAAP metric "Adjusted net income available to Class A Common Shareholders" and "Adjusted diluted earnings per share" amounts for the quarter ended September 30, 2026 previously reported in its earnings release dated November 4, 2026. The Company's net income does not reflect the income tax provision that would otherwise be reflected if 100% of the economic interest in UWM was owned by the Company. Therefore, for comparison purposes, the Company provides the non-GAAP metric "Adjusted net income available to Class A common shareholders," which is our pre-tax income together with an adjusted income tax provision, which is calculated as the provision for income taxes plus the tax effects of net income attributable to non-controlling interest determined using a blended statutory effective tax rate, less preferred stock dividends. "Adjusted diluted earnings per share" is defined as "Adjusted net income available to Class A common shareholders" divided by the weighted average number of shares of Class A common stock outstanding for the applicable period, assuming the exchange and conversion of all outstanding Class D common stock for Class A common stock, and is calculated and presented for periods in which the assumed exchange and conversion of Class D common stock to Class A common stock is anti-dilutive to EPS. Management believes that these non-GAAP metrics provide useful information to investors based on our Up-C structure, however, these measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income or diluted earnings per share calculated in accordance with GAAP.
The following is the corrected reconciliation of these non-GAAP measures for the quarter ended September 30, 2026:
Adjusted net income available to Class A Common Shareholders Q3 2026
Earnings before income taxes $ 223,701
Adjusted income tax provision (47,172)
Preferred stock dividends (26,125)
Adjusted net income available to Class A Common Shareholders $ 150,404
Adjusted diluted earnings per share Q3 2026
Diluted weighted average Class A Common shares outstanding 343,280,299
Assumed pro forma conversion of Class D shares(1)
1,261,862,603
Adjusted diluted weighted average shares outstanding(1)
1,605,142,902
Adjusted net income available to Class A Common Shareholders $ 150,404
Adjusted diluted earnings per share 0.09
(1) Reflects the pro forma exchange and conversion of antidilutive Class D common stock to Class A common stock
Results of Operations for the Three and Nine Months Ended September 30, 2026 and 2025
For the three months ended September 30, For the nine months ended September 30,
($ in thousands) 2026 2025 2026 2025
Revenue
Loan production income $ 414,976 $ 542,144 $ 1,496,765 $ 1,294,777
Loan servicing income 246,621 169,019 680,503 538,349
Interest income 149,496 132,089 423,255 382,196
Total revenue 811,093 843,252 2,600,523 2,215,322
Other gains (losses)
Change in fair value of mortgage servicing rights 470,324 (307,825) 337,306 (807,831)
Gain (loss) on other interest rate derivatives
(481,537) 27,813 (1,222,926) 236,717
Other gains (losses), net
(11,213) (280,012) (885,620) (571,114)
Expenses
Salaries, commissions and benefits 197,683 222,760 635,281 627,021
Direct loan production costs 52,571 64,213 185,237 153,670
Marketing, travel, and entertainment 32,545 23,410 99,011 71,979
Depreciation and amortization 14,611 12,747 43,651 36,287
General and administrative 74,067 62,243 222,849 190,390
Servicing costs 34,062 33,928 126,874 99,445
Interest expense 164,816 132,084 464,520 385,961
Other expense (income)
5,824 (815) 9,200 (1,817)
Total expenses 576,179 550,570 1,786,623 1,562,936
Earnings (loss) before income taxes
223,701 12,670 (71,720) 81,272
Provision (benefit) for income taxes
11,131 582 (2,762) 1,733
Net income (loss)
212,570 12,088 (68,958) 79,539
Less: Net income (loss) attributable to non-controlling interest 157,048 13,350 (69,187) 71,571
Net income (loss) attributable to UWM Holdings Corporation
55,522 (1,262) 229 7,968
Less: Preferred stock dividends 26,125 - 26,125 -
Net income (loss) available to Class A common shareholders $ 29,397 $ (1,262) $ (25,896) $ 7,968
Loan production income
The table below provides details of the composition of our loan production for each of the periods presented:
Loan Production Data: For the three months ended September 30, For the nine months ended September 30,
($ in thousands) 2026 2025 2026 2025
Loan origination volume by type
Purchase:
Conventional $ 12,831,815 $ 14,677,985 $ 36,640,554 $ 44,682,599
Government 8,439,245 8,411,136 23,782,722 23,442,925
Jumbo and other(1)
1,497,078 2,124,362 4,782,715 6,134,396
Total purchase $ 22,768,138 $ 25,213,483 $ 65,205,991 $ 74,259,920
Refinance:
Conventional $ 3,542,927 $ 7,193,198 $ 21,668,453 $ 16,615,084
Government 5,402,491 7,302,600 26,072,268 17,690,086
Jumbo and other(1)
1,680,200 2,032,789 5,137,390 5,273,268
Total refinance 10,625,618 16,528,587 52,878,111 39,578,438
Total loan origination volume $ 33,393,756 $ 41,742,070 $ 118,084,102 $ 113,838,358
Portfolio metrics
Average loan amount $ 369 $ 380 $ 386 $ 381
Weighted average loan-to-value ratio 82.56 % 81.90 % 82.11 % 81.85 %
Weighted average credit score 739 736 739 736
Weighted average note rate 6.46 % 6.42 % 6.13 % 6.52 %
Percentage of loans sold
To GSEs/GNMA
91 % 93 % 93 % 90 %
To other counterparties 9 % 7 % 7 % 10 %
Servicing-retained 93 % 95 % 94 % 93 %
Servicing-released 7 % 5 % 6 % 7 %
(1) Comprised of non-agency jumbo products, construction loans, and non-qualified mortgage products, including home equity loans and lines of credit ("HELOCs") (which in many instances are second liens).
The components of loan production income for the periods presented were as follows:
For the three months ended September 30, Change
$ 		Change
%
($ in thousands) 2026 2025
Primary loss $ (477,990) $ (434,825) $ (43,165) 9.9 %
Loan origination fees 138,280 152,573 (14,293) (9.4) %
Provision for representation and warranty obligations (6,052) (5,582) (470) 8.4 %
Capitalization of MSRs 760,738 829,978 (69,240) (8.3) %
Loan production income $ 414,976 $ 542,144 $ (127,168) (23.5) %
Gain margin(1)
1.24 % 1.30 % (0.06) %
For the nine months ended September 30,
Change
$
Change
%
($ in thousands) 2026 2025
Primary loss $ (1,842,042) $ (1,552,928) $ (289,114) 18.6 %
Loan origination fees
453,503 406,643 46,860 11.5 %
Provision for representation and warranty obligations (18,289) (25,758) 7,469 (29.0) %
Capitalization of MSRs 2,903,593 2,466,820 436,773 17.7 %
Loan production income $ 1,496,765 $ 1,294,777 $ 201,988 15.6 %
Gain margin(1)
1.27 % 1.14 % 0.13 %
(1) Represents total loan production income divided by total loan origination volume for the applicable period.
MSRs are an element of the total fair value of originated mortgage loans recognized as part of primary gain (loss) upon loan origination, and are separately recognized at estimated fair value within the "capitalization of MSRs" component of loan production income when loans are sold with servicing retained. These components of total loan production income are primarily impacted by market pricing competition, loan production volume, the estimated fair value of originated MSRs, and the effectiveness of our pipeline hedging strategies, which can be impacted by fluctuations in market interest rates between the lock date and the date a loan is sold into the secondary market.
The total of primary loss and capitalization of MSRs decreased approximately $112.4 million for the three months ended September 30, 2026 as compared to the same period in 2025. This decrease was primarily due to a decrease in loan production volume of $8.3 billion, or 20.0%, from $41.7 billion to $33.4 billion during the three months ended September 30, 2026, as compared to the same period in 2025 driven by decreases in both purchase and refinance volumes as mortgage rates increased.
Loan origination fees decreased by approximately $14.3 million for the three months ended September 30, 2026 as compared to the same period in 2025, due to a decrease in loan originations, partially offset by an increase in per loan origination and other fees. The provision for representations and warranties obligations remained relatively flat for the three months ended September 30, 2026 as compared to the same period in 2025.
The total of primary loss and capitalization of MSRs increased approximately $147.7 million for the nine months ended September 30, 2026 as compared to the same period in 2025. This increase was primarily due to improved pricing and gain margin, and an increase in loan production volume of $4.2 billion, or 3.7%, from $113.8 billion to $118.1 billion during the nine months ended September 30, 2026, as compared to the same period in 2025. The increase in production volume for the nine months ended September 30, 2026, as compared to the same period in 2025, was primarily due to an increase in refinance volume, partially offset by a decrease in purchase volume.
Loan origination fees increased by approximately $46.9 million for the nine months ended September 30, 2026 as compared to the same period in 2025, due to increases in loan production volume and increases in per loan origination and other fees, including from increased adoption of our TRAC+ and PA+ services. The provision for representations and warranties obligations decreased by $7.5 million for the nine months ended September 30, 2026 as compared to the same period in 2025, primarily due to a decrease in expected loss rates.
Loan servicing income and servicing costs
The table below summarizes loan servicing income and servicing costs for each of the periods presented (servicing costs include amounts paid to sub-servicers and other direct costs of servicing, but exclude the costs of team members that participate in and oversee our servicing operations):
For the three months ended September 30, Change
$ 		Change
%
($ in thousands) 2026 2025
Contractual servicing fees $ 241,946 $ 165,518 $ 76,428 46.2 %
Late, ancillary and other fees 4,675 3,501 1,174 33.5 %
Loan servicing income $ 246,621 $ 169,019 $ 77,602 45.9 %
Servicing costs 34,062 33,928 134 0.4 %
For the nine months ended September 30, Change
$ 		Change
%
($ in thousands) 2026 2025
Contractual servicing fees $ 666,183 $ 526,421 $ 139,762 26.5 %
Late, ancillary and other fees 14,320 11,928 2,392 20.1 %
Loan servicing income $ 680,503 $ 538,349 $ 142,154 26.4 %
Servicing costs 126,874 99,445 27,429 27.6 %
For the three months ended September 30, For the nine months ended September 30,
($ in thousands) 2026 2025 2026 2025
Average UPB of loans serviced $ 259,887,265 $ 217,344,544 $ 246,157,748 $ 222,343,411
Average number of loans serviced 667,585 602,403 636,798 624,299
Weighted average servicing fee as of period end 0.40 % 0.33 % 0.40 % 0.33 %
Loan servicing income was $246.6 million for the three months ended September 30, 2026, an increase of $77.6 million, or 45.9%, as compared to $169.0 million for the three months ended September 30, 2025. The increase in loan servicing income during the three months ended September 30, 2026 was primarily due to an increase in the portfolio weighted-average servicing fee as a result of increased retained servicing fees on new production due to better execution, as well as an increase in the average servicing portfolio UPB.
Loan servicing income was $680.5 million for the nine months ended September 30, 2026, an increase of $142.2 million, or 26.4%, as compared to $538.3 million for the nine months ended September 30, 2025. The increase in loan servicing income during the nine months ended September 30, 2026, was primarily attributable to the same factors discussed above for the three-month period.
Servicing costs increased $27.4 million for the nine months ended September 30, 2026, as compared to the same period in 2025 primarily as a result of higher shortfall interest, as well as increased foreclosure expenses and reserves for servicing advances. These increases were partially offset by lower third-party subservicing costs as we continued to transition loans to our in-house servicing platform. We began boarding newly originated loans onto the platform in the first quarter of 2026 and subsequently began transitioning existing loans serviced by our third-party subservicer. As of September 30, 2026, approximately 78% of our servicing portfolio, representing approximately $211 billion of UPB, was serviced in-house, compared to approximately 27%, representing approximately $66 billion of UPB, as of June 30, 2026. We expect third-party subservicing costs to continue to decrease as the remaining servicing portfolio is transitioned in-house. We expect to have substantially all loans transitioned to our in-house servicing platform by the end of 2026.
As of the dates presented below, our portfolio of loans serviced for others consisted of the following:
($ in thousands) September 30,
2026 		December 31,
2025
UPB of loans serviced $ 269,788,104 $ 240,813,979
Number of loans serviced 695,040 663,743
MSR portfolio delinquency count (60+ days) as % of total 1.53 % 1.62 %
Weighted average note rate 5.97 % 5.65 %
Weighted average service fee 0.40 % 0.36 %
Interest income and Interest expense
For the periods presented below, interest income and the components of total interest expense were as follows:
For the three months ended September 30, Change
$ 		Change
%
($ in thousands) 2026 2025
Interest income $ 149,496 $ 132,089 $ 17,407 13.2 %
Less: Interest expense on funding facilities 79,835 80,256 (421) (0.5) %
Net interest income $ 69,661 $ 51,833 $ 17,828 34.4 %
Interest expense on non-funding debt $ 84,981 $ 51,828 $ 33,153 64.0 %
Total interest expense 164,816 132,084 32,732 24.8 %
For the nine months ended September 30, Change
$ 		Change
%
($ in thousands)
2026
2025
Interest income $ 423,255 $ 382,196 $ 41,059 10.7 %
Less: Interest expense on funding facilities 222,002 233,278 (11,276) (4.8) %
Net interest income $ 201,253 $ 148,918 $ 52,335 35.1 %
Interest expense on non-funding debt $ 242,518 $ 152,683 $ 89,835 58.8 %
Total interest expense 464,520 385,961 78,559 20.4 %
Net interest income (interest income less interest expense on funding facilities) was $69.7 million for the three months ended September 30, 2026, an increase of $17.8 million, or 34.4%, as compared to $51.8 million for the three months ended September 30, 2025, as a result of an increase in interest income and a decrease in interest expense on funding facilities. The increase in interest income was primarily a result of higher average balances of mortgage loans at fair value and slightly higher average note rates on mortgage loans at fair value. The decrease in interest expense on funding facilities was primarily due to lower short-term interest rates, partially offset by higher average warehouse balances.
Interest expense on non-funding debt was $85.0 million for the three months ended September 30, 2026, an increase from $51.8 million for the three months ended September 30, 2025, primarily due to higher average borrowings under the MSR facilities, partially offset by lower interest rates on these facilities due to declines in short-term interest rates. Additionally, there was an increase in interest expense related to the $1.0 billion of 2031 Senior Notes issued in September of 2025, proceeds from which were used to repay the $800.0 million 2025 Senior Notes upon maturity in November 2025.
Net interest income (interest income less interest expense on funding facilities) was $201.3 million for the nine months ended September 30, 2026, an increase of $52.3 million, or 35.1%, as compared to $148.9 million for the nine months ended September 30, 2025, as a result of an increase in interest income and a decrease in interest expense on funding facilities. The increase in interest income was primarily attributable to higher average balances of mortgage loans at fair value, partially offset by lower average note rates on mortgage loans at fair value. The decrease in interest expense on funding facilities was primarily due to lower short-term interest rates, partially offset by higher average warehouse balances.
Interest expense on non-funding debt was $242.5 million for the nine months ended September 30, 2026, an increase from $152.7 million for the nine months ended September 30, 2025, was primarily attributable to the same factors discussed above for the three-month period.
Other gains (losses)
The change in fair value of MSRs for the three months ended September 30, 2026 was an increase of $470.3 million, as compared with a decrease of $307.8 million for the three months ended September 30, 2025. The increase in fair value of MSRs for the three months ended September 30, 2026 was primarily attributable to an increase in fair value of approximately $632.9 million due to changes in valuation inputs and assumptions, net, (primarily due to increases in relevant market interest rates), partially offset by a decline in fair value of approximately $162.9 million due to realization of cash flows, decay, and other (including loans paid in full) and approximately $0.3 million of net reserves and transaction costs for bulk MSR sales.
The decrease in fair value for the three months ended September 30, 2025 of approximately $307.8 million was primarily attributable to a decrease in fair value of approximately $158.8 million due to changes in valuation inputs and assumptions, net (primarily due to changes in relevant market interest rates and related valuation assumptions), a decline in fair value of approximately $115.7 million due to realization of cash flows, decay, and other (including loans paid in full), and approximately $33.3 million of net reserves and transaction costs for bulk MSR sales and sales of excess servicing cash flows.
The change in fair value of MSRs for the nine months ended September 30, 2026 was an increase of $337.3 million, as compared with a decrease of $807.8 million for the nine months ended September 30, 2025. The increase in fair value of MSRs for the nine months ended September 30, 2026 was primarily attributable to an increase in fair value of approximately $945.8 million due to changes in valuation inputs and assumptions, net (primarily due to increases in relevant market interest rates), partially offset by a decline in fair value of approximately $558.0 million due to realization of cash flows, decay, and other (including loans paid in full, which increased for the nine months ended September 30, 2026 as a result of higher refinance activity) and approximately $50.5 million of net reserves and transaction costs for bulk MSR sales and sales of excess servicing cash flows.
The decrease in fair value for the nine months ended September 30, 2025 of approximately $807.8 million was primarily attributable to a decrease in fair value of approximately $406.5 million resulting from changes in valuation inputs and assumptions, net (primarily due to changes in relevant market interest rates), a decline of approximately $335.3 million due to realization of cash flows, decay, and other (including loans paid in full) and approximately $66.0 million of net reserves and transaction costs for bulk MSR sales and sales of excess servicing cash flows.
The loss on other interest rate derivatives of $481.5 million for the three months ended September 30, 2026 was due to a loss on certain derivative financial instruments, primarily driven by increases in relevant market interest rates which was offset by a change in the fair value of the MSR portfolio which is recorded separately under "Change in fair value of mortgage servicing rights." The loss on other interest rate derivatives of $1.2 billion for the nine months ended September 30, 2026 was primarily attributable to increases and volatility of relevant market interest rates.
The gain on other interest rate derivatives of $27.8 million and $236.7 million for the three and nine months ended September 30, 2025 was due to the gain on certain derivative financial instruments we entered into as part of our overall interest rate mitigation strategy, primarily driven by changes in relevant market interest rates.
Other costs
Other costs (excluding servicing costs and interest expense, explained above) for the periods presented below were as follows:
For the three months ended September 30, Change
$ 		Change
%
($ in thousands) 2026 2025
Salaries, commissions and benefits $ 197,683 $ 222,760 $ (25,077) (11.3) %
Direct loan production costs 52,571 64,213 (11,642) (18.1) %
Marketing, travel, and entertainment 32,545 23,410 9,135 39.0 %
Depreciation and amortization 14,611 12,747 1,864 14.6 %
General and administrative 74,067 62,243 11,824 19.0 %
Other expense (income) 5,824 (815) 6,639 (814.6) %
Other costs $ 377,301 $ 384,558 $ (7,257) (1.9) %
For the nine months ended September 30, Change
$ 		Change
%
2026 2025
Salaries, commissions and benefits $ 635,281 $ 627,021 $ 8,260 1.3 %
Direct loan production costs 185,237 153,670 31,567 20.5 %
Marketing, travel, and entertainment 99,011 71,979 27,032 37.6 %
Depreciation and amortization 43,651 36,287 7,364 20.3 %
General and administrative 222,849 190,390 32,459 17.0 %
Other expense (income)
9,200 (1,817) 11,017 (606.3) %
Other costs $ 1,195,229 $ 1,077,530 $ 117,699 10.9 %
Other costs were $377.3 million for the three months ended September 30, 2026, a decrease of $7.3 million, or 1.9%, as compared to $384.6 million for the three months ended September 30, 2025. Salaries, commissions and benefits decreased by $25.1 million primarily due to a decrease in average team member count. Direct loan production costs decreased $11.6 million, primarily due to lower costs associated with down payment assistance programs and lower production volume, partially offset by increased costs associated with our free credit report program. General and administrative expenses increased $11.8 million primarily due to increased software licensing, including licensing associated with our AI initiatives, and support costs and legal fees. Marketing, travel and entertainment expenses increased $9.1 million, primarily due to increases in costs associated with broker incentives, training and development programs, and sponsorship fees. The increase of $6.6 million in other expense was primarily as a result of the decline in fair value of retained investment securities.
Other costs were $1.2 billion for the nine months ended September 30, 2026, an increase of $117.7 million, or 10.9%, as compared to $1.1 billion for the nine months ended September 30, 2025. This increase was primarily due to increases in general and administrative expenses of $32.5 million, direct loan production costs of $31.6 million, marketing, travel and entertainment expenses of $27.0 million, other expense of $11.0 million, and salaries, commissions and benefits of $8.3 million. The increase in direct loan production costs was primarily due to increased costs associated with our free credit reports program and our free appraisals incentive, partially offset by lower costs associated with our down payment assistance programs. The increase in salaries, commissions and benefits was primarily driven by increases in incentive-based compensation, as well as a shift in team member mix supporting our continued investments in AI and other technologies. The increases for the remaining cost components were attributable to the same drivers mentioned in the three months analysis above.
Income Taxes
We recorded a $11.1 million provision for income taxes during the three months ended September 30, 2026, compared to a $0.6 million provision for income taxes for the three months ended September 30, 2025. The increase in income tax provision for the three months ended September 30, 2026, as compared to the same period in 2025, was primarily due to an increase in pre-tax income attributable to the Company and the effects of UWMC's increased ownership in Holdings LLC due to Exchange Transactions.
We recorded a $2.8 million benefit for income taxes during the nine months ended September 30, 2026, compared to a $1.7 million provision for income taxes for the nine months ended September 30, 2025. The decrease in income tax provision for the nine months ended September 30, 2026, as compared to the same period in 2025, was primarily due to a decrease in pre-
tax income attributable to the Company, and the effects of UWMC's increased ownership in Holdings LLC due to Exchange Transactions.
Net income (loss)
Net income was $212.6 million for the three months ended September 30, 2026, an increase of $200.5 million or 1658.5%, as compared to net income of $12.1 million for the three months ended September 30, 2025. The increase in net income was primarily the result of a decrease in other losses, net, of $268.8 million, partially offset by an increase in total expenses (including income taxes) of $36.2 million and a decrease in total revenue of $32.2 million.
Net income attributable to the Company of $55.5 million for the three months ended September 30, 2026 includes the net income of Holdings LLC attributable to UWMC due to its approximate 21% ownership interest in Holdings LLC and its ownership of the Series A-1 and A-2 Preferred Units of Holdings LLC (issued in August 2026). Net loss attributable to the Company of $1.3 million for the three months ended September 30, 2025, includes the net income of Holdings LLC attributable to the Company due to its approximate 15% ownership interest in Holdings LLC.
Net loss was $69.0 million for the nine months ended September 30, 2026, a decrease of $148.5 million or 186.7%, as compared to net income of $79.5 million for the nine months ended September 30, 2025. The decrease in net income was primarily the result of an increase of $314.5 million in other losses, net, an increase in total expenses (including income taxes) of $219.2 million, partially offset by an increase in total revenue of $385.2 million.
Net income attributable to the Company of $0.2 million for the nine months ended September 30, 2026 includes the net income of Holdings LLC attributable to UWMC due to its approximate 21% ownership interest in Holdings LLC and its ownership of the Series A-1 and A-2 Preferred Units of Holdings LLC (issued in August 2026). Net income attributable to the Company of $8.0 million for the nine months ended September 30, 2025 includes the net income of Holdings LLC attributable to UWMC due to its approximate 15% ownership interest in Holdings LLC.
Liquidity and Capital Resources
Overview
Our primary sources of liquidity in the normal course of our business include:
•proceeds from borrowings to fund originations, including under our loan funding facilities;
•cash flow from operations, investing, and financing activities, including:
◦sale or securitization of loans into the secondary market;
◦loan origination fees and certain other fees related to the origination of a loan;
◦servicing fee income;
◦interest income on mortgage loans;
◦sale of MSRs and excess servicing cash flows; and
◦proceeds from borrowings under our other financing facilities.
Our primary uses of funds in the normal course of our business include:
•origination of loans;
•retention of MSRs from our loan sales;
•payment of interest expense;
•payment of operating expenses; and
•dividends and tax distributions.
Holdings LLC is generally required from time to time to make distributions in cash to SFS Corp. (as well as distributions to UWMC) in amounts sufficient to cover the taxes on SFS Corp.'s allocable share of the taxable income of
Holdings LLC. We are also subject to contingencies which may have a significant impact on the use of our cash, including our obligations under the Tax Receivable Agreement that we entered into with SFS Corp. at the time of the business combination.
To originate and aggregate loans for sale or securitization into the secondary market, we use our own working capital and borrow or obtain funding on a short-term basis primarily through uncommitted and committed warehouse facilities that we have established with large global banks, regional or specialized banks and certain agencies.
We continually evaluate our capital structure and capital resources to enhance our liquidity and financial flexibility, optimize our leverage and profitability, and take advantage of market opportunities. As part of such evaluation, we regularly review our levels of secured and unsecured indebtedness, available borrowing capacity and available equity, unsecured debt maturities, our strategic investments, including technology and growth of the wholesale channel, the availability or desirability of growth through the acquisition of other companies or other mortgage portfolios, the repurchase or redemption of our outstanding indebtedness, including our senior notes, or repurchases of our common stock or common stock derivatives.
In August 2026, we completed a strategic capital transaction involving the issuance of $1.65 billion of Series A Preferred Stock and 330 million warrants on our Class A common stock, which strengthened our capital and liquidity position. In October 2026, we commenced a rights offering pursuant to which we expect to receive gross proceeds of $400 million from the rights offering or from the related backstop commitments. These transactions have provided and will provide the Company with additional liquidity and capital resources to support our operational cash requirements, meet our contractual and other obligations, and manage our leverage levels.
We currently believe that our cash on hand, as well as the sources of liquidity described above, will be sufficient to maintain our current operations and fund our loan originations, capital commitments, and other financing obligations (including the 2027 Senior Notes which mature in June 2027) for the next twelve months.
Loan Funding Facilities
Warehouse facilities
Our warehouse facilities, which are our primary loan funding facilities used to fund the origination of our mortgage loans, are primarily in the form of master repurchase agreements. Loans financed under these facilities are generally financed, on average, at approximately 97% to 98% of the principal balance of the loan, which requires us to fund the remaining 2-3% of the unpaid principal balance from cash generated from our operations. Once closed, the underlying residential mortgage loan is pledged as collateral for the borrowing or advance that was made under these loan funding facilities. In most cases, the loans we originate will remain in one of our warehouse facilities for less than one month, until the loans are pooled and sold. During the time we hold the loans pending sale, we earn interest income from the borrower on the underlying mortgage loan note. This income is partially offset by the interest and fees we have to pay under the warehouse facilities.
When we sell or securitize a pool of loans, the proceeds we receive from the sale or securitization of the loans are used to pay back the amounts we owe on the warehouse facilities. The remaining funds received then become available to be re-advanced to originate additional loans. We are dependent on the cash generated from the sale or securitization of loans to fund future loans and repay borrowings under our warehouse facilities. Delays or failures to sell or securitize loans in the secondary market could have an adverse effect on our liquidity position.
From a cash flow perspective, the vast majority of cash received from mortgage originations occurs at the point the loans are sold or securitized into the secondary market. The vast majority of servicing fee income relates to the retained servicing fee on the loans, where cash is received monthly over the life of the loan and is typically a product of the borrowers' current unpaid principal balance multiplied by the weighted average service fee. For a given mortgage loan, servicing revenue from the retained servicing fee generally declines over time as the principal balance of the loan is reduced.
The amount of financing advanced to us under our warehouse facilities, as determined by agreed upon advance rates, may be less than the stated advance rate depending, in part, on the fair value of the mortgage loans securing the financings and premium we pay the broker. Each of our warehouse facilities allows the bank extending the advances to evaluate regularly the market value of the underlying loans that are serving as collateral. If a bank determines that the value of the collateral has decreased, the bank can require us to provide additional collateral (e.g., initiate a margin call) or reduce the amount outstanding with respect to the corresponding loan. Our inability to satisfy the request could result in the termination of the facility and, depending on the terms of our agreements, possibly result in a default being declared under our other warehouse facilities.
Warehouse lenders generally conduct daily evaluations of the adequacy of the underlying collateral for the warehouse loans based on the fair value of the mortgage loans. As the loans are generally financed at 97% to 98% of principal balance and our loans are typically outstanding on warehouse lines for short periods (e.g., less than one month), significant increases in market interest rates would be required for us to experience margin calls or requirements to reduce the amount outstanding with respect to the corresponding loan from a majority of our warehouse lenders. Four of our warehouse lines advance based on the fair value of the loans, rather than the principal balance. For those lines, we exchange collateral for modest changes in value. As of September 30, 2026, there were no outstanding exchanges of collateral.
The amount owed and outstanding on our warehouse facilities fluctuates based on our loan origination volume, the amount of time it takes us to sell the loans we originate, our cash on hand, and our ability to obtain additional financing. From time to time, we will increase or decrease the size of the lines to reflect anticipated increases or decreases in volume, strategies regarding the timing of sales of mortgages to the GSEs or secondary markets and costs associated with not utilizing the lines. We reserve the right to arrange for the early payment of outstanding loans and advances from time to time. As we accumulate loans, a significant portion of our total warehouse facilities may be utilized to fund loans.
The table below reflects the current line amounts of our principal warehouse facilities and the amounts advanced against those lines as of September 30, 2026:
Facility Type2
Collateral
Line Amount as of September 30, 20261
Date of Initial Agreement With Warehouse Lender Current Agreement Expiration Date
Total Advanced Against Line as of September 30, 2026
(in thousands)
MRA Funding:
Master Repurchase Agreement Mortgage Loans $325 Million 2/26/2016 12/17/2026 $ 280,647
Master Repurchase Agreement Mortgage Loans
$1.5 Billion
2/7/2025 2/5/2027 639,262
Master Repurchase Agreement Mortgage Loans
$1.0 Billion
2/9/2026 2/9/2027 538,771
Master Repurchase Agreement Mortgage Loans
$3.0 Billion
12/31/2014 2/17/2027 1,760,302
Master Repurchase Agreement Mortgage Loans
$1.0 Billion
3/7/2019 2/19/2027 588,934
Master Repurchase Agreement Mortgage Loans $500 Million 2/29/2012 5/14/2027 178,365
Master Repurchase Agreement Mortgage Loans
$- 3
10/30/2020 6/15/2027 -
Master Repurchase Agreement Mortgage Loans $2.0 Billion 7/24/2020 8/3/2027 720,296
Master Repurchase Agreement Mortgage Loans
$2.0 Billion
7/10/2012 9/28/2027 597,654
Master Repurchase Agreement Mortgage Loans
$750 Million
4/23/2021 10/8/2027 128,241
Master Repurchase Agreement Mortgage Loans
$3.5 Billion
5/9/2019 11/26/2027 1,900,353
Early Funding:
Master Repurchase Agreement Mortgage Loans $600 Million (ASAP+ - see below) No expiration -
Master Repurchase Agreement Mortgage Loans $750 Million (EF - see below) No expiration 318,138
$ 7,650,963
All interest rates are variable based upon a spread to SOFR.
1 An aggregate of $900.0 million of these line amounts is committed as of September 30, 2026.
2 Interest rates under these funding facilities are based on SOFR plus a spread, which ranged from 1.00% to 1.75% for substantially all of our loan production volume as of September 30, 2026.
3 The combined funding limit with this counterparty is $2.0 billion, which can be allocated between the MRA Facility and the Conventional MSR Facility (see below) at UWM's discretion. As of September 30, 2026, all of this combined funding capacity was allocated to the Conventional MSR Facility.
Early Funding Programs
We are an approved lender for loan early funding facilities with Fannie Mae through its As Soon As Pooled Plus ("ASAP+") program and Freddie Mac through its Early Funding ("EF") program. As an approved lender for these early funding programs, we enter into an agreement to deliver closed and funded one-to-four family residential mortgage loans, each secured by related mortgages and deeds of trust, and receive funding in exchange for such mortgage loans in some cases before the lender has grouped them into pools to be securitized by Fannie Mae or Freddie Mac. All such mortgage loans must adhere to a set of eligibility criteria to be acceptable. As of September 30, 2026, no amount was outstanding under the ASAP+ program and $318.1 million was outstanding through the EF program.
Covenants
Our warehouse facilities generally require us to comply with certain operating and financial covenants and the availability of funds under these facilities is subject to, among other conditions, our continued compliance with these covenants. These financial covenants include, but are not limited to, maintaining (i) a certain minimum tangible net worth, (ii) minimum liquidity, (iii) a maximum ratio of total liabilities or total debt to tangible net worth, and (iv) profitability. A breach of these covenants can result in an event of default under these facilities and as such would allow the lenders to pursue certain remedies. In addition, each of these facilities, as well as our secured and unsecured lines of credit, includes cross default or cross acceleration provisions that could result in all facilities terminating if an event of default or acceleration of maturity occurs under any facility. We were in compliance with all covenants under these facilities as of September 30, 2026.
Other Financing Facilities
Senior Notes
On April 7, 2021, our consolidated subsidiary, UWM, issued $700.0 million in aggregate principal amount of senior unsecured notes due April 15, 2029 (the "2029 Senior Notes"). The 2029 Senior Notes accrue interest at a rate of 5.500% per annum. Interest on the 2029 Senior Notes is due semi-annually on April 15 and October 15 of each year. We used a portion of the proceeds from the issuance of the 2029 Senior Notes to pay off and terminate a line of credit that was in place at the time of issuance, and the remainder for general corporate purposes.
Beginning on April 15, 2024, we may, at our option, redeem the 2029 Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: April 15, 2024 at 102.750%; April 15, 2025 at 101.375%; or April 15, 2026 until maturity at 100%, of the principal amount of the 2029 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.
On November 22, 2021, our consolidated subsidiary, UWM, issued $500.0 million in aggregate principal amount of senior unsecured notes due June 15, 2027 (the "2027 Senior Notes"). The 2027 Senior Notes accrue interest at a rate of 5.750% per annum. Interest on the 2027 Senior Notes is due semi-annually on June 15 and December 15 of each year. We used the proceeds from the issuance of the 2027 Senior Notes for general corporate purposes. The Company may currently redeem the 2027 Senior Notes at par plus accrued and unpaid interest.
On December 10, 2024, our consolidated subsidiary, Holdings LLC, issued $800.0 million in aggregate principal amount of senior unsecured notes due February 1, 2030, which are guaranteed by its wholly-owned subsidiary, UWM (the "2030 Senior Notes"). The 2030 Senior Notes accrue interest at a rate of 6.625% per annum. Interest on the 2030 Senior Notes is due semi-annually on February 1 and August 1 of each year, commencing August 1, 2025. We used the net proceeds from the issuance of the 2030 Senior Notes to pay down outstanding amounts on our MSR facilities and for general corporate purposes.
On or after February 1, 2027, we may, at our option, redeem the 2030 Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: February 1, 2027 at 103.313%; February 1, 2028 at 101.656%; or February 1, 2029 until maturity at 100%, of the principal amount of the 2030 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest. Prior to February 1, 2027, we may, at our option, redeem up to 40% of the aggregate principal amount of the 2030 Senior Notes originally issued at a redemption price of 106.625% of the principal amount of the 2030 Senior Notes redeemed on the redemption date plus accrued and unpaid interest, with net proceeds of certain equity offerings. In addition, we may, at our option, redeem some or all of the 2030 Senior Notes prior to February 1, 2027 at a price equal to 100% of the principal amount redeemed plus a "make-whole" premium, plus accrued and unpaid interest.
On September 9, 2025, our consolidated subsidiary, Holdings LLC, issued $1.0 billion in aggregate principal amount of senior unsecured notes due March 15, 2031, which are guaranteed by its wholly-owned subsidiary, UWM (the "2031 Senior Notes"). The 2031 Senior Notes accrue interest at a rate of 6.250% per annum. Interest on the 2031 Senior Notes is due semi-annually on March 15 and September 15 of each year, commencing on March 15, 2026. We used the net proceeds from the issuance of the 2031 Senior Notes (i) to repay the 2025 Senior Notes at maturity, (ii) temporarily pay down outstanding amounts on our MSR facilities, and (iii) for working capital.
On or after March 15, 2028, we may, at our option, redeem the 2031 Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: March 15, 2028 at 103.125%; March 15, 2029 at 101.563%; or March 15, 2030 until maturity at 100%, of the principal amount of the 2031 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest. Prior to March 15, 2028, we may, at our option, redeem up
to 40% of the aggregate principal amount of the 2031 Senior Notes originally issued at a redemption price of 106.250% of the principal amount of the 2031 Senior Notes redeemed on the redemption date plus accrued and unpaid interest, with net proceeds of certain equity offerings. In addition, we may, at our option, redeem some or all of the 2031 Senior Notes prior to March 15, 2028 at a price equal to 100% of the principal amount redeemed plus a "make-whole" premium, plus accrued and unpaid interest.
The indentures governing the outstanding Senior Notes contain certain operating covenants and restrictions, subject to a number of exceptions and qualifications, including restrictions on our ability to (1) incur additional non-funding indebtedness unless either (y) the Fixed Charge Coverage Ratio (as defined in the applicable indenture) is no less than 3.0 to 1.0 or (z) the Debt-to-Equity Ratio (as defined in the applicable indenture) does not exceed 2.0 to 1.0, (2) merge, consolidate or sell assets, (3) make restricted payments, including distributions, (4) enter into transactions with affiliates, (5) enter into sale and leaseback transactions and (6) incur liens securing indebtedness. We were in compliance with the terms of these indentures as of September 30, 2026.
MSR Facilities
In 2022, our consolidated subsidiary, UWM, entered into a Loan and Security Agreement with Citibank, N.A. ("Citibank"), which currently provides UWM with up to $2.0 billion of uncommitted borrowing capacity to finance the origination, acquisition or holding of certain mortgage servicing rights (the "Conventional MSR Facility"). The Conventional MSR Facility is collateralized by all of UWM's mortgage servicing rights that are appurtenant to mortgage loans pooled in securitizations by Fannie Mae or Freddie Mac that meet certain criteria. Available borrowings, as well as mandatory curtailments, under the Conventional MSR Facility are based on the fair market value of the collateral, and borrowings under the Conventional MSR Facility bear interest based on one-month term SOFR plus an applicable margin. The current maturity date of the Conventional MSR Facility is June 15, 2027. As of September 30, 2026, $1.415 billion was outstanding under the Conventional MSR Facility.
The Conventional MSR Facility contains covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquidity, and net income as defined in the agreement. As of September 30, 2026, we were in compliance with all applicable covenants under the Conventional MSR Facility.
In 2023, our consolidated subsidiary, UWM, entered into a Credit Agreement with Goldman Sachs Bank USA, which currently provides UWM with up to $1.25 billion of uncommitted borrowing capacity to finance the origination, acquisition or holding of certain mortgage servicing rights (the "Ginnie Mae MSR Facility"). The Ginnie Mae MSR Facility is collateralized by all of UWM's mortgage servicing rights that are appurtenant to mortgage loans pooled in securitization by Ginnie Mae that meet certain criteria. Available borrowings, as well as mandatory curtailments, under the Ginnie Mae MSR Facility are based on the fair market value of the collateral. Borrowings under the Ginnie Mae MSR Facility bear interest based on SOFR plus an applicable margin. Currently, the draw period for the Ginnie Mae MSR Facility extends to March 20, 2028, and the maturity date is March 20, 2029. As of September 30, 2026, $875.0 million was outstanding under the Ginnie Mae MSR Facility.
The Ginnie Mae MSR Facility contains covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquidity, maximum debt to net worth ratio, and net income as defined in the agreement. As of September 30, 2026, we were in compliance with all applicable covenants under the Ginnie Mae MSR Facility.
The weighted average interest rate charged for borrowings under our MSR facilities was 6.31% and 7.17% for the three months ended September 30, 2026 and 2025, respectively. The weighted average interest rate charged for borrowings under our MSR facilities was 6.22% and 7.21% for the nine months ended September 30, 2026 and 2025, respectively.
Revolving Credit Facility
In 2022, UWM entered into the Revolving Credit Agreement, between UWM, as the borrower, and SFS Corp., as the lender. The Revolving Credit Agreement provides for, among other things, a $500.0 million unsecured revolving credit facility (the "Revolving Credit Facility"). The Revolving Credit Facility had an initial one-year term and automatically renews for successive one-year periods unless terminated by either party. Amounts borrowed under the Revolving Credit Facility may be borrowed, repaid and reborrowed from time to time, and accrue interest at the Applicable Prime Rate (as defined in the Revolving Credit Agreement). UWM may utilize the Revolving Credit Facility in connection with: (i) operational and investment activities, including but not limited to funding and/or advances related to (a) servicing rights, (b) 'scratch and dent' loans, (c) margin requirements, and (d) equity in loans held for sale; and (ii) general corporate purposes.
In September 2025, UWM entered into Amendment No. 1 to the Revolving Credit Agreement with SFS Corp. which, among other things, subordinates amounts due under the Revolving Credit Agreement to amounts due under the outstanding
senior notes including (i) restricting UWM from making any payment to SFS Corp., as lender, for amounts due under the Revolving Credit Agreement and (ii) restricting SFS Corp., as lender, from pursuing certain remedies, including acceleration, off-set or counterclaims, in each case upon the occurrence of an event of default under any of the indentures governing any of the senior notes outstanding and until such event of default is cured or waived. All other material terms of the Revolving Credit Agreement remain unchanged. The Revolving Credit Agreement contains certain financial and operating covenants and restrictions, subject to a number of exceptions and qualifications, and the availability of funds under the Revolving Credit Facility is subject to our continued compliance with these covenants. We were in compliance with these covenants as of September 30, 2026. No amounts were outstanding under the Revolving Credit Facility as of September 30, 2026.
Borrowings Against Investment Securities
UWM has entered into sale and repurchase agreements for a portion of the retained beneficial interests in the securitization trusts established to facilitate its private label securitization transactions which have been accounted for as borrowings against investment securities. As of September 30, 2026, we had $80.7 million outstanding under individual trades executed pursuant to a master repurchase agreement with a counterparty which is collateralized by the investment securities (beneficial interests in the trusts) that we retained due to regulatory requirements. The borrowings against investment securities have remaining terms ranging from one to three months as of September 30, 2026, and interest rates based on SOFR plus a spread. We intend to renew these sale and repurchase agreements upon their maturity during the required holding period for the retained investment securities.
The counterparty under these sale and repurchase agreements conducts daily evaluations of the adequacy of the underlying collateral based on the fair value of the retained investment securities less any specified haircuts. These investment securities are financed on average at approximately 75% of the outstanding principal balance, and exchanges of cash collateral are required if the fair value of the retained investment securities, less the haircut, is less than the principal balance plus accrued interest on the secured borrowings. As of September 30, 2026, we had delivered $4.5 million of collateral to the counterparty under these sale and repurchase agreements.
Finance Leases
As of September 30, 2026, our finance lease liabilities were $21.9 million, $21.5 million of which relates to leases with related parties. Our financing lease agreements have remaining terms ranging from approximately two years to ten years.
Redeemable Preferred Stock and Warrants
On August 5, 2026, we issued 1,500,000 shares of our Series A-1 Preferred Stock and 150,000 shares of its Series A-2 Preferred Stock and warrants to purchase shares of its Class A common stock for an aggregate purchase price of $1.65 billion. In connection with the transaction, we issued 165,000,000 Class A warrants with an exercise price of $6.00 per share of Class A Common Stock ("Class A Warrants") and 165,000,000 Class B warrants with an exercise price of $2.00 per share of Class A Common Stock ("Class B Warrants"), each exercisable for shares of the Company's Class A common stock. The Class A Warrants and the Class B Warrants are exercisable solely for cash and expire August 5, 2036.
In October 2026, the Company commenced a rights offering, intended to raise gross proceeds of up to $400 million. Pursuant to a support and backstop agreement entered into on August 5, 2026, to the extent the rights offering does not generate $400 million of gross proceeds, certain funds affiliated with Oaktree have the option, and SFS Group and our Chairman, President, and CEO have the obligation, to purchase securities for the unfunded amount such that aggregate gross proceeds from the rights offering and the backstop purchases would be at least $400 million.  Purchases pursuant to the support and backstop agreement may be either (x) shares of Class A Common Stock, at the same price as was available in the rights offering or (y) junior perpetual non-convertible preferred stock which is similar to the Series A-2 Preferred Stock, except that it is further subordinated to the Series A-1 Preferred Stock and the Series A-2 Preferred Stock, and an equal amount of Class A Warrants and Class B Warrants for aggregate number of warrants equal to 20% of principal amount of such preferred stock.
The Series A Preferred Stock is classified as temporary equity because it may become redeemable based on events that are not solely within the Company's control. As of September 30, 2026, the Series A Preferred Stock had an aggregate carrying amount of $1.50 billion and an aggregate redemption amount of $2.31 billion.
The Series A Preferred Stock accrues cumulative dividends at an annual cash rate of 10.0% or, if paid in kind, an annual rate of 13.0%. Cash dividends will represent a use of the Company's liquidity, while payment-in-kind dividends will increase the stated value of the Series A Preferred Stock without a current-period cash payment.
The Series A-1 Certificate of Designation requires the Company to maintain specified financial thresholds, including minimum tangible book value of equity, minimum liquidity, and a maximum corporate net leverage ratio. The Company was in compliance with these financial requirements as of September 30, 2026.
See Note 11 - Redeemable Preferred Stock and Warrants, Note 18 - Earnings Per Share, and Note 19 - Subsequent Events, to the accompanying condensed consolidated financial statements for additional information.
Cash flow data for the nine months ended September 30, 2026 and 2025
For the nine months ended September 30,
($ in thousands) 2026 2025
Net cash used in operating activities $ (1,858,934) $ (2,751,314)
Net cash provided by investing activities 808,322 2,099,290
Net cash provided by financing activities 967,668 1,015,388
Net (decrease) increase in cash and cash equivalents $ (82,944) $ 363,364
Cash and cash equivalents at the end of the period 420,420 870,703
Net cash used in operating activities
Net cash used in operating activities was $1.9 billion for the nine months ended September 30, 2026 compared to net cash used in operating activities of $2.8 billion for the same period in 2025. The decrease in cash flows used in operating activities year-over-year was primarily driven by the decrease in mortgage loans at fair value for the period ended September 30, 2026, as compared to the increase in mortgage loans at fair value for same period in 2025, partially offset by a decrease in net income as adjusted for non-cash operational items, including the capitalization and change in fair value of MSRs.
Net cash provided by investing activities
Net cash provided by investing activities was $808.3 million for the nine months ended September 30, 2026 compared to $2.1 billion of net cash provided by investing activities for the same period in 2025. The decrease in cash flows provided by investing activities was primarily driven by a decrease in net proceeds from the sales of MSRs.
Net cash provided by financing activities
Net cash provided by financing activities was $967.7 million for the nine months ended September 30, 2026 compared to $1.0 billion of net cash provided by financing activities for the same period in 2025. During the nine months ended September 30, 2026, there were net repayments of warehouse facilities compared to net borrowings during the same period in 2025, related to the changes in mortgage loans at fair value during these periods, offset by net borrowings on the secured lines of credit and net proceeds from the issuance of redeemable preferred stock and warrants. The nine months ended September 30, 2025 included net repayments on the secured lines of credit, and net proceeds from the issuance of senior notes.
Contractual Obligations
Cash requirements from contractual and other obligations
As of September 30, 2026, our material cash requirements from known contractual and other obligations include dividend payments on our preferred stock issued during the third quarter of 2026, interest and principal payments under our Senior Notes, principal payments under our borrowings against investment securities, interest and principal payments under our Conventional MSR Facility and Ginnie Mae MSR Facility, payments under our financing and operating lease agreements, payments to SFS Corp. under the TRA and required tax distributions to SFS Corp. Except for the issuance of the preferred stock, there have been no other material changes in the cash requirements from known contractual and other obligations since December 31, 2025.
Holdings LLC is generally required from time to time to make distributions in cash to SFS Corp. (as well as distributions to UWMC) in amounts sufficient to cover the taxes on its allocable share of the taxable income of Holdings LLC.
The sources of funds needed to satisfy these cash requirements include cash flows from operations and investing activities, including cash flows from sales of MSRs and excess servicing cash flows, sale or securitization of loans into the secondary market, loan origination fees and certain other fees related to the origination of a loan, servicing fee income, and interest income on mortgage loans.
Repurchase and indemnification obligations
Loans sold to investors, which we believe met investor and agency underwriting guidelines at the time of sale, may be subject to repurchase in the event of specific default by the borrower or subsequent discovery that underwriting or documentation standards were not explicitly satisfied. We establish a reserve which is estimated based on an assessment of our contingent and non-contingent obligations, including expected losses, expected frequency, the overall potential remaining exposure, as well as an estimate for a market participant's potential readiness to stand by to perform on such obligations. See Note 8 - Commitments and Contingencies to the condensed consolidated financial statements for further information.
Interest rate lock commitments, loan sale and forward commitments, and other interest rate derivatives
In the normal course of business, we are party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit to borrowers at either fixed or floating interest rates. IRLCs are binding agreements to lend to a borrower at a specified interest rate within a specified period of time as long as there is no violation of conditions established in the contract. These commitments generally have fixed expiration dates or other termination clauses which may require payment of a fee. As many of these commitments expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The blended average pullthrough rate was 84% and 78% as of September 30, 2026 and December 31, 2025, respectively.
We also enter into contracts to sell loans into the secondary market at specified future dates (commitments to sell loans), and forward commitments to sell MBS at specified future dates and interest rates. We also occasionally enter into other interest rate derivatives as part of our overall interest rate mitigation strategy for MSRs, including interest rate swap futures, treasury futures, and forward loan purchase commitments. These financial instruments include margin call provisions that require us to transfer cash in an amount sufficient to eliminate any margin deficit. A margin deficit generally results from daily changes in the fair value of these financial instruments. We are generally required to satisfy the margin call on the day of or within one business day of such notice.
Following is a summary of the notional amounts of commitments as of dates indicated:
($ in thousands) September 30, 2026 December 31, 2025
Interest rate lock commitments-fixed rate (a) $ 8,011,383 $ 11,770,855
Interest rate lock commitments-variable rate (a) 614,968 450,348
Commitments to sell loans 1,811,199 2,608,946
Forward commitments to sell mortgage-backed securities 13,359,658 14,355,079
Other interest rate derivatives 5,700,000 -
(a) Adjusted for pullthrough rates of 84% and 78% as of September 30, 2026 and December 31, 2025, respectively.
As of September 30, 2026, we had sold $2.1 billion of loans to a global insured depository institution and assigned the related trades to the institution. The loans underlying these trades were scheduled for delivery into securities for settlement with end investors in October 2026.
Critical Accounting Estimates and Use of Significant Estimates
Preparation of financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We have identified certain accounting estimates as being critical because they require management to make difficult, subjective or complex judgments about matters that are uncertain. Actual results could differ and the use of other assumptions or estimates could result in material differences in our condensed consolidated financial statements. Our critical accounting policies and estimates relate to accounting for mortgage loans held at fair value and revenue recognition, mortgage servicing rights, derivative financial instruments and representations and warranties reserve. There were no significant changes to our policies, methodologies, or processes used in applying our critical accounting estimates from what was described in our 2025 Annual Report on Form 10-K.
Cautionary Note Regarding Forward-Looking Statements
This report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. Specifically, forward-looking statements in this report include statements relating to:
•our financial and operational performance;
•future loan originations;
•our client-based business strategies, business model, strategic initiatives, competitive advantages;
•the impact of interest rate risks on our business and results of operations, including expected subscriptions and proceeds;
•the benefits and risks associated with an Exchange Transaction;
•the completion of our rights offering;
•the delays or failures to sell or securitize loans in the secondary market and its impact on our financial performance;
•our hedging and risk mitigation strategies, including the natural hedges provided by our originations;
•our ability to successfully implement our hedging and risk mitigation strategies and the impact of unanticipated macroeconomic factors on such strategy;
•the impacts of defaults on our business;
•the potential impact of technological developments on our operations;
•the impact of new tax laws and regulations on our financial results;
•our accounting policies and the impacts to our agreements and financial results;
•the renewal of our sale and repurchase and other financing agreements upon their maturity;
•the quality of our loan portfolio;
•our ability to increase or decrease the size of our warehouse lines to reflect anticipated increases or decreases in volume;
•macroeconomic conditions that may affect our business and the mortgage industry in general;
•our ability to sell our MSRs and excess servicing;
•the impact of pending litigation on our financial position and the outcome of such litigation;
•the sufficiency of our liquidity;
•our repurchase and indemnification obligations for loans sold to investors and other contractual indemnification obligations; and
•other statements preceded by, followed by or that include the words "may," "can," "should," "will," "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "target" or similar expressions.
These forward-looking statements involve estimates and assumptions that may be affected by risks and uncertainties in our business, as well as other external factors, and actual results could differ materially from those expressed or implied in any forward-looking statement as a result of a number of factors, including:
•our dependence on macroeconomic and U.S. residential real estate market conditions, including changes in U.S. monetary policies that affect interest rates and inflation;
•our reliance on our warehouse and other short-term financing facilities to fund mortgage loans and otherwise operate our business, our use of leverage under these facilities and the risk that a decrease in the value of collateral underlying certain of these facilities could result in an unanticipated margin call;
•our ability to access, and increase, warehouse lines to meet our anticipated growth;
•the impact of actions taken by the Presidential Administration, including actions that could adversely affect inflation, interest rates, consumer discretionary income and confidence and home building starts, which could adversely affect our loan origination volume and profitability;
•our ability to sell loans in the secondary market, including to government-sponsored enterprises ("GSEs"), and to securitize our loans into mortgage-backed securities through the GSEs and Ginnie Mae, and our ability to sell MSRs in the bulk MSR secondary market;
•our dependence on the GSEs and the risk of changes to these entities and their roles, including, as a result of GSE reform, termination of conservatorship or efforts to increase the capital levels of the GSEs;
•changes in the GSEs', FHA, USDA and VA guidelines or GSE and Ginnie Mae guarantees;
•our ability to comply with all applicable rules and regulations in connection with our internal servicing operations and the risks associated with the transition of servicing operations in-house;
•our dependence on licensed residential mortgage loan officers or entities, including brokers that arrange for the funding of mortgage loans, or banks, credit unions or other entities that use their own funds or warehouse facilities to fund mortgage loans but do not underwrite or otherwise make the credit decision with respect to such loans, and changes in banking regulations and capital requirements that may impact the availability of warehouse financing or otherwise affect liquidity in the residential mortgage industry;
•our inability to continue to grow or effectively manage the growth of our loan origination volume;
•our ability to continue to attract and retain our Independent Mortgage Broker relationships;
•the occurrence of a data breach or other failure in our cybersecurity or information security systems;
•our reliance on third-party software and services in our operations;
•our reliance on third-party sub-servicers to service our mortgage loans or MSRs;
•the occurrence of data breaches or other cybersecurity failures at our third-party sub-servicers or other vendors;
•intense competition in the mortgage industry;
•our ability to implement and maintain technological innovations in our operations;
•the loss of key management;
•our ability to continue to comply with the complex state and federal laws, regulations and practices applicable to mortgage loan origination and servicing generally, including maintaining appropriate state licenses, managing the costs and operational risks associated with material changes to such laws and regulations and the impact of recent changes in federal and state government administrations;
•errors in, or the ineffectiveness of, internal and external models or data we rely on to manage risk and make business decisions;
•fines or other penalties associated with the conduct of Independent Mortgage Brokers;
•the risk that we are or may become subject to legal actions that if decided adversely, could be detrimental to our business;
•those risks described in Item 1A - Risk Factors in our 2025 Annual Report on Form 10-K, as well as those described from time to time in our other filings with the SEC.
All forward-looking statements speak only as of the date of this report and should not be relied upon as representing our views as of any subsequent date. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
UWM Holdings Corporation published this content on November 06, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 06, 2026 at 20:35 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]