UWM Holdings Corporation
02/25/2026 | Press release | Distributed by Public on 02/25/2026 14:37
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
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 consolidated financial statements and the related notes and other information included elsewhere in this Annual Report on Form 10-K (the "Form 10-K"). 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" and elsewhere in this Form 10-K.
Business Overview
We are the largest overall residential mortgage lender in the U.S., by closed loan volume, despite originating mortgage loans exclusively through the wholesale channel. For the last eleven years, including the year ended December 31, 2025, we have also 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 year ended December 31, 2025, approximately 90% 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 thatare 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 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 Policiesto the consolidated financial statements for details of recently issued accounting pronouncements and their expected impact on the Company's 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, and the decrease or increase, respectively, in the fair value of retained investment securities).
Years Ended December 31, 2025, 2024 and 2023 Summary
For the year ended December 31, 2025, we originated $163.4 billion in loans, which was an increase of $24.0 billion, or 17.2%, from the $139.4 billion of originations during the year ended December 31, 2024. We reported net income of $244.0 million for the year ended December 31, 2025, which was a decrease of $85.4 million, compared to net income of $329.4 million for the year ended December 31, 2024. Adjusted EBITDA for the year ended December 31, 2025 was $697.3 million as compared to $460.0 million for the year ended December 31, 2024. Refer to the "Non-GAAP Financial Measures" section below for a detailed discussion of how we define and calculate Adjusted EBITDA.
For the year ended December 31, 2024, we originated $139.4 billion in loans, which was an increase of $31.1 billion, or 28.8%, from the $108.3 billion of originations during the year ended December 31, 2023. We reported net income of $329.4 million for the year ended December 31, 2024, which was an increase of $399.2 million, compared to net loss of $69.8 million for the year ended December 31, 2023. Adjusted EBITDA for the year ended December 31, 2024 was $460.0 million as compared to $478.3 million for the year ended December 31, 2023. 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, theimpact 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 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 year ended December 31, | |||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
|
Net income (loss)
|
$ | 244,023 | $ | 329,375 | (69,782) | ||||||||||||
| Interest expense on non-funding debt | 214,513 | 148,620 | 172,498 | ||||||||||||||
|
Provision (benefit) for income taxes
|
6,873 | 6,582 | (6,511) | ||||||||||||||
| Depreciation and amortization | 50,044 | 45,474 | 46,146 | ||||||||||||||
| Stock-based compensation expense | 50,363 | 24,580 | 13,832 | ||||||||||||||
|
Change in fair value of MSRs due to valuation inputs or assumptions, net (1)
|
435,267 | (295,197) | 330,031 | ||||||||||||||
|
(Gain) loss on other interest rate derivatives
|
(298,126) | 215,436 | - | ||||||||||||||
|
Deferred compensation, net(2)
|
(6,195) | (9,349) | (7,938) | ||||||||||||||
|
Change in fair value of Public and Private Warrants (3)
|
(2,743) | (5,091) | 6,060 | ||||||||||||||
|
Change in Tax Receivable Agreement liability(4)
|
3,144 | 70 | (1,575) | ||||||||||||||
|
Change in fair value of investment securities (5)
|
(4,793) | (526) | (4,491) | ||||||||||||||
|
Acquisition-related expenses(6)
|
4,966 | - | - | ||||||||||||||
| Adjusted EBITDA | $ | 697,336 | $ | 459,975 | 478,270 | ||||||||||||
(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 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, which expire 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 consolidated financial statements for additional information related to the Tax Receivable Agreement. See Note 18 - Income Taxesfor further information.
(5)Reflects the change ((increase)/decrease) in the fair value of the retained investment securities.
(6)Reflects acquisition expenses related to the pending merger with Two Harbors Investment Corp.
Results of Operations for the Year Ended December 31, 2025, 2024 and 2023
| For the year ended December 31, | |||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Revenue | |||||||||||||||||
| Loan production income | $ | 1,898,141 | $ | 1,528,840 | $ | 1,000,547 | |||||||||||
| Loan servicing income | 724,741 | 636,665 | 818,703 | ||||||||||||||
| Interest income | 537,687 | 508,621 | 346,225 | ||||||||||||||
| Total revenue | 3,160,569 | 2,674,126 | 2,165,475 | ||||||||||||||
|
Other gains (losses)
|
|||||||||||||||||
| Change in fair value of mortgage servicing rights | (1,055,448) | (294,999) | (854,148) | ||||||||||||||
|
Gain (loss) on other interest rate derivatives
|
298,126 | (215,436) | - | ||||||||||||||
|
Other gains (losses), net
|
(757,322) | (510,435) | (854,148) | ||||||||||||||
| Expenses | |||||||||||||||||
| Salaries, commissions and benefits | 851,213 | 689,160 | 530,231 | ||||||||||||||
| Direct loan production costs | 208,811 | 190,277 | 104,262 | ||||||||||||||
| Marketing, travel, and entertainment | 106,191 | 96,782 | 84,515 | ||||||||||||||
| Depreciation and amortization | 50,044 | 45,474 | 46,146 | ||||||||||||||
| General and administrative | 264,060 | 209,838 | 170,423 | ||||||||||||||
| Servicing costs | 145,629 | 110,986 | 131,792 | ||||||||||||||
| Interest expense | 530,794 | 490,763 | 320,256 | ||||||||||||||
|
Other income
|
(4,391) | (5,546) | (5) | ||||||||||||||
| Total expenses | 2,152,351 | 1,827,734 | 1,387,620 | ||||||||||||||
|
Earnings (loss) before income taxes
|
250,896 | 335,957 | (76,293) | ||||||||||||||
|
Provision (benefit) for income taxes
|
6,873 | 6,582 | (6,511) | ||||||||||||||
|
Net income (loss)
|
244,023 | 329,375 | (69,782) | ||||||||||||||
|
Net income (loss) attributable to non-controlling interest
|
216,643 | 314,971 | (56,552) | ||||||||||||||
|
Net income (loss) attributable to UWM Holdings Corporation
|
$ | 27,380 | $ | 14,404 | $ | (13,230) | |||||||||||
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 year ended December 31, | ||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Loan origination volume by type | |||||||||||||||||
| Purchase: | |||||||||||||||||
| Conventional | $ | 54,890,984 | $ | 56,899,265 | $ | 58,833,673 | |||||||||||
| Government | 30,184,108 | 29,257,856 | 29,640,141 | ||||||||||||||
|
Jumbo and other(1)
|
8,104,556 | 9,924,433 | 5,381,530 | ||||||||||||||
| Total purchase | $ | 93,179,647 | $ | 96,081,554 | $ | 93,855,344 | |||||||||||
| Refinance: | |||||||||||||||||
| Conventional | $ | 31,657,196 | $ | 17,300,663 | $ | 7,082,401 | |||||||||||
| Government | 30,825,361 | 20,382,191 | 5,189,598 | ||||||||||||||
|
Jumbo and other(1)
|
7,784,260 | 5,668,998 | 2,148,540 | ||||||||||||||
| Total refinance | 70,266,817 | 43,351,852 | 14,420,539 | ||||||||||||||
| Total loan origination volume | $ | 163,446,463 | $ | 139,433,406 | $ | 108,275,883 | |||||||||||
| Portfolio metrics | |||||||||||||||||
| Average loan amount | $ | 388 | $ | 386 | $ | 368 | |||||||||||
| Weighted average loan-to-value ratio | 81.57 | % | 81.91 | % | 82.89 | % | |||||||||||
| Weighted average credit score | 737 | 737 | 737 | ||||||||||||||
| Weighted average note rate | 6.36 | % | 6.53 | % | 6.65 | % | |||||||||||
| Percentage of loans sold | |||||||||||||||||
|
To GSEs/GNMA
|
90 | % | 89 | % | 93 | % | |||||||||||
| To other counterparties | 10 | % | 11 | % | 7 | % | |||||||||||
| Servicing-retained | 93 | % | 91 | % | 95 | % | |||||||||||
| Servicing-released | 7 | % | 9 | % | 5 | % | |||||||||||
|
(1)Comprised of non-agency jumbo products, construction loans, and non-qualified mortgage products, including home equity 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 year ended December 31, |
Change
$
|
Change % |
|||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | |||||||||||||||||||||
| Primary loss | $ | (2,290,665) | $ | (1,823,222) | $ | (467,443) | 25.6 | % | |||||||||||||||
|
Loan origination fees
|
576,644 | 463,957 | 112,687 | 24.3 | % | ||||||||||||||||||
| Provision for representation and warranty obligations | (35,289) | (43,438) | 8,149 | (18.8) | % | ||||||||||||||||||
| Capitalization of MSRs | 3,647,451 | 2,931,543 | 715,908 | 24.4 | % | ||||||||||||||||||
| Loan production income | $ | 1,898,141 | $ | 1,528,840 | $ | 369,301 | 24.2 | % | |||||||||||||||
|
Gain margin(1)
|
1.16 | % | 1.10 | % | 0.06 | % | |||||||||||||||||
| For the year ended December 31, |
Change
$
|
Change % |
|||||||||||||||||||||
| ($ in thousands) | 2024 | 2023 | |||||||||||||||||||||
|
Primary loss
|
$ | (1,823,222) | $ | (1,514,340) | $ | (308,882) | 20.4 | % | |||||||||||||||
| Loan origination fees | 463,957 | 284,185 | 179,772 | 63.3 | % | ||||||||||||||||||
| Provision for representation and warranty obligations | (43,438) | (38,676) | (4,762) | 12.3 | % | ||||||||||||||||||
| Capitalization of MSRs | 2,931,543 | 2,269,378 | 662,165 | 29.2 | % | ||||||||||||||||||
| Loan production income | $ | 1,528,840 | $ | 1,000,547 | $ | 528,293 | 52.8 | % | |||||||||||||||
|
Gain margin(1)
|
1.10 | % | 0.92 | % | 0.18 | % | |||||||||||||||||
| (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 increased approximately $248.5 million for the year ended December 31, 2025 as compared to the same period in 2024. This increase was primarily due to an increase in loan production volume of $24.0 billion, or 17.2%, from $139.4 billion to $163.4 billion during the year ended December 31, 2025, as compared to the same period in 2024.
Loan origination fees increased by approximately $112.7 million for the year ended December 31, 2025 as compared to the same period in 2024, due to increases in loan production volume and increases in per loan origination and other fees. The provision for representations and warranties obligations decreased by $8.1 million for the year ended December 31, 2025 as compared to the same period in 2024, primarily due to reduced loss severity on repurchased loans.
The increase in production volume was primarily due to higher refinance volume during the year ended December 31, 2025 compared to the same period in 2024 primarily as a result of the growth in our overall market share as well as the generally lower market interest rate environment in 2025 as compared to 2024.
The total of primary loss and capitalization of MSRs increased approximately $353.3 million for the year ended December 31, 2024 as compared to the same period in 2023. This increase was primarily due to an increase in loan production volume of $31.1 billion, or 28.8%, from $108.3 billion to $139.4 billion during the year ended December 31, 2024, as compared to the same period in 2023, and the impacts of improved market pricing.
Loan origination fees increased by approximately $179.8 million for the year ended December 31, 2024 as compared to the same period in 2023, due to increases in loan production volume and increases in per loan origination and other fees associated with new product offerings. The provision for representations and warranties obligations increased by $4.8 million for the year ended December 31, 2024 as compared to the same period in 2023, due to an increase in loan sales, partially offset by a decrease in expected loss rates.
The increase in production volume was primarily due to higher refinance volume as a result of the generally lower market interest rate environment in 2024 as compared to 2023, along with higher jumbo and other production volume.
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 oversee the Company's servicing operations):
| For the year ended December 31, |
Change $ |
Change % |
||||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | ||||||||||||||||||||||||
| Contractual servicing fees | $ | 708,518 | $ | 621,325 | $ | 87,193 | 14.0 | % | ||||||||||||||||||
| Late, ancillary and other fees | 16,223 | 15,340 | 883 | 5.8 | % | |||||||||||||||||||||
| Loan servicing income | $ | 724,741 | $ | 636,665 | $ | 88,076 | 13.8 | % | ||||||||||||||||||
| Servicing costs | 145,629 | 110,986 | 34,643 | 31.2 | % | |||||||||||||||||||||
| For the year ended December 31, |
Change $ |
Change % |
||||||||||||||||||||||||
| ($ in thousands) | 2024 | 2023 | ||||||||||||||||||||||||
| Contractual servicing fees | $ | 621,325 | $ | 803,750 | $ | (182,425) | (22.7) | % | ||||||||||||||||||
| Late, ancillary and other fees | 15,340 | 14,953 | 387 | 2.6 | % | |||||||||||||||||||||
| Loan servicing income | $ | 636,665 | $ | 818,703 | $ | (182,038) | (22.2) | % | ||||||||||||||||||
| Servicing costs | 110,986 | 131,792 | (20,806) | (15.8) | % | |||||||||||||||||||||
| For the year ended December 31, | |||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Average UPB of loans serviced | $ | 225,573,713 | $ | 225,840,226 | $ | 297,033,124 | |||||||||||
| Average number of loans serviced | 630,544 | 692,908 | 908,519 | ||||||||||||||
| Weighted average servicing fee as of period end | 0.36 | % | 0.33 | % | 0.30 | % | |||||||||||
Loan servicing income was $724.7 million for the year ended December 31, 2025, an increase of $88.1 million, or 13.8%, as compared to $636.7 million for the year ended December 31, 2024. The increase in loan servicing income during the year ended December 31, 2025 was primarily due to an increase in the average portfolio weighted average servicing fee as a result of increased retained servicing fees on new production due to better execution, partially offset by a slight decline in the average servicing portfolio UPB.
Servicing costs increased $34.6 million for the year ended December 31, 2025, as compared to the same period in 2024 primarily as a result of higher shortfall interest, due to increased refinance volume in 2025 from the general decline in mortgage rates, and foreclosure expenses.
Loan servicing income was $636.7 million for the year ended December 31, 2024, a decrease of $182.0 million, or 22.2%, as compared to $818.7 million for the year ended December 31, 2023. The decrease in loan servicing income during the year ended December 31, 2024 was primarily driven by a decline in the average servicing portfolio, partially offset by an increase in the portfolio weighted average servicing fee as a result of increased retained servicing fees on new production due to better execution.
Servicing costs decreased $20.8 million for the year ended December 31, 2024 as compared to the same period in 2023 primarily as a result of a decline in the average servicing portfolio.
As of the dates presented below, our portfolio of loans serviced for others consisted of the following:
| ($ in thousands) |
December 31, 2025 |
December 31, 2024 |
|||||||||
| UPB of loans serviced | $ | 240,813,979 | $ | 242,405,767 | |||||||
| Number of loans serviced | 663,743 | 729,781 | |||||||||
| MSR portfolio delinquency count (60+ days) as % of total | 1.62 | % | 1.37 | % | |||||||
| Weighted average note rate | 5.65 | % | 4.76 | % | |||||||
| Weighted average service fee | 0.36 | % | 0.33 | % | |||||||
Interest income and Interest expense
For the periods presented below, interest income and the components of and total interest expense were as follows:
| For the year ended December 31, |
Change $ |
Change % |
|||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | |||||||||||||||||||||
| Interest income | $ | 537,687 | $ | 508,621 | $ | 29,066 | 5.7 | % | |||||||||||||||
| Less: Interest expense on funding facilities | 316,281 | 342,143 | (25,862) | (7.6) | % | ||||||||||||||||||
| Net interest income | $ | 221,406 | $ | 166,478 | $ | 54,928 | 33.0 | % | |||||||||||||||
| Interest expense on non-funding debt | $ | 214,513 | $ | 148,620 | $ | 65,893 | 44.3 | % | |||||||||||||||
| Total interest expense | 530,794 | 490,763 | 40,031 | 8.2 | % | ||||||||||||||||||
| For the year ended December 31, |
Change $ |
Change % |
|||||||||||||||||||||
| ($ in thousands) | 2024 | 2023 | |||||||||||||||||||||
| Interest income | $ | 508,621 | $ | 346,225 | $ | 162,396 | 46.9 | % | |||||||||||||||
| Less: Interest expense on funding facilities | 342,143 | 147,758 | 194,385 | 131.6 | % | ||||||||||||||||||
| Net interest income | $ | 166,478 | $ | 198,467 | $ | (31,989) | (16.1) | % | |||||||||||||||
| Interest expense on non-funding debt | $ | 148,620 | $ | 172,498 | $ | (23,878) | (13.8) | % | |||||||||||||||
| Total interest expense | 490,763 | 320,256 | 170,507 | 53.2 | % | ||||||||||||||||||
Net interest income (interest income less interest expense on funding facilities) was $221.4 million for the year ended December 31, 2025, an increase of $54.9 million, or 33.0%, as compared to $166.5 million for the year ended December 31, 2024, as a result of an increase in interest income and a decrease interest expense on funding facilities. The increase in interest income was primarily due to higher average balances of mortgage loans at fair value due to increased loan production volume, 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 slightly higher average warehouse balances due to increased loan production.
Interest expense on non-funding debt was $214.5 million for the year ended December 31, 2025, an increase from $148.6 million for the year ended December 31, 2024, primarily due to interest expense on the $800.0 million of 2030 Senior Notes issued in December of 2024 and interest expense on 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. Additionally, we had higher average borrowings under the MSR facilities in 2025, partially offset by lower interest rates on these facilities, due to declines in short-term interest rates.
Net interest income (interest income less interest expense on funding facilities) was $166.5 million for the year ended December 31, 2024, a decrease of $32.0 million, or 16%, as compared to $198.5 million for the year ended December 31, 2023, as a result of higher interest expense on funding facilities, partially offset by an increase in interest income. The increase in interest expense on funding facilities was primarily due to higher average warehouse balances from increased loan production volume in 2024. The increase in interest income was primarily due to higher average balances of mortgage loans at fair value due to increased loan production volume, partially offset by lower average note rates on mortgage loans at fair value.
Interest expense on non-funding debt was $148.6 million for the year ended December 31, 2024, a decrease from $172.5 million for the year ended December 31, 2023, primarily due to a decrease in average borrowings on the MSR facilities in 2024 as proceeds from sales of MSRs were used to reduce outstanding borrowings on the MSR facilities.
Other gains (losses)
The change in fair value of MSRs for the year ended December 31, 2025 was a decrease of $1.1 billion, as compared with a decrease of $295.0 million for the year ended December 31, 2024. The decrease in fair value of MSRs for the year ended December 31, 2025 was primarily attributable to a decline in fair value of approximately $530.9 million due to realization of cash flows, decay, and other (including loans paid in full), a decrease in fair value of approximately $435.3 million due to changes in valuation inputs and assumptions, net, (primarily due to changes in relevant market interest rates) and approximately $89.3 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 year ended December 31, 2024 of approximately $295.0 million was primarily attributable to a decline of approximately $521.4 million due to realization of cash flows, decay, and other (including loans paid in full) and approximately $68.8 million of net reserves and transaction costs for bulk MSR sales and sales of excess servicing cash flows, partially offset by an increase in fair value of approximately $295.2 million resulting from changes in valuation inputs and assumptions, primarily due to changes in relevant market interest rates.
The decrease in fair value for the year ended December 31, 2023 of approximately $854.1 million was primarily attributable to a decline of approximately $484.8 million due to realization of cash flows, decay, and other (including loans paid in full), a decline of approximately $330.0 million resulting from changes in valuation inputs and assumptions, primarily due to changes in relevant market interest rates, and approximately $39.3 million of net reserves and transaction costs for bulk MSR sales and sales of excess servicing cash flows.
The gain on other interest rate derivatives of $298.1 million for the year ended December 31, 2025 was due to a gain on other interest rate derivative instruments that we entered into during 2025 in order to manage overall interest rate risk.
The loss on other interest rate derivatives of $215.4 million for the year ended December 31, 2024 was due to losses on interest rate swap futures that we entered into in 2024. The loss was as a result of increases in relevant market interest rates and partially offset the increase in fair value of MSRs due to changes in valuation inputs and assumptions in 2024.
Other costs
Other costs (excluding servicing costs and interest expense, explained above) for the periods presented below were as follows:
| For the year ended December 31, |
Change $ |
Change % |
||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Salaries, commissions and benefits | $ | 851,213 | $ | 689,160 | $ | 162,053 | 23.5 | % | ||||||||||||||||||
| Direct loan production costs | 208,811 | 190,277 | 18,534 | 9.7 | % | |||||||||||||||||||||
| Marketing, travel, and entertainment | 106,191 | 96,782 | 9,409 | 9.7 | % | |||||||||||||||||||||
| Depreciation and amortization | 50,044 | 45,474 | 4,570 | 10.0 | % | |||||||||||||||||||||
| General and administrative | 264,060 | 209,838 | 54,222 | 25.8 | % | |||||||||||||||||||||
|
Other income
|
(4,391) | (5,546) | 1,155 | (20.8) | % | |||||||||||||||||||||
| Other costs | $ | 1,475,928 | $ | 1,225,985 | $ | 249,943 | 20.4 | % | ||||||||||||||||||
| For the year ended December 31, |
Change $ |
Change % |
||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||||
| Salaries, commissions and benefits | $ | 689,160 | $ | 530,231 | $ | 158,929 | 30.0 | % | ||||||||||||||||||
| Direct loan production costs | 190,277 | 104,262 | 86,015 | 82.5 | % | |||||||||||||||||||||
| Marketing, travel, and entertainment | 96,782 | 84,515 | 12,267 | 14.5 | % | |||||||||||||||||||||
| Depreciation and amortization | 45,474 | 46,146 | (672) | (1.5) | % | |||||||||||||||||||||
| General and administrative | 209,838 | 170,423 | 39,415 | 23.1 | % | |||||||||||||||||||||
|
Other income
|
(5,546) | (5) | (5,541) | 110820.0 | % | |||||||||||||||||||||
| Other costs | $ | 1,225,985 | $ | 935,572 | $ | 290,413 | 31.0 | % | ||||||||||||||||||
Other costs were $1.5 billion for the year ended December 31, 2025, an increase of $249.9 million, or 20.4%, as compared to $1.2 billion for the year ended December 31, 2024. This increase was primarily due to an increase in salaries, commissions and benefits of $162.1 million, or 23.5%, primarily due to an increase in average team member count to support our investment in various product, growth, and technology initiatives, along with an increase in stock-based compensation expense. General and administrative expenses increased $54.2 million primarily due to an increase in computer services, software licensing, and support, driven in part by an increase in costs related to AI initiatives, partially offset by a decrease in legal expenses. Direct loan production costs increased $18.5 million, primarily due to costs associated with our free credit report program and higher production volume, partially offset by lower costs associated with down payment assistance programs. Marketing, travel and entertainment expenses increased $9.4 million, primarily due to increases in costs associated with broker training and development programs, and sponsorship fees.
Other costs were $1.2 billion for the year ended December 31, 2024, an increase of $290.4 million, or 31.0%, as compared to $935.6 million for the year ended December 31, 2023. This increase was primarily due to an increase in salaries, commissions and benefits of $158.9 million, or 30.0%, primarily due to an increase in average team member count as we
prepare for anticipated increases in production volume, and an increase in direct loan production costs of $86.0 million, primarily due to costs associated with our free credit report and down payment assistance programs as well as increased loan production volume. General and administrative expenses increased $39.4 million primarily due to an increase in computer support services and professional service and legal fees, and marketing, travel and entertainment expenses increased $12.3 million, primarily due to our continued investment in our broker relationships through broker visits and training programs. These increases were partially offset by an increase in other income of $5.5 million primarily due to the decrease in fair value of Public and Private Warrants, partially offset by the decrease in fair value of retained investment securities.
Income Taxes
We recorded a $6.9 million provision for income taxes during the year ended December 31, 2025, compared to a $6.6 million provision for income taxes for the year ended December 31, 2024 and $6.5 million benefit for income taxes for the year ended December 31, 2023. The increase in income tax provision for the year ended December 31, 2025, as compared to the same period in 2024, was primarily due to an increase in pre-tax income attributable to the Company as a result of UWMC's increased ownership of Holdings LLC as a result of Exchange Transactions. The increase in income tax provision for the year ended December 31, 2024, as compared to the same period in 2023, was primarily due to an increase in pre-tax income attributable to the Company.
Net income
Net income was $244.0 million for the year ended December 31, 2025, a decrease of $85.4 million or 25.9%, as compared to net income of $329.4 million for the year ended December 31, 2024. The decrease in net income was primarily the result of an increase in total expenses (including income taxes) of $324.9 million and an increase of $246.9 million in other gains (losses), net, partially offset by an increase in total revenue of $486.4 million.
Net income was $329.4 million for the year ended December 31, 2024, an increase of $399.2 million or 572.0%, as compared to net loss of $69.8 million for the year ended December 31, 2023. The increase in net income was primarily the result of an increase in total revenue of $508.7 million and a decrease in other losses of $343.7 million, partially offset by an increase in total expenses (including income taxes) of $453.2 million.
Net income attributable to the Company of $27.4 million for the year ended December 31, 2025 includes the net income of UWM attributable to the Company due to its approximate 17% ownership interest in Holdings LLC. Net income attributable to the Company of $14.4 million for the year ended December 31, 2024 includes the net income of UWM attributable to the Company due to its approximate 10% ownership interest in Holdings LLC. Net loss attributable to the Company of $13.2 million for the year ended December 31, 2023 includes the net loss of UWM attributable to the Company due to its approximate 6% ownership interest in Holdings LLC.
Liquidity and Capital Resources
Overview
Historically, our primary sources of liquidity have included:
•borrowings including under our warehouse facilities and other financing facilities;
•cash flow from operations and investing 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; and
◦sale of MSRs and excess servicing cash flows.
Historically, our primary uses of funds have included:
•origination of loans;
•retention of MSRs from our loan sales;
•payment of interest expense;
•payment of operating expenses; and
•dividends on, and repurchases of, our Class A common stock and distributions to SFS Corp., including 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 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, or repurchases of our common stock or common stock derivatives.
We currently believe that our cash on hand, as well as the sources of liquidity described above, will besufficient to maintain our current operations and fund our loan originations capital commitments 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 December 31, 2025, 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 December 31, 2025:
|
Facility Type2
|
Collateral |
Line Amount as of December 31, 20251
|
Date of Initial Agreement With Warehouse Lender | Current Agreement Expiration Date |
Total Advanced Against Line as of December 31, 2025
(in thousands)
|
||||||||||||||||||||||||
|
MRA Funding:
|
|||||||||||||||||||||||||||||
| Master Repurchase Agreement | Mortgage Loans | $500 Million | 2/29/2012 | 5/15/2026 | $ | 396,734 | |||||||||||||||||||||||
| Master Repurchase Agreement | Mortgage Loans | $500 Million | 10/30/2020 |
6/26/2026
|
123,379 | ||||||||||||||||||||||||
| Master Repurchase Agreement | Mortgage Loans | $2.0 Billion | 7/24/2020 | 8/27/2026 | 1,319,244 | ||||||||||||||||||||||||
| Master Repurchase Agreement | Mortgage Loans |
$2.0 Billion
|
7/10/2012 | 9/29/2026 | 898,190 | ||||||||||||||||||||||||
| Master Repurchase Agreement | Mortgage Loans |
$750 Million
|
4/23/2021 | 10/08/2026 | 167,375 | ||||||||||||||||||||||||
| Master Repurchase Agreement | Mortgage Loans | $325 Million | 2/26/2016 | 12/17/2026 | 288,777 | ||||||||||||||||||||||||
| Master Repurchase Agreement | Mortgage Loans |
$4.5 Billion
|
5/9/2019 | 11/26/2027 | 2,807,107 | ||||||||||||||||||||||||
| Master Repurchase Agreement | Mortgage Loans |
$1.5 Billion
|
2/7/2025 | 2/5/2027 | 827,941 | ||||||||||||||||||||||||
| Master Repurchase Agreement | Mortgage Loans |
$3.0 Billion
|
12/31/2014 | 2/17/2027 | 1,353,618 | ||||||||||||||||||||||||
| Master Repurchase Agreement | Mortgage Loans |
$1.0 Billion
|
3/7/2019 | 2/19/2027 | 709,683 | ||||||||||||||||||||||||
| 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 | 20,448 | |||||||||||||||||||||||||
| $ | 8,912,496 | ||||||||||||||||||||||||||||
|
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 December 31, 2025.
2Interest rates under these funding facilities are based on SOFR plus a spread, which ranged from 1.15% to 1.75% for substantially all of our loan production volume as of December 31, 2025.
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 December 31, 2025, no amount was outstanding under the ASAP+ program and $20.4 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 December 31, 2025.
Other Financing Facilities
Senior Notes
On November 3, 2020, our consolidated subsidiary, UWM, issued $800.0 million in aggregate principal amount of senior unsecured notes due November 15, 2025 (the "2025 Senior Notes"). The 2025 Senior Notes accrued interest at a rate of 5.500% per annum. Interest on the 2025 Senior Notes was due semi-annually on May 15 and November 15 of each year. We used approximately $500.0 million of the net proceeds from the offering of 2025 Senior Notes for general corporate purposes to fund future growth and distributed the remainder to SFS Corp. for tax distributions. The 2025 Senior Notes were repaid at maturity in November 2025.
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.
Beginning on June 15, 2024, we may, at our option, redeem the 2027 Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: June 15, 2024 at 102.875%; June 15, 2025 at 101.438%; or June 15, 2026 until maturity at 100%, of the principal amount of the 2027 Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest.
On December 10, 2024, the Company's 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, the Company may, at its 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, the Company may, at its 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, the Company may, at its 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, the Company's 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, the Company may, at its 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, the Company may, at its 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, the Company may, at its 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 December 31, 2025.
MSR Facilities
In 2022, the Company's consolidated subsidiary, UWM, entered into a Loan and Security Agreement with Citibank, N.A. ("Citibank"), providing UWM with up to $1.5 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.
On January 30, 2023, UWM amended the Loan and Security Agreement with Citibank, to permit UWM, with the prior consent of Citibank, to enter into transactions for the sale of excess servicing cash flows whereby Citibank will release its security interest in that portion of the collateral.
On June 27, 2024, UWM and Citibank amended both the Loan and Security Agreement and the warehouse facility agreement between the parties. These amendments increased the combined total uncommitted borrowing capacity of the Conventional MSR Facility and the warehouse facility to $2.0 billionand extended the maturity dates to June 26, 2026. As of December 31, 2025, $900.0 million 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, maximum debt to net worth ratio, and net income as defined in the agreement. As of December 31, 2025, we were in compliance with all applicable covenants under the Conventional MSR Facility.
In 2023, the Company's consolidated subsidiary, UWM, entered into a Credit Agreement with Goldman Sachs Bank USA, providing UWM with up to $500.0 million 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. The draw period for the Ginnie MaeMSR Facility ends on March 20, 2026, and the facility has a maturity date of March 20, 2027. As of December 31, 2025, $300.0 million was outstanding under the Ginnie Mae MSR Facility. Subsequent to December 31, 2025, the uncommitted borrowing capacity of the Ginnie Mae MSR facility was increased by $300.0 million, resulting in a total of $800.0 million of uncommitted borrowing capacity.
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 December 31, 2025, 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 6.82%, 8.28%, and 8.80% for the years ended December 31, 2025, 2024, and 2023, 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 and SFS Corp. amended the Revolving Credit Agreement to, among other things, (i) restrict UWM from making any payment to SFS Corp. upon the occurrence of an event of default under any of the indentures governing any of senior notes outstanding and (ii) restrict SFS Corp. from pursuing certain remedies until all outstanding amounts due under any of the senior notes has been paid upon the occurrence of any event of default under any of the indentures governing the senior notes.
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 December 31, 2025. No amounts were outstanding under the Revolving Credit Facility as of December 31, 2025.
Borrowings Against Investment Securities
In 2021, UWM began selling some of the mortgage loans that it originates through UWM's private label securitization transactions. In executing these transactions, UWM sells mortgage loans to a securitization trust for cash and, in some cases, retained interests in the trust. The securitization entities are funded through the issuance of beneficial interests in the securitized assets. The beneficial interests take the form of trust certificates, some of which are sold to investors and some of which may be retained by UWM due to regulatory requirements. UWM 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 December 31, 2025, we had $87.5 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 December 31, 2025, 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 74% 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 December 31, 2025, we had delivered $1.7 million of collateral to the counterparty under these sale and repurchase agreements.
Finance Leases
As of December 31, 2025, our finance lease liabilities were $23.5 million, $22.9 million of which relates to leases with related parties. The Company's financing lease agreements have remaining terms ranging from approximately three years to ten years.
Cash flow data for the years ended December 31, 2025, 2024 and 2023
| For the year ended December 31, | |||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
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Net cash (used in) provided by operating activities
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$ | (2,647,557) | $ | (6,241,495) | $ | 165,244 | |||||||||||
| Net cash provided by investing activities | 2,259,557 | 2,676,092 | 1,829,962 | ||||||||||||||
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Net cash provided by (used in) financing activities
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384,025 | 3,575,274 | (2,202,636) | ||||||||||||||
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Net increase (decrease) in cash and cash equivalents
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$ | (3,975) | $ | 9,871 | $ | (207,430) | |||||||||||
| Cash and cash equivalents at the end of the period | 503,364 | 507,339 | 497,468 | ||||||||||||||
Net cash (used in) provided by operating activities
Net cash used in operating activities was $2.6 billion for the yearended December 31, 2025 compared to net cash used in operating activities of $6.2 billionfor the same period in 2024. The decrease in cash flows used in operating activities year-over-year was primarily driven by the smaller increase in mortgage loans at fair value (funded in the normal course by borrowings on warehouse facilities) for the period ended December 31, 2025, as compared to the same period in 2024, partially offset by a slight increase in net income as adjusted for non-cash operational items, including the capitalization and change in fair value of MSRs.
Net cash used in operating activities was $6.2 billion for the year ended December 31, 2024 compared to net cash provided by operating activities of $165.2 millionfor the same period in 2023. The decrease in cash flows from operating activities year-over-year was primarily driven by the increase in mortgage loans at fair value (funded in the normal course by borrowings on warehouse facilities) for the period ended December 31, 2024, as compared to a decrease in mortgage loans at fair value for the comparable period in 2023, and an increase in capitalization of MSRs in 2024, along with a smaller decrease in fair value of MSRs, partially offset by an increase in net income in 2024.
Net cash provided by investing activities
Net cash provided by investing activities was $2.3 billion for the year ended December 31, 2025 compared to $2.7 billion of net cash provided by investing activities for the same period in 2024. The decrease in cash flows provided by investing activities was primarily driven by a decrease in net proceeds from the sales of MSRs and excess servicing cash flows as well as an investment in private company equity securities in 2025.
Net cash provided by investing activities was $2.7 billionfor the year ended December 31, 2024 compared to $1.8 billionof net cash provided by investing activities for the same period in 2023. The increase in cash flows provided by investing activities was primarily driven by an increase in proceeds from the sales of MSRs and excess servicing cash flows.
Net cash provided by (used in) financing activities
Net cash provided by financing activities was $0.4 billion for the year ended December 31, 2025 compared to $3.6 billion of net cash provided by financing activities for the same period in 2024. The decrease in cash flows from financing activities year-over-year was primarily driven by a decrease in net borrowings under warehouse lines of credit for the year ended December 31, 2025 compared to the year ended December 31, 2024 (related to a smaller increase in mortgage loans at fair value for these comparable periods) and the repayment of the 2025 Senior Notes during the year ended December 31, 2025, partially offset by net proceeds from the issuance of the 2031 Senior Notes and an increase in net borrowings on our MSR facilities during the year ended December 31, 2025.
Net cash provided by financing activities was $3.6 billion for the year ended December 31, 2024 compared to $2.2 billion of net cash used in financing activities for the same period in 2023. The increase in cash flows provided by financing activities year-over-year was primarily driven by net borrowings under warehouse lines of credit (due to the increase in mortgage loans at fair value) and net proceeds from the issuance of the 2030 Senior Notes, partially offset by net repayments on our MSR facilities, member distributions (including tax distributions), and dividends.
Contractual Obligations
Cash requirements from contractual and other obligations
As of December 31, 2025, our material cash requirements from known contractual and other obligations include 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. In the third quarter of 2025, Holdings LLC issued $1.0 billion in aggregate principal amount of 6.250% senior unsecured notes due 2031. In November 2025, UWM repaid the $800.0 million in aggregate principal amount of 5.500% senior unsecured notes due in 2025. Therehave been no other material changes in the cash requirements from known contractual and other obligations since December 31, 2024.
During the fourth quarter of 2025, the Board declared a dividend of $0.10 per share of Class A common stock for an aggregate amount of $26.8 million. Concurrently with this declaration, the Board, in its capacity as the Manager of Holdings LLC, under the Holdings LLC Second Amended and Restated Operating Agreement, approved a proportional distribution of
$133.1 million from Holdings LLC to SFS Corp. with respect to Class B Units of Holdings LLC. The dividend and the distributions were paid on January 8, 2026.
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 10 - Commitments and Contingenciesto the 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 78% and 80% as of December 31, 2025 and December 31, 2024, 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 occasionally enter into other interest rate derivatives as part of its overall interest rate mitigation strategy for MSRs. There were no other interest rate derivatives outstanding as of December 31, 2025. 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) | December 31, 2025 | December 31, 2024 | |||||||||
| Interest rate lock commitments-fixed rate (a) | $ | 11,770,855 | $ | 7,661,650 | |||||||
| Interest rate lock commitments-variable rate (a) | 450,348 | 7,742 | |||||||||
| Commitments to sell loans | 2,608,946 | 2,240,558 | |||||||||
| Forward commitments to sell mortgage-backed securities | 14,355,079 | 12,601,895 | |||||||||
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(a) Adjusted for pullthrough rates of 78% and 80% as of December 31, 2025 and December 31, 2024, respectively.
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As of December 31, 2025, we had sold $3.7 billion of loans to a global insured depository institution and assigned the related trades to deliver the applicable loans into securities for end investors for settlement in January 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's judgment 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 consolidated financial statements. Our critical accounting policies and estimates are discussed below and primarily relate to the fair value and other estimates.
Mortgage loans held at fair value and revenue recognition
We record mortgage loans at estimated fair value. Mortgage loans at fair value is comprised of loans that are expected to be sold into the secondary market. When we have the unilateral right to repurchase certain Ginnie Mae pool loans we have previously sold (generally loans that are more than 90 days past due) and the call option results in a more than trivial benefit to us, the previously sold assets are required to be re-recognized on the balance sheet. We record our potential purchase obligation at the unpaid principal balance of the loan. The related asset and liability for the Ginnie Mae pool loans eligible for repurchase are presented separately on the consolidated balance sheet.
The fair value of mortgage loans is estimated using observable market information including pricing from current cash commitments from GSEs, recent market commitment prices, or broker quotes, as if the loans were to be sold currently into the secondary market. Loans at fair value for which there is little to no observable trading activity of similar instruments (e.g., scratch and dent buyers) are valued using dealer price quotations which typically results in purchase price discounts. We also factor our loans' readiness to be sold to loan outlets and adjust the fair value accordingly.
A majority of the revenues from mortgage loan originations are recognized as a component of "loan production income" in the consolidated statements of operations when the loan is originated, which is the primary revenue recognition event as the loans are recorded at estimated fair value upon origination. Loan production income also includes the unrealized gains and losses associated with the changes in the fair value of mortgage loans at fair value and the realized and unrealized gains and losses from derivative assets and liabilities. Other companies recognize a majority of the revenue related to lending activity when they make an interest rate lock commitment with a borrower.
Mortgage loans at fair value were $9.9 billion at December 31, 2025, compared to $9.5 billion as of December 31, 2024.
Mortgage servicing rights
MSRs represent the fair value assigned to the rights in the contracts that obligate us to service the loans sold in exchange for a servicing fee. At the date the loan is sold with servicing retained, the fair value of the MSR is capitalized and recognized as a component of "loan production income" in the consolidated statements of operations.
For purposes of both initial and subsequent measurement, the fair value of MSRs is determined using a valuation model that calculates the present value of estimated net future servicing income. The model includes estimates of prepayment speeds, discount rates, cost to service, float earnings, contractual servicing income, and ancillary income and late fees, among others. Changes in the estimates used to value MSRs could materially change the estimated fair value. Judgment is made when determining these assumptions, however, these estimates are supported by market and economic data collected from various outside sources. The key unobservable inputs used in determining the fair value of our MSRs include the discount rate, prepayment speeds, and the cost of servicing.
Changes in economic and other relevant conditions could cause actual results to differ from assumptions used to determine fair value. Markets, specifically buyers of MSRs, may change perspective on assumptions or MSR value entirely which can lead to different values and outcomes. Assumptions emanate from recent market transactions as well as current expectations and vary over time. There are also differences between assumptions used to determine fair value (what a buyer would pay) and what we can achieve in our operations. Prepayment speeds can change quickly and related assumptions can be materially different between buyers. Consequently, prepayment speed assumptions often differ from our estimates. Increases in prepayment speeds generally have an adverse effect on the fair value of MSRs. Discount rates imply a rate of return. Similarly, discount rates are subjective and, in practice, are often imputed to reconcile to prices observed from recent trades. Increases in the discount rate result in a lower MSR value and decreases in the discount rate result in a higher MSR value. The cost to service assumption can vary based upon buyer expectation, bidding strategy, and can depend upon the cost structure of a potential bidder. The higher the servicing cost assumption, the lower the MSR value. If we are unable to achieve the cost assumption, the MSRs' operational economics will lag fair value. Refer to Note 5- Mortgage Servicing Rightsto the consolidated financial statements for additional detail regarding the quantitative impact on the fair value of MSRs as a result of adverse changes in key unobservable inputs.
MSRs were $4.1 billion as of December 31, 2025, compared to $4.0 billion as of December 31, 2024. For the year ended December 31, 2025, we recognized a loss of $435.3 million due to changes in the fair value of MSRs as a result of changes in valuation inputs and assumptions, primarily as a result of decreases in market interest rates, compared to $295.2 million of income recognized for the same period in the prior year as a result of increased in market interest rates.
Derivative Financial Instruments
Derivatives are recognized as assets or liabilities on the balance sheets and are measured at estimated fair value with changes recorded in the consolidated statements of operations within "loan production income" in the period in which they occur. IRLCs on mortgage loans to be originated or purchased which are intended to be sold are considered derivative financial instruments and are the primary basis of our interest rate or pricing risk. We enter into FLSCs to mitigate risk of IRLCs as well as loans, and to efficiently facilitate sale of loans into the secondary market. IRLCs and FLSCs are free standing derivative financial instruments. The Company also occasionally enters into other interest rate derivatives as part of its overall interest rate mitigation strategy for MSRs. These other interest rate derivative financial instruments are measured at estimated fair value, based on quoted prices in an active market, with changes in fair value reported in the consolidated statements of operations within "Gain (loss) on other interest rate derivatives." There were no other interest rate derivative financial instruments outstanding as of December 31, 2025 or 2024.
We estimate the fair value of derivatives based on estimates of the price that would be received to sell an asset or paid to transfer a liability. Each individual contract is the basis for the determination. FLSCs are firm commitments and the value is almost exclusively determined based upon the underlying difference in interest rates between the contract's terms and current market. Similarly, we value IRLCs based upon the difference between the terms of the individual contract and the current market interest rates. Fair value estimates of IRLCs also take into account the probability that loan commitments may not be expected to be exercised by borrowers (the "pullthrough" rate), which is estimated based on historical experience. We consider the value of net future cash flows related to the associated servicing right of the eventual loan (however, the loan must first be originated, then the loan would need to be sold, with servicing retained or contractually separated, for MSR cash flows to distinctively exist), because if we did not, in most market conditions, IRLCs would result in a somewhat arbitrary loss recognition at inception. For valuation of IRLCs, we prioritize determination of exit price (what a buyer would pay) of the contract in its current form, over future components or elements. This approach results in revenue recognition for relative changes in the fair value of IRLCs during the interest rate lock period (as opposed to the primary revenue recognition event of accepting an interest rate lock), and full revenue recognition when the loan is originated.
IRLCs and loans at fair value expose us to the risk that the price of the existing loans and future loans to be made, which underlie the commitments, might decline in value due to increases in mortgage interest rates. To protect against this risk, we use FLSCs to economically hedge the risk of potential changes in the value of the loans and IRLCs (future loans). We expect that the changes in fair value of the forward commitments will either substantially or partially offset the changes in fair value of the loans and IRLCs.
Derivative assets and liabilities were $37.6 million and $26.6 million, respectively, as of December 31, 2025, as compared to $100.0 million and $36.0 million, respectively, as of December 31, 2024.
Representations and warranties reserve
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 our assessment of our contingent and non-contingent obligations, including the universe of loans which may still be at risk for indemnity, expected frequency, appeal rate success, expected loss severity, expected economic conditions, as well as an estimate for the cost of a market participant's potential readiness to stand by to perform on such obligations. We also consider our historical repurchase and loss experience when making these estimates. The reserve includes amounts for repurchase demands received but still under review as well as a reserve for the expected future losses on loans sold to investors for which no request for repurchase or indemnification demand has yet been received. The initial estimated provision for these losses is included in "loan production income" in the consolidated statements of operations, with subsequent changes in estimates recorded as part of "general and administrative" expenses.
The maximum exposure under our representations and warranties obligations would be the outstanding principal balance, any premium received on all loans sold by us that are not subject to agency certainty clauses, as well as potential costs associated with repurchasing or indemnifying the buyers, less any loans that have already been paid in full by the borrower, loans that have defaulted without a breach of representations and warranties, that have been indemnified via settlement or make whole, or that have been repurchased. The Company repurchased $207.4 million, $234.4 million and $259.0 million in UPB of loans during the years ended December 31, 2025, 2024 and 2023, respectively, related to its representations and warranties obligations.
UWM Holdings Corporation published this content on February 25, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 25, 2026 at 20:37 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]