Finance of America (FOA) reported a net loss of $110 million in the third quarter of 2026, as noncash fair value adjustments weighed on results despite growth in the company’s home equity lending business.
The Plano, Texas-based company on Tuesday reported $748 million in funded volume for the quarter ending Sept. 30, up 24% from $603 million during the same period last year. Year-to-date funded volume reached $2.07 billion, a 17% increase from the first nine months of 2025.
FOA recorded a basic loss of $5.24 per share, compared with a loss of 98 cents per share in the third quarter of 2025. The quarterly net loss was primarily driven by $125 million in noncash fair value adjustments.
On an adjusted basis, FOA reported net income of $6 million, or 28 cents per share, compared with $33 million, or $1.33 per share, a year earlier. Adjusted EBITDA totaled $17 million, down from $55 million in the third quarter of 2025.
“The third quarter of 2026 demonstrated the continued strength of our platform, with funded origination volume growing 24% year over year. While higher interest rates drove near-term pressure on earnings, we believe this impact is temporary,” CEO Graham Fleming said in a statement. “We have already taken steps to improve margins.”
During the company’s earnings call, Fleming said the company remains focused on production growth, operational efficiency and cash generation, and explained that margins compressed after the Federal Reserve shifted from cutting to raising interest rates.
“We have already made the necessary changes to product pricing, and we expect margins to return to historical levels in the first half of 2027,” Fleming told investors.
“Finance of America has grown volumes on average by 20% each year since 2023. The third quarter was a challenging rate environment, with the 10-year Treasury yields increasing over 75 basis points during the quarter, a reaction to the Fed’s pivot to raising rates and elevated inflation,” he added.
Retirement solutions performance
FOA’s retirement solutions segment, which originates home equity-based financing products, including reverse mortgages, recorded $748 million in funded volume during the quarter, up 24% year over year.
“Our retirement solutions revenue margin was impacted in the third quarter, decreasing to 9%, compared with 11.3% in the third quarter of 2025, and a historical average since the start of 2024 of 10.7%,” Fleming said during the call. “We believe these impacts are temporary and do not change the underlying fundamentals of our business.”
Revenue for the segment totaled $67 million, down 1% from the prior-year period and a decrease from Q2 2026‘s $74 million. Pretax income fell to $3 million, down from $10 million a year earlier, while adjusted net income declined to $9 million, down from $20 million.
The company attributed the decline in profitability primarily to pressure on origination margins as benchmark interest rates increased during the quarter. It said it implemented product and pricing adjustments to address the impact and expects margins to return to historical levels.
For the first nine months of 2026, the retirement solutions segment generated $2.07 billion in funded volume, up 17% year over year. Revenue increased 14% to $208 million.
“Since 2023, our submission volumes have increased by 21% annually, while our funded volume has grown by 20% annually. This is across our product suite, as HECM volume is up 14% year over year, HomeSafe first liens are up 15%, and HomeSafe seconds are up 63%,” FOA President Kristen Sieffert said during the call.
Portfolio management performance
FOA’s portfolio management segment, which generates revenue through net interest income and fair value changes on portfolio assets, reported a pretax loss of $138 million, compared with an $11 million loss in the third quarter of 2025.
The company attributed the loss primarily to negative non-cash fair value adjustments on retained interests in securitizations. Portfolio management reported adjusted net income of $11 million, down from $30 million a year earlier.
Assets under management in the segment increased 23% year over year to $37.4 billion. The growth reflected new originations and the acquisition of Onity Mortgage Corp.‘s HECM servicing portfolio on July 1.
For the first nine months of 2026, portfolio management recorded a pretax loss of $128 million, compared with pretax income of $202 million in the same period last year. Adjusted net income totaled $57 million, down from $66 million.
FOA ended the third quarter with $118 million in cash and cash equivalents, up from $85 million at the end of June. The company attributed the increase to cash generation from originations and capital markets activity.
Total equity stood at $307 million as of Sept. 30, including $259 million attributable to common stock. Book value was $28.08 per common share.
The company said it expects to complete a $60 million paydown of senior secured notes in November. Looking ahead to the final quarter of 2026, chief financial officer Matt Engel said the company expects funded volume to reach $3.1 billion to $3.4 billion, a range “supported by consumer demographics, our product breadth, and ongoing conversion improvements.”
