Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 12, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | HUNT COMPANIES FINANCE TRUST, INC. | ||
Entity Central Index Key | 0001547546 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 24,938,883 | ||
City Area Code | 212 | ||
Local Phone Number | 521-6323 | ||
Entity Address, Address Line One | 230 Park Avenue | ||
Entity Address, Address Line Two | 19th Floor | ||
Entity Address, City or Town | New York | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10169 | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 45-4966519 | ||
Entity File Number | 001-35845 | ||
Document Transition Report | false | ||
Document Annual Report | true | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
Security Exchange Name | NYSE | ||
Trading Symbol | HCFT | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Entity Public Float | $ 60.4 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Documents Incorporated by Reference | Part III of this annual report on Form 10-K incorporates information by reference from the registrant's definitive proxy statement with respect to its 2020 annual meeting of stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of the registrant's fiscal year. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |
ASSETS | |||
Cash and cash equivalents | [1] | $ 10,942,115 | $ 7,882,862 |
Restricted cash | [1] | 5,069,715 | 51,330,950 |
Commercial mortgage loans held-for-investment, at amortized cost | [1] | 635,260,420 | 555,172,891 |
Receivables held in securitization trusts, at fair value | [1],[2] | 0 | 24,357,335 |
Mortgage servicing rights, at fair value | [1] | 2,700,207 | 3,997,786 |
Deferred offering costs | [1] | 40,000 | 126,516 |
Accrued interest receivable | [1] | 2,342,354 | 2,430,790 |
Investment related receivable | [1] | 0 | 33,042,234 |
Other assets | [1] | 1,547,187 | 1,010,671 |
Total assets | [1] | 657,901,998 | 679,352,035 |
LIABILITIES: | |||
Collateralized loan obligations, net | [1] | 505,930,065 | 503,978,918 |
Secured Term Loan, net | [1] | 39,384,041 | 0 |
Multi-family securitized debt obligations | [1],[2] | 0 | 19,231,331 |
Accrued interest payable | [1] | 805,126 | 1,231,649 |
Dividends payable | [1] | 1,776,912 | 1,465,610 |
Fees and expenses payable to Manager | [1] | 991,981 | 1,175,000 |
Other accounts payable and accrued expenses | [1] | 369,161 | 2,066,189 |
Total liabilities | [1] | 549,257,286 | 529,148,697 |
Commitments and contingencies | [1] | ||
EQUITY: | |||
Preferred Stock: par value $0.01 per share; 50,000,000 shares authorized, 8.75% Series A cumulative redeemable, $25 liquidation preference, 0 issued and outstanding at December 31, 2019 and 1,610,000 issued and outstanding at December 31, 2018, respectively | [1] | 0 | 37,156,972 |
Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 23,692,164 and 23,687,664 shares issued and outstanding, at December 31, 2019 and December 31, 2018, respectively | [1] | 236,877 | 236,832 |
Additional paid-in capital | [1] | 228,135,116 | 231,305,743 |
Cumulative distributions to stockholders | [1] | (122,236,981) | (114,757,019) |
Accumulated earnings (deficit) | [1] | 2,410,200 | (3,838,690) |
Total stockholders' equity | [1] | 108,545,212 | 150,103,838 |
Noncontrolling interests | [1] | 99,500 | 99,500 |
Total equity | [1] | 108,644,712 | 150,203,338 |
Total liabilities and equity | [1] | $ 657,901,998 | $ 679,352,035 |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. | ||
[2] | As of December 31, 2018, assets of the consolidated VIE related to the FREMF 2012-KF01 Trust totaled $24,357,335, and the liabilities of consolidated VIE related to the FREMF 2012-KF01 trust totaled $19,595,186. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Variable Interest Entity [Line Items] | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |
Preferred stock, dividend rate (percentage) | 8.75% | 8.75% | |
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 | |
Preferred stock, shares issued (in shares) | 0 | 1,610,000 | |
Preferred stock, shares outstanding (in shares) | 0 | 1,610,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 | |
Common stock, shares issued (in shares) | 23,692,164 | 23,687,664 | |
Common stock, shares outstanding (in shares) | 23,692,164 | 23,687,664 | |
Total Assets | [1] | $ 657,901,998 | $ 679,352,035 |
Total Liabilities | [1] | 549,257,286 | 529,148,697 |
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | |||
Variable Interest Entity [Line Items] | |||
Total Assets | 636,541,489 | 636,951,486 | |
Total Liabilities | 506,662,238 | 504,846,712 | |
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Total Assets | 636,541,489 | 636,951,486 | |
Total Liabilities | $ 506,662,238 | 504,846,712 | |
FREMF 2012-KF01 Trust | Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Total Assets | 24,357,335 | ||
Total Liabilities | $ 19,595,186 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Interest income: | ||
Available-for-sale securities | $ 0 | $ 10,748,966 |
Commercial mortgage loans held-for-investment | 38,969,471 | 25,077,632 |
Multi-family loans held in securitization trusts | 78,361 | 20,891,992 |
Residential loans held in securitization trusts | 0 | 2,102,352 |
Cash and cash equivalents | 9,647 | 134,002 |
Interest expense: | ||
Repurchase agreements - available-for-sale securities | 0 | (7,637,242) |
Collateralized loan obligations | (20,882,076) | (12,578,306) |
Secured term loan | (2,761,561) | 0 |
Multi-family securitized debt obligations | 0 | (19,652,710) |
Residential securitized debt obligations | 0 | (1,685,971) |
Net interest income | 15,413,842 | 17,400,715 |
Other income: | ||
Realized (loss) on investments, net | (709,439) | (33,391,712) |
Realized gain on derivative contracts, net | 0 | 25,984,870 |
Change in unrealized (loss) on derivative contracts, net | 0 | (5,349,613) |
Change in unrealized gain (loss) on mortgage servicing rights | (1,297,579) | 1,033,926 |
Change in unrealized gain (loss) on multi-family loans held in securitization trusts | 694,339 | (6,398,348) |
Change in unrealized gain on residential loans held in securitization trusts | 0 | 5,650,199 |
Servicing income, net | 869,032 | 940,090 |
Other income | 0 | 155,378 |
Total other (loss) | (443,647) | (11,375,210) |
Expenses: | ||
Management fee | 2,245,065 | 2,335,998 |
General and administrative expenses | 4,335,376 | 4,006,774 |
Operating expenses reimbursable to Manager | 1,629,908 | 2,375,804 |
Other operating expenses | 360,517 | 1,003,734 |
Compensation expense | 193,962 | 252,912 |
Total expenses | 8,764,828 | 9,975,222 |
Net income (loss) before provision for income taxes | 6,205,367 | (3,949,717) |
Benefit from (provision for) income taxes | 43,523 | (1,521,745) |
Net income | 6,248,890 | (5,471,462) |
Dividends to preferred stockholders | (491,764) | (3,528,588) |
Deemed dividend on preferred stock related to redemption | (3,093,028) | 0 |
Net income (loss) attributable to common stockholders (basic and diluted) | 2,664,098 | (9,000,050) |
Earnings (loss) per share: | ||
Net income (loss) attributable to common stockholders | $ 2,664,098 | $ (9,000,050) |
Weighted average number of shares of common stock outstanding (in shares) | 23,687,812 | 23,613,636 |
Basic and diluted income (loss) per share (in dollars per share) | $ 0.11 | $ (0.38) |
Dividends declared per share of common stock (in dollars per share) | $ 0.30 | $ 0.28 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 6,248,890 | $ (5,471,462) |
Less: | ||
Dividends to preferred stockholders | (491,764) | (3,528,588) |
Deemed dividend on preferred stock related to redemption | (3,093,028) | 0 |
Net income (loss) attributable to common stockholders (basic and diluted) | 2,664,098 | (9,000,050) |
Other comprehensive income: | ||
Reclassification adjustment for net loss included in net income | 0 | 12,617,794 |
Total other comprehensive income | 0 | 12,617,794 |
Comprehensive income attributable to common stockholders | $ 2,664,098 | $ 3,617,744 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) | Total | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Distributions to Stockholders | Accumulated Earnings (Deficit) | Noncontrolling interests | Preferred Stock | Preferred StockPreferred Stock | Preferred StockNoncontrolling interests | Common Stock | Common StockCommon Stock | Common StockAdditional Paid in Capital | |
Balance (in shares) at Dec. 31, 2017 | 1,610,000 | 22,143,758 | |||||||||||
Balance at Dec. 31, 2017 | $ 145,791,277 | $ 224,048,169 | $ (12,617,794) | $ (104,650,235) | $ 1,632,772 | $ 0 | $ 37,156,972 | $ 221,393 | |||||
Issuance of common stock, net (in shares) | 1,543,906 | ||||||||||||
Issuance of stock | $ 99,500 | $ 99,500 | $ 7,362,452 | $ 15,439 | $ 7,347,013 | ||||||||
Cost of issuing common stock | (92,866) | (92,866) | |||||||||||
Restricted stock compensation expense | 3,427 | 3,427 | |||||||||||
Net income (loss) | (5,471,462) | (5,471,462) | |||||||||||
Reclassification adjustment for net loss included in net income | 12,617,794 | 12,617,794 | |||||||||||
Common dividends declared | (6,578,196) | (6,578,196) | |||||||||||
Preferred dividends declared | (3,528,588) | (3,528,588) | |||||||||||
Balance (in shares) at Dec. 31, 2018 | 1,610,000 | 23,687,664 | |||||||||||
Balance at Dec. 31, 2018 | 150,203,338 | [1] | 231,305,743 | 0 | (114,757,019) | (3,838,690) | 99,500 | $ 37,156,972 | $ 236,832 | ||||
Issuance of common stock, net (in shares) | 4,500 | ||||||||||||
Issuance of stock | $ 15,300 | $ 45 | $ 15,255 | ||||||||||
Cost of issuing common stock | (86,516) | (86,516) | |||||||||||
Redemption of preferred stock, net (in shares) | (1,610,000) | ||||||||||||
Redemption of preferred stock, net | (40,250,000) | (3,093,028) | $ (37,156,972) | ||||||||||
Restricted stock compensation expense | (6,338) | (6,338) | |||||||||||
Net income (loss) | 6,248,890 | 6,248,890 | |||||||||||
Reclassification adjustment for net loss included in net income | 0 | ||||||||||||
Common dividends declared | (6,988,198) | (6,988,198) | |||||||||||
Preferred dividends declared | (491,764) | (491,764) | |||||||||||
Balance (in shares) at Dec. 31, 2019 | 0 | 23,692,164 | |||||||||||
Balance at Dec. 31, 2019 | $ 108,644,712 | [1] | $ 228,135,116 | $ 0 | $ (122,236,981) | $ 2,410,200 | $ 99,500 | $ 0 | $ 236,877 | ||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Cash flows from operating activities: | |||
Net income (loss) | $ 6,248,890 | $ (5,471,462) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Amortization/accretion of available-for-sale securities premiums and discounts, net | 0 | 1,403,431 | |
Amortization of collateralized loan obligations discounts, net | 1,095,750 | 738,507 | |
Amortization of deferred offering costs | (86,516) | 0 | |
Amortization of deferred financing costs | 1,006,858 | 314,037 | |
Realized loss on investments, net | 709,439 | 33,391,712 | |
Realized (gain) on derivative contracts, net | 0 | (25,984,870) | |
Unrealized loss on derivative contracts | 0 | 5,349,613 | |
Unrealized (gain) loss on mortgage servicing rights | 1,297,579 | (1,033,926) | |
Unrealized (gain) loss on multi-family loans held in securitization trusts | (694,339) | 6,398,348 | |
Unrealized (gain) on residential loans held in securitization trusts | 0 | (5,650,199) | |
Restricted stock compensation expense | 8,962 | 22,912 | |
Net change in: | |||
Accrued interest receivable | 88,436 | 1,647,640 | |
Deferred offering costs | 86,516 | 52,866 | |
Other assets | (536,516) | (245,454) | |
Accrued interest payable | (62,668) | (654,217) | |
Deferred income | 0 | (222,518) | |
Fees and expenses payable to Manager | (183,019) | 423,000 | |
Other accounts payable and accrued expenses | (1,697,029) | 1,792,988 | |
Net cash provided by operating activities | 7,282,343 | 12,272,408 | |
Cash flows from investing activities: | |||
Purchase of commercial mortgage loans held-for-investment | (300,319,433) | (410,901,286) | |
Proceeds from sales of available-for-sale securities | 0 | 1,227,314,578 | |
Proceeds from sales of commercial mortgage loans held-for-investment | 6,816,250 | 0 | |
Net proceeds from derivative contracts | 0 | 25,984,870 | |
Principal payments from available-for-sale securities | 0 | 62,932,244 | |
Principal payments from retained beneficial interests | 4,747,049 | 0 | |
Principal payments from commercial mortgage loans held-for-investment | 213,415,654 | 201,392,408 | |
Investment related receivable | 33,042,234 | (25,581,106) | |
Purchase of Hunt CMT Equity LLC (net of $9,829,774 in restricted cash) | 0 | (58,220,292) | |
Due to broker | 0 | (1,123,463) | |
Net cash (used in) provided by investing activities | (42,298,246) | 1,021,797,953 | |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock | 0 | 7,250,101 | |
Redemption of preferred stock | (40,250,000) | 0 | |
Capital contributed by noncontrolling interests | 0 | 99,500 | |
Dividends paid on common stock | (6,632,546) | (5,156,936) | |
Dividends paid on preferred stock | (536,114) | (3,523,370) | |
Proceeds from repurchase agreements - available-for-sale securities | 0 | 6,017,838,000 | |
Proceeds from collateralized loan obligations | 0 | 219,449,000 | |
Proceeds from secured term loan | 40,250,000 | 0 | |
Payment of deferred financing costs | (1,017,419) | (4,075,446) | |
Principal repayments of repurchase agreements - available-for-sale securities | 0 | (7,252,360,000) | |
Net cash (used in) financing activities | (8,186,079) | (1,020,479,151) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | (43,201,982) | 13,591,210 | |
Cash, cash equivalents and restricted cash, beginning of period | 59,213,812 | 45,622,602 | |
Cash, cash equivalents and restricted cash, end of period | 16,011,830 | 59,213,812 | |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 21,603,697 | 19,163,004 | |
Cash paid for income taxes | 1,956,337 | 0 | |
Non-cash investing and financing activities information | |||
Dividends declared but not paid at end of period | [1] | 1,776,912 | 1,465,610 |
Net change in unrealized gain on available-for-sale securities | 0 | 12,617,794 | |
Consolidation of receivables held in securitization trusts | 0 | 24,357,335 | |
Consolidation of multi-family securitized debt obligations | 0 | 19,595,186 | |
Commercial mortgage loans acquired, Hunt CMT Equity LLC acquisition | 0 | 345,664,012 | |
Restricted cash acquired, Hunt CMT Equity LLC acquisition | 0 | 9,829,774 | |
Other assets acquired, Hunt CMT Equity LLC acquisition | 0 | 109,100 | |
Collateralized loan obligations assumed, Hunt CMT Equity LLC acquisition | $ 0 | $ (287,552,820) | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
ORGANIZATION AND BUSINESS OPERA
ORGANIZATION AND BUSINESS OPERATIONS | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS OPERATIONS | Hunt Companies Finance Trust, Inc. (together with its consolidated subsidiaries, the “Company”), is a Maryland corporation that focuses primarily on investing in, financing and managing a portfolio of commercial real estate debt investments. Effective January 3, 2020, the Company is externally managed by OREC Investment Management, LLC (the "Manager" or "OREC IM"), who replaced the prior manager, Hunt Investment Management, LLC ("HIM"). The Company's common stock is listed on the NYSE under the symbol "HCFT." The Company was incorporated on March 28, 2012 and commenced operations on May 16, 2012. The Company began trading as a publicly traded company on March 22, 2013. The Company has elected to be taxed as a real estate investment trust (“REIT”) and to comply with Sections 856 through 859 of the Internal Revenue Code of 1986, as amended, (the "Code"). Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent of its distributions to stockholders and as long as certain asset, income and share ownership tests are met. On April 30, 2018, as more particularly described in our current Report on Form 8-K filed on April 30, 2018, the Company acquired Hunt CMT Equity LLC for an aggregate purchase price of approximately $68 million. The assets of Hunt CMT Equity LLC were comprised of commercial mortgage loans financed through a collateralized loan obligation ("Hunt CRE 2017-FL1, Ltd."), a licensed commercial mortgage lender ("Hunt CMT Finance, LLC") and eight loan participations from a Hunt affiliate. The assets of Hunt CRE 2017-FL1, Ltd. were comprised of performing floating-rate commercial mortgage loans with a portfolio balance of $339.4 million and $9.8 million in cash available for reinvestment at the acquisition date. The securitization pool was financed by investment-grade notes with a notional principal balance of $290.7 million and a net carrying value of $287.6 million after accounting for unamortized discount. Additionally, the Company paid $0.1 million for the assets acquired with the licensed lender and $6.2 million for the loan participations. On February 14, 2019, the Company drew on its secured term loan ("Secured Term Loan") in the aggregate principal amount of $40.25 million and used the net proceeds of $39.2 million and working capital of $1.1 million to redeem all 1,610,000 shares of its outstanding 8.75% Series A Cumulative Redeemable Preferred Stock at its $25 per share liquidation preference plus accrued and unpaid dividends. On March 18, 2019, the Company entered into a support agreement with HIM, pursuant to which HIM agreed to reduce the expense reimbursement cap by 25% per annum (subject to such reduction not exceeding $568,000 per annum) until such time as the aggregate support provided thereunder equaled approximately $1.96 million. The terms of the support agreement are materially unchanged in the new management agreement with the Manager. On January 3, 2020, the Company and HIM entered into a termination agreement to which the Company and HIM agreed to mutually and immediately terminate that certain management agreement dated January 18, 2018, by and between the Company and HIM. The Company simultaneously entered into a new management agreement with OREC IM. See Note 13 for further discussion. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation These financial statements have been prepared in accordance with U.S. GAAP and are expressed in United States dollars. The consolidated financial statements of the Company include the accounts of its subsidiaries. Reclassification Certain prior year amounts have been reclassified to conform to current year presentation related to restricted stock compensation expense and proceeds from issuance of common stock in the Consolidated Statement of Cash Flows. Principles of Consolidation The accompanying consolidated financial statements of the Company include the accounts of the Company and all subsidiaries which it controls (i) through voting or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not the primary beneficiary are accounted for under the equity method or other appropriate GAAP. All significant intercompany transactions have been eliminated on consolidation. VIEs An entity is considered a VIE when any of the following applies: (1) the equity investors (if any) lack one or more essential characteristics of a controlling financial interest; (2) the equity investment at risk is not sufficient to finance that entity's activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both the following characteristics: (1) the power to direct activities that, when taken together, most significantly impact the VIE performance; and (2) the obligation to absorb losses and right to receive returns from the VIE that would be significant to the VIE. The Company evaluates quarterly its junior retained notes and preferred shares of Hunt CRE 2017-FL1, Ltd and Hunt CRE 2018-FL2, Ltd. for potential consolidation. At December 31, 2019, the Company determined it was the primary beneficiary of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. based on its obligation to absorb losses derived from ownership of its preferred shares. Accordingly, the Company consolidated the assets, liabilities, income and expenses of the underlying issuing entities. The Company's maximum exposure to loss from collateralized loan obligations was $124,046,671 at December 31, 2019 and December 31, 2018. During the second quarter of 2018, the Company sold first-loss securities of the FREMF 2011-K13 Trust and the first-loss and subordinated tranches issued by the CSMC 2014-OAK1 Trust, and as a result, having determined it is no longer the primary beneficiary of these trusts, no longer consolidates the assets, liabilities, income and expenses of those trusts. In the first quarter of 2019, the first-loss tranche of the Re-REMIC related to the FREMF 2012-KF01 Trust was redeemed, and as a result, having determined the Company is no longer the primary beneficiary of that trust, no longer consolidates the assets, liabilities, income and expense of the trust. The Company’s maximum exposure to loss from consolidated trusts was $0 and $4,762,149, respectively, at December 31, 2019, and December 31, 2018. Use of Estimates The financial statements have been prepared on the accrual basis of accounting in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires the Company to make a number of significant estimates. These include estimates of fair value of certain assets and liabilities, amount and timing of credit losses, prepayment rates, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates (e.g. valuation changes due to supply and demand, credit performance, prepayments, interest rates, or other reasons) will occur in the near term. The Company’s estimates are inherently subjective in nature and actual results could differ from its estimates and the differences may be material. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents at time of purchase include cash held in bank accounts on an overnight basis and other short term deposit accounts with banks having maturities of 90 days or less. The Company maintains its cash and cash equivalents in highly rated financial institutions, and at times these balances exceed insurable amounts. Restricted cash includes cash held within Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. for purposes of reinvestment in qualifying commercial mortgage loans. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the statement of cash flows. December 31, 2019 December 31, 2018 Cash and cash equivalents $ 10,942,115 $ 7,882,862 Restricted cash CRE 2017-FL1, Ltd. $ 2,158,497 $ 24,085,890 Restricted cash CRE 2018-FL2, Ltd. $ 2,911,218 $ 27,245,060 Total cash, cash equivalents and restricted cash $ 16,011,830 $ 59,213,812 Deferred Offering Costs Direct costs incurred to issue shares classified as equity, such as legal and accounting fees, are deducted from the related proceeds and the net amount recorded as stockholders’ equity. Accordingly, payments made by the Company in respect of such costs related to the issuance of shares are recorded as an asset in the accompanying consolidated balance sheets in the line item “Deferred offering costs”, for subsequent deduction from the related proceeds upon closing of the offering. To the extent that certain costs, in particular legal fees, are known to have been accrued but have not yet been invoiced and paid, they are included in “Other accounts payable and accrued expenses” on the accompanying consolidated balance sheets. Fair Value Measurements The "Fair Value Measurements and Disclosures" Topic 820 of the FASB, or ASC 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurement under GAAP. Specifically, the guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at measurement date. ASC 820 specifies a hierarchy of valuation techniques based on the inputs used in measuring fair value. Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable market data from independent sources, while unobservable inputs reflect the Company's market assumptions. The three levels are defined as follows: • Level 1 Inputs - Quoted prices for identical instruments in active markets • Level 2 Inputs - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 Inputs - Instruments with primarily unobservable value drivers. Pursuant to ASC 820 we disclose fair value information about financial instruments, which are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate fair value for those certain instruments. The following methods and assumptions are used to estimate the fair value of each class of financial instrument, for which it is practicable to estimate that value: • Cash and cash equivalents : The carrying amount of cash and cash equivalents approximates fair value. • Restricted cash : The carrying amount of restricted cash approximates fair value. • Commercial mortgage loans : The Company may record fair value adjustments on a non-recurring basis when it has determined it necessary to record a specific impairment reserve or charge-off against a loan and the Company measures such specific reserve or charge-off using the fair value of the loan's collateral. To determine the fair value of loan collateral, the Company employs different approaches including income capitalization approach or appraised values depending upon the nature of such collateral and other relevant market factors. • Mortgage servicing rights : The Company determines the fair value of MSRs from a third-party pricing service on a recurring basis. The third-party pricing service uses common market pricing methods that include using discounted cash flow models to calculate present value estimated net servicing income and observed market pricing for MSR purchase and sale transactions. The model considers contractually specified servicing fees, prepayment assumptions, delinquency rates, late charges, other ancillary revenue, costs to service and other economic factors. • Collateralized loan obligations : The Company determines the fair value of collateralized loan obligations by utilizing a third-party pricing service. In determining the value of a particular investment, pricing service providers may use market spreads, inventory levels, trade and bid history, as well as market insight from clients, trading desks and global research platform. • Secured term loan : The Company determines the fair value of its secured term loan based on a discounted cash flow methodology. Commercial Mortgage Loans Held-for-Investment Commercial mortgage loans held-for-investment represent floating-rate transitional loans and other commercial mortgage loans purchased by the Company. These loans include loans sold into securitizations that the Company consolidates. Commercial mortgage loans held-for-investment are intended to be held-to-maturity and, accordingly, are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs (in respect of originated loans), premiums and discounts (in respect of purchased loans) and impairment, if any. Interest income is recognized as revenue using the effective interest method and is recorded on the accrual basis according to the terms of the underlying loan agreement. Any fees, costs, premiums and discounts associated with these loan investments are deferred and amortized over the term of the loan using the effective interest method, or on a straight line basis when it approximates the effective interest method. Income accrual is generally suspended and loans are placed on non-accrual status on the earlier of the date at which payment has become 90 days past due or when full and timely collection of interest and principal is considered not probable. The Company may return a loan to accrual status when repayment of principal and interest is reasonably assured under the terms of the underlying loan agreement. As of December 31, 2019, the Company did not hold any loans placed in non-accrual status. Quarterly, the Company assesses the risk factors of each loan classified as held-for-investment and assigns a risk rating based on a variety of factors, including, without limitation, debt-service coverage ratio ("DSCR"), loan-to-value ratio ("LTV"), property type, geographic and local market dynamics, physical condition, leasing and tenant profile, adherence to business plan and exit plan, maturity default risk and project sponsorship. The Company's loans are rated on a 5-point scale, from least risk to greatest risk, respectively, which ratings are described as follows: 1. Very Low Risk : exceeds expectations and is outperforming underwriting or it is very likely that the underlying loan can be refinanced easily in the period's prevailing capital market conditions 2. Low Risk : meeting or exceeding underwritten expectations 3. Moderate Risk : in-line with underwritten expectations or the sponsor may be in the early stages of executing the business plan and the loan structure appropriately mitigates additional risks 4. High Risk : potential risk of default, a loss may occur in the event of default 5. Default Risk : imminent risk of default, a loss is likely in the event of default The Company evaluates each loan rated High Risk or above as to whether it is impaired on a quarterly basis. Impairment occurs when the Company determines that the facts and circumstances of the loan deem it probable that the Company will not be able to collect all amounts due in accordance with the contractual terms of the loan. If a loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan through a charge to the provision for loan losses. Impairment of these loans, which are collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, actions of other lenders, and other factors deemed necessary by the Manager. Actual losses, if any, could ultimately differ from estimated losses. In addition, the Company evaluates the entire portfolio to determine whether the portfolio has any impairment that requires a valuation allowance on the remainder of the loan portfolio. As of December 31, 2019, the Company has not recognized any impairments on its loans held-for-investment. We also assessed the remainder of the loan portfolio, considering the absence of delinquencies and current market conditions, and, as such has not recorded any allowance for loan losses. Mortgage Servicing Rights, at Fair Value Mortgage servicing rights (“MSRs”) are associated with residential mortgage loans that the Company historically purchased and subsequently sold or securitized. MSRs are held and managed at Five Oaks Acquisition Corp. ("FOAC"), the Company's taxable REIT subsidiary ("TRS"). As the owner of MSRs, the Company is entitled to receive a portion of the interest payments from the associated residential mortgage loan, and is obligated to service, directly or through a subservicer, the associated loan. MSRs are reported at fair value as a result of a fair value option election. Residential mortgage loans for which the Company owns the MSRs are directly serviced by one or more sub-servicers retained by the Company. The Company does not directly service any residential mortgage loans. MSR income is recognized at the contractually agreed upon rate, net of the costs of sub-servicers retained by the Company. If a sub-servicer with which the Company contracts were to default, an evaluation of MSR assets for impairment would be undertaken at that time. Collateralized Loan Obligations Collateralized loan obligations represent third-party liabilities of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. (the "CLOs"). The CLOs are VIEs that the Company has determined it is the primary beneficiary of and accordingly are consolidated in the Company's financial statements, excluding liabilities of the CLOs acquired by the Company that are eliminated on consolidation. The third-party obligations of the CLOs do not have any recourse to the Company as the consolidator of the CLOs. CLOs are carried at their outstanding unpaid principal balances, net of any unamortized discounts or deferred financing costs. Any premiums, discounts or deferred financing costs associated with these liabilities are amortized to interest expense using the effective interest method over the expected average life of the related obligations, or on a straight line basis when it approximates the effective interest method. Secured Term Loan The Company and certain of its subsidiaries are party to a $40.25 million credit and guaranty agreement with the lenders referred to therein and Cortland Capital Service LLC, as administrative agent and collateral agent for the lenders (the "Secured Term Loan"). The Secured Term Loan is carried at its unpaid principal balance, net of deferred financing costs. Deferred financing costs of $1,017,419 associated with this liability are amortized to interest expense using the effective interest method over the term of the Secured Term Loan, or on a straight line basis when it approximates the effective interest method. Multi-Family and Residential Mortgage Loans Held in Securitization Trusts Multi-family and residential mortgage loans held in consolidated securitization trusts were comprised of multi-family mortgage loans held in the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust, and residential mortgage loans held in the CSMC 2014-OAK1 Trust. Based on a number of factors, the Company determined it was the primary beneficiary of the VIE underlying the trusts, met the criteria for consolidation and, accordingly, consolidated the trusts, including its assets, liabilities, income and expenses in its consolidated financial statements. The Company elected the fair value option on each of the assets and liabilities held within the trusts. The Company sold the subordinated securities of the FREMF 2011-K13 Trust on May 18, 2018 and the CSMC 2014-OAK1 Trust on June 18, 2018, and having determined that it was no longer the primary beneficiary of either trust as of those dates, the Company no longer consolidated either trust as of those dates. Additionally, in the first quarter of 2019, the first-loss tranche of the re-REMIC related to the FREMF 2012-KF01 Trust paid-in full, and as a result, having determined the Company is no longer the primary beneficiary of the trust, no longer consolidates the assets, liabilities, income and expense of the trust. Interest income on multi-family and residential mortgage loans held in securitization trusts was recognized at the loan coupon rate. Interest income recognition was suspended when mortgage loans were placed on non-accrual status. The accrual of interest on loans was discontinued when, in management's opinion, the interest was considered non-collectible, and in all cases when payment became greater than 90 days past due. Loans returned to accrual status when principal and interest became current and were anticipated to be fully collectible. As of December 31, 2019, the Company no longer held any multi-family securitization trusts and as of December 31, 2019 and December 31, 2018, respectively, the Company no longer held any residential securitization trusts. Multi-Family and Residential Securitized Debt Obligations Multi-family and residential securitized debt obligations represented third-party liabilities of the FREMF 2011-K13 Trust, FREMF 2012-KF01 Trust and CSMC 2014-OAK1 Trust, and excluded the liabilities of the trusts acquired by the Company that were eliminated on consolidation. The third-party obligations of the trusts did not have any recourse to the Company as the consolidator of each trust. As of December 31, 2019, the Company no longer had any multi-family securitized debt obligations outstanding and as of December 31, 2019 and December 31, 2018, respectively, the Company no longer had any residential securitized debt obligations outstanding. Common Stock At December 31, 2019, and December 31, 2018, the Company was authorized to issue up to 450,000,000 shares of common stock, par value $0.01 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s Board of Directors. The Company had 23,692,164 shares of common stock issued and outstanding at December 31, 2019 and 23,687,664 at December 31, 2018. Stock Repurchase Program On December 15, 2015, the Company’s Board of Directors authorized a stock repurchase program (“Repurchase Program”) to repurchase up to $10 million of the Company’s outstanding common stock. Subject to applicable securities laws, repurchase of common stock under the Repurchase Program may be made at times and in amounts as the Company deems appropriate, using available cash resources. Shares of common stock repurchased by the Company under the Repurchase Program, if any, will be canceled and, until reissued by the Company, will be deemed to be authorized but unissued shares of common stock. The Repurchase Program may be suspended or discontinued by the Company at any time and without prior notice. Preferred Stock On February 14, 2019, the Company redeemed all 1,610,000 shares of its outstanding 8.75% Series A Cumulative Redeemable Preferred Stock at its $25 per share liquidation preference plus accrued and unpaid dividends. At December 31, 2018, the Company was authorized to issue up to 50,000,000 shares of preferred stock, par value $0.01 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company's Board. The Company had 1,610,000 shares of preferred stock issued and outstanding at December 31, 2018. Income Taxes The Company has elected to be taxed as a REIT under the Code for U.S. federal income tax purposes, commencing with the Company’s short taxable period ended December 31, 2012. A REIT is generally taxable as a U.S. C-Corporation; however, so long as the Company qualifies as a REIT it is entitled to a special deduction for dividends paid to shareholders not otherwise available to corporations. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent its distributions to stockholders equals, or exceeds, its REIT taxable income for the year. In addition, the Company must continue to meet certain REIT qualification requirements with respect to distributions, as well as certain asset, income and share ownership tests, in accordance with Sections 856 through 860 of the Code, as summarized below. In addition, the TRS is maintained to perform certain services and earn income for the Company that the Company is not permitted engage in as a REIT. To maintain its qualification as a REIT, the Company must meet certain requirements, including but not limited to the following: (i) distribute at least 90% of its REIT taxable income to its stockholders; (ii) invest at least 75% of its assets in REIT qualifying assets, with additional restrictions with respect to asset concentration risk; and (iii) earn at least 95% of its gross income from qualifying sources of income, including at least 75% from qualifying real estate and real estate related sources. Regardless of the REIT election, the Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax as a U.S. C-Corporation, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company has historically met the requisite ownership, asset and income tests, with the exception of a failure to meet the 75% gross income test for the 2018 calendar year. The failure to meet the 75% gross income test for the 2018 calendar year was a result of gains generated from the termination of hedges associated with the disposition of the Agency RMBS portfolio during 2018. The Company accrued a tax liability of $1.96 million as of December 31, 2018 as a result of its failure to meet the 75% gross income test for the 2018 calendar year, which was paid on April 12, 2019, in connection with the filing its 2018 tax extension. Certain activities of the Company are conducted through a TRS and therefore are taxed as a standalone U.S. C-Corporation. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The TRS is not subject to a distribution requirement with respect to its REIT owner. The TRS may retain earnings annually, resulting in an increase in the consolidated book equity of the Company and without a corresponding distribution requirement by the REIT. If the TRS generates net income, and declares dividends to the Company, such dividends will be included in its taxable income and necessitate a distribution to its stockholders in accordance with the REIT distribution requirements. The Company assesses its tax positions for all open tax years and determines whether the Company has any material unrecognized liabilities in accordance with ASC 740, Income Taxes. The Company records these liabilities to the extent the Company deems them more likely than not to be incurred. The Company's accounting policy with respect to interest and penalties is to classify these amounts as other interest expense. Earnings per Share The Company calculates basic and diluted earnings per share by dividing net income attributable to common stockholders for the period by the weighted-average shares of the Company’s common stock outstanding for that period. Diluted earnings per share takes into account the effect of dilutive instruments, such as warrants, stock options, and unvested restricted stock, but use the average share price for the period in determining the number of incremental shares that are to be added to the weighted-average number of shares outstanding. See Note 17 for details of the computation of basic and diluted earnings per share. Stock-Based Compensation The Company is required to recognize compensation costs relating to stock-based payment transactions in the consolidated financial statements. The Company accounts for share-based compensation issued to its Manager and non-management directors using the fair-value based methodology prescribed by ASC 505, Equity (“ASC 505”), or ASC 718, Share-Based Payment (“ASC 718”), as appropriate. Compensation cost related to restricted common stock issued to the Manager is initially measured at estimated fair value at the grant date, and is remeasured on subsequent dates to the extent the awards are unvested. Additionally, the compensation cost related to restricted common stock issued to the non-management directors is measured at its estimated fair value at the grant date and amortized and expensed over the vesting period. See Note 13 for details of stock-based awards issuable under the Manager Equity Plan. Comprehensive Income (Loss) Attributable to Common Stockholders Comprehensive income (loss) is comprised of net income (loss), as presented in the consolidated statements of operations, adjusted for changes in unrealized gain or loss on available-for-sale securities (excluding Non-Agency RMBS IOs), reclassification adjustments for net gain (loss) and other-than-temporary impairments included in net income (loss), deemed dividends on preferred stock related to redemption and dividends paid to preferred stockholders. Recently Issued and/or Adopted Accounting Standards Credit Losses In June 2016, the FASB issued ASU 2016-13, which is a comprehensive amendment of credit losses on financial instruments. Currently, GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The standard’s core principle is that an entity replaces the “incurred loss” impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to support credit loss estimates. For public business entities that are SEC filers, the amendment in this update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU 2019-10 which amended the effective dates for implementation of ASU 2016-13. ASU 2019-10 defers the effective date of ASU 2016-13 for SEC filers that are eligible to be smaller reporting companies, public business entities that are not SEC filers and all other companies, including not-for-profit companies and employee benefit plans for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is designated as a smaller reporting company and has deferred implementation of ASU 2016-13 pursuant to ASU 2019-10 and is continuing to assess the impact of this guidance. Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, which amends ASC topic 820, Fair Value Measurement, to reduce the disclosure requirements for fair value measurements. The amendments of ASU 2018-13 remove the requirements to disclose transfers between Levels 1 and 2 of the fair value hierarchy, the policy for the timing of transfers between levels of the fair value hierarchy and the valuation process for Level 3 fair value measurements. ASU 2018-13 is effective for all entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. Early adoption is permitted upon issuance of the ASU. Early adoption of this ASU was applied, which did not have any impact on the Company's financial condition or results of operations. Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This guidance eliminates certain exceptions to the general principles in Topic 740. This new guidance is effective for us on January 1, 2021, with early adoption permitted. We are evaluating the potential impact of this new guidance on our consolidated financial statements. |
COMMERCIAL MORTGAGE LOANS HELD-
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Commercial mortgage loans held-for-investment | The following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of December 31, 2019 and December 31, 2018: Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Term (Years) (2) December 31, 2019 Loans held-for-investment Senior secured loans (3) $ 635,260,420 $ 635,260,420 51 100.0 % 5.4 % 3.8 635,260,420 635,260,420 51 100.0 % 5.4 % 3.8 Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Term (Years) (2) December 31, 2018 Loans held-for-investment Senior secured loans (3) $ 555,172,891 $ 555,172,891 44 100.0 % 6.4 % 4.1 555,172,891 555,172,891 44 100.0 % 6.4 % 4.1 (1) Weighted average coupon assumes applicable one-month LIBOR of 1.70% and 2.38% as of December 3, 2019 and December 3, 2018, respectively, inclusive of weighted average LIBOR floors of 1.56% and 1.18%, respectively. (2) Weighted average term assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. (3) As of December 31, 2019, $629,157,956 of the outstanding senior secured loans were held in VIEs and $6,102,464 of the outstanding senior secured loans were held outside VIEs. As of December 31, 2018, $550,555,503 of the outstanding senior secured loans were held in VIEs and $4,617,388 of the outstanding senior secured loans were held outside VIEs. Activity: For the years ended December 31, 2019 and December 31, 2018, the loan portfolio activity was as follows: Commercial Mortgage Loans Held-for-Investment Balance at December 31, 2017 $ — Purchases, net (1) 756,565,299 Proceeds from principal repayments (201,392,408) Balance at December 31, 2018 $ 555,172,891 Purchases 300,319,433 Proceeds from principal payments (213,415,654) Proceeds from sales (6,816,250) Balance at December 31, 2019 $ 635,260,420 (1) The Company acquired $345,664,012 of loans in connection with the Hunt CMT Equity LLC transaction on April 30, 2018. Loan Risk Ratings: As further described in Note 2, the Company evaluates the commercial mortgage loan portfolio on a quarterly basis and assigns a risk rating based on a variety of factors. The following table presents the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of December 31, 2019 and December 31, 2018: December 31, 2019 December 31, 2018 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value Number of Loans Unpaid Principal Balance Net Carrying Value 1 1 $ 9,000,000 9,000,000 — $ — — 2 9 87,176,088 87,176,088 5 51,589,000 51,589,000 3 37 487,513,256 487,513,256 34 455,323,082 455,323,082 4 4 51,571,076 51,571,076 5 48,260,809 48,260,809 5 — — — — — — 51 635,260,420 635,260,420 44 555,172,891 555,172,891 As of December 31, 2019, the average risk rating of the commercial mortgage loan portfolio was 2.8 (Moderate Risk), weighted by investment carrying value, with 91.9% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager. As of December 31, 2018, the average risk rating of the commercial mortgage loan portfolio was 2.9 (Moderate Risk), weighted by investment carrying value, with 91.3% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager. Concentration of Credit Risk: The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of December 31, 2019 and December 31, 2018: Loans Held-for-Investment December 31, 2019 December 31, 2018 Geography Southwest 38.7 % 30.2 % South 27.5 22.6 Midwest 16.9 20.2 Mid-Atlantic 8.4 10.3 Various 5.5 5.9 West 3.0 10.8 Total 100.0 % 100.0 % December 31, 2019 December 31, 2018 Collateral Property Type Multi-Family 93.9 % 87.2 % Retail 2.7 1.2 Office 2.0 7.6 Mixed-Use 0.7 3.0 Self-Storage 0.7 1.0 Total 100.0 % 1 100.0 % We did not have any impaired loans, past due loans, nonaccrual loans, or loans in maturity default as of December 31, 2019 and December 31, 2018. |
AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE SECURITIES | As of December 31, 2019 and December 31, 2018, the Company no longer held AFS securities. The following table presents a summary of the Company’s net realized (loss) from the sale of AFS securities for the year ended December 2018: December 31, 2018 AFS securities sold, at amortized cost $ 1,260,655,162 Proceeds from AFS securities sold 1,227,314,578 Net realized gain (loss) on sale of AFS securities $ (33,340,584) Gains and losses from the sale of AFS securities are recorded within "realized (loss) on investments, net" in the Company's consolidated statements of operations. The following table presents components of interest income on the Company's AFS securities for the year ended December 31, 2018: Year Ended December 31, 2018 Coupon Interest Net (premium amortization)/discount accretion Interest income Agency $ 12,152,397 $ (1,435,534) $ 10,716,863 Multi-Family — 32,103 32,103 Total $ 12,152,397 $ (1,403,431) $ 10,748,966 |
RESIDENTIAL MORTGAGE LOAN SECUR
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS | 12 Months Ended |
Dec. 31, 2019 | |
Residential mortgage loans | |
Variable Interest Entity [Line Items] | |
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS | The Company previously elected the fair value option on the assets and liabilities of the CSMC 2014-OAK1 Trust, which requires that changes in valuations of the trust be reflected in the Company’s statements of operations. The Company’s net investment in the trust was limited to the Non-Agency RMBS comprised of subordinated and first loss securities, IO securities and excess servicing rights acquired by the Company in 2014. The Company sold all underlying Non-Agency RMBS of the trust effective June 18, 2018. As of December 31, 2019 and December 31, 2018, the Company no longer held any investments in residential mortgage loan securitization trusts. The consolidated statement of operations of the residential mortgage loan securitization trusts for the year ended December 31, 2018 is set out below: Statement of Operations December 31, 2018 Interest income $ 2,102,352 Interest expense 1,685,971 Net interest income $ 416,381 General and administrative fees (20,886) Unrealized gain (loss) on residential mortgage loans held in securitization trusts 5,650,199 Net income (loss) $ 6,045,694 |
USE OF SPECIAL PURPOSE ENTITIES
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES | 12 Months Ended |
Dec. 31, 2019 | |
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | |
Variable Interest Entity [Line Items] | |
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES | As further discussed in Notes 2, 5 and 6, the Company evaluated its investments in Multi-Family MBS and Non-Agency RMBS and determined that they were VIEs. The Company determined that it was the primary beneficiary of the FREMF 2012-KF01 Trust as of December 31, 2018 and through January 25, 2019, the repayment date of the underlying security. Accordingly, the Company consolidated the assets, liabilities, income and expenses of this trust in its financial statements through January 25, 2019 and December 31, 2018. However, the assets of the trust were restricted, and could only have been used to fulfill the obligations of the trust. Additionally, the obligations of the trust did not have any recourse to the Company as the consolidator of the trust. The Company had elected the fair value option in respect of the assets and liabilities of the trust. As noted in Notes 5 and 6, the Company sold the underlying securities of the FREMF 2011-K13 and CSMC 2014-OAK1 trusts effective May 18, 2018 and June 18, 2018, respectively, and the FREMF 2012-KF01 Trust was paid-in full effective January 25, 2019, and henceforth no longer consolidates these three trusts. On April 30, 2018, the Company acquired Hunt CMT Equity LLC, which was comprised of commercial mortgage loans financed through collateralized loan obligations ("Hunt CRE 2017-FL1, Ltd."), a licensed commercial mortgage lender and eight loan participations. The Company determined Hunt CRE 2017-FL1, Ltd. was a VIE and that the Company was the primary beneficiary of the issuing entity, and accordingly consolidated its assets and liabilities into the Company's financial statements in accordance with GAAP. On August 20, 2018, the Company closed a collateralized loan obligation ("Hunt CRE 2018-FL2, Ltd."). The Company determined Hunt CRE 2018-FL2, Ltd. was a VIE and the Company was the primary beneficiary of the issuing entity, and accordingly consolidated its assets and liabilities into the Company's financial statements in accordance with GAAP. However, the assets of each of the trusts are restricted, and can only be used to fulfill the obligations of the respective trusts. Additionally, the obligations of each of the trusts do not have any recourse to the Company as the consolidator of the trusts. The carrying values of the Company's total assets and liabilities related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. at December 31, 2019 and December 31, 2018 included the following VIE assets and liabilities: ASSETS December 31, 2019 December 31, 2018 Cash, cash equivalents and restricted cash $ 5,069,715 $ 51,330,950 Accrued interest receivable 2,313,818 2,398,905 Investment related receivable — 32,666,128 Loans held for investment 629,157,956 550,555,503 Total Assets $ 636,541,489 $ 636,951,486 LIABILITIES Accrued interest payable $ 732,173 $ 867,794 Collateralized loan obligations (1) 505,930,065 503,978,918 Total Liabilities $ 506,662,238 $ 504,846,712 Equity 129,879,251 132,104,774 Total liabilities and equity $ 636,541,489 $ 636,951,486 (1) The stated maturity of the collateral loan obligations per the terms of the underlying collateralized loan obligation agreement is August 15, 2034 for Hunt CRE 2017-FL1, Ltd. and August 15, 2028 for Hunt CRE 2018-FL2, Ltd. The following tables present certain loan and borrowing characteristics of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd.as of December 31, 2019 and December 31, 2018: As of December 31, 2019 Collateralized Loan Obligations Count Principal Value Carrying Value Wtd. Avg. Coupon Collateral (loan investments) 51 629,157,956 629,157,956 L + 3.60% Debt (notes issued) (1) 2 510,181,000 505,930,065 L + 1.40% As of December 31, 2018 Collateralized Loan Obligations Count Principal Value Carrying Value Wtd. Avg. Coupon Collateral (loan investments) 44 550,555,503 550,555,503 L + 4.05% Debt (notes issued) (1) 2 510,181,000 503,978,918 L + 1.40% (1) The carrying value for Hunt CRE 2017-FL1, Ltd. is net of discount of $1,344,923 and $2,440,674 for December 31, 2019 and December 31, 2018, respectively and the carrying value for Hunt CRE 2018-FL2, Ltd. is net of debt issuance costs of $2,906,012 and $3,761,410 for December 31, 2019 and December 31, 2018, respectively. The statement of operations related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. at December 31, 2019 and December 31, 2018 include the following income and expense items: Statements of Operations December 31, 2019 December 31, 2018 Interest income $ 38,530,632 $ 24,800,048 Interest expense 20,882,076 12,578,306 Net interest income $ 17,648,556 $ 12,221,742 General and administrative fees (708,207) (355,723) Net income (loss) $ 16,940,349 $ 11,866,019 |
RESTRICTED CASH
RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
RESTRICTED CASH | Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. are actively managed with initial reinvestment periods of 30 and 36 months, respectively. As loans payoff or mature, as applicable, during this reinvestment period, cash received is restricted and intended to be reinvested within Hunt CRE 2017-FL1, Ltd. or Hunt CRE 2018-FL2, Ltd. in accordance with the terms and conditions of their respective governing agreements. |
SECURED TERM LOAN
SECURED TERM LOAN | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
SECURED TERM LOAN | On February 14, 2019, the Company drew on the Secured Term Loan in the aggregate principal amount of $40.25 million generating net proceeds of $39.2 million. The outstanding balance of the Secured Term Loan in the table below is presented gross of deferred financing costs ($865,959 at December 31, 2019). As of December 31, 2019, the outstanding balance and total commitment under the Credit Agreement consisted of the following: December 31, 2019 Outstanding Balance Total Commitment Secured Term Loan $ 40,250,000 $ 40,250,000 Total $ 40,250,000 $ 40,250,000 On January 15, 2019, the Company, together with its FOAC and Hunt CMT Equity subsidiaries (together with the Company, the "Credit Parties"), entered into the Secured Term Loan with the lenders party thereto and Cortland Capital Market Services, LLC, as administrative agent (in such capacity, the "Agent"), providing for a term facility ("Credit Agreement") to be drawn in an aggregate principal amount of $40.25 million with a maturity of 6 years. The borrowings under the Secured Term Loan are joint and several obligations of the Credit Parties. In addition, the Credit Parties' obligations under the Secured Term Loan are secured by substantially all the assets of the Credit Parties through pledge and security documentation. Amounts advanced under the Secured Term Loan are subject to compliance with a borrowing base comprised of assets of the Credit Parties and certain of their subsidiaries, and includes senior and subordinated commercial real estate mortgage loans, preferred equity in commercial real estate assets (directly or indirectly), commercial real estate construction mortgage loans and certain types of equity interests (the "Eligible Assets"). Borrowings under the Secured Term Loan bear interest at a fixed rate of 7.25% for the five year period following the initial draw-down, which is subject to step up by 0.25% for the first four months after the fifth anniversary of the borrowing of the Senior Secured Term Loan, then by 0.375% for the following four months, then by 0.50% for the last four months until maturity. The Credit Agreement contains affirmative and negative covenants binding the Company and its subsidiaries that are customary for credit facilities of this type, including, but not limited to: minimum asset coverage ratio; minimum unencumbered assets ratio; maximum total net leverage ratio, minimum tangible net worth; and an interest charge coverage ratio. As of December 31, 2019, we were in compliance with these covenants. |
DERIVATIVE INSTRUMENTS HEDGING
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instrument Detail [Abstract] | |
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES | As of December 31, 2019 and December 31, 2018, the Company no longer held any derivative instruments. The Company previously entered into a variety of derivative instruments in connection with its risk management activities. The Company's primary objective for executing these derivatives was to mitigate the Company's economic exposure to future events that are outside its control. The Company's derivative financial instruments were utilized principally to manage market risk and cash flow volatility associated with interest rate risk (including associated prepayment risk) related to certain assets and liabilities. As part of its risk management activities, the Company entered into various forward contracts, including short securities, Agency to-be-announced securities, or TBAs, options, futures, swaps, swaptions and caps and may do so again in the future. In executing on the Company's former risk management strategy, the Company previously entered into interest rate swaps, swaption agreements, TBA’s and futures contracts. Amounts receivable and payable under interest rate swap agreements were accounted for as unrealized gain (loss) on derivative contracts, net in the consolidated statement of operations. Premiums on swaptions were amortized on a straight-line basis between trade date and expiration date and were recognized in the consolidated statement of operations as a realized loss on derivative contracts. Income Statement Presentation The following table summarizes the underlying hedged risks and the amount of gains and losses on derivative instruments reported net in the consolidated statement of operations as realized gain on derivative contracts, net and change in unrealized (loss) on derivative contracts, net for the year ended December 31, 2018: Year Ended December 31, 2018 Primary underlying risk Amount of realized gain (loss) Amount of unrealized appreciation (depreciation) Total Interest rate: Futures 25,984,870 (5,349,613) 20,635,257 Total $ 25,984,870 $ (5,349,613) $ 20,635,257 |
MSRs
MSRs | 12 Months Ended |
Dec. 31, 2019 | |
Mortgage Servicing Rights MSR Disclosure [Abstract] | |
MSRs | As of December 31, 2019, the Company retained the servicing rights associated with an aggregate principal balance of $333,563,728 of residential mortgage loans that the Company had previously transferred to residential mortgage loan securitization trusts. The Company’s MSRs are held and managed at the Company’s TRS, and the Company employs two licensed sub-servicers to perform the related servicing activities. To the extent that the Company determines it is the primary beneficiary of a residential mortgage loan securitization trust into which it has sold loans, any associated MSRs are eliminated on the consolidation of the trust. The trust is contractually obligated to pay a portion of the interest payments from the associated residential mortgage loans for the direct servicing of the loans, and after deduction of sub-servicing fees payable to contracted sub-servicers, the net amount, excess servicing rights, represents a liability of the trust. Upon consolidation of the trust, the fair value of the excess servicing rights is equal to the related MSRs held at the Company’s TRS. In addition, the Company previously consolidated the assets and liabilities of the CSMC 2014-OAK1 Trust, but following the sale of subordinated and first loss securities during the second quarter of 2018, the Company has determined that it is no longer the primary beneficiary of the trust, and accordingly no longer consolidates its assets and liabilities. Consequently, MSRs associated with this trust are recorded on the Company's consolidated balance sheet at December 31, 2019. The following table presents the Company’s MSR activity as of the years ended December 31, 2019 and December 31, 2018: December 31, 2019 December 31, 2018 Balance at beginning of year $ 3,997,786 $ 2,963,861 MSRs related to deconsolidation of securitization trust — 1,025,129 Changes in fair value due to: Changes in valuation inputs or assumptions used in valuation model (572,963) 375,016 Other changes to fair value (1) (724,616) (366,220) Balance at end of year $ 2,700,207 $ 3,997,786 Loans associated with MSRs (2) $ 333,563,728 $ 407,332,854 MSR values as percent of loans (3) 0.81 % 0.98 % (1) Amounts represent changes due to realization of expected cash flows (2) Amounts represent the unpaid principal balance of loans associated with MSRs outstanding at December 31, 2019 and December 31, 2018, respectively (3) Amounts represent the carrying value of MSRs at December 31, 2019 and December 31, 2018, respectively divided by the outstanding balance of the loans associated with these MSRs The following table presents the servicing income recorded on the Company’s consolidated statements of operations for the years ended December 31, 2019 and December 31, 2018: Year Ended December 31, 2019 Year Ended December 31, 2018 Servicing income, net $ 869,032 $ 940,090 Income from MSRs, net $ 869,032 $ 940,090 |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | The following tables summarize the valuation of the Company’s assets and liabilities carried at fair value on a recurring basis within the fair value hierarchy levels as of December 31, 2019 and December 31, 2018: December 31, 2019 Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Unobservable inputs Level 3 Balance as of December 31, Assets: Mortgage servicing rights $ — $ — $ 2,700,207 $ 2,700,207 Total $ — $ — $ 2,700,207 $ 2,700,207 December 31, 2018 Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Unobservable inputs Level 3 Balance as of December 31, Assets: Mortgage servicing rights $ — $ — $ 3,997,786 $ 3,997,786 Total $ — $ — $ 3,997,786 $ 3,997,786 Liabilities: Multi-family securitized debt obligations $ — $ (19,231,331) $ — $ (19,231,331) Total $ — $ (19,231,331) $ — $ (19,231,331) As of December 31, 2019 and December 31, 2018, the Company had $2,700,207 and $3,997,786, respectively, in Level 3 assets. The Company’s Level 3 assets are comprised of MSRs. Accordingly, for more detail about Level 3 assets, also see Notes 2 and 11. The following table provides quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s MSRs classified as Level 3 fair value assets at December 31, 2019 and December 31, 2018: As of December 31, 2019 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 7.4 - 27.6% 13.3 % Discount rate 12.0 % 12.0 % As of December 31, 2018 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 7.0 - 20.4% 10.1 % Discount rate 12.0 % 12.0 % As discussed in Note 2, GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate that value. The following table details the carrying amount, face amount and fair value of the financial instruments described in Note 2: December 31, 2019 Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents 10,942,115 $ 10,942,115 $ 10,942,115 Restricted cash 5,069,715 5,069,715 5,069,715 Commercial mortgage loans held-for-investment 635,260,420 635,260,420 635,260,420 Total $ 651,272,250 $ 651,272,250 $ 651,272,250 Liabilities: Collateralized loan obligations $ 505,930,065 $ 510,181,000 $ 510,834,435 Secured term loan 39,384,041 40,250,000 42,999,082 Total $ 545,314,106 $ 550,431,000 $ 553,833,517 December 31, 2018 Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents $ 7,882,862 $ 7,882,862 $ 7,882,862 Restricted cash 51,330,950 51,330,950 51,330,950 Cash held in securitization trusts, at fair value 24,357,335 24,357,335 24,357,335 Commercial mortgage loans held-for-investment 555,172,891 555,172,891 555,172,891 Total $ 638,744,038 $ 638,744,038 $ 638,744,038 Liabilities: Collateralized loan obligations $ 503,978,918 $ 510,181,000 $ 509,000,439 Total $ 503,978,918 $ 510,181,000 $ 509,000,439 Estimates of cash and cash equivalents and restricted cash are measured using quoted prices, or Level 1 inputs. Estimates of the fair value of collateralized loan obligations are measured using observable, quoted market prices, in active markets, or Level 2 inputs. All other fair value significant estimates are measured using unobservable inputs, or Level 3 inputs. See Note 2 for further discussion regarding fair value measurement of certain of our assets and liabilities. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Management Fee The Company is externally managed and advised by the Manager. Pursuant to the terms of the prior management agreement in effect for the year ended December 31, 2019, the Company paid the prior manager a management fee equal to 1.5% per annum, calculated and payable quarterly (0.375% per quarter) in arrears. For purposes of calculating the management fee, the Company’s stockholders’ equity included the sum of the net proceeds from all issuances of the Company’s equity securities since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus the Company’s retained earnings at the end of the most recently completed calendar quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), less any amount that the Company paid for repurchases of the Company’s common stock since inception, and excluding any unrealized gains, losses or other items that did not affect realized net income (regardless of whether such items were included in other comprehensive income or loss, or in net income). This amount was adjusted to exclude one-time events pursuant to changes in GAAP and certain non-cash items after discussions between the manager and the Company’s independent directors and approval by a majority of the Company’s independent directors. To the extent an asset impairment reduced the Company’s retained earnings at the end of any completed calendar quarter, it would reduce the management fee for such quarter. The Company’s stockholders’ equity for the purposes of calculating the management fee could be greater than the amount of stockholders’ equity shown on the consolidated financial statements. Additionally, starting in the first full calendar quarter following January 18, 2019, the Company is also required to pay the Manager a quarterly incentive fee equal to 20% of the excess of Core Earnings (as defined in the management agreement) over the product of (i) Stockholders' Equity as of the end of such fiscal quarter, and (ii) 8% per annum. On January 3, 2020, the management agreement in effect for the year ended December 31, 2019 was terminated, and a new management agreement with the Manager became effective. Pursuant to the terms of the new management contract, the Company is required to pay the Manager an annual base management fee of 1.50% of Stockholders' Equity (as defined in the management agreement), payable quarterly (0.375% per quarter) in arrears. The definition of stockholders' equity in the new management agreement is materially unchanged from the definition in the prior management agreement. Additionally, starting in the first full calendar quarter following January 3, 2020, the Company is also required to pay the Manager a quarterly incentive fee equal to 20% of the excess of Core Earnings (as defined in the management agreement) over the product of (i) the Stockholders' Equity as of the end of such fiscal; quarter, and (ii) 8% per annum. On June 7, 2017, a prior manager agreed to waive a portion equal to 0.75% of its 1.50% management fee on the net proceeds of the June 16, 2017 common stock offering, for the next twelve monthly payments, beginning with the payment due for the month of June 2017. Due to the termination of that previous management agreement, the fee waiver terminated on January 18, 2018. The net amount of management fee waived from January 1, 2018 to January 18, 2018 was $6,959. For the year ended December 31, 2019, the Company incurred management fees of $2,245,065 (2018: $2,335,998, net of $6,959 in management fees waived), recorded as "Management Fee" in the consolidated statement of operations, of which $564,620 (2018: $587,500) was accrued but had not been paid, included in "fees and expenses payable to Manager" in the consolidated balance sheets. Expense Reimbursement Pursuant to the management agreement, the Company is required to reimburse the Manager for operating expenses related to the Company incurred by the Manager, including accounting, auditing and tax services, technology and office facilities, operations, compliance, legal and filing fees, and miscellaneous general and administrative costs, including the cost of non-investment management personnel of the Manager who spend all or a portion of their time managing the Company’s affairs. The Manager has agreed to certain limitations on manager expense reimbursement from the Company. On March 18, 2019, the Company entered into a support agreement with the prior manager, pursuant to which, the prior manager agreed to reduce the reimbursement cap by 25% per annum (subject to such reduction not exceeding $568,000 per annum) until such time as the aggregate support provided thereunder equaled approximately $1.96 million. As of December 31, 2019, $89,379 in expense reimbursement has exceeded the reimbursement cap and was not paid. Pursuant to the terms of the new management agreement, the terms of the support agreement are unchanged. For the year ended December 31, 2019, the Company incurred reimbursable expenses of $1,629,908 (2018: $2,375,804) recorded as "operating expenses reimbursable to Manager" in the consolidated statement of operations, of which $427,361 (2018: $587,500) was accrued but had not yet been paid, included in "fees and expenses payable to Manager" in the consolidated balance sheets. Manager Equity Plan The Company has in place a Manager Equity Plan under which the Company may compensate the Manager and the Company's independent directors or consultants, or officers whom it may employ in the future. In turn, the Manager, in its sole discretion, grants such awards to its directors, officers employees or consultants. The Company is able to issue under the Manager Equity Plan up to 3.0% of the total number of issued and outstanding shares of common stock (on a fully diluted basis) at the time of each award. Stock based compensation arrangements may include incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock awards and other awards based on the Company's common stock. The following table summarizes the activity related to restricted common stock for the years December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Shares Weighted Average Grant Date Fair Market Value Shares Weighted Average Grant Date Fair Market Value Outstanding Unvested Shares at Beginning of Period 4,500 $ 3.40 4,500 $ 4.33 Granted 4,500 3.33 4,500 3.40 Vested (4,500) 3.40 (4,500) 4.33 Outstanding Unvested Shares at End of Period 4,500 $ 3.33 4,500 $ 3.40 For the year ended December 31, 2019, the Company recognized compensation expense related to restricted common stock of $8,962 (2018: $22,912). The Company has unrecognized compensation expense of $13,946 as of December 31, 2019 (2018: $7,922) for unvested shares of restricted common stock. As of December 31, 2019, the weighted average period for which the unrecognized compensation expense will be recognized is 5.4 months. MAXEX LLC The Company’s lead independent director is also an independent director of an entity, MAXEX LLC (“MAXEX”), with which the Company has a commercial business relationship. The objective of MAXEX, together with its subsidiaries, is to create a whole loan mortgage trading platform which encompasses a centralized counterparty with a standardized purchase and sale contract and an independent dispute resolution process. For the year ended December 31, 2018, the Company received $359,626 in fees, net of $83,893 in marketing services fees paid to MAXEX, relating to its provision to MAXEX of seller eligibility review and backstop services. The Company did not receive any fees from MAXEX for the year ended December 31, 2019. Pursuant to an Assumption Agreement dated December 31, 2018, among MAXEX Clearing LLC and FOAC, MAXEX Clearing LLC assumed all of FOAC's obligations under its backstop guarantees and agreed to indemnify and hold FOAC harmless against any losses, liabilities, costs, expenses and obligations under the backstop guarantee. FOAC paid MAXEX Clearing LLC, as the replacement backstop provider, a fee of $426,770. See Note 14 for additional disclosure relating to the backstop services. Hunt Financial Securities, LLC During the second quarter of 2018, the Company sold four AFS securities with a total notional balance of $82.9 million to Hunt Financial Securities, LLC ("HFS"), an affiliate of the Company's prior manager. Additionally, Hunt Financial Securities, LLC acted as a placement agent related to Hunt CRE 2018-FL2, Ltd. in the third quarter of 2018 and earned fees of $208,477 in this capacity. The Company did not have any transactions with HFS during the year ended December 31, 2019. Hunt Finance Company, LLC During the year ended December 31, 2019, Hunt CRE 2017-FL1 purchased twenty-two loans with unpaid principal balance of $180.8 million at par and Hunt CRE 2018-FL2 purchased six loans with unpaid principal balance of $87.6 million and purchased twenty-five loan advances with unpaid principal balance of $12.0 million from Hunt Finance Company, LLC ("HFC"), an affiliate of our Manager. Additionally, Hunt CRE 2017-FL1, Seller sold six loan advances with unpaid principal balance of $6.8 million at par to HFC. During the year ended 2018, Hunt CRE 2017-FL1, Ltd. purchased nine loans with unpaid principal balance of $151.1 million at par and Hunt CRE 2018-FL2, Ltd. purchased twenty-four loans with unpaid principal balance of $257.8 million at par from HFC. Hunt Servicing Company, LLC |
GUARANTEES
GUARANTEES | 12 Months Ended |
Dec. 31, 2019 | |
Guarantees [Abstract] | |
GUARANTEES | The Company, through FOAC, is party to customary and standard loan repurchase obligations in respect of residential mortgage loans that it has sold into securitizations or to third parties, to the extent it is determined that there has been a breach of standard seller representations and warranties in respect of such loans. To date, the Company has not been required to repurchase any loan due to a claim of breached seller reps and warranties. In July 2016, the Company announced that it would no longer aggregate and securitize residential mortgage loans; however, the Company sought to capitalize on its infrastructure and knowledge to become the provider of seller eligibility review and backstop services to MAXEX. See Note 13 for a further description of MAXEX. MAXEX’s wholly owned clearinghouse subsidiary, MAXEX Clearing LLC, formerly known as Central Clearing and Settlement LLC (“MAXEX Clearing LLC”) functions as the central counterparty with which buyers and sellers transact, and acts as the buyer’s counterparty for each transaction. Pursuant to a Master Agreement dated June 15, 2016, as amended August 29, 2016, January 30, 2017 and June 27, 2018, among MAXEX, MAXEX Clearing LLC and FOAC (the "Master Agreement"). FOAC provided seller eligibility review services under which it reviewed, approved and monitored sellers that sold loans via MAXEX Clearing LLC. Once approved, and having signed the standardized loan sale contract, the seller sold loan(s) to MAXEX Clearing LLC, and MAXEX Clearing LLC simultaneously sold loan(s) to the buyer on substantially the same terms including representations and warranties. The Master Agreement was terminated on November 28, 2018 (the "MAXEX Termination Date"). To the extent that a seller approved by FOAC prior to the MAXEX Termination Date failed to honor its obligations to repurchase a loan based on an arbitration finding that it breached its representations and warranties, FOAC was obligated to backstop the seller’s repurchase obligation. The term of the backstop guarantee is the earlier of the contractual maturity of the underlying mortgage, or its earlier repayment in full; however, the incidence of claims for breaches of representations and warranties over time is considered unlikely to occur more than five The maximum potential amount of future payments that the Company could be required to make under the outstanding backstop guarantees, which represents the outstanding balance of all underlying mortgage loans sold by approved sellers to MAXEX Clearing LLC, was estimated to be $1,405,182,222 as of December 31, 2019 and December 31, 2018, although the Company believes this amount is not indicative of the Company's actual potential losses. Amounts payable in excess of the outstanding principal balance of the related mortgage, for example any premium paid by the loan buyer or costs associated with collecting mortgage payments, are not currently estimable. Amounts that may become payable under the backstop guarantee are normally recoverable from the related seller, as well as from any payments received on (or from the sale of property securing) the mortgage loan repurchased and, as noted above, MAXEX Clearing LLC has assumed all of FOAC's obligations in respect of its backstop guarantees. Pursuant to the Master Agreement, FOAC is required to maintain minimum available liquidity equal to the greater of (i) $5.0 million or (ii) 0.10% of the aggregate unpaid principal balance of loans backstopped by FOAC, either directly or through a credit support agreement acceptable by MAXEX. As of December 31, 2019, the Company was not aware of any circumstances expected to lead to the triggering of a backstop guarantee obligation. In addition, the Company enters into certain contracts that contain a variety of indemnification obligations, principally with the Manager, brokers and counterparties to repurchase agreements. The maximum potential future payment amount the Company could be required to pay under these indemnification obligations is unlimited. The Company has not incurred any costs to defend lawsuits or settle claims related to these indemnification obligations. As a result, the estimated fair value of these agreements is minimal. Accordingly, the Company recorded no liabilities for these agreements as of December 31, 2019. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Unfunded Commitments As of December 31, 2019, the Company had $50.5 million of unfunded commitments related to Hunt CRE 2017-FL1, Ltd. and $41.6 million of unfunded commitments related to Hunt CRE 2018-FL2, Ltd. The Hunt CRE 2018-FL2, Ltd. unfunded commitments are not commitments of the Company, but are obligations of HFC. These commitments are not reflected on the Company's consolidated balance sheets. As of December 31, 2018, the Company had $26.6 million of unfunded commitments related to Hunt CRE 2017-FL1, Ltd. and $55.4 million of unfunded commitments related to Hunt CRE 2018-FL2, Ltd. The Hunt CRE 2018-FL2, Ltd. unfunded commitments are not commitments of the Company, but are obligations of HFC. These commitments are not reflected on the Company's consolidated balance sheets. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | Ownership and Warrants Pursuant to the terms of the May 2012 private offering, the Company agreed to issue to XL Investments Ltd warrants to purchase the Company’s common stock. The warrants were subsequently issued, effective as of September 29, 2012, and following adjustment in December 31, 2016, entitled XL Investments Ltd, to purchase an aggregate of 3,753,492 shares of the Company’s common stock at a per share exercise price equal to $13.11. Pursuant to an agreement dated January 18, 2018, XL Investments agreed to terminate all of it previously held warrants to purchase 3,753,492 shares of common stock held by it. Common Stock The Company has 450,000,000 authorized shares of common stock, par value $0.01 per share, with 23,692,164 and 23,687,664 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively. On January 18, 2018, the Company issued 1,539,406 shares of common stock to an affiliate of the Company's prior manager in a private placement at a purchase price of $4.77 per share resulting in aggregate net proceeds of $7.3 million. Stock Repurchase Program On December 15, 2015, the Company’s board of directors authorized a stock repurchase program (or the “Repurchase Program”), to repurchase up to $10 million of the Company’s outstanding common stock. Shares of the Company’s common stock may be purchased in the open market, including through block purchases, or through privately negotiated transactions, or pursuant to any trading plan that may be adopted in accordance with Rule 10b 18(b)(1) of the Securities Exchange Act of 1934, as amended. The timing, manner, price and amount of any repurchases will be determined at the Company’s discretion and the program may be suspended, terminated or modified at any time for any reason. Among other factors, the Company intends to only consider repurchasing shares of the Company’s common stock when the purchase price is less than the Company’s estimate of the Company’s current net asset value per common share. Shares of common stock repurchased by the Company under the Repurchase Program, if any, will be canceled and, until reissued by the Company, will be deemed to be authorized but unissued shares of the Company’s common stock. Through December 31, 2019, the Company had repurchased 126,856 shares of common stock at a weighted average share price of $5.09. No share repurchases were made during the years ended December 31, 2019 and December 31, 2018. As of December 31, 2019, $9.4 million of common stock remained authorized for future share repurchase under the Repurchase Program. Preferred Stock The Company had 50,000,000 authorized shares of preferred stock, par value $0.01 per share, with 1,610,000 shares of 8.75% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred Stock”), par value of $0.01 per share and liquidation preference of $25.00 per share, issued and outstanding as of December 31, 2018. The Series A Preferred Stock was entitled to receive a dividend rate of 8.75% per year on the $25 liquidation preference and was senior to the common stock with respect to distributions upon liquidation, dissolution or winding up. The Company declared quarterly and paid monthly dividends on the shares of the Series A Preferred Stock, in arrears, on the 27th day of each month to holders of record at the close of business on the 15th day of each month. No dividends may be paid on the Company’s common stock unless full cumulative dividends have been paid on the preferred stock. The Company paid full cumulative dividends on its preferred stock on a monthly basis since it was first issued in December 2013. On February 14, 2019, the Company redeemed all 1,610,000 shares of its outstanding 8.75% Series A Cumulative Redeemable Preferred Stock at its $25 per share liquidation preference plus accrued and unpaid dividends. Distributions to stockholders For the 2019 taxable year to date, the Company has declared dividends to common stockholders totaling $6,988,198, or $0.30 per share. The following table presents cash dividends declared by the Company on its common stock for the year ended December 31, 2019: Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Weighted Average Share March 18, 2019 March 29, 2019 April 15, 2019 $ 1,658,135 $ 0.07000 June 10, 2019 June 28, 2019 July 15, 2019 $ 1,776,575 $ 0.07500 September 17, 2019 September 30, 2019 October 15, 2019 $ 1,776,575 $ 0.07500 December 4, 2019 December 31, 2019 January 15, 2020 $ 1,776,912 $ 0.07500 The following table presents cash dividends declared by the Company on its Series A Preferred Stock for the year ended December 31, 2019: Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Weighted Average Share December 7, 2018 January 15, 2019 January 28, 2019 $ 332,626 $ 0.20660 December 7, 2018 February 14, 2019 February 14, 2019 $ 188,488 $ 0.11710 Non-controlling interests |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | In accordance with ASC 260, outstanding instruments that contain rights to non-forfeitable dividends are considered participating securities. The Company is required to apply the two-class method or the treasury stock method of computing basic and diluted earnings per share when there are participating securities outstanding. The Company has determined that outstanding unvested restricted shares issued under the Manager Equity Plan are participating securities, and they are therefore included in the computation of basic and diluted earnings per share. The following tables provide additional disclosure regarding the computation for the years ended December 31, 2019 and December 31, 2018: Year Ended December 31, 2019 Year Ended December 31, 2018 Net income (loss) $ 6,248,890 $ (5,471,462) Less dividends expense: Common stock $ 6,988,198 $ 6,578,196 Preferred stock 491,764 3,528,588 Deemed dividend on preferred stock redemption 3,093,028 — 10,572,990 10,106,784 Undistributed (deficit) $ (4,324,100) $ (15,578,246) Unvested Share-Based Payment Awards Common Stock Unvested Share-Based Payment Awards Common Stock Distributed earnings $ 0.30 $ 0.30 $ 0.28 $ 0.28 Undistributed (deficit) $ — $ (0.19) — (0.66) Total $ 0.30 $ 0.11 $ 0.28 $ (0.38) For the years ended December 31, 2019 2018 Basic weighted average shares of common stock outstanding 23,685,223 23,607,891 Weighted average of non-vested restricted stock 2,589 5,745 Diluted weighted average shares of common stock outstanding 23,687,812 23,613,636 |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | The Company invests in a portfolio comprised of commercial mortgage loans and other mortgage-related investments and operates as a single reporting segment. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Company has elected to be treated as a REIT under federal income tax laws. As a REIT, the Company is generally not subject to federal income taxation at the corporate level to the extent that it distributes 100% of its taxable earnings to shareholders annually and does not engage in prohibited transactions. Certain activities of the Company that produce prohibited income are conducted through a taxable REIT subsidiary ("TRS"), FOAC, to protect REIT election and FOAC is therefore subject to tax as a U.S. C-Corporation. To maintain our REIT election, the Company must continue to meet certain ownership, asset and income requirements set forth in the Code. As further discussed below, the Company may be subject to non-income taxes on excess amounts of assets or income that cause a failure of any of the REIT testing requirements. The following table reconciles the Company’s TRS GAAP net income (loss) to taxable income (in thousands): Year Ended December 31, 2019 2018 (in thousands) (in thousands) GAAP consolidated net income (loss) attributable to Hunt Companies Finance Trust, Inc. 6,205 (3,950) GAAP net loss (income) from REIT operations (5,555) 5,241 GAAP net income (loss) of taxable subsidiary 650 1,291 Capitalized transaction fees (41) (41) Unrealized gain (loss) 1,298 (20) Deferred income — (222) Taxable income (loss) of taxable subsidiary before utilization of net operating losses 1,907 1,008 Utilization of net operating losses (571) (288) Current state tax expense 2 — Net taxable income of taxable subsidiaries 1,338 720 The following is a reconciliation of the statutory federal and state tax rates to the effective rates, for the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 (in thousands) (in thousands) U.S. Federal Statutory Income Tax 1,303 (830) State Taxes (2) 61 REIT loss (income) not subject to federal income tax (1,166) 1,101 Tax effect of state corporate rate change (179) — REIT Testing Income Tax (1) — 1,956 Valuation Allowance — (767) Total income tax (benefit) provision (44) 1,522 Effective income tax rate (0.71) % (38.50) % (1) Please see REIT Testing and Tax on 75% Income Test Failure The TRS has a deferred tax asset (liability), comprised of the following (in thousands): As of December 31, 2019 As of December 31, 2018 Accumulated net operating losses of TRS 137 263 Unrealized gain (loss) 686 245 Capitalized transaction costs 120 112 Deferred tax asset 943 620 Valuation allowance — — Net non-current deferred tax asset (liability) 943 620 During 2018, the TRS reported GAAP earnings of $1.3 million which, when combined with the prior two years of profit and loss, resulted in cumulative GAAP earnings for the prior three years. The history of earnings, combined with the introduction of a new investment at the TRS in the fourth quarter of 2018, results in the Company's determination that, as of December 31, 2018, it is more likely than not that the Company will realize benefit from its deferred tax assets in subsequent periods. Therefore, the Company has reversed the valuation allowance effective as of December 31, 2018, the impact of which is reported as part of the net deferred tax benefit in the current period. At December 31, 2019, and 2018, the TRS had net operating loss carryforwards for federal income tax purposes of $0.4 million and $1.0 million, which are available to offset future taxable income and begin expiring in 2034. There is no change to the valuation allowance position for calendar year 2019. As of December 31, 2019, the Company is not aware of any material uncertain tax positions, but the Company could be subject to federal and state tax audits for its tax years of 2016, 2017 and 2018. REIT Testing and Tax on 75% Income Test Failure: During tax years 2018 and 2019 the Company passed all the requisite ownership, asset and income tests, with the exception of the 2018 test under Section 856(c)(3) of the Code, also known as the 75% Income Test. The 75% Income Test requires that at least 75% of the gross income earned by the Company be generated by qualifying real estate income, including interest income on mortgages and realized gain on the sale of real estate assets. In our case, the gains generated by the asset protection hedging strategy resulting from the complete disposition of the MBS asset portfolio during 2018 were determined to be non- |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On January 6, 2020, we announced the entry into a new external management agreement with OREC IM and the concurrent mutual termination of our management agreement with HIM. OREC IM is part of ORIX Real Estate Capital's finance and investment management platform, which was created through the combination of RED Capital Group, Lancaster Pollard and Hunt Real Estate Capital. The terms of the new management agreement align with the terms of HCFT's prior management agreement with HIM in all material respects, including a cap on reimbursable expenses. Pursuant to the terms of the termination agreement between the Company and HIM, the termination of the management agreement did not trigger, and HIM was not paid, a termination fee by the Company. In connection with the transaction, an affiliate of ORIX USA purchased 1,246,719 shares of the Company's common stock in a private placement by the Company at a purchase price of $4.61, resulting in an aggregate capital raise of $5,747,375. The purchase price per share represented a 43% premium over the HCFT common share price on January 2, 2020. As a result of this share purchase, an affiliate of ORIX USA owns approximately 5.0% of HCFT's outstanding common shares. Also, in connection with the transaction, James C. Hunt resigned as the Company's Chairman of the Board but continues to serve as a member of the Board. In addition, the Board approved Interim Chief Financial Officer James A. Briggs as Chief Financial Officer of the Company. James P. Flynn continues to serve as CEO and Michael P. Larsen continues to serve as President of HCFT. |
QUARTERLY FINANCIAL DATA
QUARTERLY FINANCIAL DATA | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA | The following table presents a comparative breakdown of our unaudited summary quarterly financial data for the immediately preceding eight quarters. 2019 Quarter Ended March 31 June 30 September 30 December 31 Total interest income $ 9,983 $ 10,289 $ 9,832 $ 8,954 Total interest expense (5,776) (6,242) (6,036) (5,589) Net interest income 4,207 4,047 3,796 3,365 Other income (loss) (147) (274) (202) 178 Total expenses 2,648 2,176 1,703 2,238 Net income before provision for income taxes 1,412 1,597 1,891 1,305 (Provision for) benefit from income taxes 63 (203) 267 (83) Net income 1,475 1,394 2,158 1,222 Net income (loss) attributable to common shareholders (basic and diluted) (2,099) 1,390 2,154 1,218 Earnings (loss) per share: Net income (loss) attributable to common shareholders (basic and diluted) (2,099) 1,390 2,154 1,218 Weighted average number of shares of common stock outstanding: 23,687,664 23,687,664 23,687,664 23,688,251 Basic and diluted income (loss) per share (0.09) 0.06 0.09 0.05 2018 Quarter Ended March 31 June 30 September 30 December 31 Total interest income $ 21,516 $ 17,551 $ 9,719 $ 10,169 Total interest expense (18,398) (12,981) (4,604) (5,571) Net interest income 3,118 4,570 5,115 4,598 Other income (loss) 11,410 (23,670) 1,361 (476) Total expenses 3,213 2,390 2,123 2,250 Net income before provision for income taxes 11,315 (21,490) 4,353 1,872 (Provision for) benefit from income taxes — — — (1,522) Net income 11,315 (21,490) 4,353 350 Net income (loss) attributable to common shareholders (basic and diluted) 10,434 (22,361) 3,473 (546) Earnings (loss) per share: Net income (loss) attributable to common shareholders (basic and diluted) 10,434 (22,361) 3,473 (546) Weighted average number of shares of common stock outstanding: 23,392,387 23,683,164 23,687,273 23,687,664 Basic and diluted income (loss) per share 0.45 (0.94) 0.15 (0.02) |
Schedule IV - Mortgage Loans on
Schedule IV - Mortgage Loans on Real Estate | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract] | |
Mortgage Loans on Real Estate | Schedule IV – Mortgage Loans on Real Estate As of December 31, 2019 Type of Loan/Borrower Senior Mortgage Loans (1) Description/Location Interest (2) Payment Rates Extended Maturity Date (2) Periodic Payment Terms (3) Prior Liens (4) Unpaid Principal Balance Carrying Amount of Loans Senior Loan in excess of 3% of the carrying amount of total loan Borrower A Multi-family / IL L+4.30% 2023 I/O $ — $ 35,625,000 $ 35,625,000 Borrower B Multi-family / Diversified L+4.05% 2023 I/O — 34,913,160 34,913,160 Borrower C Multi-family / TX L+3.65% 2023 I/O — 32,321,681 32,321,681 Borrower D Multi-family / MD L+3.25% 2023 I/O — 32,148,978 32,148,978 Borrower E Multi-family / AZ L+3.75% 2022 I/O — 30,505,000 30,505,000 Borrower F Multi-family / VA L+2.75% 2024 I/O — 26,500,000 26,500,000 Borrower G Multi-family / IL L+3.75% 2023 I/O — 25,355,116 25,355,116 Borrower H Multi-family / TX L+3.15% 2025 I/O — 23,500,000 23,500,000 Borrower I Multi-family / NE L+3.70% 2023 I/O — 20,853,067 20,853,067 Borrower K Multi-family / GA L+2.75% 2024 I/O — 20,000,000 20,000,000 Senior Loan less than 3% of the carrying amount of total loan Senior Loan Multi-family / Diversified L+2.80% - 5.95% 2020 - 2025 I/O $ — $ 314,964,735 $ 314,964,735 Senior Loan Retail / TX L+4.10% 2023 I/O — 17,115,524 17,115,524 Senior Loan Office / IL L+3.75% 2023 I/O — 12,828,794 12,828,794 Senior Loan Mixed-Use / DC L+4.65% 2023 I/O — 4,404,365 4,404,365 Senior Loan Self-Storage / VA L+3.15% 2024 I/O — 4,225,000 4,225,000 Total senior loans $ — $ 635,260,420 $ 635,260,420 (1) Includes senior mortgage loans and pari passu participations in senior mortgage loans. (2) L = one-month LIBOR rate (3) Extended maturity date assumes all extension options are exercised (4) I/O = interest only (5) Represents only third party liens 1. Reconciliation of Mortgage Loans on Real Estate The following table reconciles activity regarding mortgage loans on real estate for the years ended: 2019 2018 Balance at January 1, $ 555,172,891 $ — Additions during period: Mortgage loans purchased 300,319,433 756,565,299 Deductions during period Mortgage loan repayments (213,415,654) (201,392,408) Mortgage loans sold (6,816,250) — Balance at December 31, $ 635,260,420 $ 555,172,891 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These financial statements have been prepared in accordance with U.S. GAAP and are expressed in United States dollars. The consolidated financial statements of the Company include the accounts of its subsidiaries. |
Reclassification | Reclassification Certain prior year amounts have been reclassified to conform to current year presentation related to restricted stock compensation expense and proceeds from issuance of common stock in the Consolidated Statement of Cash Flows. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements of the Company include the accounts of the Company and all subsidiaries which it controls (i) through voting or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not the primary beneficiary are accounted for under the equity method or other appropriate GAAP. All significant intercompany transactions have been eliminated on consolidation. |
VIEs | VIEs An entity is considered a VIE when any of the following applies: (1) the equity investors (if any) lack one or more essential characteristics of a controlling financial interest; (2) the equity investment at risk is not sufficient to finance that entity's activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined as the entity having both the following characteristics: (1) the power to direct activities that, when taken together, most significantly impact the VIE performance; and (2) the obligation to absorb losses and right to receive returns from the VIE that would be significant to the VIE. The Company evaluates quarterly its junior retained notes and preferred shares of Hunt CRE 2017-FL1, Ltd and Hunt CRE 2018-FL2, Ltd. for potential consolidation. At December 31, 2019, the Company determined it was the primary beneficiary of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. based on its obligation to absorb losses derived from ownership of its preferred shares. Accordingly, the Company consolidated the assets, liabilities, income and expenses of the underlying issuing entities. The Company's maximum exposure to loss from collateralized loan obligations was $124,046,671 at December 31, 2019 and December 31, 2018. During the second quarter of 2018, the Company sold first-loss securities of the FREMF 2011-K13 Trust and the first-loss and subordinated tranches issued by the CSMC 2014-OAK1 Trust, and as a result, having determined it is no longer the primary beneficiary of these trusts, no longer consolidates the assets, liabilities, income and expenses of those trusts. In the first quarter of 2019, the first-loss tranche of the Re-REMIC related to the FREMF 2012-KF01 |
Use of Estimates | Use of Estimates The financial statements have been prepared on the accrual basis of accounting in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires the Company to make a number of significant estimates. These include estimates of fair value of certain assets and liabilities, amount and timing of credit losses, prepayment rates, and other estimates that affect the reported amounts of certain assets and liabilities as of the date of the financial statements and the reported amounts of certain revenues and expenses during the reported period. It is likely that changes in these estimates (e.g. valuation changes due to supply and demand, credit performance, prepayments, interest rates, or other reasons) will occur in the near term. The Company’s estimates are inherently subjective in nature and actual results could differ from its estimates and the differences may be material. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents at time of purchase include cash held in bank accounts on an overnight basis and other short term deposit accounts with banks having maturities of 90 days or less. The Company maintains its cash and cash equivalents in highly rated financial institutions, and at times these balances exceed insurable amounts. Restricted cash includes cash held within Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. for purposes of reinvestment in qualifying commercial mortgage loans. |
Deferred Offering Costs | Deferred Offering Costs Direct costs incurred to issue shares classified as equity, such as legal and accounting fees, are deducted from the related proceeds and the net amount recorded as stockholders’ equity. Accordingly, payments made by the Company in respect of such costs related to the issuance of shares are recorded as an asset in the accompanying consolidated balance sheets in the line item “Deferred offering costs”, for subsequent deduction from the related proceeds upon closing of the offering. To the extent that certain costs, in particular legal fees, are known to have been accrued but have not yet been invoiced and paid, they are included in “Other accounts payable and accrued expenses” on the accompanying consolidated balance sheets. |
Fair Value Measurements | Fair Value Measurements The "Fair Value Measurements and Disclosures" Topic 820 of the FASB, or ASC 820, defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurement under GAAP. Specifically, the guidance defines fair value based on exit price, or the price that would be received upon the sale of an asset or the transfer of a liability in an orderly transaction between market participants at measurement date. ASC 820 specifies a hierarchy of valuation techniques based on the inputs used in measuring fair value. Valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable market data from independent sources, while unobservable inputs reflect the Company's market assumptions. The three levels are defined as follows: • Level 1 Inputs - Quoted prices for identical instruments in active markets • Level 2 Inputs - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level 3 Inputs - Instruments with primarily unobservable value drivers. Pursuant to ASC 820 we disclose fair value information about financial instruments, which are not otherwise reported at fair value in our consolidated balance sheet, to the extent it is practicable to estimate fair value for those certain instruments. The following methods and assumptions are used to estimate the fair value of each class of financial instrument, for which it is practicable to estimate that value: • Cash and cash equivalents : The carrying amount of cash and cash equivalents approximates fair value. • Restricted cash : The carrying amount of restricted cash approximates fair value. • Commercial mortgage loans : The Company may record fair value adjustments on a non-recurring basis when it has determined it necessary to record a specific impairment reserve or charge-off against a loan and the Company measures such specific reserve or charge-off using the fair value of the loan's collateral. To determine the fair value of loan collateral, the Company employs different approaches including income capitalization approach or appraised values depending upon the nature of such collateral and other relevant market factors. • Mortgage servicing rights : The Company determines the fair value of MSRs from a third-party pricing service on a recurring basis. The third-party pricing service uses common market pricing methods that include using discounted cash flow models to calculate present value estimated net servicing income and observed market pricing for MSR purchase and sale transactions. The model considers contractually specified servicing fees, prepayment assumptions, delinquency rates, late charges, other ancillary revenue, costs to service and other economic factors. • Collateralized loan obligations : The Company determines the fair value of collateralized loan obligations by utilizing a third-party pricing service. In determining the value of a particular investment, pricing service providers may use market spreads, inventory levels, trade and bid history, as well as market insight from clients, trading desks and global research platform. • Secured term loan : The Company determines the fair value of its secured term loan based on a discounted cash flow methodology. |
Commercial Mortgage Loans Held-for-Investment | Commercial Mortgage Loans Held-for-Investment Commercial mortgage loans held-for-investment represent floating-rate transitional loans and other commercial mortgage loans purchased by the Company. These loans include loans sold into securitizations that the Company consolidates. Commercial mortgage loans held-for-investment are intended to be held-to-maturity and, accordingly, are carried at their unpaid principal balances, adjusted for net unamortized loan fees and costs (in respect of originated loans), premiums and discounts (in respect of purchased loans) and impairment, if any. Interest income is recognized as revenue using the effective interest method and is recorded on the accrual basis according to the terms of the underlying loan agreement. Any fees, costs, premiums and discounts associated with these loan investments are deferred and amortized over the term of the loan using the effective interest method, or on a straight line basis when it approximates the effective interest method. Income accrual is generally suspended and loans are placed on non-accrual status on the earlier of the date at which payment has become 90 days past due or when full and timely collection of interest and principal is considered not probable. The Company may return a loan to accrual status when repayment of principal and interest is reasonably assured under the terms of the underlying loan agreement. As of December 31, 2019, the Company did not hold any loans placed in non-accrual status. Quarterly, the Company assesses the risk factors of each loan classified as held-for-investment and assigns a risk rating based on a variety of factors, including, without limitation, debt-service coverage ratio ("DSCR"), loan-to-value ratio ("LTV"), property type, geographic and local market dynamics, physical condition, leasing and tenant profile, adherence to business plan and exit plan, maturity default risk and project sponsorship. The Company's loans are rated on a 5-point scale, from least risk to greatest risk, respectively, which ratings are described as follows: 1. Very Low Risk : exceeds expectations and is outperforming underwriting or it is very likely that the underlying loan can be refinanced easily in the period's prevailing capital market conditions 2. Low Risk : meeting or exceeding underwritten expectations 3. Moderate Risk : in-line with underwritten expectations or the sponsor may be in the early stages of executing the business plan and the loan structure appropriately mitigates additional risks 4. High Risk : potential risk of default, a loss may occur in the event of default 5. Default Risk : imminent risk of default, a loss is likely in the event of default The Company evaluates each loan rated High Risk or above as to whether it is impaired on a quarterly basis. Impairment occurs when the Company determines that the facts and circumstances of the loan deem it probable that the Company will not be able to collect all amounts due in accordance with the contractual terms of the loan. If a loan is considered to be impaired, an allowance is recorded to reduce the carrying value of the loan through a charge to the provision for loan losses. Impairment of these loans, which are collateral dependent, is measured by comparing the estimated fair value of the underlying collateral, less costs to sell, to the book value of the respective loan. These valuations require significant judgments, which include assumptions regarding capitalization rates, leasing, creditworthiness of major tenants, occupancy rates, availability of financing, exit plan, actions of other lenders, and other factors deemed necessary by the Manager. Actual losses, if any, could ultimately differ from estimated losses. |
Mortgage Servicing Rights, at Fair Value | Mortgage Servicing Rights, at Fair Value Mortgage servicing rights (“MSRs”) are associated with residential mortgage loans that the Company historically purchased and subsequently sold or securitized. MSRs are held and managed at Five Oaks Acquisition Corp. ("FOAC"), the Company's taxable REIT subsidiary ("TRS"). As the owner of MSRs, the Company is entitled to receive a portion of the interest payments from the associated residential mortgage loan, and is obligated to service, directly or through a subservicer, the associated loan. MSRs are reported at fair value as a result of a fair value option election. Residential mortgage loans for which the Company owns the MSRs are directly serviced by one or more sub-servicers retained by the Company. The Company does not directly service any residential mortgage loans. MSR income is recognized at the contractually agreed upon rate, net of the costs of sub-servicers retained by the Company. If a sub-servicer with which the Company contracts were to default, an evaluation of MSR assets for impairment would be undertaken at that time. |
Collateralized Loan Obligation | Collateralized Loan Obligations Collateralized loan obligations represent third-party liabilities of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. (the "CLOs"). The CLOs are VIEs that the Company has determined it is the primary beneficiary of and accordingly are consolidated in the Company's financial statements, excluding liabilities of the CLOs acquired by the Company that are eliminated on consolidation. The third-party obligations of the CLOs do not have any recourse to the Company as the consolidator of the CLOs. CLOs are carried at their outstanding unpaid principal balances, net of any unamortized discounts or deferred financing costs. Any premiums, discounts or deferred financing costs associated with these liabilities are amortized to interest expense using the effective interest method over the expected average life of the related obligations, or on a straight line basis when it approximates the effective interest method. |
Multi Family and Residential Mortgage Loans Held in Securitization Trusts | Multi-Family and Residential Mortgage Loans Held in Securitization Trusts Multi-family and residential mortgage loans held in consolidated securitization trusts were comprised of multi-family mortgage loans held in the FREMF 2011-K13 Trust and the FREMF 2012-KF01 Trust, and residential mortgage loans held in the CSMC 2014-OAK1 Trust. Based on a number of factors, the Company determined it was the primary beneficiary of the VIE underlying the trusts, met the criteria for consolidation and, accordingly, consolidated the trusts, including its assets, liabilities, income and expenses in its consolidated financial statements. The Company elected the fair value option on each of the assets and liabilities held within the trusts. The Company sold the subordinated securities of the FREMF 2011-K13 Trust on May 18, 2018 and the CSMC 2014-OAK1 Trust on June 18, 2018, and having determined that it was no longer the primary beneficiary of either trust as of those dates, the Company no longer consolidated either trust as of those dates. Additionally, in the first quarter of 2019, the first-loss tranche of the re-REMIC related to the FREMF 2012-KF01 Trust paid-in full, and as a result, having determined the Company is no longer the primary beneficiary of the trust, no longer consolidates the assets, liabilities, income and expense of the trust. Interest income on multi-family and residential mortgage loans held in securitization trusts was recognized at the loan coupon rate. Interest income recognition was suspended when mortgage loans were placed on non-accrual status. The accrual of interest on loans was discontinued when, in management's opinion, the interest was considered non-collectible, and in all cases when payment became greater than 90 days past due. Loans returned to accrual status when principal and interest became current and were anticipated to be fully collectible. |
Multi Family and Residential Securitized Debt Obligations | Multi-Family and Residential Securitized Debt Obligations Multi-family and residential securitized debt obligations represented third-party liabilities of the FREMF 2011-K13 Trust, FREMF 2012-KF01 Trust and CSMC 2014-OAK1 Trust, and excluded the liabilities of the trusts acquired by the Company that were eliminated on consolidation. The third-party obligations of the trusts did not have any recourse to the Company as the consolidator of each trust. |
Income Taxes | Income Taxes The Company has elected to be taxed as a REIT under the Code for U.S. federal income tax purposes, commencing with the Company’s short taxable period ended December 31, 2012. A REIT is generally taxable as a U.S. C-Corporation; however, so long as the Company qualifies as a REIT it is entitled to a special deduction for dividends paid to shareholders not otherwise available to corporations. Accordingly, the Company generally will not be subject to U.S. federal income tax to the extent its distributions to stockholders equals, or exceeds, its REIT taxable income for the year. In addition, the Company must continue to meet certain REIT qualification requirements with respect to distributions, as well as certain asset, income and share ownership tests, in accordance with Sections 856 through 860 of the Code, as summarized below. In addition, the TRS is maintained to perform certain services and earn income for the Company that the Company is not permitted engage in as a REIT. To maintain its qualification as a REIT, the Company must meet certain requirements, including but not limited to the following: (i) distribute at least 90% of its REIT taxable income to its stockholders; (ii) invest at least 75% of its assets in REIT qualifying assets, with additional restrictions with respect to asset concentration risk; and (iii) earn at least 95% of its gross income from qualifying sources of income, including at least 75% from qualifying real estate and real estate related sources. Regardless of the REIT election, the Company may also be subject to certain state, local and franchise taxes. Under certain circumstances, federal income and excise taxes may be due on its undistributed taxable income. If the Company were to fail to meet these requirements, it would be subject to U.S. federal income tax as a U.S. C-Corporation, which could have a material adverse impact on its results of operations and amounts available for distributions to its stockholders. The Company has historically met the requisite ownership, asset and income tests, with the exception of a failure to meet the 75% gross income test for the 2018 calendar year. The failure to meet the 75% gross income test for the 2018 calendar year was a result of gains generated from the termination of hedges associated with the disposition of the Agency RMBS portfolio during 2018. The Company accrued a tax liability of $1.96 million as of December 31, 2018 as a result of its failure to meet the 75% gross income test for the 2018 calendar year, which was paid on April 12, 2019, in connection with the filing its 2018 tax extension. Certain activities of the Company are conducted through a TRS and therefore are taxed as a standalone U.S. C-Corporation. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The TRS is not subject to a distribution requirement with respect to its REIT owner. The TRS may retain earnings annually, resulting in an increase in the consolidated book equity of the Company and without a corresponding distribution requirement by the REIT. If the TRS generates net income, and declares dividends to the Company, such dividends will be included in its taxable income and necessitate a distribution to its stockholders in accordance with the REIT distribution requirements. The Company assesses its tax positions for all open tax years and determines whether the Company has any material unrecognized liabilities in accordance with ASC 740, Income Taxes. The Company records these liabilities to the extent the Company deems them more likely than not to be incurred. The Company's accounting policy with respect to interest and penalties is to classify these amounts as other interest expense. |
Earnings per Share | Earnings per Share |
Stock-Based Compensation | Stock-Based Compensation The Company is required to recognize compensation costs relating to stock-based payment transactions in the consolidated financial statements. The Company accounts for share-based compensation issued to its Manager and non-management directors using the fair-value based methodology prescribed by ASC 505, Equity (“ASC 505”), or ASC 718, Share-Based Payment |
Comprehensive Income (Loss) Attributable to Common Stockholders | Comprehensive Income (Loss) Attributable to Common Stockholders Comprehensive income (loss) is comprised of net income (loss), as presented in the consolidated statements of operations, adjusted for changes in unrealized gain or loss on available-for-sale securities (excluding Non-Agency RMBS IOs), reclassification adjustments for net gain (loss) and other-than-temporary impairments included in net income (loss), deemed dividends on preferred stock related to redemption and dividends paid to preferred stockholders. |
Recently Issued and/or Adopted Accounting Standards | Recently Issued and/or Adopted Accounting Standards Credit Losses In June 2016, the FASB issued ASU 2016-13, which is a comprehensive amendment of credit losses on financial instruments. Currently, GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The standard’s core principle is that an entity replaces the “incurred loss” impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to support credit loss estimates. For public business entities that are SEC filers, the amendment in this update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU 2019-10 which amended the effective dates for implementation of ASU 2016-13. ASU 2019-10 defers the effective date of ASU 2016-13 for SEC filers that are eligible to be smaller reporting companies, public business entities that are not SEC filers and all other companies, including not-for-profit companies and employee benefit plans for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is designated as a smaller reporting company and has deferred implementation of ASU 2016-13 pursuant to ASU 2019-10 and is continuing to assess the impact of this guidance. Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, which amends ASC topic 820, Fair Value Measurement, to reduce the disclosure requirements for fair value measurements. The amendments of ASU 2018-13 remove the requirements to disclose transfers between Levels 1 and 2 of the fair value hierarchy, the policy for the timing of transfers between levels of the fair value hierarchy and the valuation process for Level 3 fair value measurements. ASU 2018-13 is effective for all entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2019. Early adoption is permitted upon issuance of the ASU. Early adoption of this ASU was applied, which did not have any impact on the Company's financial condition or results of operations. Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This guidance eliminates certain exceptions to the general principles in Topic 740. This new guidance is effective for us on January 1, 2021, with early adoption permitted. We are evaluating the potential impact of this new guidance on our consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the statement of cash flows. December 31, 2019 December 31, 2018 Cash and cash equivalents $ 10,942,115 $ 7,882,862 Restricted cash CRE 2017-FL1, Ltd. $ 2,158,497 $ 24,085,890 Restricted cash CRE 2018-FL2, Ltd. $ 2,911,218 $ 27,245,060 Total cash, cash equivalents and restricted cash $ 16,011,830 $ 59,213,812 |
COMMERCIAL MORTGAGE LOANS HEL_2
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | The following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of December 31, 2019 and December 31, 2018: Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Term (Years) (2) December 31, 2019 Loans held-for-investment Senior secured loans (3) $ 635,260,420 $ 635,260,420 51 100.0 % 5.4 % 3.8 635,260,420 635,260,420 51 100.0 % 5.4 % 3.8 Weighted Average Loan Type Unpaid Principal Balance Carrying Value Loan Count Floating Rate Loan % Coupon (1) Term (Years) (2) December 31, 2018 Loans held-for-investment Senior secured loans (3) $ 555,172,891 $ 555,172,891 44 100.0 % 6.4 % 4.1 555,172,891 555,172,891 44 100.0 % 6.4 % 4.1 (1) Weighted average coupon assumes applicable one-month LIBOR of 1.70% and 2.38% as of December 3, 2019 and December 3, 2018, respectively, inclusive of weighted average LIBOR floors of 1.56% and 1.18%, respectively. (2) Weighted average term assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. (3) As of December 31, 2019, $629,157,956 of the outstanding senior secured loans were held in VIEs and $6,102,464 of the outstanding senior secured loans were held outside VIEs. As of December 31, 2018, $550,555,503 of the outstanding senior secured loans were held in VIEs and $4,617,388 of the outstanding senior secured loans were held outside VIEs. Activity: For the years ended December 31, 2019 and December 31, 2018, the loan portfolio activity was as follows: Commercial Mortgage Loans Held-for-Investment Balance at December 31, 2017 $ — Purchases, net (1) 756,565,299 Proceeds from principal repayments (201,392,408) Balance at December 31, 2018 $ 555,172,891 Purchases 300,319,433 Proceeds from principal payments (213,415,654) Proceeds from sales (6,816,250) Balance at December 31, 2019 $ 635,260,420 (1) The Company acquired $345,664,012 of loans in connection with the Hunt CMT Equity LLC transaction on April 30, 2018. |
Financing Receivable Credit Quality Indicators | The following table presents the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of December 31, 2019 and December 31, 2018: December 31, 2019 December 31, 2018 Risk Rating Number of Loans Unpaid Principal Balance Net Carrying Value Number of Loans Unpaid Principal Balance Net Carrying Value 1 1 $ 9,000,000 9,000,000 — $ — — 2 9 87,176,088 87,176,088 5 51,589,000 51,589,000 3 37 487,513,256 487,513,256 34 455,323,082 455,323,082 4 4 51,571,076 51,571,076 5 48,260,809 48,260,809 5 — — — — — — 51 635,260,420 635,260,420 44 555,172,891 555,172,891 |
Geographic Concentrations | The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of December 31, 2019 and December 31, 2018: Loans Held-for-Investment December 31, 2019 December 31, 2018 Geography Southwest 38.7 % 30.2 % South 27.5 22.6 Midwest 16.9 20.2 Mid-Atlantic 8.4 10.3 Various 5.5 5.9 West 3.0 10.8 Total 100.0 % 100.0 % December 31, 2019 December 31, 2018 Collateral Property Type Multi-Family 93.9 % 87.2 % Retail 2.7 1.2 Office 2.0 7.6 Mixed-Use 0.7 3.0 Self-Storage 0.7 1.0 Total 100.0 % 1 100.0 % |
AVAILABLE-FOR-SALE SECURITIES (
AVAILABLE-FOR-SALE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Net Realized Gain (Loss) From the Sale of AFS Securities | The following table presents a summary of the Company’s net realized (loss) from the sale of AFS securities for the year ended December 2018: December 31, 2018 AFS securities sold, at amortized cost $ 1,260,655,162 Proceeds from AFS securities sold 1,227,314,578 Net realized gain (loss) on sale of AFS securities $ (33,340,584) |
Fair Value of AFS Investment Securities, by Rate Type | The following table presents components of interest income on the Company's AFS securities for the year ended December 31, 2018: Year Ended December 31, 2018 Coupon Interest Net (premium amortization)/discount accretion Interest income Agency $ 12,152,397 $ (1,435,534) $ 10,716,863 Multi-Family — 32,103 32,103 Total $ 12,152,397 $ (1,403,431) $ 10,748,966 |
THE FREMF TRUSTS (Tables)
THE FREMF TRUSTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Balance Sheet | The consolidated balance sheet of the FREMF trusts at December 31, 2018 are set out below: Balance Sheet December 31, 2018 Assets Receivables 24,357,335 Total assets $ 24,357,335 Liabilities and Equity Multi-family securitized debt obligations $ 19,231,331 Payables 363,855 Total liabilities $ 19,595,186 Equity 4,762,149 Total liabilities and equity $ 24,357,335 |
Condensed Consolidated Statements of Operations | The consolidated statements of operations of the FREMF trusts for the years ended December 31, 2019 and December 31, 2018 are as follows: Statements of Operations December 31, 2019 December 31, 2018 Interest income $ 78,361 $ 20,891,992 Interest expense — 19,652,710 Net interest income $ 78,361 $ 1,239,282 General and administrative fees — (887,388) Unrealized gain (loss) on multi-family loans held in securitization trusts 694,339 (6,398,348) Net income (loss) $ 772,700 $ (6,046,454) |
RESIDENTIAL MORTGAGE LOAN SEC_2
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |
Condensed Consolidated Statements of Operations | The consolidated statements of operations of the FREMF trusts for the years ended December 31, 2019 and December 31, 2018 are as follows: Statements of Operations December 31, 2019 December 31, 2018 Interest income $ 78,361 $ 20,891,992 Interest expense — 19,652,710 Net interest income $ 78,361 $ 1,239,282 General and administrative fees — (887,388) Unrealized gain (loss) on multi-family loans held in securitization trusts 694,339 (6,398,348) Net income (loss) $ 772,700 $ (6,046,454) |
Residential mortgage loans | |
Variable Interest Entity [Line Items] | |
Condensed Consolidated Statements of Operations | The consolidated statement of operations of the residential mortgage loan securitization trusts for the year ended December 31, 2018 is set out below: Statement of Operations December 31, 2018 Interest income $ 2,102,352 Interest expense 1,685,971 Net interest income $ 416,381 General and administrative fees (20,886) Unrealized gain (loss) on residential mortgage loans held in securitization trusts 5,650,199 Net income (loss) $ 6,045,694 |
USE OF SPECIAL PURPOSE ENTITI_2
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |
Condensed Balance Sheet | The consolidated balance sheet of the FREMF trusts at December 31, 2018 are set out below: Balance Sheet December 31, 2018 Assets Receivables 24,357,335 Total assets $ 24,357,335 Liabilities and Equity Multi-family securitized debt obligations $ 19,231,331 Payables 363,855 Total liabilities $ 19,595,186 Equity 4,762,149 Total liabilities and equity $ 24,357,335 |
Schedule of Loan and Borrowing Characteristics | The following tables present certain loan and borrowing characteristics of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd.as of December 31, 2019 and December 31, 2018: As of December 31, 2019 Collateralized Loan Obligations Count Principal Value Carrying Value Wtd. Avg. Coupon Collateral (loan investments) 51 629,157,956 629,157,956 L + 3.60% Debt (notes issued) (1) 2 510,181,000 505,930,065 L + 1.40% As of December 31, 2018 Collateralized Loan Obligations Count Principal Value Carrying Value Wtd. Avg. Coupon Collateral (loan investments) 44 550,555,503 550,555,503 L + 4.05% Debt (notes issued) (1) 2 510,181,000 503,978,918 L + 1.40% (1) The carrying value for Hunt CRE 2017-FL1, Ltd. is net of discount of $1,344,923 and $2,440,674 for December 31, 2019 and December 31, 2018, respectively and the carrying value for Hunt CRE 2018-FL2, Ltd. is net of debt issuance costs of $2,906,012 and $3,761,410 for December 31, 2019 and December 31, 2018, respectively. |
Condensed Consolidated Statements of Operations | The consolidated statements of operations of the FREMF trusts for the years ended December 31, 2019 and December 31, 2018 are as follows: Statements of Operations December 31, 2019 December 31, 2018 Interest income $ 78,361 $ 20,891,992 Interest expense — 19,652,710 Net interest income $ 78,361 $ 1,239,282 General and administrative fees — (887,388) Unrealized gain (loss) on multi-family loans held in securitization trusts 694,339 (6,398,348) Net income (loss) $ 772,700 $ (6,046,454) |
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | |
Variable Interest Entity [Line Items] | |
Condensed Balance Sheet | The carrying values of the Company's total assets and liabilities related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. at December 31, 2019 and December 31, 2018 included the following VIE assets and liabilities: ASSETS December 31, 2019 December 31, 2018 Cash, cash equivalents and restricted cash $ 5,069,715 $ 51,330,950 Accrued interest receivable 2,313,818 2,398,905 Investment related receivable — 32,666,128 Loans held for investment 629,157,956 550,555,503 Total Assets $ 636,541,489 $ 636,951,486 LIABILITIES Accrued interest payable $ 732,173 $ 867,794 Collateralized loan obligations (1) 505,930,065 503,978,918 Total Liabilities $ 506,662,238 $ 504,846,712 Equity 129,879,251 132,104,774 Total liabilities and equity $ 636,541,489 $ 636,951,486 (1) The stated maturity of the collateral loan obligations per the terms of the underlying collateralized loan obligation agreement is August 15, 2034 for Hunt CRE 2017-FL1, Ltd. and August 15, 2028 for Hunt CRE 2018-FL2, Ltd. |
Condensed Consolidated Statements of Operations | The statement of operations related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. at December 31, 2019 and December 31, 2018 include the following income and expense items: Statements of Operations December 31, 2019 December 31, 2018 Interest income $ 38,530,632 $ 24,800,048 Interest expense 20,882,076 12,578,306 Net interest income $ 17,648,556 $ 12,221,742 General and administrative fees (708,207) (355,723) Net income (loss) $ 16,940,349 $ 11,866,019 |
SECURED TERM LOAN (Tables)
SECURED TERM LOAN (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Credit Agreement | As of December 31, 2019, the outstanding balance and total commitment under the Credit Agreement consisted of the following: December 31, 2019 Outstanding Balance Total Commitment Secured Term Loan $ 40,250,000 $ 40,250,000 Total $ 40,250,000 $ 40,250,000 |
DERIVATIVE INSTRUMENTS HEDGIN_2
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instrument Detail [Abstract] | |
Schedule of Gains and Losses on Derivative Instruments | The following table summarizes the underlying hedged risks and the amount of gains and losses on derivative instruments reported net in the consolidated statement of operations as realized gain on derivative contracts, net and change in unrealized (loss) on derivative contracts, net for the year ended December 31, 2018: Year Ended December 31, 2018 Primary underlying risk Amount of realized gain (loss) Amount of unrealized appreciation (depreciation) Total Interest rate: Futures 25,984,870 (5,349,613) 20,635,257 Total $ 25,984,870 $ (5,349,613) $ 20,635,257 |
MSRs (Tables)
MSRs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Mortgage Servicing Rights MSR Disclosure [Abstract] | |
MSR Activity | The following table presents the Company’s MSR activity as of the years ended December 31, 2019 and December 31, 2018: December 31, 2019 December 31, 2018 Balance at beginning of year $ 3,997,786 $ 2,963,861 MSRs related to deconsolidation of securitization trust — 1,025,129 Changes in fair value due to: Changes in valuation inputs or assumptions used in valuation model (572,963) 375,016 Other changes to fair value (1) (724,616) (366,220) Balance at end of year $ 2,700,207 $ 3,997,786 Loans associated with MSRs (2) $ 333,563,728 $ 407,332,854 MSR values as percent of loans (3) 0.81 % 0.98 % (1) Amounts represent changes due to realization of expected cash flows (2) Amounts represent the unpaid principal balance of loans associated with MSRs outstanding at December 31, 2019 and December 31, 2018, respectively (3) Amounts represent the carrying value of MSRs at December 31, 2019 and December 31, 2018, respectively divided by the outstanding balance of the loans associated with these MSRs |
Components of Servicing Income | The following table presents the servicing income recorded on the Company’s consolidated statements of operations for the years ended December 31, 2019 and December 31, 2018: Year Ended December 31, 2019 Year Ended December 31, 2018 Servicing income, net $ 869,032 $ 940,090 Income from MSRs, net $ 869,032 $ 940,090 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Valuation of Assets and Liabilities at Fair Value | The following tables summarize the valuation of the Company’s assets and liabilities carried at fair value on a recurring basis within the fair value hierarchy levels as of December 31, 2019 and December 31, 2018: December 31, 2019 Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Unobservable inputs Level 3 Balance as of December 31, Assets: Mortgage servicing rights $ — $ — $ 2,700,207 $ 2,700,207 Total $ — $ — $ 2,700,207 $ 2,700,207 December 31, 2018 Quoted prices in active markets for identical assets Level 1 Significant other observable inputs Level 2 Unobservable inputs Level 3 Balance as of December 31, Assets: Mortgage servicing rights $ — $ — $ 3,997,786 $ 3,997,786 Total $ — $ — $ 3,997,786 $ 3,997,786 Liabilities: Multi-family securitized debt obligations $ — $ (19,231,331) $ — $ (19,231,331) Total $ — $ (19,231,331) $ — $ (19,231,331) |
Quantitative Information About the Significant Unobservable Inputs Used in the Fair Value Measurement of MSRs Classified as Level 3 | The following table provides quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s MSRs classified as Level 3 fair value assets at December 31, 2019 and December 31, 2018: As of December 31, 2019 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 7.4 - 27.6% 13.3 % Discount rate 12.0 % 12.0 % As of December 31, 2018 Valuation Technique Unobservable Input Range Weighted Average Discounted cash flow Constant prepayment rate 7.0 - 20.4% 10.1 % Discount rate 12.0 % 12.0 % |
Fair Value, by Balance Sheet Grouping | The following table details the carrying amount, face amount and fair value of the financial instruments described in Note 2: December 31, 2019 Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents 10,942,115 $ 10,942,115 $ 10,942,115 Restricted cash 5,069,715 5,069,715 5,069,715 Commercial mortgage loans held-for-investment 635,260,420 635,260,420 635,260,420 Total $ 651,272,250 $ 651,272,250 $ 651,272,250 Liabilities: Collateralized loan obligations $ 505,930,065 $ 510,181,000 $ 510,834,435 Secured term loan 39,384,041 40,250,000 42,999,082 Total $ 545,314,106 $ 550,431,000 $ 553,833,517 December 31, 2018 Carrying Value Face Amount Fair Value Assets: Cash and cash equivalents $ 7,882,862 $ 7,882,862 $ 7,882,862 Restricted cash 51,330,950 51,330,950 51,330,950 Cash held in securitization trusts, at fair value 24,357,335 24,357,335 24,357,335 Commercial mortgage loans held-for-investment 555,172,891 555,172,891 555,172,891 Total $ 638,744,038 $ 638,744,038 $ 638,744,038 Liabilities: Collateralized loan obligations $ 503,978,918 $ 510,181,000 $ 509,000,439 Total $ 503,978,918 $ 510,181,000 $ 509,000,439 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Restricted Common Stock Activity | The following table summarizes the activity related to restricted common stock for the years December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Shares Weighted Average Grant Date Fair Market Value Shares Weighted Average Grant Date Fair Market Value Outstanding Unvested Shares at Beginning of Period 4,500 $ 3.40 4,500 $ 4.33 Granted 4,500 3.33 4,500 3.40 Vested (4,500) 3.40 (4,500) 4.33 Outstanding Unvested Shares at End of Period 4,500 $ 3.33 4,500 $ 3.40 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Cash Dividends Declared | The following table presents cash dividends declared by the Company on its common stock for the year ended December 31, 2019: Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Weighted Average Share March 18, 2019 March 29, 2019 April 15, 2019 $ 1,658,135 $ 0.07000 June 10, 2019 June 28, 2019 July 15, 2019 $ 1,776,575 $ 0.07500 September 17, 2019 September 30, 2019 October 15, 2019 $ 1,776,575 $ 0.07500 December 4, 2019 December 31, 2019 January 15, 2020 $ 1,776,912 $ 0.07500 The following table presents cash dividends declared by the Company on its Series A Preferred Stock for the year ended December 31, 2019: Declaration Date Record Date Payment Date Dividend Amount Cash Dividend Per Weighted Average Share December 7, 2018 January 15, 2019 January 28, 2019 $ 332,626 $ 0.20660 December 7, 2018 February 14, 2019 February 14, 2019 $ 188,488 $ 0.11710 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following tables provide additional disclosure regarding the computation for the years ended December 31, 2019 and December 31, 2018: Year Ended December 31, 2019 Year Ended December 31, 2018 Net income (loss) $ 6,248,890 $ (5,471,462) Less dividends expense: Common stock $ 6,988,198 $ 6,578,196 Preferred stock 491,764 3,528,588 Deemed dividend on preferred stock redemption 3,093,028 — 10,572,990 10,106,784 Undistributed (deficit) $ (4,324,100) $ (15,578,246) Unvested Share-Based Payment Awards Common Stock Unvested Share-Based Payment Awards Common Stock Distributed earnings $ 0.30 $ 0.30 $ 0.28 $ 0.28 Undistributed (deficit) $ — $ (0.19) — (0.66) Total $ 0.30 $ 0.11 $ 0.28 $ (0.38) |
Schedule of Weighted Average Number of Shares | For the years ended December 31, 2019 2018 Basic weighted average shares of common stock outstanding 23,685,223 23,607,891 Weighted average of non-vested restricted stock 2,589 5,745 Diluted weighted average shares of common stock outstanding 23,687,812 23,613,636 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Taxable Income Reconciliation | The following table reconciles the Company’s TRS GAAP net income (loss) to taxable income (in thousands): Year Ended December 31, 2019 2018 (in thousands) (in thousands) GAAP consolidated net income (loss) attributable to Hunt Companies Finance Trust, Inc. 6,205 (3,950) GAAP net loss (income) from REIT operations (5,555) 5,241 GAAP net income (loss) of taxable subsidiary 650 1,291 Capitalized transaction fees (41) (41) Unrealized gain (loss) 1,298 (20) Deferred income — (222) Taxable income (loss) of taxable subsidiary before utilization of net operating losses 1,907 1,008 Utilization of net operating losses (571) (288) Current state tax expense 2 — Net taxable income of taxable subsidiaries 1,338 720 |
Schedule of Effective Income Tax Rate Reconciliation | The following is a reconciliation of the statutory federal and state tax rates to the effective rates, for the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 (in thousands) (in thousands) U.S. Federal Statutory Income Tax 1,303 (830) State Taxes (2) 61 REIT loss (income) not subject to federal income tax (1,166) 1,101 Tax effect of state corporate rate change (179) — REIT Testing Income Tax (1) — 1,956 Valuation Allowance — (767) Total income tax (benefit) provision (44) 1,522 Effective income tax rate (0.71) % (38.50) % (1) Please see REIT Testing and Tax on 75% Income Test Failure |
Schedule of Deferred Tax Assets | The TRS has a deferred tax asset (liability), comprised of the following (in thousands): As of December 31, 2019 As of December 31, 2018 Accumulated net operating losses of TRS 137 263 Unrealized gain (loss) 686 245 Capitalized transaction costs 120 112 Deferred tax asset 943 620 Valuation allowance — — Net non-current deferred tax asset (liability) 943 620 |
QUARTERLY FINANCIAL DATA (Table
QUARTERLY FINANCIAL DATA (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The following table presents a comparative breakdown of our unaudited summary quarterly financial data for the immediately preceding eight quarters. 2019 Quarter Ended March 31 June 30 September 30 December 31 Total interest income $ 9,983 $ 10,289 $ 9,832 $ 8,954 Total interest expense (5,776) (6,242) (6,036) (5,589) Net interest income 4,207 4,047 3,796 3,365 Other income (loss) (147) (274) (202) 178 Total expenses 2,648 2,176 1,703 2,238 Net income before provision for income taxes 1,412 1,597 1,891 1,305 (Provision for) benefit from income taxes 63 (203) 267 (83) Net income 1,475 1,394 2,158 1,222 Net income (loss) attributable to common shareholders (basic and diluted) (2,099) 1,390 2,154 1,218 Earnings (loss) per share: Net income (loss) attributable to common shareholders (basic and diluted) (2,099) 1,390 2,154 1,218 Weighted average number of shares of common stock outstanding: 23,687,664 23,687,664 23,687,664 23,688,251 Basic and diluted income (loss) per share (0.09) 0.06 0.09 0.05 2018 Quarter Ended March 31 June 30 September 30 December 31 Total interest income $ 21,516 $ 17,551 $ 9,719 $ 10,169 Total interest expense (18,398) (12,981) (4,604) (5,571) Net interest income 3,118 4,570 5,115 4,598 Other income (loss) 11,410 (23,670) 1,361 (476) Total expenses 3,213 2,390 2,123 2,250 Net income before provision for income taxes 11,315 (21,490) 4,353 1,872 (Provision for) benefit from income taxes — — — (1,522) Net income 11,315 (21,490) 4,353 350 Net income (loss) attributable to common shareholders (basic and diluted) 10,434 (22,361) 3,473 (546) Earnings (loss) per share: Net income (loss) attributable to common shareholders (basic and diluted) 10,434 (22,361) 3,473 (546) Weighted average number of shares of common stock outstanding: 23,392,387 23,683,164 23,687,273 23,687,664 Basic and diluted income (loss) per share 0.45 (0.94) 0.15 (0.02) |
ORGANIZATION AND BUSINESS OPE_2
ORGANIZATION AND BUSINESS OPERATIONS - Narrative (Details) | Mar. 18, 2019USD ($) | Feb. 14, 2019USD ($)$ / sharesshares | Apr. 30, 2018USD ($)Loan_Participation | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Jan. 15, 2019USD ($) | Dec. 31, 2017USD ($) | ||
Variable Interest Entity [Line Items] | |||||||||
Residential mortgage loan aggregate principal balance | $ 635,260,420 | $ 555,172,891 | $ 0 | ||||||
Cash and cash equivalents | [1] | 10,942,115 | 7,882,862 | ||||||
Collateralized loan obligations, net | [1] | 505,930,065 | $ 503,978,918 | ||||||
Maximum borrowing capacity | $ 40,250,000 | ||||||||
Preferred stock, shares outstanding (in shares) | shares | 0 | 1,610,000 | |||||||
Preferred stock, dividend rate (percentage) | 8.75% | 8.75% | |||||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 25 | $ 25 | |||||||
Carrying Value | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Cash and cash equivalents | $ 10,942,115 | [1] | $ 7,882,862 | ||||||
Collateralized loan obligations, net | 505,930,065 | 503,978,918 | |||||||
Principal Value | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Cash and cash equivalents | 10,942,115 | 7,882,862 | |||||||
Collateralized loan obligations, net | 510,181,000 | 510,181,000 | |||||||
Hunt CRE 2017-FL1, Ltd. | Carrying Value | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Collateralized loan obligations, net | $ 287,600,000 | 1,344,923 | $ 2,440,674 | ||||||
Hunt CRE 2017-FL1, Ltd. | Principal Value | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Collateralized loan obligations, net | 290,700,000 | ||||||||
Hunt CMT Equity, LLC | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Consideration transferred | $ 68,000,000 | ||||||||
Business acquisition, acquired commercial loans, number of loan participations | Loan_Participation | 8 | ||||||||
Assets acquired | $ 100,000 | ||||||||
Loan participations | 6,200,000 | ||||||||
Hunt CMT Equity, LLC | Hunt CRE 2017-FL1, Ltd. | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Residential mortgage loan aggregate principal balance | 339,400,000 | ||||||||
Cash and cash equivalents | $ 9,800,000 | ||||||||
Delayed Draw Facility | Credit Agreement | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Maximum borrowing capacity | $ 40,250,000 | $ 40,250,000 | $ 40,250,000 | ||||||
Proceeds from debt | 39,200,000 | ||||||||
Redeemable Preferred Stock | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Working capital | $ 1,100,000 | ||||||||
Preferred stock, shares outstanding (in shares) | shares | 1,610,000 | ||||||||
Preferred stock, dividend rate (percentage) | 8.75% | ||||||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 25 | ||||||||
Hunt Investment Management, LLC | Support Agreement | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Maximum reduction of expense reimbursement per annum (percent) | 25.00% | ||||||||
Maximum expense reimbursement reduction per annum | $ 568,000 | ||||||||
Aggregate reduction of expense reimbursement | $ 1,960,000 | ||||||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | Feb. 14, 2019 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 15, 2015 |
Debt and Equity Securities, FV-NI [Line Items] | |||||
Maximum exposure to loss from consolidated trusts | $ 4,762,149 | $ 0 | |||
Nonaccrual status loans | 0 | ||||
Impairments on loans held-for-investments | 0 | ||||
Allowance for loan losses | 0 | ||||
Total Commitment | 40,250,000 | ||||
Accumulated amortization, debt issuance costs | $ 1,017,419 | ||||
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Common stock, shares issued (in shares) | 23,692,164 | 23,687,664 | |||
Common stock, shares outstanding (in shares) | 23,692,164 | 23,687,664 | |||
Stock repurchase program, authorized amount | $ 10,000,000 | ||||
Preferred stock, shares outstanding (in shares) | 0 | 1,610,000 | |||
Preferred stock, dividend rate (percentage) | 8.75% | 8.75% | |||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 | |||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Preferred stock, shares issued (in shares) | 0 | 1,610,000 | |||
Accrued tax liability from REIT Testing | $ 1,960,000 | ||||
Redeemable Preferred Stock | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Preferred stock, shares outstanding (in shares) | 1,610,000 | ||||
Preferred stock, dividend rate (percentage) | 8.75% | ||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | ||||
Collateralized Loan Obligations | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Maximum exposure to loss from consolidated trusts | $ 124,046,671 | $ 124,046,671 | |||
Stock Repurchase Program | |||||
Debt and Equity Securities, FV-NI [Line Items] | |||||
Stock repurchase program, authorized amount | $ 10,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | [1] | $ 10,942,115 | $ 7,882,862 | |
Restricted cash | [1] | 5,069,715 | 51,330,950 | |
Total cash, cash equivalents and restricted cash | 16,011,830 | 59,213,812 | $ 45,622,602 | |
Restricted cash CRE 2017-FL1, Ltd. | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash | 2,158,497 | 24,085,890 | ||
Restricted cash CRE 2018-FL2, Ltd. | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash | $ 2,911,218 | $ 27,245,060 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
COMMERCIAL MORTGAGE LOANS HEL_3
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT Summary of Commercial Mortgage Loans (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($)mortgage_loan | Dec. 31, 2018USD ($)mortgage_loan | Dec. 31, 2017USD ($) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
One month LIBOR rate | $ 0.0170 | $ 0.0238 | ||
Weighted average LIBOR floor rate | 0.0156 | 0.0118 | ||
Loans held for investment | [1] | 635,260,420 | 555,172,891 | |
Commercial Real Estate Portfolio Segment | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Unpaid Principal Balance | 635,260,420 | 555,172,891 | ||
Carrying Value | $ 635,260,420 | $ 555,172,891 | ||
Loan Count | mortgage_loan | 51 | 44 | ||
Floating Rate Loan % | 100.00% | 100.00% | ||
Weighted average, coupon rate, percentage | 5.40% | 6.40% | ||
Weighted average, life (years) | 3 years 9 months 18 days | 4 years 1 month 6 days | ||
Loans held for investment | $ 635,260,420 | $ 555,172,891 | $ 0 | |
Outstanding senior secured loans from loan participants | 6,102,464 | 4,617,388 | ||
Hunt CMT Equity, LLC | Commercial Real Estate Portfolio Segment | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment | $ 629,157,956 | $ 550,555,503 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
COMMERCIAL MORTGAGE LOANS HEL_4
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT Loan Portfolio Activity (Details) - USD ($) | Apr. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning Balance | [1] | $ 555,172,891 | ||
Purchases | 300,319,433 | $ 410,901,286 | ||
Proceeds from principal repayments | (213,415,654) | (201,392,408) | ||
Proceeds from sales | (6,816,250) | 0 | ||
Ending Balance | [1] | 635,260,420 | 555,172,891 | |
Commercial Real Estate Portfolio Segment | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning Balance | 555,172,891 | 0 | ||
Purchases | 300,319,433 | 756,565,299 | ||
Proceeds from principal repayments | (213,415,654) | (201,392,408) | ||
Proceeds from sales | (6,816,250) | |||
Ending Balance | 635,260,420 | 555,172,891 | ||
Commercial Real Estate Portfolio Segment | Hunt CMT Equity, LLC | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Beginning Balance | 550,555,503 | |||
Purchases | $ 345,664,012 | |||
Ending Balance | $ 629,157,956 | $ 550,555,503 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
COMMERCIAL MORTGAGE LOANS HEL_5
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT Summary of Commercial Loan Risk Ratings (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($)mortgage_loan | Dec. 31, 2018USD ($)mortgage_loan | Dec. 31, 2017USD ($) | ||
Financing Receivable, Recorded Investment [Line Items] | ||||
Loans held for investment | [1] | $ 635,260,420 | $ 555,172,891 | |
Commercial Real Estate Portfolio Segment | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Number of Loans | mortgage_loan | 51 | 44 | ||
Unpaid Principal Balance | $ 635,260,420 | $ 555,172,891 | ||
Loans held for investment | $ 635,260,420 | $ 555,172,891 | $ 0 | |
Commercial Real Estate Portfolio Segment | Risk Rating, 1 | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Number of Loans | mortgage_loan | 1 | 0 | ||
Unpaid Principal Balance | $ 9,000,000 | $ 0 | ||
Loans held for investment | $ 9,000,000 | $ 0 | ||
Commercial Real Estate Portfolio Segment | Risk Rating, 2 | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Number of Loans | mortgage_loan | 9 | 5 | ||
Unpaid Principal Balance | $ 87,176,088 | $ 51,589,000 | ||
Loans held for investment | $ 87,176,088 | $ 51,589,000 | ||
Commercial Real Estate Portfolio Segment | Risk Rating, 3 | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Number of Loans | mortgage_loan | 37 | 34 | ||
Unpaid Principal Balance | $ 487,513,256 | $ 455,323,082 | ||
Loans held for investment | $ 487,513,256 | $ 455,323,082 | ||
Average risk rating, percentage | 91.90% | 91.30% | ||
Commercial Real Estate Portfolio Segment | Risk Rating, 4 | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Number of Loans | mortgage_loan | 4 | 5 | ||
Unpaid Principal Balance | $ 51,571,076 | $ 48,260,809 | ||
Loans held for investment | $ 51,571,076 | $ 48,260,809 | ||
Commercial Real Estate Portfolio Segment | Risk Rating, 5 | ||||
Financing Receivable, Recorded Investment [Line Items] | ||||
Number of Loans | mortgage_loan | 0 | 0 | ||
Unpaid Principal Balance | $ 0 | $ 0 | ||
Loans held for investment | $ 0 | $ 0 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
COMMERCIAL MORTGAGE LOANS HEL_6
COMMERCIAL MORTGAGE LOANS HELD-FOR-INVESTMENT Summary of Concentration of Credit Risk (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Collateral Property | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 100.00% | 100.00% |
Commercial Real Estate Portfolio Segment | Commercial Loans Held-For-Investment | Geographic Concentration Risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 100.00% | 100.00% |
Commercial Real Estate Portfolio Segment | Multi-Family | Commercial Loans Held-For-Investment | Collateral Property | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 93.90% | 87.20% |
Commercial Real Estate Portfolio Segment | Retail | Commercial Loans Held-For-Investment | Collateral Property | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 2.70% | 1.20% |
Commercial Real Estate Portfolio Segment | Office | Commercial Loans Held-For-Investment | Collateral Property | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 2.00% | 7.60% |
Commercial Real Estate Portfolio Segment | Mixed-Use | Commercial Loans Held-For-Investment | Collateral Property | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 0.70% | 3.00% |
Commercial Real Estate Portfolio Segment | Self-Storage | Commercial Loans Held-For-Investment | Collateral Property | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 0.70% | 1.00% |
Commercial Real Estate Portfolio Segment | Southwest | Commercial Loans Held-For-Investment | Geographic Concentration Risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 38.70% | 30.20% |
Commercial Real Estate Portfolio Segment | South | Commercial Loans Held-For-Investment | Geographic Concentration Risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 27.50% | 22.60% |
Commercial Real Estate Portfolio Segment | Midwest | Commercial Loans Held-For-Investment | Geographic Concentration Risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 16.90% | 20.20% |
Commercial Real Estate Portfolio Segment | Mid-Atlantic | Commercial Loans Held-For-Investment | Geographic Concentration Risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 8.40% | 10.30% |
Commercial Real Estate Portfolio Segment | Various | Commercial Loans Held-For-Investment | Geographic Concentration Risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 5.50% | 5.90% |
Commercial Real Estate Portfolio Segment | West | Commercial Loans Held-For-Investment | Geographic Concentration Risk | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Concentration risk (as a percentage) | 3.00% | 10.80% |
AVAILABLE-FOR-SALE SECURITIES -
AVAILABLE-FOR-SALE SECURITIES - Realized Gain (Loss) from Sale of AFS Securities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Securities, Available-for-sale [Line Items] | ||
Proceeds from sales of available-for-sale securities | $ 0 | $ 1,227,314,578 |
AFS Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
AFS securities sold, at amortized cost | 1,260,655,162 | |
Proceeds from sales of available-for-sale securities | 1,227,314,578 | |
Net realized gain (loss) on sale of AFS securities | $ (33,340,584) |
AVAILABLE-FOR-SALE SECURITIES_2
AVAILABLE-FOR-SALE SECURITIES - Fair Value of AFS Investment Securities by Rate Type (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Securities, Available-for-sale [Line Items] | ||
Coupon Interest | $ 12,152,397 | |
Net (premium amortization)/discount accretion | $ 0 | (1,403,431) |
Interest income | 10,748,966 | |
Agency | ||
Debt Securities, Available-for-sale [Line Items] | ||
Coupon Interest | 12,152,397 | |
Net (premium amortization)/discount accretion | (1,435,534) | |
Interest income | 10,716,863 | |
Multi-Family | ||
Debt Securities, Available-for-sale [Line Items] | ||
Coupon Interest | 0 | |
Net (premium amortization)/discount accretion | 32,103 | |
Interest income | $ 32,103 |
THE FREMF TRUSTS - Narrative (D
THE FREMF TRUSTS - Narrative (Details) - FREMF Trusts - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | ||
Investment in Multi-Family MBS, carrying value | $ 0 | $ 4,762,149 |
Realized Losses | $ 709,439 | $ 51,132 |
THE FREMF TRUSTS - Condensed Co
THE FREMF TRUSTS - Condensed Consolidated Balance Sheets (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets | |||
Total assets | [1] | $ 657,901,998 | $ 679,352,035 |
Liabilities and Equity | |||
Multi-family securitized debt obligations | [1],[2] | 0 | 19,231,331 |
Total liabilities | [1] | 549,257,286 | 529,148,697 |
Equity | [1] | 108,545,212 | 150,103,838 |
Total liabilities and equity | [1] | $ 657,901,998 | 679,352,035 |
FREMF Trusts | |||
Assets | |||
Receivables | 24,357,335 | ||
Total assets | 24,357,335 | ||
Liabilities and Equity | |||
Multi-family securitized debt obligations | 19,231,331 | ||
Payables | 363,855 | ||
Total liabilities | 19,595,186 | ||
Equity | 4,762,149 | ||
Total liabilities and equity | $ 24,357,335 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. | ||
[2] | As of December 31, 2018, assets of the consolidated VIE related to the FREMF 2012-KF01 Trust totaled $24,357,335, and the liabilities of consolidated VIE related to the FREMF 2012-KF01 trust totaled $19,595,186. |
THE FREMF TRUSTS - Condensed _2
THE FREMF TRUSTS - Condensed Consolidated Statements of Operations (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | ||||||||||
Interest income | $ 8,954,000 | $ 9,832,000 | $ 10,289,000 | $ 9,983,000 | $ 10,169,000 | $ 9,719,000 | $ 17,551,000 | $ 21,516,000 | ||
Interest expense | 5,589,000 | 6,036,000 | 6,242,000 | 5,776,000 | 5,571,000 | 4,604,000 | 12,981,000 | 18,398,000 | ||
Net interest income | 3,365,000 | 3,796,000 | 4,047,000 | 4,207,000 | 4,598,000 | 5,115,000 | 4,570,000 | 3,118,000 | $ 15,413,842 | $ 17,400,715 |
General and administrative fees | (4,335,376) | (4,006,774) | ||||||||
Net income | $ 1,222,000 | $ 2,158,000 | $ 1,394,000 | $ 1,475,000 | $ 350,000 | $ 4,353,000 | $ (21,490,000) | $ 11,315,000 | 6,248,890 | (5,471,462) |
FREMF Trusts | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Interest income | 78,361 | 20,891,992 | ||||||||
Interest expense | 0 | 19,652,710 | ||||||||
Net interest income | 78,361 | 1,239,282 | ||||||||
General and administrative fees | 0 | (887,388) | ||||||||
Unrealized gain (loss) on multi-family loans held in securitization trusts | 694,339 | (6,398,348) | ||||||||
Net income | $ 772,700 | $ (6,046,454) |
RESIDENTIAL MORTGAGE LOAN SEC_3
RESIDENTIAL MORTGAGE LOAN SECURITIZATION TRUSTS - Condensed Consolidated Statements of Operations (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | ||||||||||
Interest income | $ 8,954,000 | $ 9,832,000 | $ 10,289,000 | $ 9,983,000 | $ 10,169,000 | $ 9,719,000 | $ 17,551,000 | $ 21,516,000 | ||
Interest expense | 5,589,000 | 6,036,000 | 6,242,000 | 5,776,000 | 5,571,000 | 4,604,000 | 12,981,000 | 18,398,000 | ||
Net interest income | 3,365,000 | 3,796,000 | 4,047,000 | 4,207,000 | 4,598,000 | 5,115,000 | 4,570,000 | 3,118,000 | $ 15,413,842 | $ 17,400,715 |
General and administrative fees | (4,335,376) | (4,006,774) | ||||||||
Unrealized gain (loss) on residential mortgage loans held in securitization trusts | 0 | 5,650,199 | ||||||||
Net income | $ 1,222,000 | $ 2,158,000 | $ 1,394,000 | $ 1,475,000 | $ 350,000 | $ 4,353,000 | $ (21,490,000) | $ 11,315,000 | $ 6,248,890 | (5,471,462) |
Residential mortgage loans | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Interest income | 2,102,352 | |||||||||
Interest expense | 1,685,971 | |||||||||
Net interest income | 416,381 | |||||||||
General and administrative fees | (20,886) | |||||||||
Unrealized gain (loss) on residential mortgage loans held in securitization trusts | 5,650,199 | |||||||||
Net income | $ 6,045,694 |
USE OF SPECIAL PURPOSE ENTITI_3
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES Narrative (Details) | Jun. 18, 2018mortgage_loan_trust | Apr. 30, 2018Loan_Participation |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of trusts | mortgage_loan_trust | 3 | |
Number of loan participations | Loan_Participation | 8 |
USE OF SPECIAL PURPOSE ENTITI_4
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES Condensed Consolidated Balance Sheets (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | [1] | $ 10,942,115 | $ 7,882,862 |
Accrued interest receivable | [1] | 2,342,354 | 2,430,790 |
Investment related receivable | [1] | 0 | 33,042,234 |
Loans held for investment | [1] | 635,260,420 | 555,172,891 |
Total assets | [1] | 657,901,998 | 679,352,035 |
Accrued interest payable | [1] | 805,126 | 1,231,649 |
Collateralized loan obligations, net | [1] | 505,930,065 | 503,978,918 |
Total liabilities | [1] | 549,257,286 | 529,148,697 |
Equity | [1] | 108,545,212 | 150,103,838 |
Total liabilities and equity | [1] | 657,901,998 | 679,352,035 |
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | |||
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | 5,069,715 | 51,330,950 | |
Accrued interest receivable | 2,313,818 | 2,398,905 | |
Investment related receivable | 0 | 32,666,128 | |
Loans held for investment | 629,157,956 | 550,555,503 | |
Total assets | 636,541,489 | 636,951,486 | |
Accrued interest payable | 732,173 | 867,794 | |
Collateralized loan obligations, net | 505,930,065 | 503,978,918 | |
Total liabilities | 506,662,238 | 504,846,712 | |
Equity | 129,879,251 | 132,104,774 | |
Total liabilities and equity | $ 636,541,489 | $ 636,951,486 | |
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
USE OF SPECIAL PURPOSE ENTITI_5
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES Summary of Loan and Borrowing Characteristics (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($)insturmentcontractmortgage_loan | Dec. 31, 2018USD ($)contractmortgage_loaninsturment | Apr. 30, 2018USD ($) | ||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations, net | [1] | $ 505,930,065 | $ 503,978,918 | |
Commercial Real Estate Portfolio Segment | ||||
Variable Interest Entity [Line Items] | ||||
Number of Loans | mortgage_loan | 51 | 44 | ||
Carrying Value | $ 635,260,420 | $ 555,172,891 | ||
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Number of notes issued | insturment | 2 | 2 | ||
Collateralized loan obligations, net | $ 505,930,065 | $ 503,978,918 | ||
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | London Interbank Offered Rate (LIBOR) | ||||
Variable Interest Entity [Line Items] | ||||
Weighted average yield (as a percentage) | 3.60% | 4.05% | ||
Weighted average yield (as a percentage) | 1.40% | 1.40% | ||
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | Commercial Real Estate Portfolio Segment | ||||
Variable Interest Entity [Line Items] | ||||
Number of Loans | contract | 51 | 44 | ||
Principal Value | ||||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations, net | $ 510,181,000 | $ 510,181,000 | ||
Principal Value | Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Carrying Value | 629,157,956 | 550,555,503 | ||
Collateralized loan obligations, net | 510,181,000 | 510,181,000 | ||
Principal Value | Hunt CRE 2017-FL1, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations, net | $ 290,700,000 | |||
Carrying Value | ||||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations, net | 505,930,065 | 503,978,918 | ||
Carrying Value | Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Carrying Value | 629,157,956 | 550,555,503 | ||
Collateralized loan obligations, net | 505,930,065 | 503,978,918 | ||
Carrying Value | Hunt CRE 2017-FL1, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations, net | 1,344,923 | 2,440,674 | $ 287,600,000 | |
Carrying Value | Hunt CRE 2018-FL2, Ltd. | ||||
Variable Interest Entity [Line Items] | ||||
Collateralized loan obligations, net | $ 2,906,012 | $ 3,761,410 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
USE OF SPECIAL PURPOSE ENTITI_6
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES Condensed Consolidated Statement of Operations (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Variable Interest Entity [Line Items] | ||||||||||
Interest expense | $ 5,589,000 | $ 6,036,000 | $ 6,242,000 | $ 5,776,000 | $ 5,571,000 | $ 4,604,000 | $ 12,981,000 | $ 18,398,000 | ||
Net interest income | 3,365,000 | 3,796,000 | 4,047,000 | 4,207,000 | 4,598,000 | 5,115,000 | 4,570,000 | 3,118,000 | $ 15,413,842 | $ 17,400,715 |
General and administrative fees | (4,335,376) | (4,006,774) | ||||||||
Net income | $ 1,222,000 | $ 2,158,000 | $ 1,394,000 | $ 1,475,000 | $ 350,000 | $ 4,353,000 | $ (21,490,000) | $ 11,315,000 | 6,248,890 | (5,471,462) |
Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. | ||||||||||
Variable Interest Entity [Line Items] | ||||||||||
Interest income | 38,530,632 | 24,800,048 | ||||||||
Interest expense | 20,882,076 | 12,578,306 | ||||||||
Net interest income | 17,648,556 | 12,221,742 | ||||||||
General and administrative fees | (708,207) | (355,723) | ||||||||
Net income | $ 16,940,349 | $ 11,866,019 |
SECURED TERM LOAN - Narrative (
SECURED TERM LOAN - Narrative (Details) - USD ($) | Feb. 14, 2019 | Jan. 15, 2019 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Total Commitment | $ 40,250,000 | ||
Collateralized loan obligation, deferred financing costs | $ 865,959 | ||
Delayed Draw Facility | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total Commitment | 40,250,000 | $ 40,250,000 | $ 40,250,000 |
Maturity term | 6 years | ||
Proceeds from debt | $ 39,200,000 | ||
Delayed Draw Facility | Credit Agreement | Five year period following initial draw | |||
Debt Instrument [Line Items] | |||
Weighted average yield (as a percentage) | 7.25% | ||
Delayed Draw Facility | Credit Agreement | First four months after fifth anniversary | |||
Debt Instrument [Line Items] | |||
Weighted average yield (as a percentage) | 0.25% | ||
Delayed Draw Facility | Credit Agreement | Second four months after fifth anniversary | |||
Debt Instrument [Line Items] | |||
Weighted average yield (as a percentage) | 0.375% | ||
Delayed Draw Facility | Credit Agreement | Last four months until maturity | |||
Debt Instrument [Line Items] | |||
Weighted average yield (as a percentage) | 0.50% |
SECURED TERM LOAN - Summary of
SECURED TERM LOAN - Summary of Credit Agreement (Details) | Dec. 31, 2019USD ($) |
Receivables [Abstract] | |
Outstanding Balance | $ 40,250,000 |
Total Commitment | $ 40,250,000 |
DERIVATIVE INSTRUMENTS HEDGIN_3
DERIVATIVE INSTRUMENTS HEDGING AND NON-HEDGING ACTIVITIES - Gains and Losses on Derivative Contracts (Details) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Interest rate: | |
Amount of realized gain (loss) | $ 25,984,870 |
Amount of unrealized appreciation (depreciation) | (5,349,613) |
Total | 20,635,257 |
Futures | |
Interest rate: | |
Amount of realized gain (loss) | 25,984,870 |
Amount of unrealized appreciation (depreciation) | (5,349,613) |
Total | $ 20,635,257 |
MSRs - Narrative (Details)
MSRs - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Mortgage servicing rights | ||
Mortgage Servicing Rights MSR [Line Items] | ||
Residential mortgage loan aggregate principal balance | $ 333,563,728 | $ 407,332,854 |
MSRs - MSR Activity (Details)
MSRs - MSR Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Mortgage Service Rights Activity [Line Items] | ||
Balance at beginning of year | $ 555,172,891 | $ 0 |
Changes in fair value due to: | ||
Balance at end of year | 635,260,420 | 555,172,891 |
Mortgage servicing rights | ||
Schedule Of Mortgage Service Rights Activity [Line Items] | ||
Balance at beginning of year | 3,997,786 | 2,963,861 |
MSRs related to deconsolidation of securitization trust | 0 | 1,025,129 |
Changes in fair value due to: | ||
Changes in valuation inputs or assumptions used in valuation model | (572,963) | 375,016 |
Other changes to fair value | (724,616) | (366,220) |
Balance at end of year | 2,700,207 | 3,997,786 |
Loans associated with MSRs | $ 333,563,728 | $ 407,332,854 |
MSR values as percent of loans | 0.81% | 0.98% |
MSRs - Components of Servicing
MSRs - Components of Servicing Income (Details) - Mortgages - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Components Of Servicing Income [Line Items] | ||
Servicing income, net | $ 869,032 | $ 940,090 |
Income from MSRs, net | $ 869,032 | $ 940,090 |
FAIR VALUE - Assets and Liabili
FAIR VALUE - Assets and Liabilities at Fair Value (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Total assets | $ 2,700,207 | $ 3,997,786 |
Liabilities: | ||
Total liabilities | (19,231,331) | |
Quoted prices in active markets for identical assets Level 1 | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Total liabilities | 0 | |
Significant other observable inputs Level 2 | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Total liabilities | (19,231,331) | |
Unobservable inputs Level 3 | ||
Assets: | ||
Total assets | 2,700,207 | 3,997,786 |
Liabilities: | ||
Total liabilities | 0 | |
Mortgage servicing rights | ||
Assets: | ||
Total assets | 2,700,207 | 3,997,786 |
Mortgage servicing rights | Quoted prices in active markets for identical assets Level 1 | ||
Assets: | ||
Total assets | 0 | 0 |
Mortgage servicing rights | Significant other observable inputs Level 2 | ||
Assets: | ||
Total assets | 0 | 0 |
Mortgage servicing rights | Unobservable inputs Level 3 | ||
Assets: | ||
Total assets | $ 2,700,207 | 3,997,786 |
Multi-family securitized debt obligations | ||
Liabilities: | ||
Total liabilities | (19,231,331) | |
Multi-family securitized debt obligations | Quoted prices in active markets for identical assets Level 1 | ||
Liabilities: | ||
Total liabilities | 0 | |
Multi-family securitized debt obligations | Significant other observable inputs Level 2 | ||
Liabilities: | ||
Total liabilities | (19,231,331) | |
Multi-family securitized debt obligations | Unobservable inputs Level 3 | ||
Liabilities: | ||
Total liabilities | $ 0 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 2,700,207 | $ 3,997,786 |
Unobservable inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 2,700,207 | 3,997,786 |
Mortgage servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 2,700,207 | 3,997,786 |
Mortgage servicing rights | Unobservable inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 2,700,207 | $ 3,997,786 |
FAIR VALUE - Unobservable Input
FAIR VALUE - Unobservable Inputs Information (Details) - Mortgage servicing rights - Discounted cash flow - Unobservable inputs Level 3 | Dec. 31, 2019 | Dec. 31, 2018 |
Constant prepayment rate | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.074 | 0.070 |
Constant prepayment rate | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.276 | 0.204 |
Constant prepayment rate | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.133 | 0.101 |
Discount rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.120 | 0.120 |
Discount rate | Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unobservable Input | 0.120 | 0.120 |
FAIR VALUE - Fair Value Informa
FAIR VALUE - Fair Value Information on Financial Instruments (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | [1] | $ 10,942,115 | $ 7,882,862 | |
Restricted cash | [1] | 5,069,715 | 51,330,950 | |
Cash held in securitization trusts, at fair value | [1],[2] | 0 | 24,357,335 | |
Total assets | [1] | 657,901,998 | 679,352,035 | |
Collateralized loan obligations, net | [1] | 505,930,065 | 503,978,918 | |
Secured Term Loan, net | [1] | 39,384,041 | 0 | |
Total liabilities | [1] | 549,257,286 | 529,148,697 | |
Principal Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | 10,942,115 | 7,882,862 | ||
Restricted cash | 5,069,715 | 51,330,950 | ||
Cash held in securitization trusts, at fair value | 24,357,335 | |||
Commercial mortgage loans held-for-investment | 635,260,420 | 555,172,891 | ||
Total assets | 651,272,250 | 638,744,038 | ||
Collateralized loan obligations, net | 510,181,000 | 510,181,000 | ||
Secured Term Loan, net | 40,250,000 | |||
Total liabilities | 550,431,000 | 510,181,000 | ||
Carrying Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | 10,942,115 | [1] | 7,882,862 | |
Restricted cash | 5,069,715 | [1] | 51,330,950 | |
Cash held in securitization trusts, at fair value | 24,357,335 | |||
Commercial mortgage loans held-for-investment | 635,260,420 | [1] | 555,172,891 | |
Total assets | 651,272,250 | 638,744,038 | ||
Collateralized loan obligations, net | 505,930,065 | 503,978,918 | ||
Secured Term Loan, net | 39,384,041 | |||
Total liabilities | 545,314,106 | 503,978,918 | ||
Fair Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | 10,942,115 | 7,882,862 | ||
Restricted cash | 5,069,715 | 51,330,950 | ||
Cash held in securitization trusts, at fair value | 24,357,335 | |||
Commercial mortgage loans held-for-investment | 635,260,420 | 555,172,891 | ||
Total assets | 651,272,250 | 638,744,038 | ||
Collateralized loan obligations, net | 510,834,435 | 509,000,439 | ||
Secured Term Loan, net | 42,999,082 | |||
Total liabilities | $ 553,833,517 | $ 509,000,439 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. | |||
[2] | As of December 31, 2018, assets of the consolidated VIE related to the FREMF 2012-KF01 Trust totaled $24,357,335, and the liabilities of consolidated VIE related to the FREMF 2012-KF01 trust totaled $19,595,186. |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) | Mar. 18, 2019USD ($) | Jan. 18, 2018 | Jan. 18, 2018USD ($) | Jun. 30, 2017 | Sep. 30, 2019USD ($) | Jun. 30, 2018USD ($)security | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($)mortgage_loan | Dec. 31, 2019USD ($)contract | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)mortgage_loan | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | |||||||||||||
Management fee (percentage) | 1.50% | 1.50% | |||||||||||
Management fee percentage, waived portion | 0.75% | ||||||||||||
Management fee waived | $ 6,959 | $ 6,959 | |||||||||||
Management fee | $ 2,245,065 | 2,335,998 | |||||||||||
Management fee payable | $ 564,620 | 564,620 | $ 564,620 | $ 564,620 | $ 564,620 | 587,500 | |||||||
Operating expenses reimbursable to Manager | 1,629,908 | 2,375,804 | |||||||||||
Reimbursable expenses payable | 427,361 | 427,361 | 427,361 | 427,361 | 427,361 | 587,500 | |||||||
Available-for-sale securities | 0 | 10,748,966 | |||||||||||
MAXEX LLC | Loan Review Services | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Proceeds received from fees | 359,626 | ||||||||||||
Marketing services feed paid | $ 83,893 | ||||||||||||
FOAC | Loan Review Services | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Alternative backstop fee | $ 426,770 | 426,770 | 426,770 | 426,770 | $ 426,770 | ||||||||
MAXEX LLC | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Proceeds received from fees | 0 | ||||||||||||
Restricted Stock Units (RSUs) | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Compensation expense | 8,962 | 22,912 | |||||||||||
Manager Equity Plan | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Maximum shares issued, percentage of issued and outstanding shares of common stock (percentage) | 3.00% | ||||||||||||
Weighted average period for compensation expense recognition | 5 months 12 days | ||||||||||||
Manager Equity Plan | Restricted Stock Units (RSUs) | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Unrecognized compensation expense | $ 13,946 | 13,946 | $ 13,946 | $ 13,946 | $ 13,946 | $ 7,922 | |||||||
Hunt Investment Management, LLC | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Annual management fee (percentage) | 1.50% | ||||||||||||
Quarterly management fee (percentage) | 0.375% | ||||||||||||
Quarterly incentive fee (percentage) | 20.00% | ||||||||||||
Hurdle rate (percentage) | 8.00% | ||||||||||||
Affiliated Entity | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Number of securities sold | security | 4 | ||||||||||||
Notional amount | $ 82,900,000 | ||||||||||||
Hunt Financial Services, LLC | Hunt CRE 2018-FL2, Ltd. | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Available-for-sale securities | $ 208,477 | ||||||||||||
Hunt Finance Company, LLC | Hunt CRE 2018-FL2, Ltd. | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Number of loans purchased | 25 | 6 | 24 | ||||||||||
Payments to acquire finance receivables | 87,600,000 | ||||||||||||
Origination of notes receivable from related parties | $ 12,000,000 | ||||||||||||
Unpaid Principal Balance | $ 257,800,000 | ||||||||||||
Hunt Finance Company, LLC | Hunt CRE 2017-FL1, Ltd. | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Number of loans purchased | 22 | 9 | |||||||||||
Number of loans sold | 6 | ||||||||||||
Payments to acquire finance receivables | $ 180,800,000 | ||||||||||||
Proceeds from sale of finance receivables | 6,800,000 | ||||||||||||
Unpaid Principal Balance | $ 151,100,000 | ||||||||||||
Support Agreement | Hunt Investment Management, LLC | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Maximum reduction of expense reimbursement per annum (percent) | 25.00% | ||||||||||||
Maximum expense reimbursement reduction per annum | $ 568,000 | ||||||||||||
Aggregate reduction of expense reimbursement | $ 1,960,000 | ||||||||||||
Amount of reimbursement expense exceeding cap | $ 89,379 | $ 89,379 | $ 89,379 | $ 89,379 | $ 89,379 |
RELATED PARTY TRANSACTIONS - Un
RELATED PARTY TRANSACTIONS - Unvested Share Activity (Details) - Employee Stock Option - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | ||
Outstanding Unvested Shares at Beginning of Period (in shares) | 4,500 | 4,500 |
Granted (in shares) | 4,500 | 4,500 |
Vested (in shares) | (4,500) | (4,500) |
Shares, Outstanding Unvested Shares at End of Period (in shares) | 4,500 | 4,500 |
Weighted Average Grant Date Fair Market Value | ||
Outstanding Unvested Shares at Beginning of Period (in dollars per share) | $ 3.40 | $ 4.33 |
Granted (in dollars per share) | 3.33 | 3.40 |
Vested (in dollars per share) | 3.40 | 4.33 |
Outstanding Unvested Shares at End of Period (in dollars per share) | $ 3.33 | $ 3.40 |
GUARANTEES - Narrative (Details
GUARANTEES - Narrative (Details) - USD ($) | Jun. 27, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Backstop Guarantee | |||
Guarantor Obligations [Line Items] | |||
Representation and warranty breach, threshold period for likely occurrence | 5 years | ||
Minimum adjusted tangible net worth | $ 20,000,000 | ||
Minimum available liquidity | $ 5,000,000 | ||
Minimum available liquidity, percentage of aggregate unpaid principal balance (percentage) | 0.10% | ||
Maximum amount of estimated future payments under the backstop guarantees | $ 1,405,182,222 | $ 1,405,182,222 | |
Indemnification Agreement | |||
Guarantor Obligations [Line Items] | |||
Maximum amount of estimated future payments under the backstop guarantees | $ 0 | ||
Loan Review Services | Backstop Guarantee | |||
Guarantor Obligations [Line Items] | |||
Minimum available liquidity, percentage of aggregate unpaid principal balance (percentage) | 0.01% | ||
FOAC | Loan Review Services | |||
Guarantor Obligations [Line Items] | |||
Alternative backstop fee | $ 426,770 | ||
FOAC | Loan Review Services | Backstop Guarantee | |||
Guarantor Obligations [Line Items] | |||
Alternative backstop fee | $ 426,770 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Hunt CRE 2017-FL1, Ltd. | ||
Loss Contingencies [Line Items] | ||
Unfunded commitments | $ 50.5 | $ 26.6 |
Hunt CRE 2018-FL2, Ltd. | ||
Loss Contingencies [Line Items] | ||
Unfunded commitments | $ 41.6 | $ 55.4 |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) - USD ($) | Feb. 14, 2019 | Dec. 27, 2018 | Jan. 18, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 27, 2016 | Dec. 15, 2015 | |
Stockholders' Equity Note [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||
Common stock, shares issued (in shares) | 23,692,164 | 23,687,664 | ||||||
Common stock, shares outstanding (in shares) | 23,692,164 | 23,687,664 | ||||||
Stock repurchase program, authorized amount | $ 10,000,000 | |||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||
Preferred stock, shares issued (in shares) | 0 | 1,610,000 | ||||||
Preferred stock, dividend rate (percentage) | 8.75% | 8.75% | ||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 | ||||||
Common stock dividends | $ 0 | $ 6,988,198 | $ 6,578,196 | |||||
Preferred stock, shares outstanding (in shares) | 0 | 1,610,000 | ||||||
Dividends payable | [1] | $ 1,776,912 | $ 1,465,610 | |||||
Series A Preferred Stock | ||||||||
Stockholders' Equity Note [Line Items] | ||||||||
Preferred stock, dividend rate (percentage) | 8.75% | |||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | |||||||
Redeemable Preferred Stock | ||||||||
Stockholders' Equity Note [Line Items] | ||||||||
Preferred stock, dividend rate (percentage) | 8.75% | |||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | |||||||
Preferred stock, shares outstanding (in shares) | 1,610,000 | |||||||
Common Stock | ||||||||
Stockholders' Equity Note [Line Items] | ||||||||
Issuance of common stock, net (in shares) | 1,539,406 | |||||||
Dividends payable | $ 6,988,198 | |||||||
Dividends payable, amount per share (in dollars per share) | $ 0.30 | |||||||
Stock Repurchase Program | ||||||||
Stockholders' Equity Note [Line Items] | ||||||||
Stock repurchase program, authorized amount | $ 10,000,000 | |||||||
Shares repurchased | 126,856 | |||||||
Weighted average share price of common stock repurchased (in dollars per share) | $ 5.09 | |||||||
Common stock shares repurchased (in shares) | 0 | 0 | ||||||
Common stock shares repurchased (in shares) | $ 9,400,000 | |||||||
XL Investments | ||||||||
Stockholders' Equity Note [Line Items] | ||||||||
Common stock shares into which warrants may be converted (in shares) | 3,753,492 | 3,753,492 | ||||||
Common stock, shares issued (in dollars per share) | $ 13.11 | |||||||
Hunt | Private Placement | ||||||||
Stockholders' Equity Note [Line Items] | ||||||||
Common stock, shares issued (in dollars per share) | $ 4.77 | |||||||
Proceeds from issuance of common stock | $ 7,300,000 | |||||||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
EQUITY - Dividends Declared (De
EQUITY - Dividends Declared (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |
Dividends [Line Items] | |||
Dividend Amount | [1] | $ 1,776,912 | $ 1,465,610 |
Common Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 6,988,198 | ||
Cash Dividend Per Share (in dollars per share) | $ 0.30 | ||
Distribution One | Series A Preferred Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 332,626 | ||
Cash Dividend Per Share (in dollars per share) | $ 0.20660 | ||
Distribution One | Common Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 1,658,135 | ||
Cash Dividend Per Share (in dollars per share) | $ 0.07000 | ||
Distribution Two | Series A Preferred Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 188,488 | ||
Cash Dividend Per Share (in dollars per share) | $ 0.11710 | ||
Distribution Two | Common Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 1,776,575 | ||
Cash Dividend Per Share (in dollars per share) | $ 0.07500 | ||
Distribution Three | Common Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 1,776,575 | ||
Cash Dividend Per Share (in dollars per share) | $ 0.07500 | ||
Distribution Four | Common Stock | |||
Dividends [Line Items] | |||
Dividend Amount | $ 1,776,912 | ||
Cash Dividend Per Share (in dollars per share) | $ 0.07500 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
EQUITY - Non-controlling Intere
EQUITY - Non-controlling Interests (Details) - USD ($) | Nov. 29, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Noncontrolling interests | [1] | $ 99,500 | $ 99,500 | |
Dividends on the HCMT preferred shares | 491,764 | 3,528,588 | ||
Noncontrolling interests | HCMT Preferred Shares | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Number of shares issued (in shares) | 125 | |||
Noncontrolling interests | $ 99,500 | |||
Equity raised | 125,000 | |||
Non-controlling interests expenses | $ 25,500 | |||
Dividend rate percentage | 12.00% | |||
Dividends on the HCMT preferred shares | $ 15,000 | $ 1,333 | ||
[1] | Our consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIE's) as the Company was the primary beneficiary of these VIEs. As of December 31, 2019 and December 31, 2018, assets of the consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $636,541,489 and $636,951,486, respectively and the liabilities of consolidated VIEs related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. totaled $506,662,238 and $504,846,712, respectively. |
EARNINGS PER SHARE - Earnings p
EARNINGS PER SHARE - Earnings per Share (Details) - USD ($) | Dec. 27, 2018 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 18, 2018 | Dec. 27, 2016 |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||||
Net income (loss) | $ 1,222,000 | $ 2,158,000 | $ 1,394,000 | $ 1,475,000 | $ 350,000 | $ 4,353,000 | $ (21,490,000) | $ 11,315,000 | $ 6,248,890 | $ (5,471,462) | |||
Less dividends expense: | |||||||||||||
Common stock dividends | $ 0 | 6,988,198 | 6,578,196 | ||||||||||
Preferred stock | 491,764 | 3,528,588 | |||||||||||
Deemed dividend on preferred stock redemption | 3,093,028 | 0 | |||||||||||
Dividends | 10,572,990 | 10,106,784 | |||||||||||
Undistributed (deficit) | $ (4,324,100) | $ (15,578,246) | |||||||||||
Incremental common shares attributable to dilutive effect of call options and warrants (in shares) | 0 | ||||||||||||
Weighted average number of shares of common stock outstanding (in shares) | 23,688,251 | 23,687,664 | 23,687,664 | 23,687,664 | 23,687,664 | 23,687,273 | 23,683,164 | 23,392,387 | 23,687,812 | 23,613,636 | |||
XL Investments | |||||||||||||
Less dividends expense: | |||||||||||||
Common stock shares into which warrants may be converted (in shares) | 3,753,492 | 3,753,492 | |||||||||||
Common Stock | |||||||||||||
Less dividends expense: | |||||||||||||
Distributed earnings (in dollars per share) | $ 0.30 | $ 0.28 | |||||||||||
Undistributed earnings (deficit) (in dollars per share) | (0.19) | (0.66) | |||||||||||
Total (in dollars per share) | 0.11 | (0.38) | |||||||||||
Unvested Share Based Payment Awards | |||||||||||||
Less dividends expense: | |||||||||||||
Distributed earnings (in dollars per share) | 0.30 | 0.28 | |||||||||||
Undistributed earnings (deficit) (in dollars per share) | 0 | 0 | |||||||||||
Total (in dollars per share) | $ 0.30 | $ 0.28 |
EARNINGS PER SHARE - Weighted A
EARNINGS PER SHARE - Weighted Average Number of Shares (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Basic weighted average shares of common stock outstanding (in shares) | 23,685,223 | 23,607,891 |
Weighted average of non-vested restricted stock (in shares) | 2,589 | 5,745 |
Diluted weighted average shares of common stock outstanding (in shares) | 23,687,812 | 23,613,636 |
INCOME TAXES - Taxable Income R
INCOME TAXES - Taxable Income Reconciliation (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Line Items] | ||||||||||
Net income | $ 1,222,000 | $ 2,158,000 | $ 1,394,000 | $ 1,475,000 | $ 350,000 | $ 4,353,000 | $ (21,490,000) | $ 11,315,000 | $ 6,248,890 | $ (5,471,462) |
Deferred income | 0 | 222,518 | ||||||||
REIT Operation | ||||||||||
Income Tax Disclosure [Line Items] | ||||||||||
Net income | (5,555,000) | 5,241,000 | ||||||||
Hunt Companies Finance Trust | ||||||||||
Income Tax Disclosure [Line Items] | ||||||||||
Net income | 6,205,000 | (3,950,000) | ||||||||
Subsidiaries | ||||||||||
Income Tax Disclosure [Line Items] | ||||||||||
Net income | 650,000 | 1,291,000 | ||||||||
Capitalized transaction fees | (41,000) | (41,000) | ||||||||
Unrealized gain (loss) | 1,298,000 | (20,000) | ||||||||
Deferred income | 0 | (222,000) | ||||||||
Taxable income (loss) of taxable subsidiary before utilization of net operating losses | 1,907,000 | 1,008,000 | ||||||||
Utilization of net operating losses | (571,000) | (288,000) | ||||||||
Current state tax expense | 2,000 | 0 | ||||||||
Net taxable income of taxable subsidiaries | $ 1,338,000 | $ 720,000 |
INCOME TAXES - Effective Income
INCOME TAXES - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
U.S. Federal Statutory Income Tax | $ 1,303 | $ (830) |
State Taxes | (2) | 61 |
REIT loss (income) not subject to federal income tax | (1,166) | 1,101 |
Tax effect of state corporate rate change | (179) | 0 |
REIT Testing Income Tax | 0 | 1,956 |
Valuation Allowance | 0 | (767) |
Total income tax (benefit) provision | $ (44) | $ 1,522 |
Effective income tax rate (as a percentage) | (0.71%) | (38.50%) |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Non-current Deferred Tax Asset (Liability) | ||
Accumulated net operating losses of TRS | $ 137 | $ 263 |
Unrealized gain (loss) | 686 | 245 |
Capitalized transaction costs | 120 | 112 |
Deferred tax asset | 943 | 620 |
Valuation allowance | 0 | 0 |
Net non-current deferred tax asset (liability) | $ 943 | $ 620 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Line Items] | ||||||||||
Net income (loss) | $ 1,222,000 | $ 2,158,000 | $ 1,394,000 | $ 1,475,000 | $ 350,000 | $ 4,353,000 | $ (21,490,000) | $ 11,315,000 | $ 6,248,890 | $ (5,471,462) |
Net operating loss carryforwards | 400,000 | 1,000,000 | 400,000 | 1,000,000 | ||||||
Accrued tax liability from REIT Testing | $ 1,960,000 | $ 1,960,000 | 1,960,000 | 1,960,000 | ||||||
Subsidiaries | ||||||||||
Income Tax Disclosure [Line Items] | ||||||||||
Net income (loss) | $ 650,000 | $ 1,291,000 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - Subsequent Event - Private Placement | Jan. 06, 2020USD ($)$ / sharesshares |
Subsequent Event [Line Items] | |
Common stock issued (in shares) | shares | 1,246,719 |
Sale of stock, price per share (in shares) | $ / shares | $ 4.61 |
Proceeds from issuance of common stock | $ | $ 5,747,375 |
Sale of stock premium over common shares | 43.00% |
Outstanding common shares owned (percentage) | 5.00% |
QUARTERLY FINANCIAL DATA (Detai
QUARTERLY FINANCIAL DATA (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||
Total interest income | $ 8,954,000 | $ 9,832,000 | $ 10,289,000 | $ 9,983,000 | $ 10,169,000 | $ 9,719,000 | $ 17,551,000 | $ 21,516,000 | ||
Total interest expense | (5,589,000) | (6,036,000) | (6,242,000) | (5,776,000) | (5,571,000) | (4,604,000) | (12,981,000) | (18,398,000) | ||
Net interest income | 3,365,000 | 3,796,000 | 4,047,000 | 4,207,000 | 4,598,000 | 5,115,000 | 4,570,000 | 3,118,000 | $ 15,413,842 | $ 17,400,715 |
Other income (loss) | 178,000 | (202,000) | (274,000) | (147,000) | (476,000) | 1,361,000 | (23,670,000) | 11,410,000 | ||
Total expenses | 2,238,000 | 1,703,000 | 2,176,000 | 2,648,000 | 2,250,000 | 2,123,000 | 2,390,000 | 3,213,000 | ||
Net income (loss) before provision for income taxes | 1,305,000 | 1,891,000 | 1,597,000 | 1,412,000 | 1,872,000 | 4,353,000 | (21,490,000) | 11,315,000 | 6,205,367 | (3,949,717) |
(Provision for) benefit from income taxes | (83,000) | 267,000 | (203,000) | 63,000 | (1,522,000) | 0 | 0 | 0 | 43,523 | (1,521,745) |
Net income | 1,222,000 | 2,158,000 | 1,394,000 | 1,475,000 | 350,000 | 4,353,000 | (21,490,000) | 11,315,000 | 6,248,890 | (5,471,462) |
Net income (loss) attributable to common stockholders | 1,218,000 | 2,154,000 | 1,390,000 | (2,099,000) | (546,000) | 3,473,000 | (22,361,000) | 10,434,000 | 2,664,098 | (9,000,050) |
Earnings (loss) per share: | ||||||||||
Net income (loss) attributable to common stockholders | $ 1,218,000 | $ 2,154,000 | $ 1,390,000 | $ (2,099,000) | $ (546,000) | $ 3,473,000 | $ (22,361,000) | $ 10,434,000 | $ 2,664,098 | $ (9,000,050) |
Weighted average number of shares of common stock outstanding (in shares) | 23,688,251 | 23,687,664 | 23,687,664 | 23,687,664 | 23,687,664 | 23,687,273 | 23,683,164 | 23,392,387 | 23,687,812 | 23,613,636 |
Basic and diluted income (loss) per share (in dollars per share) | $ 0.05 | $ 0.09 | $ 0.06 | $ (0.09) | $ (0.02) | $ 0.15 | $ (0.94) | $ 0.45 | $ 0.11 | $ (0.38) |
Schedule IV - Mortgage Loans _2
Schedule IV - Mortgage Loans on Real Estate (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 635,260,420 | ||
Carrying Amount of Loans | 635,260,420 | $ 555,172,891 | $ 0 |
Multi-family | Illinois | Senior loan in excess of 3% | Borrower A | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | 0 | ||
Unpaid Principal Balance | 35,625,000 | ||
Carrying Amount of Loans | 35,625,000 | ||
Multi-family | Illinois | Senior loan in excess of 3% | Borrower G | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | 0 | ||
Unpaid Principal Balance | 25,355,116 | ||
Carrying Amount of Loans | $ 25,355,116 | ||
Multi-family | Illinois | Senior loan in excess of 3% | London Interbank Offered Rate (LIBOR) | Borrower A | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 4.30% | ||
Multi-family | Illinois | Senior loan in excess of 3% | London Interbank Offered Rate (LIBOR) | Borrower G | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 3.75% | ||
Multi-family | Diversified | Senior loan in excess of 3% | Borrower B | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 34,913,160 | ||
Carrying Amount of Loans | $ 34,913,160 | ||
Multi-family | Diversified | Senior loan in excess of 3% | London Interbank Offered Rate (LIBOR) | Borrower B | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 4.05% | ||
Multi-family | Diversified | Senior loan less than 3% | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 314,964,735 | ||
Carrying Amount of Loans | $ 314,964,735 | ||
Multi-family | Diversified | Senior loan less than 3% | Minimum | London Interbank Offered Rate (LIBOR) | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 2.80% | ||
Multi-family | Diversified | Senior loan less than 3% | Maximum | London Interbank Offered Rate (LIBOR) | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 5.95% | ||
Multi-family | Texas | Senior loan in excess of 3% | Borrower C | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 32,321,681 | ||
Carrying Amount of Loans | 32,321,681 | ||
Multi-family | Texas | Senior loan in excess of 3% | Borrower H | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | 0 | ||
Unpaid Principal Balance | 23,500,000 | ||
Carrying Amount of Loans | $ 23,500,000 | ||
Multi-family | Texas | Senior loan in excess of 3% | London Interbank Offered Rate (LIBOR) | Borrower C | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 3.65% | ||
Multi-family | Texas | Senior loan in excess of 3% | London Interbank Offered Rate (LIBOR) | Borrower H | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 3.15% | ||
Multi-family | Maryland | Senior loan in excess of 3% | Borrower D | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 32,148,978 | ||
Carrying Amount of Loans | $ 32,148,978 | ||
Multi-family | Maryland | Senior loan in excess of 3% | London Interbank Offered Rate (LIBOR) | Borrower D | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 3.25% | ||
Multi-family | Arizona | Senior loan in excess of 3% | Borrower E | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 30,505,000 | ||
Carrying Amount of Loans | $ 30,505,000 | ||
Multi-family | Arizona | Senior loan in excess of 3% | London Interbank Offered Rate (LIBOR) | Borrower E | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 3.75% | ||
Multi-family | Virginia | Senior loan in excess of 3% | Borrower F | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 26,500,000 | ||
Carrying Amount of Loans | $ 26,500,000 | ||
Multi-family | Virginia | Senior loan in excess of 3% | London Interbank Offered Rate (LIBOR) | Borrower F | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 2.75% | ||
Multi-family | Nebraska | Senior loan in excess of 3% | Borrower I | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 20,853,067 | ||
Carrying Amount of Loans | $ 20,853,067 | ||
Multi-family | Nebraska | Senior loan in excess of 3% | London Interbank Offered Rate (LIBOR) | Borrower I | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 3.70% | ||
Multi-family | Georgia | Senior loan in excess of 3% | Borrower K | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 20,000,000 | ||
Carrying Amount of Loans | $ 20,000,000 | ||
Multi-family | Georgia | Senior loan in excess of 3% | London Interbank Offered Rate (LIBOR) | Borrower K | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 2.75% | ||
Retail | Texas | Senior loan less than 3% | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 17,115,524 | ||
Carrying Amount of Loans | $ 17,115,524 | ||
Retail | Texas | Senior loan less than 3% | London Interbank Offered Rate (LIBOR) | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 4.10% | ||
Office | Illinois | Senior loan less than 3% | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 12,828,794 | ||
Carrying Amount of Loans | $ 12,828,794 | ||
Office | Illinois | Senior loan less than 3% | London Interbank Offered Rate (LIBOR) | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 3.75% | ||
Mixed-Use | District of Columbia | Senior loan less than 3% | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 4,404,365 | ||
Carrying Amount of Loans | $ 4,404,365 | ||
Mixed-Use | District of Columbia | Senior loan less than 3% | London Interbank Offered Rate (LIBOR) | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 4.65% | ||
Self-Storage | Virginia | Senior loan less than 3% | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Prior Liens | $ 0 | ||
Unpaid Principal Balance | 4,225,000 | ||
Carrying Amount of Loans | $ 4,225,000 | ||
Self-Storage | Virginia | Senior loan less than 3% | London Interbank Offered Rate (LIBOR) | |||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Line Items] | |||
Interest Payment Rates | 3.15% |
Schedule IV - Reconciliation of
Schedule IV - Reconciliation of Mortgage Loans on Real Estate (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-29, Real Estate Companies, Investment in Movement in Mortgage Loans on Real Estate [Roll Forward] | ||
Balance at beginning of year | $ 555,172,891 | $ 0 |
Mortgage loans purchased | 300,319,433 | 756,565,299 |
Mortgage loan repayments | (213,415,654) | (201,392,408) |
Mortgage loans sold | (6,816,250) | 0 |
Balance at end of year | $ 635,260,420 | $ 555,172,891 |