Finance of America (FOA) Q3 2025: Adjusted Net Income Doubles as Digital Origination Surges
Finance of America delivered a quarter marked by sharp adjusted earnings acceleration and digital origination breakthroughs, as technology investments and capital markets execution drove operating leverage. Liquidity and balance sheet flexibility improved on the back of record securitization activity and a major equity repurchase plan. With AI-driven origination and new partnerships expanding the addressable market, FOA is positioning for sustained volume growth and margin expansion into 2026.
Summary
- AI and Digital Origination Drive Efficiency: Over 20% of customers completed pre-qualification digitally, improving conversion and loan officer productivity.
- Balance Sheet Flexibility Enhanced: Record securitizations and cash build support debt payments and a major equity buyback.
- 2026 Growth Trajectory Set: Management targets 20%+ volume growth and substantial EPS gains as digital transformation scales.
Performance Analysis
Finance of America’s third quarter results highlight a business gaining operational momentum and demonstrating the leverage from its digital investments. Adjusted net income for the quarter more than doubled year over year, driven by higher origination margins, robust capital markets activity, and strong expense discipline. Funded origination volume reached $603 million for the quarter, with year-to-date volumes up 28% over 2024, reflecting both market share gains and improved customer engagement.
Capital markets execution was a standout, with over $3 billion in proprietary loan securitizations completed, including a record $2 billion issuance in September. This drove a significant increase in cash reserves to $110 million, positioning FOA to meet near-term bond obligations and execute on a planned $80 million equity repurchase. Digital initiatives directly impacted funnel metrics, with unique web leads up 16% and email-driven leads up 206% quarter over quarter, signaling a step-change in top-of-funnel productivity.
- Origination Margin Expansion: Stronger margins on HomeSafe and HECM (Home Equity Conversion Mortgage) products contributed to profit growth.
- Record Securitizations: Two large deals in Q3 attracted new investor classes and improved funding stability.
- Expense Control: Continued discipline supported margin improvement despite a dynamic rate and home price environment.
The combination of technology-driven origination, capital markets access, and balance sheet optimization is now translating into higher operating leverage and sets a foundation for 2026 growth.
Executive Commentary
"Over the last several years, we've continued to invest in digital innovation, AI, and data analytics. strengthening the foundation of our business. While still very early in the adoption of AI technology, we fully expect these investments to improve the customer experience, enhance the ROI in our marketing spend, and increase the productivity of the organization, driving improved operating leverage."
Graham Fleming, Chief Executive Officer
"Adjusted net income for the quarter totaled $33 million, or $1.33 per share, a 125% increase from the prior quarter and more than double the level from the same period last year. This improvement was driven by higher origination margins and increased capital markets activity."
Matt Engel, Chief Financial Officer
Strategic Positioning
1. Digital Origination and AI Enablement
FOA’s digital-first strategy is now delivering tangible efficiency gains. Over 20% of customers completed the pre-qualification process digitally, requiring no loan officer intervention. This not only accelerates the customer journey but also enables each loan officer to service more opportunities—evidenced by a 25% increase in opportunities per officer and a 32% rise in monthly submission volume. AI-powered call agents and wholesale tools are next, aiming to further boost conversion and partner experience.
2. Capital Markets Scale and Liquidity
Capital markets execution is a core lever, with the company completing its largest ever securitizations and attracting a broader investor base. The resulting cash build and facility repayments enhance FOA’s ability to fund growth, service debt, and execute the $80 million Blackstone equity buyback. These moves reduce risk and provide flexibility for future origination volume spikes or market volatility.
3. Product and Market Diversification
FOA’s partnership with Better.com expands its reach beyond traditional reverse mortgages, enabling the company to serve approximately 30% more potential borrowers with higher loan-to-value needs. This move not only increases the total addressable market but also positions FOA to capture share as home equity solutions become mainstream among retirees.
Key Considerations
FOA’s Q3 results reflect a business in transition, leveraging technology and capital markets to unlock new growth and margin opportunities. Investors should weigh the following:
Key Considerations:
- AI-Driven Productivity: Early digital and AI adoption is materially improving loan officer efficiency and customer conversion rates.
- Balance Sheet Resilience: Increased cash and reduced leverage from securitizations and facility repayments provide a buffer against macro shocks.
- Equity Buyback Dynamics: The $80 million Blackstone repurchase will materially reduce share count, amplifying per-share earnings power.
- Top-of-Funnel Acceleration: Record web traffic and email engagement signal potential for sustained origination growth into 2026.
Risks
FOA remains exposed to home price volatility, as softer appreciation projections directly impacted non-cash fair value marks this quarter. Interest rate shifts and capital markets conditions could alter securitization cadence or investor appetite. The integration of AI and digital tools, while promising, still faces adoption hurdles and execution risk. Regulatory scrutiny and demographic shifts in the reverse mortgage market could also impact long-term growth assumptions.
Forward Outlook
For Q4 2025, FOA expects:
- Continued robust origination, with a smaller securitization planned for the quarter
- Completion of the Blackstone equity buyback, reducing share count to approximately 24 million fully diluted shares
For full-year 2025, management reaffirmed guidance:
- Adjusted EPS of $2.60 to $3.00
- Origination volume tracking toward the low end of the $2.4 to $2.7 billion range
Looking to 2026, FOA projects:
- Volume growth of 20% to 25% year over year
- Adjusted EPS of $4.25 to $4.75, reflecting increased scale and digital leverage
Management cited AI adoption, digital engagement, and new product partnerships as key drivers for the 2026 outlook, emphasizing sustained operating leverage and market share gains.
Takeaways
FOA’s Q3 results demonstrate a business at an inflection point, with digital and capital markets execution translating into margin and earnings growth.
- Technology Investment Is Paying Off: Digital origination and AI are driving measurable efficiency, setting a new standard for the reverse mortgage industry.
- Capital Markets Access Underpins Growth: Record securitizations and liquidity provide flexibility for both growth and shareholder returns.
- 2026 Will Test Scale and Diversification: Investors should monitor the impact of new product partnerships and digital adoption on volume and margin expansion.
Conclusion
Finance of America’s Q3 2025 results mark a decisive step forward, as digital origination and capital markets strength combine to accelerate earnings and unlock new growth levers. With a streamlined share base and robust liquidity, FOA is well positioned to capitalize on demographic and technology-driven shifts in the home equity market.
Industry Read-Through
FOA’s digital origination breakthroughs and capital markets success signal a broader shift in the mortgage and home equity industry toward automation, AI, and platform-driven efficiency. Incumbents relying on legacy processes risk margin compression and share loss, while those able to scale digital engagement and securitization will be best positioned for demographic-driven growth. Partnerships with fintechs and digital-first lenders are likely to accelerate across the sector as customer acquisition and conversion move online. Investors should watch for similar digital adoption metrics and balance sheet moves among reverse mortgage and home equity peers as industry transformation accelerates.