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CREDIT FACILITIES AND LONG-TERM DEBT | 6 Months Ended
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Jun. 30, 2022
Debt Disclosure [Abstract] |
CREDIT FACILITIES AND LONG-TERM DEBT | CREDIT FACILITIES AND LONG-TERM DEBT The following tables summarize certain details related to the Company's credit facilities and long-term debt as of June 30, 2022 and December 31, 2021 (in millions, except interest rates):
|  |  |  | Outstanding Amount |  |  |  |  |  |
June 30, 2022 |  | Borrowing Capacity |  | Current |  | Non-Current |  | Weighted Average Interest Rate |  | End of Revolving / Withdrawal Period |  | Final Maturity Date
Non-Recourse Asset-backed Debt: |  |  |  |  |  |  |  |  |  |  |  |
Asset-backed Senior Revolving Credit Facilities |  |  |  |  |  |  |  |  |  |  |  |
Revolving Facility 2018-2 |  | $ | 1,000 |  |  | $ | 104 |  |  | $ | — |  |  | 3.07 | % |  | June 7, 2024 |  | June 7, 2024
Revolving Facility 2018-3 |  | 750 |  |  | 271 |  |  | — |  |  | 2.62 | % |  | May 26, 2024 |  | May 26, 2024
Revolving Facility 2019-1 |  | 900 |  |  | 876 |  |  | — |  |  | 3.43 | % |  | June 30, 2023 |  | June 30, 2023
Revolving Facility 2019-2 |  | 1,850 |  |  | 1,809 |  |  | — |  |  | 2.89 | % |  | July 8, 2023 |  | July 8, 2024
Revolving Facility 2019-3 |  | 925 |  |  | 252 |  |  | — |  |  | 3.42 | % |  | April 5, 2024 |  | April 5, 2025
Revolving Facility 2021-1 |  | 125 |  |  | 50 |  |  | — |  |  | 2.46 | % |  | October 31, 2022 |  | October 31, 2022
Asset-backed Senior Term Debt Facilities |  |  |  |  |  |  |  |  |  |  |  |
Term Debt Facility 2021-S1 |  | 400 |  |  | — |  |  | 400 |  |  | 3.48 | % |  | April 1, 2024 |  | April 1, 2025
Term Debt Facility 2021-S2 |  | 600 |  |  | — |  |  | 500 |  |  | 3.20 | % |  | September 10, 2024 |  | September 10, 2025
Term Debt Facility 2021-S3 |  | 1,000 |  |  | — |  |  | 500 |  |  | 3.75 | % |  | January 31, 2027 |  | July 31, 2027
Term Debt Facility 2022-S1 |  | 250 |  |  | — |  |  | 250 |  |  | 4.07 | % |  | March 1, 2025 |  | September 1, 2025
Total |  | $ | 7,800 |  |  | $ | 3,362 |  |  | $ | 1,650 |  |  |  |  |  |  |
Issuance Costs |  |  |  |  |  | (16) |  |  |  |  |  |  |
Carrying Value |  |  |  |  |  | $ | 1,634 |  |  |  |  |  |  |
Asset-backed Mezzanine Term Debt Facilities |  |  |  |  |  |  |  |  |  |  |  |
Term Debt Facility 2020-M1 |  | 3,000 |  |  | — |  |  | 1,500 |  |  | 10.00 | % |  | April 1, 2025 |  | April 1, 2026
Term Debt Facility 2022-M1 |  | 500 |  |  | — |  |  | 75 |  |  | 10.00 | % |  | September 15, 2025 |  | September 15, 2026
Total |  | $ | 3,500 |  |  | $ | — |  |  | $ | 1,575 |  |  |  |  |  |  |
Issuance Costs |  |  |  |  |  | (33) |  |  |  |  |  |  |
Carrying Value |  |  |  |  |  | $ | 1,542 |  |  |  |  |  |  |
Total Non-Recourse Asset-backed Debt |  | $ | 11,300 |  |  | $ | 3,362 |  |  | $ | 3,176 |  |  |  |  |  |  |
Recourse Debt - Other Secured Borrowings: |  |  |  |  |  |  |  |  |  |  |  |
Mortgage Financing |  |  |  |  |  |  |  |  |  |  |  |
Repo Facility 2019-R1 |  | $ | 100 |  |  | $ | 12 |  |  | $ | — |  |  | 2.43 | % |  | May 25, 2023 |  | May 25, 2023
Total Recourse Debt |  | $ | 100 |  |  | $ | 12 |  |  | $ | — |  |  |  |  |  |  |
|  | Outstanding Amount |  |
December 31, 2021 |  | Current |  | Non-Current |  | Weighted Average Interest Rate
Non-Recourse Asset-backed Debt: |  |  |  |  |  |
Asset-backed Senior Revolving Credit Facilities |  |  |  |  |  |
Revolving Facility 2018-2 |  | $ | 759 |  |  | $ | — |  |  | 2.84 | %
Revolving Facility 2018-3 |  | 673 |  |  | — |  |  | 2.39 | %
Revolving Facility 2019-1 |  | 648 |  |  | — |  |  | 2.84 | %
Revolving Facility 2019-2 |  | 1,149 |  |  | — |  |  | 2.52 | %
Revolving Facility 2019-3 |  | 886 |  |  | — |  |  | 3.25 | %
Revolving Facility 2021-1 |  | 125 |  |  | — |  |  | 2.15 | %
Asset-backed Senior Term Debt Facilities |  |  |  |  |  |
Term Debt Facility 2021-S1 |  | — |  |  | 400 |  |  | 3.48 | %
Term Debt Facility 2021-S2 |  | — |  |  | 500 |  |  | 3.20 | %
Term Debt Facility 2021-S3 |  | — |  |  | — |  |  | 3.75 | %
Total |  | $ | 4,240 |  |  | $ | 900 |  |  |
Issuance Costs |  |  |  | (3) |  |  |
Carrying Value |  |  |  | $ | 897 |  |  |
Asset-backed Mezzanine Term Debt Facilities |  |  |  |  |  |
Term Debt Facility 2020-M1 |  | $ | — |  |  | $ | 1,000 |  |  | 10.00 | %
Total |  | $ | — |  |  | $ | 1,000 |  |  |
Issuance Costs |  |  |  | (35) |  |  |
Carrying Value |  |  |  | $ | 965 |  |  |
Total Non-Recourse Asset-backed Debt |  | $ | 4,240 |  |  | $ | 1,862 |  |  |
Recourse Debt - Other Secured Borrowings: |  |  |  |  |  |
Mortgage Financing |  |  |  |  |  |
Repo Facility 2019-R1 |  | $ | 7 |  |  | $ | — |  |  | 1.84 | %
Total Recourse Debt |  | $ | 7 |  |  | $ | — |  |  |
Non-Recourse Asset-backed Debt The Company utilizes inventory financing facilities consisting of asset-backed senior debt facilities and asset-backed mezzanine term debt facilities to provide financing for the Company’s real estate inventory purchases and renovation. The credit facilities are secured by the assets and equity of one or more SPEs. Each SPE is a consolidated subsidiary of Opendoor and a separate legal entity. Neither the assets nor credit of any such SPE are generally available to satisfy the debts and other obligations of any other Opendoor entities, except to the extent other Opendoor entities are also a party to the financing arrangements. These facilities are non-recourse to Opendoor and, with limited exceptions, non-recourse to other Opendoor subsidiaries. As of June 30, 2022, the Company had total borrowing capacity with respect to the Company’s non-recourse asset- backed debt of $11.3 billion. Borrowing capacity amounts under non-recourse asset-backed debt as reflected in the table above are in some cases not fully committed and any borrowings above the fully committed amounts are subject to the applicable lender’s discretion. Any amounts repaid for senior term and mezzanine term debt facilities reduce total borrowing capacity as repaid amounts are not available to be reborrowed. As of June 30, 2022, the Company had fully committed borrowing capacity with respect to the Company’s non-recourse asset-backed debt of $8.7 billion; this fully committed borrowing capacity is comprised of $4.3 billion for senior revolving credit facilities, $1.9 billion for senior term debt facilities, and $2.5 billion for mezzanine term debt facilities. Asset-backed Senior Revolving Credit Facilities The Company classifies the senior revolving credit facilities as current liabilities on the Company’s condensed consolidated balance sheets as amounts drawn to acquire and renovate homes are required to be repaid as the related real estate inventory is sold, which the Company expects to occur within 12 months. The senior revolving credit facilities are typically structured with an initial revolving period of up to 24 months during which time amounts can be borrowed, repaid and borrowed again. The borrowing capacity is generally available until the end of the applicable revolving period as reflected in the table above. Outstanding amounts drawn under each senior revolving credit facility are required to be repaid on the facility maturity date or earlier if accelerated due to an event of default or other mandatory repayment event. The final maturity dates and revolving period end dates reflected in the table above are inclusive of any extensions that are at the sole discretion of the Company. These facilities may also have extensions subject to lender discretion that are not reflected in the table above. Borrowings under the senior revolving credit facilities accrue interest at a Benchmark reference rate ("Benchmark Rate"), which may be based on London Interbank Offered Rate ("LIBOR") or the secured overnight financing rate ("SOFR"), plus a margin that varies by facility. The Company may also pay fees on certain unused portions of the committed borrowing capacity, as defined in the respective credit agreements. The Company’s senior revolving credit facility arrangements typically include upfront fees that may be paid at execution of the applicable agreements or be earned at execution and payable over time. These facilities are generally fully prepayable at any time without penalty other than customary Benchmark Rate breakage costs. These borrowings are collateralized by cash, equity in the real estate owning SPEs, and the real estate inventory funded by the relevant facility. The lenders have legal recourse only to the real estate-owning SPE borrowers, certain SPE guarantors, and the assets securing the debt, and do not have general recourse to the Company. The senior revolving credit facilities have aggregated borrowing bases, which increase or decrease based on the cost and value of the properties financed under a given facility and the time that those properties are in the Company’s possession. When the Company resells a home, the proceeds are used to reduce the outstanding balance under the related senior revolving credit facility. The borrowing base for a given facility may be reduced as properties age beyond certain thresholds and any borrowing base deficiencies may be satisfied through contributions of additional properties or partial repayment of the facility. Asset-backed Senior Term Debt Facilities The Company classifies its senior term debt facilities as non-current liabilities on the Company’s condensed consolidated balance sheets because its borrowings under these facilities are generally not required to be repaid until the final maturity date. The senior term debt facilities are typically structured with an initial withdrawal period up to 60 months during which the outstanding principal amounts are generally not required to be repaid when homes financed through those facilities are sold and instead are intended to remain outstanding until final maturity for each facility. Outstanding amounts drawn under each senior term debt facility are required to be repaid on the facility maturity date or earlier if accelerated due to an event of default or other mandatory repayment event. The final maturity dates and withdrawal period end dates reflected in the table above are inclusive of any extensions that are at the sole discretion of the Company. These facilities may also have extensions subject to lender discretion that are not reflected in the table above. Borrowings under the senior term debt facilities accrue interest at a fixed rate. The Company's senior term debt facilities may include upfront issuance costs that are capitalized as part of the facilities' respective carrying values. These facilities are fully prepayable at any time but may be subject to certain customary prepayment penalties. These borrowings are collateralized by cash, equity in the real estate owning SPEs, and the real estate inventory funded by the relevant facility. The lenders have legal recourse only to the real estate-owning SPE borrowers, certain SPE guarantors, and the assets securing the debt, and do not have general recourse to the Company. The senior term debt facilities have aggregated property borrowing bases, which increase or decrease based on the cost and the value of the properties financed under a given facility, the time those properties are in the Company’s possession and the amount of cash collateral pledged by the SPE borrowers. The borrowing bases for a given facility may be reduced as properties age beyond certain thresholds and any borrowing base deficiencies may be satisfied through contributions of additional properties, cash or through partial repayment of the facility. Asset-backed Mezzanine Term Debt Facilities The Company classifies its mezzanine term debt facilities as long-term liabilities on the Company’s condensed consolidated balance sheets because its borrowings under these facilities are generally not required to be repaid until the applicable final maturity date. These facilities are structurally and contractually subordinated to the related asset-backed senior debt facilities. The mezzanine term debt facilities have been structured with an initial 42 month withdrawal period during which the outstanding principal amounts are generally not required to be repaid when homes financed through those facilities are sold and instead are intended to remain outstanding until final maturity. Outstanding amounts drawn under the mezzanine term debt facilities are required to be repaid on the facility maturity date or earlier if accelerated due to an event of default or other mandatory repayment event. The final maturity date and withdrawal period end date reflected in the table above are inclusive of any extensions that are at the sole discretion of the Company. These facilities may also have extensions subject to lender discretion that are not reflected in the table above. Borrowings under a given term debt facility accrue interest at a fixed rate. The mezzanine term debt facilities include upfront issuance costs that are capitalized as part of the facilities’ respective carrying values. These facilities are fully prepayable at any time but may be subject to certain prepayment penalties. These borrowings are collateralized by cash and equity in certain holding companies that own the Company’s real estate owning SPEs. The lenders generally have legal recourse only to the applicable borrowers of the debt and their assets securing the debt and do not have recourse to Opendoor and, with limited exceptions, do not have recourse to other Opendoor subsidiaries. The mezzanine term debt facilities have aggregated property borrowing bases, which increase or decrease based on the cost and the value of the properties financed under a given facility and time in the Company’s possession of those properties and the amount of cash collateral pledged by the relevant SPE borrower. The borrowing base for a given facility may be reduced as properties age beyond certain thresholds and any borrowing base deficiencies may be satisfied through contributions of additional properties or cash or through partial repayment of the facility. Covenants The Company’s inventory financing facilities include customary representations and warranties, covenants and events of default. Financed properties are subject to customary eligibility criteria and concentration limits. The terms of these inventory financing facilities and related financing documents require Opendoor to comply with a number of customary financial and other covenants, such as maintaining certain levels of liquidity, tangible net worth or leverage (ratio of debt to equity). As of June 30, 2022, the Company was in compliance with all financial covenants and no event of default had occurred. Mortgage Financing To provide capital for Opendoor Home Loans, the Company utilizes a master repurchase agreement (the “Repurchase Agreement”) which is classified as a current liability on its condensed consolidated balance sheets. In March 2019, the Company entered into the Repurchase Agreement with a lender to provide short-term funding for mortgage loans originated by Opendoor Home Loans. The facility provides short-term financing between the issuance of a mortgage loan and when Opendoor Home Loans sells the loan to an investor. In accordance with the Repurchase Agreement, the lender agrees to pay Opendoor Home Loans a negotiated purchase price for eligible loans and Opendoor Home Loans simultaneously agrees to repurchase such loans from the lender within a specified timeframe and at an agreed upon price that includes interest. Opendoor Labs Inc. is the guarantor with respect to the Repurchase Agreement and the obligation to repurchase loans previously transferred under the arrangement for the benefit of the lender. Historically, we primarily delivered mortgage services through Opendoor Home Loans, which operated as a correspondent lender. We are focusing our mortgage efforts on the seamless integration of financing with the rest of the Opendoor ecosystem and, as such, are now more focused on brokerage activities via both Opendoor Home Loans and OD Homes Brokerage (formerly RedDoor). The change in how Opendoor delivers mortgage services will result in the Company no longer requiring this facility after the existing mortgage loans financed under the facility have been sold. As of June 30, 2022, the Repurchase Agreement has a borrowing capacity of $100 million, of which $20 million is fully committed. The Repurchase Agreement includes customary representations and warranties, covenants and provisions regarding events of default. As of June 30, 2022, $12 million in mortgage loans were financed under the facility, and Opendoor was in compliance with all financial covenants and no event of default had occurred. Transactions under the Repurchase Agreement bear interest at a rate based on one-month LIBOR plus an applicable margin, as defined in the Repurchase Agreement, and are secured by residential mortgage loans available for sale. The Repurchase Agreement contains margin call provisions that provide the lender with certain rights in the event of a decline in the market value of the assets purchased under the Repurchase Agreement. The Repurchase Agreement is recourse to Opendoor Labs Inc. Convertible Senior Notes In August 2021, the Company issued 0.25% senior notes due in 2026 (the “2026 Notes”) with an aggregate principal amount of $978 million. The tables below summarizes certain details related to the 2026 Notes (in millions, except interest rates):
June 30, 2022 |  | Aggregate Principal Amount |  | Unamortized Debt Issuance Costs |  | Net Carrying Amount
2026 Notes |  | $ | 978 |  |  | $ | (22) |  |  | $ | 956 |
June 30, 2022 |  | Maturity Date |  | Stated Cash Interest Rate |  | Effective Interest Rate |  | Semi-Annual Interest Payment Dates |  | Conversion Rate |  | Conversion Price
2026 Notes |  | August 15, 2026 |  | 0.25 | % |  | 0.77 | % |  | February 15; August 15 |  | 51.9926 |  | $ | 19.23 |
The 2026 Notes will be convertible at the option of the holders before February 15, 2026 only upon the occurrence of certain events. Beginning on August 20, 2024, the Company has the option to redeem the 2026 Notes upon meeting certain conditions related to price of the Company's common stock. Beginning on February 15, 2026 and until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2026 Notes are convertible at any time at election of each holder. The conversion rate and conversion price are subject to customary adjustments under certain circumstances. In addition, if certain corporate events that constitute a make-whole fundamental change occur, then the conversion rate will be adjusted in accordance with the make-whole table within the Indenture. Upon conversion, the Company may satisfy its conversion obligation by paying cash or providing a combination of cash and the Company's common stock, at the Company's election, based on the applicable conversion rate. For the three and six months ended June 30, 2022, total interest expense on the Company's convertible senior notes was $2 million and $4 million, respectively. Capped Calls In August 2021, in connection with the issuance of the 2026 Notes, the Company purchased capped calls (the “Capped Calls”) from certain financial institutions at a cost of $119 million. The Capped Calls cover, subject to customary adjustments, the number of shares of the Company's common stock underlying the 2026 Notes. By entering into the Capped Calls, the Company expects to reduce the potential dilution to its common stock (or, in the event of a conversion of the 2026 Notes settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the 2026 Notes its common stock price exceeds the conversion price. The Capped Calls have an initial strike price of $19.23 per share and an initial cap price of $29.59 per share or a cap price premium of 100%.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI https://asc.fasb.org/topic&trid=2208564 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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