XML 23 R10.htm IDEA: XBRL DOCUMENT
v3.26.1

USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES | 3 Months Ended
--- | ---
Mar. 31, 2026
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES | USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES We account for CLO transactions and secured financings on our consolidated balance sheet as financing facilities. The issuing entities for our CLOs and secured financings are VIEs for which we are the primary beneficiary and are consolidated in our financial statements. The investment grade tranches are treated as secured financings and are non-recourse to us. See Note 2 ("Summary of Significant Accounting Policies - Principles of Consolidation - VIE") for further discussion. On June 14, 2021, the Company completed the 2021-FL1 CLO, issuing eight tranches of CLO notes through two newly formed wholly-owned subsidiaries totaling $903.8 million. Of the total CLO notes issued $833.8 million were investment grade notes issued to third party investors and $70 million were below investment-grade notes retained by us. In addition, a $96.25 million equity interest in the portfolio was retained by us. The financing had an initial two-and-a-half year reinvestment period, which expired in December 2023, that allowed principal proceeds of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance was reduced as loans were repaid. Initially, the proceeds of the issuance of the securities also included $330.3 million for the purpose of acquiring additional loan obligations for a period up to 180 days from the 2021-FL1 CLO closing date, resulting in the issuer owning loan obligations with a face value of $1.0 billion, representing leverage of 83%. On November 18, 2025, the Company redeemed the 2021-FL1 CLO in full. On July 12, 2023, the Company entered into and closed a matched-term, non-recourse collateralized commercial real estate financing (the "LMF 2023-1 Financing"), secured by $386.4 million of first lien floating-rate multifamily mortgage assets and was not subject to margin calls or additional collateralization requirements. In connection with the LMF 2023-1 Financing, approximately $270.4 million of an investment-grade rated senior secured floating rate loan was provided by a private lender and approximately $47.3 million of investment-grade rated notes (collectively, the "Senior Debt") were issued and sold to an affiliate of LFT's external manager, Lument IM. A consolidated subsidiary of LFT retained the subordinate interests in the issuing vehicle of approximately $68.6 million. The Senior Debt had an initial weighted average spread of approximately 314 basis points over 30-day term SOFR, excluding fees and transaction costs. The Senior Debt matured on the payment date in July 2032, unless it was repaid or redeemed sooner in accordance with its terms. The financing had an initial two-year reinvestment period that allowed principal proceeds of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance was reduced as loans were repaid. On February 20, 2026, the Company redeemed the LMF 2023-1 Financing in full and expensed the remaining $1.2 million of deferred financing costs into loss on extinguishment of debt on the consolidated statements of operations. On December 10, 2025, the Company completed the LMNT 2025-FL3 CLO, issuing eight tranches of CLO notes through a newly formed wholly-owned subsidiary totaling $620.7 million. Of the total CLO notes issued, $585.0 million were investment grade notes issued to third party investors and $35.7 million were below investment-grade and retained by us. In addition, a $43.1 million income note was retained by us. The financing has an initial two-and-a-half year reinvestment period that allows principal proceeds of the loan obligations to be reinvested in qualifying replacement loan obligations, subject to the satisfaction of certain conditions set forth in the indenture. Thereafter, the outstanding debt balance will be reduced as loans are repaid. Initially, the proceeds of the issuance of the securities included $5.8 million for the purpose of acquiring additional loan obligations for a period up to 180 days from the CLO closing date, resulting in the issuer owning collateral interests with a face value of $663.8 million, representing effective leverage of 88%. The investment grade notes have an initial weighted average spread of approximately 190.5 basis points over 30-day term SOFR, excluding fees and transaction costs. The investment grade notes mature on the payment date in July 2043, unless sooner repaid or redeemed in accordance with their terms. The LMNT 2025-FL3 CLO is subject to collateralization and coverage tests and prior to its redemption the LMF 2023-1 Financing was subject to collateralization and coverage tests that are customary for these types of securitizations. As of March 31, 2026 and December 31, 2025, all such collateralization and coverage tests in the 2021-FL1 CLO and LMF 2023-1 Financing were met. The carrying values of the Company's total assets and liabilities related to the LMNT 2025-FL3 CLO as of March 31, 2026 and LMNT 2025-FL3 CLO and LMF 2023-1 Financing as of December 31, 2025, included the following VIE assets and liabilities:
ASSETS |  | March 31, 2026 |  | December 31, 2025
Cash, cash equivalents and restricted cash |  | $ | 7,082,122 |  |  | $ | 2,253,630 |
Other assets |  | — |  |  | 524,278 |
Accrued interest receivable |  | 3,566,053 |  |  | 4,309,202 |
Investment related receivable |  | — |  |  | 15,449,323 |
Loans held for investment, net of allowance for credit losses |  | 655,905,140 |  |  | 856,064,489 |
Real estate owned, held-for-sale |  | $ | — |  |  | $ | 10,906,169 |
Total Assets |  | $ | 666,553,315 |  |  | $ | 889,507,091 |
LIABILITIES |  |  |  |
Accrued interest payable |  | $ | 997,422 |  |  | $ | 1,445,867 |
Collateralized loan obligations and secured financings(1) |  | 580,032,828 |  |  | 748,433,484 |
Other liabilities |  | $ | — |  |  | $ | 395,205 |
Total Liabilities |  | $ | 581,030,250 |  |  | $ | 750,274,556 |
Equity |  | 85,523,065 |  |  | 139,232,535 |
Total liabilities and equity |  | $ | 666,553,315 |  |  | $ | 889,507,091 |
(1) The stated maturity of the collateralized loan obligations per the terms of the underlying collateralized loan obligation agreement is July 20, 2043 for the LMNT 2025-FL3 CLO and the stated maturity of the secured financing per the terms of the underlying indenture is July 20, 2032. The following tables present certain loan and borrowing characteristics of the LMNT 2025-FL3 CLO as of March 31, 2026 and LMNT 2025-FL3 CLO and LMF 2023-1 Financing as of December 31, 2025:
As of March 31, 2026
Collateralized Loan Obligations/Financings |  | Count |  | Principal Value |  | Carrying Value(1) |  | Wtd. Avg. Coupon(2)
Collateral (loan investments) |  | 30 |  | $ | 656,985,469 |  |  | $ | 655,905,141 |  |  | 7.02%
Financing provided |  | 1 |  | $ | 584,983,000 |  |  | $ | 580,302,828 |  |  | 5.58%
As of December 31, 2025
Collateralized Loan Obligations/Financings |  | Count |  | Principal Value |  | Carrying Value(1) |  | Wtd. Avg. Coupon(2)
Collateral (loan investments) |  | 44 |  | $ | 873,054,065 |  |  | $ | 856,064,489 |  |  | 7.11 | %
Collateral (REO assets) |  | 1 |  | $ | 11,467,505 |  |  | $ | 10,906,169 |  |  | N/A
Financing provided |  | 2 |  | $ | 754,638,462 |  |  | $ | 748,433,484 |  |  | 5.98 | %
(1) The carrying value of the collateral is net of unaccreted purchase discounts of $0 and $1,595,224 and allowance for credit loss of $19,543,903 and $22,658,121 as of March 31, 2026 and December 31, 2025, respectively. The carrying value for LMNT 2025-FL3 CLO is net of debt issuance costs of $4,680,172 and $4,912,883 for March 31, 2026 and December 31, 2025, respectively and LMF 2023-1 Financing is net of debt issuance costs of $1,292,096 for December 31, 2025. (2) Weighted average coupon for loan investments assumes applicable 30-day term SOFR of 3.67% and 3.86% as of March 31, 2026 and December 31, 2025, respectively, inclusive of weighted average interest rate floors of 2.66% and 2.55%, and spreads of 3.21% and 3.27%, respectively. As of March 31, 2026 and December 31, 2025, 100.0% of the investments by total exposure earned a floating rate indexed to 30-day term SOFR. Weighted average coupon for the financings assumes applicable 30-day term SOFR of 3.67% and 3.74% as of March 31, 2026 and December 31, 2025, respectively and spreads of 1.91% and 2.24% for March 31, 2026 and December 31, 2025, respectively. The statement of operations related to the LMNT 2025-FL3 CLO and LMF 2023-1 Financing for the three months ended March 31, 2026 and 2021-FL1 CLO and LMF 2023-1 Financing for the three months ended March 31, 2025 include the following income and expense items:
Statements of Operations |  | Three Months Ended March 31, 2026 |  | Three Months Ended March 31, 2025
Interest income |  | $ | 13,094,776 |  |  | $ | 20,485,198 |
Interest expense |  | (10,375,765) |  |  | (13,636,474) |
Net interest income |  | $ | 2,719,011 |  |  | $ | 6,848,724 |
Less: |  |  |  |
Provision for credit losses |  | 465,674 |  |  | (5,739,974) |
Loss on extinguishment of debt |  | (1,152,861) |  |  | — |
General and administrative fees |  | (112,557) |  |  | (183,564) |
Net (loss) income |  | $ | 1,919,267 |  |  | $ | 925,186 |

X
- Definition The entire disclosure for a special purpose entity (SPE) and variable interest entity (VIE). + References No definition available. + Details
Name: | oaks_SpecialPurposeEntityAndVariableInterestEntityDisclosureTextBlock
Namespace Prefix: | oaks_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration