Morningstar DBRS Assigns Credit Ratings to Finance of America Structured Securities Trust, Series 2025-PC1

DBRS, Inc. (Morningstar DBRS) assigned credit ratings to the Mortgage-Backed Notes, Series 2025-PC1 (the Notes) issued by Finance of America Structured Securities Trust, Series 2025-PC1 (the Issuer) as follows:

-- $424.8 million Class A1 at AAA (sf)
-- $141.6 million Class A2 at AAA (sf)

The AAA (sf) credit ratings on Class A1 and A2 reflect 79.5% and 106.0% of cumulative advance rates (as a % of the underlying collateral) with accrual rates of 4.500% and 5.500%, respectively. The accommodation loan is sized to 120% of the collateral. The advance rates calculated with reference to the accommodation loan are 66.2% and 88.3% for the Class A1 and Class A2 Notes, respectively.

Other than the specified classes above, Morningstar DBRS does not rate any other classes in this transaction.

Reverse mortgage loans are typically offered to people who are at least 62 years old. Through reverse mortgage loans, borrowers are able to access home equity through a lump sum amount or a stream of payments without periodic repayment of principal or interest, allowing the loan balance to accumulate over a period of time until a maturity event occurs.

Loan repayment is required (1) when the borrower dies; (2) if the borrower sells the related residence; (3) if the borrower no longer occupies the related residence for a period (usually a year), or if it is no longer the primary residence; (4) upon the occurrence of a tax or insurance default; and (5) if the borrower fails to properly maintain the related residence. In addition, borrowers are required to be current on any homeowner's association dues if applicable.

Reverse mortgages are typically nonrecourse: Borrowers are not required to provide additional assets in cases where the outstanding loan amount exceeds the property's value (the crossover point). As a result, liquidation proceeds will fall below the loan amount in cases where the crossover point is reached, contributing to higher loss severities for these loans.

As of the March 31, 2025, cut-off date, the collateral consists of approximately $534.6 million in current unpaid principal balance (UPB) from 1,873 nonrecourse reverse mortgage loans secured by first liens on single-family residential properties, condominiums, multifamily (two- to four-family) properties, townhomes, and planned unit developments. Of the 1,873 loans in this pool, 1,798 (97.08% of UPB) are performing under loan terms, 43 loans are in a status in which the borrower is deceased (2.01% of UPB), 23 are in default status (0.50% of UPB), one is in foreclosure (0.00% of UPB), seven are in called due status (0.41% of UPB), and one is in bankruptcy (0.00% of UPB).

As of the cut-off date, 1,320 loans in the transaction are line-of-credit loans, representing roughly $32.24 million in UPB (6.03% of total UPB), 538 are lump sum loans, representing roughly $477.69 million in UPB (89.35% of total UPB), and 15 are term/modified term loans, representing $24.73 million in UPB (4.62% of total UPB). Of the pool, 93.97% of the loans are fixed rate and have a weighted-average (WA) mortgage interest rate of 7.599%. The remaining 6.03% of the pool is floating-rate with a WA mortgage rate of 10.298%. This brings the entire transaction's WA interest rate to 7.762%. The current unadjusted WA loan-to-value ratio of the pool is 44.35%.

The transaction uses a structure in which cash distributions are first made to reduce the interest accrual amount on Class A1, Class A2, Class M1, Class M2, followed by the principal amounts on Class A1, followed by payments on a pro-rata basis to the Class A2, M1, and M2 Notes. If there is an (i) Event of Default, (ii) Sequential Trigger in effect, (iii) Loan Maturity Date, then payments to the Class A1, A2, M1, and M2 Notes will be paid on a sequential basis until such bonds are paid off.

Once the Target Credit Enhancement is satisfied (i.e., overcollateralization percentage of Class A1 is greater than 50%), the principal balance on the Offered Notes will be paid on a pro rata basis on each payment date, if the following conditions are met: there is (i) no Event of Default, (ii) Sequential Trigger is not in effect, (iii) Loan Maturity Date has not occurred.

Available Funds Cap: Beginning with the payment date in June 2026, the interest accrual amounts on the Offered Notes that are due and payable will be capped by their respective Available Funds Cap. This transaction includes several Sequential Triggers and a Rapid Amortization Event as described below. On each payment date when they are in effect, the cash distribution will change, causing the Class Available Funds Cap to reduce to zero. Therefore, the Offered Notes may not receive any payments of interest as a result. For additional details, please refer to the Securitization Trust Summary section of the related presale report.

(1) LTM Home Price Trigger
For the June 2026 Loan Payment Date and each Loan Payment Date thereafter, the "LTM Home Price Trigger" will be in effect if the Home Price Index Values have had zero (i.e., no change) or negative month-over-month changes, measured from Calculation Date to Calculation Date, for each of the last 12 Calculation Dates.

(2) Home Value Trigger
For the June 2026 Loan Payment Date and each Loan Payment Date thereafter, the "Home Value Trigger" will be in effect if the Loan Principal Balance of the Loan as of the related Calculation Date is greater than the excess, if any, of (A) the aggregate Home Values of the Underlying Mortgage Assets as of the related Calculation Date over (B) the aggregate of the liquidation expenses for the last 12 months relating to each Underlying Mortgage Asset, multiplied by the related Asset Allocation Percentage for each Underlying Mortgage Asset, calculated as of the Calculation Date. For purposes of this calculation, "Home Value" means, with respect to each Underlying Mortgage Asset, the latest appraised value of such Underlying Mortgage Asset indexed to the related Calculation Date using the S&P CoreLogic Case-Shiller National Index, multiplied by the related Asset Allocation Percentage for such Underlying Mortgage Asset.

(3) Auction Trigger
An Auction Trigger event will occur if the borrower has not exercised its Optional Redemption right within two years following the Optional Redemption Date. (The Optional Redemption Date will occur on the payment date on which the principal balance of the A1 Note is less than 30% of its principal balance.)

Rapid Amortization Event: With respect to any Loan Payment Date following the end of the Reinvestment Period, the "Rapid Amortization Event" will be in effect if the lifetime prepayment rate relating to the Underlying Mortgage Assets since the Closing Date is more than 20%.

The Class M3 Notes will not be entitled to any payments of principal until the Class A1, Class A2, Class M1, and Class M2 Notes have been paid in full.

The notes are expected (but not required) to be paid in full, or redeemed by the Issuer, on the optional redemption date on which the principal Balance of the Class A1 Notes is reduced to less than 30% of the Initial Principal Balance.

Morningstar DBRS' credit ratings on the Notes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related Component Accrual Amount and Component Principal Balance.

Morningstar DBRS' credit ratings do not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction document(s) that are not financial obligations. For example, the credit ratings on the Notes do not address Cap Carryover Amounts based on their position in the cash flow waterfall.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. The Morningstar DBRS short-term debt credit rating scale provides an opinion on the risk that an issuer will not meet its short-term financial obligations in a timely manner.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025), https://dbrs.morningstar.com/research/454196.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology applicable to the credit ratings is Rating and Monitoring U.S. Reverse Mortgage Securitizations (September 30, 2024) https://dbrs.morningstar.com/research/440088.

Other methodologies referenced in this transaction are listed at the end of this press release.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings

DBRS, Inc.
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Tel. +1 212 806-3277

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

-- Interest Rate Stresses for U.S. Structured Finance Transactions (March 27, 2025), https://dbrs.morningstar.com/research/450750
-- Legal Criteria for U.S. Structured Finance (December 3, 2024),
https://dbrs.morningstar.com/research/444064
-- Operational Risk Assessment for U.S. RMBS Originators and Servicers (September 30, 2024), https://dbrs.morningstar.com/research/440086
-- Third-Party Due-Diligence and Representations & Warranties Criteria for U.S. RMBS Transactions (September 30, 2024), https://dbrs.morningstar.com/research/440091

For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.