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Item 1. Financial Statements

2025-08-13 compared with 2025-05-14 · 332 added, 240 removed, 682 unchanged (46% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, December 31,

June 30, December 31,

(Amounts in thousands, except share and per share amounts) 2025 2024

4 unchanged sentences

Loans held for investment (net of allowance for credit losses

of $ 3,000 and $ 1,667 as of March 31, 2025 and December 31, 2024, respectively)

of $ 2,801 and $ 1,667 as of June 30, 2025 and December 31, 2024, respectively)

420,566 111,477

8 unchanged sentences

Total Assets $ 1,231,861 $ 913,057

Liabilities and Stockholders’ (Deficit)/Equity

Liabilities and Stockholders’ Equity/(Deficit)

Warehouse lines of credit $ 371,189 $ 244,070

Convertible Note 521,449 519,749

Convertible Notes — 519,749

Senior Notes 200,409 —

Customer deposits 482,360 134,130

Liabilities held for sale 6,932 6,116

Accounts payable and accrued expenses (includes $ 78 and $ 74 payable to related parties as of March 31, 2025 and December 31, 2024, respectively

Accounts payable and accrued expenses (includes $ 111 and $ 74 payable to related parties as of June 30, 2025 and December 31, 2024, respectively)

63,782 48,134

Escrow payable and other customer accounts 376 74

Derivative liabilities, at fair value 2,402 —

Warrant and equity related liabilities, at fair value 1,751 1,407

3 unchanged sentences

Commitments and contingencies (see Note 12)

Stockholders’ (Deficit)/Equity

Stockholders’ Equity/(Deficit)

Common stock $ 0.0001 par value;

66,000,000 shares authorized as of March 31, 2025 and December 31, 2024, and 15,188,035 and 15,168,795 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

66,000,000 shares authorized as of June 30, 2025 and December 31, 2024, and 15,274,145 and 15,168,795 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Notes receivable from stockholders ( 9,160 ) ( 9,158 )

2 unchanged sentences

Accumulated other comprehensive income/(loss) 5,605 ( 1,936 )

Total Stockholders’ (Deficit)/Equity ( 102,145 ) ( 58,170 )

Total Liabilities and Stockholders’ (Deficit)/Equity $ 1,004,992 $ 913,057

Total Stockholders’ Equity/(Deficit) 76,557 ( 58,170 )

Total Liabilities and Stockholders’ Equity/(Deficit) $ 1,231,861 $ 913,057

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands, except share and per share amounts) 2025 2024 2025 2024

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three Months Ended March 31, 2025

For the Three Months Ended June 30, 2025

(Amounts in thousands, except share and per share amounts) Issued and Outstanding Par

1 unchanged sentence

Capital Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Total Stockholders' Equity (Deficit)

Balance - March 31, 2025 15,188,035 2 ( 9,160 ) 1,867,649 ( 1,960,923 ) 287 ( 102,145 )

Gain on troubled debt restructuring (see Note 10) — — — 210,044 — — 210,044

Tax effect on gain on troubled debt restructuring — — — ( 4,721 ) — — ( 4,721 )

Stock-based compensation — — — 4,617 — — 4,617

Tax withholding upon vesting of restricted stock units ( 53,884 ) — — ( 286 ) — — ( 286 )

Shares issued for vested restricted stock units 139,994 — — — — — —

Net loss — — — — ( 36,270 ) — ( 36,270 )

Other comprehensive income— foreign currency translation adjustment, net of tax — — — — — 5,318 5,318

Balance - June 30, 2025 15,274,145 $ 2 $ ( 9,160 ) $ 2,077,303 $ ( 1,997,193 ) $ 5,605 $ 76,557

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three Months Ended June 30, 2024

(Amounts in thousands, except share and per share amounts) Issued and Outstanding 1

Notes Receivables from Stockholders Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Total Stockholders' Equity (Deficit)

Balance - March 31, 2024 15,111,574 2 ( 10,976 ) 1,844,859 ( 1,755,568 ) ( 2,027 ) 76,290

Issuance of common stock for options exercised 353 — — 1,435 — — 1,435

Cancellation of common stock ( 17,194 ) — — — — — —

Stock-based compensation — — — 8,053 — — 8,053

Tax withholding upon vesting of restricted stock units — — — ( 84 ) — — ( 84 )

Shares issued for vested restricted stock units 16,241 — — — — — —

Settlement of notes receivable from stockholders — — 1,846 ( 1,846 ) — — —

Net loss — — — — ( 41,365 ) — ( 41,365 )

Other comprehensive income— foreign currency translation adjustment, net of tax — — — — — 579 579

Balance - June 30, 2024 15,110,974 $ 2 $ ( 9,130 ) $ 1,852,417 $ ( 1,796,933 ) $ ( 1,448 ) $ 44,908

Periods have been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

See Note 1 Organization and Nature of the Business - Reverse Stock Split, for additional information.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Six Months Ended June 30, 2025

(Amounts in thousands, except share and per share amounts) Issued and Outstanding Par

Value Notes Receivables from Stockholders Additional Paid-In

Capital Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Total Stockholders' Equity (Deficit)

Balance - December 31, 2024 15,168,795 2 ( 9,158 ) 1,863,288 ( 1,910,366 ) ( 1,936 ) ( 58,170 )

Gain on troubled debt restructuring (see Note 10) — — — 210,044 — — 210,044

Tax effect on gain on troubled debt restructuring — — — ( 4,721 ) — — ( 4,721 )

Stock-based compensation — — — 9,060 — — 9,060

Tax withholding upon vesting of restricted stock units ( 63,563 ) — — ( 373 ) — — ( 373 )

Share issued for vested restricted stock units 28,919 — — — — — —

Shares issued for vested restricted stock units 168,913 — — — — — —

Vesting of common stock issued via notes receivable from stockholders — — ( 2 ) 5 — — 3

1 unchanged sentence

Other comprehensive income— foreign currency translation adjustment, net of tax — — — — — 7,541 7,541

Balance - March 31, 2025 15,188,035 $ 2 $ ( 9,160 ) $ 1,867,649 $ ( 1,960,923 ) $ 287 $ ( 102,145 )

Balance - June 30, 2025 15,274,145 $ 2 $ ( 9,160 ) $ 2,077,303 $ ( 1,997,193 ) $ 5,605 $ 76,557

The accompanying notes are an integral part of these unaudited consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three Months Ended March 31, 2024

For the Six Months Ended June 30, 2024

(Amounts in thousands, except share and per share amounts) Issued and Outstanding 1

1 unchanged sentence

Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity (Deficit)

Balance - December 31, 2023 15,035,467 $ 2 $ ( 10,111 ) $ 1,838,499 $ ( 1,704,076 ) $ ( 1,714 ) $ 122,600

Adjustment of transaction costs related to the Business Combination — — — ( 2,372 ) — — ( 2,372 )

Adjusted Balance as of December 31, 2023 15,035,467 $ 2 $ ( 10,111 ) $ 1,838,499 $ ( 1,704,076 ) $ ( 1,714 ) $ 122,600

Adjustment of transaction costs related to Business Combination — — — ( 2,372 ) — — ( 2,372 )

Issuance of common stock for options exercised 2,770 — — 1,454 — — 1,454

2 unchanged sentences

Tax withholding upon vesting of restricted stock units — — — ( 1,372 ) — — ( 1,372 )

Share issued for vested restricted stock units 87,168 — — 1 — — 1

Shares issued for vested restricted stock units 101,810 — — 1 — — 1

Vesting of common stock issued via notes receivable from stockholders — — ( 865 ) 857 — — ( 8 )

Settlement of notes receivable from stockholders — — 1,846 ( 1,846 ) — — —

Net loss — — — — ( 92,857 ) — ( 92,857 )

Other comprehensive loss— foreign currency translation adjustment, net of tax — — — — — ( 313 ) ( 313 )

Balance - March 31, 2024 15,111,574 2 ( 10,976 ) 1,844,859 ( 1,755,568 ) ( 2,027 ) 76,290

Other comprehensive income— foreign currency translation adjustment, net of tax — — — — — 266 266

Balance - June 30, 2024 15,110,974 2 ( 9,130 ) 1,852,417 ( 1,796,933 ) ( 1,448 ) 44,908

Periods have been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

3 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

Three Months Ended March 31,

Six Months Ended June 30,

(Amounts in thousands) 2025 2024

47 unchanged sentences

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the total of the same such amounts shown on the previous page.

Three Months Ended March 31,

Six Months Ended June 30,

(Amounts in thousands) 2025 2024

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Capitalization of stock-based compensation related to internal use software $ 776 $ 871

Vesting of stock options early exercised in prior periods $ — $ 1,415

Vesting of common stock issued via notes receivable from stockholders $ 2 $ 865

Settlement of Notes Receivable from Stockholders $ — $ 1,846

Convertible notes exchange $ 205,323 $ —

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Organization and Nature of the Business

Better Home & Finance Holding Company, formerly known as Aurora Acquisition Corp.

(“Aurora”), together with its subsidiaries (collectively, the “Company”), provides a comprehensive set of homeownership offerings in the United States while expanding in the United Kingdom (the “U.K.”).

Better Home & Finance Holding Company together with its subsidiaries (collectively, the “Company”), provides a comprehensive set of homeownership offerings in the United States while expanding in the United Kingdom (the “U.K.”).

The Company’s offerings include mortgage loans, real estate agent services, title and homeowner’s insurance, and other homeownership offerings.

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and offers a multitude of financial products and services to consumers via regulated entities obtained through acquisitions.

Within the fourth quarter of 2024, the Company decided to dispose of certain operating units in the U.K., see Note 8 for further details.

On August 22, 2023 (the “Closing Date”), the Company consummated the previously announced Business Combination (the “Business Combination”), pursuant to the terms of the Agreement and Plan of Merger, dated as of May 10, 2021 (as amended from time to time, the “Merger Agreement”), by and among Aurora, Better Holdco, Inc.

In the fourth quarter of 2024, the Company decided to dispose of certain operating units in the U.K., see Note 8 for further details.

(“Aurora”), Better Holdco, Inc.

(“Pre-Business Combination Better”), and Aurora Merger Sub I, Inc., formerly a wholly owned subsidiary of Aurora (“Merger Sub”).

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The Company’s Class A common stock and warrants are listed on the Nasdaq Capital Market (the “Nasdaq”) under the ticker symbols “BETR” and “BETRW,” respectively.

Reverse Stock Split— On Friday, August 16, 2024, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, effecting a 1-for-50 reverse stock split of the Company’s common stock (the “Reverse Stock Split”) for the primary purpose of increasing the per share trading price of the Company’s Class A common stock to enable the Company to regain compliance with the minimum bid price requirement for continued listing on The Nasdaq.

The Company’s Class A common stock began trading on a split-adjusted basis on the Nasdaq upon the market open on Monday, August 19, 2024.

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Basis of Presentation — The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in convertible preferred stock and stockholders’ equity (deficit) and cash flows.

The results of operations and other information for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2025.

The unaudited

The results of operations and other information for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2025.

The unaudited condensed consolidated

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

condensed consolidated financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2024.

financial statements presented herein should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2024.

Consolidation — The accompanying condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries.

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Actual results could differ from those estimates.

Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, which includes interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, determination of fair value of the stock options at grant date, the fair value of acquired intangible assets and goodwill, the provision for loan repurchase reserves, the allowance for credit losses, and the incremental borrowing rate used in determining lease liabilities, and the fair value of warrant and equity related liabilities.

Significant items subject to such estimates and assumptions include the fair value of mortgage loans held for sale, the fair value of derivative assets and liabilities, which includes interest rate lock commitments and forward sale commitments, the determination of a valuation allowance on the Company’s deferred tax assets, capitalization of internally developed software and its associated useful life, the fair value of acquired intangible assets and goodwill, the provision for loan repurchase reserves, the allowance for credit losses, and the incremental borrowing rate used in determining lease liabilities, and the fair value of warrant and equity related liabilities.

Short-term investments — Short-term investments consist of fixed income securities, typically U.S.

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LHFS primarily consists of mortgage loans as well as home equity line of credit and closed-end second lien loans (together defined as “HELOC”), originated for sale by BMC.

The Company elects the fair value option, in accordance with Accounting Standard Codification (“ASC”) 825 – Financial Instruments (“ASC 825”), for all LHFS with changes in fair value recorded in gain on loans, net in the consolidated statements of operations and comprehensive loss.

The Company elects the fair value option, in accordance with Accounting Standard Codification (“ASC”) 825 – Financial Instruments (“ASC 825”), for all LHFS with changes in fair value recorded in gain on loans, net in the condensed consolidated statements of operations and comprehensive loss.

Management believes that the election of the fair value option for LHFS improves financial reporting by presenting the most relevant market indication of LHFS.

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Loans Held for Investment — The Company originates, primarily through its U.K.

operations, loans held for investment, for which management has the intent and ability to hold for the foreseeable future or until maturity or payoff and are reported at amortized cost, which is the principal amount outstanding, net of cumulative charge-offs, unamortized net deferred loan origination fees and costs and unamortized premiums or discounts on purchased loans.

operations, loans held for investment, for which management has the intent and ability to cause the Company to hold for the foreseeable future or until maturity or payoff and are reported at amortized cost, which is the principal amount outstanding, net of cumulative charge-offs, unamortized net deferred loan origination fees and costs and unamortized premiums or discounts on purchased loans.

The allowance for credit losses is a valuation account that is deducted from the loans held for investment amortized cost basis to present the net amount expected to be collected on the loans.

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Assets and liabilities measured at fair value on a recurring basis include LHFS, derivative assets and liabilities, including IRLCs and forward sale commitments, and warrant and equity related liabilities.

Common stock warrants are measured at fair value at issuance only and are classified as equity on the condensed consolidated balance sheets.

When developing fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs.

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The Company did not incur any significant issuance costs related to its warehouse lines of credit.

Convertible Note — As part of the Closing of the Business Combination, the Company issued to SB Northstar LP, an affiliate of SoftBank Group Corp., a senior subordinated convertible note (the “Convertible Note”).

Upon initial issuance, the Convertible Note is evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the notes.

Senior Notes — Upon initial issuance, the Senior Notes are evaluated for redemption and conversion features that could result in embedded derivatives that require bifurcation from the notes.

Upon initial issuance, any embedded derivatives are measured at fair value.

Convertible Note proceeds are allocated between the carrying value of the note and the fair value of embedded derivatives on the initial issuance date.

Any portion of proceeds allocated to embedded derivatives are treated as reductions in, or discounts to, the carrying value of the Convertible Note on the issuance date.

Embedded derivatives are adjusted to fair value at each reporting period, with the change in fair value included within interest expense on the consolidated statements of operations and comprehensive income (loss).

See Note 10 for further details on the Convertible Note.

The notes proceeds are allocated between the carrying value of the note and the fair value of embedded derivatives on the initial issuance date.

Any portion of proceeds allocated to embedded derivatives are treated as reductions in, or discounts to, the carrying value of the Senior Notes on the issuance date.

Embedded derivatives are adjusted to fair value at each reporting period, with the change in fair value included within interest expense on the condensed consolidated statements of operations and comprehensive income (loss).

See Note 10 for further details on the Senior Notes.

Debt Modifications and Extinguishments — When the Company modifies or extinguishes debt, it first evaluates whether the modification qualifies as a troubled debt restructuring (“TDR”) under ASC 470-60, which requires debt modifications to be evaluated if (1) the borrower is experiencing financial difficulty, and (2) the lender grants the borrower a concession.

Concessions may include modifications to the terms of the debt, such as reducing the interest rate, extending the repayment period, or forgiving a portion of the debt.

If a TDR is determined not to have occurred, the Company evaluates the modification in accordance with ASC Topic 470-50-40, which requires modification to debt instruments to be evaluated to assess whether the modifications are considered “substantial modifications”.

A substantial modification of terms is accounted for like an extinguishment.

Income Taxes — Income taxes are calculated in accordance with ASC 740, Accounting for Income Taxes .

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This method differs from that described in the Company’s income taxes policy footnote in the audited consolidated financial statements and related notes thereto for the year ended December 31, 2024, which describes the Company’s annual significant income tax accounting policy and related methodology.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition — The Company generates revenue from the following streams:

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The fair value of LHFS is measured based on observable market data.

This also includes activity for loans originated on behalf of the integrated partnership that are subsequently purchased by the Company as well as the portion of the sale

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

proceeds to be received by the integrated partner.

The portion of the sale proceeds that is to be allocated to the integrated partner is accrued as a reduction of gain on sale of loans, net when the loan is initially purchased by the Company from the integrated partner.

Gain on sale of loans, net also includes the changes in fair value of IRLCs and forward sale commitments.

1 unchanged sentence

Fair value of forward sale commitments hedging IRLCs and LHFS are measured based on quoted prices for similar assets.

Integrated partnership fees —Includes fees that the Company receives for originating loans on behalf of an integrated partnership, which are recognized as revenue upon the integrated partner’s funding of the loan.

Broker Revenue —Includes fees that the Company receives for originating loans on behalf of third-parties.

Loan repurchase reserve recovery/(provision) —In connection with the sale of loans on the secondary market, the Company makes customary representations and warranties to the relevant loan purchasers about various characteristics of each loan, such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws.

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For title insurance, the Company recognizes revenue from fees upon the completion of the performance obligation which is when the mortgage transaction closes.

For homeowners insurance and title insurance, the Company is the agent in the transactions as the Company does not control the ability to direct the fulfillment of the service, is not primarily responsible for fulfilling the performance of the service, and does not assume the risk in a claim against a policy.

For homeowners insurance and title insurance, the Company is the agent in the transactions as

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

the Company does not control the ability to direct the fulfillment of the service, is not primarily responsible for fulfilling the performance of the service, and does not assume the risk in a claim against a policy.

For international lending revenue, the Company generates revenue primarily from broker fees earned in the U.K.

1 unchanged sentence

3) Net interest income includes interest income from LHFS calculated based on the note rate of the respective loan, interest income from short-term investments, and interest income on loans held for investment.

Interest expense includes interest expense on warehouse lines of credit, interest expense on customer deposits, as well as interest expense on the Convertible Note.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Interest expense includes interest expense on warehouse lines of credit, interest expense on customer deposits, as well as interest expense on the Convertible Notes.

Compensation and Benefits — Compensation and benefits include salaries, wages, and incentive pay as well as stock-based compensation, employee health benefits, 401(k) plan benefits, and social security and unemployment taxes.

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Accordingly, the CODM uses consolidated net income to measure segment profit or loss, allocate resources and assess performance.

Further, the CODM reviews and utilizes functional expenses (general and administrative, marketing and advertising, loan origination expense, and others as presented in the consolidated statements of operations and comprehensive loss) at the consolidated level to manage the Company’s operations.

Other segment items included in consolidated net income are net interest income and income tax expense (benefit), which are reflected in the consolidated statements of operations and comprehensive loss.

Further, the CODM reviews and utilizes functional expenses (general and administrative, marketing and advertising, loan origination expense, and others as presented in the condensed consolidated statements of operations and comprehensive loss) at the consolidated level to manage the Company’s operations.

Other segment items included in consolidated net income are net interest income and income tax expense (benefit), which are reflected in the condensed consolidated statements of operations and comprehensive loss.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, and in January 2025, ASU 2025-01, Income Statement - Comprehensive Income - Expense Disaggregation Disclosures (subtopic 220-40), which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses.

In November 2024, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, and in January 2025, ASU 2025-01, Income Statement - Comprehensive Income - Expense Disaggregation Disclosures (subtopic 220-40), which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses.

The ASUs are effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted for annual financial statements that have not yet been issued.

The Company is in the process of assessing the impact the adoption of this guidance will have on the Company’s financial statement disclosures.

Revenue — The Company disaggregates revenue based on the following revenue streams:

Early adoption is permitted for annual financial statements that have not yet been

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company is in the process of assessing the impact the adoption of this guidance will have on the Company’s financial statement disclosures.

Revenue — The Company disaggregates revenue based on the following revenue streams:

Gain on loans, net consisted of the following :

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2025 2024 2025 2024

Gain on sale of loans, net $ 34,015 $ 18,374 $ 55,293 $ 28,195

Integrated partnership fees 1,171 2,268

Broker revenue 2,335 2,476 3,506 4,744

Loan repurchase reserve recovery/(provision) 422 3,379 2,549 6,942

1 unchanged sentence

Other revenue consisted of the following:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2025 2024 2025 2024

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Net interest income consisted of the following:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2025 2024 2025 2024

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Other interest expense (1)

( 6 ) ( 1,668 ) ( 1,711 ) ( 4,332 )

Total net interest income/(loss) $ 4,072 $ 5,152 $ 8,019 $ 8,934

__________________

(1) Primarily consists of interest on Convertible Notes, see Note 10 for more details.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Mortgage Loans Held for Sale and Warehouse Lines of Credit

The Company has the following outstanding warehouse lines of credit:

(Amounts in thousands) Maturity Facility Size March 31, 2025 December 31, 2024

(Amounts in thousands) Maturity Facility Size June 30, 2025 December 31, 2024

Funding Facility 1 (1)

September 30, 2025 $ 100,000 $ 21,000 $ 60,747

May 13, 2025 $ — $ — $ 60,747

Funding Facility 2 (2)

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August 1, 2025 175,000 153,943 108,851

Funding Facility 4 (4)

April 5, 2026 250,000 134,744 —

Total warehouse lines of credit $ 575,000 $ 371,189 $ 244,070

1 unchanged sentence

(1) Interest charged under the facility is at the 30-day term SOFR plus 2.125 % .

Cash collateral deposit of $ 15.0 million is maintained and included in restricted cash.

During the second quarter of 2025, Funding Facility 1 was terminated prior to maturity.

(2) Interest charged under the facility is at the 30-day term SOFR plus 2.10 % - 2.25 %.

1 unchanged sentence

(3) Interest charged under the facility is at the 30-day term SOFR plus 1.75 % - 3.75 %.

There is no cash collateral deposit maintained as of March 31, 2025.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

There is no cash collateral deposit maintained as of June 30, 2025.

Subsequent to June 30, 2025, the Company extended the maturity to July 1, 2026.

(4) Interest charged under the facility is at the daily simple SOFR plus 2.25 % - 2.50 % .

There is no cash collateral deposit maintained as of June 30, 2025.

The unpaid principal amounts of the Company’s LHFS are also pledged as collateral under the relevant warehouse funding facilities.

The Company’s LHFS are summarized below by those pledged as collateral and those fully funded by the Company:

(Amounts in thousands) March 31, 2025 December 31, 2024

(Amounts in thousands) June 30, 2025 December 31, 2024

Funding Facility 1 $ — $ 61,341

1 unchanged sentence

Funding Facility 3 165,815 123,081

Funding Facility 4 134,767 —

Total LHFS pledged as collateral 392,805 267,984

4 unchanged sentences

Total LHFS at fair value $ 447,738 $ 399,241

Average days loans held for sale, other than Company-funded LHFS and Company-funded HELOC, for the three months ended March 31, 2025 and 2024 were approximately 21 days and 20 days, respectively.

Average days loans held for sale, other than Company-funded LHFS and Company-funded HELOC, for the three and six months ended June 30, 2025 were approximately 27 days and 26 days, respectively.

Average days loans held for sale, other than Company-funded LHFS and Company-funded HELOC, for the three and six months ended June 30, 2024 were approximately 20 days and 22 days, respectively.

This is defined as the average days between funding and sale for loans funded during each period.

As of March 31, 2025 and December 31, 2024, the unpaid principal balance of loans that were either 90 days past due or non-performing was $ 0.8 million and $ 1.4 million, respectively.

For the three months ended March 31, 2025 and 2024, the weighted average interest rate for the warehouse lines of credit was 6.46 % and 7.39 %, respectively.

As of June 30, 2025 and December 31, 2024, the unpaid principal balance of loans that were either 90 days past due or non-performing was $ 1.7 million and $ 1.4 million, respectively.

For the six months ended June 30, 2025 and 2024, the weighted average interest rate for the warehouse lines of credit was 6.46 % and 7.40 %, respectively.

The warehouse lines of credit contain certain restrictive covenants that require the Company to maintain certain minimum net worth, liquid assets, current ratios, liquidity ratios, and leverage ratios.

In addition, these warehouse lines also require the Company to maintain compensating cash balances which aggregated to $ 18.8 million as of March 31, 2025 and December 31, 2024 and are included in restricted cash on the accompanying condensed consolidated balance sheets.

The Company was in compliance with all financial covenants under the warehouse lines as of March 31, 2025.

In addition, these warehouse lines also require the Company to maintain compensating cash balances which aggregated to $ 3.8 million as of June 30, 2025 and December 31, 2024 and are included in restricted cash on the accompanying condensed consolidated balance sheets.

The Company was in compliance with all financial covenants under the warehouse lines as of June 30, 2025.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Loans Held for Investment

The majority of the Company’s Loans Held for Investment portfolio consists of property - buy to let loans, which is the purchase of property for the purpose of renting to a tenant, which makes up 99.4 % and 98.6 % of the total loan portfolio as of March 31, 2025 and December 31, 2024, respectively.

The Company’s Loans Held for Investment portfolio is summarized as follows:

(Amounts in thousands) March 31, 2025 December 31, 2024

The majority of the Company’s Loans Held for Investment portfolio consists of property - buy to let loans, which is the purchase of property for the purpose of renting to a tenant, which makes up 99.8 % and 98.6 % of the total loan portfolio as of June 30, 2025 and December 31, 2024, respectively.

The Company’s Loans Held for Investment portfolio consists of U.K.

loans and is summarized as follows:

(Amounts in thousands) June 30, 2025 December 31, 2024

Property - Buy to Let $ 422,397 $ 111,630

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Total Loans Held for Investment, net $ 420,566 $ 111,477

Accrued interest receivable on loans receivable totaled $ 0.6 million and $ 0.4 million, respectively, as of March 31, 2025 and December 31, 2024 and is included in other receivables, net on the condensed consolidated balance sheets.

Accrued interest receivable on loans receivable totaled $ 0.7 million and $ 0.4 million, respectively, as of June 30, 2025 and December 31, 2024 and is included in other receivables, net on the condensed consolidated balance sheets.

The Company elected the practical expedient to exclude the applicable accrued interest receivable on loans receivable from the disclosed amortized cost basis.

The Company concluded that it has a substantive non-accrual policy which allows for the timely reversal of accrued interest should an asset be placed on non-accrual;

accordingly, there was no allowance for credit losses for accrued interest receivable on loans receivable as of March 31, 2025.

The Company concluded that it has a non-accrual policy which allows for the timely reversal of accrued interest should an asset be placed on non-accrual;

accordingly, there was no allowance for credit losses for accrued interest receivable on loans receivable as of June 30, 2025.

When writing off uncollectible accrued interest receivables on its loans held for investment portfolio, the Company considers 90 days to be a timely manner.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Uncollectible amounts of accrued interest receivable are charged off by reversing interest income.

The Company had no charge offs of uncollectible accrued interest on its outstanding loans held for investment during the during the three months ended March 31, 2025 and 2024.

The Company had no charge offs of uncollectible accrued interest on its outstanding loans held for investment during the three months ended June 30, 2025 and 2024.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due.

As of both March 31, 2025 and December 31, 2024 there were no loans held for investment past due.

As of both June 30, 2025 and December 31, 2024 there were no loans held for investment past due.

The Company considers loans for which the repayment is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, or where foreclosure is probable, to be collateral dependent.

As of March 31, 2025 and December 31, 2024, there were no loans secured by any asset type for which formal foreclosure proceedings are in process.

As of June 30, 2025 and December 31, 2024, there were no loans secured by any asset type for which formal foreclosure proceedings are in process.

Loans are placed on non-accrual status and the accrual of interest is discontinued if principal or interest payments become 90 days past due and/or management deems the collectability of the principal and/or interest to be in question.

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Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

As of March 31, 2025 and December 31, 2024, there were no loans that were placed on non-accrual status.

During the three months ended March 31, 2025 and 2024, there were no modifications for loans to borrowers experiencing financial difficulty.

As of June 30, 2025 and December 31, 2024, there were no loans that were placed on non-accrual status.

During the three and six months ended June 30, 2025 and 2024, there were no modifications for loans to borrowers experiencing financial difficulty.

Loans are categorized into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends.

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Homogeneous loans are not risk rated and credit risk is analyzed largely by the contractual maturity and payment status of the loan.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company utilizes maturity bands to assess the probability of credit losses within the portfolio.

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0-20 months, 21-40 months, and over 40 months.

The following table presents amortized cost for outstanding loans, by class and year of origination/renewal, as of March 31, 2025 and December 31, 2024.

The following table presents amortized cost for outstanding loans, by class and year of origination/renewal, as of June 30, 2025 and December 31, 2024.

The tables below present loans by credit quality indicator and vintage year:

March 31, 2025

June 30, 2025

(Amounts in thousands) 2025 2024 2023 2022 2021 Prior Total

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Total $ 300,624 $ 120,966 $ 827 $ 643 $ 296 $ 11 $ 423,367

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

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Goodwill and Internal Use Software and Other Intangible Assets, Net

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Changes in the carrying amount of goodwill, net consisted of the following:

Three Months Ended March 31,

Six Months Ended June 30,

(Amounts in thousands) 2025 2024

Balance at beginning of period $ 23,615 $ 32,390

Goodwill impairment ( 488 ) —

Effect of foreign currency exchange rate changes 1,638 ( 145 )

Balance at end of period $ 24,765 $ 32,245

No impairment of goodwill was recognized for the three months ended March 31, 2025 and 2024.

During the second quarter of 2025, the Company recorded goodwill impairment charges of $ 0.5 million which is included within other expense/(income) in the condensed consolidated statements of operations and comprehensive loss.

The goodwill impairment is related to entities in the U.K.

for which management has classified as held for sale, see Note 8.

No impairment of goodwill was recognized for the three and six months ended June 30, 2024.

Internal use software and other intangible assets, net consisted of the following:

As of March 31, 2025

As of June 30, 2025

(Amounts in thousands, except useful lives) Weighted Average Useful Lives (in years) Gross Carrying Value Accumulated Amortization Net Carrying Value

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Total Internal use software and other intangible assets, net $ 159,344 $ ( 138,071 ) $ 21,273

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024

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Total Internal use software and other intangible assets, net $ 150,714 $ ( 129,778 ) $ 20,936

The Company capitalized $ 2.7 million and $ 0.4 million in internal use software and website development costs during the three months ended March 31, 2025 and 2024, respectively.

Included in capitalized internal use software and website development costs are $ 0.4 million and $ 0.4 million of stock-based compensation costs for the three months ended March 31, 2025 and 2024, respectively.

Amortization expense totaled $ 3.6 million and $ 8.0 million during the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2025 and 2024, no impairment was recognized relating to intangible assets.

The Company capitalized $ 2.9 million and $ 2.2 million in internal use software and website development costs during the three months ended June 30, 2025 and 2024, respectively.

Included in capitalized internal use software and website development costs are $ 0.4 million and $ 0.5 million of stock-based compensation costs for the three months ended June 30, 2025 and 2024, respectively.

Amortization expense totaled $ 3.2 million and $ 7.1 million during the three months ended June 30, 2025 and 2024, respectively.

For the three months ended June 30, 2025 and 2024, no impairment was recognized relating to intangible assets.

The Company capitalized $ 5.6 million and $ 3.0 million in internal use software and website development costs during the six months ended June 30, 2025 and 2024, respectively.

Included in capitalized internal use software and website

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

development costs are $ 0.8 million and $ 0.9 million of stock-based compensation costs for the six months ended June 30, 2025 and 2024, respectively.

Amortization expense totaled $ 6.8 million and $ 15.1 million during the six months ended June 30, 2025 and 2024, respectively.

For the six months ended June 30, 2025 and 2024, no impairment was recognized relating to intangible assets.

Prepaid Expenses and Other Assets

Prepaid expenses and other assets consisted of the following:

As of March 31, As of December 31,

As of June 30, As of December 31,

(Amounts in thousands) 2025 2024

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The following table represents summarized balance sheet information of assets and liabilities held for sale:

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands) March 31, 2025 December 31, 2024

(Amounts in thousands) June 30, 2025 December 31, 2024

Cash and cash equivalents $ 2,079 $ 3,814

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Other receivables, net 1,990 1,244

Write down of assets to fair value less cost to sell ( 4,346 ) ( 4,220 )

Property and equipment, net 17 35

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Prepaid expenses and other assets 589 634

Write down of assets to fair value less cost to sell ( 5,029 ) ( 4,220 )

Total assets held for sale $ 9,071 $ 10,411

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Total liabilities held for sale $ 6,932 $ 6,116

For the three and six months ended June 30, 2025, the Company recorded a write down of the disposal group to fair value, less cost to sell, in the amount of $ 0.4 million which is included in other expenses/(income) on the condensed consolidated statements of operations and comprehensive loss.

For the three and six months ended June 30, 2025, the Company recorded goodwill impairment relating to the entities in the U.K.

classified as held for sale of $ 0.5 million which is included within other expense/(income) in the condensed consolidated statements of operations and comprehensive loss.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Customer Deposits

Customer Deposits —In relation to the Company’s banking activities tied to the Company’s acquisition of Birmingham Bank in the U.K., the Company offers individual savings accounts and other depository products with differing maturities and interest rates to its customers.

The balance of customer deposits as of March 31, 2025 and December 31, 2024 was $ 261.1 million and $ 134.1 million, respectively, on the condensed consolidated balance sheets.

The balance of customer deposits as of June 30, 2025 and December 31, 2024 was $ 482.4 million and $ 134.1 million, respectively, on the condensed consolidated balance sheets.

The following table presents average balances and weighted average rates paid on deposits for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30, 2025

(Amounts in thousands) Average Balance Average Rate Paid Average Balance Average Rate Paid

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Total Deposits $ 409,151 3.69 % $ 28,739 2.97 %

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended June 30, 2025

(Amounts in thousands) Average Balance Average Rate Paid Average Balance Average Rate Paid

Notice $ 65,410 3.75 % $ 2,413 2.85 %

Term 248,019 4.64 % 13,805 3.87 %

Savings 492 2.11 % 4,211 2.20 %

Total Deposits $ 313,921 3.50 % $ 20,429 2.97 %

The following table presents maturities of customer deposits:

(Amounts in thousands) As of March 31, 2025

(Amounts in thousands) As of June 30, 2025

Demand deposits

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Total $ 482,360

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Interest expense on deposits is recorded in interest expense in the condensed consolidated statements of operations and comprehensive loss for the periods indicated as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30, 2025

(Amounts in thousands) 2025 2024 2025 2024

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Term 3,499 218 5,041 270

Savings — 28 — 57

Total Interest Expense $ 4,352 $ 267 $ 6,357 372

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banking clients and are protected up to £ 85 thousand ( $ 116.4 thousand ) per eligible person by the Financial Services Compensation Scheme in the U.K.

Of the total customer deposits as of March 31, 2025, $ 58.3 million were over the applicable insured amount.

Corporate Line of Credit and Convertible Note

Pre-Closing Bridge Notes —In connection with the Closing of the Business Combination, the Pre-Closing Bridge Notes held by SB Northstar in an aggregate principal amount of $ 650.0 million automatically converted into Class C common stock at a conversion price of $ 500.00 per share, adjusted by the 1-for-50 reverse stock split.

The Pre-Closing Bridge Notes held by Novator Capital Sponsor Ltd.

(the “Sponsor”) in an aggregate principal amount of $ 100.0 million were exchanged for $ 0.8 million shares of Class A common stock.

Convertible Note —In connection with the Closing of the Business Combination, the Company issued to SB Northstar LP, a related party, the Convertible Note in the aggregate principal amount of $ 528.6 million, $ 550.0 million less approximately $ 21.4 million released to the Company at the Closing from Aurora’s trust account, pursuant to an Indenture, dated as of August 22, 2023 (the “Indenture”).

The Convertible Note bears 1 % interest per annum and matures on August 22, 2028, unless earlier converted or redeemed.

Per the Indenture, the Company may elect to pay all or any portion of interest in kind by issuing to the holder of such note an additional note or in cash.

The Convertible Note is convertible, at the option of SB Northstar, into shares of the Company’s Class A common stock, with an initial conversion rate per $1,000 principal amount of Convertible Note equal to (a) $1,000 divided by (b) a dollar amount equal to 115 % of the First Anniversary VWAP (as defined in the Indenture), subject to adjustments as described therein.

The Indenture provides that the First Anniversary VWAP may be no less than $ 400.00 and no greater than $ 600.00 , adjusted by the 1-for-50 reverse stock split, subject to adjustments as described therein.

The Convertible Note may be redeemed at the option of the Company at a redemption price of 115 % of par pl us accrued interest in cash, at any time on or before the 30 th trading day prior to the maturity date of the Convertible Note if the last reported sale price of the Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days during the 30 trading day period ending on, and including, the trading day immediately preceding the d ate of notice of optional redemption.

The Convertible Note is redeemable prior to maturity in the event of a fundamental change under the Indenture, such as the removal of the Company’s Class A common stock from the Nasdaq.

In this event, the Company

Of the total customer deposits as of June 30, 2025, $ 117.5 million were over the applicable insured amount.

Convertible Notes —As of June 30, 2025 and December 31, 2024, the carrying amount of the Convertible Notes was none and $ 519.7 million on the condensed consolidated balance sheets, respectively.

For the three and six months ended June 30, 2025, the Company recorded a total of none and $ 1.7 million of interest expense related to the Convertible Notes.

For the three and six months ended June 30, 2024, the Company recorded a total of $ 1.6 million and $ 4.3 million of interest expense related to the Convertible Notes.

Interest expense from the Convertible Notes is included in interest expense within the condensed consolidated statements of operations and comprehensive loss.

In February 2024, the Company made a cash payment in the amount of $ 2.5 million, which consisted of $ 1.1 million towards the principal and $ 1.4 million of interest from January 1, 2024 through February 15, 2024.

On April 12, 2025, the Company entered into a privately negotiated Exchange Agreement (the “Note Exchange Agreement”) with SB Northstar LP (the “Investor”), a related party, pursuant to which the Company and the Investor agreed to exchange (the “Exchange”) all of the $ 532.5 million total aggregate principal amount outstanding of the Company’s existing 1.00 % Convertible Notes due 2028 (the “Existing Notes”) held by the Investor for (i) $ 155.0 million in aggregate principal amount of new 6.00 % Senior Secured Notes due 2028 (the “Senior Notes”), and (ii) a cash payment of $ 110.0 million (the “Cash Payment”).

The Company will not receive any cash proceeds in connection with the Exchange.

The Exchange was subsequently consummated on April 28, 2025 (the “Closing Date”), upon which the Company received and cancelled all Existing Notes and the Investor forfeited any accrued and unpaid interest in respect of the Existing Notes to, but not including, the Closing Date.

Pursuant to the Note Exchange Agreement, the Company granted the Investor, conditioned on closing of the Exchange, a non-transferrable right to designate one non-voting board observer from June 1, 2025, for so long as the Investor and affiliates of the Investor continue to hold, in the aggregate, either (i) at least 25 % of the initial aggregate principal amount of the Senior Notes or (ii) at least 12 % of the sum of the outstanding shares of the Company’s Class A Common Stock, Class B Common Stock and Class C Common Stock, calculated on a fully diluted basis.

The Exchange was accounted for as a TDR under ASC 470-60.

On the Closing Date, the principal amount was $ 532.5 million with a discount of $ 11.0 million for a net carrying value of $ 521.4 million .

The Company made a cash payment on the Closing Date of $ 110.0 million and recognized the Senior Notes at a carrying value $ 200.4 million .

The gain on troubled debt restructuring of $ 210.0 million was recognized through equity as the Investor is considered a related party.

The Company also accrued for $ 1.0 million of expenses related to the TDR which reduced the gain recognized through equity.

Under the TDR accounting treatment, the carrying value of the Senior Notes of $ 200.4 million is made up of the total future undiscounted cash flows which includes principal of $ 155.0 million and interest make-whole as well as a redemption premium of $ 45.4 million.

The interest make-whole and the redemption premium are related to the optional redemption feature where the Company can redeem all or part of the Senior Notes prior to December 31, 2028 at 108 % of the principal plus a make-whole premium as discussed further below.

The Company assumes contingent future payments will have to be paid and those amounts shall be included in the total future cash payments.

Senior Notes —On the Closing Date, the Company entered into an indenture (the “Senior Notes Indenture”) with GLAS Trust Company LLC, as trustee and notes collateral agent (the “Trustee”).

As of June 30, 2025 and December 31,

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

would be required to redeem the Convertible Note for an amount in cash equal to the principal balance plus accrued and unpaid interest on the redemption date.

As of March 31, 2025 and December 31, 2024, the carrying amount of the Convertible Note was $ 521.4 million and $ 519.7 million on the condensed consolidated balance sheets, respectively.

For the three months ended March 31, 2025 and March 31, 2024, the Company recorded a total of $ 1.7 million and $ 2.7 million, respectively, of interest expense related to the Convertible Note.

Interest expense from the Convertible Note is included in interest expense within the condensed consolidated statements of operations and comprehensive loss.

For the period February 16, 2024 to March 31, 2025, the Company has elected to pay interest in kind on the Convertible Note, which is calculated at 1 % per annum and accrued at the fair value of the additional note issued.

Refer to Note 20 for additional information.

2024, the carrying amount of the Senior Notes was $ 200.4 million and none on the condensed consolidated balance sheets, respectively.

The Senior Notes represent the Company’s senior secured obligations, and are secured by substantially all of the Company’s and its material domestic subsidiaries’ assets.

The Senior Notes are (i) senior in right of payment to the Company’s existing and future senior, unsecured indebtedness to the extent of the value of the collateral;

and (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Senior Notes.

Interest on the Senior Notes is payable, at the Company’s election, in cash or by payment-in-kind by issuing additional notes in an aggregate principal amount equal to the relevant amount of interest paid in kind.

The Senior Notes will accrue interest at a rate of 6.00 % per annum, payable semi-annually in arrears on June 30 and December 31 of each year, beginning on June 30, 2025.

The Senior Notes will mature on December 31, 2028.

The Senior Notes will be redeemable, in whole and not in part, at the Company’s option at any time prior to December 31, 2028, at a cash redemption price equal to 106.00 % of the principal amount of the Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, with an amount not exceeding the net cash proceeds of one or more “Equity Offerings” (as defined in the Senior Notes Indenture);

provided that at least 60 % of the aggregate principal amount of the Senior Notes remains outstanding immediately after the redemption and the redemption occurs within 150 days of the date of the closing of each such Equity Offering.

Additionally, prior to December 31, 2028, the Company may redeem all or part of the Senior Notes at a redemption price equal to the sum of 108 % of the principal amount of the Senior Notes to be redeemed, plus the “Make Whole Premium” (as defined in the Senior Notes Indenture) at the redemption date, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If certain corporate events that constitute a “Change of Control Triggering Event” (as defined in the Senior Notes Indenture) occur, then noteholders may require the Company to repurchase all or any part of their Senior Notes at a cash repurchase price equal to 101 % of the aggregate principal amount of the Senior Notes to be repurchased, plus accrued and unpaid interest, if any, to the date of settlement.

The definition of Change of Control Triggering Event includes certain business combination transactions involving the Company.

Related Party Transactions

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The services provided by TheNumber are not integral to the Company’s technology platform and amounts incurred are not material to the Company.

In connection with these agreements, the Company paid expenses of $ 0.3 million and $ 0.1 million for the three months ended March 31, 2025 and 2024 respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss and had an immaterial payable as of March 31, 2025 and December 31, 2024, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets.

In connection with these agreements, the Company paid expenses of $ 0.3 million and $ 0.2 million for the three months ended June 30, 2025 and 2024, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

The Company paid expenses of $ 0.5 million for both the six months ended June 30, 2025 and 2024, respectively, which are included within general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss, and had a payable of $ 0.1 million and an immaterial amount as of June 30, 2025 and December 31, 2024, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets.

Notable —In previous years, the Company or subsidiaries of the Company, entered into several agreements (herein referred to as the “Notable Agreements”) with Notable Finance LLC (“Notable”), an entity in which Vishal Garg and 1/0 Real Estate (an entity affiliated with Vishal Garg), collectively hold a majority ownership interest.

The Notable Agreements included products such as a consumer lending program, a non-revolving personal line of credit, and other financial products which were offered to borrowers of the Company.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Agreements included products such as a consumer lending program, a non-revolving personal line of credit, and other financial products which were offered to borrowers of the Company.

The Notable Agreements also included the ability for the Company to purchase up to $ 20.0 million of unsecured home improvement loans underwritten and originated by Notable for the Company’s customers.

During 2024, the Company decided to cease offering the products and services provided via the Notable Agreements.

As of March 31, 2025 and December 31, 2024, the Company had $ 3.8 million and $ 4.2 million of unsecured home improvement loans purchased from Notable, which are included within mortgage loans held for sale, at fair value on the condensed consolidated balance sheets.

As of June 30, 2025 and December 31, 2024, the Company had $ 3.3 million and $ 4.2 million of unsecured home improvement loans purchased from Notable, which are included within mortgage loans held for sale, at fair value on the condensed consolidated balance sheets.

Notable will continue to provide servicing for the loans purchased from Notable that remain on the Company’s balance sheet.

Other Related Party Services —The Company has relationships with 1/0 Capital LLC and Zethos Inc (doing business as “True Work”), companies affiliated with Vishal Garg, the Chief Executive Officer, which provide services to the Company varying from data analytics to information technology support services.

For the three and six months ended June 30, 2025 and 2024, the Company recorded an immaterial amount, in relation to these services, which are included in general and administrative expenses on the consolidated statements of operations and comprehensive loss.

Note Exchange Agreement —See Note 10, for further details on the Exchange with SB Northstar LP, a related party of the Company.

Commitments and Contingencies

Litigation —The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies.

The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies.

While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results.

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The majority of such legal claims and proceedings are in the early stages and, to the extent applicable, have not yet reached the class certification stage and as such the ultimate outcomes cannot be predicted with certainty due to inherent uncertainties in the legal claims and proceedings.

As part of the disputes and other similar types of legal matters, the Company included an estimated liability of $ 8.3 million as of both March 31, 2025 and December 31, 2024, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets.

No additional expense was accrued for both the three months ended March 31, 2025 and 2024.

As part of the disputes and other similar types of legal matters, the Company included an estimated liability of $ 6.9 million and $ 8.3 million, as of June 30, 2025 and December 31, 2024, respectively, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets.

During the three and six months ended June 30, 2025, the changes in the liability included a settlement of $ 1.4 million.

No additional expense was accrued for both the three months ended June 30, 2025 and 2024.

Refer to Note 20 for additional information.

1 unchanged sentence

Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers.

As of March 31, 2025 and December 31, 2024, the Company included an estimated liability of $ 5.6 million and $ 6.6 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets.

For the three months ended March 31, 2025, the Company recorded a reduction in the liability for these potential TRID defects of $ 0.9 million and is included within loan origination expense in the condensed consolidated statement of operations and comprehensive loss.

During the three months ended March 31, 2025, the Company had relief of the liability due to payments to customers in the amount of $ 0.1 million.

For the three months ended March 31, 2024, the Company recorded an additional accrual for these potential TRID defects of $ 0.1 million and is included within loan origination expense in the consolidated statement of operations and comprehensive loss.

As of June 30, 2025 and December 31, 2024, the Company included an estimated liability of $ 5.0 million and $ 6.6 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets.

During the three months ended June 30, 2025, the Company recorded an additional accrual for these potential TRID defects of $ 0.1 million, which is included within loan origination expense in the condensed consolidated statements of operations and comprehensive loss.

During the six months ended June 30, 2025, the Company recorded a reduction in the liability for these potential TRID defects of $ 0.8 million, which is included within loan origination expense in the condensed consolidated statements of operations and comprehensive loss.

During the three and six months ended June 30, 2025, the Company had relief of the liability due to payments to customers in the amount of $ 0.7 million and $ 0.8 million, respectively.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three and six months ended June 30, 2024, the Company recorded an additional accrual for these potential TRID defects of $ 0.1 million and $ 0.1 million, respectively, which are included within loan origination expense in the condensed consolidated statements of operations and comprehensive loss.

During the three and six months ended June 30, 2024, the Company had relief of the liability due to payments to customers in the amount of $ 2.1 million and $ 2.1 million, respectively.

This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample.

2 unchanged sentences

Loan Commitments —The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria.

As of March 31, 2025 and December 31, 2024, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $ 219.9 million and $ 129.9 million, respectively.

The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of March 31, 2025 and December 31, 2024, respectively, on the condensed consolidated balance sheets.

As of June 30, 2025 and December 31, 2024, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $ 205.6 million and $ 129.9 million, respectively.

The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of June 30, 2025 and December 31, 2024, respectively, on the condensed consolidated balance sheets.

Forward Sale Commitments —In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates.

As of March 31, 2025 and December 31, 2024, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $ 207.0 million and $ 158.0 million, respectively.

The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of March 31, 2025 and December 31, 2024, respectively, on the condensed consolidated balance sheets.

As of June 30, 2025 and December 31, 2024, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $ 234.0 million and $ 158.0 million, respectively.

The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of June 30, 2025 and December 31, 2024, respectively, on the condensed consolidated balance sheets.

Concentrations —See below for areas considered to be concentrations of credit risk for the Company:

Significant loan purchasers are those which represent more than 10% of the Company’s loan volume.

During the three months ended March 31, 2025, the Company had three loan purchasers that accounted for 33 %, 15 % and 14 % of loans sold by the Company.

During the three months ended March 31, 2024, the Company had three loan purchasers that accounted for 53 %, 18 %, and 17 % of loans sold by the Company.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended June 30, 2025, the Company had three loan purchasers that accounted for 35 %, 12 % and 11 % of loans sold by the Company.

During the three months ended June 30, 2024, the Company had three loan purchasers that accounted for 48 %, 27 %, and 12 % of loans sold by the Company.

During the six months ended June 30, 2025, the Company had three loan purchasers that accounted for 34 % , 13 % and 12 % of loans sold by the Company.

During the six months ended June 30, 2024, the Company had three loan purchasers that accounted for 51 % , 22 % and 15 % of loans sold by the Company.

Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States.

As of March 31, 2025 , the company originated 11 % of its LHFS secured by properties in California.

As of June 30, 2025 , the company originated 12 % of its LHFS secured by properties in California.

As of December 31, 2024 , the Company originated 10 % of its LHFS secured by properties in California.

1 unchanged sentence

Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million.

As of March 31, 2025 and December 31, 2024, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.

As of June 30, 2025 and December 31, 2024, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.

Escrow Payable and Other Customer Accounts —In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement.

2 unchanged sentences

These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower or customer.

The balance in these accounts as of March 31, 2025 and December 31, 2024 was $ 0.7 million and $ 0.1 million, respectively, and are included within escrow payable and other customer accounts on the condensed consolidated balance sheets.

The balance in these accounts as of June 30, 2025 and December 31, 2024 was $ 0.4 million and $ 0.1 million, respectively, and are included within escrow payable and other customer accounts on the condensed consolidated balance sheets.

Risks and Uncertainties

2 unchanged sentences

Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Interest Rate Risk —The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations.

5 unchanged sentences

Through this program, mortgage-backed securities are purchased and sold forward.

For all counterparties with open positions as of March 31, 2025, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis.

For all counterparties with open positions as of June 30, 2025, in the event that the Company does not deliver into the forward-delivery commitments, they can be settled on a net basis.

Net settlements entail paying or receiving cash based upon the change in market value of the existing instrument.

8 unchanged sentences

However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan for up to three years post sale.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses.

In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers.

The Company repurchased $ 2.0 million ( 6 l oans) and $ 2.0 million ( 6 l oans) in unpaid principal balance of loans during the three months ended March 31, 2025 and 2024, respectively, related to its loan repurchase obligations.

The Company repurchased $ 2.2 million ( 9 l oans) and $ 1.0 million ( 5 l oans) in unpaid principal balance of loans during the three months ended June 30, 2025 and 2024, respectively, related to its loan repurchase obligations.

The Company repurchased $ 4.2 million ( 15 l oans) and $ 3.0 million ( 11 l oans) in unpaid principal balance of loans during the six months ended June 30, 2025 and 2024, respectively, related to its loan repurchase obligations.

The Company’s loan repurchase reserve is included within other liabilities on the condensed consolidated balance sheets.

The (recovery of)/provision for the loan repurchase reserve is included within gain on loans, net on the consolidated statements of operations and comprehensive loss.

The recovery of the loan repurchase reserve is included within gain on loans, net on the consolidated statements of operations and comprehensive loss.

The following presents the activity of the Company’s loan repurchase reserve:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2025 2024 2025 2024

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If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s consolidated financial statements unless the Company found a suitable alternative source.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Net Loss Per Share

The computation of net loss per share and weighted average shares of the Company's common stock outstanding during the periods presented is as follows:

Three Months Ended March 31,

(Amounts in thousands, except for share and per share amounts) 2025 2024

(Amounts in thousands, except for share and per share amounts) Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Basic net loss per share:

10 unchanged sentences

Diluted $ ( 2.39 ) $ ( 2.74 ) $ ( 5.72 ) $ ( 6.15 )

Period ended March 31, 2024 has been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

Periods ended June 30, 2024 has been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

See Note 1 Organization and Nature of the Business - Reverse Stock Split, for additional information.

1 unchanged sentence

Basic and diluted loss per share are presented together as the amounts for basic and diluted loss per share are the same (i.e., the Company’s other equity-linked instruments outstanding are anti-dilutive for the periods presented).

The Company's potentially dilutive securities, which include stock options, RSUs, warrants to purchase shares of common stock, and Sponsor locked-up shares, have been excluded from the computation of diluted net loss per share, as the effect would be anti-dilutive.

The Company excluded the following securities, presented based on amounts outstanding

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated as including them would have had an anti-dilutive effect:

Three Months Ended March 31,

The Company's potentially dilutive securities, which include stock options, restricted stock units (“RSUs”), warrants to purchase shares of common stock, and Sponsor locked-up shares, have been excluded from the computation of diluted net loss per share, as the effect would be anti-dilutive.

The Company excluded the following securities, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated as including them would have had an anti-dilutive effect:

Six Months Ended June 30,

(Amounts in thousands) 2025 2024 (2)

6 unchanged sentences

(1) Securities have an antidilutive effect under the treasury stock method.

(2) Period ended March 31, 2025 has been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

(2) Period ended June 30, 2025 has been adjusted to reflect the 1-for-50 reverse stock split on August 16, 2024.

See Note 1 Organization and Nature of the Business - Reverse Stock Split, for additional information.

(3) Public and Private warrants are unadjusted by the Reverse Stock Split as a holder must exercise 50 warrants to receive one share of common stock .

(3) Public and Private Warrants (as defined below) are unadjusted by the Reverse Stock Split as a holder must exercise 50 warrants to receive one share of common stock .

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements

The Company’s financial instruments measured at fair value on a recurring basis are summarized below:

March 31, 2025

June 30, 2025

(Amounts in thousands) Level 1 Level 2 Level 3 Total

17 unchanged sentences

Warrants and equity related liabilities, at fair value (2)

729 678 — 1,407

Total Liabilities $ 729 $ 678 $ 86 $ 1,493

__________________

(1) As of March 31, 2025, derivative assets represent IRLCs, and liabilities represent both IRLCs and forward sale commitments.

(1) As of June 30, 2025, derivative assets represent IRLCs, and liabilities represent both IRLCs and forward sale commitments.

As of December 31, 2024, derivative assets represent forward sale commitments and IRLCs, and liabilities represent IRLCs.

4 unchanged sentences

The changes in fair value of these assets are largely driven by changes in interest rates subsequent to loan funding and receipt of principal payments associated with the relevant LHFS.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Derivative Assets and Liabilities —The Company uses derivatives to manage various financial risks.

2 unchanged sentences

The fair value of IRLCs, which are related to mortgage loan commitments, is based on quoted market prices, adjusted by the pull-through factor, and includes the value attributable to the net servicing fee.

The Company evaluated the significance and unobservable nature of the pull-through factor and determined that the classification of IRLCs should be Level 3 as of March 31, 2025 and December 31, 2024.

The Company evaluated the significance and unobservable nature of the pull-through factor and determined that the classification of IRLCs should be Level 3 as of June 30, 2025 and December 31, 2024.

Significant changes in the pull-through factor of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement.

1 unchanged sentence

for example, entering into interest rate lock commitments at low interest rates followed by an increase in interest rates in the market, will decrease the value of IRLC.

The Company had purchases/issuances of approximately $ 8.0 million and $ 2.6 million of IRLCs during the three months ended March 31, 2025 and 2024, respectively.

The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of March 31, 2025 was approximately 47 days on average.

The Company attempts to match the maturity date of the IRLCs with the forward commitments.

The Company had purchases/issuances of approximately $ 10.8 million and $ 3.4 million of IRLCs during the three months ended June 30, 2025 and 2024, respectively.

The Company had purchases/issuances of approximately $ 18.8 million and $ 5.9 million of IRLCs during the six months ended June 30, 2025 and 2024, respectively.

The number of days from the date of the IRLC to expiration of the rate lock commitment outstanding as of June 30, 2025 was approximately 46 days on average.

The Company attempts to match the maturity date of the IRLCs with the

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

forward commitments.

Derivatives are presented in the condensed consolidated balance sheets under derivative assets, at fair value and derivative liabilities, at fair value.

During the three months ended March 31, 2025, the Company recognized $ 2.6 million of gains and $ 2.5 million of losses related to changes in fair value of IRLCs and forward sale commitments, respectively.

During the three months ended March 31, 2024, the Company recognized no gains or losses and $ 2.5 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively.

During the three months ended June 30, 2025, the Company recognized $ 0.9 million of gains and $ 0.7 million of losses related to changes in fair value of IRLCs and forward sale commitments, respectively.

During the six months ended June 30, 2025, the Company recognized $ 3.5 million of gains and $ 3.2 million of losses related to changes in fair value of IRLCs and forward sale commitments, respectively.

During the three months ended June 30, 2024, the Company recognized $ 1.5 million and $ 4.0 million of gains related to changes in the fair value of IRLCs and forward sale commitments, respectively.

During the six months ended June 30, 2024, the Company recognized $ 1.6 million and $ 6.4 million of gains related to changes in fair value of IRLCs and forward sale commitments, respectively.

Gains and losses related to changes in the fair value of IRLCs and forward sale commitments are included in gain on loans, net within the condensed consolidated statements of operations and comprehensive loss.

Unrealized activity related to changes in the fair value of forward sale commitments were $ 2.6 million of losses and $ 3.8 million of gains, included in the $ 2.5 million of losses and $ 2.5 million of gains, during the three months ended March 31, 2025 and 2024, respectively.

Unrealized activity related to changes in the fair value of forward sale commitments were $ 1.3 million of losses and $ 0.7 million of gains, included in the $ 0.7 million of losses and $ 4.0 million of gains, during the three months ended June 30, 2025 and 2024, respectively.

Unrealized activity related to changes in the fair value of forward sale commitments were $ 3.9 million of losses and $ 4.5 million of gains, included in the $ 3.2 million of losses and $ 6.4 million of gains, during the six months ended June 30, 2025 and 2024, respectively.

The notional and fair value of derivative financial instruments not designated as hedging instruments were as follows:

(Amounts in thousands) Notional Value Derivative Asset Derivative Liability

Balance as of March 31, 2025

Balance as of June 30, 2025

IRLCs $ 205,564 $ 5,248 $ 110

5 unchanged sentences

Total $ 2,539 $ 86

Warrant and equity related liabilities— The warrant liability consists of Warrants and certain shares issued to the Sponsor, a related party, that are subject to transfer restrictions contingent on the price of Class A common stock exceeding certain thresholds (the "Sponsor-Locked-Up Shares").

The warrants consist of the Company's publicly traded warrants ("Public Warrants") and private warrants to acquire shares of Aurora that have been converted into warrants to acquire shares of Class A common stock ("Private Warrants").

Warrant and equity related liabilities— The warrant liability consists of Warrants and certain shares issued to Novator Capital Sponsor Ltd.

(the “Sponsor”), a related party, that are subject to transfer restrictions contingent on the price of Class A common stock exceeding certain thresholds (the "Sponsor-Locked-Up Shares").

The Public Warrants trade on the Nasdaq under the ticker symbol “BETRW” and as such is considered a Level 1 input from an active market to derive the value.

The Private Warrants and Sponsor-Locked up Shares, although not publicly traded on an active market, use inputs from the publicly traded Public Warrants and the Company’s publicly traded common stock, respectively, and are further calibrated using unobservable inputs representing Level 2 measurements within the fair value hierarchy.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2025 and December 31, 2024, Level 3 instruments include IRLCs, bifurcated derivative and convertible preferred stock warrants.

As of June 30, 2025 and December 31, 2024, Level 3 instruments include IRLCs, bifurcated derivative and convertible preferred stock warrants.

The following table presents the rollforward of Level 3 IRLCs:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2025 2024 2025 2024

2 unchanged sentences

Balance at end of period $ 5,138 $ 3,206 $ 5,138 $ 3,206

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Counterparty agreements for forward sale commitments contain master netting agreements, which contain a legal right to offset amounts due to and from the same counterparty and can be settled on a net basis.

3 unchanged sentences

Balance as of:

March 31, 2025:

June 30, 2025:

December 31, 2024:

$ 1,249 $ ( 18 ) $ 1,231

Offsetting of Forward Commitments - Liabilities

Balance as of:

March 31, 2025:

June 30, 2025:

$ — $ ( 2,292 ) $ ( 2,292 )

1 unchanged sentence

Significant Unobservable Inputs — The following table presents quantitative information about the significant unobservable inputs used in the recurring fair value measurements categorized within Level 3 of the fair value hierarchy:

March 31, 2025

June 30, 2025

(Amounts in dollars, except percentages) Range Weighted Average

10 unchanged sentences

The use of market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.

The estimated fair value of the Company’s cash and cash equivalents, restricted cash, warehouse lines of credit, and escrow funds approximates their carrying values as these financial instruments are highly liquid or short-term in nature.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the carrying amounts and estimated fair value of financial instruments that are not recorded at fair value on a recurring or non-recurring basis:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(Amounts in thousands) Fair Value Level Carrying Amount Fair Value Carrying Amount Fair Value

1 unchanged sentence

Loans held for investment Level 3 $ 423,367 $ 423,732 $ 113,144 $ 113,348

Convertible Note Level 3 $ 521,449 $ 356,657 $ 519,749 $ 371,160

In determining the fair value of the Convertible Note and loans held for investment, management uses factors that are material to the valuation process, including but not limited to, risks, prospects, and economic and market conditions, among other factors.

As a number of assumptions and estimates were involved that are largely unobservable, Convertible Note, and loans held for investment are classified as Level 3 inputs within the fair value hierarchy.

On a consolidated basis, the Company recorded total income tax expense (benefit) of $ 0.1 million and $ 0.1 million for the three months ended March 31, 2025 and 2024, respectively.

Convertible Notes Level 3 $ — $ — $ 519,749 $ 371,160

Senior Notes Level 3 $ 200,409 $ 112,550 $ — $ —

In determining the fair value of the Senior Notes and loans held for investment, management uses factors that are material to the valuation process, including but not limited to, risks, prospects, and economic and market conditions, among other factors.

As a number of assumptions and estimates were involved that are largely unobservable, the Senior Notes and loans held for investment are classified as Level 3 inputs within the fair value hierarchy.

On a consolidated basis, the Company recorded total income tax expense of $ 0.2 million and $ 0.3 million for the six months ended June 30, 2025 and 2024, respectively.

The Company’s quarterly tax provision, and estimate of its annual effective tax rate, is subject to variation due to several factors, including the ability to accurately project the Company’s pre-tax income or loss for the year and the mix of earnings among various tax jurisdictions.

The year-to-date effective tax rate, after discrete items, of ( 0.28 )% for the three months ended March 31, 2025, changed from ( 0.28 )% for the three months ended March 31, 2024, as the Company is forecasting reduction in losses for 2025.

The income tax expense for the three months ended March 31, 2025 primarily relates to the pre-tax income projections in certain foreign jurisdictions where the Company files standalone returns.

The income tax expense for the three months ended March 31, 2024 relates to the pre-tax income projections and dividend income withholding tax paid in certain foreign jurisdictions where the Company files standalone returns.

The year-to-date effective tax rate, after discrete items, of ( 0.28 )% for the six months ended June 30, 2025, changed from ( 0.37 )% for the six months ended June 30, 2024, as the Company is forecasting reduction in losses for 2025.

The income tax expense for the six months ended June 30, 2025 primarily relates to the pre-tax income projections in certain foreign jurisdictions where the Company files standalone returns.

The income tax expense for the six months ended June 30, 2024 relates to the pre-tax income projections and dividend income withholding tax paid in certain foreign jurisdictions where the Company files standalone returns.

As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred income tax assets.

The Company is in a three-year cumulative loss position as of March 31, 2025.

The Company is in a three-year cumulative loss position as of June 30, 2025.

Further, due to losses being estimated in the future, management continues to believe it is more likely than not that the benefit of the deferred income tax assets will not be realized.

4 unchanged sentences

Each outstanding share of Pre-Business Combination Better common stock was exchanged for approximately 3.06 shares of the Company’s Class A or Class B common stock.

Private and Public Warrants— As of March 31, 2025 and December 31, 2024, the Company had a total of $ 1.1 million and $ 1.3 million, in respect of Private Warrants and Public Warrants, respectively, included as warrant and equity related liabilities within the condensed consolidated balance sheets.

The change in fair value of Warrants for the three months ended March 31, 2025 and 2024, was a gain of $ 0.2 million and a gain of $ 0.6 million, respectively, and is included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

Sponsor Locked-up Shares— As of March 31, 2025 and December 31, 2024, the Company had a total of $ 0.1 million and $ 0.1 million, respectively, in respect of Sponsor Locked-up Share liabilities which are included within warrant and equity liabilities in the condensed consolidated balance sheets.

The change in fair value of Sponsor Locked-up Shares for the three months ended March 31, 2025 and 2024, was an immaterial loss and a gain of $ 0.2 million, respectively, and was included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

Private and Public Warrants— As of June 30, 2025 and December 31, 2024, the Company had a total of $ 1.6 million and $ 1.3 million of Private Warrants and Public Warrants, respectively, included as warrant and equity related liabilities within the condensed consolidated balance sheets.

The change in fair value of Warrants for the three and six months ended June 30, 2025, was a loss of $ 0.6 million and a loss of $ 0.3 million, respectively, and is included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

The change in fair value of Warrants for the three and six months ended June 30, 2024, was a loss of $ 0.1 million and a gain of $ 0.5 million, respectively, and is included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

Sponsor Locked-up Shares— As of June 30, 2025 and December 31, 2024, the Company had a total of $ 0.1 million and $ 0.1 million, respectively, of Sponsor Locked-up Share liabilities, which are included within warrant and equity liabilities in the condensed consolidated balance sheets.

The change in fair value of Sponsor Locked-up Shares for both the three and six months ended June 30, 2025 , was an immaterial loss and was included in other expenses within the

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

condensed consolidated statements of operations and comprehensive loss.

The change in fair value of Sponsor Locked-up Shares for the three and six months ended June 30, 2024, was none and a gain of $ 0.2 million, respectively, and was included in other expenses within the condensed consolidated statements of operations and comprehensive loss.

Notes Receivable from Stockholders —The Company, previously at times, entered into promissory note agreements with certain employees for the purpose of financing the exercise of the Company’s stock options.

2 unchanged sentences

The Company no longer enters into promissory note agreements for the purpose of financing the exercise of the Company’s stock options and no longer allows for the early exercise of stock options.

As of both March 31, 2025 and December 31, 2024 the Company had a total of $ 16.0 million of outstanding promissory notes.

Of the notes outstanding as of both March 31, 2025 and December 31, 2024 $ 9.2 million were issued for the exercise of stock options vested and are recorded as a component of stockholders’ equity within the condensed consolidated balance sheets.

The balance as of March 31, 2025 does not include any promissory notes due from directors and officers of the Company.

Of the notes outstanding as of both March 31, 2025 and December 31, 2024 $ 6.8 million were issued for the early exercise of stock options not yet vested.

Notes issued for the early exercise of stock options not yet vested are not reflected within stockholders’ equity on the condensed consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises.

As the unvested share awards vest and are exercised in conjunction with the notes, they are recognized in the statement of equity within vesting of common stock issued via notes receivable from stockholders.

The notes range in maturity from May 2025 to January 2026 and include interest rates ranging from 0.5 % to 2.5 % per annum.

As of both June 30, 2025 and December 31, 2024 the Company had a total of $ 16.0 million of outstanding promissory notes.

Of the promissory notes outstanding as of both June 30, 2025 and December 31, 2024 $ 9.2 million were issued for the exercise of stock options vested, and are recorded as a component of stockholders’ equity within the condensed consolidated balance sheets.

The balance as of June 30, 2025 does not include any promissory notes due from directors and officers of the Company.

Of the promissory notes outstanding as of both June 30, 2025 and December 31, 2024 $ 6.8 million were issued for the early exercise of stock options not yet vested.

Promissory notes issued for the early exercise of stock options not yet vested are not reflected within stockholders’ equity on the condensed consolidated balance sheets as they relate to unvested share awards and therefore are considered non-substantive exercises.

As the unvested share awards vest and are exercised in conjunction with the notes, they are recognized in the statement of equity within vesting of common stock issued via promissory notes receivable from stockholders.

The maturity of the promissory notes are in January 2026 and include interest rates ranging from 0.5 % to 2.5 % per annum.

Stock-Based Compensation

1 unchanged sentence

The Company recognized stock-based compensation expense as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Amounts in thousands) 2025 2024 2025 2024

Stock-based compensation expense 4,252 7,959 8,285 16,325

Stock-based compensation expense excludes $ 0.4 million and $ 0.4 million of stock-based compensation expense for the three months ended March 31, 2025 and 2024, which was capitalized (see Note 6).

Stock-based compensation expense excludes $ 0.4 million and $ 0.5 million of stock-based compensation expense for the three months ended June 30, 2025 and 2024, which was capitalized (see Note 6).

Stock-based compensation expense excludes $ 0.8 million and $ 0.9 million of stock-based compensation expense for the six months ended June 30, 2025 and 2024, which was capitalized (see Note 6).

Regulatory Requirements

2 unchanged sentences

The Company is required to meet certain minimum net worth, minimum capital ratio and minimum liquidity requirements, including those established by HUD, FMCC and FNMA.

As of March 31, 2025, the Company was in compliance with all necessary requirements.

As of June 30, 2025, the Company was in compliance with all necessary requirements.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Additionally, the Company may be subject to other financial requirements established by government-sponsored enterprises (“GSEs”), which include a limit for a decline in net worth and quarterly profitability requirements.

1 unchanged sentence

The decline in net worth and decline in profitability permit GSEs to declare a breach of the Company’s contract.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company has implemented additional financial requirements and remains in compliance with all applicable obligations as of March 31, 2025.

The Company has implemented additional financial requirements and remains in compliance with all applicable obligations as of June 30, 2025.

Subsequent Events

The Company evaluated subsequent events from the date of the condensed consolidated balance sheets of March 31, 2025 through the date of the release of financial statements, and has determined that, there have been no subsequent events that require recognition or disclosure in the condensed consolidated financial statements, except as described below:

Legal Settlement —Subsequent to March 31, 2025, the court approved a $ 1.4 million settlement regarding a subset of the Company’s employee labor disputes as disclosed in Note 12.

During May 2025, the Company funded the $ 1.4 million settlement to the Settlement Administrator.

Note Exchange Agreement —On April 12, 2025, the Company entered into a privately negotiated Exchange Agreement (the “Note Exchange Agreement”) with SB Northstar LP (the “Investor”), pursuant to which the Company and the Investor agreed to exchange (the “Exchange”) all of the $ 532.5 million total aggregate principal amount outstanding of the Company’s existing 1.00 % Convertible Notes due 2028 (the “Existing Notes”) held by the Investor for (i) $ 155.0 million in aggregate principal amount of new 6.00 % Senior Secured Notes due 2028 (the “New Notes”), and (ii) a cash payment of $ 110.0 million (the “Cash Payment”).

The Company will not receive any cash proceeds in connection with the Exchange.

Pursuant to the Note Exchange Agreement, the Company granted the Investor, conditioned on closing of the Exchange, a non-transferrable right to designate one non-voting board observer from June 1, 2025, for so long as the Investor and affiliates of the Investor continue to hold, in the aggregate, either (i) at least 25 % of the initial aggregate principal amount of the New Notes or (ii) at least 12 % of the sum of the outstanding shares of the Company’s Class A Common Stock, Class B Common Stock and Class C Common Stock, calculated on a fully diluted basis.

New Notes Indenture

On the Closing Date, the Company entered into an indenture (the “New Notes Indenture”) with GLAS Trust Company LLC, as trustee and notes collateral agent (the “Trustee”).

The New Notes represent the Company’s senior secured obligations, and are secured by substantially all of the Company’s and its material domestic subsidiaries’ assets.

The New Notes are (i) senior in right of payment to the Company’s existing and future senior, unsecured indebtedness to the extent of the value of the collateral;

and (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the New Notes.

Interest on the New Notes is payable, at the Company’s election, in cash or by payment-in-kind by issuing additional notes in an aggregate principal amount equal to the relevant amount of interest paid in kind.

The New Notes will accrue interest at a rate of 6.00 % per annum, payable semi-annually in arrears on June 30 and December 31 of each year, with the initial payment on June 30, 2025.

The New Notes will mature on December 31, 2028.

The New Notes will be redeemable, in whole and not in part, at the Company’s option at any time prior to December 31, 2028, at a cash redemption price equal to 106.00 % of the principal amount of the New Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, with an amount not exceeding the net cash proceeds of one or more “Equity Offerings” (as defined in the New Notes Indenture);

provided that at least 60 % of the aggregate principal amount of the New Notes remains outstanding immediately after the redemption and the redemption occurs within 150 days of the date of the closing of each such Equity Offering.

Additionally, prior to December 31, 2028, the Company may redeem all or part of the New Notes at a redemption price equal to the sum of 108 % of the principal amount of the New Notes to be redeemed, plus the “Make Whole Premium” (as defined in the New Notes Indenture) at the redemption date, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If certain corporate events that constitute a “Change of Control Triggering Event” (as defined in the New Notes Indenture) occur, then noteholders may require the Company to repurchase all or any part of their New Notes at a cash repurchase price equal to 101 % of the aggregate principal amount of the New Notes to be repurchased, plus accrued and unpaid interest, if any, to the date of settlement.

The definition of Change of Control Triggering Event includes certain business combination transactions involving the Company.

BETTER HOME & FINANCE HOLDING COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company evaluated subsequent events from the date of the condensed consolidated balance sheets of June 30, 2025 through the date of the release of financial statements, and has determined that, there have been no subsequent events that require recognition or disclosure in the condensed consolidated financial statements, except as described in Note 4 and as follows:

Approval for U.K.

Sale —Subsequent to June 30, 2025, the Company received regulatory approval from the Financial Conduct Authority in the U.K.

for the sale of one of the disposal units which were classified as held for sale as of June 30, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements