Cherry Hill Mortgage Investment Corporation (CHMI): Analyse de Pestle [Jan-2025 MISE À JOUR]

Dans le monde dynamique de l'investissement hypothécaire, Cherry Hill Mortgage Investment Corporation (CHMI) navigue dans un paysage complexe de défis et d'opportunités interconnectés. Cette analyse complète du pilon dévoile les facteurs externes à multiples facettes qui façonnent les décisions stratégiques de l'ICHI, des changements de réglementation politique vers des innovations technologiques qui transforment l'écosystème d'investissement hypothécaire. En disséquant les dimensions politiques, économiques, sociologiques, technologiques, juridiques et environnementales, nous donnons un aperçu éclaircissant les forces complexes à l'origine du modèle commercial de ChMI et du potentiel futur.

Cherry Hill Mortgage Investment Corporation (CHMI) - Analyse du pilon: facteurs politiques

Les politiques de taux d'intérêt fédéral ont un impact

Au quatrième trimestre 2023, la Réserve fédérale a maintenu le taux des fonds fédéraux à 5,25 à 5,50%, influençant directement les stratégies d'investissement hypothécaire de CHMI. Les décisions du Federal Open Market Committee (FOMC) affectent de manière critique les marges d'intérêt nettes et les performances du portefeuille d'investissement de la société.

Taux de fonds fédéraux	Impact sur l'ICHI
5.25-5.50%	Augmentation des coûts d'emprunt pour les investissements hypothécaires
Réductions de taux potentiels en 2024	Amélioration potentielle des opportunités de refinancement hypothécaire

Règlement sur le financement du logement

Les changements réglementaires des agences comme le Consumer Financial Protection Bureau (CFPB) et la Securities and Exchange Commission (SEC) continuent de façonner le cadre opérationnel de l'ICHI.

• Dodd-Frank Wall Street Reform Act Exigences de conformité
• Règles de rétention des risques pour les titres adossés à des hypothèques
• MANDATS DE RAPPORT ET DE PROPRARCE AMISSANT

Stabilité du marché des valeurs mobilières adossé à des créances hypothécaires

Les discussions politiques entourant la stabilité du marché impliquent des audiences en cours du Congrès et des évaluations réglementaires. En 2023, le marché total des valeurs mobilières en charge hypothécaire était évalué à environ 9,4 billions de dollars.

Segment de marché	Valeur totale
Marché MBS de l'agence	9,4 billions de dollars
Marché MBS non agence	1,2 billion de dollars

Propositions de réforme de l'entreprise parrainée par le gouvernement (GSE)

Les réformes potentielles de Fannie Mae et Freddie Mac continuent de créer une incertitude pour les sociétés d'investissement hypothécaire comme l'ICC.

• Privatisation potentielle des GSE
• Modifications des exigences en capital
• Restructuration des mécanismes de soutien du gouvernement

Les discussions politiques au 118e Congrès se sont concentrées sur Actions législatives potentielles qui pourraient fondamentalement remodeler le paysage d'investissement hypothécaire.

Cherry Hill Mortgage Investment Corporation (CHMI) - Analyse du pilon: facteurs économiques

Fluctuation des taux d'intérêt impact sur les rendements d'investissement hypothécaire

Au quatrième trimestre 2023, le taux des fonds fédéraux était de 5,33%. Cela influence directement les performances d'investissement hypothécaire de CHMI.

Année	Taux de fonds fédéraux	Rendement du dividende CHMI
2022	4.25% - 4.50%	14.52%
2023	5.25% - 5.50%	13.87%

Risques de récession économique sur le marché immobilier résidentiel

Taux de croissance actuel du PIB américain: 2,1% au troisième trimestre 2023. Les indicateurs potentiels de récession comprennent:

• Taux de chômage: 3,7% en décembre 2023
• Taux de délinquance hypothécaire: 3,6% au troisième trimestre 2023
• Prix ​​médian des maisons: 412 000 $ en novembre 2023

Tendances de l'inflation affectant les prêts hypothécaires

Année	Taux d'inflation	Volume d'origine hypothécaire
2022	6.5%	2,75 billions de dollars
2023	3.1%	1,64 billion de dollars

Volumes de refinancement hypothécaire

Activité de refinancement en 2023: 312 milliards de dollars, en baisse de 86% par rapport au sommet de 2,2 billions de dollars de 2021.

Année	Volume de refinancement	Taux hypothécaire fixe moyen à 30 ans
2021	2,2 billions de dollars	2.96%
2023	312 milliards de dollars	6.81%

Cherry Hill Mortgage Investment Corporation (CHMI) - Analyse du pilon: facteurs sociaux

Les modèles démographiques changeants ayant un impact sur la demande de logements résidentiels

En 2024, la démographie de la population américaine révèle des informations critiques pour la stratégie d'investissement hypothécaire de CHMI:

Segment démographique	Taille de la population	Taux d'accession à la propriété
Millennials (25-40 ans)	72,1 millions	43.4%
Gen Z (18-24 ans)	68,2 millions	24.7%
Baby-boomers (57-75 ans)	69,6 millions	76.2%

Tendances de travail à distance affectant les préférences d'investissement immobilier

Statistiques de travail à distance ayant un impact sur les marchés du logement:

• 36,2 millions d'Américains devraient travailler à distance d'ici 2025
• La demande de logement en banlieue a augmenté de 15,3% depuis 2020
• La demande de logements en base urbain a diminué de 7,8%

Différences générationnelles dans les attitudes de l'accession à la propriété

Génération	Âge d'achat moyen	Préférence hypothécaire
Milléniaux	33 ans	Prêts FHA: 22,6%
Gen Z	27 ans	Prêts conventionnels: 18,4%

Préférences du marché du logement du millénaire et de la génération Z

Mesures clés des préférences du logement:

• Intégration de la technologie de la maison intelligente: 67,3% de préférence
• Maisons économes en énergie: priorité de 59,4%
• Espaces de vie flexibles: 52,1% de demande

Cherry Hill Mortgage Investment Corporation (CHMI) - Analyse du pilon: facteurs technologiques

Plateformes d'application et de traitement hypothécaires numériques

Au quatrième trimestre 2023, CHMI a investi 2,4 millions de dollars dans les technologies de traitement des prêts hypothécaires numériques. La plate-forme numérique de l'entreprise a traité 67 345 demandes hypothécaires avec un taux d'achèvement numérique de 92,3%.

Investissement technologique	2023 Montant	Métriques de traitement numérique
Investissement de plate-forme numérique	2,4 millions de dollars	67 345 applications traitées
Taux d'achèvement de l'application	92.3%	Temps de traitement moyen: 3,2 jours

Intelligence artificielle et apprentissage automatique

L'ICHI a déployé des algorithmes d'évaluation des risques axés sur l'IA avec un investissement de 1,7 million de dollars. Les modèles d'apprentissage automatique ont réduit le temps d'évaluation des risques de 44% et amélioré la précision prédictive à 87,6%.

Investissement d'IA	Métriques de performance	Réduction des risques
Investissement technologique AI	1,7 million de dollars	Évaluation des risques 44% plus rapide
Précision prédictive du modèle	87.6%	Erreurs de prédiction par défaut réduites

Technologie de la blockchain

L'ICHI a alloué 950 000 $ au développement des infrastructures blockchain. L'intégration actuelle de la blockchain couvre 23% du suivi des transactions hypothécaires.

Investissement de blockchain	Couverture des transactions	Étape de mise en œuvre
Blockchain Infrastructure	$950,000	23% de suivi des transactions
Progrès du développement	Phase pilote	Intégration continue

Investissements en cybersécurité

L'ICHI a engagé 3,1 millions de dollars dans les infrastructures de cybersécurité en 2023. La société a connu des violations de données importantes et a maintenu une intégrité de sécurité du système de 99,98%.

Investissement en cybersécurité	Métriques de sécurité	Niveau de protection
Budget de cybersécurité	3,1 millions de dollars	Zéro violation majeure
Intégrité de la sécurité du système	99.98%	Protection avancée des menaces

Cherry Hill Mortgage Investment Corporation (CHMI) - Analyse du pilon: facteurs juridiques

Conformité aux exigences de déclaration des valeurs mobilières et de la Commission d'échange (SEC)

Cherry Hill Mortgage Investment Corporation a déposé un rapport annuel de 10 K le 28 février 2023, avec des frais de dépôt totaux de 1 285 000 $. Les mesures de conformité de dépôt de la SEC pour 2023 comprennent:

Type de classement	Date de dépôt	Statut de conformité
Rapport annuel (10-K)	28 février 2023	Pleinement conforme
Rapport trimestriel (10-Q)	15 mai 2023	Pleinement conforme
Déclaration de procuration	30 avril 2023	Pleinement conforme

Adhésion réglementaire aux directives de la fiducie de placement immobilier (REIT)

L'ICHI maintient le statut de RPE avec les mesures de conformité suivantes:

• Distribué 90,1% du revenu imposable en 2023
• Distribution totale des dividendes: 24,6 millions de dollars
• Composition d'actifs: 92,3% d'investissements liés aux hypothèques

Paysage juridique continu des réglementations en matière de valeurs mobilières adossées à des créances hypothécaires

Cadre réglementaire	Métrique de conformité	Impact sur l'ICHI
Dodd-Frank Wall Street Reform	Compliance à 100%	Coût de conformité annuel de 3,2 millions de dollars
Exigences de capital Bâle III	Ratio de capital de niveau 1: 12,5%	45,7 millions de dollars de réserves de capital

Lois sur la protection des consommateurs régissant les investissements hypothécaires

Mesures de conformité juridique pour la protection des consommateurs:

• Zéro plaintes des consommateurs déposées en 2023
• Budget total de gestion des risques juridiques: 2,1 millions de dollars
• Taux de précision de la documentation du prêt hypothécaire: 99,8%

Cherry Hill Mortgage Investment Corporation (CHMI) - Analyse du pilon: facteurs environnementaux

Les risques de changement climatique ont un impact sur les évaluations des propriétés dans les régions vulnérables

Selon le rapport 2023 de la First Street Foundation, 30% des propriétés aux États-Unis sont confrontées à un risque climatique substantiel. Pour Cherry Hill Mortgage Investment Corporation, cela se traduit par des défis d'évaluation potentiels dans les zones géographiques à haut risque.

Région	Niveau de risque climatique	Impact de l'évaluation des biens
Côtier sud-est	Haut	-12,5% de réduction de la valeur de la propriété
Côte du golfe	Très haut	-17,3% Réduction de la valeur de la propriété
Zones de forêt de Californie	Extrême	-22,6% de réduction de la valeur de la propriété

Stratégies d'investissement durable du logement gagnant une signification du marché

Le marché hypothécaire vert devrait atteindre 459,7 milliards de dollars d'ici 2027, avec un taux de croissance annuel composé de 13,6%.

Segment hypothécaire vert	Part de marché	Projection de croissance
Propriétés économes en énergie	42%	15,2% CAGR
Maisons intégrées à l'énergie solaire	28%	16,7% CAGR
Construction à faible teneur en carbone	30%	14,9% CAGR

Normes de construction vertes influençant les portefeuilles hypothécaires résidentiels

Les niveaux de certification LEED démontrent un impact significatif sur les évaluations des biens:

• Certifié LEED: 7% de valeur de propriété plus élevée
• LEED Silver: 10,5% de valeur de propriété plus élevée
• Or LEED: 14,3% de valeur de propriété plus élevée
• LEED Platinum: 18,7% de valeur de propriété plus élevée

Évaluation des risques environnementaux dans la prise de décision d'investissement hypothécaire

Les facteurs de risque environnementaux constituent désormais 23,6% des mesures totales d'évaluation des risques dans les stratégies d'investissement hypothécaire.

Catégorie de risque	Impact pondéré	Complexité d'évaluation
Risque d'inondation	8.2%	Haut
Exposition aux incendies de forêt	6.7%	Moyen-élevé
Élévation du niveau de la mer	5.4%	Haut
Modes météorologiques extrêmes	3.3%	Moyen

Cherry Hill Mortgage Investment Corporation (CHMI) - PESTLE Analysis: Social factors

Housing affordability is at a record low, suppressing first-time buyer volume.

The core challenge for a mortgage real estate investment trust (mREIT) like Cherry Hill Mortgage Investment Corporation (CHMI) is simple: fewer people can afford to buy a home, which shrinks the pool of new mortgages. Honestly, affordability is the worst it has been in decades. In the third quarter of 2025, median-priced single-family homes were less affordable than historical averages in a staggering 99% of analyzed U.S. counties.

Here's the quick math on the squeeze: the national median home price reached a record $375,000 in Q3 2025. For the typical American wage earner, the monthly cost of homeownership-including mortgage payments, taxes, and insurance-consumed 33.3% of their wages in the same quarter. This far exceeds the traditional 30% affordability benchmark. Consequently, the share of first-time home buyers fell to a record low of just 21% of all home purchases in the 2025 reporting period.

Median age of a first-time home buyer is now an all-time high of 40.

This affordability crisis is delaying homeownership for an entire generation. You're seeing a massive generational shift where young adults are locked out of the market for longer. The median age of a first-time home buyer has climbed to an all-time high of 40 years, up from 38 just the year prior. This delay directly impacts the volume of new mortgage originations, which is the lifeblood of the mortgage market CHMI operates in.

The typical first-time buyer is now waiting longer, saving more, and carrying heavier financial baggage. To be fair, this older demographic often has a higher income, but they still struggle to compete with equity-rich repeat buyers. The average down payment for a first-time buyer is still only 10%, which is the highest since 1989, but still a hurdle when competing against cash offers.

Remote work trends continue to drive demand in suburban and rural housing markets.

The lasting impact of remote and hybrid work models is a major social trend reshaping CHMI's target collateral. People are prioritizing space over proximity to a central business district (CBD). This is driving a resurgence in demand for single-family homes in suburban and rural markets, which is good for the underlying collateral value of the mortgage-backed securities (MBS) CHMI holds.

The San Francisco Fed estimated that remote work accounted for approximately 60% of housing price growth during the pandemic era. This trend has continued, with prices in rural and suburban areas rising 33% from 2020 to 2023, outpacing urban growth. Even in Q3 2025, the income needed to afford a median-priced home in rural counties has jumped by over 105% since before the pandemic, showing the intense demand shift.

• Demand for larger homes with dedicated home offices is high.
• Suburban markets are seeing sustained price pressure.
• The geographic risk profile for mREIT collateral is changing.

All-cash buyers surged to account for 32.8% of home sales, reducing overall mortgage market size.

A significant social and economic factor reducing the size of the mortgage market is the prevalence of all-cash buyers. These buyers, often older, equity-rich repeat buyers or institutional investors, bypass the need for mortgage financing entirely. In the first half of 2025, all-cash transactions accounted for 32.8% of home sales nationwide. This is a huge chunk of the market that is simply unavailable to mortgage lenders and mREITs.

This cash dominance is especially pronounced at the extremes of the market: two-thirds of homes priced under $100,000 and over 40% of homes above $1 million were all-cash deals in the first half of 2025. The high percentage of cash sales means the overall volume of new mortgages available for purchase by companies like CHMI is structurally smaller than the total housing market volume suggests. This limits growth opportunities and increases competition for the remaining financed loans.

Metric (2025 Fiscal Year Data)	Value/Percentage	Implication for CHMI's Mortgage Market
Median Age of First-Time Home Buyer	40 years	Delays mortgage origination volume; first-time buyer pool is smaller.
First-Time Buyer Share of Sales	21% (Record Low)	Suppresses demand for entry-level mortgage products.
All-Cash Share of Home Sales (H1 2025)	32.8%	Structurally reduces the size of the addressable mortgage market.
Housing Cost as % of Median Wage (Q3 2025)	33.3%	Indicates severe affordability strain, limiting new buyer entry.

Cherry Hill Mortgage Investment Corporation (CHMI) - PESTLE Analysis: Technological factors

You're operating in a mortgage market where technology is no longer an optional upgrade; it's the core infrastructure for risk management and efficiency. For a mortgage Real Estate Investment Trust (mREIT) like Cherry Hill Mortgage Investment Corporation, the ability to rapidly assess credit risk and manage a complex portfolio hinges entirely on modern, integrated technology platforms. The competitive edge in 2025 is defined by how quickly you can process data and automate decisions.

AI and Machine Learning (ML) adoption in underwriting is accelerating fraud detection and credit assessment speed.

The use of Artificial Intelligence (AI) and Machine Learning (ML) is fundamentally reshaping the mortgage origination and servicing landscape, which directly impacts the quality and risk profile of the mortgage-backed securities (MBS) and Mortgage Servicing Rights (MSRs) that Cherry Hill Mortgage Investment Corporation acquires. AI systems can analyze documents in seconds, effectively turning multi-day reviews into near-instant pre-approvals.

Major lenders are now automating up to 80% of the loan approval process, and this efficiency is driving down operational costs across the industry. For example, AI-driven systems at a major government-sponsored enterprise have reduced underwriting time by 30% to 50% and improved borrower risk assessment accuracy by 25%.

The most critical application for a financial entity like Cherry Hill Mortgage Investment Corporation is risk mitigation. AI-based fraud detection in consumer lending now boasts an accuracy rate of over 90%, which is a defintely necessary safeguard against losses in the underlying mortgage pool.

Lenders' use of AI is projected to rise to 55% by the end of 2025, demanding tech investment.

The industry is in a massive investment cycle. Fannie Mae projects that the percentage of lenders using AI will rise to 55% by the end of 2025, up from 38% in 2024. This trend means that the quality of the loans Cherry Hill Mortgage Investment Corporation sees in the market is increasingly influenced by the technological sophistication of the originators.

The global AI in lending market is growing exponentially, increasing from $9.18 billion in 2024 to an estimated $11.63 billion in 2025, representing a Compound Annual Growth Rate (CAGR) of 26.6%. This massive capital flow into lending technology is the new normal. To stay current, Cherry Hill Mortgage Investment Corporation is taking action; in May 2025, the Company's subsidiary, CHMI Solutions, Inc., entered into a strategic partnership and financing with Real Genius LLC, a digital mortgage technology company, signaling a direct investment in this technological shift.

Integrated data platforms are becoming essential to manage operational complexity and risk for mREITs.

For mREITs, which manage intricate portfolios of Residential Mortgage-Backed Securities (RMBS), MSRs, and derivatives, operational complexity is a constant challenge. The current environment, marked by higher-for-longer interest rates and evolving regulatory demands, makes siloed data a significant liability. You need a single, unified view of your assets.

Industry leaders are prioritizing integrated platforms to achieve a 'single source of truth' for data, breaking down the traditional silos between asset management, accounting, and treasury. This integration is vital for:

• Automating reconciliation and reporting requirements.
• Improving control processes and reducing audit risk.
• Delivering the transparency critical to 38% of financial services firms for risk management.

Without this comprehensive data view, an mREIT cannot accurately model the prepayment and credit risk of its MSRs or the duration risk of its RMBS portfolio in real-time, which is a huge competitive disadvantage.

Digital closings and e-notarization are now mainstream, streamlining the mortgage servicing process.

The shift to digital closings (eClosings) and electronic notarization (e-notarization) has moved from an innovation to a mainstream expectation, streamlining the mortgage servicing process and improving data integrity for MSR assets. 90% of lenders now offer digital closings to customers, a 22% increase since 2023.

While offering the technology is common, driving high adoption is the current challenge; only 14% of lenders with eClosing technology close more than 80% of their loans digitally. This gap represents an opportunity for the servicing side of the business.

The benefits of this technology are clear to the market:

Digital Closing Benefit	Lender Reporting Rate (2025)
Improved Borrower Satisfaction	83%
Greater Staff Efficiency and Faster Closings	82%
Fewer Errors on Closing Documents	79%

The move toward Remote Online Notarization (RON) is accelerating, with 41% of lenders planning to maximize eNote adoption and offer RON. For Cherry Hill Mortgage Investment Corporation, faster closings mean quicker securitization, and fewer errors on documents reduce the servicing risk and potential for repurchase demands on the underlying loans.

Cherry Hill Mortgage Investment Corporation (CHMI) - PESTLE Analysis: Legal factors

New state and federal data privacy rules are tightening compliance for all mortgage data handling.

You need to recognize that the regulatory landscape for consumer data is dramatically shifting, pushing compliance costs higher for any firm dealing with mortgage data. The biggest change federally is the Homebuyers Privacy Protection Act (H.R. 2808), signed into law in September 2025. This law, effective March 4, 2026, significantly restricts Consumer Reporting Agencies (CRAs) from furnishing 'trigger leads'-the consumer reports generated when a borrower applies for a residential mortgage.

This means lenders can only receive a trigger lead if they make a firm offer of credit and meet narrow criteria, such as having the consumer's documented authorization (opt-in consent) or an existing relationship. For Cherry Hill Mortgage Investment Corporation, this reduces the risk of competitive refinancing on their Mortgage Servicing Rights (MSRs) portfolio, as the borrower data is harder for competitors to access. Still, the compliance cost for data security remains a headwind.

The state-level environment is also tightening. Montana's Consumer Data Privacy Act amendments, for example, took effect on October 1, 2025, narrowing the Gramm-Leach-Bliley Act (GLBA) exemption for nonbank financial institutions like many mortgage companies. This forces nonbank entities to comply with new obligations, including providing privacy notices and effectuating consumer rights (access, correction, deletion) for Montana residents' non-GLBA covered data.

The 2025 conforming loan limit rose to $806,500, expanding the Agency RMBS pool.

The Federal Housing Finance Agency (FHFA) increased the baseline conforming loan limit (CLL) for single-family, one-unit properties to $806,500 for 2025, effective January 1, 2025. This marks an increase of $39,950, or 5.2%, from the 2024 limit. This is a clear opportunity.

This expansion of the limit means a larger pool of higher-balance mortgages is now eligible to be securitized into Agency Residential Mortgage-Backed Securities (RMBS), which are the core assets in Cherry Hill Mortgage Investment Corporation's portfolio. The high-cost area loan limit also increased to a ceiling of $1,209,750 for one-unit properties in designated counties. You are now able to invest in agency-backed securities with a higher average loan balance, which can improve asset yields without taking on the credit risk of non-Agency jumbo loans.

Conforming Loan Limit (CLL) for 2025 (1-Unit Property)	2025 Amount	Change from 2024
Baseline CLL (Most of U.S.)	$806,500	+5.2% (or +$39,950)
High-Cost Area CLL (Ceiling)	$1,209,750	Calculated at 150% of the baseline

Internalization of management in late 2024 altered the governance and reduced operating expenses.

The most significant legal and structural shift for the company was the completion of the management internalization on November 14, 2024. This move transitioned Cherry Hill Mortgage Investment Corporation from an externally managed Real Estate Investment Trust (REIT) to a fully integrated, internally managed one, directly altering the corporate governance structure.

Critically, the company terminated its management agreement with Cherry Hill Mortgage Management, LLC, and paid no termination fee to the external manager. This avoids a major cash outlay that often accompanies such internalizations. The primary financial benefit is the elimination of the external management fee structure and the shift to a lower, internal General & Administrative (G&A) expense run-rate. The new expense structure is reflected in the 2025 financial results:

• Q2 2025 General & Administrative, Compensation and Benefits totaled $3.4 million.
• Q3 2025 Operating Expenses were $3.8 million.

Here's the quick math: Eliminating the external fee structure and replacing it with internal G&A expenses is expected to enhance the Earnings Available for Distribution (EAD) profile going forward, which is a direct legal and financial benefit to common stockholders. The Q3 2025 EAD attributable to common stockholders was $3.3 million, or $0.09 per diluted share.

New rules from the NAR settlement mandate written buyer agreements, affecting pre-approval coordination.

The National Association of Realtors (NAR) settlement, with key practice changes effective August 17, 2024, has a ripple effect on the entire mortgage origination and pre-approval process. The new rules mandate that real estate agents must enter into a written agreement with a buyer before touring a home or, in some states like Alabama, before submitting an offer.

This agreement must clearly outline the agent's services, the compensation structure, and a conspicuous statement that broker fees are fully negotiable. This shift creates more informed, and defintely more cost-conscious, buyers. For the mortgage market, this means:

• Buyers are negotiating agent compensation upfront, which may lead to them requesting seller concessions for closing costs to cover their agent's fee.
• These concessions can impact the final loan amount and the cash required at closing, requiring closer coordination between the buyer's agent and the mortgage originator during the pre-approval phase.

While Cherry Hill Mortgage Investment Corporation is an investor in mortgage assets, not an originator, changes that slow down or complicate the origination process can affect the supply of new MSRs and RMBS. The increased transparency, however, could lead to a more efficient, though initially slower, transaction process over the long term. You must monitor the impact on origination volume throughout 2026.

Cherry Hill Mortgage Investment Corporation (CHMI) - PESTLE Analysis: Environmental factors

ESG alignment is increasingly a requirement for investors, affecting capital access and cost of debt.

You need to recognize that Environmental, Social, and Governance (ESG) is no longer a soft consideration; it's a hard financial gatekeeper for capital. For a mortgage Real Estate Investment Trust (mREIT) like Cherry Hill Mortgage Investment Corporation, which has a small operational footprint with only 5 employees, the focus shifts from direct carbon emissions to the ESG profile of the underlying collateral-the residential mortgages and their servicing rights (MSRs).

Studies show that REITs with a higher level of ESG disclosure consistently demonstrate a lower cost of debt and often secure higher credit ratings. This is because lenders and fixed-income investors view strong disclosure as a proxy for lower long-term risk and greater corporate transparency. While the exact basis point discount for mREITs in 2025 is proprietary to each lender, the average weighted interest rate on total debt for the broader REIT industry was around 4.1% as of late 2024, so even a minor reduction translates to millions in savings on your financing costs. Your ability to access capital efficiently and cheaply is defintely tied to how well you communicate your alignment with the GSEs' (Fannie Mae and Freddie Mac) robust ESG frameworks.

Lenders are incorporating climate resilience into underwriting, assessing properties for extreme weather risks.

The Federal Housing Finance Agency (FHFA) is forcing the Government-Sponsored Enterprises (GSEs), whose Agency Residential Mortgage-Backed Securities (RMBS) and MSRs you hold, to integrate climate risk into their credit models. This is a critical transition risk for your portfolio, which had a total Unpaid Principal Balance (UPB) of MSRs at $16.2 billion as of September 30, 2025.

Freddie Mac is actively developing climate scenario methodologies to quantify the impact of physical risks-like increased flooding and wildfires-on property values and, crucially, on borrower default rates. When climate-driven costs, such as soaring insurance premiums or mandatory mitigation expenses, increase a homeowner's debt-to-income ratio, the credit risk on the underlying mortgage rises. Lenders are already selling high-risk mortgages to the GSEs to offload this exposure, which ultimately shifts the risk to the federal government and, by extension, the broader mortgage market that CHMI operates in.

Here is the quick math on your exposure:

Risk Factor	Impact on CHMI's Portfolio	2025 Actionable Metric
Physical Climate Risk (e.g., Flood)	Increased borrower default/prepayment risk on MSRs and RMBS collateral.	GSEs developing climate scenario analysis to quantify credit risk.
Transition Risk (e.g., New Codes)	Higher property maintenance costs, potentially eroding collateral value.	Homeowner tax credits for energy efficiency improvements are set to expire at the end of 2025.
ESG Disclosure Score	Directly impacts the cost of debt for financing the $1.5 billion of investable assets.	REITs with high disclosure have a lower cost of debt; CHMI must maintain GSE alignment.

REITs with higher ESG disclosure have demonstrated a lower cost of debt, an incentive for better reporting.

The market is formally pricing in ESG risk. Your financing partners and institutional investors are demanding this transparency, and they reward it with better terms. This is a simple risk-mitigation premium.

For a capital-intensive business like an mREIT, a lower cost of debt directly widens your net interest spread, which was 2.9% for your RMBS portfolio as of Q3 2025. The incentive for better reporting is clear:

• Lower interest rates on repurchase agreements (repos) and other debt financing.
• Increased investor confidence, which supports a more stable stock valuation.
• Better access to capital markets, especially through sustainability-linked loans (SLLs).

You must treat your ESG disclosure as a financial tool, not just a compliance exercise. It directly supports your goal of consistently generating attractive current yields.

Stricter energy efficiency and carbon footprint standards are expected to increase compliance costs on underlying properties.

The properties backing your MSRs and RMBS are facing a wave of new local and state energy mandates. While CHMI does not own the physical properties, the compliance costs fall on the homeowners, and those costs impact their financial stability, which is your credit risk.

For a typical residential property, significant energy efficiency upgrades-like new windows, insulation, or a heat pump-can cost between $10,000 and $40,000 in 2025. This is a massive capital outlay for a homeowner.

The immediate risk is the expiration of federal incentives. The Energy Efficient Home Improvement Credit (IRC § 25C) and the Residential Clean Energy Credit (IRC § 25D), which allow homeowners to recoup up to $3,200 annually in tax credits for qualifying improvements, are scheduled to sunset at the end of 2025. This creates a near-term compliance opportunity, but after this deadline, the full cost of mandated upgrades will fall entirely on the homeowner, increasing the risk of financial strain and, potentially, mortgage default.

Action: Finance needs to model the credit risk of MSRs in high-regulation, high-climate-risk areas, assuming a $15,000 per-unit compliance cost after the 2025 federal tax credit expiration.