The Company uses SPEs to facilitate transactions that involve securitizing financial assets or re-securitizing previously securitized financial assets. The objective of such transactions may include obtaining non-recourse financing, obtaining liquidity or refinancing the underlying securitized financial assets on improved terms. Securitization involves transferring assets to an SPE to convert all or a portion of those assets into cash before they would have been realized in the normal course of business through the SPE’s issuance of debt or equity instruments. Investors in an SPE usually have recourse only to the assets in the SPE and depending on the overall structure of the transaction, may benefit from various forms of credit enhancement, such as over-collateralization in the form of excess assets in the SPE, priority with respect to receipt of cash flows relative to holders of other debt or equity instruments issued by the SPE, or a line of credit or other form of liquidity agreement that is designed with the objective of ensuring that investors receive principal and/or interest cash flow on the investment in accordance with the terms of their investment agreement.

The Company has entered into financing transactions, including residential loan securitizations and re-securitizations, which required the Company to analyze and determine whether the SPEs that were created to facilitate the transactions are VIEs in accordance with ASC 810 and if so, whether the Company is the primary beneficiary requiring consolidation.

During the year ended December 31, 2020, the Company completed two securitizations of certain residential loans for which the Company received aggregate net proceeds of approximately $540.4 million after deducting expenses associated with the securitization transactions. The Company engaged in these transactions for the purpose of obtaining non-recourse, longer-term financing on a portion of its residential loan portfolio. The residential loans serving as collateral for the financings are comprised of performing, re-performing and non-performing loans which are included in residential loans, at fair value on the accompanying consolidated balance sheets.

Also during the year ended December 31, 2020, the Company completed a re-securitization of certain non-Agency RMBS for which the Company received net cash proceeds of approximately $109.0 million after deducting expenses associated with the re-securitization transaction. The Company engaged in the re-securitization transaction primarily for the purpose of obtaining non-recourse, longer-term financing on a portion of its non-Agency RMBS portfolio and continues to classify the non-Agency RMBS collateral in the re-securitization as available for sale securities as the purpose is not to trade these securities.

As of December 31, 2020 and 2019, the Company evaluated its residential loan securitizations and re-securitization of non-agency RMBS and concluded that the entities created to facilitate the financing transactions are VIEs and that the Company is the primary beneficiary of these VIEs (each a "Financing VIE" and collectively, the "Financing VIEs"). Accordingly, the Company consolidated the Financing VIEs as of December 31, 2020 and 2019.

The Company invests in subordinated securities that represent the first loss position of the Freddie Mac-sponsored residential loan securitization from which they were issued, and certain IOs and senior securities issued from the securitization. The Company has evaluated its investments in this securitization trust to determine whether it is a VIE and if so, whether the Company is the primary beneficiary requiring consolidation. The Company has determined that the Freddie Mac-sponsored residential loan securitization trust, which we refer to as Consolidated SLST, is a VIE as of December 31, 2020 and 2019, and that the Company is the primary beneficiary of the VIE within Consolidated SLST. Accordingly, the Company has consolidated its assets, liabilities, income and expenses, in the accompanying consolidated financial statements (see Notes 2 and 3). The Company’s investments that are included in Consolidated SLST were not included as collateral to any Financing VIE as of December 31, 2020 and 2019.

As of December 31, 2019, the Company invested in multi-family CMBS consisting of POs that represent the first loss position of the Freddie Mac-sponsored multi-family K-series securitizations from which they were issued, and certain IOs and certain senior and mezzanine CMBS securities issued from those securitizations. The Company evaluated these CMBS investments in Freddie Mac-sponsored K-Series securitization trusts to determine whether they were VIEs and if so, whether the Company was the primary beneficiary requiring consolidation. The Company determined that the Freddie Mac-sponsored multi-family K-Series securitization trusts were VIEs as of December 31, 2019, which we refer to as the Consolidated K-Series. The Company also determined that it was the primary beneficiary of each VIE within the Consolidated K-Series and, accordingly, consolidated its assets, liabilities, income and expenses in the accompanying consolidated financial statements (see Notes 2 and 4). In March 2020, the Company sold its first loss POs and certain mezzanine securities issued by the Consolidated K-Series which resulted in the de-consolidation of each Consolidated K-Series as of the sale date of each first loss PO.

In analyzing whether the Company is the primary beneficiary of the Financing VIEs, Consolidated SLST and the Consolidated K-Series, the Company considered its involvement in each of the VIEs, including the design and purpose of each VIE, and whether its involvement reflected a controlling financial interest that resulted in the Company being deemed the primary beneficiary of the VIEs. In determining whether the Company would be considered the primary beneficiary, the following factors were assessed:

On November 12, 2020 (the "Changeover Date"), the Company reconsidered its evaluation of its variable interest in Campus Lodge, a VIE that owns a multi-family apartment community and in which the Company holds a preferred equity investment. The Company determined that it gained the power to direct the activities, and became primary beneficiary, of Campus Lodge on the Changeover Date. Prior to the Changeover Date, the Company accounted for Campus Lodge as a preferred equity investment included in multi-family loans. The Company does not have any claims to the assets or obligations for the liabilities of Campus Lodge.

On the Changeover Date, the Company consolidated Campus Lodge into its consolidated financial statements. The estimated Changeover Date fair value of the consideration transferred totaled $8.7 million, which consisted of the estimated fair value of the Company's preferred equity investment in Campus Lodge. The Company determined the estimated fair value of its preferred equity investment in Campus Lodge using assumptions for the underlying contractual cash flows and a discount rate.


Cash	$	327
Operating real estate (1)	50,481
Lease intangible (1)	1,619
Other assets	1,395
Total assets	53,822

Mortgage payable, net (2)	36,752
Other liabilities	1,543
Total liabilities	38,295

Non-controlling interest (3)	6,808
Net assets consolidated	$	8,719

(3)Represents third party ownership of membership interests in Campus Lodge. The fair value of the non-controlling interests in Campus Lodge, a private company, was estimated using the net asset value of the underlying multi-family apartment community.

The Company owns 100% of RBDHC. RBDHC owns 50% of KRVI, a limited liability company that owns developed land and residential homes under development in Kiawah Island, SC, for which RiverBanc, a wholly-owned subsidiary of the Company, is the manager. The Company has evaluated KRVI to determine if it is a VIE and if so, whether the Company is the primary beneficiary requiring consolidation. The Company has determined that KRVI is a VIE for which RBDHC is the primary beneficiary as the Company, collectively through its wholly-owned subsidiaries, RiverBanc and RBDHC, has both the power to direct the activities that most significantly impact the economic performance of KRVI and has a right to receive benefits or absorb losses of KRVI that could be potentially significant to KRVI. Accordingly, the Company consolidated KRVI in its consolidated financial statements with a non-controlling interest for the third-party ownership of KRVI membership interests. KRVI sold its remaining real estate under development during the year ended December 31, 2020. Real estate under development in KRVI as of December 31, 2019 of $14.5 million is included in other assets on the Company's consolidated balance sheets.

The following table presents a summary of the assets, liabilities and non-controlling interests of the Company’s residential loan securitizations, non-Agency RMBS re-securitization, Consolidated SLST and other Consolidated VIEs of as of December 31, 2020 (dollar amounts in thousands). Intercompany balances have been eliminated for purposes of this presentation:


	Financing VIEs				Other VIEs
	Residential Loan Securitizations		Non-Agency RMBS Re-Securitization		Consolidated SLST		Other		Total
Cash and cash equivalents	$	—	$	—	$	—	$	462	$	462
Residential loans, at fair value	691,451		—		1,266,785		—		1,958,236
Investment securities available for sale, at fair value	—		109,140		—		—		109,140
Operating real estate, net held in Consolidated VIEs (1)	—		—		—		50,532		50,532
Other assets	24,959		535		4,075		3,045		32,614
Total assets	$	716,410	$	109,675	$	1,270,860	$	54,039	$	2,150,984

Collateralized debt obligations ($569,323 at amortized cost, net and $1,054,335 at fair value)	$	554,067	$	15,256	$	1,054,335	$	—	$	1,623,658


Mortgages payable, net in Consolidated VIEs (2)	—		—		—		36,752		36,752
Other liabilities	2,610		70		2,781		1,435		6,896
Total liabilities	$	556,677	$	15,326	$	1,057,116	$	38,187	$	1,667,306
Non-controlling interest in Consolidated VIEs (3)	$	—	$	—	$	—	$	6,371	$	6,371
Net investment (4)	$	159,733	$	94,349	$	213,744	$	9,481	$	477,307

The following table presents a summary of the assets, liabilities and non-controlling interests of the Company's residential loan securitizations, the Consolidated K-Series, Consolidated SLST and KRVI as of December 31, 2019 (dollar amounts in thousands). Intercompany balances have been eliminated for purposes of this presentation:


	Financing VIE		Other VIEs
	Residential Loan Securitizations		Consolidated K-Series		Consolidated SLST		KRVI		Total
Cash and cash equivalents	$	—	$	—	$	—	$	107	$	107
Residential loans ($44,030 at amortized cost, net and $1,328,886 at fair value)	44,030		—		1,328,886		—		1,372,916

Multi-family loans, at fair value	—		17,816,746		—		—		17,816,746
Other assets	1,328		59,417		5,244		14,626		80,615
Total assets	$	45,358	$	17,876,163	$	1,334,130	$	14,733	$	19,270,384

Collateralized debt obligations ($40,429 at amortized cost, net and $17,777,280 at fair value)	$	40,429	$	16,724,451	$	1,052,829	$	—	$	17,817,709


Other liabilities	14		57,873		2,643		75		60,605
Total liabilities	$	40,443	$	16,782,324	$	1,055,472	$	75	$	17,878,314
Non-controlling interest in Consolidated VIEs (1)	$	—	$	—	$	—	$	(704)	$	(704)
Net investment (2)	$	4,915	$	1,093,839	$	278,658	$	15,362	$	1,392,774

As of December 31, 2020 and 2019, the Company evaluated its investment securities available for sale, preferred equity, mezzanine loan and other equity investments to determine whether they are VIEs and should be consolidated by the Company. Based on a number of factors, the Company determined that, as of December 31, 2020 and 2019, it does not have a controlling financial interest and is not the primary beneficiary of these VIEs. The following tables present the classification and carrying value of unconsolidated VIEs as of December 31, 2020 and 2019, respectively (dollar amounts in thousands):


	December 31, 2020
	Multi-family loans		Investment securities available for sale, at fair value		Equity investments		Total
ABS	$	—	$	43,225	$	—	$	43,225
Preferred equity investments in multi-family properties	158,501		—		182,765		341,266
Mezzanine loans on multi-family properties	5,092		—		—		5,092
Equity investments in entities that invest in residential properties and loans	—		—		76,330		76,330
Maximum exposure	$	163,593	$	43,225	$	259,095	$	465,913