Contract analysis

I. Purpose and Summary The purpose of this memorandum is to analyze the compliance of Fairwater Real Estate Investment Trust ("Fairwater REIT" or the "Guarantor") and Fairwater Operating Partnership, L.P. (the "Borrower," and together with Fairwater REIT, "Fairwater") with the financial covenants contained in that certain Bridge Credit Agreement dated as of June 30, 2025 (the "Bridge Credit Agreement"), among Fairwat

II. Background — Bridge Credit Facility Summary The following is a summary of the material terms of the Bridge Credit Agreement relevant to this covenant compliance analysis. This summary is provided for reference and convenience only and is qualified in its entirety by the terms of the Bridge Credit Agreement and related loan documents. Facility. The Bridge Credit Agreement provides for a $240,000,000 senior secured

III. Financial Covenant Framework The Bridge Credit Agreement contains two categories of financial covenants that the Borrower and the Guarantor must satisfy on an ongoing basis during the term of the bridge facility: Entity-Level Covenants. These covenants are tested on a consolidated basis for Fairwater REIT and all of its subsidiaries, including the Borrower and the fourteen Sun Belt Portfolio SPEs. The entity-lev

IV. Portfolio-Level Covenant Analysis A. Portfolio Loan-to-Value Ratio (LTV) Covenant Requirement. Pursuant to Section 7.11(a) of the Bridge Credit Agreement, the Portfolio Loan-to-Value Ratio (the "Portfolio LTV") shall not exceed 65% at any quarterly testing date. Definition. The Portfolio LTV is defined as the ratio of (i) the outstanding principal balance of the bridge loan to (ii) the aggregate appraised value o

V. Entity-Level Covenant Analysis The Bridge Credit Agreement includes four entity-level financial covenants that are tested on a consolidated basis for Fairwater REIT and all of its subsidiaries, including the Borrower, the fourteen Sun Belt Portfolio SPEs, and all other entities within the Fairwater organizational structure. The entity-level covenants are designed to ensure the overall financial health, leverage di

VI. Summary Compliance Table The following table summarizes the compliance status of each financial covenant under the Bridge Credit Agreement as of the June 30, 2025 testing date: Overall Result: All financial covenants are satisfied as of June 30, 2025. No event of default or potential event of default has been identified in connection with this covenant compliance review. The compliance certificate delivered by Fa

VII. Forward-Looking Considerations and Observations While Fairwater is in compliance with all financial covenants as of the June 30, 2025 testing date, several forward-looking considerations merit attention in connection with our permanent financing engagement. Each of these considerations bears on the risk profile of the bridge facility during the remaining term and informs the urgency of completing the permanent t

VIII. Recommendations Based on the analysis set forth in this memorandum, we recommend the following actions:

1. Confirm Entity-Level Covenant Figures. Request from Naomi T. Sinclair, Chief Financial Officer of Fairwater REIT, the detailed calculations supporting each of the entity-level financial covenants (consolidated leverage ratio, consolidated fixed charge coverage ratio, tangible net worth, and minimum liquidity) as set forth in the compliance certificate delivered to Kensington National Bank, N.A. on August 14, 2025.

2. Monitor SOFR Trajectory. Given that the Portfolio DSCR could fall below the 1.10x covenant minimum if SOFR increases by approximately 60 basis points, the team should maintain active awareness of interest rate movements and Federal Reserve monetary policy guidance through the targeted permanent loan closing date. We recommend establishing a monitoring protocol under which any SOFR increase exceeding 25 basis point

3. Track NOI Performance. Obtain monthly or quarterly operating reports from Fairwater Residential Management LLC (the affiliated property manager, EIN 52-2953810) for each of the fourteen Sun Belt Portfolio properties. These reports should include occupancy data, effective rental rates, concession activity, and detailed operating expense information. Early detection of any adverse NOI trends will be critical to asse

4. Prioritize Permanent Loan Closing Timeline. The thin DSCR cushion under the ongoing covenant (0.069x above the 1.10x minimum) and the current inability to satisfy the extension option DSCR threshold (1.20x) underscore the importance of completing the Clarendon Metropolitan Insurance Company permanent take-out financing on or before the November 28, 2025 targeted closing date. Any delay that pushes the closing beyo

5. Coordinate with REIT Counsel. Coordinate with Crestline & Alderman LLP (Patricia S. Keene, responsible partner) regarding any REIT-specific reporting requirements, distribution obligations, or corporate governance considerations that could affect entity-level covenant compliance during the remaining bridge term. In particular, Fairwater's obligation to distribute at least 90% of taxable income to maintain REIT qua

IX. Conclusion Based on our review of the compliance certificate delivered by Fairwater's Chief Financial Officer and the supporting analysis set forth in this memorandum, we conclude as follows: Fairwater Real Estate Investment Trust and Fairwater Operating Partnership, L.P. are in compliance with all financial covenants under the Bridge Credit Agreement as of the June 30, 2025 testing date. The Portfolio Loan-to-Va