Material Agreement - Form 8-K

Item 1.01 Entry into a Material Definitive Agreement

On May 3, 2024, Velocity Financial, Inc. (the "Company"), entered into separate Equity Distribution Agreements (the "Equity Distribution Agreements") by and between the Company, on the one hand, and each of BTIG, LLC and Virtu Americas LLC (each, a "Placement Agent" and collectively, the "Placement Agents"), on the other hand. The Equity Distribution Agreement with Virtu Americas LLC supersedes the equity distribution agreement, dated as of September 3, 2021, by and between the Company and Virtu Americas LLC, and the equity distribution agreement, dated as of September 3, 2021, by and between the Company and JMP Securities LLC has been terminated in accordance with its terms. Pursuant to the terms of the Equity Distribution Agreements, the Company may sell, from time to time through or to the Placement Agents, as the Company's sales agents or as principals, shares of the Company's common stock, par value $0.01 per share, having an aggregate offering price of up to $50,000,000; providedthat the number of shares sold under the Equity Distribution Agreements does not exceed 4,000,000 in the aggregate (the "Shares" and, the lesser of Shares representing $50,000,000 in aggregate offering price and 4,000,000 Shares, the "Maximum Amount"), which Maximum Amount has been reduced by 38,880 Shares having an aggregate offering price of $512,931 that were sold prior to May 3, 2024 under the prior equity distribution agreements dated as of September 3, 2021.

The sales, if any, of the Shares under the Equity Distribution Agreements will be made by means of ordinary brokers' transactions on The New York Stock Exchange at market prices, to or through a market maker at market prices prevailing at the time of sale, at prices related to prevailing market prices, in block transactions, or as otherwise agreed upon by the Placement Agents and the Company by any method permitted by law deemed to be an "at the market offering" as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the "Securities Act").

For the sales of Shares through the Placement Agents, as the Company's sales agents, the Company will pay the Placement Agents a commission at a mutually agreed rate, not to exceed 2.0% of the gross sales price per Share. In addition, the Company has agreed to pay certain expenses incurred by the Placement Agents in connection with the offering. The Company may also sell Shares to one or more of the Placement Agents as principal for such Placement Agent's own account at a price agreed upon at the time of sale. If the Company sells Shares to one or more of the Placement Agents as principal, the Company will enter into a separate terms agreement with such Placement Agent. The Company has no obligation to sell any shares under the Equity Distribution Agreements, and may at any time suspend the offering of shares under the Equity Distribution Agreements.

The Equity Distribution Agreements contain customary representations and warranties of the parties and indemnification and contribution provisions under which the Company and the Placement Agents have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act. The Company expects to use the net proceeds from sales of the Shares under the Equity Distribution Agreements, if any, for general corporate purposes, which may include, without limitation, originating and acquiring investor real estate loans, repayment or refinancing of debt or other corporate obligations, capital expenditures, working capital, acquisitions and repurchases and redemptions of securities, and acquisitions or investments in complementary businesses .

The Shares will be issued pursuant to the Company's shelf registration statement on Form S-3(File No. 333-258971).The Company filed a prospectus supplement, dated May 3, 2024, with the Securities and Exchange Commission in connection with the offer and sale of the Shares pursuant to the Equity Distribution Agreements.

The foregoing description of the Equity Distribution Agreements is not complete and is qualified in its entirety by reference to the full text of the form of such agreements, a form of which is filed herewith as Exhibit 1.1 to this Current Report on Form 8-Kand is incorporated herein by reference.

The legal opinion of Simpson Thacher & Bartlett LLP relating to the shares of common stock being offered is filed as Exhibit 5.1 to this Current Report on Form 8-K.