BofA Finance Launches 18-Month Callable Notes Linked to Russell 2000 and S&P 500 Performance

Contingent Coupon Structure and Payment Terms

The notes carry a contingent coupon rate of 9.60% per annum, representing 0.80% of the principal amount per month. This coupon payment is contingent on both the Russell 2000 Index and the S&P 500 Index maintaining closing levels greater than or equal to 65.00% of their respective starting values on each applicable monthly observation date. The starting values were established on the strike date of July 21, 2026, with the Russell 2000 set at 2,987.395 and the S&P 500 at 7,509.20.

Monthly contingent coupon payments are scheduled on designated contingent payment dates, with the final coupon payment due at maturity on January 26, 2028, assuming the notes have not been redeemed prior to that date. The calculation agent, identified as BofA Securities, Inc., will determine observation values based on the closing levels of each underlying index on the applicable observation dates. If either underlying index falls below its coupon barrier of 65.00% of its starting value on any observation date, no contingent coupon payment will be made for that month.

Issuer Call Option and Early Redemption Features

Beginning on October 26, 2026, BofA Finance retains the right to redeem all of the notes at its option on any monthly call payment date. The early redemption amount is equal to the principal amount of $1,000.00 per note plus the applicable contingent coupon payment if the observation value of each underlying on the corresponding observation date is greater than or equal to its coupon barrier. Notice of any optional early redemption must be given to the trustee no fewer than five business days but not more than 60 calendar days before the applicable call payment date.

The notes will not be listed on any securities exchange, and the disclosure filing indicates that the initial estimated value of the notes as of the pricing date is expected to be between $940.00 and $990.00 per $1,000.00 in principal amount, which is less than the public offering price. This valuation discount reflects the difference between the theoretical value of the structured product and the $1,000.00 public offering price before consideration of the underwriting discount.

Downside Exposure and Principal Risk at Maturity

The notes feature a critical downside protection threshold of 35% decline from starting values. If either the Russell 2000 or the S&P 500 declines by more than 35% from its starting value by the valuation date on January 21, 2028, investors will experience 1:1 downside exposure to the least performing underlying index, with up to 100% of the principal amount at risk. This means that losses in the worst-performing index will be passed through dollar-for-dollar to note holders at maturity.

Conversely, if the ending value of the least performing underlying is greater than or equal to its threshold value of 65.00% of the starting value—meaning neither index has declined by more than 35%—investors will receive the full principal amount of $1,000.00 per note at maturity. Additionally, a final contingent coupon payment is payable at maturity if the ending value of the least performing underlying is greater than or equal to its coupon barrier. The filing states that in the event of default and acceleration, the redemption amount would be calculated as though the acceleration date were the maturity date, with the valuation date deemed to be the third trading day prior to acceleration.

Terms, Dates, and Index Specifications

The notes have an approximate 18-month term, with a strike date of July 21, 2026, pricing date of July 22, 2026, issue date of July 27, 2026, valuation date of January 21, 2028, and maturity date of January 26, 2028. The notes are linked to the Russell 2000 Index (Bloomberg symbol RTY) and the S&P 500 Index (Bloomberg symbol SPX), each structured as price return indices. The filing identifies starting values as RTY: 2,987.395 and SPX: 7,509.20, determined on the strike date.

The coupon barrier and threshold value for each index are identical at 65.00% of the starting value, equating to 1,941.807 for the Russell 2000 and 4,880.98 for the S&P 500. The notes will be issued in minimum denominations of $1,000.00 and whole multiples of $1,000.00 in excess thereof. Observation dates for determining coupon eligibility and call decisions are defined on pages PS-4 and PS-5 of the pricing supplement, with call payment dates specified separately for optional early redemption opportunities.

Pricing, Underwriting Discount, and Fee Structure

The public offering price for the notes is set at $1,000.00 per note, with an underwriting discount of $3.50 per $1,000.00 in principal amount, resulting in proceeds to BofA Finance of $996.50 per note. The underwriting discount comprises a sales commission of up to $2.50 and a structuring fee of up to $1.00 per note. Certain dealers who purchase the notes for sale to fee-based advisory accounts may forgo some or all of their selling concessions or commissions, potentially reducing the public offering price to $996.50 for those investors.

The calculation agent, BofA Securities, Inc., an affiliate of BofA Finance, is responsible for determining observation values and calculating payment amounts. The selling agent for the offering is also identified as BofA Securities, Inc. The CUSIP number assigned to the notes is 09712GBR4. The disclosure notes that the actual value of the notes at any time will reflect many factors and cannot be predicted with accuracy, directing prospective investors to review risk factors detailed beginning on page PS-9 of the pricing supplement.

Credit Risk and Guarantee Structure

All payments on the notes are subject to the credit risk of BofA Finance LLC as the issuer and Bank of America Corporation as the guarantor of the notes. Bank of America Corporation has provided a full and unconditional guarantee of the notes, meaning that BAC is obligated to ensure payment of all principal and coupon amounts if BofA Finance defaults. However, the notes are explicitly not FDIC insured and are not bank guaranteed, despite the involvement of Bank of America subsidiaries and the holding company guarantee.

The filing indicates that investors' recovery rights in the event of issuer default are governed by the terms of the senior indenture relating to the notes and the section on "Description of Debt Securities of BofA Finance LLC—Events of Default and Rights of Acceleration" on page 51 of the accompanying prospectus. In the event of default and acceleration, the redemption amount would be calculated using the deemed valuation date methodology, and whether a final contingent coupon payment is payable would be determined based on underlying index levels on that deemed valuation date, with any such payment prorated to reflect the length of the final period.

Registration and Regulatory Framework

The notes are issued pursuant to a registration statement under the Securities Act of 1933, with registration statement numbers 333-290665 and 333-290665-01. The pricing supplement was filed on July 21, 2026, pursuant to Rule 424(b)(2) and relates to an effective registration statement. The offering documentation includes a prospectus dated December 8, 2025, a Series A Prospectus Supplement dated December 8, 2025, and Product Supplement EQUITY-1 dated December 8, 2025.

The filing includes explicit statements that the Securities and Exchange Commission, state securities commissions, and other regulatory bodies have not approved or disapproved these securities or determined whether the pricing supplement and accompanying documents are truthful or complete, with a notation that any contrary representation constitutes a criminal offense. The disclosure emphasizes important differences between the notes and conventional debt securities, directing prospective purchasers to review risk factors beginning on page PS-9 of the pricing supplement, page PS-3 of the product supplement, page S-7 of the prospectus supplement, and page 7 of the prospectus.

Starting Values and Index Performance Mechanics

The filing establishes that the starting values of the underlying indices were determined on July 21, 2026, the strike date, with the Russell 2000 starting value at 2,987.395 and the S&P 500 starting value at 7,509.20. The disclosure explicitly notes that the starting value of each underlying may be higher or lower than its respective closing level on the pricing date, meaning the strike date levels may differ from the actual market levels on July 22, 2026.

The least performing underlying is defined as the underlying with the lowest underlying return calculated over the term of the notes. The performance of both indices must be monitored jointly, since monthly coupon payments require that each underlying maintain a closing level at or above 65.00% of its starting value. This dual-index structure means that even strong performance in one index will not result in a coupon payment if the other index falls below its coupon barrier, introducing correlation risk between the two equity benchmarks.

Valuation Date Postponement and Observation Mechanics

The valuation date is scheduled for January 21, 2028, but the filing indicates that this date is subject to postponement as described under "Description of the Notes—Certain Terms of the Notes—Events Relating to Observation Dates" in the accompanying product supplement. The specific circumstances under which the valuation date may be postponed are not detailed in the pricing supplement itself, but rather referenced in the product supplement documentation.

The filing clarifies that observation values for each underlying are determined by the closing level of the respective index on the applicable observation date, while the ending value is the observation value on the valuation date. This structure means that the final assessment of investor gains or losses depends on where the indices close on the valuation date of January 21, 2028, subject to any postponement that may occur. Investors in the notes should monitor the product supplement for complete information regarding observation date mechanics and any potential adjustments or postponements.