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The Atlantic Building

950 F Street, NW

Washington, DC 20004-1404

202-239-3300

Fax: 202-654-4951

www.alston.com

    David E. Brown, Jr.
    Direct Dial: 202-239-3345
    Email: david.brown@alston.com

July 18, 2016

VIA EDGAR

Ms. Kim McManus

Senior Attorney – Office of Real Estate and Commodities

Division of Corporation Finance

United States Securities and Exchange Commission

Washington, DC 20549

 Re: ZAIS Financial Corp.

Amendment No. 1 to Registration Statement
on Form S-4

Filed June 20, 2016

File No. 333-211251

Form 10-K for Fiscal Year Ended December
31, 2015

File No. 001-35808

Dear Ms. McManus:

On behalf of our client,
ZAIS Financial Corp., a Maryland corporation (“ZAIS Financial” or the “Company”), we are writing to respond
to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
contained in your letter dated July 8, 2016 (the “July 8 Letter”) in connection with your review of Amendment No. 1
to the Registration Statement on Form S-4, File No. 333-211251 (“Amendment No. 1”) and the Form 10-K for the fiscal
year ended December 31, 2015 filed by ZAIS Financial on March 10, 2016 (the “Form 10-K”). For ease of reference, the
text of each of the Staff’s comments is set forth in this letter in bold with our response immediately following each bolded
comment. Concurrently with the submission of this letter, the Company has filed with the Commission Amendment No. 2 to the Form
S-4 (“Amendment No. 2”) to reflect these comments and other changes to the Form S-4.

Amendment No. 1 to Registration Statement
on Form S-4 Filed June 20, 2016

General

 1. We note your response to comment 42 and reissue in part. We note your beneficial ownership disclosure
on page 15 of the amended 10-K filed by ZAIS Financial Corp. on April 29, 2016. For each entity disclosed as a 5% or greater beneficial
owner of the Registrant, please identify the natural persons with voting or dispositive power.

Atlanta
• Beijing • Brussels • Charlotte
• Dallas • Los Angeles • New York • Research Triangle • Silicon Valley • Washington, D.C.

In response to the
Staff’s comment, ZAIS Financial has included a revised table showing the beneficial ownership of its shares of common stock
by its officers, directors and 5% or greater beneficial owners in Amendment No. 2 on page 301 under the heading "Security
Ownership of Certain Beneficial Owners and Management—ZAIS Financial" to update the beneficial ownership information
included in its Form 10-K/A as of a more recent date. To the extent that any Schedule 13G or Schedule 13D filed by the 5% or greater
beneficial owners identified natural persons having voting or dispositive power, ZAIS Financial has included such information as
footnotes to the revised beneficial ownership table. ZAIS Financial will also include such natural person information in subsequent
reports filed under the Securities Exchange Act of 1934, as amended, requiring beneficial ownership information to the extent that
the beneficial owner includes such information in its Schedule 13G or Schedule 13D filings.

 2. We note the reference to data from Boxwood Means Inc., a real estate research and consulting
firm, on pages 39, 230, and 265. Please advise if this data was prepared by Boxwood Means for the company for inclusion in this
registration statement. If so, please file a consent as contemplated by Rule 436(a).

The data from Boxwood
Means is publicly available and was not prepared by Boxwood Means for the company for inclusion in this registration statement.
In Amendment No. 2, we have indicated that this data is publicly available, on pages 39, 230 and 265.

The Mergers, 104

Background of the Mergers, page 104

 3. We note your revised disclosure on page 108 and 111 in response to comment 12. Please expand
upon your disclosure to discuss the strategic considerations reviewed by the BofA Merrill Lynch representative during these meetings.

In Amendment No. 2,
we have revised the relevant disclosure on pages 108 and 111.

 4. We note your revised disclosure on page 137 in response to comment 20. You state that “the
nonpublic unaudited prospective financial information does not necessarily reflect management’s current estimates and does
not take into account any circumstances or events occurring after the date it was prepared.” You include similar disclosure
on page 143, indicating that Sutherland does not intend to, and disclaims any obligation to update the Sutherland projections.
To the extent the financial projections no longer reflect management’s view of future performance you should either update
such projections or explain why the projections are no longer valid.

Each of ZAIS Financial
and Sutherland confirms its understanding that it will, to the extent required by applicable securities laws, update the unaudited
prospective financial information or provide an explanation as to why such information is no longer valid in the event that such
information is no longer consistent with management’s view of future performance. In Amendment No. 2, we have revised the
disclosure on page 143 to state Sutherland’s obligation, to the extent required by applicable securities laws, to update
or revise the unaudited prospective financial information.

      2

Certain ZAIS Financial Unaudited Prospective
Financial Information, page 137

 5. Please revise to provide a reconciliation of Adjusted Net Income to Net Income. Please refer
to Regulation G.

In Amendment No. 2,
we have added disclosure on page 137 of the joint proxy statement/prospectus to provide a reconciliation of Adjusted Net Income-non-U.S.
GAAP to Net Income.

Certain Financial Projections Utilized
by the Sutherland Board of Directors and Sutherland’s Financial Advisor, page 143

 6. We note your presentation of Free Cash Flows to Equity Holders for both Sutherland and ZAIS.
Please revise to present the most directly comparable financial measure calculated in accordance with U.S. GAAP. Also, please revise
to provide a reconciliation of Free Cash Flows to Equity Holders to the most directly comparable financial measure presented in
accordance with U.S. GAAP. Please refer to Regulation G.

In Amendment
No. 2, we have revised the relevant disclosure on page 144 in response to the Staff’s comment. The Free Cash Flows
to Equity Holders represent estimated cash flows from operations, investing and financing, and were prepared using the
direct method in accordance with U.S. GAAP (in the case of Sutherland) and the indirect method in accordance with U.S. GAAP
(in the case of ZAIS Financial). The estimated cash flows from operations, investing and financing have been disclosed on
page 144 in Amendment No. 2, and we respectfully submit that no reconciliation is necessary.

Directors and Executive Officers of
the Combined Company After the Mergers, page 146

 7. We note your revised disclosure in response to comment 4. We also note your disclosure on page
146 that the Board expects to determine that a majority of its members are “independent” as determined by the requirements
of the NYSE. Please identify each director that is independent under the listing standards of the NYSE or advise. Refer to Item
407(a) of Regulation S-K and Item 18(a)(7)(iii) of Form S-4.

In Amendment No. 2,
we have revised the relevant disclosure on page 146 to identify the independent directors.

Director and Executive Compensation,
page 148

 8. We note your response to comment 3. However, Item 402(a)(2) requires disclosure of “all…compensation
awarded to, earned by, or paid to [NEOs and directors] by any person for all services rendered in all capacities to the registrant
and its subsidiaries,” and further states “[a]ll such compensation shall be reported pursuant to this Item, …
including transactions between the registrant and a third party where a purpose of the transaction is to furnish compensation to
any such named executive officer or director.” Please provide the disclosure required by Item 402 of Regulation S-K. Alternatively,
please provide your analysis as to how you determined that compensation paid by Waterfall to your executive officers does not require
disclosure under Item 402.

      3

In Amendment No. 2,
we have revised the relevant disclosure beginning on page 148 to disclose the plan and non-plan compensation paid to the independent
directors of Sutherland for the fiscal year ended December 31, 2015 and to Mr. Herbst, the Chief Financial Officer of Sutherland,
for the fiscal years ended December 31, 2015, 2014 and 2013. As noted in the Registration Statement, the combined company will
pay for the allocable share of the compensation of the combined company’s Chief Financial Officer based on the percentage
of his time spent managing the combined company’s affairs, which will be all of the combined company’s Chief Financial
Officer’s compensation so long as he is exclusively dedicated to the combined company’s affairs. Mr. Herbst has exclusively
dedicated his time to Sutherland affairs for the fiscal years ended December 31, 2015, 2014 and 2013, and we have disclosed in
Amendment No. 2 the compensation of Mr. Herbst reimbursed by Sutherland to its external manager, Waterfall.

As previously disclosed
on page 148 of the Registration Statement under the heading “Executive Compensation,” except for certain equity grants,
Waterfall compensates each of the combined company’s officers, and Waterfall will use the proceeds from the management fee
in part to pay compensation to its officers and personnel, which is consistent with the compensation of Sutherland’s officers
currently. The terms of the management fee have been disclosed in the Registration Statement. As disclosed in Amendment No. 2,
Sutherland has made no equity grants to its executive officers, and other than with respect to Mr. Herbst, Sutherland has not paid
or made any reimbursement to Waterfall with respect to any executive officer’s compensation, for the fiscal years ended December
31, 2015, 2014 and 2013. In response to the Staff’s comment, Sutherland advises the Staff that in future filings that require
Item 402 of Regulation S-K disclosure, the combined company will provide such disclosure for Mr. Herbst and for any other named
executive officers, as appropriate.

Unaudited Pro Forma Condensed Combined
Financial Information, page 255

 9. We note your response to comment 34 and your statement that you would revise disclosures on
page 255 of the joint proxy statement/prospectus to clarify the accounting treatment of the mortgage servicing rights post-merger.
However, we could not locate such revised disclosures on page 255. Please advise or revise.

In Amendment No. 2,
we have revised the relevant disclosure on page 255 to clarify the accounting treatment of the mortgage servicing rights post-merger.

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 10. We note your response to comment 35. Please clarify for us, if true, that the allocation of
a portion of the change in fair value to interest income pertains only to the accretion of discount to interest income.

In response to the
Staff's comment, the allocation of a portion of the change in fair value to interest income pertains both to the accretion of discount
and amortization of premiums.

 11. We note your response to comment 36 and the revised disclosure in footnote (P). Please further
revise your disclosure to clarify how you calculated the amount.

In Amendment No. 2,
we have revised footnote (P) as follows:

 (P) Rebalancing adjustment to reallocate income between common stockholders and non-controlling interest for the pro-forma assuming
the mergers happened at the beginning of the pro-forma period, such that income allocation to common stock and OP Unit holders
on a per-share basis is the same and in accordance with post-merger ending equity balances for common stock and OP Unit holders
as described in note Q.

Quarter ended March 31, 2016

    Reversal of historical ZAIS Financial allocation of net loss to non-controlling interest
    $ 337

    Reversal of historical Sutherland allocation of net income to non-controlling interest
      (766 )

    Allocation of historical ZAIS Financial total net loss to non-controlling interest in accordance with post merger equity balance % (6.91%) as described in note Q
      (233 )

    Allocation of historical Sutherland total net income to non-controlling interest in accordance in accordance with post merger equity balance % (6.91%) as described in note Q
      654

    Allocation of total Pro forma Adjustment of ($5,511) to non-controlling interest in accordance with post merger equity balance % as described in note Q
      (381 )

    Net rebalancing adjustment
    $ (389 )

Year ended December 31, 2015

    Reversal of historical ZAIS Financial allocation of net loss to non-controlling interest
    $ 159

    Reversal of historical Sutherland allocation of net income to non-controlling interest
      (4,385 )

    Allocation of historical ZAIS Financial total net loss to non-controlling interest in accordance with post merger equity balance % (6.84%) as described in note Q
      (97 )

    Allocation of historical Sutherland total net income to non-controlling interest in accordance in accordance with post merger equity balance % (6.84%) as described in note Q
      3,106

    Allocation of total Pro forma Adjustment of ($3,778) to non-controlling interest in accordance with post merger equity balance % as described in note Q
      (258 )

    Net rebalancing adjustment
    $ (1,476 )

Financial Statements of Sutherland Asset
Management Corporation, page F-1

Note 28 – Discontinued Operations,
page F-113

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 12. We note your response to comment 44. Please revise your filing to clarify that the company has
concluded the complete exit from the real estate brokerage business is a strategic shift.

In Amendment No.
2, we have revised the disclosure on page F-54, F-71, F-113 and F-144 to clarify that the company has concluded the complete
exit from the real estate brokerage business is a strategic shift.

Note 3 – Summary of Significant
Accounting Policies

Real estate acquired in settlement of
loans, page F-126

 13. We note your response to comment 46 and your revisions on page 234. Please further revise the
disclosure on page F-126 for consistency.

In Amendment No. 2,
we have revised the disclosure on page F-126 to be consistent with the revisions on page 234.

ZAIS Financial Corp. Form 10-K for the
year ended December 31, 2015

Item 8. Financial Statements and Supplementary
Data, page 80

Note 2. Summary of Significant Accounting
Policies, page 86

Revenue Recognition, page 91

Mortgage Loans Held for Investment,
at Fair Value, page 91

 14. We note your response to comment 49 and your references to ASC 310-30 and ASC 310-35. However,
it appears that ASC 310-35 is not a valid codification reference. We also note that ASC 310-30-15-2a appears to exclude loans measured
at fair value from the scope of ASC 310-30 and therefore, we are unclear how you determined ASC 310-30-35-2 applies to your situation.
Please tell us in further detail how you determined these references are applicable. Please revise or advise. To the extent you
continue to believe your policy for allocating a portion of the change in fair value to interest income is appropriate, please
tell us and disclose in future periodic filings the allocation methodology, and disclose the amount of unrealized gain allocate
to interest income. Please provide us an example of your proposed disclosure.

In response to the
Staff’s comment, the Company has elected the fair value option on its mortgage loans held for investment under ASC 825-10.
As a result of the fair value option election under ASC 825-10, all changes in the fair value of the mortgage loans held for investment
are recorded through earnings.

ASC 825-10 does not
provide guidance on the appropriate geography within the statement of ope