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Debt | 12 Months Ended
--- | ---
Dec. 31, 2024
Debt Disclosure [Abstract] |
Debt Disclosure [Text Block] | . DEBT The aggregated annual principal payments under the borrowings on lines of credit, senior unsecured notes, and notes payable over the next five years and thereafter as of December 31, 2024 are as follows (in thousands):
2025 | $ | 37,500 |
2026 | 89,871 |
2027 | 87,500 |
2028 | 55,000 |
2029 | 70,000 |
Total | $ | 339,871 |
Lines of Credit Borrowings on lines of credit outstanding, net of debt issuance costs, as of December 31, 2024 and 2023 consist of the following (in thousands):
| December 31, 2024 |  | December 31, 2023
Secured Revolving Credit Facility | $ | — |  |  | $ | — |
Unsecured Revolving Credit Facility | 25,000 |  |  | — |
Debt issuance costs, net of amortization | (2,355) |  |  | (2,328) |
Total borrowings on lines of credit, net | $ | 22,645 |  |  | $ | (2,328) |
Secured Revolving Credit Facility The Company is party to a revolving credit facility (the “Secured Revolving Credit Facility”) with Inwood National Bank, which provides for an aggregate commitment amount of $35.0 million. Amounts outstanding under the Secured Revolving Credit Facility are secured by mortgages on real property and security interests in certain personal property (to the extent that such personal property is connected with the use and enjoyment of the real property) that is owned by certain of the Company’s subsidiaries. The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the maturity date. On February 9, 2022, the Company entered into the Eighth Amendment to the Secured Revolving Credit Facility to extend its maturity date to May 1, 2025 and to reduce the minimum interest rate from 4.00% to 3.15%. All other material terms of the Secured Revolving Credit Facility, as amended, remain unchanged. As of December 31, 2024, we had no letters of credit outstanding to reduce the aggregate maximum commitment amount of $35.0 million. Outstanding borrowings under the amended Secured Revolving Credit Facility bear interest payable monthly at a floating rate per annum equal to the rate announced by Bank of America, N.A., from time to time, as its “Prime Rate” (the “Index”) with such adjustments to the interest rate being made on the effective date of any change in the Index, less 0.25%. Notwithstanding the foregoing, the interest may not, at any time, be less than 3.15% per annum or more than the lesser amount of 18% and the highest maximum rate allowed by applicable law. The Secured Revolving Credit Facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 65% of the total value of lots owned by certain of the Company’s subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 65% of the borrowing base. The amended Secured Revolving Credit Facility is also subject to a non-usage fee equal to 0.25% of the average unfunded amount of the commitment amount over a trailing 12 month period. No fees or other debt issuance costs were incurred during the years ended December 31, 2024 and 2023, associated with the Secured Revolving Credit Facility. During the year ended December 31, 2022, de minimis fees and other issuance costs were incurred associated with the Secured Revolving Credit Facility amendment. These costs are deferred and reduce the carrying amount of debt in our consolidated balance sheets. The Company subjects these costs to analysis for capitalization to inventory over the term of the Secured Revolving Credit Facility using the straight-line method, which approximates the effective interest rate method for our senior unsecured notes and notes payable. Under the terms of the amended Secured Revolving Credit Facility, the Company is required, among other things, to maintain minimum multiples of tangible net worth in excess of the outstanding Secured Revolving Credit Facility balance, minimum interest coverage and maximum leverage. The Company was in compliance with these financial covenants under the Secured Revolving Credit Facility as of December 31, 2024. Unsecured Revolving Credit Facility The Company is party to a credit agreement, providing for a senior, unsecured revolving credit facility (the “Unsecured Revolving Credit Facility”). On December 13, 2024, the Company entered into the Twelfth Amendment (the “Twelfth Amendment”) to this credit agreement which adopted a leverage-based pricing grid for a reduction in both interest rate and non-use fee and other administrative changes. The Twelfth Amendment removed one lender with a $25 million prior commitment and added $30.0 million in new commitments, thereby increasing total commitments to $330.0 million. The maturity of all commitments under the facility were extended to December 14, 2027. Outstanding advances under the Unsecured Revolving Credit Facility accrue interest at the benchmark rate plus the Applicable Rate (as defined in the Unsecured Revolving Credit Facility). The Applicable Rate is based upon the leverage ratio of the last day of the most recently ended fiscal quarter. Interest on amounts borrowed under the Unsecured Revolving Credit Facility is payable in arrears on a monthly basis. The Company pays the lenders a commitment fee on the amount of the unused commitments on a monthly basis at a rate per annum equal to the Commitment Fee Rate (as defined in the Unsecured Revolving Credit Facility). The Commitment Fee Rate is based upon the leverage ratio of the most recently ended fiscal quarter. As of December 31, 2024, the interest rate on outstanding borrowings under the Unsecured Revolving Credit Facility was 6.61% per annum. Outstanding borrowings under the Unsecured Revolving Credit Facility are subject to, among other things, a borrowing base. The borrowing base limitation is equal to the sum of: 100% of unrestricted cash in excess of $15.0 million; 85% of the book value of model homes, construction in progress homes, completed sold and speculative homes (subject to certain limitations on the age and number of speculative homes and model homes); 65% of the book value of finished lots and land under development; and 50% of the book value of entitled land (subject to certain limitations on the value of entitled land and land under development as a percentage of the borrowing base). Fees and other debt issuance costs of $0.8 million, $0.6 million and $0.7 million were incurred during the years ended December 31, 2024, 2023 and 2022, respectively, associated with the amendments, term extensions and increases in lenders’ commitments. These costs are deferred and reduce the carrying amount of debt in our consolidated balance sheets. The Company capitalizes these costs to inventory over the term of the Unsecured Revolving Credit Facility using the straight-line method, which approximates the effective interest rate method for our senior unsecured notes and notes payable. Under the terms of the Unsecured Revolving Credit Facility, the Company is required to maintain compliance with various financial covenants, including a maximum leverage ratio, a minimum interest coverage ratio, and a minimum consolidated tangible net worth. The Company was in compliance with these financial covenants under the Unsecured Revolving Credit Facility as of December 31, 2024. Warehouse Facilities As of December 31, 2024, GRBK Mortgage, a wholly owned subsidiary of the Company, had warehouse facilities to fund its origination of mortgage loans as follows (in thousands):
|  |  |  | Outstanding Balance As of
Maturity Date |  | Maximum Aggregate Commitment |  | December 31, 2024
October 31, 2025 |  | $ | 40,000 |  |  | $ | — |
December 18, 2025 |  | 40,000 |  |  | —
|  | $ | 80,000 |  |  | $ | — |
During the year ended December 31, 2024, GRBK Mortgage entered into two uncommitted warehouse facility agreements (the “Warehouse Facilities”) to finance its origination of mortgage loans. The Warehouse Facilities provide for an aggregate uncommitted amount of $80.0 million. The Warehouse Facilities are secured by the underlying mortgage loans and bear interest at a variable rate based on SOFR plus a margin ranging from 1.75% to 2%. The facilities are subject to annual renewal and contain customary covenants and conditions regarding minimum net worth, leverage, and liquidity. The Company was in compliance with the financial covenants under the Warehouse Facilities as of December 31, 2024. No fees or other debt issuance costs were incurred during the year ended December 31, 2024 associated with the Warehouse Facilities. As of December 31, 2024, no amounts were outstanding under the Warehouse Facilities. Senior Unsecured Notes Senior unsecured notes, net of debt issuance costs, as of December 31, 2024 and December 31, 2023 consisted of the following (in thousands):
| December 31, 2024 |  | December 31, 2023
4.00% senior unsecured notes due in 2026 (“2026 Notes”) | $ | 62,500 |  |  | $ | 75,000 |
3.35% senior unsecured notes due in 2027 (“2027 Notes”) | 37,500 |  |  | 37,500 |
3.25% senior unsecured notes due in 2028 (“2028 Notes”) | 100,000 |  |  | 125,000 |
3.25% senior unsecured notes due in 2029 (“2029 Notes”) | 100,000 |  |  | 100,000 |
Debt issuance costs, net of amortization | (910) |  |  | (1,293) |
Total senior unsecured notes, net | $ | 299,090 |  |  | $ | 336,207 |
The Senior Unsecured Notes are guaranteed on an unsecured senior basis by the Company’s significant subsidiaries and certain other subsidiaries. The Senior Unsecured Notes will rank equally in right of payment with all of the Company’s existing and future senior unsecured and unsubordinated indebtedness. Optional prepayment of each of the Notes is allowed with a payment of a “make-whole” penalty which fluctuates depending on market interest rates. Interest is payable quarterly in arrears. 2026 Notes On August 8, 2019, the Company entered into a Note Purchase Agreement with Prudential Private Capital to issue $75.0 million aggregate principal amount of senior unsecured notes due on August 8, 2026 at a fixed rate of 4.00% per annum in a Section 4(a)(2) private placement transaction. The Company received net proceeds of $73.3 million and incurred debt issuance costs of approximately $1.7 million that were deferred and reduced the amount of debt on our consolidated balance sheet. The Company used the net proceeds from the issuance of the 2026 Notes to repay borrowings under the Company’s existing revolving credit facilities. Principal on the 2026 Notes of $12.5 million is due on August 8, 2025 and the remaining principal amount of $50.0 million is due on August 8, 2026. 2027 Notes On August 26, 2020, the Company entered into a Note Purchase Agreement with The Prudential Insurance Company of America and Prudential Universal Reinsurance Company to issue $37.5 million aggregate principal amount of senior unsecured notes due on August 26, 2027 at a fixed rate of 3.35% per annum in a Section 4(a)(2) private placement transaction. The Company received net proceeds of $37.4 million and incurred debt issuance costs of approximately $0.1 million that were deferred and reduced the amount of debt on our consolidated balance sheet. The Company used the net proceeds from the issuance of the 2027 Notes to repay borrowings under the Company’s existing revolving credit facilities and for general corporate purposes. 2028 Notes On February 25, 2021, the Company entered into a Note Purchase Agreement with several purchasers to issue $125.0 million aggregate principal amount of senior unsecured notes due on February 25, 2028 at a fixed rate of 3.25% per annum in a Section 4(a)(2) private placement transaction. The Company received net proceeds of $124.4 million and incurred debt issuance costs of approximately $0.6 million that were deferred and reduced the amount of debt on our consolidated balance sheet. The Company used the net proceeds from the issuance of the 2028 Notes to repay borrowings under the Company’s existing revolving credit facilities and for general corporate purposes. Principal on the 2028 Notes is due in increments of $25.0 million annually on February 25 in each of 2025, 2026, 2027, and 2028. 2029 Notes On December 28, 2021, the Company entered into a Note Purchase Agreement with several purchasers to issue $100.0 million aggregate principal amount of senior unsecured notes due on December 28, 2029 at a fixed rate of 3.25% per annum in a Section 4(a)(2) private placement transaction. The Company received net proceeds of $99.6 million and incurred debt issuance costs of approximately $0.4 million that were deferred and reduced the amount of debt on our consolidated balance sheet. The Company used the net proceeds from the issuance of the 2029 Notes to repay borrowings under the Company’s existing revolving credit facilities and for general corporate purposes. Principal on the 2029 Notes of $30.0 million is due on December 28, 2028 and the remaining principal amount of $70.0 million is due on December 28, 2029. Under the terms of the Senior Unsecured Notes, the Company is required, among other things, to maintain compliance with various financial covenants, including maximum leverage ratios, a minimum interest coverage ratio, and a minimum consolidated tangible net worth. The Company was in compliance with these financial covenants under the Senior Unsecured Notes as of December 31, 2024.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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