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NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes")

12 Months Ended

Dec. 31, 2023

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes")

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes")

5. NOTES RECEIVABLE FROM MOBILE HOME PARKS (“MHP Notes”)

MHP Notes are stated at amounts due from customers, net of allowance for loan losses. The Company determines the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, and the Company’s previous loss history. The Company establishes an allowance reserve composed of specific and general reserve amounts. As of December 31, 2023 and 2022, the MHP Note balance is presented net of unamortized finance fees of $1,565 and $1,068, respectively. The finance fees are amortized over the life of the MHP Notes.

As of December 31, 2023 there were past due balances of $98 on the MHP Notes, and for the year ended December 31, 2023, there were no charge offs recorded for MHP Notes. Allowance for loan loss for the MHP Notes was $735 as of December 31, 2023. As of December 31, 2022 there were minimal past due balances on the MHP Notes, and for the year ended December 31, 2022, no charge offs were recorded for MHP Notes. Allowance for loan loss was considered immaterial and accordingly no provision was recorded against the MHP Notes as of December 31, 2022.

Approximately $55 million of MHP Notes and Other notes receivable is with borrowers either owned or operated by one individual. Approximately $37 million of these notes currently is in default and is the subject of ongoing litigation in which the Company is the plaintiff. These notes are collateralized by mobile homes and land and are personally guaranteed by multiple borrowers. The Company evaluated the recoverability of these notes as of December

31, 2023 and determined a provision for expected loan losses is not deemed necessary based on the analysis of the underlying collateral.

Notes receivable from mobile home parks, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2023 and 2022:


	2023		2022
Outstanding principal balance	$	184,280	$	143,810
Loan discount and deferred financing fees		(1,565)		(1,068)
Allowance for loan losses		(735)		—
Total	$	181,980	$	142,742

The following table presents a detail of the activity in the allowance for loan losses for the years ended December 31, 2023 and 2022:


	2023		2022
Allowance for loan losses, beginning of year	$	—	$	—
Provision for loan losses		735		—
Charge offs (recoveries)		—		—
Allowance for loan losses, end of year	$	735	$	—

The following table presents impaired and general reserve for allowance for loan losses at December 31, 2023 and 2022:


	2023		2022
Total MHP loans	$	184,280	$	134,067
Allowance for loan losses		735		—
Impaired loans individually evaluated for impairment		31,215		—
Specific reserve against impaired loans		5		—
Other loans collectively evaluated for allowance		153,065		—
General allowance for loan losses		730		—

We evaluate the credit quality of our MHP portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is generally based upon borrower payment activity relative to the contractual terms of the loan. The following table disaggregates the outstanding principal balance of MHP receivable by credit quality indicator based on delinquency status and fiscal year of origination:


	Year of Origination
	2023		2022		2021		2020		2019		Total		% of Portfolio
< 30 days past due	$	55,783	$	51,809	$	36,215	$	35,551	$	4,073	$	183,431	%	99.5
30-90 days past due		—		—		—		—		—		—		—
> 90 days past due		462		387		—		—		—		849		0.5
Total	$	56,245	$	52,196	$	36,215	$	35,551	$	4,073	$	184,280	%	100