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OTHER NOTES RECEIVABLE

9 Months Ended

Sep. 30, 2024

5. OTHER NOTES RECEIVABLE

Other notes receivable relate to notes issued to mobile home park owners and dealers and are not directly tied to the sale of mobile homes. These other notes have varying maturity dates and generally require monthly principal and interest payments. They are collateralized by mortgages on real estate, mobile homes that we have financed for which

the borrower uses as offices, as well as vehicles. These notes typically are personally guaranteed by the borrowers. The interest rates on the other notes generally are fixed and range from 5.00% to 17.50%. The Company reserves for estimated losses on the other notes based on current economic conditions that may affect the borrower’s ability to pay, the borrower’s financial strength, and historical loss experience.

As of September 30, 2024, there were past due balances of $569 on other notes. As of December 31, 2023, there were past due balances of $22 on other notes, excluding any amounts attributable to the Notes, as described in Note 4, Notes Receivable from Mobile Home Parks, above. For the three months ended September 30, 2024 and 2023, there were no charge offs recorded for other notes. For the nine months ended September 30, 2024 and 2023, there were no charge offs recorded for other notes. Allowance for loan loss for the other notes was $208 and $236 as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024 and December 31, 2023, the impaired balance of other notes was $88 and $84, respectively. Collateral for repossessed loans is acquired through foreclosure or similar proceedings and is recorded at the estimated fair value of the home, less the costs to sell.

Note 4, Notes Receivable from Mobile Home Parks, in these Notes to Condensed Financial Statements (Unaudited) for the quarter ended September 30, 2024 provides details regarding a settlement agreement related to prior debt that was presented in Form 10-Q for the quarterly period ended June 30, 2024 on the balance sheets under the headings Current portion of notes receivable from mobile home parks (“MHP”), Notes receivable from mobile home parks, net, Current portion of other notes receivable and Other notes receivable, net.

Other notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at September 30, 2024 and December 31, 2023:


	As of September 30,		As of December 31,
	2024		2023
Outstanding principal balance	$	8,151	$	35,353
Loan discount and deferred financing fees		(97)		(527)
Allowance for loan losses		(208)		(236)
Total	$	7,846	$	34,590

The following table presents a detail of the activity in the allowance for loan losses for the three and nine months ended September 30, 2024 and 2023:


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023
Allowance for loan losses, beginning of period	$	211	$	231	$	236	$	—
Provision for loan losses		(3)		(42)		(28)		189
(Charge offs) recoveries		—		—		—		—
Allowance for loan losses, end of period	$	208	$	189	$	208	$	189

The following table presents impaired and general reserve for allowance for loan losses at September 30, 2024 and December 31, 2023:


	As of September 30,		As of December 31,
	2024		2023
Total Other notes receivable	$	8,151	$	35,353
Allowance for loan losses		208		236
Impaired loans individually evaluated for impairment		1,361		25,135
Specific reserve against impaired loans		88		84
Other notes receivable collectively evaluated for allowance		6,790		10,218
General allowance for loan losses		120		152

We evaluate the credit quality of our Other notes receivable 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 Other notes receivable by credit quality indicator based on delinquency status and fiscal year of origination and is presented as of September 30, 2024:


	Year of Origination
	2024		2023		2022		2021		2020		Prior		Total		% of Portfolio
< 30 days past due	$	2,949	$	3,338	$	—	$	166	$	300	$	37	$	6,790	%	83.3
30-90 days past due		—		—		—		—		—		—		—		—
> 90 days past due		—		—		655		649		—		57		1,361		16.7
Total	$	2,949	$	3,338	$	655	$	815	$	300	$	94	$	8,151	%	100.0