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OTHER NOTES RECEIVABLE

6 Months Ended

Jun. 30, 2025

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 June 30, 2025, the Company had concentrations of other notes receivable with three independent third-parties and their respective affiliates that equated to 40.0%, 27.0% and 7.9% of the principal balance outstanding, all of which were secured by the mobile homes. As of December 31, 2024, the Company had concentrations of other notes receivable with three independent third-parties and their respective affiliates that equated to 33.7%, 22.7% and 10.5% of the principal balance outstanding, all of which were secured by the mobile homes.

As of June 30, 2025, there were past due balances of $1,704 on other notes. As of December 31, 2024, there were past due balances of $1,357 on other notes.

For the three and six months ended June 30, 2025 and 2024, there were no charge offs recorded for other notes. Allowance for loan loss for the other notes was $432 and $364 as of June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025 and December 31, 2024, the impaired balance of other notes was $210 and $141, 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 June 30, 2025 provides details regarding a settlement agreement related to prior notes receivable. Prior to the three months ending September 30, 2024, the Company recorded the old Notes described in Note 4 in MHP notes and other notes. The New Note is recorded in MHP notes only.

Other notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at June 30, 2025, December 31, 2024 and December 31, 2023:


	As of June 30,		As of December 31,		As of December 31,
	2025		2024		2023
Outstanding principal balance	$	12,988	$	15,412	$	35,353
Loan discount and deferred financing fees		(60)		(132)		(527)
Allowance for loan losses		(432)		(364)		(236)
Total	$	12,496	$	14,916	$	34,590

The following table presents a detail of the activity in the allowance for loan losses for the three and six months ended June 30, 2025 and 2024:


	Three months ended				Six months ended
	June 30,				June 30,
	2025		2024		2025		2024
Allowance for loan losses, beginning of period	$	468	$	176	$	364	$	236
Provision for loan losses		(36)		35		68		(25)
(Charge offs) recoveries		—		—				—
Allowance for loan losses, end of period	$	432	$	211	$	432	$	211

The following table presents impaired and general reserve for allowance for loan losses at June 30, 2025 and December 31, 2024:


	As of June 30,		As of December 31,
	2025		2024
Total Other notes receivable	$	12,988	$	15,412
Allowance for loan losses		432		364
Impaired loans individually evaluated for impairment		2,349		2,038
Specific reserve against impaired loans		210		141
Other notes receivable collectively evaluated for allowance		10,639		13,374
General allowance for loan losses		222		223

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 generally is based on 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 June 30, 2025:


	Year of Origination
	2025		2024		2023		2022		2021		Prior		Total		% of Portfolio
< 30 days past due	$	896	$	9,229	$	486	$	—	$	—	$	29	$	10,640	%	81.9
30-90 days past due		—		—		567		—		—		—		567		4.4
> 90 days past due		919		699		—		—		163		—		1,781		13.7
Total	$	1,815	$	9,928	$	1,053	$	—	$	163	$	29	$	12,988	%	100.0