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DEALER FINANCED RECEIVABLES

12 Months Ended

Dec. 31, 2025

8. DEALER FINANCED RECEIVABLES

Dealer finance receivable are receivables for loans that we make to independent retailers, or dealers, for the purchase of manufactured homes so that dealers can then market them for sale to consumers. The loans are part of our inventory finance program. In late 2022 and early 2023, the Company transitioned many of its dealers from a traditional consignment arrangement to an inventory finance arrangement. The terms of the financing typically include a three year term, a monthly interest payment, an annual curtailment payment and require the retailer to pay the principal amount of the loan to the Company upon the earlier of the sale of the home by the retailer to its customer or the end of the term.

Dealer financed notes receivable, net of allowance for loan losses, consisted of the following:


	As of December 31,		As of December 31,		As of December 31,
	2025		2024		2023
Outstanding principal balance	$	28,403	$	32,779	$	32,980
Allowance for loan losses		(1,718)		(194)		(442)
Total	$	26,685	$	32,585	$	32,538

The following table presents a detail of the activity in the allowance for loan losses for:


	Year ended
	December 31,
	2025		2024
Allowance for loan losses, beginning of period	$	194	$	442
Provision for loan losses		1,524		(248)
(Charge offs) recoveries		—		—
Allowance for loan losses, end of period	$	1,718	$	194

The dealer financed loan portfolio was established primarily in late 2022 and 2023 as a result of converting from consignment arrangements with dealers to inventory finance arrangements with dealers. As such, there is relatively little historical data to measure credit quality of the loans in this portfolio.

Included in the allowance for loan losses as of December 31, 2025 is a provision of $900 related to one independent dealer. This amount represents approximately 51% of the total allowance for loan losses related to dealer financed receivables as of December 31, 2025.