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NOTES RECEIVABLE FROM MOBILE HOME PARKS

6 Months Ended

Jun. 30, 2026

NOTES RECEIVABLE FROM MOBILE HOME PARKS

4. NOTES RECEIVABLE FROM MOBILE HOME PARKS

The notes receivable from mobile home parks (“MHP Notes”) relate to manufactured homes sold to mobile home parks and financed through notes receivable. The MHP Notes have varying maturity dates and require monthly principal

and interest payments. The interest rate on the MHP Notes can be fixed or variable, and the interest rates range from 4.9% to 17.5%. The average interest rate per loan was approximately 8.3% as of June 30, 2026 and 8.1% as of December 31, 2025, with maturities that range from 1 to 10 years. The collateral underlying the MHP Notes are individual manufactured homes which can be repossessed and resold. The MHP Notes are generally personally guaranteed by borrowers.

As of June 30, 2026, the Company had concentrations of MHP Notes with three independent third parties and their respective affiliates that equated to 23.0%, 10.4%, and 7.0% of the principal balance outstanding, all of which were secured by the manufactured homes. As of December 31, 2025, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equated to 24.7%, 9.6%, and 7.4% of the principal balance outstanding, all of which were secured by the manufactured homes.

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 composed of specific and general reserve amounts. As of June 30, 2026 and December 31, 2025, the MHP Notes balance is presented net of unamortized finance fees of $1.1 million and $1.1 million, respectively. The finance fees are amortized over the life of the MHP Notes. As of June 30, 2026, there were past due balances of $0.4 million on MHP Notes. As of December 31, 2025, there were past due balances of $0.6 million on the MHP Notes.

Settlement Agreement

In 2024, the Company and various borrowers and guarantors (the “Makers”) entered into a Settlement Agreement and Release (the “Agreement”) to resolve disputes related to previously existing promissory notes with an aggregate principal balance of approximately $55.0 million, of which approximately $37.0 million had been accelerated following default. As consideration under the Agreement, the Makers conveyed to the Company clear title to the Forest Hollow Mobile Home Community in Beaumont, Texas and the Cleveland Mobile Home Community in Richland, Mississippi, together with related personal property and intangible assets, and the parties executed a new $48.6 million promissory note (the “New Note”) bearing a fixed interest rate of 7.9%, requiring monthly interest-only payments for twenty-four months and maturing in July 2026. The New Note is secured by a first-priority interest in more than 1,000 manufactured homes and two mobile-home parks located in Louisiana and is personally guaranteed by the individual borrowers.

As of June 30, 2026, the Company evaluated the recoverability of the New Note and, based on an analysis of the fair value of the underlying collateral, the current payment status of the borrowers, and other relevant credit quality indicators, determined that a provision for expected loan losses on the New Note was not necessary as of that date. The New Note matured in July 2026 and was not repaid in full at maturity. Subsequent to June 30, 2026, the Company received a principal reduction payment of $2.0 million and agreed with the borrowers to a forbearance and modification of the New Note, including additional collateral and an increased personal guaranty. See Note 17 — Subsequent Events.

Notes receivable from mobile home parks, net of allowance for loan losses and deferred financing fees, consisted of the following (in thousands):


	As of June 30,		As of December 31,		As of December 31,
	2026		2025		2024
Outstanding principal balance	$	211,509	$	199,083	$	208,175
Loan discount and deferred financing fees		(1,127)		(1,146)		(1,057)
Allowance for loan losses		(1,365)		(1,399)		(654)
Total	$	209,017	$	196,538	$	206,464

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


	Three months ended				Six months ended
	June 30,				June 30,
	2026		2025		2026		2025
Allowance for loan losses, beginning of period	$	1,460	$	776	$	1,399	$	654
Provision for loan losses		(95)		124		(34)		246
Allowance for loan losses, end of period	$	1,365	$	900	$	1,365	$	900

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 and is presented as of June 30, 2026 (in thousands):


	Year of Origination
	2026		2025		2024		2023		2022		Prior		Total		% of Portfolio
< 30 days past due	$	37,549	$	57,296	$	71,152	$	10,158	$	17,198	$	11,237	$	204,590		96.7%
30-90 days past due		—		2,134		1,286		—		433		—		3,853		1.8%
> 90 days past due		495		890		999		572		—		110		3,066		1.5%
Total	$	38,044	$	60,320	$	73,437	$	10,730	$	17,631	$	11,347	$	211,509		100%