Bond MDC Holdings, Inc. 3.85% ( US552676AT59 ) in USD

Issuer MDC Holdings, Inc.
Market price refresh price now   95.2635 %  ▼ 
Country  United States
ISIN code  US552676AT59 ( in USD )
Interest rate 3.85% per year ( payment 2 times a year)
Maturity 14/01/2030



Prospectus brochure of the bond M.D.C. Holdings Inc US552676AT59 en USD 3.85%, maturity 14/01/2030


Minimal amount 1 000 USD
Total amount 300 000 000 USD
Cusip 552676AT5
Standard & Poor's ( S&P ) rating BBB ( Lower medium grade - Investment-grade )
Moody's rating Ba1 ( Non-investment grade speculative )
Next Coupon 15/07/2026 ( In 102 days )
Detailed description M.D.C. Holdings, Inc. is a leading homebuilder in the United States, operating primarily under the brands Richmond American Homes and Century Communities, offering a range of homes across various price points and locations.

The Bond issued by MDC Holdings, Inc. ( United States ) , in USD, with the ISIN code US552676AT59, pays a coupon of 3.85% per year.
The coupons are paid 2 times per year and the Bond maturity is 14/01/2030

The Bond issued by MDC Holdings, Inc. ( United States ) , in USD, with the ISIN code US552676AT59, was rated Ba1 ( Non-investment grade speculative ) by Moody's credit rating agency.

The Bond issued by MDC Holdings, Inc. ( United States ) , in USD, with the ISIN code US552676AT59, was rated BBB ( Lower medium grade - Investment-grade ) by Standard & Poor's ( S&P ) credit rating agency.







mdc20191220_424b5.htm
424B2 1 mdc20200106b_424b2.htm FORM 424B2

Table of Contents

Filed Pursuant to Rule 424(b)(2)
Registration No. 333-232327


CALCULATION OF REGISTRATION FEE

Proposed
Proposed
Title of Each Class of
Amount
Maximum Offering
Maximum Aggregate
Amount of
Securities to be Registered
to be Registered
Price per Unit
Offering Price
Registration Fee (1)

US$

US$
US$
3.850% Senior Notes due 2030
300,000,000
100.000%
300,000,000
38,940.00
Guarantees of Senior Notes
--
--
--
-- (2)
Total
300,000,000

300,000,000
38,940.00

(1) This "Calculation of Registration Fee" table updates the "Calculation of Registration Fee" table in the Company's Registration Statement on
Form S-3ASR (File No. 333-232327) in accordance with Rule 456(b) and Rule 457(r) of the Securities Act of 1933, as amended.
(2) Pursuant to Rule 457(n), no registration fee is required with respect to the guarantees.


Table of Contents

PROSPECTUS SUPPLEMENT
(To Prospectus Dated June 25, 2019)
$300,000,000
M.D.C. Holdings, Inc.
3.850% Senior Notes due 2030
_______________________

We are offering $300,000,000 aggregate principal amount of our 3.850% Senior Notes due 2030.

We will pay interest on the notes semi-annually in arrears on January 15 and July 15 of each year, beginning July 15, 2020. The notes
will mature on January 15, 2030.

We may redeem the notes at any time at the redemption prices set forth in this prospectus supplement under "Description of Notes--
Optional Redemption."

The interest rate on the notes may be adjusted under the circumstances described in this prospectus supplement under "Description of
Notes--Interest Rate Adjustment Following a Change of Control."

We expect to use the net proceeds of this offering for general corporate purposes, which may include the repayment of indebtedness.
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The notes will be senior unsecured obligations of our company and will rank equally with all of our existing and future unsecured and
senior indebtedness.

The notes will be fully and unconditionally guaranteed jointly and severally by certain of our subsidiaries on a senior unsecured basis.

Before buying any notes, you should read the discussion of material risks of investing in our notes beginning on page S-5.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
notes, or passed upon the accuracy or adequacy of this prospectus supplement or the accompanying prospectus. Any representation to
the contrary is a criminal offense.

________________



Per Note

Total

Public offering price

100.000% $
300,000,000
Underwriting discount

0.650% $
1,950,000
Proceeds to M.D.C. Holdings, Inc. (before expenses)

99.350% $
298,050,000

________________

The underwriters expect to deliver the notes to purchasers through the book-entry delivery system of The Depository Trust Company on or
about January 9, 2020.
________________

Joint Book-Running Managers

Citigroup
US Bancorp


Lead Managers
SunTrust Robinson Humphrey
BNP PARIBAS
PNC Capital Markets LLC

Co-Managers
Regions Securities LLC
UMB Financial Services, Inc.
TCB Capital Markets

________________

January 6, 2020.


Table of Contents

You should only rely on the information contained in or incorporated by reference in this prospectus supplement and the
accompanying prospectus. We have not, and the underwriters identified on the cover of this prospectus supplement (the "underwriters") have
not, authorized anyone to provide you with different information. We are not, and the underwriters are not, making an offer of these securities
in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus supplement, the
accompanying prospectus or the documents incorporated by reference herein is accurate as of any date other than the date on the front of this
prospectus supplement, the date on the front of the accompanying prospectus or the date of the applicable incorporated document, as applicable.
We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may
give you.

TABLE OF CONTENTS


Page
Prospectus Supplement


FORWARD-LOOKING STATEMENTS
S-ii
PROSPECTUS SUPPLEMENT SUMMARY
S-1
RISK FACTORS
S-5
USE OF PROCEEDS
S-13
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CAPITALIZATION
S-14
DESCRIPTION OF CERTAIN OTHER INDEBTEDNESS
S-15
DESCRIPTION OF NOTES
S-17
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
S-29
UNDERWRITING
S-32
LEGAL MATTERS
S-35
EXPERTS
S-35
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
S-35


Page
Prospectus


M.D.C. HOLDINGS, INC.
1
RISK FACTORS
1
USE OF PROCEEDS
1
DESCRIPTION OF COMMON STOCK
1
DESCRIPTION OF PREFERRED STOCK
1
DESCRIPTION OF THE DEBT SECURITIES
2
LEGAL MATTERS
2
EXPERTS
2
WHERE YOU CAN FIND MORE INFORMATION
2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
2

________________

The information contained in this prospectus supplement, the accompanying prospectus or the documents incorporated by reference
herein concerning the homebuilding industry, our market share, our size relative to other homebuilders and other matters is derived principally
from publicly available information and from industry sources. Although we believe the publicly available information and the information
from industry sources are reliable, we have not independently verified any of this information and we cannot assure you of its accuracy.

This prospectus supplement sets forth certain terms of the notes that we are offering. It supplements the section entitled "Description of
the Debt Securities" in the accompanying prospectus. This prospectus supplement supersedes the accompanying prospectus to the extent it
contains information that is different from the information in the accompanying prospectus.

S-i
Table of Contents

FORWARD-LOOKING STATEMENTS

Certain statements in this prospectus supplement, the accompanying prospectus and the documents incorporated herein and therein by
reference constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-
looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects.
These forward-looking statements may be identified by terminology such as "likely," "may," "will," "should," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential" or "continue," or the negative of such terms and other comparable terminology.
Although we believe that the expectations reflected in the forward-looking statements contained in this prospectus supplement, the
accompanying prospectus and the documents incorporated herein and therein by reference are reasonable, we cannot guarantee future results.
These statements involve known and unknown risks, uncertainties and other factors, including those discussed under "Risk Factors," that may
cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by the
forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new
information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q
and 8-K should be considered.

S-ii
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PROSPECTUS SUPPLEMENT SUMMARY

This is only a summary of the offering. To fully understand the investment you are contemplating you must consider this prospectus
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supplement, the accompanying prospectus, and the detailed information incorporated into them by reference, including our financial
statements and their accompanying notes. Unless the context otherwise requires, the terms "M.D.C. Holdings, Inc.," "MDC" "we" and
"our" refer to M.D.C. Holdings, Inc., a Delaware corporation, and its subsidiaries.

M.D.C. Holdings, Inc.

M.D.C. Holdings, Inc. is a Delaware corporation. We have two primary operations, homebuilding and financial services. Our
homebuilding operations consist of wholly owned subsidiary companies that generally purchase finished lots or develop lots to the extent
necessary for the construction and sale primarily of single-family detached homes to first-time and first-time move-up homebuyers under
the name "Richmond American Homes." Our homebuilding operations are comprised of various homebuilding divisions that we consider to
be our operating segments. For financial reporting, we have aggregated our homebuilding operating segments into reportable segments as
follows: (1) West (includes operating segments located in Arizona, California, Nevada, Washington and Oregon); (2) Mountain (includes
operating segments located in Colorado and Utah); and (3) East (includes operating segments located in the mid-Atlantic, which includes
Virginia and Maryland, and Florida).

Our financial services operations primarily consist of (1) HomeAmerican Mortgage Corporation ("HomeAmerican"), which
originates mortgage loans primarily for our homebuyers, (2) Allegiant Insurance Company, Inc., A Risk Retention Group ("Allegiant"),
which provides insurance coverage primarily to our homebuilding subsidiaries on homes that have been delivered and most of our
subcontractors for completed work on those delivered homes, (3) StarAmerican Insurance Ltd., which is a re-insurer of Allegiant claims, (4)
American Home Insurance Agency, Inc., which offers third-party insurance products to our homebuyers, and (5) American Home Title and
Escrow Company, which provides title agency services to our homebuilding subsidiaries and our customers in certain states. For financial
reporting, we have aggregated our financial services operating segments into reportable segments as follows: (1) mortgage operations
(represents HomeAmerican only) and (2) other (all remaining operating segments).

Our principal executive offices are at 4350 South Monaco Street, Suite 500, Denver, Colorado 80237 (telephone (303) 773-1100).
Additional information about us can be obtained on the investor relations section of our website. Our website is
http://ir.richmondamerican.com, although the information on our website is not incorporated into this prospectus supplement.

Recent Developments

On January 6, 2020, we announced selected preliminary operating results for the quarter-to-date period ended December 31, 2019.
These selected operating results are preliminary and unaudited, and may change. They include:

New home deliveries of 2,389, an increase of 31% from the comparable prior year period's new home deliveries of 1,827, with

an average sales price of approximately $450,000;




net new home orders of 1,574, an increase of 49% from the comparable prior year period's net new home orders of 1,059;




monthly sales absorption pace of 2.8, an increase of 28% from the comparable prior year period;




homes in backlog of 3,801, an increase of 29% from the comparable prior year period's homes in backlog of 2,936; and




dollar value of backlog of $1.75 billion, an increase of 23% from the comparable prior year period.

S-1
Table of Contents

The Offering

The following is a brief summary of certain terms of this offering. For a more complete description of the terms of the notes, see the
section "Description of Notes." In this "Prospectus Supplement Summary--The Offering" section, "we" refers to M.D.C. Holdings, Inc.
and not to any of its subsidiaries.

Issuer
M.D.C. Holdings, Inc.


Securities Offered
$300,000,000 aggregate principal amount of 3.850% Senior Notes due 2030.


Maturity Date
January 15, 2030.
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Interest Rate and Interest Payment Dates
The notes will have an interest rate of 3.850%. Interest will be payable semi-
annually in arrears on each January 15 and July 15, commencing July 15, 2020.


Optional Redemption
We may redeem the notes, in whole or in part. If the notes are redeemed prior to
July 15, 2029 (the "Par Call Date"), the redemption price for the notes to be
redeemed will equal the greater of the following amounts: (1) 100% of the
aggregate principal amount, and (2) the sum of the present value of the remaining
scheduled payments of principal and interest in respect of the notes being
redeemed on the redemption date, discounted to the redemption date, on a semi-
annual basis, at the Treasury Rate (as defined in "Description of Notes--
Optional Redemption") plus 50 basis points (0.500%), plus, in each case, accrued
and unpaid interest to the redemption date. If the notes are redeemed on or after
the Par Call Date, the redemption price for the notes to be redeemed will equal
100% of the principal amount of such notes, plus accrued and unpaid interest to
the redemption date. See "Description of Notes--Optional Redemption."


Interest Rate Adjustment
The interest rate payable on the notes will be subject to adjustments from time to
time upon the occurrence of a change of control and if the debt ratings assigned
to the notes by Moody's Investors Service, Inc., Standard & Poor's Ratings
Services and Fitch Ratings (or any replacement ratings agency selected by us) are
all below investment grade, or in the event of certain subsequent upgrades to the
debt rating, as described under "Description of Notes--Interest Rate Adjustment
Following a Change of Control."

Ranking
The notes will be our general unsecured obligations. Your right to payment
under these notes will be:




·
effectively junior to the rights of our secured creditors to the extent of the
value of their security in our assets;




·
structurally junior to the rights of creditors (including trade creditors) of our
subsidiaries that are not guarantors of the notes;




·
equal with the rights of creditors under our unsecured unsubordinated debt;
and




·
senior to the rights of creditors under any of our debt that is expressly
subordinated in right of payment to these notes.




At September 30, 2019, we had total consolidated indebtedness of approximately
$1.095 billion, of which none would be expressly subordinated to the notes. At
such date, MDC had no secured indebtedness outstanding and the guarantor
subsidiaries had no secured indebtedness outstanding on MDC's consolidated
balance sheet. In addition, we had issued and outstanding surety bonds and letters
of credit totaling $251.1 million and $93.0 million, respectively, as of September
30, 2019. At September 30, 2019, our non-guarantor subsidiaries had
approximately $90.5 million of indebtedness reflected on our consolidated
balance sheet to which the notes will be structurally subordinated.

S-2
Table of Contents

Guarantees
Certain of our existing subsidiaries and future subsidiaries will fully and
unconditionally guarantee our obligations under the notes, jointly and severally,
on a senior unsecured basis. Your right to payment under any guarantee will be:




·
effectively junior to the rights of secured creditors to the extent of their
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security in the guarantors' assets;




·
equal with the rights of creditors under the guarantors' other unsecured
unsubordinated debt; and




·
senior to the rights of creditors under the guarantors' debt that is expressly
subordinated in right of payment to the guarantees.



Covenants
The indenture imposes certain limitations on our ability and the ability of our
restricted subsidiaries to:




·
issue certain additional secured indebtedness; and




·
engage in sale and lease-back transactions.




These covenants are subject to important exceptions and qualifications, which are
described under the heading "Description of Notes."



The indenture does not limit the amount of unsecured debt that we may issue or
require us to offer to purchase the notes upon a change of control.


Use of Proceeds
We intend to use the net proceeds from this offering for general corporate
purposes, which may include repayment of our 5.625% Senior Notes due
February 1, 2020 (the "2020 Notes") of which $250 million aggregate principal
amount is outstanding. See "Use of Proceeds."



Risk Factors
You should carefully consider the factors discussed in detail elsewhere in this
prospectus supplement under the caption "Risk Factors."

S-3
Table of Contents

Summary Financial and Other Data

The income statement data and balance sheet data set forth below at December 31, 2018, 2017 and 2016 and for the years then
ended have been derived from our audited consolidated financial statements. The income statement data and balance sheet data set forth
below at September 30, 2019 and 2018, and for the nine months ended September 30, 2019 and 2018, have been derived from our unaudited
consolidated financial statements which, in the opinion of management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of such information. The operating results for the nine months ended September 30, 2019 and
2018 are not necessarily indicative of results for the full fiscal year. This information should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations," our consolidated financial statements and the notes thereto
incorporated herein by reference and other financial information in our Annual Report on Form 10-K for the year ended December 31, 2018
and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, incorporated herein by reference.

Nine Months Ended


September 30,

Year Ended December 31,



2019

2018

2018

2017

2016










(dollars in thousands)

INCOME STATEMENT DATA






Home sale revenues
$
2,130,396 $
2,123,323 $
2,981,811 $
2,498,695 $
2,257,153
Financial services revenues

58,389
60,018
83,405
74,372
63,991
Home cost of sales

1,724,040
1,722,283
2,415,139
2,073,883
1,884,391
Inventory impairments

610
11,848
21,850
10,010
10,173
Homebuilding selling, general and administrative
expenses

257,689
236,435
329,801
287,488
250,540
Income before income taxes

192,743
194,568
263,854
229,732
151,781
Net income

145,723
156,055
210,780
141,835
103,211
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BALANCE SHEET DATA (at period end)






Assets






Cash and cash equivalents (1)
$
332,128 $
410,926 $
463,776 $
505,428 $
282,909
Marketable securities

52,876
49,006
40,879
91,638
96,206
Total inventories

2,395,677
2,107,934
2,132,994
1,829,736
1,758,814
Total assets

3,158,579
2,908,170
3,001,077
2,780,292
2,528,589







Debt






Senior notes, net
$
989,050 $
987,617 $
987,967 $
986,597 $
841,646
Revolving credit facility

15,000
15,000
15,000
15,000
15,000
Mortgage repurchase facility

90,471
90,784
116,815
112,340
114,485
Total debt
$
1,094,521 $
1,093,401 $
1,119,782 $
1,113,937 $
971,131
Stockholders' Equity
$
1,701,801 $
1,532,742 $
1,576,000 $
1,407,287 $
1,320,070
________________________
(1) Excludes restricted cash.

Nine Months Ended


September 30,

Year Ended December 31,



2019

2018

2018

2017

2016










(dollars in thousands)

OPERATING DATA






New home deliveries (units)

4,585
4,370
6,197
5,541
5,054
Average selling price
$
465 $
486 $
481 $
451 $
447
Net new home orders (units)

6,265
4,915
5,974
5,816
5,606
Homes in backlog at period end (units)

4,616
3,704
2,936
3,159
2,884
Estimated backlog sales value at period end
$
2,099,085 $
1,803,064 $
1,425,967 $
1,602,492 $
1,381,649
Estimated average selling price of homes in backlog
$
455 $
487 $
486 $
507 $
479
Active subdivisions at period end

190
158
166
151
164

S-4
Table of Contents

RISK FACTORS

Before purchasing the notes offered hereby, you should consider all of the information set forth in this prospectus supplement, the
accompanying prospectus and the information incorporated herein by reference, and, in particular, you should evaluate the risk factors set
forth below and in the accompanying prospectus.

Risks Relating to Our Business

Changes in general economic, real estate and other business conditions may have an adverse effect on the homebuilding and mortgage
industries, which could have a negative impact on our business.

The homebuilding industry is cyclical and is significantly affected by changes in industry conditions, the national political environment
and general economic conditions such as:


·
employment levels;


·
availability of financing for homebuyers;


·
interest rates;


·
consumer confidence;


·
wage growth;

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·
household formations;


·
levels of new and existing homes for sale;


·
cost of land, labor and construction materials;


·
demographic trends; and


·
housing demand.

These conditions may exist on a national level or may affect some of the regions or markets in which we operate more than others.
When adverse conditions affect any of our larger markets, they could have a proportionately greater impact on us than on some other
homebuilding companies.

Changes to monetary policy or other actions by the Federal Reserve could have an adverse effect on interest rates (including mortgage
interest rates), equity markets and consumer confidence. Such effects could cause us to experience declines in the market value of our inventory
and the demand for our homes, resulting in a negative impact to our financial position, results of operations and cash flows.

An oversupply of alternatives to new homes, including foreclosed homes, homes held for sale by investors and speculators, other
existing homes, and rental properties, can also reduce our ability to sell new homes, depress new home prices and reduce our margins on the
sale of new homes. High levels of foreclosures and short-sales not only contribute to additional inventory available for sale, but also can reduce
appraisal valuations for new homes, potentially resulting in lower sales prices.

Terrorist attacks, acts of war, other acts of violence or threats to national security, and any corresponding response by the United
States or others, or related domestic or international instability, may adversely affect general economic conditions or cause a slowdown of the
economy.

As a result of the foregoing matters, potential customers may be less willing or able to buy our homes. In the future, our pricing
strategies may continue to be limited by market conditions. We may be unable to change the mix of our home offerings, reduce the costs of the
homes we build or offer more affordable homes to maintain our gross margins or satisfactorily address changing market conditions in other
ways. In addition, cancellations of home sales contracts in backlog may increase as homebuyers choose to not honor their contracts.

Additionally, the factors discussed above may increase our counterparty risk, which may include, among others, banks under our
credit facilities and mortgage purchasers who may not be willing or able to perform on obligations to us. To the extent a third-party is unable or
unwilling to meet its obligations, our financial position, results of operations and cash flows could be negatively impacted.

S-5
Table of Contents

Our mortgage operations are closely related to our homebuilding business, as HomeAmerican originates mortgage loans principally to
purchasers of the homes we build. Therefore, a decrease in the demand for our homes because of the preceding matters may also adversely
affect the financial results of this segment of our business. Furthermore, any adverse changes in the economic conditions discussed previously
could increase the default rate on the mortgages we originate, which may adversely affect our ability to sell the mortgages, the pricing we
receive upon the sale of mortgages, or our potential exposure to recourse regarding mortgage loan sales.

These challenging conditions are complex and interrelated. We cannot predict their occurrence or severity, nor can we provide
assurance that our responses would be successful.

Increased competition levels in the homebuilding and mortgage lending industries could have a negative impact on our homebuilding
and mortgage operations.

The homebuilding industry is fragmented and highly competitive. Our homebuilding subsidiaries compete with numerous public and
private homebuilders, including a number that are substantially larger than us and may have greater financial resources than we do. Our
homebuilding subsidiaries also compete with subdivision developers and land development companies, some of which are themselves
homebuilders or affiliates of homebuilders. Homebuilders compete for customers, land, building materials, subcontractor labor and desirable
financing. Competition for home orders is based primarily on home sales price, location of property, home style, financing available to
prospective homebuyers, quality of homes built, customer service and general reputation in the community, and may vary market-by-market
and/or submarket-by-submarket. Additionally, competition within the homebuilding industry can be impacted by an excess supply of new and
existing homes available for sale resulting from a number of factors, including, among other things, increases in the number of new home
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communities, increases in speculative homes available for sale and increases in home foreclosures. Increased competition can result in a
decrease in our net new home orders, a decrease in our home sales prices and/or an increase in our home sales incentives in an effort to
generate new home sales and maintain homes in backlog until they close. These competitive pressures may negatively impact our financial
position, results of operations and cash flows.

Our mortgage lending subsidiary, HomeAmerican, experiences competition from numerous banks and other mortgage bankers and
brokers, many of which are larger and may have greater financial resources. As a result, these competitors may be able to offer better pricing
and/or mortgage loan terms, more relaxed underwriting criteria and a greater range of products, which could negatively impact the financial
position, results of operations and cash flows of our mortgage operations.

If land is not available at reasonable prices or terms, we could be required to scale back our operations in a given market and/or we
may operate at lower levels of profitability.

Our operations depend on our homebuilding subsidiaries' ability to obtain land for the development of our residential communities at
reasonable prices and with terms that meet our underwriting criteria. Our ability to obtain land for new residential communities may be
adversely affected by changes in the general availability of land, the willingness of land sellers to sell land at reasonable prices, competition for
available land, availability of financing to acquire land, zoning, regulations that limit housing density, and other market conditions. If the supply
of land, and especially finished lots, appropriate for development of residential communities is limited because of these factors, or for any other
reason, the number of homes that our homebuilding subsidiaries build and sell may decline. To the extent that we are unable to purchase land
timely or enter into new contracts for the purchase of land at reasonable prices, due to the lag time between the time we acquire land and the
time we begin selling homes, we may be required to scale back our operations in a given market and/or we may operate at lower levels of
profitability. As a result, our financial position, results of operations and cash flows could be negatively impacted.

Supply shortages and other risks related to the demand for skilled labor and building materials could increase costs and delay
deliveries.

The residential construction industry experiences price fluctuations and shortages in labor and materials from time to time. Shortages
in labor can be due to: work stoppages, labor disputes, shortages in qualified trades people, lack of availability of adequate utility infrastructure
and services, or our need to rely on local subcontractors who may not be adequately capitalized or insured. Labor and material shortages can be
more severe during periods of strong demand for housing or during periods in which the markets where we operate experience natural disasters
that have a significant impact on existing residential and commercial structures. Additionally, we could experience labor shortages as a result of
subcontractors going out of business or leaving the residential construction market due to low levels of housing production and volumes.
Pricing for labor and materials can be affected by the factors discussed above, changes in energy prices, and various other national, regional and
local economic factors. In addition, environmental and other regulations and import tariffs and trade restrictions have had, and in the future
could continue to have, an adverse impact on the cost of certain raw materials such as lumber. Recalls of materials driven by manufacturing
defects can drive shortages in materials and delay the delivery of homes. Any of these circumstances could give rise to delays in the start or
completion of our residential communities, increase the cost of developing one or more of our residential communities and/or increase the
construction cost of our homes.

We generally are unable to pass on increases in construction costs to customers who have already entered into sales contracts, as those
sales contracts fix the price of the homes at the time the contracts are signed, which generally is in advance of the construction of the home. To
the extent that market conditions prevent the recovery of increased costs, including, among other things, subcontracted labor, finished lots,
building materials, and other resources, through higher selling prices, our financial position, cash flows and operating results, including our
gross margin from home sales, could be negatively impacted.

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If mortgage interest rates rise, if down payment requirements are increased, if loan limits are decreased, or if mortgage financing
otherwise becomes less available, it could adversely affect our business.

Mortgage liquidity influenced by governmental entities like the Federal Housing Administration, U.S. Department of Veterans Affairs,
U.S. Department of Agriculture and Ginnie Mae or government-sponsored enterprises ("GSEs") like Fannie Mae and Freddie Mac continue to
be an important factor in marketing our homes. Financial losses or other factors may limit, restrict or otherwise curtail their ability or
willingness to insure mortgage loans, offer insurance at rates and on terms that are not prohibitive, or purchase mortgage loans. Should this
occur, it may negatively impact the availability of mortgage financing and our sales of new homes.

We believe that the liquidity provided by Fannie Mae, Freddie Mac and Ginnie Mae to the mortgage industry has been very important
to the housing market. The future of Fannie Mae and Freddie Mac are in question and any reduction in the availability of the liquidity provided
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by these institutions could adversely affect interest rates, mortgage availability and our sales of new homes and mortgage loans.

Loans sold to or insured by the GSEs are subject to various loan limits. Decreases in these loan limits may require homebuyers to
make larger down payments or obtain more restrictive non-conforming or "jumbo" mortgages, which could adversely impact on our financial
position, results of operations and cash flows.

Even if potential customers do not need financing, changes in the availability of mortgage products may make it harder for them to
sell their current homes to potential buyers who need financing.

If interest rates increase, the costs of owning a home may be affected and could result in further reductions in the demand for our
homes.

Changes to tax laws, incentives or credits currently available to our customers may negatively impact our business.

Many homeowners receive substantial tax benefits in the form of tax deductions against their personal taxable income for mortgage
interest and property tax payments and the loss or reduction of these deductions could affect homeowners' net cost of owning a home. On
December 22, 2017, the Tax Cuts and Jobs Act of 2017 was enacted. As a result of the Tax Cuts and Jobs Act, substantial changes were made
to personal income tax rates and the deductibility of (1) mortgage interest, (2) state and local taxes and (3) real property taxes, among other
items. The full impact of these changes is still unknown. However, the changes resulting from the Tax Cuts and Jobs Act, in addition to any
other future changes to existing tax laws, may result in an increase in the total cost of home ownership and may make the purchase of a home
less attractive to buyers. This could adversely impact demand for and/or sales prices of new homes, which would have a negative impact on our
business.

A decline in the market value of our homes or carrying value of our land would have a negative impact on our business.

Our homebuilding subsidiaries acquire land for the replacement of land inventory and/or expansion within our current markets and
may, from time to time, purchase land for expansion into new markets. The fair value of our land and land under development inventory and
housing completed or under construction inventory depends on market conditions. Factors that can impact our determination of the fair value of
our inventory primarily include home sale prices, levels of home sale incentives and home construction and land costs. Our home sale prices
and/or levels of home sale incentives can be impacted by, among other things, uncertainty in the homebuilding and mortgage industries or the
United States/global economy overall, decreased demand for new homes, decreased home prices offered by our competitors, home foreclosure
and short-sale levels, decreased ability of our homebuyers to obtain suitable mortgage loan financing and high levels of home order
cancellations. Under such circumstances, we may be required to record impairments of our inventory. Any such inventory impairments would
have a negative impact on our financial position and results of operations.

Natural disasters could cause an increase in home construction costs, as well as delays, and could negatively impact our business.

The climates and geology of many of the markets in which we operate present increased risks of natural disasters. To the extent that
hurricanes, severe storms, earthquakes, droughts, floods, heavy or prolonged precipitation, wildfires or other natural disasters or similar events
occur, the financial position, results of operations and cash flows of our business may be negatively impacted.

Changes in energy prices or regulations may have an adverse effect on our cost of building homes.

Some of the markets in which we operate are impacted by regulations related to energy, such as setbacks required from oil / gas
drilling operations or restrictions on the use of land. To the extent that these regulations are modified, the value of land we already own or the
availability of land we are looking to purchase may decline, which may adversely impact the financial position, results of operations and cash
flows of our business. Furthermore, pricing offered by our suppliers and subcontractors can be adversely affected by increases in various energy
costs resulting in a negative impact to our financial position, results of operations and cash flows of our business.

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We have financial needs that we meet through the capital markets, including the debt and secondary mortgage markets, and
disruptions in these markets could have an adverse impact on the results of our business.

We have financial needs that we meet through the capital markets, including the debt and secondary mortgage markets. Our
requirements for additional capital, whether to finance operations or to service or refinance our existing indebtedness, fluctuate as market
conditions and our financial performance and operations change. We cannot provide assurance that we will maintain cash reserves and generate
sufficient cash flow from operations in an amount to enable us to service our debt or to fund other liquidity needs.
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