dfh-20220630
000182508812-312022Q2false00018250882022-01-012022-06-300001825088us-gaap:CommonClassAMember2022-08-04xbrli:shares00018250882022-06-30iso4217:USD00018250882021-12-310001825088us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2022-06-300001825088us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-12-310001825088us-gaap:CommonClassAMember2022-06-30iso4217:USDxbrli:shares0001825088us-gaap:CommonClassAMember2021-12-310001825088us-gaap:CommonClassBMember2021-12-310001825088us-gaap:CommonClassBMember2022-06-300001825088us-gaap:HomeBuildingMember2022-04-012022-06-300001825088us-gaap:HomeBuildingMember2021-04-012021-06-300001825088us-gaap:HomeBuildingMember2022-01-012022-06-300001825088us-gaap:HomeBuildingMember2021-01-012021-06-300001825088us-gaap:ProductAndServiceOtherMember2022-04-012022-06-300001825088us-gaap:ProductAndServiceOtherMember2021-04-012021-06-300001825088us-gaap:ProductAndServiceOtherMember2022-01-012022-06-300001825088us-gaap:ProductAndServiceOtherMember2021-01-012021-06-3000018250882022-04-012022-06-3000018250882021-04-012021-06-3000018250882021-01-012021-06-3000018250882020-09-112020-09-110001825088dfh:RedeemablePreferredUnitsMember2022-03-310001825088dfh:RedeemableNonVotingCommonUnitsMember2022-03-310001825088dfh:CapitalUnitCommonUnitsMembersMember2022-03-310001825088us-gaap:CommonClassAMember2022-03-310001825088us-gaap:CommonClassBMember2022-03-310001825088us-gaap:AdditionalPaidInCapitalMember2022-03-310001825088us-gaap:RetainedEarningsMember2022-03-310001825088us-gaap:NoncontrollingInterestMember2022-03-3100018250882022-03-310001825088us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001825088us-gaap:NoncontrollingInterestMember2022-04-012022-06-300001825088us-gaap:RetainedEarningsMember2022-04-012022-06-300001825088dfh:RedeemablePreferredUnitsMember2022-04-012022-06-300001825088dfh:RedeemablePreferredUnitsMember2022-06-300001825088dfh:RedeemableNonVotingCommonUnitsMember2022-06-300001825088dfh:CapitalUnitCommonUnitsMembersMember2022-06-300001825088us-gaap:AdditionalPaidInCapitalMember2022-06-300001825088us-gaap:RetainedEarningsMember2022-06-300001825088us-gaap:NoncontrollingInterestMember2022-06-300001825088dfh:RedeemablePreferredUnitsMember2021-12-310001825088dfh:RedeemableNonVotingCommonUnitsMember2021-12-310001825088dfh:CapitalUnitCommonUnitsMembersMember2021-12-310001825088us-gaap:AdditionalPaidInCapitalMember2021-12-310001825088us-gaap:RetainedEarningsMember2021-12-310001825088us-gaap:NoncontrollingInterestMember2021-12-310001825088us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300001825088us-gaap:NoncontrollingInterestMember2022-01-012022-06-300001825088us-gaap:RetainedEarningsMember2022-01-012022-06-300001825088dfh:RedeemablePreferredUnitsMember2022-01-012022-06-300001825088dfh:RedeemablePreferredUnitsMember2021-03-310001825088dfh:RedeemableNonVotingCommonUnitsMember2021-03-310001825088dfh:CapitalUnitCommonUnitsMembersMember2021-03-310001825088us-gaap:CommonClassAMember2021-03-310001825088us-gaap:CommonClassBMember2021-03-310001825088us-gaap:AdditionalPaidInCapitalMember2021-03-310001825088us-gaap:RetainedEarningsMember2021-03-310001825088us-gaap:NoncontrollingInterestMember2021-03-3100018250882021-03-310001825088us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001825088us-gaap:NoncontrollingInterestMember2021-04-012021-06-300001825088dfh:RedeemablePreferredUnitsMember2021-04-012021-06-300001825088us-gaap:RetainedEarningsMember2021-04-012021-06-300001825088dfh:RedeemablePreferredUnitsMember2021-06-300001825088dfh:RedeemableNonVotingCommonUnitsMember2021-06-300001825088dfh:CapitalUnitCommonUnitsMembersMember2021-06-300001825088us-gaap:CommonClassAMember2021-06-300001825088us-gaap:CommonClassBMember2021-06-300001825088us-gaap:AdditionalPaidInCapitalMember2021-06-300001825088us-gaap:RetainedEarningsMember2021-06-300001825088us-gaap:NoncontrollingInterestMember2021-06-3000018250882021-06-300001825088dfh:RedeemablePreferredUnitsMember2020-12-310001825088dfh:RedeemableNonVotingCommonUnitsMember2020-12-310001825088dfh:CapitalUnitCommonUnitsMembersMember2020-12-310001825088us-gaap:CommonClassAMember2020-12-310001825088us-gaap:CommonClassBMember2020-12-310001825088us-gaap:AdditionalPaidInCapitalMember2020-12-310001825088us-gaap:RetainedEarningsMember2020-12-310001825088us-gaap:NoncontrollingInterestMember2020-12-3100018250882020-12-310001825088dfh:RedeemablePreferredUnitsMember2021-01-012021-01-200001825088dfh:RedeemableNonVotingCommonUnitsMember2021-01-012021-01-200001825088dfh:CapitalUnitCommonUnitsMembersMember2021-01-012021-01-200001825088us-gaap:NoncontrollingInterestMember2021-01-012021-01-2000018250882021-01-012021-01-200001825088dfh:RedeemablePreferredUnitsMember2021-01-200001825088dfh:RedeemableNonVotingCommonUnitsMember2021-01-200001825088dfh:CapitalUnitCommonUnitsMembersMember2021-01-200001825088us-gaap:CommonClassAMember2021-01-200001825088us-gaap:CommonClassBMember2021-01-200001825088us-gaap:AdditionalPaidInCapitalMember2021-01-200001825088us-gaap:RetainedEarningsMember2021-01-200001825088us-gaap:NoncontrollingInterestMember2021-01-2000018250882021-01-200001825088dfh:RedeemablePreferredUnitsMember2021-01-212021-06-300001825088dfh:RedeemableNonVotingCommonUnitsMember2021-01-212021-06-300001825088dfh:CapitalUnitCommonUnitsMembersMember2021-01-212021-06-300001825088us-gaap:CommonClassAMember2021-01-212021-06-300001825088us-gaap:CommonClassBMember2021-01-212021-06-300001825088us-gaap:AdditionalPaidInCapitalMember2021-01-212021-06-3000018250882021-01-212021-06-300001825088us-gaap:NoncontrollingInterestMember2021-01-212021-06-300001825088us-gaap:RetainedEarningsMember2021-01-212021-06-300001825088us-gaap:IPOMemberus-gaap:CommonClassAMember2021-01-252021-01-250001825088us-gaap:CommonClassBMember2021-01-252021-01-250001825088us-gaap:IPOMemberus-gaap:CommonClassAMember2021-01-250001825088dfh:RedeemableConvertibleSeriesCPreferredStockMember2021-01-270001825088dfh:VillageParkHomesLLCMember2022-06-300001825088dfh:VillageParkHomesLLCMember2021-12-310001825088us-gaap:OtherExpenseMemberdfh:VillageParkHomesLLCMember2022-04-012022-06-300001825088us-gaap:OtherExpenseMemberdfh:VillageParkHomesLLCMember2021-04-012021-06-300001825088us-gaap:OtherExpenseMemberdfh:VillageParkHomesLLCMember2022-01-012022-06-300001825088us-gaap:OtherExpenseMemberdfh:VillageParkHomesLLCMember2021-01-012021-06-300001825088dfh:HHConstructorsOfFayettevilleMember2022-06-300001825088dfh:HHConstructorsOfFayettevilleMember2021-12-310001825088us-gaap:OtherExpenseMemberdfh:HHConstructorsOfFayettevilleMember2022-04-012022-06-300001825088us-gaap:OtherExpenseMemberdfh:HHConstructorsOfFayettevilleMember2021-04-012021-06-300001825088us-gaap:OtherExpenseMemberdfh:HHConstructorsOfFayettevilleMember2022-01-012022-06-300001825088us-gaap:OtherExpenseMemberdfh:HHConstructorsOfFayettevilleMember2021-01-012021-06-300001825088dfh:MHIAcquisitionMember2021-10-010001825088dfh:MHIAcquisitionMember2022-06-300001825088dfh:MHIAcquisitionMember2021-12-310001825088us-gaap:OtherExpenseMemberdfh:MHIAcquisitionMember2022-04-012022-06-300001825088us-gaap:OtherExpenseMemberdfh:MHIAcquisitionMember2022-01-012022-06-300001825088dfh:MHIAcquisitionMember2022-04-012022-06-300001825088dfh:MHIAcquisitionMember2021-04-012021-06-300001825088srt:ScenarioPreviouslyReportedMember2021-01-012021-06-300001825088srt:RestatementAdjustmentMember2021-01-012021-06-300001825088dfh:CenturyHomesFloridaLimitedLiabilityCompanyMember2021-01-310001825088dfh:CenturyHomesFloridaLimitedLiabilityCompanyMember2022-01-012022-06-300001825088dfh:CenturyHomesFloridaLimitedLiabilityCompanyMember2022-01-310001825088dfh:MHIAcquisitionMember2021-10-012021-10-01xbrli:pure0001825088dfh:MHIAcquisitionMember2021-12-032021-12-030001825088dfh:MHIAcquisitionMembersrt:MaximumMember2021-12-032021-12-03dfh:Period0001825088dfh:MHIAcquisitionMember2022-01-012022-06-300001825088dfh:MHIAcquisitionMemberus-gaap:RevolvingCreditFacilityMember2021-10-010001825088dfh:MHIAcquisitionMemberdfh:ModelHomeMember2022-01-312022-01-310001825088dfh:MHIAcquisitionMemberdfh:ModelHomeMember2022-03-24dfh:Homedfh:Lease0001825088us-gaap:IPOMemberdfh:UnsecuredSyndicatedCreditFacilityMemberdfh:BankOfAmericaNationalAssociationAndOtherLendersMember2021-01-250001825088us-gaap:IPOMemberdfh:UnsecuredSyndicatedCreditFacilityMemberdfh:BankOfAmericaNationalAssociationAndOtherLendersMember2021-01-252021-01-250001825088dfh:BankOfAmericaNationalAssociationAndOtherLendersMember2021-09-300001825088dfh:BankOfAmericaNationalAssociationAndOtherLendersMember2022-06-010001825088dfh:BankOfAmericaNationalAssociationAndOtherLendersMember2022-06-020001825088srt:MinimumMemberus-gaap:BaseRateMemberus-gaap:LineOfCreditMember2022-01-012022-06-300001825088us-gaap:BaseRateMembersrt:MaximumMemberus-gaap:LineOfCreditMember2022-01-012022-06-300001825088dfh:VariableRateHighestOptionOneMemberus-gaap:FederalFundsEffectiveSwapRateMemberus-gaap:LineOfCreditMember2022-01-012022-06-300001825088us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberus-gaap:LineOfCreditMemberdfh:VariableRateHighestOptionTwoMember2022-01-012022-06-300001825088dfh:VariableRateHighestOptionThreeMemberus-gaap:LineOfCreditMember2022-01-012022-06-300001825088srt:MinimumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberdfh:VariableRateHighestOptionFourMemberus-gaap:LineOfCreditMember2022-01-012022-06-300001825088us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberdfh:VariableRateHighestOptionFourMembersrt:MaximumMemberus-gaap:LineOfCreditMember2022-01-012022-06-300001825088dfh:UnsecuredSyndicatedCreditFacilityMemberdfh:BankOfAmericaNationalAssociationAndOtherLendersMember2022-06-300001825088dfh:LineOfCreditAndNotesPayableMember2022-06-300001825088dfh:LineOfCreditAndNotesPayableMember2021-12-310001825088srt:ParentCompanyMember2019-11-182019-11-180001825088srt:SubsidiariesMember2019-11-182019-11-1800018250882022-03-022022-03-020001825088us-gaap:IPOMember2021-01-250001825088us-gaap:IPOMemberus-gaap:CommonClassBMember2021-01-250001825088us-gaap:SeriesBPreferredStockMember2021-01-25dfh:Vote0001825088us-gaap:IPOMemberus-gaap:CommonClassBMember2021-01-252021-01-250001825088dfh:SeriesAConvertiblePreferredStockMember2021-09-290001825088dfh:SeriesAConvertiblePreferredStockMember2021-09-292021-09-290001825088us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2022-01-012022-06-30dfh:Entity0001825088us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-01-012021-06-300001825088dfh:JetHomeLoansMember2022-06-300001825088dfh:JetHomeLoansMember2021-12-310001825088dfh:OtherUnconsolidatedVariableInterestEntitiesMember2022-06-300001825088dfh:OtherUnconsolidatedVariableInterestEntitiesMember2021-12-3100018250882021-01-012021-12-31dfh:Segment0001825088us-gaap:OperatingSegmentsMemberdfh:JacksonvilleSegmentMember2022-04-012022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:JacksonvilleSegmentMember2021-04-012021-06-300001825088us-gaap:OperatingSegmentsMemberdfh:JacksonvilleSegmentMember2022-01-012022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:JacksonvilleSegmentMember2021-01-012021-06-300001825088us-gaap:OperatingSegmentsMemberdfh:ColoradoSegmentMember2022-04-012022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:ColoradoSegmentMember2021-04-012021-06-300001825088us-gaap:OperatingSegmentsMemberdfh:ColoradoSegmentMember2022-01-012022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:ColoradoSegmentMember2021-01-012021-06-300001825088us-gaap:OperatingSegmentsMemberdfh:OrlandoSegmentMember2022-04-012022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:OrlandoSegmentMember2021-04-012021-06-300001825088us-gaap:OperatingSegmentsMemberdfh:OrlandoSegmentMember2022-01-012022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:OrlandoSegmentMember2021-01-012021-06-300001825088dfh:DCMetroSegmentMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001825088dfh:DCMetroSegmentMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300001825088dfh:DCMetroSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001825088dfh:DCMetroSegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300001825088us-gaap:OperatingSegmentsMemberdfh:TheCarolinasSegmentMember2022-04-012022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:TheCarolinasSegmentMember2021-04-012021-06-300001825088us-gaap:OperatingSegmentsMemberdfh:TheCarolinasSegmentMember2022-01-012022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:TheCarolinasSegmentMember2021-01-012021-06-300001825088dfh:TexasSegmentMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001825088dfh:TexasSegmentMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300001825088dfh:TexasSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001825088dfh:TexasSegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300001825088dfh:JetHomeLoansSegmentMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001825088dfh:JetHomeLoansSegmentMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300001825088dfh:JetHomeLoansSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001825088dfh:JetHomeLoansSegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300001825088us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2022-04-012022-06-300001825088us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2021-04-012021-06-300001825088us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2022-01-012022-06-300001825088us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2021-01-012021-06-300001825088us-gaap:OperatingSegmentsMember2022-04-012022-06-300001825088us-gaap:OperatingSegmentsMember2021-04-012021-06-300001825088us-gaap:OperatingSegmentsMember2022-01-012022-06-300001825088us-gaap:OperatingSegmentsMember2021-01-012021-06-300001825088us-gaap:MaterialReconcilingItemsMember2022-04-012022-06-300001825088us-gaap:MaterialReconcilingItemsMember2021-04-012021-06-300001825088us-gaap:MaterialReconcilingItemsMember2022-01-012022-06-300001825088us-gaap:MaterialReconcilingItemsMember2021-01-012021-06-300001825088us-gaap:OperatingSegmentsMemberdfh:JacksonvilleSegmentMember2022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:JacksonvilleSegmentMember2021-12-310001825088us-gaap:OperatingSegmentsMemberdfh:ColoradoSegmentMember2022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:ColoradoSegmentMember2021-12-310001825088us-gaap:OperatingSegmentsMemberdfh:OrlandoSegmentMember2022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:OrlandoSegmentMember2021-12-310001825088dfh:DCMetroSegmentMemberus-gaap:OperatingSegmentsMember2022-06-300001825088dfh:DCMetroSegmentMemberus-gaap:OperatingSegmentsMember2021-12-310001825088us-gaap:OperatingSegmentsMemberdfh:TheCarolinasSegmentMember2022-06-300001825088us-gaap:OperatingSegmentsMemberdfh:TheCarolinasSegmentMember2021-12-310001825088dfh:TexasSegmentMemberus-gaap:OperatingSegmentsMember2022-06-300001825088dfh:TexasSegmentMemberus-gaap:OperatingSegmentsMember2021-12-310001825088dfh:JetHomeLoansSegmentMemberus-gaap:OperatingSegmentsMember2022-06-300001825088dfh:JetHomeLoansSegmentMemberus-gaap:OperatingSegmentsMember2021-12-310001825088us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2022-06-300001825088us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2021-12-310001825088us-gaap:OperatingSegmentsMember2022-06-300001825088us-gaap:OperatingSegmentsMember2021-12-310001825088us-gaap:MaterialReconcilingItemsMember2022-06-300001825088us-gaap:MaterialReconcilingItemsMember2021-12-310001825088us-gaap:FairValueInputsLevel3Member2021-12-310001825088us-gaap:FairValueInputsLevel3Member2022-01-012022-06-300001825088us-gaap:FairValueInputsLevel3Member2022-06-300001825088us-gaap:SeriesAPreferredStockMemberdfh:DFHInvestorsLimitedLiabilityCompanyMember2022-06-300001825088dfh:DFResidentialILimitedPartnershipMember2022-06-30dfh:JointVenturedfh:Project0001825088dfh:DFCapitalMember2022-06-300001825088dfh:DFManagementGPIILLCMember2022-06-300001825088dfh:DFHInvestorsLimitedLiabilityCompanyMember2022-06-300001825088dfh:DFResidentialILimitedPartnershipMember2019-01-012019-12-310001825088dfh:DFResidentialILimitedPartnershipMemberdfh:DirectorsExecutiveOfficersAndManagementMember2019-01-012019-12-310001825088dfh:DreamFindersHomesLimitedLiabilityCompanyAndDFHInvestorsLimitedLiabilityCompanyMember2019-01-012019-12-310001825088dfh:DFManagementGPIILLCMember2022-01-012022-01-310001825088dfh:DFResidentialIILimitedPartnershipMember2022-06-300001825088dfh:DFResidentialIILimitedPartnershipMember2022-01-012022-06-300001825088srt:MinimumMemberdfh:DFManagementGPIILLCMember2021-03-112021-03-110001825088dfh:DFResidentialIILimitedPartnershipMemberdfh:DirectorsExecutiveOfficersAndManagementMember2022-01-012022-06-300001825088dfh:RockpointGroupLimitedLiabilityCompanyMemberdfh:DirectorsExecutiveOfficersAndManagementMember2022-01-012022-06-300001825088dfh:DFResidentialIILimitedPartnershipMemberdfh:DirectorsExecutiveOfficersAndManagementMember2021-01-012021-12-310001825088dfh:DFCapitalMember2022-01-012022-06-300001825088dfh:LBParkerOwnersLLCMember2021-08-102021-08-100001825088dfh:RockpointGroupLimitedLiabilityCompanyMember2022-02-152022-02-150001825088dfh:JetHomeLoansMember2022-06-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2022
OR
oTransition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________ to _________.
Commission file number 001-39916
___________________________________________________________
DREAM FINDERS HOMES, INC.
(Exact name of registrant as specified in its charter)
Delaware85-2983036
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
14701 Philips Highway, Suite 300, Jacksonville, FL
32256
(Address of principal executive offices)(Zip code)
(904) 644-7670
(Registrants Telephone Number, Including Area Code)
___________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01 per shareDFH
NASDAQ Global Select Market
___________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filero
Non-accelerated filerxSmaller reporting company
o
Emerging growth company
o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of August 4, 2022, there were 32,378,939 shares of the registrant’s Class A common stock, par value $0.01 per share, issued and outstanding and 60,380,000 shares of the registrant’s Class B common stock, par value $0.01 per share, issued and outstanding.



TABLE OF CONTENTS
2

Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. DREAM FINDERS HOMES, INC CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DREAM FINDERS HOMES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
June 30,
2022
December 31,
2021
Assets
Cash and cash equivalents$84,097$227,227
Restricted cash (VIE amounts of $2,944 and $4,275)
45,29654,095
Accounts receivable (VIE amounts of $1,711 and $2,684)
30,28033,482
Inventories:
Construction in process and finished homes1,254,199 961,779 
Company owned land and lots93,404 83,197 
VIE owned land and lots8,414 21,686 
Total inventories1,356,017 1,066,662 
Lot deposits288,426 241,406 
Other assets (VIE amounts of $2,727 and $2,185)
78,946 43,962 
Equity method investments14,188 15,967 
Property and equipment, net6,511 6,789 
Operating lease right-of-use assets25,108 19,359 
Deferred tax asset4,905 4,232 
Intangible assets, net of amortization7,085 9,140 
Goodwill171,927 171,927 
Total assets$2,112,786 $1,894,248 
Liabilities  
Accounts payable (VIE amounts of $668 and $1,309)
$130,115 $113,498 
Accrued expenses (VIE amounts of $6,213 and $6,915)
126,823 139,508 
Customer deposits190,945 177,685 
Construction lines of credit875,000 760,000 
Notes payable (VIE amounts of $0 and $1,979)
1,568 3,292 
Operating lease liabilities25,625 19,826 
Contingent consideration115,555 124,056 
Total liabilities$1,465,631 $1,337,865 
Commitments and contingencies (Note 5)   
Mezzanine Equity  
Preferred mezzanine equity155,621 155,220 
Stockholders’ Equity  
Class A common stock, $0.01 per share, 289,000,000 authorized, 32,378,939 outstanding
323 323 
Class B common stock, $0.01 per share, 61,000,000 authorized, 60,380,000 outstanding
602 602 
Additional paid-in capital261,207 257,963 
Retained earnings217,346 118,194 
Non-controlling interests12,056 24,081 
Total mezzanine and stockholders’ equity647,155 556,383 
Total liabilities, mezzanine equity, and stockholders’ equity$2,112,786 $1,894,248 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

Table of Contents
DREAM FINDERS HOMES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Revenues:
Homebuilding$791,230 $363,743 $1,453,703 $705,910 
Other1,904 1,533 3,497 2,926 
Total revenues793,134 365,276 1,457,200 708,836 
Homebuilding cost of sales635,422 303,589 1,174,290 594,626 
Selling, general and administrative expense66,015 30,137 127,725 59,452 
Income from equity in earnings of unconsolidated entities(3,334)(1,125)(6,294)(2,857)
Contingent consideration revaluation5,042 3,977 9,234 5,160 
Other (income) expense, net278 (7,856)(691)(7,153)
Interest expense13 16 26 658 
Income before taxes89,698 36,538 152,910 58,950 
Income tax expense(23,327)(4,479)(40,205)(9,295)
Net and comprehensive income66,371 32,059 112,705 49,655 
Net and comprehensive income attributable to non-controlling interests(3,747)(3,486)(6,365)(4,961)
Net and comprehensive income attributable to Dream Finders Homes, Inc. $62,624 $28,573 $106,340 $44,694 
Earnings per share(1)
  
Basic$0.64 $0.31 $1.07 $0.49 
Diluted$0.60 $0.31 $1.02 $0.49 
Weighted-average number of shares  
Basic92,758,939 92,521,482 92,758,939 92,521,482 
Diluted104,566,243 92,670,727 103,531,560 92,641,222 
(1)The Company calculated earnings per share (“EPS”) based on net income attributable to common stockholders for the period January 21, 2021 through June 30, 2021 over the weighted average diluted shares outstanding for the same period. EPS was calculated prospectively for the period subsequent to the Company’s initial public offering and corporate reorganization as described in Note 1, Nature of Business and Significant Accounting Policies, resulting in 92,521,482 shares of common stock outstanding as of the closing of the initial public offering. The total outstanding shares of common stock are made up of Class A common stock and Class B common stock, which participate equally in their ratable ownership share of the Company. Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the convertible preferred stock and the associated preferred dividends.
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

Table of Contents
DREAM FINDERS HOMES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Three and six months ended June 30, 2022
(In thousands, except share amounts)
(Unaudited)
Redeemable Preferred
Units
Mezzanine
Redeemable Common
Units
Mezzanine
Common Units Members’Common Stock - Class ACommon Stock - Class BAdditional
Paid-in
Capital
Retained
Earnings
Total
Non-
Controlling
Interests
Total Equity
UnitsAmountUnitsAmountUnitsAmountSharesAmountSharesAmount
Balance at March 31, 2022157,143$155,417 $ $ 32,295,329$323 60,226,153$602 $259,328 $158,611 $21,511 $595,792 
Equity-based compensation— — — 83,610— 153,847— 1,879 — — 1,879 
Distributions — — — — — — — (13,202)(13,202)
Preferred dividends declared— — — — — — (3,685)— (3,685)
Net income204 — — — — — 62,420 3,747 66,371 
Balance at June 30, 2022157,143$155,621   32,378,939$323 60,380,000$602 $261,207 $217,346 $12,056 $647,155 
Redeemable Preferred
Units
Mezzanine
Redeemable Common
Units
Mezzanine
Common Units Members’Common Stock - Class ACommon Stock - Class BAdditional
Paid-in
Capital
Retained
Earnings
Total
Non-
Controlling
Interests
Total Equity
UnitsAmountUnitsAmountUnitsAmountSharesAmountSharesAmount
Balance at December 31, 2021157,143$155,220 $ $ 32,295,329$323 60,226,153$602 $257,963 $118,194 $24,081 $556,383 
Equity-based compensation— — — 83,610— 153,847— 3,244 — — 3,244 
Distributions— — — — — — — (18,390)(18,390)
Preferred dividends declared— — — — — — (6,787)— (6,787)
Net income401 — — — — — 105,939 6,365 112,705 
Balance at June 30, 2022157,143$155,621   32,378,939$323 60,380,000$602 $261,207 $217,346 $12,056 $647,155 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

Table of Contents
DREAM FINDERS HOMES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Three and six months ended June 30, 2021
In thousands, except share amounts)
(Unaudited)
Redeemable Preferred
Units
Mezzanine
Redeemable Common
Units
Mezzanine
Common Units Members’Common Stock - Class ACommon Stock - Class BAdditional
Paid-in
Capital
Retained
Earnings
Total
Non-
Controlling
Interests
Total Equity
UnitsAmountUnitsAmountUnitsAmountSharesAmountSharesAmount
Balance at March 31, 20217,143$6,515 $ $ 32,295,329323 60,226,153602 253,838 17,226 $21,696 $300,200 
Equity-based compensation— — — — — 1,452 — — 1,452 
Contributions— — — — — — — — — 
Contribution from non-controlling interests— — — — — — — — — 
Distributions— — — — — — — (4,309)(4,309)
Net income188 — — — — — 28,385 3,486 32,059 
Balance at June 30, 20217,143$6,703   32,295,329$323 60,226,153$602 $255,290 $45,611 $20,874 $329,403 
Redeemable Preferred
Units/Stock
Mezzanine
Redeemable Common
Units
Mezzanine
Common Units
Members’
Common Stock - Class ACommon Stock - Class BAdditional
Paid-in
Capital
Retained
Earnings
Total
Non-
Controlling
Interests
Total Equity
Units/SharesAmountUnitsAmountUnitsAmountSharesAmountSharesAmount
Balance at December 31, 202048,543$55,638 7,010$20,593 76,655$103,853 $ $ $ $ $31,939 $212,023 
Unit compensation— — — — — — — — — 
Contributions— — — — — — — — — 
Contributions from non-controlling interests— — — — — — — — — 
Conversion units— — — — — — — — — 
Redemptions— — — — — — — — — 
Distributions(3,617)(1,275)(18,384)— — — — (3,476)(26,753)
Net income (loss)(157)(91)(996)— — — — 210 (1,034)
Balance at January 20, 2021 - prior to reorganization transactions and IPO48,543$51,864 7,010$19,227 76,655$84,473 $ $ $ $ $28,673 $184,237 
Reorganization transaction(15,400)(19,958)(7,010)(19,227)(76,655)(84,473)21,255,329213 60,226,153602 122,843 — —  
Issuance of common stock in IPO, net— — — 11,040,000110 — 129,887 — — 129,997 
Equity-based compensation— — — — — 2,560 — — 2,560 
Contributions— — — — — — — — — 
Contributions from non-controlling interests— — — — — — — — — 
Conversion of units— — — — — — — — — 
Redemptions(26,000)(25,531)— — — — — — — (25,531)
Distributions— — — — — — — (12,550)(12,550)
Net income328 — — — — — 45,611 4,751 50,689 
Balance at June 30, 20217,143$6,703   32,295,329$323 60,226,153$602 $255,290 $45,611 $20,874 $329,403 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

Table of Contents
DREAM FINDERS HOMES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June 30,
20222021
Cash Flows from Operating Activities
Net income$112,705 $49,655 
Adjustments to Reconcile Net Income to Net cash used in operating activities  
Depreciation and amortization4,230 1,927 
(Gain) loss on sale of property and equipment(16)17 
Amortization of debt issuance costs1,860 1,429 
Extinguishment of unamortized debt issuance costs 282  
Amortization of right-of-use operating lease2,489 1,695 
Stock compensation expense3,244 2,560 
Deferred tax expense16,633 9,295 
Income from equity method investments, net of distributions received1,372 (2,857)
Remeasurement of contingent consideration9,234 5,160 
Changes in Operating Assets and Liabilities  
Accounts receivable3,203 1,762 
Inventories(289,355)(117,315)
Lot deposits(47,021)(41,001)
Other assets(32,058)(6,915)
Accounts payable and accrued expenses(20,161)(26,176)
Customer deposits13,260 28,942 
Operating lease ROU assets(8,238)(264)
Operating lease liabilities5,799 (1,346)
Net cash used in operating activities(222,538)(93,432)
Cash Flows from Investing Activities  
Purchase of property and equipment(1,923)(1,278)
Proceeds from disposal of property and equipment42 460 
Investments in equity method investments  (600)
Returns of investment from equity method investments407 549 
Business combinations, net of cash acquired (22,616)
Net cash used in investing activities(1,474)(23,485)
Cash Flows from Financing Activities  
Proceeds from construction lines of credit230,000 1,001,317 
Principal payments on construction lines of credit(115,000)(926,703)
Proceeds from notes payable578 2,420 
Principal payments on notes payable(2,301)(24,378)
Payment of debt issuance costs(5,069)(3,884)
Payment of equity issuance costs (12,572)
Payments on financing leases (77)
Payments on contingent consideration(17,735)(1,207)
Distributions to non-controlling interests(18,390)(16,026)
Proceeds from stock issuance 142,569 
Distributions (23,276)
Redemptions (25,531)
Contribution from conversion of converted LLC units 123,658 
Conversion of LLC units (123,658)
Net cash provided by financing activities72,083 112,652 
Net increase (decrease) in cash, cash equivalents and restricted cash(151,929)(4,265)
Cash, cash equivalents and restricted cash at beginning of period281,322 85,211 
Cash, cash equivalents and restricted cash at end of period$129,393 $80,946 
Non-cash Financing Activities  
Financed land payments to seller$ $8,916 
Leased assets obtained in exchange for new operating lease liabilities8,239  
Equity issuance costs incurred 906 
Accrued distributions  
Non-cash Investing Activities  
Investment capital reallocation (3,469)
Total non-cash financing and investing activities$8,239 $6,353 
Reconciliation of Cash, cash equivalents and Restricted cash  
Cash and cash equivalents$84,097 $34,009 
Restricted cash45,296 46,937 
Total Cash, cash equivalents and Restricted cash shown on the Consolidated Statements of Cash Flows$129,393 $80,946 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7

Table of Contents
DREAM FINDERS HOMES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.    Nature of Business and Significant Accounting Policies
Nature of Business
Dream Finders Homes, Inc. (the “Company”, “DFH, Inc.” or “we”) was incorporated in the State of Delaware on September 11, 2020. The Company was formed for the purpose of completing an initial public offering (“IPO”) of its common stock and related transactions in order to carry on the business of Dream Finders Holdings LLC, a Florida limited liability company (“DFH LLC”), as a publicly-traded entity. Pursuant to a corporate reorganization and completion of its IPO on January 25, 2021, the Company became a holding company for DFH LLC and its subsidiaries.
In connection with the IPO, and pursuant to the terms of the Agreement and Plan of Merger by and among DFH, Inc., DFH LLC and DFH Merger Sub LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of DFH, Inc., DFH Merger Sub LLC merged with and into DFH LLC with DFH LLC as the surviving entity (the “Merger”). As a result of the Merger, all of the outstanding non-voting common units and Series A Preferred Units of DFH LLC converted into 21,255,329 shares of Class A common stock of DFH, Inc., all of the outstanding common units of DFH LLC converted into 60,226,153 shares of Class B common stock of DFH, Inc. and all of the outstanding Series B Preferred Units and Series C Preferred Units of DFH LLC remained outstanding. We refer to this and certain other related events and transactions, as the “Corporate Reorganization”. Following the Corporate Reorganization, the Company owns all of the voting membership interest of DFH LLC.
The Company successfully completed its IPO of 11,040,000 shares of Class A common stock (which included full exercise of the over-allotment option) at an IPO price of $13.00 per share. Shares of the Company’s Class A common stock began trading on the NASDAQ Global Select Market under the ticker symbol “DFH” on January 21, 2021, and the IPO closed on January 25, 2021. On January 27, 2021, the Company redeemed all of the outstanding Series C Preferred Units for $26.0 million, including accrued unpaid preferred distributions.
Basis of Presentation and Consolidation
The accompanying unaudited, condensed consolidated financial statements include the accounts of DFH, Inc., its wholly-owned subsidiaries and its investments that qualify for consolidation treatment (see Note 7). The accompanying statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for a complete set of financial statements. As such, the accompanying statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The accompanying statements include all adjustments that are of a normal recurring nature and necessary for the fair presentation of our results for the interim periods presented, which are not necessarily indicative of results to be expected for the full year. All intercompany accounts and transactions have been eliminated in consolidation. There are no other components of comprehensive income not already reflected in net and comprehensive income on our Condensed Consolidated Statements of Comprehensive Income.
As a result of the Corporate Reorganization, for accounting purposes, our historical results included herein present the combined assets, liabilities and results of operations of DFH, Inc. and DFH LLC and its direct and indirect subsidiaries for the period January 1 to January 21, 2021.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.
8

Table of Contents
Contingent Consideration
In connection with applicable acquisitions, the Company records the fair value of contingent consideration as a liability on the acquisition date, based on estimated pre-tax net income of the acquiree for future periods prescribed by the underlying agreement. The initial measurement of contingent consideration is based on projected cash flows such as revenues, gross margin, overhead expenses and pre-tax income and is discounted to present value using the discounted cash flow method. The remaining estimated earn-out payments are subsequently remeasured to fair value at each reporting date based on the estimated future earnings of the acquired entities and the re-assessment of risk-adjusted discount rates that reflect current market conditions. Maximum potential exposure for contingent consideration is not estimable based on the contractual terms of the contingent consideration agreements, which allow for a percentage payout based on a potentially unlimited range of pre-tax net income.
As of June 30, 2022, and December 31, 2021, the Company remeasured contingent consideration related to the acquisition of Village Park Homes, LLC and adjusted the liability to $3.4 million and $7.6 million, respectively. The Company recorded contingent consideration adjustments resulting in $2.4 million and $0.1 million of expense for the three months ended June 30, 2022 and 2021, and $2.8 million and $0.5 million of expense for the six months ended June 30, 2022, and 2021, respectively.
As of June 30, 2022, and December 31, 2021, the Company remeasured contingent consideration related to the acquisition of H&H Constructors of Fayetteville, LLC (“H&H”) and adjusted the liability to $17.8 million and $19.8 million, respectively. The Company recorded contingent consideration adjustments resulting in $0.7 million and $3.9 million of expense for the three months ended June 30, 2022 and 2021, and $2.5 million and $4.7 million of expense for the six months ended June 30, 2022, and 2021, respectively.
The Company measured contingent consideration related to the acquisition of MHI on October 1, 2021 (see Note 2), and recorded a liability in the opening balance sheet of $94.6 million. As of June 30, 2022 and December 31, 2021, the Company remeasured contingent consideration related to the MHI acquisition and adjusted the liability to $94.4 million and $96.7 million, respectively. The Company recorded contingent consideration adjustments resulting in $1.9 million and $3.9 million of expense for the three and six months ended June 30, 2022, respectively.
The contingent consideration re-measurement adjustments are included in contingent consideration revaluation on the Condensed Consolidated Statements of Comprehensive Income. The payment of the H&H and MHI earn-outs are also subject to certain minimum earnings thresholds, which must be met by H&H and MHI, respectively, before an earn-out payment occurs.
During the three months ended June 30, 2022 and 2021, the Company made total contingent consideration payments of $17.7 million and $1.2 million, respectively. See Note 10, Fair Value Disclosures, for additional discussion on fair value measurement inputs related to contingent consideration.
Change in Accounting Principle – Cash and cash equivalents
On December 31, 2021, the Company elected to change its accounting policy for the presentation of cash proceeds that are in transit from or held within title company escrow accounts for the benefit of the Company, typically for less than five days. Under the new principle, these proceeds are included in cash and cash equivalents, whereas previously, they were considered accounts receivable and included in other assets. The Company believes this reclassification to be preferable because it is a more accurate reflection of its liquidity at period end and the predominant method used in the industry. This change in accounting principle has been applied retrospectively. This reclassification had no impact on the Condensed Consolidated Statements of Comprehensive Income or Condensed Consolidated Statements of Equity.
The impact of the retrospective presentation change on the Condensed Consolidated Statement of Cash Flows for the six month period ended June 30, 2021, is shown below (in thousands):
As previously reported As adjusted Effect of change
Net cash used in operating activities$(121,287)$(93,432)$27,855 
9

Table of Contents
Reclassifications
Certain other reclassifications have been made in the 2021 condensed consolidated financial statements to conform to the classifications used in 2022.
Recent Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform, which provides practical expedients and exceptions for applying GAAP when modifying contracts and hedging relationships that use LIBOR as a reference rate. In addition, these amendments are not applicable to contract modifications made, and hedging relationships entered into or evaluated after December 31, 2022. We do not anticipate a material increase in interest rates from our creditors as a result of the shift away from LIBOR as a reference rate. In June 2022, we amended and restated our revolving credit facility, with no material impact as a result of the shift away from LIBOR (see Note 3). We will continue to evaluate the impact of the shift and relevant guidance on our financial statements and disclosures, as applicable.
2.    Business Acquisitions
Century Homes
On January 31, 2021, the Company completed the acquisition of Century Homes Florida, LLC (“Century Homes”) from Tavistock Development Company for a total purchase price of $35.6 million. The acquisition was accounted for as a business combination under FASB Topic 805, Business Combinations (“Topic 805”). We recorded an allocation of the purchase price to Century Homes’ tangible assets acquired and liabilities assumed based on their estimated fair values as of January 31, 2021. There were no identifiable intangible assets. Goodwill was recorded as the residual amount by which the purchase price exceeded the provisional fair value of the net assets acquired and is expected to be fully deductible for tax purposes. Goodwill consists primarily of expected synergies of combining operations, the acquired workforce, and growth opportunities, none of which qualify as separately identifiable intangible assets. As of January 31, 2022, the Company has completed its allocation of the purchase price and no measurement period adjustments were identified.
The final purchase price allocation as of January 31, 2022 was as follows (in thousands):
Cash acquired$3,993 
Other assets754 
Goodwill1,795 
Inventories34,324 
Property and equipment, net549 
Liabilities(5,831)
Total purchase price$35,584 
MHI
On October 1, 2021, we completed the acquisition of certain assets, rights and properties, and assumed certain liabilities of privately held Texas homebuilder McGuyer Homebuilders, Inc. and related affiliates (“MHI”), including: (i) single-family residential homebuilding; (ii) owning model homes; (iii) acquisition, ownership and licensing of intellectual property (including architectural plans); (iv) purchasing and reselling homebuilding supplies; (v) development, construction and sale of condominium units in Austin, Texas; (vi) mortgage origination through a mortgage company; and (vii) title insurance, escrow and closing services through a title company. The acquisition allows the Company to expand its existing footprint in the Texas market.
Total cash paid at closing of approximately $471.0 million included $463.0 million in purchase price based on the preliminary value of purchased net assets and a 10.0% deposit on a separate land bank facility. On December 3, 2021, the Company paid an additional $25.2 million in cash for customary post-closing adjustments based on the final value of the net assets acquired as of September 30, 2021. Additionally, the Company agreed to the future payment of additional consideration of up to 25.0% of pre-tax net income for up to five periods, the last of which ends 48 months after the closing, subject to certain minimum pre-tax income thresholds and certain overhead expenses, estimated at approximately $94.6 million as of the acquisition date.
10

Table of Contents
The total purchase price was as follows (in thousands):
Cash consideration$488,178 
Contingent consideration based on future earnings94,573 
Total consideration$582,751 
The Company used $20.0 million of cash on hand and proceeds from the sale of the Convertible Preferred Stock (see Note 6) and from unsecured debt incurred under the Credit Agreement, to fund the MHI acquisition. On October 1, 2021, the Company borrowed approximately $300.0 million under the Credit Agreement and paid off MHI’s vertical lines of credit in connection with the closing of the acquisition (see Note 3).
The acquisition was accounted for as a business combination under Topic 805. We recorded an allocation of the purchase price to MHI tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of October 1, 2021. The amounts for intangible assets were based on third-party valuations performed. Goodwill was recorded as the residual amount by which the purchase price exceeded the provisional fair value of the net assets acquired and is expected to be fully deductible for tax purposes. Goodwill consists primarily of expected synergies of combining operations, the acquired workforce, and growth opportunities, none of which qualify as separately identifiable intangible assets. As of June 30, 2022, the Company has substantially completed its purchase price allocation. The principal open items relate to the valuation of certain contingencies as management is awaiting additional information to complete its assessment. Estimates have been recorded as of the acquisition date and updates to these estimates may increase or decrease goodwill.
Pursuant to Topic 805, the financial statements will not be retrospectively adjusted for any provisional amount changes that occur in subsequent periods. Rather, we will recognize any provisional adjustments during the reporting period in which the adjustments are determined. We will also be required to record, in the same period’s financial statements, the effect on earnings, if any, as a result of any change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. We expect to finalize the purchase price allocation as soon as practicable, but no later than one year from the acquisition date.
The purchase price allocation as of June 30, 2022, was as follows (in thousands):
Cash acquired$297 
Inventories473,037 
Lot deposits40,452 
Other assets14,722 
Property and equipment, net3,163 
Equity method investments6,192 
Intangible assets, net of amortization8,840 
Goodwill141,071 
Operating lease right-of-use assets1,508 
Accounts payable(41,466)
Accrued expenses(25,801)
Customer deposits(37,756)
Operating lease liabilities(1,508)
Total purchase price$582,751 
On January 31, 2022, the Company made a cash payment of $34.9 million for model homes from MHI Models, Ltd., a Texas limited partnership (“the MHI Model Homes”). The post-close consideration payment completed the asset purchase transaction, which was considered to be economically separate from the acquisition of MHI and related purchase price allocation above.
11

Table of Contents
On March 24, 2022, the Company sold 93 completed model homes for $55.4 million, including the MHI Model Homes. The Company simultaneously entered into 93 individual lease agreements. The Company is responsible for paying the operating expenses associated with the homes while under lease. The Company considered the terms of the sale and leaseback arrangement and based on applicable GAAP guidance, concluded the transaction qualifies for sale treatment and that the leases should be classified as operating leases.
3.    Construction Lines of Credit
On January 25, 2021, the Company entered into a $450.0 million syndicated senior credit facility with Bank of America, N.A. (the “Credit Agreement”), and subsequently repaid $340.0 million in outstanding debt and terminated all then-existing construction lines of credit. Through subsequent amendments in September 2021 (“the Amendments”), additional lenders were added as well as provisions for any existing lender, at the Company’s request, to increase its revolving commitment under the Credit Agreement, add new revolving loan tranches under the Credit Agreement or add new term loan tranches under the Credit Agreement, not to exceed an aggregate of $1.1 billion, which would include the exercise of the accordion feature (collectively, the "Existing Credit Agreement").

On June 2, 2022, the Company entered into an Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement") to amend and restate its Existing Credit Agreement. The Amended and Restated Credit Agreement is substantially similar to the Existing Credit Agreement except that the Amended and Restated Credit Agreement, among other things, (i) provides for an increase in the aggregate commitments under the facility from $817.5 million to $1.1 billion; (ii) allows the facility to expand to a borrowing base of up to $1.6 billion through its accordion feature; (iii) extends the maturity date from January 25, 2024 to June 2, 2025; and (iv) transitions the applicable interest rate from a Eurodollar based rate to a Secured Overnight Financing Rate (“SOFR”) based rate, as described below.

Under the Amended and Restated Credit Agreement, loans bear interest at the Company’s option of (1) a “Base Rate”, which means, for any day, a fluctuating rate per annum equal to credit spreads of 1.5% to 2.6%, which are determined based on the Company’s debt to capitalization ratio, plus the highest of (a) the Federal Funds Rate plus 0.5%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” (c) Term SOFR plus 1.0% and (d) 1.0%, or (2) a “Term SOFR/Letter of Credit Rate”, which means for any day a fluctuating rate
per annum equal to credit spreads of 2.5% to 3.6%, which are determined based on the Company’s debt to capitalization ratio, plus the adjusted term SOFR rate (based on one, three or six-month interest periods).

On June 30, 2022, the Company received an additional commitment of $50.0 million under the terms of the accordion feature.

As of June 30, 2022 and December 31, 2021, the outstanding balance under the Amended and Restated Credit Agreement was $875.0 million and $760.0 million, respectively, and the effective interest rate was 4.1% and 3.8%, respectively. Under the Amended and Restated Credit Agreement, the funds available are unsecured and availability under the borrowing base is calculated based on finished lots, construction in process, and finished homes inventory on the Condensed Consolidated Balance Sheets.

The Company had capitalized debt issuance costs related to the line of credit and notes payable, net of amortization, of $9.0 million and $5.5 million as of June 30, 2022 and December 31, 2021, respectively, which were included in other assets on the Condensed Consolidated Balance Sheets. The Company amortized $1.1 million and $0.6 million of debt issuance costs for the three months ended June 30, 2022 and 2021, and $1.9 million and $1.4 million of debt issuance costs for the six months ended June 30, 2022 and 2021, respectively.

The Credit Agreement contains restrictive covenants and financial covenants. The Company was in compliance with all debt covenants as of June 30, 2022 and December 31, 2021. The Company expects to remain in compliance with all debt covenants over the next twelve months.
12

Table of Contents
4.    Inventories
Inventories consist of finished lots, construction in process (“CIP”) and finished homes, including capitalized interest. In addition, lot option fees related to off-balance sheet arrangements and due diligence costs related to land development are also capitalized into inventories – finished lots and land. Finished lots are purchased with the intent of building and selling a home, and are generally purchased just-in-time for construction. CIP represents the homebuilding activity associated with homes to be sold and speculative homes. CIP includes the cost of the finished lot and all of the direct costs incurred to build the home. The cost of the home is expensed on a specific identification basis.
Interest is capitalized and included within each inventory category above. Capitalized interest activity is summarized in the table below for the three and six months ended June 30, 2022 and 2021 (in thousands):
For the Three Months Ended
June 30,
For the Six Months Ended
June 30,
2022202120222021
Capitalized interest at the beginning of the period$49,392 $18,842 $33,266 $21,091 
Interest incurred25,447 7,329 50,433 13,997 
Interest expensed(13)(16)(26)(658)
Interest charged to homebuilding cost of sales(12,790)(7,365)(21,637)(15,640)
Capitalized interest at the end of the period$62,036 $18,791 $62,036 $18,791 
5.