LOANS AND MORTGAGES PAYABLE

12 Months Ended

Dec. 31, 2011

Debt Disclosure [Abstract]

LOANS AND MORTGAGES PAYABLE

NOTE 5 – LOANS AND MORTGAGES PAYABLE

Loans Payable

The Company purchases securities on margin. The interest rates charged on the margin loans at December 31, 2011 and 2010 was 2%. These loans are due on demand. At December 31, 2011 and 2010, the margin loans amounted to $13,662,267 and $5,185,212, respectively, and are collateralized by the Company’s securities portfolio. The Company must maintain a coverage ratio of approximately 50%.

The Company had a $7,500,000 revolving credit agreement with GE Commercial Distribution Finance Corporation (GE) (formerly Transamerica Commercial Finance Corporation) to finance inventory purchases. During 2011, GE limited its inventory financing to specific manufacturers. Therefore, the Company obtained $3,000,000 of additional inventory financing lines of credit with other inventory financing companies. Interest rates on these new lines range from prime with a minimum of 6% to prime plus 2% with a minimum of 8% after 18 months. Additionally, GE reviews the Company’s inventory financing line annually and adjusts the amount of the line based upon the amount outstanding on the line. During its current review, GE reduced the line from $6,000,000 to $2,000,000. As of December 31, 2011 and December 31, 2010, the total amount outstanding on these lines was $2,367,366 and $3,450,951, respectively.

The Company has a revolving line of credit with Sun National Bank secured by the Company's eligible notes receivables. The maximum availability on this line is $10,000,000. Interest was at the prime rate. This revolving line of credit had a maturity date of April 1, 2011 but was modified and extended during 2011. The interest rate was modified from prime to LIBOR plus 350 basis points. Advances were increased from 50% of eligible notes receivables secured by manufactured home loans to 60%. As of December 31, 2011 and 2010, the amount outstanding on this revolving line of credit was $7,920,199 and $8,100,000, respectively. As of December 31, 2011 and 2010, the interest rates were 3.77% and 3.25%, respectively. This revolving line of credit expires on June 30, 2014.

The Company had a $2,500,000 loan with Two River Community Bank, collateralized by 875,000 shares of Monmouth Real Estate Investment Corporation common stock. The interest on this loan was 6.75%. This loan was due on November 8, 2010, but was extended to October 31, 2011. This loan was repaid on June 1, 2011.

Unsecured Lines of Credit

During 2011, the Company extended its $5,000,000 unsecured line of credit with Bank of America. As of December 31, 2011 and 2010, the amounts outstanding on this credit line was $-0- and $3,000,000, respectively. This line of credit expires on August 31, 2012.

Mortgages Payable

The following is a summary of mortgages payable:

	At December 31, 2011		Balance at December 31,
Property	Due Date	Interest Rate	2011	2010
Allentown	12/01/11	6.36%	$ -0-	$ 4,676,776
Cedarcrest	04/01/21	5.125%	9,417,680	-0-
Cranberry Village	12/01/18	6.8%	2,990,316	3,080,764
D & R Village and Waterfalls Village	02/27/13	5.614%	7,670,858	7,950,165
Fairview Manor	02/01/17	5.785%	10,720,691	10,893,447
Forest Park Village	12/01/18	6.8%	2,990,316	3,080,764
Heather Highlands	08/28/18	Prime + 1.0%	1,847,558	2,109,877
Highland Estates	09/01/17	6.175%	9,887,460	10,028,889
Oxford Village	01/01/20	5.94%	7,850,087	7,998,109
Port Royal Village	04/01/12	7.36%	4,744,677	4,830,956
Sandy Valley Estates	07/01/12	LIBOR + 4.0%	2,031,946	2,238,046
Somerset Estates/Whispering Pines	02/26/19	4.89%	1,185,835	1,321,089
Southwind Village	01/01/20	5.94%	6,270,422	6,388,658
Suburban Estates and Sunny Acres	06/01/20	6.5%	7,174,164	7,368,234
Weatherly Estates	05/28/14	Prime + 2%	-0-	3,850,003
Various (5 properties)	01/01/22	4.25%	15,500,000	15,000,000
Total Mortgages	Payable		$90,282,010	$90,815,777

At December 31, 2011 and 2010, mortgages were collateralized by real property with a carrying value of $99,358,951 and $105,019,668, respectively, before accumulated depreciation and amortization. Interest costs amounting to $294,150, $309,000 and $273,231 were capitalized during 2011, 2010 and 2009, respectively, in connection with the Company’s expansion program.

Recent Financing

During 2010, the Company modified and extended its mortgage on Sandy Valley Estates. The interest rate was modified from LIBOR plus 450 basis points to LIBOR plus 400 basis points.  As of December 31, 2011 and 2010, the interest rates were 4.28% and 4.26%, respectively. The maturity was extended to July 1, 2012.

On June 4, 2010, the Company entered into a $7,478,250 mortgage from Sun National Bank for the acquisition of Suburban Estates and Sunny Acres. This mortgage is at a fixed rate of 6.5% and matures on June 1, 2020. The interest rate will reset after five years to the rate the Federal Home Loan Bank of New York charges to its members plus 3%.

On December 15, 2010, the Company obtained a $15,000,000 mortgage from KeyBank National Association (KeyBank mortgage) for the acquisition of Brookside Village, Maple Manor, Moosic Heights, Oakwood Lake Village and Pleasant View Estates. Interest on this mortgage is at LIBOR plus 350 basis points. The interest rate at December 31, 2010 was 3.76%. This mortgage payable is due on December 15, 2013 but may be extended for an additional year.

On March 28, 2011, the Company obtained a $9,520,000 mortgage on Cedarcrest Village from Oritani Bank. This mortgage is at a fixed rate of 5.125% and matures on April 1, 2021. The interest rate will reset after five years to the rate the Federal Home Loan Bank of New York charges to its members plus 2%. The monthly payment of principal and interest is based on a 30-year amortization schedule.

On December 13, 2011, the Company obtained a new $15,500,000 mortgage loan from Oritani Bank, to refinance the KeyBank mortgage. This mortgage is at a fixed rate of 4.25% and matures on January 1, 2022. The interest rate will reset after five years to the rate the Federal Home Loan Bank of New York charges to its members plus 1.9%. The monthly payment of principal and interest is based on a 30-year amortization schedule. Proceeds of this mortgage were used to pay off the existing floating rate debt.

On June 1, 2011, the Company repaid its mortgage on Weatherly Estates in the amount of approximately $3,800,000.

The aggregate principal payments of all mortgages payable are scheduled as follows:

2012	$ 8,899,127
2013	9,316,142
2014	2,049,945
2015	2,166,363
2016	2,281,757
Thereafter	65,568,676
Total	$90,282,010