Loans and Mortgages Payable

12 Months Ended

Dec. 31, 2013

Loans and Mortgages Payable [Abstract]

LOANS AND MORTGAGES PAYABLE

NOTE 5 – LOANS AND MORTGAGES PAYABLE

Loans Payable

The Company may purchase securities on margin.  The interest rates charged on the margin loans at December 31, 2013 and 2012 was 2%.  These margin loans are due on demand.  At December 31, 2013 and 2012, respectively, the margin loans amounted to $18,574,228 and $-0-, respectively, and are collateralized by the Company’s securities portfolio.  The Company must maintain a coverage ratio of approximately 2 times.

The Company has revolving credit agreements totaling $13,500,000 with GE Commercial Distribution Finance Corporation (GE), Customers Bank, Northpoint Commercial Finance and 21st Mortgage Corporation to finance inventory purchases.  Interest rates on these agreements range from prime with a minimum of 6% to prime plus 2% with a minimum of 8% after 18 months.  As of December 31, 2013 and 2012, the total amount outstanding on these lines was $5,624,569 and $5,521,406, 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 through April 1, 2011.  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, 2013 and 2012, the amount outstanding on this revolving line of credit was $4,920,199.  As of December 31, 2013 and 2012, the interest rates were 3.67% and 3.73%, respectively.  This revolving line of credit expires on June 30, 2014.

Unsecured Lines of Credit

On March 29, 2013, the Company entered into a new $35 million Unsecured Revolving Credit Facility with Bank of Montreal (“Credit Facility”).  The Company has the ability to increase the borrowing capacity by an amount not to exceed $15 million, representing a maximum aggregate borrowing capacity of $50 million, subject to various conditions, as defined in the agreement. The maturity date of the Credit Facility is March 29, 2016 with a one year extension available at the Company’s option.  Borrowings under the Credit Facility can be used for, among other things, acquisitions, working capital, capital expenditures, and repayment of other indebtedness.  Borrowings will bear interest at the Company’s option of LIBOR plus 2.00% to 2.75% or BMO’s prime lending rate plus 1.00% to 1.75%, based on the Company’s overall leverage.  Based on the current leverage ratio, interest on this borrowing is at LIBOR plus 225 basis points which was 2.42% as of December 31, 2013.  The Company incurs a fee on the unused commitment amount of up to 0.35% per annum.  The Credit Facility replaces the Company’s former $5.0 million unsecured line of credit, which was at an interest rate of LIBOR plus 375 basis points.  As of December 31, 2013, the amount outstanding on the Credit Facility was $20,000,000.  There were no amounts outstanding as of December 31, 2012 or 2011 on the Company’s previous unsecured line of credit.

Mortgages Payable

The following is a summary of mortgages payable:

	At December 31, 2013				Balance at December 31,
Property	Due Date	Interest Rate			2013		2012
Allentown and Clinton Mobile Home Resort	02/01/17	LIBOR + 3.25%			$	10,799,401	$	11,112,757
Cedarcrest	04/01/21		5.125	%		9,124,838		9,275,010
Cranberry Village	12/01/18		6.8	%		-0-		2,894,029
D & R Village and Waterfalls Village	02/27/15	LIBOR + 2.25%				7,089,610		7,376,497
Fairview Manor	02/01/17		5.785	%		10,345,239		10,539,333
Forest Park Village	12/01/18		6.8	%		-0-		2,894,029
Heather Highlands	08/28/18	Prime + 1.0%				1,288,149		1,573,968
Highland Estates	09/01/17		6.175	%		9,578,574		9,738,702
Oxford Village	01/01/20		5.94	%		7,527,426		7,694,260
Somerset Estates and Whispering Pines	02/26/19		4.89	%		891,382		1,044,107
Southwind Village	01/01/20		5.94	%		6,012,690		6,145,953
Suburban Estates and Sunny Acres	06/01/18		4.0	%		6,711,306		6,968,277
Twin Oaks	12/01/19		5.75	%		2,702,771		2,764,752
Various (5 properties)	01/01/22		4.25	%		14,964,116		15,236,831
Various (5 properties)	12/06/22		4.75	%		7,675,595		-0-
Various (11 properties)	08/01/17	LIBOR + 3.0%				12,909,520		13,612,847
Various (13 properties)	03/01/23		4.065	%		53,019,327		-0-
Total Mortgages	Payable				$	160,639,944	$	108,871,352

At December 31, 2013 and 2012, mortgages were collateralized by real property with a carrying value of $235,685,401 and $143,383,848, respectively, before accumulated depreciation and amortization.  Interest costs amounting to $247,186, $269,891 and $294,150 were capitalized during 2013, 2012 and 2011, respectively, in connection with the Company’s expansion program.

Recent Transactions

2013

On February 27, 2013, the Company had one mortgage loan due for D&R Village and Waterfalls Village with a balance of approximately $7,400,000.  Under the terms of the loan agreement, this loan may be extended for an additional two years.  Management has extended this loan to February 27, 2015.  Interest during the extension period is at LIBOR plus 225 basis points which was 2.41% as of December 31, 2013.

On March 1, 2013, the Company obtained a $53,760,000 mortgage loan from JP Morgan Chase Bank, N.A. on its 10 community acquisition.  The Company also included 3 additional communities in this mortgage.  Interest on the mortgage loan is fixed at 4.065%. This mortgage loan matures on March 1, 2023.

On April 3, 2013, the Company repaid its mortgages on Cranberry Village and Forest Park Village for a total amount of approximately $5,700,000.  The interest rate on these mortgages was 6.8%.

In June 2013, the Company modified its mortgage on Sunny Acres and Suburban Estates.  The interest rate was reduced from a fixed rate of 6.5% to a fixed rate of 4.0%.  The maturity date was accelerated from June 1, 2020 to June 1, 2018.

On November 6, 2013, the Company assumed a $7,700,000 mortgage on the acquisition of five manufactured home communities.  This mortgage is at a fixed interest rate of 4.75% and matures on December 6, 2022.

2012

On February 2, 2012, the Company obtained an $11,400,000 mortgage on Allentown and Clinton Mobile Home Resort from Bank of America, N.A.  This mortgage is at a variable rate of LIBOR plus 3.25% and matures on February 1, 2017.  The Company may extend this mortgage for an additional two years.  To eliminate the variability of the interest expense, the Company simultaneously entered into an interest rate swap agreement having identical terms to the mortgage, resulting in a net fixed interest rate on the mortgage of 4.39%.

On February 28, 2012, the Company repaid its 7.36% mortgage on Port Royal Village in the amount of approximately $4,700,000.

On July 2, 2012, the Company repaid its mortgage on Sandy Valley Estates in the amount of approximately $1,900,000.

On August 1, 2012, the Company obtained a $13,980,000 mortgage from Sun National Bank on the eleven community acquisition.  This mortgage is at a variable rate of LIBOR plus 3.00% and matures on August 1, 2017.  First Niagara Bank participated in this mortgage.  To eliminate the variability of the interest expense, the Company subsequently entered into an interest rate swap agreement having identical terms to the mortgage, resulting in a net fixed interest rate on the mortgage of 3.89%.

On October 11, 2012, the Company modified and extended its $5,000,000 unsecured line of credit with Bank of America.  The interest rate was modified from LIBOR plus 400 basis points to LIBOR plus 375 basis points.  This line of credit expires on August 31, 2013.

On December 3, 2012, the Company assumed a $2,774,660 mortgage on Twin Oaks from Fannie Mae.  This mortgage is at a fixed interest rate of 5.75% and matures on December 1, 2019.

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

Year Ended December 31,
2014	$	4,434,099
2015		11,089,066
2016		4,429,688
2017		42,382,196
2018		7,530,449
Thereafter		90,774,446
Total	$	160,639,944