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, 2014 and 2013 was 2%. These margin loans are due on demand. At December 31, 2014 and 2013, respectively, the margin loans amounted to $19,392,382 and $18,574,228, 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 $18,500,000 with GE Commercial Distribution Finance Corporation (GE), Customers Bank, Northpoint Commercial Finance and 21^st 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, 2014 and 2013, the total amount outstanding on these lines was $8,323,300 and $5,624,509, respectively, with a weighted average interest rate of 6.62% and 6.03%, respectively.

The Company had a revolving line of credit with Sun National Bank secured by the Company's eligible notes receivables. As of December 31, 2013, the amount outstanding on this revolving line of credit was $4,920,199, and the interest rate was 3.67%. During 2014, the Company borrowed an additional $5.0 million on this revolving line of credit with Sun National Bank for the acquisition of the four manufactured home communities located in Pennsylvania. On September 29, 2014, the Company entered into a new revolving line of credit with OceanFirst Bank (“OceanFirst Line”) secured by the Company’s eligible notes receivable. The maximum availability on this line is $10.0 million. Interest is at a variable rate of prime plus 50 basis points (0.5%) and matures on June 1, 2017. This line replaces the revolving line of credit with Sun National Bank, which was fully repaid with proceeds from the OceanFirst Line. As of December 31, 2014, the amount outstanding on this revolving line of credit was $10,000,000, and the interest rate was 3.75%.

On October 6, 2014, the Company entered into an agreement with 21st Mortgage Corporation (21^st Mortgage) under which 21st Mortgage will finance the Company’s purchase of a maximum of 500 rental units. These loans are at an interest rate of 6.99%, with an origination fee of 2% on new units and 3% on existing units. These loans will have a 10 year term from the date of the borrowing. The amount outstanding on this loan was $723,548, as of December 31, 2014.

On October 30, 2014, the Company obtained a $4,000,000 loan from Two River Community Bank, secured by 1,000,000 shares of MREIC common stock. This loan is at an interest rate of 4.625%, with interest only payments through October 2017, and matures on October 30, 2019.

Unsecured Lines of Credit

On March 29, 2013, the Company entered into a $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 leverage ratios, interest on this borrowing is at LIBOR plus 275 basis points or 2.91% as of December 31, 2014, and LIBOR plus 225 basis points or 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, 2014, the amount outstanding on the Credit Facility was $35,000,000.

The aggregate principal payments of all loans payable, including the Credit Facility, are scheduled as follows:

Year Ended December 31,
2015	$ 8,375,131
2016	35,055,572
2017	10,059,584
2018	63,885
2019	4,068,496
Thereafter	19,816,562

Total	$ 77,439,230

Mortgages Payable

The following is a summary of mortgages payable:

	At December 31, 2014		Balance at December 31,
Property	Due Date	Interest Rate	2014	2013

Allentown and Clinton Mobile Home Resort	02/01/17	LIBOR + 3.25%	$10,486,045	$10,799,401
Cedarcrest	04/01/21	5.125%	8,966,785	9,124,838
D & R Village and Waterfalls Village	02/27/15	LIBOR + 2.25%	6,803,625	7,089,610
Fairview Manor	02/01/17	5.785%	10,139,450	10,345,239
Heather Highlands	08/28/18	Prime + 1.0%	989,773	1,288,149
Highland Estates	09/01/17	6.175%	9,408,128	9,578,574
Oxford Village	01/01/20	5.94%	7,350,261	7,527,426
Somerset Estates and Whispering Pines	02/26/19	4.89%	731,900	891,382
Southwind Village	01/01/20	5.94%	5,871,176	6,012,690
Suburban Estates and Sunny Acres	06/01/18	4.0%	6,417,395	6,711,306
Summit Estates	05/01/16	12.75%	575,021	-0-
Twin Oaks	12/01/19	5.75%	2,637,078	2,702,771
Various (3 properties)	05/01/16	6.23%	8,221,043	-0-
Various (4 properties)	07/01/23	4.975%	8,495,880	-0-
Various (5 properties)	01/01/22	4.25%	14,679,583	14,964,116
Various (5 properties)	12/06/22	4.75%	7,554,281	7,675,595
Various (5 properties)	02/01/18	6.83%	9,083,178	-0-
Various (11 properties)	08/01/17	LIBOR + 3.0%	12,177,725	12,909,520
Various (13 properties)	03/01/23	4.065%	52,082,527	53,019,327
Total Mortgages	Payable		$182,670,854	$160,639,944

At December 31, 2014 and 2013, mortgages were collateralized by real property with a carrying value of $294,759,460 and $235,685,401, respectively, before accumulated depreciation and amortization. Interest costs amounting to $280,354, $247,186 and $269,891 were capitalized during 2014, 2013 and 2012, respectively, in connection with the Company’s expansion program.

On February 27, 2015, the Company refinanced the D&R Village and Waterfalls Village mortgage (See Note 15). On March 6, 2015, the Company obtained a mortgage on Olmsted Falls (See Note 15).

Recent Transactions

2014

On March 13, 2014, the Company assumed approximately $18.1 million in mortgage loans on its 8 community acquisition. The weighted average interest rate on these mortgages is fixed at 6.74%. Approximately $8.9 million matures on May 1, 2016 and the remaining balance matures on February 1, 2018. In addition, the Company borrowed $10.0 million on its Credit Facility to finance this acquisition.

On July 14, 2014, the Company assumed an $8.6 million mortgage loan on its 4 community acquisition. The interest rate on this mortgage is fixed at 4.975%. This mortgage matures on July 1, 2023.

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 both December 31, 2014 and 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.

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

Year Ended December 31,
2015	$ 11,476,760
2016	13,294,102
2017	42,609,986
2018	16,524,653
2019	16,061,179
Thereafter	82,704,174

Total	$ 182,670,854