LOANS AND MORTGAGES PAYABLE

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

LOANS AND MORTGAGES PAYABLE

NOTE 6 – LOANS AND MORTGAGES PAYABLE

Loans Payable

The Company may purchase securities on margin. The interest rates charged on the margin loans at December 31, 2021 and 2020 was 0.75%. These margin loans are due on demand. At December 31, 2021 and 2020, the margin loans amounted to $-0- and $17.6 million, 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 $28.5 million with 21^st Mortgage Corporation (“21^st Mortgage”), Customers Bank and Northpoint Commercial Finance to finance inventory purchases. Interest rates on these agreements range from 4.15% to prime with a minimum of 6%. As of December 31, 2021 and 2020, the total amount outstanding on these lines was $10.9 million and $13.1 million, respectively, with a weighted average interest rate of 4.38% and 4.44%, respectively.

In June 2020, the Company expanded its revolving line of credit with OceanFirst Bank (“OceanFirst Line”) from $15 million to $20 million. This line is secured by the Company’s eligible notes receivable. Interest was reduced from prime plus 25 basis points to prime with a floor of 3.25%. The amendment also extended the maturity date from June 1, 2020 to June 1, 2022, with a one year extension at the Bank’s option. As of December 31, 2021 and 2020, the amount outstanding on this revolving line of credit was $6 million and the interest rate was 3.25%.

On October 7, 2020, the Company entered into a revolving line of credit with FirstBank secured by rental homes and rental home leases in several of our manufactured home communities. This facility allows for proceeds of $20 million and is expandable to $30 million with an accordion feature. The facility has a maturity date of November 29, 2022, with a one-year extension available at the Company’s option. Interest is payable at prime plus 25 basis points with a floor of 3.5%. As of December 31, 2021 and 2020, the amount outstanding on this revolving line of credit was $5 million and the interest rate was 3.5%.

Unsecured Line of Credit

On November 29, 2018, the Company entered into a First Amendment to Amended and Restated Credit Agreement (the “Amendment”) to expand and extend its existing unsecured revolving credit facility (the “Facility”). The Facility is syndicated with two banks led by BMO Capital Markets Corp. (“BMO”), as sole lead arranger and sole book runner, with Bank of Montreal as administrative agent, and includes JPMorgan Chase Bank, N.A. (“J.P. Morgan”) as the sole syndication agent. The Amendment provided for an increase from $50 million in available borrowings to $75 million in available borrowings with a $50 million accordion feature, bringing the total potential availability up to $125 million, subject to certain conditions including obtaining commitments from additional lenders. The Amendment also extended the maturity date of the Facility from March 27, 2020 to November 29, 2022, with a one-year extension available at the Company’s option, subject to certain conditions including payment of an extension fee. Availability under the Facility is limited to 60% of the value of the unencumbered communities which the Company has placed in the Facility’s unencumbered asset pool (“Borrowing Base”). The First Amendment increased the value of the Borrowing Base communities by reducing the capitalization rate applied to the Net Operating Income (“NOI”) generated by the communities in the Borrowing Base from 7.5% to 7.0%. On February 5, 2021, the Company entered into a Second Amendment to Amended and Restated Credit Agreement with BMO to further reduce the capitalization rate from 7.0% to 6.5%.

Interest rates on borrowings are based on the Company’s overall leverage ratio and decreased from LIBOR plus 1.75% to 2.50% or BMO’s prime lending rate plus 0.75% to 1.50%, at the Company’s option, to LIBOR plus 1.50% to 2.20%, or BMO’s prime lending rate plus 0.50% to 1.20%. Based on the Company’s current leverage ratio, borrowings under the Facility will bear interest at LIBOR plus 1.60% or at BMO’s prime lending rate plus 0.60%, which results in an interest rate of 1.60% and 1.65% at December 31, 2021 and 2020, respectively.

As of December 31, 2021 and 2020, the amount outstanding under this Facility was $25 million and $45 million, respectively.

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

Year Ended December 31,
2022	$	46,945
2023		-0-
2024		-0-
2025		-0-
2026		-0-
Thereafter		-0-
Total Loans Payable		46,945
Unamortized Debt Issuance Costs		(188	)
Total Loans Payable, net of Unamortized Debt Issuance Costs	$	46,757

Mortgages Payable

Mortgages Payable represents the principal amounts outstanding, net of unamortized debt issuance costs. Interest is payable on these mortgages at fixed rates ranging from 2.62% to 6.35%. The weighted average interest rate was 3.8% and 3.9% as of December 31, 2021 and 2020, respectively, including the effect of unamortized debt issuance costs. The weighted average interest rate as of December 31, 2021 and 2020 was 3.8%, respectively, not including the effect of unamortized debt issuance costs. The weighted average loan maturity of the Mortgage Notes Payable was 5.2 and 6.0 years at December 31, 2021 and 2020, respectively.

The following is a summary of mortgages payable at December 31, 2021 and 2020 (in thousands):

	At December 31, 2021				Balance at December 31,
Property	Due Date	Interest Rate			2021			2020
Allentown	10/01/25		4.06	%	$	12,295		$	12,587
Brookview Village	04/01/25		3.92	%		2,539			2,603
Candlewick Court	09/01/25		4.10	%		4,104			4,201
Catalina	08/19/25		3.00	%		4,586			4,853
Cedarcrest Village	04/01/25		3.71	%		10,956			11,238
Clinton Mobile Home Resort	10/01/25		4.06	%		3,227			3,303
Cranberry Village	04/01/25		3.92	%		6,965			7,139
D & R Village	03/01/25		3.85	%		7,013			7,191
Fairview Manor	11/01/26		3.85	%		14,739			15,076
Forest Park Village	09/01/25		4.10	%		7,652			7,833
Friendly Village	05/06/23		4.618	%		6,650			6,906
Hayden Heights	04/01/25		3.92	%		1,914			1,962
Highland Estates	06/01/27		4.12	%		15,419			15,744
Holiday Village	09/01/25		4.10	%		7,282			7,454
Holiday Village- IN	11/01/25		3.96	%		7,811			7,998
Holly Acres Estates	09/01/31		3.21	%		6,031			2,077
Kinnebrook Village	04/01/25		3.92	%		3,700			3,792
Lake Erie Estates	07/06/25		5.16	%		2,604			2,657
Lake Sherman Village	09/01/25		4.10	%		5,060			5,180
Meadows of Perrysburg	10/06/23		5.413	%		2,825			2,888
Northtowne Meadows	09/06/26		4.45	%		11,576			11,818
Olmsted Falls	04/01/25		3.98	%		1,915			1,962
Oxford Village	07/01/29		3.41	%		14,985			15,301
Perrysburg Estates	09/06/25		4.98	%		1,526			1,558
Pikewood Manor	11/29/28		5.00	%		13,766			14,103
Shady Hills	04/01/25		3.92	%		4,563			4,677
Springfield Meadows	10/06/25		4.83	%		2,914			2,975
Suburban Estates	10/01/25		4.06	%		5,126			5,248
Sunny Acres	10/01/25		4.06	%		5,706			5,842
Trailmont	04/01/25		3.92	%		3,042			3,118
Twin Oaks	10/01/29		3.37	%		5,809			5,930
Valley Hills	06/01/26		4.32	%		3,152			3,220
Waterfalls	06/01/26		4.38	%		4,293			4,386
Weatherly Estates	04/01/25		3.92	%		7,422			7,607
Wellington Estates	01/01/23		6.35	%		2,205			2,263
Woods Edge	01/07/26		3.25	%		5,627			5,940
Worthington Arms	09/01/25		4.10	%		8,580			8,783
Various (2 properties)	02/01/27		4.56	%		13,073			13,335
Various (2 properties)	08/01/28		4.27	%		12,661			12,902
Various (2 properties)	07/01/29		3.41	%		21,907			22,368
Various (4 properties)	07/01/23		4.975	%		7,418			7,596
Various (5 properties)	01/01/22		4.25	%		-0-			12,694
Various (5 properties)	12/06/22		4.75	%		6,523			6,692
Various (6 properties)	08/01/27		4.18	%		12,320			12,581
Various (13 properties)	03/01/23		4.065	%		44,339			45,588
Various (28 properties)	09/01/30		2.62	%		102,882			105,221
Total Mortgages Payable						456,702			476,390
Unamortized Debt Issuance Costs						(4,135	)		(4,913	)
Total Mortgages Payable, net of Unamortized Debt Issuance Costs					$	452,567		$	471,477

At December 31, 2021 and 2020, mortgages were collateralized by real property with a carrying value of $950.9 million and $932.5 million, respectively, before accumulated depreciation and amortization. Interest costs amounting to $1.5 million, $1.3 million and $1.5 million were capitalized during 2021, 2020 and 2019, respectively, in connection with the Company’s expansion program. At December 31, 2021, the Company owned 127 communities of which 28 are unencumbered.

Recent Financing Transactions

During the year ended December 31, 2021

On August 17, 2021, the Company obtained a Federal Home Loan Mortgage Corporation (“Freddie Mac”) mortgage totaling $6.1 million through Wells Fargo Bank, N.A. (“Wells Fargo”) on Holly Acres. The interest rate on this mortgage is fixed at 3.21%. This mortgage matures on September 1, 2031, with principal repayments based on a 30-year amortization schedule.

During the year ended December 31, 2020

On August 20, 2020, the Company completed the financing of 28 of its previously unencumbered communities, containing approximately 4,100 sites, through Wells Fargo Bank, N. A. for total proceeds of approximately $106 million. This Federal National Mortgage Association (“Fannie Mae”) credit facility has a 10-year maturity with a 30-year amortization schedule. Interest is at a fixed rate of 2.62%.

On September 21, 2020, the Company assumed a mortgage loan with a balance of approximately $2.7 million, in conjunction with its acquisition of Lake Erie Estates in Fredonia, New York. The interest rate on this mortgage is fixed at 5.16%. This mortgage matures on July 6, 2025.

The aggregate principal payments of all mortgages payable are scheduled as follows (in thousands):

Year Ended December 31,
2022	$	17,870
2023		71,368
2024		10,182
2025		138,969
2026		35,863
Thereafter		182,450
Total	$	456,702

Subsequent to year end, the Company issued $102.7 million of its 4.72% Series A Bonds due 2027. (See Note 16.)