18.	Lines of Credit

Revolving Credit Facility.

We have an unsecured revolving credit agreement (“Revolving Credit Facility”) with a group of lenders which

may

be used for general corporate purposes.

This agreement has an

aggregate commitment of

$550

million (the “Commitment”)

and was amended on

December 18, 2015

to extend the maturity to

December 18, 2020.

Each lender

may

issue letters of credit in an amount up to

50%

of its commitment. The facility permits an increase in the maximum Commitment amount to

$1.0

billion upon our request, subject to receipt of additional commitments from existing or additional lenders and the consent of the designated agent and the co-administrative agent. As defined in the Revolving Credit Facility agreement, interest rates on outstanding borrowings are equal to the highest of (

)

0.0%

or (

) a specified eurocurrency rate, federal funds effective rate or prime rate, plus a margin that is determined based on our credit ratings and leverage ratio. At any time at which our leverage ratio, as of the last day of the most recent calendar quarter, exceeds

55%,

the aggregate principal amount of all consolidated senior debt borrowings outstanding

may

not

exceed the borrowing base. There is

borrowing base requirement if our leverage ratio, as of the last day of the most recent calendar quarter, is

55%

or less.

The Revolving Credit Facility is fully and unconditionally guaranteed, jointly and severally, by most of our homebuilding segment subsidiaries. The facility contains various representations, warranties and covenants that we believe are customary for agreements of this type. The financial covenants include a consolidated tangible net worth test and a leverage test, along with a consolidated tangible net worth covenant, all as defined in the facility agreement. A failure to satisfy the foregoing tests does

not

constitute an event of default, but can trigger a “term-out” of the facility. A breach of the consolidated tangible net worth covenant (but

not

the consolidated tangible net worth test) or a violation of anti-corruption or sanctions laws would result in an event of default.

The Revolving Credit Facility is subject to acceleration upon certain specified events of default, including breach of the consolidated tangible net worth covenant, a violation of anti-corruption or sanctions laws, failure to make timely payments, breaches of certain representations or covenants, failure to pay other material indebtedness, or another person becoming beneficial owner of

50%

or more of our outstanding common stock. We believe we were in compliance with the representations, warranties and covenants included in the Revolving Credit Facility as of

June 30, 2017.

We incur costs associated with unused commitment fees pursuant to the terms of the Revolving Credit Facility. At

June 30, 2017

and

December 31, 2016,

there were

$32.8

million and

$23.0

million, respectively, in letters of credit outstanding, which reduced the amounts available to be borrowed under the Revolving Credit Facility. At both

June 30, 2017

and

December 31, 2016,

we had

$15.0

million outstanding under the Revolving Credit Facility. As of

June 30, 2017,

availability under the Revolving Credit Facility was approximately

$502.2

million.

Mortgage Repurchase Facility.

HomeAmerican

entered into an Amended and Restated Master Repurchase Agreement (the “Mortgage Repurchase Facility”) with U.S. Bank National Association

(“USBNA”), effective

September 16, 2016

The Mortgage Repurchase Facility amends and restates the prior Master Repurchase Agreement with USBNA dated as of

November 12, 2008,

as amended, which contained similar terms. The Mortgage Repurchase Facility increases the facility amount from

$50

million to

$75

million, extends the expiration date to

September 15, 2017,

adjusts the facility’s sublimits, expands the types of eligible loans, and reduces the facility fee.

The Mortgage Repurchase Facility provides liquidity to HomeAmerican by providing for the sale of eligible mortgage loans to USBNA with an agreement by HomeAmerican to repurchase the mortgage loans at a future date. Until such mortgage loans are transferred back to HomeAmerican, the documents relating to such loans are held by USBNA, as custodian, pursuant to the Custody Agreement (“Custody Agreement”), dated as of

November 12, 2008,

by and between HomeAmerican and USBNA. In the event that an eligible mortgage loan becomes ineligible, as defined under the Mortgage Repurchase Facility, HomeAmerican

may

be required to repurchase the ineligible mortgage loan immediately. The maximum aggregate commitment of the Mortgage Repurchase Facility was temporarily increased on

June 28, 2017

from

$75

million to

$100

million and was effective through

July 27, 2017.

The Mortgage Repurchase Facility also had a temporary increase in the maximum aggregate commitment from

$75

million to

$125

million from

December 27, 2016

through

January 25, 2017.

June 30, 2017

and

December 31, 2016,

HomeAmerican had

$69.1

million and

$114.5

million, respectively, of mortgage loans that HomeAmerican was obligated to repurchase under the Mortgage Repurchase Facility. Mortgage loans that HomeAmerican is obligated to repurchase under the Mortgage Repurchase Facility are accounted for as a debt financing arrangement and are reported as mortgage repurchase facility in the consolidated balance sheets. Advances under the Mortgage Repurchase Facility carry a price range that is LIBOR-based. The Mortgage Repurchase Facility contains various representations, warranties and affirmative and negative covenants that we believe are customary for agreements of this type. The negative covenants include, among others, (i) a minimum Adjusted Tangible Net Worth requirement, (ii) a maximum Adjusted Tangible Net Worth ratio, (iii) a minimum adjusted net income requirement, and (iv) a minimum Liquidity requirement. The foregoing capitalized terms are defined in the Mortgage Repurchase Facility. We believe HomeAmerican was in compliance with the representations, warranties and covenants included in the Mortgage Repurchase Facility as of

June 30, 2017.