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 was amended on

November 1, 2018

to (

) extend the Revolving Credit Facility maturity to

December 18, 2023, (

) increase the aggregate commitment from

$700

million to

$1.0

billion (the “Commitment”) and (

) provide that the aggregate amount of the commitments

may

increase to an amount

not

to exceed

$1.5

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

)

0.0%,

(

) a prime rate, (

) a federal funds effective rate plus

1.50%,

and (

) a specified eurocurrency rate plus

1.00%

and, in each case, plus a margin that is determined based on our credit ratings and leverage ratio. Interest rates on eurocurrency borrowings are equal to a specified eurocurrency 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 Revolving Credit Facility. 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

March 31, 2019.

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

March 31, 2019

and

December 31, 2018,

there were

$27.6

million and

$27.8

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

$15.0

million outstanding under the Revolving Credit Facility as of

March 31, 2019

and

December 31, 2018.

As of

March 31, 2019,

availability under the Revolving Credit Facility was approximately

$957.4

million.

Mortgage Repurchase Facility.

HomeAmerican has a Master Repurchase Agreement (the “Mortgage Repurchase Facility”) with U.S. Bank National Association (“USBNA”). Effective

August 9, 2018,

the Mortgage Repurchase Facility was amended to extend its termination date to

August 8, 2019.

The Mortgage Repurchase Facility provides liquidity to HomeAmerican by providing for the sale of up to an aggregate of

$75

million (subject to increase by up to

$75

million under certain conditions) 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

March 27, 2019

from

$75

million to

$100

million and was effective through

April 24, 2019.

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

$75

million to

$130

million on

December 27, 2018

and was effective through

January 25, 2019.

March 31, 2019

and

December 31, 2018,

HomeAmerican had

$84.9

million and

$116.8

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 based on a LIBOR rate or successor benchmark rate.

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

March 31, 2019.