Dream Finders Homes, Inc.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Business and Significant Accounting Policies

Nature of Business

Dream Finders Homes, Inc., a Delaware corporation incorporated in 2020 (together with its subsidiaries, “Dream Finders”, “DFH” or the “Company”), designs, builds, and sells homes in markets throughout the United States. The homebuilding operations are structured regionally into three reportable segments—Southeast, Mid-Atlantic, and Midwest. The Company also operates a financial services reportable segment, which provides mortgage banking solutions and title insurance services—inclusive of agency and underwriting services—through its wholly-owned subsidiaries Jet HomeLoans, LP (“Jet HomeLoans”), DF Title, LLC doing business as Golden Dog Title & Trust and Golden Dog Title (“DF Title”) and Alliant National Title Insurance Company, Inc. (“Alliant Title”). Additionally, the Financial Services segment offers homeowners insurance and ancillary products to homebuyers through the Company’s wholly-owned insurance broker.

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) for interim financial information and with instructions to Form 10-Q and Regulation S-X. The condensed consolidated financial statements include the accounts of DFH, its wholly-owned subsidiaries and any investments that may qualify for consolidation treatment. The noncontrolling interests represent equity interests held by others in certain of the Company’s subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The condensed consolidated financial statements and related notes do not include all of the information and footnotes required by GAAP for a complete set of financial statements. As such, the accompanying statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Below are certain accounting policies adopted as a result of the Company’s acquisition of title insurance underwriter, Alliant Title, discussed further in Note 2, Acquisitions. Alliant Title was consolidated in the Company’s condensed consolidated financial statements and are included in the Financial Services segment as of April 18, 2025, the date of acquisition.

Title Insurance Revenue Recognition

Title insurance premiums are recognized as revenue at the time of settlement of the related real estate transaction, as the earnings process is then considered complete. Title insurance premium revenue is included within financial services revenues on the Condensed Consolidated Statements of Operations. Expenses typically associated with premiums, including agent commissions, premium taxes and a provision for future claims are recognized concurrent with the recognition of the related premium revenue and are included within financial services expense on the Condensed Consolidated Statements of Operations.

Available-For-Sale Debt Securities

Investments in available-for-sale (“AFS”) debt securities are reported at fair value within other assets on the Condensed Consolidated Balance Sheets. Changes in unrealized gains and losses, net of tax, are recorded as a component of accumulated other comprehensive income. Realized gains and losses on sales and maturities of securities are reported within other income or other expense on the Condensed Consolidated Statements of Operations. Realized gains and losses on sales of AFS debt securities are determined on the basis of the cost of the specific investments sold and are credited or charged to income on a trade-date basis.

The Company evaluates AFS debt securities in an unrealized loss position on a regular basis for potential credit loss. Factors considered in determining whether a loss is credit-related include, but are not limited to, the financial condition and prospects of the issuer, including credit ratings and analyst reports. If the Company has the intent to sell an AFS debt security or it is more likely than not it will be required to sell the security before recovery, the security will be written down to its current fair value, with a corresponding impairment loss recorded within other expense in the Condensed Consolidated Statements of Operations, net of any amount previously recognized as an allowance for expected credit loss. If the Company does not have the intent to sell or it is more likely than not that it will not be required to sell the security before recovery, an allowance for expected credit loss is established and recorded within other expense in the Condensed Consolidated Statements of Operations, net of any amount previously recognized as an allowance for expected credit loss. All non-credit related portions of potential loss, typically due to changes in market interest rates and other market conditions, are considered unrealized losses and are recorded in accumulated other comprehensive income.

Reserve for Title Claim Losses

The reserve for title claim losses is based on the prior period’s reserve balance for title claim losses, increased by the current period provision for title claim losses and reduced by actual paid claims. The reserve for title claim losses is included within accrued liabilities on the Condensed Consolidated Balance Sheets.

The current provision for estimated future claim payments is calculated by applying an estimated loss provision rate to current period title insurance premiums. The estimated loss provision rate is based on estimated amounts required to settle claims which have been reported and claims that have been incurred but not reported (“IBNR”), which may be reported in the future. The Company continually refines its reserve estimates as current loss experience develops and credible data emerges. Due to variances between actual and expected loss payments, loss development is subject to variability.

In the ordinary course of business, the Company limits its maximum claim loss exposure by ceding certain risks to other insurers, including through excess of loss risk policies, which are issued by accredited reinsurers.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

Reclassifications

Certain reclassifications have been made in the prior period condensed consolidated financial statements to conform to the 2025 presentation, including the reclassifications of right-of-use assets and property and equipment, net into other assets, and lease liabilities into accrued liabilities—both reported on the Condensed Consolidated Balance Sheets. These reclassifications had no impact on the Company’s total assets, total equity, revenues or net income in its condensed consolidated financial statements.

Recent Accounting Pronouncements

In November 2024, the FASB issued Accounting Standard Update (“ASU”) Number 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures” (“ASU 2024-03”). ASU 2024-03 requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. Annual disclosure requirements under ASU 2024-03 will become effective for the fiscal year ending December 31, 2027, and interim disclosure requirements will become effective beginning in the first quarter of 2028. The Company is currently evaluating the adoption of ASU 2024-03 on its condensed consolidated financial statements.

In December 2023, the FASB issued ASU Number 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires more disaggregated income tax disclosures, including additional information in the rate reconciliation and additional disclosures about income taxes paid. ASU 2023-09 will become effective for the fiscal year ending December 31, 2025. Early adoption is permitted, and guidance should be applied prospectively, with an option to apply guidance retrospectively. The Company does not expect the adoption of ASU 2023-09 to have a material effect on the condensed consolidated financial statements.

2. Acquisitions

Financial Services

Alliant Title

On April 18, 2025, the Company acquired Colorado-based title insurance underwriter, Alliant National Title Insurance Company, Inc. and a related affiliate (collectively, “Alliant Title”), the operations of which are included in the Financial Services segment as of that date. The cash consideration paid for the Alliant Title acquisition was $37.2 million, net of $3.0 million of cash acquired. The purpose of this acquisition was to expand the Company’s financial services offerings to include title underwriting. The acquisition was accounted for as a business combination under ASC Topic 805 and the operations are included in the Financial Services segment as of the date of acquisition.

As of September 30, 2025, the total fair value of the assets acquired and the liabilities assumed (“acquired net assets”) resulted in $48.4 million of other assets and $35.4 million in accrued liabilities on the Company’s Condensed Consolidated Balance Sheet as of the date of acquisition, mostly related to AFS debt securities and reserve for title claim losses, respectively. Based on new information obtained related to the fair value of separately identifiable intangible assets, the Company recognized a measurement period adjustment during the three months ended September 30, 2025, which increased other assets and decreased goodwill by $3.9 million as of the acquisition date. As of September 30, 2025, the excess of the aggregate purchase price over the aggregate fair value of the acquired net assets resulted in goodwill of $20.4 million, all of which was assigned to the Financial Services segment. Goodwill consists primarily of expected synergies from vertical integration with our title and homebuilding operations, the acquired workforce and growth opportunities.

Homebuilding

Green River Builders

On May 2, 2025, the Company acquired Atlanta, Georgia-based homebuilder, Green River Builders, Inc. (“Green River Builders”), the operations of which are included in the Southeast segment as of that date. The cash consideration paid for the Green River Builders acquisition was $34.1 million. Based on the fair value of the acquired net assets pursuant to ASC Topic 805, as of September 30, 2025, the Company primarily recorded $26.8 million of inventories on the Company’s Condensed Consolidated Balance Sheet as of the date of acquisition. The excess of the aggregate purchase price over the aggregate fair value of the acquired net assets of $8.8 million was recorded as goodwill, all of which was assigned to the Southeast segment.

Liberty Communities

On January 23, 2025, the Company acquired certain assets and assumed certain liabilities, comprising the majority of the Atlanta, Georgia-based homebuilder, Liberty Communities, LLC (“Liberty Communities” or “Liberty”), primarily through wholly-owned DFH subsidiaries, Dream Finders Holdings, LLC, and DFH Liberty, LLC (“DFH Liberty”). This acquisition allowed the Company to enter the Atlanta, Georgia market and expand its operations in the Greenville, South Carolina market. The cash consideration paid for the Liberty acquisition was $112.7 million. Additionally, as part of the consideration, the former owner of Liberty Communities received a redeemable noncontrolling interest in DFH Liberty and contractual rights to a portion of its future earnings upon exceeding a minimum earnings threshold.

The purchase agreement includes put and call options relating to the noncontrolling interest that, upon the occurrence of certain events, are not solely in the control of the Company. As a result, the noncontrolling interest is redeemable and reported within mezzanine equity on the Company’s Condensed Consolidated Balance Sheet at the greater of the initial carrying amount (its fair value on the acquisition date), adjusted for the noncontrolling interest’s share of net income (loss) less distributions, or its redemption value. After achieving the minimum earnings threshold, the amount of net income that is attributable to the redeemable noncontrolling interest will be presented within net income attributable to noncontrolling interests on the Condensed Consolidated Statements of Operations.

The acquisition was accounted for as a business combination under ASC Topic 805. In determining the purchase price allocation, the Company evaluated Liberty’s acquired net assets based on their estimated fair values as of January 23, 2025. Goodwill was recorded as the residual amount by which the purchase price plus the fair value of the noncontrolling interest exceeded the provisional fair value of the acquired net assets and is expected to be fully deductible for tax purposes. Goodwill consists primarily of expected synergies of combining operations, the acquired workforce and growth opportunities, none of which qualify as separately identifiable intangible assets. The fair value of the redeemable noncontrolling interest, inclusive of put and call options, was determined using an income-based approach, coupled with Monte Carlo simulations, which were impacted by various inputs, including projected future cash flows, discount rates and market volatility.

The consideration for the total purchase price and related purchase price allocation as of September 30, 2025, inclusive of measurement period adjustments, was as follows (in thousands):

Measurement period adjustments of $1.8 million were recorded during the three months ended June 30, 2025, which related to and reflect the most current provisional valuation of the post-closing balances of the acquired net assets.

Unaudited Pro Forma Information

The following unaudited pro forma condensed consolidated results of operations are provided for illustrative purposes only and have been presented as if the three acquisitions discussed above had occurred on January 1, 2024 (in thousands):

(1)This unaudited pro forma information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisitions had occurred on that date, nor of the results that may be obtained in the future.

For the three and nine months ended September 30, 2025, Liberty contributed $62.1 million and $164.1 million, respectively, in homebuilding revenues and $7.1 million and $11.0 million, respectively, in income before taxes, all of which is attributable to DFH. Liberty’s Atlanta operations are included in the Southeast segment and Liberty’s Greenville operations are included in the Mid-Atlantic segment from the acquisition date. Refer to Note 8, Segment Reporting for more information.

For the three and nine months ended September 30, 2025, Alliant Title contributed $31.6 million and $59.2 million, respectively, in financial services revenues and $0.7 million and $3.0 million, respectively, in income before taxes. Alliant Title’s operations are included in the Financial Services segment from the acquisition date. Refer to Note 8, Segment Reporting for more information.

Previous Acquisitions

Jet HomeLoans

On July 1, 2024, the Company acquired the remaining 40% equity interest in the previously unconsolidated mortgage banking joint venture, Jet HomeLoans, which was consolidated as of that date in the Company’s condensed consolidated financial statements. Cash consideration was $9.3 million. The majority of the acquired net assets on July 1, 2024 included mortgage loans held for sale of $114.7 million and mortgage warehouse facilities of $109.1 million, which were reported on the Company’s Condensed Consolidated Balance Sheet as of that date. The acquisition was accounted for as an asset acquisition under ASC Topic 805.

Crescent Homes

On February 1, 2024, the Company acquired certain assets and assumed certain liabilities, comprising the majority of the homebuilding business of Crescent Ventures, LLC (“Crescent Homes” or “Crescent”) through wholly-owned DFH subsidiaries, Dream Finders Holdings LLC, and DFH Crescent, LLC (“DFH Crescent”). This acquisition allowed the Company to expand into the markets of Charleston and Greenville, South Carolina, and Nashville, Tennessee. The cash consideration for the Crescent acquisition was $210.4 million.

Additionally, as part of the consideration, the former owner of Crescent Homes received a redeemable noncontrolling interest in DFH Crescent and contractual rights to a portion of its future earnings upon exceeding a minimum earnings threshold. The purchase agreement includes put and call options relating to the noncontrolling interest that, upon the occurrence of certain events, are not solely in the control of the Company.

The acquisition was accounted for as a business combination under ASC Topic 805. In determining the purchase price allocation, the Company evaluated Crescent Homes’ acquired net assets based on their estimated fair values as of February 1, 2024. Goodwill was recorded as the residual amount by which the purchase price plus the fair value of the noncontrolling interest exceeded the fair value of the acquired net assets and is expected to be fully deductible for tax purposes. Goodwill consists primarily of expected synergies of combining operations, the acquired workforce and growth opportunities, none of which qualify as separately identifiable intangible assets. The fair value of the redeemable noncontrolling interest, inclusive of put and call options, was determined using an income-based approach, coupled with Monte Carlo simulations, which were impacted by various inputs, including projected future cash flows, discount rates and market volatility

The consideration for the total purchase price and related final purchase price allocation as of February 1, 2025, inclusive of measurement period adjustments, was as follows (in thousands):

In March 2025, the Company recorded $6.7 million in purchase price adjustments relating to the net asset value of the Crescent Homes acquisition within other income, net on the Condensed Consolidated Statement of Operations, as these adjustments were recognized outside of the measurement period for the acquisition, which ended February 1, 2025.

3. Debt

The Company’s outstanding debt obligations included the following as of September 30, 2025 and December 31, 2024 (in thousands):

The Company is obligated to adhere to specified financial covenants as part of its debt obligations. The Company was in compliance with these financial covenants as of September 30, 2025 and December 31, 2024, as applicable, and expects to remain in compliance over the next 12 months.

Senior Unsecured Notes

The Company had the following senior unsecured notes (collectively, the “Senior Notes”) outstanding as of September 30, 2025:

2030 Notes

On September 5, 2025, the Company issued $300.0 million in aggregate principal amount of 6.875% senior unsecured notes due September 15, 2030 (the “2030 Notes”), which were issued pursuant to an indenture. Interest on the 2030 Notes is payable in arrears semiannually on each March 15 and September 15, beginning March 15, 2026. The 2030 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of the Company’s subsidiaries. The net proceeds from the 2030 Notes were used to repay a portion of the then outstanding balance under the revolving credit facility.

The 2030 Notes are redeemable by the Company prior to September 15, 2027 by the payment of the principal amount due, which can be accomplished through the issuance of certain restricted equity offerings for specified portions of the principal balance of notes outstanding, plus specified rates and accrued and unpaid interest, and a make-whole premium in the event 100.0% of the principal amount is redeemed. On or after September 15, 2027, the 2030 Notes are redeemable at specified rates equal to 103.4% of the principal balance, plus accrued and unpaid interest, which periodically decreases to 100.0% on September 15, 2029. Upon the occurrence of a Change of Control (as defined in the indenture governing the 2030 Notes), the holders of the 2030 Notes will have the right to require the Company to repurchase all or a portion of the 2030 Notes at a price equal to 101% of the aggregate principal amount of the 2030 Notes, plus any accrued and unpaid interest.

2028 Notes

On August 22, 2023, the Company issued $300.0 million in aggregate principal amount of 8.250% senior unsecured notes due August 15, 2028 (the “2028 Notes”), which were issued pursuant to an indenture. Interest on the 2028 Notes is payable in arrears semiannually on each February 15 and August 15. The 2028 Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of the Company’s subsidiaries.

The 2028 Notes are redeemable at specified rates, currently equal to 104.1% of the principal balance, plus accrued and unpaid interest, which will periodically decrease to 100.0% on August 15, 2027. Upon the occurrence of a Change of Control (as defined in the indenture governing the 2028 Notes), the holders of the 2028 Notes will have the right to require the Company to repurchase all or a portion of the 2028 Notes at a price equal to 101.0% of the aggregate principal amount of the 2028 Notes, plus any accrued and unpaid interest.

The indentures for the Senior Notes include customary events of default. Subject to specified exceptions, the indentures contain certain restrictive covenants that, among other things, limit the Company’s ability to incur or guarantee certain indebtedness, issue certain equity interests or engage in certain capital stock transactions. In addition, the indentures contain certain limitations related to mergers, consolidations, and transfers of assets.

As of September 30, 2025 and December 31, 2024, unamortized debt issuance costs were $9.5 million and $5.0 million, respectively. Unamortized debt issuance costs reduce the carrying value of the Senior Notes reported on the Condensed Consolidated Balance Sheets within senior notes unsecured, net.

Credit Agreement

On March 20, 2025 and August 21, 2025, the Company entered into amendments to its existing revolving credit facility (as amended, the “Credit Agreement”). The August 21, 2025 amendments, among other things, (i) increased the aggregate commitments under the Credit Agreement to $1.5 billion, subject to a borrowing base; (ii) extended the maturity date from June 4, 2027 to August 21, 2028 for certain new and existing lenders comprising $1.2 billion of the $1.5 billion of aggregate commitments under the Credit Agreement, and; (iii) updated the Company’s minimum tangible net worth covenant, which resulted in an increase to the base component of such covenant to $981.3 million. The March 20, 2025 amendments, among other things, changed the borrowing base calculation to include available cash and escrow receivables in excess of $25.0 million. Certain of the Company’s subsidiaries guaranteed the Company’s obligations under the Credit Agreement. The Credit Agreement includes an accordion feature that allows the aggregate commitments to increase to up to $2.0 billion, subject to the borrowing base.

Under the Credit Agreement, the Company has the ability to draw “Term SOFR Rate Loans” or “Daily Simple SOFR Rate Loans.” Term SOFR Rate Loans bear interest based on Term SOFR rates for one or three-month interest periods and include a SOFR adjustment of 10 basis points (“bps”) for each interest period. Daily Simple SOFR Rate Loans bear interest based on Daily Simple SOFR rates and include a SOFR adjustment of 10 bps. Interest under Term SOFR Rate Loans and Daily Simple SOFR Rate Loans also include an “applicable rate margin” determined based on the Company’s net debt to capitalization ratio, equivalent to credit spreads of 2.00% to 2.95%.

Under the Credit Agreement, the funds available are unsecured and availability under the borrowing base is calculated based on specific advance rates for finished lots, construction in process homes, and finished homes inventory on the Condensed Consolidated Balance Sheets, plus available cash and escrow receivables in excess of $25.0 million, as applicable, and reduced for any outstanding unsecured indebtedness permitted under the Credit Agreement, including the Senior Notes.

The Company had unamortized debt issuance costs primarily related to the Credit Agreement of $12.3 million and $10.3 million as of September 30, 2025 and December 31, 2024. Unamortized debt issuance costs are included within other assets on the Condensed Consolidated Balance Sheets.

Amortization of debt issuance costs related to the Senior Notes and the Credit Agreement are recorded as capitalized interest within inventories on the Condensed Consolidated Balance Sheets and are expensed in cost of sales as the related homes close.

Mortgage Warehouse Facilities

The Company had the following mortgage warehouse lines of credit and repurchase agreements (“mortgage warehouse facilities”) with various financial institutions as of September 30, 2025 and December 31, 2024 related to Jet HomeLoans, which are used to finance its mortgage loans held for sale.

All of the outstanding balances for the borrowings below were collateralized by the mortgage loans held for sale reported on the Condensed Consolidated Balance Sheets (dollars presented in thousands):

(1)As of September 30, 2025, there is a warehouse E for $25 million with interest terms of SOFR plus 2.25% and a floor rate of 4.25%. This facility has not yet been utilized.

Amounts outstanding under the mortgage warehouse facilities are not guaranteed by DFH, or any of its other subsidiaries and the agreements contain various affirmative and negative covenants applicable solely to Jet HomeLoans that are customary for arrangements of this type.

4. Inventories

Inventories consist ofconstruction in process (“CIP”) and finished homes, including capitalized interest costs incurred under certain of the Company’s debt obligations discussed in Note 3, owned land and lots and pre-acquisition land costs. CIP represents homes under construction or completed, including sold, speculative (“spec”) and model homes. CIP includes the cost of finished lots and all direct costs incurred to build homes. The cost of homes is expensed on a specific identification basis when the home is delivered to the customer. Finished lots are generally purchased just-in-time for construction, whether for spec or sold homes, and are included within owned land and lots until construction begins when the finished lot cost is transferred to CIP. Costs related to finished lots or land under development held by third-party land bank partners incurred prior to the Company’s purchase of the finished lots, including lot option fees, property taxes and due diligence costs are capitalized into pre-acquisition land costs.

Inventories consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands):

(1)Finished lots are purchased just-in-time for construction through existing lot option contracts with land developers or third-party land banks.

(2)Primarily represents capitalized due diligence and lot option fees in relation to the Company’s existing controlled lot pipeline.

Capitalized interest activity related to the Company’s Credit Agreement and Senior Notes is summarized in the table below for the three and nine months ended September 30, 2025 and 2024 (in thousands):

The Company reviews the performance and outlook of its inventories for indicators of potential impairment on a quarterly basis at the community level. Such indicators include gross margins or sales paces significantly below expectations, construction costs significantly in excess of budgeted amount, significant delays or changes in the planned development for the community, and other known qualitative factors. In addition to considering market and economic conditions, the Company assesses current sales absorption levels, recent profitability as well as future plans including cost management initiatives and remaining life cycle of the community. The Company looks for instances where sales prices for homes in a community or potential sales prices for the future sale of homes within a community would be at a level at which the carrying value of that community may not be recoverable. If indicators of potential impairment exist and the carrying value of a community is determined to not be recoverable based on the expected undiscounted cash flows to be generated by the community are lower than its carrying amount, impairment charges are recorded to write down the associated inventory to its estimated fair value. There wereno inventory impairment charges recorded for the three and nine months ended September 30, 2025 and 2024.

The Company reviews lot deposits for impairment on a quarterly basis and will record an impairment charge if it believes it will forfeit its deposit on an individual or portfolio of lots. The Company recorded$2.6 million and $4.2 million of impairmentsfor lot deposits for the three and nine months ended September 30, 2025, respectively, and$1.0 millionand$1.2 million for thethree and nine months ended September 30, 2024, respectively.

5. Commitments and Contingencies

Legal Proceedings

The Company is party to legal matters from time to time that are typically derived from the Company’s general business practices, primarily related to the construction and sale of homes. The Company believes that if a claim has merit, parties other than the Company would be, at least in part, liable for the claim, and the eventual outcome of the claim would not have a material adverse effect upon the condensed consolidated financial statements. When it is believed that a loss is probable and estimable, the Company records the estimated contingency loss within the Condensed Consolidated Statements of Operations.

On April 28, 2025, the former owner of Crescent Homes and his affiliates filed a complaint in Chancery Court in Delaware against the Company for an alleged breach of contract claim related to the Crescent Homes acquisition. The Company intends to defend the lawsuit. Mediation commenced on October 8, 2025 and remains ongoing as of October 30, 2025 in an attempt to resolve the matter. At this time, it is not possible to reasonably estimate the probability that either party will prevail. The Company does not believe that any future outcomes of any claims or lawsuits currently outstanding will have a material adverse effect upon the condensed consolidated financial statements.

Surety Bonds and Letters of Credit

In the ordinary course of business, the Company obtains surety bonds and letters of credit to cover the Company’s land development performance obligations with local municipalities. While substantial development and construction work may already be complete concerning the improvements at these sites, the letters of credit and surety bonds are typically not fully released until all development and construction activities have been completed. As of September 30, 2025 and December 31, 2024, the Company had outstanding surety bonds of $342.5 million and $297.8 million, respectively, and outstanding letters of credit of $27.0 million and $20.9 million, respectively, which are not reported on the Company’s Condensed Consolidated Balance Sheets.

6. Variable Interest Entities

The Company holds investments in certain limited partnerships and similar entities that conduct land acquisition, and land development in various markets where the Company’s homebuilding operations are located, which are considered variable interests. The Company’s investments create a variable interest in a variable interest entity (“VIE”), depending on the contractual terms of the arrangement. Additionally, in the ordinary course of business, the Company enters into option contracts with third-party land bank entities and certain unconsolidated entities for the ability to acquire rights to finished lots for the construction of homes.

The carrying amounts of the Company’s investments in unconsolidated VIEs, other than the lot option contracts discussed below, were $10.8 million and $11.5 million as of September 30, 2025 and December 31, 2024, respectively. The Company’s maximum exposure to loss is limited to its investment in the entities as the Company is not obligated to provide them with any additional capital and does not guarantee any of their debt or other liabilities.

Jet HomeLoans, previously an investment in unconsolidated VIEs accounted for under the equity method, is consolidated in the Company’s condensed consolidated financial statements beginning July 1, 2024, when the remaining 40% interest was acquired. Refer to Note 2, Acquisitions for more information.

Under lot option contracts, the Company typically makes a specified earnest money deposit in consideration for the right to purchase finished lots in the future, usually at a predetermined price. The Company concluded that it is not the primary beneficiary of the land bank entities with which it enters into lot option contracts and, therefore, the Company does not consolidate any of these entities. The Company’s risk of loss related to finished lot and land bank option deposits, and related fees was $709.4 million and $551.9 million as of September 30, 2025 and December 31, 2024, respectively.

7. Income Taxes

The Company’s effective tax rate for the nine months ended September 30, 2025 and 2024 was estimated to be 23.0% and 22.0%, respectively. The effective tax rate increase of 1.0% was primarily attributable to decreased tax benefits from stock-based compensation due to an overall lower Company stock price on the vesting date when compared to the grant date for certain awards.

The One Big Beautiful Bill Act (the “OBBBA”) was enacted on July 4, 2025. Based on the Company’s current structure and operations, the OBBBA does not have a material impact as of September 30, 2025. However, the OBBBA will eliminate Section 45L tax credits for new energy-efficient homes delivered after June 30, 2026, at which time the income tax expense and effective rate will not include the benefit from these tax credits. The Company will continue to monitor the impact of the OBBBA on its condensed consolidated financial statements.

8. Segment Reporting

The Company primarily operates in the homebuilding business and is organized and reported mainly by region. The Company’sfour reportable segments consist of the three homebuilding segments—the Southeast, Mid-Atlantic and Midwest—as well as the Financial Services segment. The homebuilding segments produce the majority of their homebuilding revenues through the sale and delivery of completed homes. The Financial Services segment generates the majority of its revenues from originating and selling mortgages, and collecting premiums and fees for closing services and title insurance. The Company’sfour reportable segments are comprised of the following:

•Southeast (Jacksonville, Orlando and Tampa, Florida and operations in the southeast coast of Florida and southwest Florida; Atlanta and Savannah, Georgia; Hilton Head and Bluffton, South Carolina; Custom Homes operations in northeast Florida)

•Mid-Atlantic (DC Metro; Nashville, Tennessee; Charlotte, Fayetteville, Raleigh and Wilmington, North Carolina; Charleston, Myrtle Beach, and Greenville, South Carolina)

•Midwest (Austin, Dallas, Houston and San Antonio, Texas; Denver, Colorado; Phoenix, Arizona)

•Financial Services (primarily Jet HomeLoans, DF Title and Alliant Title)

The corporate component, which is not considered an operating segment, is reported separately as “Corporate.” Certain corporate SG&A expenses are charged to the segments and eliminated in consolidation.

The following table summarizes revenues, significant expenses and income before taxes by segment for the three months ended September 30, 2025 and 2024 (in thousands):

(1)The Southeast segment results exclude profits related to the manufacturing of panels used in homebuilding operations within the Southeast segment, which are eliminated in consolidation.

(2)Corporate includes operations and investments of the corporate component. In the first quarter of 2025, the Company retrospectively changed its expense allocation method to include corporate SG&A expenses that are homebuilding related within the respective homebuilding segment, as the Company believes this presents a more representative view of segment profitability.

(3)Financial services expense primarily consists of salaries, commissions and benefits.

(4)Other segment items primarily consist of loss (income) from unconsolidated entities, management fees, interest income and rental income.

The following table summarizes revenues, significant expenses and income before taxes by segment for the nine months ended September 30, 2025 and 2024 (in thousands):

See notes (1) to (4) under segment results for the three months ended September 30, 2025 and 2024.

(5)Other segment items for the Mid-Atlantic segment included purchase price adjustments of $6.7 million related to the Crescent Homes acquisition for the nine months ended September 30, 2025. See Note 2, Acquisitions for more information.

(6)Represents reconciling items related to Jet HomeLoans prior to the acquisition on July 1, 2024 and the resulting consolidation. Refer to Note 2, Acquisitions for more information.

The following table summarizes total assets and goodwill by segment as of September 30, 2025 and December 31, 2024 (in thousands):

(1)As of September 30, 2025, the Liberty Communities acquisition resulted in $45.6 million of goodwill, predominantly attributable to the acquired Atlanta, Georgia operations included in the Southeast segment. Refer to Note 2, Acquisitions for more information.

(2)As of September 30, 2025, the Alliant Title acquisition resulted in $20.4 million of goodwill. Refer to Note 2, Acquisitions for more information.

(3)Corporate assets are comprised of, but are not limited to, operating and restricted cash, deferred tax assets, prepaids and other assets not directly attributable to a reportable segment.

9. Title Insurance

Regulation

Alliant Title is subject to extensive regulation under applicable state laws, including, among other things, restrictions on ability to pay dividends to its parent and oversight of certain investment policies. The laws of each of the states in which Alliant Title transacts business establish supervisory agencies with broad administrative powers relating to issuing and revoking licenses to transact business; regulating trade practices; licensing agents; approving policy forms; prescribing accounting principles and financial practices; establishing reserves, capital and surplus as regards policyholders (“capital and surplus”) requirements; defining suitable investments, and; approving rate schedules. The Company is required to submit financial statements using statutory accounting principles to insurance regulatory authorities (“statutory financial statements”). Statutory financial statements differ in some respects to these GAAP condensed consolidated financial statements.

Alliant Title’s capital and surplus on a statutory basis was $17.2 million as of September 30, 2025. The amount of statutory capital and surplus necessary to satisfy regulatory requirements based on Alliant Title's current operations was $7.0 million as of September 30, 2025. On a statutory basis, Alliant Title had net income of $2.5 million and $0.8 million for the three and nine months ended September 30, 2025, respectively, as reported in their statutory financial statements. As of September 30, 2025, retained earnings cannot be transferred in the form of dividends, loans or advances to the parent company under statutory regulations without prior insurance department approval. Alliant Title was in compliance with its respective minimum net worth and working capital requirements as of September 30, 2025.

Reserve For Title Claim Losses

As of September 30, 2025, the reserve for title claim losses was $31.3 million, of which $27.6 million, or 88.2%, represents the IBNR component. For the three and nine months ended September 30, 2025, the Company had a title claim loss provision of $1.2 million and $1.0 million, respectively, and claims paid, net of recoveries, of $1.6 million and $2.4 million, respectively.

10. Fair Value Disclosures

Fair value represents the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is determined using a fair value hierarchy established by GAAP, based on the inputs used to measure fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 inputs are inputs other than quoted market prices that are observable for the asset orliability, either directly or indirectly. Level 3 inputs are unobservable and significant to the fair value. The Company applies the fair value hierarchy to certain assets and liabilities remeasured or disclosed at fair value on a recurring basis, including mortgage loans held for sale, derivative assets and liabilities, AFS debt securities, senior unsecured notes, net, and contingent consideration in connection with certain acquisitions.

The fair value of mortgage loans held for sale is based on either investor commitments or quoted secondary-market prices. Derivative assets and liabilities are associated with mandatory and best effort interest rate lock commitments (“IRLCs”) and forward sales on mortgage backed securities (“MBS”) used to hedge interest rate risk on certain of the IRLCs. The fair values for IRLCs are derived from market pricing for instruments with similar characteristics or forward sale commitment prices, as well as certain unobservable inputs such as estimated costs to originate the loans and the probability that the mortgage loan will fund within the terms of the IRLC, known as the pull-through rate. The Company estimates the fair value of forward sales of MBS contracts based on quoted MBS prices. As of September 30, 2025 and December 31, 2024, the total notional amount of mortgage loans locked and approved through IRLCs totaled approximately $124.0 million and $24.1 million, respectively, and carried weighted average interest rates of approximately 5.5% and 6.2%, respectively. As of September 30, 2025, the total notional amount of MBS sales totaled approximately $141.5 million and carried a weighted average interest rate of approximately 4.9%. There wereno outstanding MBSs as of December 31, 2024. Management believes that carrying the mortgage loans held for sale and the derivative instruments used to economically hedge them at fair value enhances financial reporting by reducing volatility in reported earnings.

The fair value of AFS debt securities is principally a function of current market conditions and is primarily determined based on quoted prices in markets that are not active or model inputs that are observable or unobservable. Thefair value of the Senior Notes isbased on recent trades or quoted market prices for debt of similar terms, including maturity, to achieve comparable yields.

The fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, customer deposits and mortgage warehouse facilities, approximate their carrying amounts due to the short-term nature of these instruments. The fair value of the Credit Agreement approximates its carrying amount since it is subject to short-term floating interest rates that reflect current market rates. Fair value measurements may also be utilized on a nonrecurring basis, such as for the accounting for acquisitions or the impairment of long-lived assets and inventory.

The following tables outline the carrying value and fair value of certain of the Company’s financial instruments with respect to the established fair value hierarchy level, and presenta summary of the changes in fair value measurement of contingent consideration (in thousands):

(1)Contingent consideration is initially measured using projected cash flows such as revenues, gross margin, overhead and pre-tax income, and discounted to present value using the discounted cash flow method. At each reporting date, it is remeasured to fair value based on actual results, updated earnings estimates and revised risk-adjusted discount rates. As of September 30, 2025, the contingent consideration balance solely reflects actual amounts owed (Level 2) related to the earnout arrangement for the 2021 acquisition of McGuyer Homebuilders, Inc. (“MHI”). The earnout period for MHI concluded on September 30, 2025. The final fair value adjustment for the earnout period was recorded during the three months ended September 30, 2025.

(2)Contingent consideration adjustments related to MHI resulted in expense of $1.8 million and $6.0 million for the three months ended September 2025 and 2024, respectively, and income of $9.8 million and expense of $12.9 million for the nine months ended September 30, 2025 and 2024, respectively. Additionally, the earnout period related to the 2020 acquisition of H&H Constructors of Fayetteville, LLC concluded in the third quarter of 2024.

(3)On April 15, 2025, the Company made a contingent consideration payment of $42.5 million related to the 2024 adjusted pre-tax income results of the MHI acquisition. Final payment for the contingent consideration agreement is due in the fourth quarter of 2025.

The following table presents additional information related to the Company’s AFS debt securities, including the largest major security type, corporate bonds (in thousands):

11. Related Party Transactions

The Company generally enters into related party transactions to secure finished lots for the construction of new homes.

DF Capital Funds

DF Capital Management, LLC (“DF Capital”) organizes real estate investment funds to acquire land and develop and sell finished lots. DF Capital is the investment manager of the funds. The Company owns a 49.0% membership interest in DF Capital and periodically enters into land bank arrangements with DF Capital. DF Capital and its funds are controlled by unaffiliated parties and the Company is not the primary beneficiary of DF Capital and its funds. The Company holds limited partnership interests in certain of the funds as well as indirect ownership through membership interests in the general partners of the respective funds. From time to time, executive officers and directors may invest as limited partners in the funds as well. Amounts due to and from the funds are based on the timing and amount of capital calls, as well as distributions of capital and earnings, all of which—as applicable—are made on a periodic basis over several years, consistent with the typical lifecycle of any land bank financing project.

DF Residential II, LP (DF Capital’s “Fund II”) has an exclusive right of first offer on any land bank financing projects that meet its investment criteria and are undertaken by the Company during Fund II’s investment period. The Company, its executive officers and a former director have investments in Fund II. As of September 30, 2025 and December 31, 2024, the Company had $19.2 million and $37.0 million, respectively, in outstanding lot deposits related to Fund II, controlling 1,771 lots and 3,271 lots, respectively.

On July 30, 2024, DF Capital initiated its first close on DF Residential III, LP (“Fund III”), which included $54.0 million in commitments from the Company’s executive officers and a former director. The Company’s investment in Fund III will be determined as part of the final closing, which is expected to occur late in the fourth quarter of 2025. As of September 30, 2025 and December 31, 2024, the Company had $47.0 million and $47.0 million, respectively, in outstanding lot deposits related to Fund III, controlling 3,564 lots and 3,417 lots, respectively.

12. Equity

Share Buyback Program

In June 2023, the Company’s Board of Directors approved a share buyback program under which the Company can repurchase up to $25.0 million of its Class A common stock through June 30, 2026 in open market purchases, privately negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. During the second quarter of 2025, the limit that can be repurchased under the share buyback program was increased to $50.0 million.

The actual timing, number and value of shares repurchased under the share buyback program depend on a number of factors, including constraints specified in any Rule 10b5-1 trading plans, price, general business and market conditions, and alternative investment opportunities. The share buyback program does not obligate the Company to acquire any specific number of shares in any period and may be expanded, extended, modified or discontinued at any time. The Company accounts for share repurchases of Class A common stock as treasury stock. Treasury stock is recorded as a reduction of stockholders’ equity based on the amount paid to repurchase shares, including associated costs. Treasury stock is not considered outstanding.

As of September 30, 2025 and December 31, 2024, approximately $9.5 million and $17.2 million, respectively, remained available for purchase under the share buyback program, inclusive of the recent program increase. During the three and nine months ended September 30, 2025, under the share buyback program, the Company repurchased 357,715 and 1,347,683 shares of Class A common stock, respectively, for an aggregate purchase price of $9.7 million and $32.7 million, respectively.180,164 and 251,997 shares, respectively, were repurchased during the three and nine months ended September 30, 2024, for an aggregate purchase price of $4.8 million and $6.7 million, respectively.

13. Earnings Per Share

The following weighted-average shares and share equivalents were used to calculate basic and diluted earnings per share (“EPS”) for the three and nine months ended September 30, 2025 and 2024 (in thousands, except share amounts):

(1)For the diluted earnings per share calculation, amounts of preferred dividends associated with redeemable preferred stock that are assumed to be converted are added back to the numerator. Amounts of preferred dividends added back included $3.4 million for the three months ended September 30, 2025, and 2024, and $10.1 million for the nine months ended September 30, 2025, and 2024.

(2)Since the conversion price of the Company’s redeemable preferred stock is based on an average of the closing price of Class A common stock for the 90 trading days immediately preceding the end of the current period, changes in the price of the Class A common stock may significantly affect the number of additional assumed common shares outstanding under the if-converted method for diluted EPS, while the number of redeemable preferred stock shares outstanding is unchanged. Stock-based compensation awards are excluded from the calculation of diluted EPS in the event they are antidilutive. There were 0.4 million and 0.7 million of common stock equivalent shares considered antidilutive that were excluded from the diluted earnings per share calculation for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2024, there were 0.8 million and 0.6 million of antidilutive common stock equivalent shares excluded from the diluted earnings per share calculation, respectively.