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., (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 agency and underwriting insurance 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. Additionally, the Financial Services segment offers homeowners insurance and ancillary products to homebuyers through the Company’s wholly-owned insurance broker. Dream Finders Homes, Inc. was incorporated in the state of Delaware in 2020 and reincorporated to the state of Texas by conversion on June 9, 2026.

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 Standards Codification (“ASC”) for interim financial informationand instructions to Form 10-Qand 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 condensed consolidated financial 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 year ended December 31, 2025.

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 2026 presentation.

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 for the three months ended March 31, 2028. The Company is currently evaluating the impact of the adoption of ASU 2024-03 on its 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, inclusive of measurement period adjustments, 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 insurance underwriting. The acquisition was accounted for as a business combination under ASC Topic 805.

The fair value of the assets acquired and the liabilities assumed (“acquired net assets”) resulted in $46.2 million of other assets and $35.4 million in accrued liabilities on the Condensed Consolidated Balance Sheet as of the date of acquisition, mostly related to available-for-sale (“AFS”) debt securities and reserve for title claim losses, respectively. The excess of the aggregate purchase price over the aggregate fair value of the acquired net assets resulted in goodwill of $22.6 million, all of which was assigned to the Financial Services segment. Goodwill consists primarily of expected synergies from vertical integration with the Company’s 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 acquisition was accounted for as a business combination under ASC Topic 805. The cash consideration paid for the Green River Builders acquisition was $34.1 million. Based on the fair value of the acquired net assets, the Company primarily recorded $26.8 million of inventories on the 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”), the operations of which are included in the Southeast segment as of that date. The acquisition was accounted for as a business combination under ASC Topic 805. 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 with an acquisition date fair value of $8.1 million, which includes contractual rights to a portion of its future earnings upon exceeding a minimum earnings threshold. The excess of the aggregate purchase price over the aggregate fair value of the acquired net assets of $45.6 million was recorded as goodwill, all of which was assigned to the Southeast segment as it is predominantly attributable to the Atlanta, Georgia operations.

3. Debt

The outstanding debt obligations included the following as of the periods indicated (in thousands):

The Company is subject to specified financial covenants as part of its debt obligations. The Company was in compliance with these financial covenants as of June 30, 2026 and December 31, 2025, 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 June 30, 2026:

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”) pursuant to an indenture. Interest on the 2030 Notes is payable in arrears semiannually on each March 15 and September 15.

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 a specified rate of 103.4% of the principal balance, plus accrued and unpaid interest, and periodically decreases to a specified rate of 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 101.0% 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”) pursuant to an indenture. Interest on the 2028 Notes is payable in arrears semiannually on each February 15 and August 15.

As of June 30, 2026, the 2028 Notes are redeemable at a specified rate of 104.1% of the principal balance, plus accrued and unpaid interest, and periodically decreases to a specified rate of 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 Senior Notes are fully and unconditionally guaranteed on a joint and several senior unsecured basis by certain of the Company’s subsidiaries.

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 ability of the Company 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 June 30, 2026 and December 31, 2025, unamortized debt issuance costs were $7.7 million and $8.9 million, respectively. Unamortized debt issuance costs reduce the carrying value of the Senior Notes reported on the Condensed Consolidated Balance Sheets within senior unsecured notes, net.

Credit Agreement

The Company has a revolving credit facility with aggregate commitments of $1.5 billion and a maturity date of August 21, 2028 for lenders comprising $1.2 billion of the aggregate commitments, with the remaining aggregate commitments maturing June 4, 2027 (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. Obligations under the Credit Agreement are fully and unconditionally guaranteed on a joint and several basis by certain of the Company’s subsidiaries.

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 debt to capitalization ratio as defined within the Credit Agreement, 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 $9.1 million and $11.4 million as of June 30, 2026 and December 31, 2025. Unamortized debt issuance costs related to the Credit Agreement 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 homebuilding 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 related to Jet HomeLoans, which are used to finance mortgage loans held for sale. The borrowings under these mortgage warehouse facilities are collateralized by the mortgage loans held for sale reported on the Consolidated Balance Sheets.

The outstanding balances for each of the mortgage warehouse facilities were as follows as of the periods indicated (in thousands, except for percentages):

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 and Lot Deposits

Inventories consist of (i)construction in process (“CIP”) and finished homes, including capitalized interest costs incurred under certain of the debt obligations discussed in Note 3, Debt, (ii) finished lots and land, and (iii) 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 through existing lot option contracts with land developers or third-party land banks and are transferred to CIP once construction begins. Costs related to finished lots or land under development held by third-party land bank partners incurred prior to the purchase of the finished lots, including due diligence costs, lot option fees and property taxes in relation to the existing controlled lot pipeline, are capitalized into pre-acquisition land costs.

Inventories consisted of the following as of the periods indicated(in thousands):

(1)As of June 30, 2026 and December 31, 2025, included $43.0 million and $70.0 million, respectively, of consolidated inventory not owned in relation to finished lot sales to land bank partners for which the Company is obligated to repurchase.

On a quarterly basis, the Company reviews the performance and outlook of its communities to identify any indicators of potential impairment. Such indicators include gross margins or sales paces significantly below expectations, significant delays or changes in the planned construction for the community, and other known qualitative factors. In addition to considering market and economic conditions, the Company assesses current sales absorption levels and 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 the inventory related to that community may not be recoverable. If indicators of potential impairment exist and the carrying value of the inventory related to a community is determined to not be recoverable because undiscounted cash flows expected 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.

Inventory impairment charges, with the exception of charges related to pre-acquisition land costs, are included in homebuilding cost of sales on the Condensed Consolidated Statements of Operations. No such impairment charges were recorded for the three and six months ended June 30, 2026 and 2025.

The Company reviews lot deposits for impairment on a quarterly basis and will record an impairment charge when it intends to forfeit its deposit on an individual lot or portfolio of lots. At that time, the Company will also record an impairment charge for costs associated with any of these deal abandonments included in pre-acquisition land costs. Lot deposit and deal abandonment impairment charges are included in SG&A on the Condensed Consolidated Statements of Operations. There were$1.4 million and$3.0 millionof these charges included in SG&A for the three and six months ended June 30, 2026, respectively, and $0.6 million and $1.6 million for the three and six months ended June 30, 2025, respectively.

Capitalized interest activity related to the Credit Agreement and Senior Notes, which is included in CIP and finished homes, is summarized in the table below for the periods indicated(in thousands):

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.

On April 28, 2025, the former owner of Crescent Ventures, LLC (“Crescent Homes”) and his affiliates (the “plaintiffs”) filed a complaint in Chancery Court in Delaware against the Company for an alleged breach of contract related to the Crescent Homes acquisition. Earlier mediation was not successful and the former owner filed a motion for summary judgment. On June 2, 2026, the plaintiffs filed an amended complaint in the Superior Court in Delaware (the “Superior Court”) after the Chancery Court in Delaware dismissed the complaint against the Company and permitted the plaintiffs to transfer the complaint to the Superior Court. The Company intends to defend the lawsuit and file counterclaims against the plaintiffs. As of July 30, 2026, 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 land development performance obligations with local municipalities. While substantial development and construction work may already be complete concerning the improvements at these sites, typically the letters of credit and surety bonds are not fully released until all development and construction activities have been completed. As of June 30, 2026 and December 31, 2025, the Company had outstanding surety bonds of $342.9 million and $358.7 million, respectively, and outstanding letters of credit of $25.1 million and $27.0 million, respectively, which are not reported on the Condensed Consolidated Balance Sheets.

6. Variable Interest Entities

The Company holds investments in certain limited liability companies and similar entities that primarily conduct land acquisition, land development and/or other homebuilding activities in various markets where its homebuilding operations are located, which are considered variable interests. The 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 investments in unconsolidated entities, including unconsolidated VIEs, other than the lot option contracts discussed below, were $21.8 million and $26.6 million as of June 30, 2026 and December 31, 2025, respectively. The maximum exposure to loss is limited to the 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.

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 at predetermined prices. 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 risk of loss related to finished lot and land bank option deposits and related fees was $812.2 million and $773.4 million as of June 30, 2026 and December 31, 2025, respectively.

7. Income Taxes

The effective tax rate for the six months ended June 30, 2026 and 2025 was estimated to be 25.6% and 23.2%, respectively. The effective tax rate increase of 2.4% was primarily attributable to decreased tax benefits from stock-based compensation due to a lower Company stock price on the vesting date when compared to the grant date for certain awards, as well as additional non-deductible executive stock-based compensation resulting from changes in tax legislation.

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 thethree 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. Thefour 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.

During the three months ended June 30, 2026, the chief operating decision makers group (“CODM”) was updated to include the Chief Operating Officer upon his appointment on June 1, 2026. The change did not result in a change to the Company’s operating segments, reportable segments or the measure of segment profit or loss used by the CODM.

The following table summarizes revenues, significant expenses and income before taxes by segment for the three months ended June 30, 2026 and 2025 (in thousands):

(1)The Southeast segment excludes 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. Corporate SG&A primarily consists of depreciation of corporate assets, professional services fees, certain payroll costs and other general corporate expenses not allocated to the segments. Corporate other segment items primarily consist of interest income and expense, investment income, rental income and income from unconsolidated entities. During the three and six months ended June 30, 2026, changes in fair value of investments in equity securities resulted in unrealized gains of $8.2 million and $5.5 million, respectively, which are recognized within other income (expense), net on the Condensed Consolidated Statements of Operations. There wasno such corporate investment income for the three and six months ended June 30, 2025.

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

(4)Other segment items related to the homebuilding segments primarily consist of interest income and expense, management fees and gains and losses on sales of fixed assets. Other segment items related to financial services primarily consist of investment income. For the three and six months ended June 30, 2025, amounts related to contingent consideration revaluation were reclassified into other segment items as there were no longer any contingent consideration arrangements as of December 31, 2025.

The following table summarizes revenues, significant expenses and income before taxes by segment for the six months ended June 30, 2026 and 2025 (in thousands):

See notes (1) to (4) above under segment results for the three months ended June 30, 2026 and 2025.

(5)During the six months ended June 30, 2025, other segment items for the Mid-Atlantic segment included $6.7 million of accrued expense from March 2025 purchase price adjustments related to the Crescent Homes acquisition.

The following table summarizes total assets and goodwill by segment as of the periods indicated (in thousands):

(1)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

On April 18, 2025, the Company acquired Colorado-based title insurance underwriter, Alliant Title, which provides title insurance and escrow services. Refer to Note 2, Acquisitions for more information. The Company estimates the reserve for title claim losses, inclusive of reserves for known claims and those incurred but not yet reported (“IBNR”) to the Company, related to the title insurance policies issued by Alliant Title.

As of June 30, 2026 and December 31, 2025, the reserve for title claim losses was $33.5 million and $32.7 million, respectively, of which $29.1 million and $27.4 million, or 86.9% and 83.6%, respectively, represents the IBNR component. For the three and six months ended June 30, 2026, the Company had a title claim loss provision of $1.4 million and $3.6 million, respectively, and claims paid, net of recoveries, of $1.1 million and $2.9 million, respectively. For both the three and six months ended June 30, 2025, the Company had a title claim loss provision of $0.1 million, and claims paid, net of recoveries, of $0.8 million.

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, equity investments in common stock (“equity securities”) and senior unsecured notes, net.

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 (“IRLC”) and mortgage backed securities (“MBS”) used to hedge interest rate risk on certain of the IRLC. The fair values for IRLC 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 June 30, 2026 and December 31, 2025, the total notional amount of mortgage loans locked and approved through IRLC totaled approximately $98.5 million and $59.0 million, respectively, and carried weighted-average interest rates of approximately 5.2% and 5.2%, respectively. As of June 30, 2026 and December 31, 2025, the total notional amount of MBS sales totaled approximately $160.0 million and $48.8 million, respectively, and carried a weighted-average interest rate of approximately 4.3% and 4.2%. As of June 30, 2026 and December 31, 2025, the aggregate unpaid principal amount of mortgage loans held for sale was $193.8 million and $199.5 million, respectively. 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 arebased on recent trades or quoted market prices for debt of similar terms, including maturity, to achieve comparable yields. The fair value of equity securities is based on independent quoted market prices.

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. As of December 31, 2025, the inventories for which the carrying value was determined to not be recoverable had a fair value of $11.6 million. These values are a level 3 in the fair value hierarchy. There wereno such inventories as of June 30, 2026.

The following table presents the carrying value and fair value of certain of the financial instrumentsas of the periods indicated (in thousands):

The following table presents additional information related to the AFS debt securities, including the largest major security type, corporate bonds, as of the periods indicated (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, certain members of executive management have invested as limited partners in the funds. 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 (“Fund II”) had an exclusive right of first offer on any land bank financing projects that meet its investment criteria and are undertaken by the Company. Fund II is currently in the harvesting period. As of June 30, 2026 and December 31, 2025, the Company had $14.4 million and $17.6 million, respectively, in outstanding lot deposits related to Fund II, controlling 1,110 lots and 1,479 lots, respectively.

DF Residential III, LP (“Fund III”) has an exclusive right of first offer on any land bank financing projects that meet its investment criteria and are undertaken by the Company. Fund III was fully committed in March 2025 and is currently in the investment period. The Company and key members of executive management have committed to make investments in Fund III of $57.6 million, of which 54.4% was contributed as of June 30, 2026. As of June 30, 2026 and December 31, 2025, the Company had $49.8 million and $53.6 million, respectively, in outstanding lot deposits related to Fund III, controlling 3,798 lots and 4,111 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 its Class A common stock 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 year ended December 31, 2025, the repurchase limit under the share buyback program was increased to $100.0 million and the period to repurchase shares was extended through June 30, 2027.

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.

As of June 30, 2026 and December 31, 2025, approximately $17.2 million and $50.5 million, respectively, remained available for purchase under the share buyback program. During the three and six months ended June 30, 2026, the Company repurchased 1,012,621 and 2,076,181 shares of Class A common stock for an aggregate purchase price of $14.8 million and $33.3 million, respectively. During the three and six months ended June 30, 2025,705,404 and 989,968 shares, respectively, were repurchased for an aggregate purchase price of $16.1 million and $23.0 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 periods indicated (in thousands, except share amounts):

(1)For the three and six months ended June 30, 2026, represents the numerator used in the diluted earnings per share calculation as preferred dividends presented above are associated with the redeemable preferred stock that was deemed to be antidilutive and, therefore, not assumed to be converted. For the three and six months ended June 30, 2025, preferred dividends are added back to the numerator for the diluted earnings per share calculation, as the redeemable preferred stock was dilutive and assumed to be converted.

(2)The redeemable preferred stock and stock-based compensation awards are excluded from the calculation of diluted EPS in the event they are antidilutive. There were 12.4 million and 11.4 million of antidilutive common stock equivalent shares associated with the redeemable preferred stock that were excluded from the diluted earnings per share calculation for the three and six months ended June 30, 2026, respectively, andnone for the three and six months ended June 30, 2025. There were 1.9 million and 1.1 million of antidilutive common stock equivalent shares associated with stock-based compensation that were excluded from the diluted earnings per share calculation for the three and six months ended June 30, 2026, respectively, and 1.3 million and 0.9 million for the three and six months ended June 30, 2025, respectively.