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 Texas corporation (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. (“Alliant National Title”). Additionally, the Financial Services segment offers homeowners insurance and ancillary products to homebuyers through the Company’s wholly-owned insurance broker.

On August 6, 2026, the Company entered into an Agreement and Plan of Merger with Beazer Homes USA, Inc., a Delaware corporation (“Beazer”) for the purpose of acquiring Beazer (the “Merger Agreement”).

On October 20, 2026, the Company completed the acquisition of Beazer (the “Beazer acquisition”). Refer to Note 14, Subsequent Events for additional information.

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 Standards 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 National Title

On April 18, 2025, the Company acquired Colorado-based title insurance underwriter, Alliant National Title and a related affiliate, the operations of which are included in the Financial Services segment as of that date. The cash consideration paid for the Alliant National 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 September 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 September 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 September 30, 2026, the 2028 Notes are redeemable at a specified rate of 102.1% 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 September 30, 2026 and December 31, 2025, unamortized debt issuance costs were $7.0 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.

On September 22, 2026, the Company entered into an amendment to the Credit Agreement that increased the letter of credit sublimit from $25.0 million to $100.0 million and modified certain restrictive covenants governing land bank transactions, dispositions of certain assets and contractual obligations assumed in connection with permitted acquisitions. The letter of credit sublimit is part of, and not in addition to, the aggregate commitments under the Credit Agreement. The amendment did not change the aggregate commitments or maturity dates under the Credit Agreement.

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. Additionally, the Credit Agreement allows the Company to temporarily increase the maximum debt to capitalization ratio from 60.0% to 65.0% for the fiscal quarter in which a material acquisition is completed and the following three fiscal quarters.

The Company had unamortized debt issuance costs primarily related to the Credit Agreement of $8.1 million and $11.4 million as of September 30, 2026 and December 31, 2025, respectively. 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 is recorded as capitalized interest within inventories on the Condensed Consolidated Balance Sheets and is 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 Condensed 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 September 30, 2026 and December 31, 2025, included $17.7 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 are included in homebuilding cost of sales on the Condensed Consolidated Statements of Operations. $6.7 million of such impairment charges were recorded for the three and nine months ended September 30, 2026, andnone were recorded for the three and nine months ended September 30, 2025.

The Company reviews lot deposits on a quarterly basis on an individual lot or portfolio of lots, and records a deal abandonment charge when the Company intends to forfeit its deposit. The Company also records deal abandonment charges for the associated pre-acquisition land costs which are included in inventory on the Condensed Consolidated Balance Sheets. Deal abandonment charges are included in SG&A on the Condensed Consolidated Statements of Operations. There were $1.6 million and $4.6 million of these charges included in SG&A for the three and nine months ended September 30, 2026, respectively, and $2.6 million and $4.2 million for the three and nine months ended September 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. A trial has been set to commence on January 31, 2028 in the Superior Court. The Company has filed its counterclaims and intends to defend the lawsuit. As of November 3, 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 September 30, 2026 and December 31, 2025, the Company had outstanding surety bonds of $347.6 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 $23.0 million and $26.6 million as of September 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 $807.5 million and $773.4 million as of September 30, 2026 and December 31, 2025, respectively.

7. Income Taxes

The effective tax rate for the nine months ended September 30, 2026 and 2025 was estimated to be 29.4% and 23.0%, respectively. The effective tax rate increase of 6.4% was primarily attributable to transaction costs related to the Beazer acquisition which are nondeductible for tax purposes.

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 National 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.

On June 1, 2026, the chief operating decision makers group (the “CODM”) was updated to include the Chief Operating Officer upon his appointment on that date. 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 (loss) before taxes by segment for the three months ended September 30, 2026 and 2025 (in thousands):

(1)Noncash items for the Southeast segment included inventory impairment and deal abandonment charges of $2.0 million and $2.4 million, respectively, for the three months ended September 30, 2026 and 2025.

(2)Noncash items for the Mid-Atlantic segment included inventory impairment and deal abandonment charges of $6.1 million and $0.2 million, respectively, for the three months ended September 30, 2026 and 2025.

(3)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 months ended September 30, 2026, changes in fair value of investments in equity securities related to a pre-acquisition investment in Beazer resulted in unrealized gains of $4.9 million which are recognized within other income, net on the Condensed Consolidated Statements of Operations. During the three months ended September 30, 2026, transaction costs associated with the Beazer acquisition were $23.5 million which are included within selling, general and administrative expense on the Condensed Consolidated Statements of Operations. There wereno such corporate investment income or transaction costs for the three months ended September 30, 2025.

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

(5)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.

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

See notes (3) to (5) above under the segment results for the three months ended September 30, 2026 and 2025.

(6)Noncash items for the Southeast segment included inventory impairment and deal abandonment charges of $3.8 million and $3.2 million, respectively, for the nine months ended September 30, 2026 and 2025.

(7)Noncash items for the Mid-Atlantic segment included inventory impairment and deal abandonment charges of $7.1 million and $0.7 million, respectively, for the nine months ended September 30, 2026 and 2025. During the nine months ended September 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.

(8)During the nine months ended September 30, 2026, changes in fair value of investments in equity securities related to a pre-acquisition investment in Beazer resulted in unrealized gains of $10.4 million, which are recognized within other income, net on the Condensed Consolidated Statements of Operations. During the nine months ended September 30, 2026, transaction costs associated with the Beazer acquisition were $23.9 million, which are included within selling, general and administrative expense on the Condensed Consolidated Statements of Operations. There wereno such corporate investment income or transaction costs for the nine months ended September 30, 2025.

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 National 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 National Title.

As of September 30, 2026 and December 31, 2025, the reserve for title claim losses was $31.3 million and $32.7 million, respectively, of which $26.6 million and $27.4 million, or 85.0% and 83.6%, respectively, represents the IBNR component. For the three and nine months ended September 30, 2026, the Company hadno title claim loss provision and $3.6 million of title claim loss provision, respectively, and claims paid, net of recoveries, of $2.2 million and $5.0 million, respectively. 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, 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 September 30, 2026 and December 31, 2025, the total notional amount of mortgage loans locked and approved through IRLC totaled approximately $100.5 million and $59.0 million, respectively, and carried weighted-average interest rates of approximately 5.5% and 5.2%, respectively. As of September 30, 2026 and December 31, 2025, the total notional amount of MBS sales totaled approximately $153.0 million and $48.8 million, respectively, and carried weighted-average interest rates of approximately 4.7% and 4.2%, respectively. As of September 30, 2026 and December 31, 2025, the aggregate unpaid principal amount of mortgage loans held for sale was $172.0 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 isbased 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. These values are level 3 measurements in the fair value hierarchy. As of September 30, 2026 and December 31, 2025, the inventories for which the carrying value was determined to not be recoverable had a fair value of $43.1 million and $11.6 million, respectively.

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”) is currently in the harvesting period. As of September 30, 2026 and December 31, 2025, the Company had $13.7 million and $17.6 million, respectively, in outstanding lot deposits related to Fund II, controlling 1,022 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 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 55.9% was contributed as of September 30, 2026. As of September 30, 2026 and December 31, 2025, the Company had $47.9 million and $53.6 million, respectively, in outstanding lot deposits related to Fund III, controlling 3,631 lots and 4,111 lots, respectively.

12. Equity

Redeemable Preferred Stock

Series A Preferred Stock

On September 14, 2026, the Company redeemed all 150,000 shares of its previously outstanding Series A Convertible Preferred Stock with an initial liquidation preference of $1,000 per share and a par value of $0.01 per share (the “Series A preferred stock”), pursuant to the redemption notice provided to the holders of the Series A preferred stock on August 14, 2026. The Company made an aggregate cash payment to the holders of the Series A preferred stock of $154.3 million, which included 101.0% of the liquidation preference of $1,000 per share and accumulated dividends of $2.8 million. Following the redemption, no shares of Series A preferred stock remained outstanding.

Series B Preferred Stock

On September 14, 2026, the Company entered into Subscription Agreements (the “Subscription Agreements”) with certain institutional investors (collectively, the “Purchasers”). Pursuant to the Subscription Agreements, the Company sold to the Purchasers 225,000 shares of newly-created Series B Convertible Preferred Stock at a first closing, which occurred on September 14, 2026 (the “First Closing”) with an initial liquidation preference of $1,000 per share and a par value of $0.01 per share for an aggregate purchase price of $225.0 million (the “Series B preferred stock” and, together with the Series A preferred stock, the “redeemable preferred stock”). The Purchasers of the Series B preferred stock received an original issue discount equal to 2.5% of the purchase price, which reduced the carrying amount of the Series B preferred stock along with certain directly attributable issuance costs recorded within redeemable preferred stock on the Condensed Consolidated Balance Sheet. The proceeds received from the First Closing were $217.1 million, net of the original issue discount and other fees incurred by the Company. The Company used the proceeds from the First Closing to redeem the then outstanding Series A preferred stock and the remainder for general corporate and operational purposes, and in anticipation of funding a portion of the Beazer acquisition.

The Series B preferred stock is perpetual with call and conversion rights. The Series B preferred stock is non-voting and entitles holders of the Series B preferred stock to cumulative dividends at a rate of 12.0% per annum, payable quarterly in arrears commencing December 31, 2026, which, after the sixth anniversary from the First Closing date, shall increase by 0.5% every six months, subject to a maximum of 15.0%. The Company may, in its sole discretion, defer payment of all or part of any dividend. Deferred dividends accrue additional dividends at the applicable annual dividend rate, currently 12.0%, compounded quarterly, until the deferred dividends and all additional dividends accrued are paid in full in cash. The Series B preferred stock ranks senior to the Company’s Class A and B common stock with respect to dividends and distributions upon liquidation, winding-up and dissolution. Upon a liquidation, dissolution or winding up of the Company, each share of Series B preferred stock will be entitled to receive the greater of (i) the sum of the initial liquidation preference of $1,000 per share, plus all accumulated and unpaid dividends, or (ii) after the sixth anniversary of the First Closing, the as-converted value of such share calculated pursuant to the calculation of the holder conversion and fundamental change options described below.

Following the third anniversary of the First Closing date, the Company can redeem all or any portion of the Series B preferred stock for an amount in cash, starting at 102.0% of the liquidation preference, and decreasing to 100.0% of the liquidation preference, if redeemed after the fifth anniversary, plus accumulated and unpaid dividends.

Subsequent to the sixth anniversary of the First Closing date, a holder can convert the Series B preferred stock into Class A common stock of the Company at a price based on the average closing price of Class A common stock for the 90 trading days immediately preceding, but not including, the conversion notice date, less a 20.0% conversion discount and subject to a floor conversion price of $4.19. In the event of an uncured breach of the protective provisions, which require the Company to be in compliance with all covenants under the Credit Agreement and the Series B preferred stock, the Series B preferred stock will become convertible prior to the sixth anniversary of the First Closing date with a conversion discount of 25.0%, and subject to a floor conversion price of $4.19. In the event that a conversion is exercised and the conversion price is less than the floor price of $4.19, inclusive of the effect of the applicable discount rate (the “conversion floor price”), the Company will issue the number of shares of Class A common stock determined using the conversion floor price and make a cash payment to the holder for the value of the additional shares the holder would have received if the floor had not applied.

Upon the occurrence of a fundamental change, which include, but are not limited to, a change of control or Patrick Zalupski ceasing to beneficially own at least 50.0% of both the voting power and economic interest of the Company, each holder of Series B preferred stock will have the right to (i) convert all or any portion of such holder’s Series B preferred stock into Class A common stock at a conversion price equal to the volume-weighted average price of the Class A common stock for the 30 trading days beginning on, and including, the First Closing date, and/or (ii) require the Company to redeem all or any portion of such holder’s Series B preferred stock for an amount in cash equal to the greater of the as-converted value and the liquidation preference, plus (a) accumulated and unpaid dividends and (b) if and only if the redemption date occurs on or prior to September 14, 2029, an amount equal to the regular dividends that would have accumulated on such share of Series B preferred stock from and after the date of the fundamental change and through September 14, 2029.

Neither the cash settlement tied to the holder conversion nor any fundamental change event, both described above, was deemed probable as of September 30, 2026. As such, the outstanding Series B preferred stock was not subject to current redemption and its carrying value remained unadjusted as of that date.

As of September 30, 2026 and December 31, 2025, the redeemable preferred stock, net of the related original issue discounts and any directly attributable issuance costs, is classified as mezzanine equity on the Condensed Consolidated Balance Sheets.

On October 20, 2026, the Company sold an additional 450,000 shares of Series B preferred stock at a second closing. Refer to Note 14, Subsequent Events for additional information.

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 September 30, 2026 and December 31, 2025, approximately $11.1 million and $50.5 million, respectively, remained available for purchase under the share buyback program. During the three and nine months ended September 30, 2026, the Company repurchased 386,103 and 2,462,284 shares of Class A common stock for an aggregate purchase price of $6.0 million and $39.3 million, respectively. During the three and nine months ended September 30, 2025,357,715 and 1,347,683 shares, respectively, were repurchased for an aggregate purchase price of $9.7 million and $32.7 million, respectively.

13.(Loss) Earnings Per Share

The following weighted-average shares and share equivalents were used to calculate basic and diluted (loss) earnings per share (“EPS”) for the periods indicated (in thousands, except per share and share amounts):

(1)Represents the excess of the redemption amount of $151.5 million over the carrying amount of $148.5 million for the Series A preferred stock redemption for the three and nine months ended September 30, 2026, which was recorded within retained earnings on the Condensed Consolidated Balance Sheet as a deemed dividend and included in the numerator as a reduction of income available to common stockholders as of the redemption notice date. Refer to Note 12, Equity for additional information.

(2)For the three and nine months ended September 30, 2026, preferred dividends associated with the redeemable preferred stock were deemed to be antidilutive and, therefore, not assumed to be converted. For the three and nine months ended September 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.

(3)The redeemable preferred stock and stock-based compensation awards are excluded from the calculation of diluted EPS in the event they are antidilutive. For the three and nine months ended September 30, 2026, the if-converted method applied to the redeemable preferred stock was weighted to account for both the redemption and issuance described in Note 12, Equity.

14. Subsequent Events

Credit Agreement

On October 9, 2026, the Company, pursuant to the existing accordion feature of the Credit Agreement, requested an increase of $220.0 million in aggregate commitments, resulting in approximately $1.7 billion in total, to fund operations, and in anticipation of funding a portion of the Beazer acquisition discussed below.

On October 20, 2026, pursuant to the Merger Agreement, the Company completed the acquisition of national homebuilder, Beazer Homes USA, Inc. (“Beazer”) in an all-cash transaction whereby a newly formed entity of the Company was merged with Beazer. As a result, Beazer became a wholly-owned subsidiary of the Company. This acquisition will be accounted for as a business combination under ASC Topic 805. The Beazer acquisition will allow the Company to enter new markets and expand its existing operations. In the transaction, Beazer stockholders received $33.50, in cash, per outstanding share of Beazer common stock and the Company settled certain outstanding debt previously held by Beazer. Additionally, the Company paid for the acceleration of certain employee stock and cash awards in accordance with the Merger Agreement. DFH funded the merger consideration with cash on hand, borrowings under the Credit Agreement, and proceeds from the Series B preferred stock. In addition, the Company assumed certain Beazer senior notes as part of the transaction and certain other Beazer indebtedness was settled with land bank financing. All financing arrangements are discussed below. Due to the close proximity in timing of the Beazer acquisition closing date and the Company’s filing of this Quarterly Report on Form 10-Q, the Company has not yet completed its evaluation and determination of the purchase price, the assets acquired and liabilities assumed, goodwill, including the assignment of goodwill to specific reporting units, and pro forma information. The Company plans to provide preliminary purchase price allocation information in its Annual Report on Form 10-K for the year ended December 31, 2026.

Second Closing of Series B Preferred Stock

On October 20, 2026, in connection with the closing of the Beazer acquisition, the Company sold an additional 450,000 shares of Series B preferred stock (the “Additional Shares”) at a second closing for an aggregate purchase price of $450.0 million (the “Second Closing”). The proceeds received from the Second Closing were $435.3 million. The Company used the proceeds from the sale of the Additional Shares to fund a portion of the Beazer acquisition. The material terms of the Series B preferred stock, including the dividend rate, redemption rights, conversion features and liquidation preference, are described in Note 12, Equity.

Land Bank Facility

On October 20, 2026, in connection with the closing of the Beazer acquisition, the Company received aggregate proceeds of $572.1 million from the funding of a land bank facility (the “Land Bank Facility”) related to the sale of certain pre-acquisition Beazer land assets to Millrose in exchange for the option to purchase the controlled homesites in the future with consistent terms to the Company’s existing land bank option contracts. At the closing of the Beazer acquisition, the Company used the proceeds from the Land Bank Facility to redeem Beazer’s $350.0 million aggregate principal amount of 7.250% Senior Notes due 2029, repay Beazer’s unsecured credit facility and pay transaction costs incurred in connection with the Beazer acquisition and the related financing transactions.

Beazer Notes

As part of the transaction closing on October 20, 2026, Beazer’s outstanding 7.500% Senior Notes due 2031 and 8.000% Senior Notes due 2032 (the “Beazer Notes”) with aggregate principal amounts of $250.0 million and $400.0 million, respectively, were assumed by the Company. In order to simplify its capital structure following the acquisition of Beazer, on October 22, 2026, the Company commenced private exchange offers and consent solicitations to eligible holders of Beazer Notes to exchange the Beazer Notes for new senior notes issued by the Company and to solicit the consent to amendments to the Beazer Notes and the related indentures under which they were issued to eliminate substantially all of the restrictive covenants and events of default thereunder (the “Exchange Offers and Consent Solicitations”). The new notes will have the same interest payment and maturity dates, interest rate and redemption provisions as the Beazer Notes, and will otherwise have substantially identical terms, other than changes to the terms to align with the Company’s Senior Notes. The Exchange Offers and Consent Solicitations will expire at 5:00 p.m., New York City time, on November 20, 2026, unless extended.