Debt (Tables)

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Debt Instrument [Line Items]

Schedule of Long-term Debt

ines of credit outstanding, net of debt issuance costs, as of December 31, 2018 and 2017 consist of the following (in thousands):

	December 31, 2018			December 31, 2017
Revolving credit facility	$	46,500		$	32,000
Unsecured revolving credit facility	155,500			75,000
Debt issuance costs, net of amortization	(1,614		)	(1,227		)
Total borrowings on lines of credit, net	$	200,386		$	105,773

Schedule of Lines of Credit Outstanding

ines of credit outstanding, net of debt issuance costs, as of December 31, 2018 and 2017 consist of the following (in thousands):

	December 31, 2018			December 31, 2017
Revolving credit facility	$	46,500		$	32,000
Unsecured revolving credit facility	155,500			75,000
Debt issuance costs, net of amortization	(1,614		)	(1,227		)
Total borrowings on lines of credit, net	$	200,386		$	105,773

Revolving Credit Facility

On July 30, 2015, the Company entered into a revolving credit facility (the “Credit Facility”) with Inwood National Bank, which initially provided for up to $50.0 million. Amounts outstanding under the Credit Facility are secured by mortgages on real property and security interests in certain personal property (to the extent that such personal property is connected with the use and enjoyment of the real property) that is owned by certain of the Company’s subsidiaries.

The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the maturity date. Following several amendments, as of December 31, 2018, the aggregate commitment amount was $75.0 million and the maturity date of the Credit Facility was May 1, 2022.

As of December 31, 2018, letters of credit outstanding totaling $1.9 million reduced the aggregate maximum commitment amount to $73.1 million.

As of December 31, 2018, outstanding borrowings under the amended Credit Facility bear interest payable monthly at a floating rate per annum equal to the rate announced by Bank of America, N.A., from time to time, as its “Prime Rate” (the “Index”) with such adjustments to the interest rate being made on the effective date of any change in the Index, less 0.25%. Notwithstanding the foregoing, the interest may not, at any time, be less than 4% per annum or more than the lesser amount of 18% and the highest maximum rate allowed by applicable law. As of December 31, 2018, the interest rate on outstanding borrowings under the Credit Facility was 5.25% per annum.

As of December 31, 2018, the amended Credit Facility was subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 65% of the total value of lots owned by certain of the Company’s subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 65% of the borrowing base.

As of December 31, 2018, the amended Credit Facility was also subject to a non-usage fee equal to 0.25% of the average unfunded amount of the commitment amount over a trailing 12 month period.

Under the terms of the amended Credit Facility, the Company is required, among other things, to maintain minimum multiples of tangible net worth in excess of the outstanding Credit Facility balance, minimum interest coverage and maximum leverage. Management is not aware of any violations of these financial covenants under the Credit Facility as of December 31, 2018.

Fees and other debt issuance costs of $0.0 million, $0.2 million and $0.0 million were incurred during the years ended December 31, 2018, 2017 and 2016, respectively, associated with the Credit Facility amendments. These costs are deferred and reduce the carrying amount of debt in our consolidated balance sheets. The Company capitalizes these costs to inventory over the term of the Credit Facility using the straight-line method.

Unsecured Revolving Credit Facility

On December 15, 2015, the Company entered into a credit agreement (the “Credit Agreement”) with Citibank, N.A. and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”) as lenders, and Citibank, N.A. as administrative agent, providing for a senior, unsecured revolving credit facility with initial aggregate lending commitments of up to $40.0 million (the “Unsecured Revolving Credit Facility”).

The Unsecured Revolving Credit Facility provides for interest rate options on advances at rates equal to either: (a) in the case of base rate advances, the highest of (i) Citibank’s base rate, (ii) the federal funds rate plus 0.5%, and (iii) the one-month LIBOR plus 1.0%, in each case plus 1.5%; or (b) in the case of Eurodollar rate advances, the reserve adjusted LIBOR plus 2.5%. Interest on amounts borrowed under the Unsecured Revolving Credit Facility is payable in arrears on a monthly basis. As of December 31, 2018, the interest rates on outstanding borrowings under the Unsecured Revolving Credit Facility ranged from 4.89% to 5.01% per annum.

The Company pays the lenders a commitment fee on the amount of the unused commitments on a quarterly basis at a rate per annum equal to 0.45%.

Outstanding borrowings under the Unsecured Revolving Credit Facility are subject to, among other things, a borrowing base. The borrowing base limitation is equal to the sum of: 100% of unrestricted cash in excess of $15.0 million; 85% of the book value of model homes, construction in progress homes, completed sold and speculative homes (subject to certain limitations on the age and number of speculative homes and model homes); 65% of the book value of finished lots and land under development; and 50% of the book value of entitled land (subject to certain limitations on the value of entitled land and land under development as a percentage of the borrowing base).

Schedule of Minimum Principal Payments

The annual principal payments over the next five years under the lines of credit as of December 31, 2018 are (in thousands):

2019	$	—
2020	—
2021	155,500
2022	46,500
Total	$	202,000

Notes Payable

Debt Instrument [Line Items]

Schedule of Long-term Debt

Notes payable to unrelated third parties outstanding as of December 31, 2018 and 2017 consist of the following (in thousands):

	December 31, 2018		December 31, 2017
Briar Ridge Investments, LTD	$	—	$	9,000
Graham Mortgage Corporation	—		926
Total notes payable	$	—	$	9,926

Briar Ridge Investments, LTD

On December 13, 2013, a subsidiary of the Company signed a promissory note for $9.0 million maturing on December 13, 2017, bearing interest at 6.0% collateralized by land purchased in Allen, Texas. In December 2016, the note was extended through December 31, 2018. The note was paid in full on June 5, 2018.

Graham Mortgage Corporation

On November 30, 2016, a subsidiary of the Company signed a promissory note for $1.2 million maturing on December 1, 2018, bearing interest at 3.0% per annum and collateralized by land located in Sunnyvale, Texas. The note was paid in full on December 3, 2018.