NOTE 7—WAREHOUSE NOTES PAYABLE

At March 31, 2017, to provide financing to borrowers, the Company has arranged for warehouse lines of credit. In support of the Agencies’ programs, the Company has warehouse lines of credit in the amount of $1.7 billion with certain national banks and a $1.5 billion uncommitted facility with Fannie Mae (collectively, the “Agency Warehouse Facilities”). The Company has pledged substantially all of its loans held for sale against the Agency Warehouse Facilities. The Company has arranged for warehouse lines of credit in the amount of $0.4 billion with certain national banks to assist in funding loans held for investment under the Interim Program (“Interim Warehouse Facilities”). The Company has pledged substantially all of its loans held for investment against these Interim Warehouse Facilities. The maximum amount and outstanding borrowings under the warehouse notes payable at March 31, 2017 are shown in the table below:


	March 31, 2017
(dollars in thousands)	Maximum		Outstanding		Loan Type
Facility	Amount		Balance		Funded (1)	Interest rate
Agency warehouse facility #1	$	425,000	$	130,719	LHFS	30-day LIBOR plus 1.40%
Agency warehouse facility #2		650,000		562,583	LHFS	30-day LIBOR plus 1.40%
Agency warehouse facility #3		280,000		90,358	LHFS	30-day LIBOR plus 1.35%
Agency warehouse facility #4		350,000		214,116	LHFS	30-day LIBOR plus 1.40%
Agency warehouse facility #5		30,000		20,348	LHFS	30-day LIBOR plus 1.80%
Fannie Mae repurchase agreement, uncommitted line and open maturity		1,500,000		180,378	LHFS	30-day LIBOR plus 1.15%
Total agency warehouse facilities	$	3,235,000	$	1,198,502

Interim warehouse facility #1	$	85,000	$	36,916	LHFI	30-day LIBOR plus 1.90%
Interim warehouse facility #2		200,000		113,272	LHFI	30-day LIBOR plus 2.00%
Interim warehouse facility #3		75,000		59,006	LHFI	30-day LIBOR plus 2.00% to 2.50%
Total interim warehouse facilities	$	360,000	$	209,194
Debt issuance costs		—		(1,234)
Total warehouse facilities	$	3,595,000	$	1,406,462

(1)

Type of loan the borrowing facility is used to fully or partially fund – loans held for sale (“LHFS”) or loans held for investment (“LHFI”).

During the second quarter of 2017, the Company executed a short-term extension related to Agency Warehouse Facility #3. The extension reduced the interest rate to the 30-day London Interbank Offered Rate (“LIBOR”) plus 125 basis points and extended the maturity date to May 30, 2017. Prior to the expiration of the extension, the Company expects to execute an amendment to extend the maturity date for a one-year period with increased capacity and the same interest rate as the extension. No other material modifications have been made to the agreement during 2017.

During the second quarter of 2017, the Company executed the seventh amendment to the credit and security agreement related to Interim Warehouse Facility #1 that extended the maturity date to April 30, 2018. No other material modifications have been made to the agreement during 2017.

During the second quarter of 2017, the Company exercised its option to extend the maturity date of Interim Warehouse Facility #3 to May 19, 2018. No other material modifications have been made to the agreement during 2017.

The warehouse notes payable and the note payable are subject to various financial covenants, all of which the Company was in compliance with as of the current period end.