0001783398-21-000046.txt : 20210513 0001783398-21-000046.hdr.sgml : 20210513 20210513172544 ACCESSION NUMBER: 0001783398-21-000046 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 89 CONFORMED PERIOD OF REPORT: 20210331 FILED AS OF DATE: 20210513 DATE AS OF CHANGE: 20210513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UWM Holdings Corp CENTRAL INDEX KEY: 0001783398 STANDARD INDUSTRIAL CLASSIFICATION: MORTGAGE BANKERS & LOAN CORRESPONDENTS [6162] IRS NUMBER: 842124167 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-39189 FILM NUMBER: 21920907 BUSINESS ADDRESS: STREET 1: 585 SOUTH BLVD E CITY: PONTIAC STATE: MI ZIP: 48341 BUSINESS PHONE: 800-981-8898 MAIL ADDRESS: STREET 1: 585 SOUTH BLVD E CITY: PONTIAC STATE: MI ZIP: 48341 FORMER COMPANY: FORMER CONFORMED NAME: Gores Holdings IV, Inc. DATE OF NAME CHANGE: 20190723 10-Q 1 ghivu-20210331.htm 10-Q ghivu-20210331
Q1false202112/3100017833980.2500017833982021-01-012021-03-310001783398us-gaap:CommonClassAMember2021-01-012021-03-310001783398us-gaap:WarrantMember2021-01-012021-03-31xbrli:shares0001783398us-gaap:CommonClassAMember2021-05-100001783398ghivu:CommonClassDMember2021-05-10iso4217:USD00017833982021-03-3100017833982020-12-31iso4217:USDxbrli:shares0001783398us-gaap:CommonClassAMember2021-03-310001783398us-gaap:CommonClassBMember2021-03-310001783398us-gaap:CommonClassCMember2021-03-310001783398ghivu:CommonClassDMember2021-03-3100017833982020-01-012020-03-310001783398us-gaap:MemberUnitsMember2019-12-310001783398us-gaap:AdditionalPaidInCapitalMember2019-12-310001783398us-gaap:RetainedEarningsMember2019-12-3100017833982019-12-310001783398us-gaap:MemberUnitsMember2020-01-012020-03-310001783398us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001783398us-gaap:RetainedEarningsMember2020-01-012020-03-310001783398us-gaap:MemberUnitsMember2020-03-310001783398us-gaap:AdditionalPaidInCapitalMember2020-03-310001783398us-gaap:RetainedEarningsMember2020-03-3100017833982020-03-310001783398us-gaap:AdditionalPaidInCapitalMember2020-12-310001783398us-gaap:RetainedEarningsMember2020-12-310001783398us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-12-310001783398srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-12-310001783398us-gaap:RetainedEarningsMember2021-01-012021-01-2000017833982021-01-012021-01-200001783398us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-01-210001783398us-gaap:CommonStockMemberghivu:CommonClassDMember2021-01-210001783398us-gaap:AdditionalPaidInCapitalMember2021-01-210001783398us-gaap:RetainedEarningsMember2021-01-210001783398us-gaap:NoncontrollingInterestMember2021-01-2100017833982021-01-210001783398us-gaap:RetainedEarningsMember2021-01-222021-03-3100017833982021-01-222021-03-310001783398us-gaap:NoncontrollingInterestMember2021-01-222021-03-310001783398us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-03-310001783398us-gaap:CommonStockMemberghivu:CommonClassDMember2021-03-310001783398us-gaap:AdditionalPaidInCapitalMember2021-03-310001783398us-gaap:RetainedEarningsMember2021-03-310001783398us-gaap:NoncontrollingInterestMember2021-03-310001783398ghivu:UWMLLCMember2021-01-20xbrli:pure0001783398ghivu:SFSCorpMember2021-01-210001783398ghivu:UwmHoldingsCorporationMember2021-01-21ghivu:vote0001783398us-gaap:CommonClassAMember2021-01-210001783398ghivu:CommonClassDMember2021-01-210001783398us-gaap:CommonClassBMember2021-01-210001783398us-gaap:CommonClassCMember2021-01-210001783398us-gaap:CommonClassBMember2021-01-012021-03-310001783398ghivu:ClassBAndClassDMemberghivu:SFSCorpMember2021-01-212021-01-210001783398srt:MinimumMemberus-gaap:CommonClassAMember2021-01-210001783398srt:MaximumMemberus-gaap:CommonClassAMember2021-01-210001783398ghivu:GoreHoldingsIVIncMember2021-01-212021-01-210001783398ghivu:GoresHoldingsIVIncMember2021-01-210001783398ghivu:GoresHoldingsIVIncMemberus-gaap:IPOMember2020-01-012020-01-310001783398ghivu:GoresHoldingsIVIncMemberus-gaap:IPOMemberus-gaap:CommonClassAMember2020-01-31iso4217:USDghivu:unit0001783398ghivu:GoresHoldingsIVIncMemberus-gaap:IPOMember2020-01-310001783398ghivu:PublicWarrantsMemberghivu:GoresHoldingsIVIncMemberus-gaap:CommonClassAMember2020-01-310001783398ghivu:PublicWarrantsMemberghivu:GoresHoldingsIVIncMember2020-01-310001783398ghivu:PrivateWarrantsMemberghivu:GoresHoldingsIVIncMember2020-01-31iso4217:USDghivu:warrant0001783398ghivu:PublicWarrantsMember2021-01-210001783398ghivu:PrivateWarrantsMember2021-01-210001783398us-gaap:GovernmentNationalMortgageAssociationGnmaInsuredLoansMember2021-03-310001783398us-gaap:GovernmentNationalMortgageAssociationGnmaInsuredLoansMember2020-12-310001783398us-gaap:GovernmentNationalMortgageAssociationGnmaInsuredLoansMember2021-01-012021-03-310001783398us-gaap:GovernmentNationalMortgageAssociationGnmaInsuredLoansMember2020-01-012020-12-3100017833982020-01-012020-12-310001783398us-gaap:InterestRateLockCommitmentsMember2021-03-310001783398us-gaap:InterestRateLockCommitmentsMember2020-12-310001783398ghivu:ForwardLoanSaleCommitmentsMember2021-03-310001783398ghivu:ForwardLoanSaleCommitmentsMember2020-12-310001783398ghivu:MortgageServicingRightsMember2020-12-310001783398ghivu:MortgageServicingRightsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2020-12-310001783398ghivu:MortgageServicingRightsMember2021-01-012021-03-310001783398ghivu:MortgageServicingRightsMember2021-03-310001783398ghivu:MortgageServicingRightsMember2019-12-310001783398ghivu:MortgageServicingRightsMember2020-01-012020-03-310001783398ghivu:MortgageServicingRightsMember2020-03-310001783398ghivu:MortgageServicingRightsMembersrt:MinimumMember2021-01-012021-03-310001783398ghivu:MortgageServicingRightsMembersrt:MaximumMember2021-01-012021-03-310001783398ghivu:MortgageServicingRightsMembersrt:MinimumMember2020-01-012020-12-310001783398ghivu:MortgageServicingRightsMembersrt:MaximumMember2020-01-012020-12-310001783398ghivu:FourHundredMillionLineOfCreditAgreementExpiringDecemberThirtyFirstTwoThousandTwentyTwoMember2021-03-310001783398ghivu:FourHundredMillionLineOfCreditAgreementExpiringDecemberThirtyFirstTwoThousandTwentyTwoMember2020-12-310001783398us-gaap:AssetPledgedAsCollateralMember2021-03-310001783398us-gaap:AssetPledgedAsCollateralMember2020-12-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueMay252021Member2021-03-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueMay252021Member2020-12-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueJune232021Member2021-03-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueJune232021Member2020-12-310001783398ghivu:LineOfCreditDueJuly12021Memberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:LineOfCreditDueJuly12021Memberghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueJuly72021Member2021-03-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueJuly72021Member2020-12-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueSeptember72021Member2021-03-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueSeptember72021Member2020-12-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueSeptember192021Member2021-03-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueSeptember192021Member2020-12-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueSeptember232021Member2021-03-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueSeptember232021Member2020-12-310001783398ghivu:LineOfCreditDueOctober292021Memberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:LineOfCreditDueOctober292021Memberghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:LineOfCreditDueOctober2920212Memberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:LineOfCreditDueOctober2920212Memberghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:LineOfCreditDueNovember162021Memberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:LineOfCreditDueNovember162021Memberghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:LineOfCreditDueDecember232021Memberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:LineOfCreditDueDecember232021Memberghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:LineOfCreditDueDecember282021Memberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:LineOfCreditDueDecember282021Memberghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueJanuary102022Member2021-03-310001783398ghivu:WarehouseLineOfCreditMemberghivu:LineOfCreditDueJanuary102022Member2020-12-310001783398ghivu:LineOfCreditDueFebruary232022Memberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:LineOfCreditDueFebruary232022Memberghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:LineOfCreditDueMarch42022Memberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:LineOfCreditDueMarch42022Memberghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:LineOfCreditWithEarlyFundingASAPMemberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:LineOfCreditWithEarlyFundingASAPMemberghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:LineOfCreditWithNoExpirationGestationLineMemberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:LineOfCreditWithNoExpirationGestationLineMemberghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:WarehouseLineOfCreditMember2020-12-310001783398ghivu:LineOfCreditThroughEarlyFundingProgramMemberghivu:WarehouseLineOfCreditMember2021-03-310001783398ghivu:SeniorUnsecuredNotesNovemberFifteenDueTwoThousandTwentyFiveMemberus-gaap:SeniorNotesMember2020-11-030001783398srt:ScenarioForecastMemberus-gaap:DebtInstrumentRedemptionPeriodOneMemberus-gaap:SeniorNotesMember2022-11-152025-11-150001783398srt:ScenarioForecastMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMemberus-gaap:SeniorNotesMember2022-11-152025-11-150001783398srt:ScenarioForecastMemberus-gaap:SeniorNotesMember2022-11-152025-11-150001783398srt:ScenarioForecastMembersrt:MaximumMemberus-gaap:SeniorNotesMember2020-11-032022-11-140001783398srt:ScenarioForecastMemberus-gaap:SeniorNotesMember2020-11-032022-11-140001783398srt:ScenarioForecastMemberus-gaap:DebtInstrumentRedemptionPeriodThreeMemberus-gaap:SeniorNotesMember2020-11-032022-11-140001783398ghivu:HoldingsLLCMember2021-01-012021-03-310001783398ghivu:HoldingsLLCMemberus-gaap:CommonClassAMember2021-03-310001783398ghivu:HoldingsLLCMemberghivu:SFSCorpMemberus-gaap:CommonClassBMember2021-03-310001783398ghivu:HoldingsLLCMember2021-03-310001783398ghivu:DepartmentOfHousingAndUrbanDevelopmentHUDMember2021-03-310001783398ghivu:FNMAFHLMCAndGNMAMember2021-03-310001783398us-gaap:FairValueInputsLevel1Member2021-03-310001783398us-gaap:FairValueInputsLevel2Member2021-03-310001783398us-gaap:FairValueInputsLevel3Member2021-03-310001783398us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateLockCommitmentsMember2021-03-310001783398us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateLockCommitmentsMember2021-03-310001783398us-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueInputsLevel3Member2021-03-310001783398ghivu:ForwardLoanSaleCommitmentsMemberus-gaap:FairValueInputsLevel1Member2021-03-310001783398ghivu:ForwardLoanSaleCommitmentsMemberus-gaap:FairValueInputsLevel2Member2021-03-310001783398ghivu:ForwardLoanSaleCommitmentsMemberus-gaap:FairValueInputsLevel3Member2021-03-310001783398ghivu:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel1Member2021-03-310001783398ghivu:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel2Member2021-03-310001783398ghivu:MortgageServicingRightsMemberus-gaap:FairValueInputsLevel3Member2021-03-310001783398us-gaap:FairValueInputsLevel1Member2020-12-310001783398us-gaap:FairValueInputsLevel2Member2020-12-310001783398us-gaap:FairValueInputsLevel3Member2020-12-310001783398us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateLockCommitmentsMember2020-12-310001783398us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateLockCommitmentsMember2020-12-310001783398us-gaap:InterestRateLockCommitmentsMemberus-gaap:FairValueInputsLevel3Member2020-12-310001783398ghivu:ForwardLoanSaleCommitmentsMemberus-gaap:FairValueInputsLevel1Member2020-12-310001783398ghivu:ForwardLoanSaleCommitmentsMemberus-gaap:FairValueInputsLevel2Member2020-12-310001783398ghivu:ForwardLoanSaleCommitmentsMemberus-gaap:FairValueInputsLevel3Member2020-12-310001783398srt:WeightedAverageMemberghivu:MeasurementInputPullThroughRateMemberus-gaap:InterestRateLockCommitmentsMember2021-03-310001783398srt:WeightedAverageMemberghivu:MeasurementInputPullThroughRateMemberus-gaap:InterestRateLockCommitmentsMember2020-12-310001783398ghivu:MortgageServicingRightsMembersrt:MinimumMemberus-gaap:MeasurementInputDiscountRateMember2021-03-310001783398ghivu:MortgageServicingRightsMemberus-gaap:MeasurementInputDiscountRateMembersrt:MaximumMember2021-03-310001783398ghivu:MortgageServicingRightsMembersrt:MinimumMemberus-gaap:MeasurementInputDiscountRateMember2020-12-310001783398ghivu:MortgageServicingRightsMemberus-gaap:MeasurementInputDiscountRateMembersrt:MaximumMember2020-12-310001783398ghivu:MortgageServicingRightsMembersrt:MinimumMemberus-gaap:MeasurementInputPrepaymentRateMember2021-03-310001783398ghivu:MortgageServicingRightsMembersrt:MaximumMemberus-gaap:MeasurementInputPrepaymentRateMember2021-03-310001783398ghivu:MortgageServicingRightsMembersrt:MinimumMemberus-gaap:MeasurementInputPrepaymentRateMember2020-12-310001783398ghivu:MortgageServicingRightsMembersrt:MaximumMemberus-gaap:MeasurementInputPrepaymentRateMember2020-12-310001783398ghivu:MortgageServicingRightsMemberghivu:MeasurementInputCostOfServicingMembersrt:MinimumMember2021-03-310001783398ghivu:MortgageServicingRightsMemberghivu:MeasurementInputCostOfServicingMembersrt:MaximumMember2021-03-310001783398ghivu:MortgageServicingRightsMemberghivu:MeasurementInputCostOfServicingMembersrt:MinimumMember2020-12-310001783398ghivu:MortgageServicingRightsMemberghivu:MeasurementInputCostOfServicingMembersrt:MaximumMember2020-12-310001783398us-gaap:FairValueInputsLevel2Memberus-gaap:SeniorNotesMember2021-03-310001783398us-gaap:FairValueInputsLevel2Memberus-gaap:SeniorNotesMember2020-12-310001783398ghivu:AdministrativeServicesProvidedToEntitiesByCompanysTeamMembersMember2021-01-012021-03-310001783398srt:AffiliatedEntityMember2021-01-012021-03-310001783398srt:AffiliatedEntityMember2020-01-012020-03-310001783398us-gaap:LineOfCreditMember2020-01-012020-03-310001783398us-gaap:LineOfCreditMember2020-12-310001783398us-gaap:SubsequentEventMemberus-gaap:RestrictedStockUnitsRSUMember2021-04-022021-04-020001783398us-gaap:SubsequentEventMemberus-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2021-04-022021-04-020001783398us-gaap:SubsequentEventMemberus-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:RestrictedStockUnitsRSUMember2021-04-022021-04-020001783398us-gaap:SubsequentEventMemberus-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2021-04-022021-04-020001783398us-gaap:SubsequentEventMemberghivu:UWMLLCMemberghivu:SeniorUnsecuredNotesDueApril152029Memberus-gaap:SeniorNotesMember2021-04-070001783398us-gaap:SubsequentEventMemberus-gaap:LineOfCreditMember2021-04-222021-04-220001783398us-gaap:SubsequentEventMembersrt:SubsidiariesMemberghivu:GoldmanSachsBankUSAMembersrt:MaximumMember2021-04-232021-04-230001783398us-gaap:SubsequentEventMembersrt:SubsidiariesMemberghivu:GoldmanSachsBankUSAMember2021-04-232021-04-230001783398us-gaap:SubsequentEventMemberus-gaap:CommonClassAMember2021-05-092021-05-090001783398us-gaap:SubsequentEventMember2021-05-110001783398us-gaap:SubsequentEventMemberghivu:FounderAndCEOMember2021-05-11
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________

Commission file number 001-39189

UWM HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
84-2124167
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
585 South Boulevard E.
Pontiac,MI48341
(Address of Principal Executive Offices)
(Zip Code)
(800) 981-8898
Registrant's telephone number, including area code
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per shareUWMCNew York Stock Exchange
Warrants, each warrant exercisable for one share of Class A Common StockUWMCWSNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x   No  o 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
o
Accelerated filer
  o
Non-accelerated filer  
x
Smaller reporting company
  
Emerging growth company
  
        
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes        No  x

As of May 10, 2021, the registrant had 103,108,205 shares of Class A common stock outstanding and 1,502,069,787 shares of Class D common stock outstanding.



Table of Contents




PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
UWM HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and per share amounts)
 March 31,
2021
December 31, 2020
Assets(Unaudited)
Cash and cash equivalents$1,592,663 $1,223,837 
Mortgage loans at fair value5,503,271 7,916,515 
Derivative assets113,168 61,072 
Accounts receivable, net549,381 253,600 
Mortgage servicing rights - fair value as of March 31, 2021; amortized cost as of December 31, 2020 (see Note 1 and Note 5)2,300,434 1,756,864 
Premises and equipment, net111,964 107,572 
Operating lease right-of-use asset, net
(includes $87,440 and $92,571 with related parties)
87,896 93,098 
Finance lease right-of-use asset
(includes $29,192 and $0 with related parties)
54,456 22,929 
Other assets59,393 57,989 
Total assets$10,372,626 $11,493,476 
Liabilities and Equity
Warehouse lines of credit$4,823,740 $6,941,397 
Accounts payable and accrued expenses1,185,499 847,745 
Accrued dividends payable160,517  
Derivative liabilities55,479 66,237 
Equipment note payable25,424 26,528 
Operating lines of credit400,000 320,300 
Senior notes789,870 789,323 
Operating lease liability
(includes $98,733 and $104,006 with related parties)
99,188 104,534 
Finance lease liability
(includes $29,241 and $0 with related parties)
54,873 23,132 
Total liabilities7,594,590 9,119,196 
Equity:
Preferred stock, $0.0001 par value - 100,000,000 shares authorized, none issued and outstanding as of March 31, 2021
 — 
Class A common stock, $0.0001 par value - 4,000,000,000 shares authorized, 103,104,205 shares issued and outstanding as of March 31, 2021
10 — 
Class B common stock, $0.0001 par value - 1,700,000,000 shares authorized, none issued and outstanding as of March 31, 2021
 — 
Class C common stock, $0.0001 par value - 1,700,000,000 shares authorized, none issued and outstanding as of March 31, 2021
 — 
Class D common stock, $0.0001 par value - 1,700,000,000 shares authorized, 1,502,069,787 shares issued and outstanding as of March 31, 2021
150 — 
Additional paid-in capital 24,839 
Retained earnings113,078 2,349,441 
Non-controlling interest2,664,798 — 
Total equity2,778,036 2,374,280 
Total liabilities and equity$10,372,626 $11,493,476 

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
1


UWM HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except shares and per share amounts)
(Unaudited)
 For the three months ended March 31,
 20212020
Revenue
Loan production income$1,074,665 $404,214 
Loan servicing income123,789 50,097 
Change in fair value of mortgage servicing rights (see Note 5)(59,259) 
Gain (loss) on sale of mortgage servicing rights4,763 (50,222)
Interest income45,912 51,367 
Total revenue, net1,189,870 455,456 
Expenses
Salaries, commissions and benefits213,061 121,784 
Direct loan production costs13,162 12,554 
Marketing, travel, and entertainment10,495 7,434 
Depreciation and amortization7,289 2,645 
Servicing costs20,508 13,322 
Amortization, impairment and pay-offs of mortgage servicing rights (see Note 5) 218,754 
General and administrative16,778 15,576 
Interest expense52,990 43,038 
Other (income)/expense(17,304) 
Total expenses316,979 435,107 
Earnings before income taxes872,891 20,349 
Provision for income taxes12,886 
Net income860,005 20,349 
Net income attributable to non-controlling interest812,020 N/A
Net income attributable to UWM Holdings Corporation$47,985 N/A
Earnings per share of Class A common stock (see Note 17):
Basic$0.47 N/A
Diluted$0.33 N/A
Weighted average shares outstanding:
Basic103,104,205 N/A
Diluted1,605,173,992 N/A

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
2



UWM HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands, except shares and per share amounts)
(Unaudited)
Member's EquityAdditional Paid-in CapitalRetained EarningsTotal
Balance, January 1, 2020$ $24,839 $636,484 $661,323 
Net income  20,349 20,349 
Member distributions  (177)(177)
Balance, March 31, 2020$ $24,839 $656,656 $681,495 

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.



















3


UWM HOLDINGS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands, except shares and per share amounts)
(Unaudited)
Class A Common Stock SharesClass A Common Stock AmountClass D Common Stock SharesClass D Common Stock AmountAdditional Paid-
in Capital
Retained
Earnings
Non-controlling InterestTotal
Balance, January 1, 2021 $  $ $24,839 $2,349,441 $ $2,374,280 
Cumulative effect of change to fair value accounting for mortgage servicing rights (See Note 1)
     3,440  3,440 
Net income prior to business combination transaction     183,756  183,756 
Member distributions to SFS Corp. prior to business combination transaction     (1,100,000) (1,100,000)
Net proceeds received from business combination transaction     879,122  879,122 
Cumulative effect of reorganization post business combination transaction103,104,205 10 1,502,069,787 150 (24,839)(2,164,975)2,189,654  
Opening net assets of Gores Holdings IV, Inc. acquired     (75,381) (75,381)
Dividend declared February 3, 2021 and payable April 6, 2021     (10,310)(150,207)(160,517)
Member distributions to SFS Corp. post business combination transaction      (2,913)(2,913)
Net income subsequent to business combination transaction     47,985 628,264 676,249 
Balance, March 31, 2021103,104,205 $10 1,502,069,787 $150 $ $113,078 $2,664,798 $2,778,036 



See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
4


UWM HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except shares and per share amounts)
(Unaudited)
 For the three months ended March 31,
 20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$860,005 $20,349 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
(Gain)/loss on sale of mortgage servicing rights(4,763)50,222 
Reserve for representations and warranties9,818 7,390 
Capitalization of mortgage servicing rights(599,389)(463,831)
Amortization and pay-offs of mortgage servicing rights 76,376 
Impairment on mortgage servicing rights, net 142,377 
Change in fair value of mortgage servicing rights59,259  
Depreciation and amortization of premises and equipment4,447 2,645 
Senior notes issuance cost amortization549  
Amortization of finance lease right-of-use assets2,985 689 
(Decrease)/increase in fair value of warrants liability(17,304) 
(Increase) decrease in:
Mortgage loans at fair value2,413,244 (126,594)
Accounts receivable, net(303,876)(648,736)
Derivative assets(52,096)(286,518)
Other assets(394)(6,051)
Increase (decrease) in:
Accounts payable and accrued expenses275,290 296,247 
Derivative liabilities(10,758)299,346 
Net cash provided by (used in) operating activities2,637,017 (636,089)
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of premises and equipment(9,815)(13,790)
Proceeds from sale of mortgage servicing rights2,582 246,246 
Net cash (used in) provided by investing activities(7,233)232,456 
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under warehouse lines of credit(2,117,657)233,096 
Repayments of finance lease liabilities(2,857)(640)
Proceeds from business combination transaction895,134 
Costs incurred related to business combination transaction(11,260) 
Borrowings under equipment notes payable453  
Repayments under equipment notes payable(1,557)(1,443)
Borrowings under operating lines of credit79,700 366,895 
Repayments under operating lines of credit (271,174)
Member distributions(1,102,914)(177)
Net cash (used in) provided by financing activities(2,260,958)326,557 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS368,826 (77,076)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD1,223,837 133,283 
CASH AND CASH EQUIVALENTS, END OF THE PERIOD$1,592,663 $56,207 
SUPPLEMENTAL INFORMATION
Cash paid for interest$36,077 $41,762 

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
5



UWM HOLDINGS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
UWM Holdings Corporation, through its consolidated subsidiaries (collectively, the "Company"), engages in the origination, sale and servicing of residential mortgage loans. The Company is based in Michigan but originates and services loans throughout the United States. The Company is approved as a Title II, non-supervised direct endorsement mortgagee with the United States Department of Housing and Urban Development (or “HUD”). In addition, the Company is an approved issuer with the Government National Mortgage Association (or “Ginnie Mae”), as well as an approved seller and servicer with the Federal National Mortgage Association (or “Fannie Mae”) and Federal Home Loan Mortgage Corporation (or “Freddie Mac”)
The Company (f/k/a Gores Holdings IV, Inc.) was incorporated in Delaware on June 12, 2019. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On September 22, 2020, the Company entered into a Business Combination Agreement (the "Business Combination Agreement") by and among the Company, SFS Holding Corp., a Michigan corporation (“SFS Corp.”), United Wholesale Mortgage, LLC, a Michigan limited liability company (“UWM”), and UWM Holdings, LLC, a newly formed Delaware limited liability company (“Holdings LLC” and, together with SFS Corp. and UWM, the “UWM Entities.”). The business combination with the UWM Entities closed on January 21, 2021.
Prior to the closing of the business combination transaction with the UWM Entities, SFS Corp. was the sole member of UWM, which had one unit authorized, issued and outstanding. On January 21, 2021, SFS Corp. contributed its equity interest in UWM to Holdings LLC and adopted the Amended and Restated Operating Agreement to admit Holdings LLC as UWM's sole member and its manager. Upon completion of the business combination transaction, (i) Holdings LLC issued approximately 6% of its units (Class A Common Units) to the Company, (ii) SFS Corp. retained approximate 94% of the units (Class B Common Units) in Holdings LLC and SFS Corp. retained approximately 94% of the economic ownership interest of the combined company and (iii) Holdings LLC became a consolidated subsidiary of the Company, as the Company is the sole managing member of Holdings LLC. The economic interest in Holdings LLC owned by SFS Corp. is presented as a non-controlling interest in these condensed consolidated financial statements (see Note 12 - Non-Controlling Interests).
Following the consummation of the transactions contemplated by the Business Combination Agreement, the Company is organized in an “Up-C” structure in which UWM (the operating subsidiary) is held directly by Holdings LLC and the Company’s only direct asset consists of Class A Common Units in Holdings LLC. The Company's current capital structure authorizes Class A common stock, Class B common stock, Class C common stock and Class D common stock. The Class A common stock and Class C common stock each provide holders with one vote on all matters submitted to a vote of stockholders, and the Class B common stock and Class D common stock each provide holders with 10 votes on all matters submitted to a vote of stockholders. The holders of Class C common stock and Class D common stock do not have any of the economic rights (including rights to dividends and distributions upon liquidation) provided to holders of Class A common stock and Class B common stock. Immediately following the business combination transaction, there were 103,104,205 shares of Class A common stock outstanding, and 1,502,069,787 shares of non-economic Class D common stock outstanding (all of which were held by SFS Corp.), and no shares of Class B or Class C common stock outstanding. Each Holdings LLC Class B Common Unit held by SFS Corp. may be exchanged, along with Class D common stock, for either, at the option of the Company, (a) cash or (b) one share of the Company’s Class B common stock (See Note 12 - Non-controlling Interests). Each share of Class B Stock is convertible into one share of Class A Stock upon the transfer or assignment of such share from SFS Corp. to a non-affiliated third-party. Pursuant to the Business Combination Agreement, SFS Corp. is entitled to receive an aggregate of up to 90,761,687 earn-out shares in the form of Class B Common Units in Holdings LLC and Class D common shares upon attainment of certain price targets. There are four different triggering events that affect the number of earn-out shares that will be issued based upon the per share price of Class A common stock ranging from $13.00 to $19.00 per share. The Company accounts for the potential earn-out shares as a component of stockholders’ equity in accordance with the applicable guidance in U.S. GAAP. See Note 17 - Earnings Per Share.
Basis of Presentation and Consolidation
The business combination transaction was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") as UWM was determined to be the accounting acquirer, primarily due to the fact that SFS Corp. continues to control the Company through its ownership of the Class D common stock. Under this method of accounting, while the Company was the legal acquirer, it was treated as the acquired
6


company for financial reporting purposes. Accordingly, the business combination transaction was treated as the equivalent of UWM issuing stock for the net assets of the Company, accompanied by a recapitalization, with the net assets of the Company stated at historical cost, with no goodwill or other intangible assets recorded. The net proceeds received from Gores Holdings IV, Inc. in the business combination transaction approximated $895.1 million, and the Company incurred approximately $16.0 million in costs related to the transaction which were charged to shareholders' equity upon the closing of the transaction. As part of the business combination transaction, the Company assumed the liability related to the Public and Private Warrants (described below) of $45.6 million. During the period from January 21, 2021 to March 31, 2021, the fair value of the Public and Private Warrants decreased to $28.3 million, resulting in other income of $17.3 million for the three-month period ended March 31, 2021. The Company’s financial statement presentation included in these condensed consolidated financial statements include the condensed consolidated financial statements of UWM and its subsidiaries for periods prior to the completion of the business combination transaction with the UWM Entities and of the Company for periods from and after the business combination transaction.
Our condensed consolidated financial statements are unaudited and presented in U.S. dollars. They have been prepared in accordance with U.S. GAAP pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In our opinion, these condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair statement of our results of operations, financial position and cash flows for the periods presented. However, our results of operations for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Accounting Change - Mortgage Servicing Rights
On January 1, 2021, the Company elected to adopt the fair value method to measure its servicing assets and liabilities for all current classes of servicing assets and liabilities subsequent to initial recognition. Management believes that the fair value method is more meaningful for users of the financial statements as it more directly reports the current expected benefits and obligations of the Company's servicing rights. The adoption of the fair value method for a particular class of servicing assets is irrevocable. Prior to January 1, 2021, the Company measured its servicing assets and liabilities after initial recognition using the amortized cost method. This change in accounting resulted in a $3.4 million increase to retained earnings and the MSR asset as of January 1, 2021. Subsequent to the adoption of the fair value method of accounting for MSRs, changes in fair value of MSRs are reported as a component of "Total revenue, net" within the condensed consolidated statements of operations.
Prior to the adoption of the fair value method, MSRs were amortized in proportion to the estimated future net servicing revenue, and periodically evaluated for impairment. For this purpose, the Company stratified its MSRs based on interest rate. The Company recorded a valuation allowance when the fair value of the mortgage servicing asset strata was less than its amortized book value. Valuation allowances were recorded as a temporary impairment to the affected strata effectively reducing recorded MSRs and incurring a charge to operations. When a mortgage prepaid, the Company permanently reduced the associated MSR in the period of prepayment with a charge to operations.
Under both the fair value and amortization accounting methods, the fair value of MSRs is estimated with the assistance of a third party broker based upon a valuation model that calculates the estimated present value of future cash flows. The valuation model incorporates market estimates of prepayment speeds, discount rates, cost to service, float value, ancillary income, inflation, and delinquency and default rates.
Income Taxes
Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes in the U.S. The tax laws are often complex and may be subject to different interpretations. To determine the financial statement impact of accounting for income taxes, the Company must make assumptions and judgements about how to interpret and apply complex tax laws to numerous transactions and business events, as well as make judgements regarding the timing of when certain items may affect taxable income.
In calculating the provision for income taxes, we apply an estimated annual effective tax rate to year-to-date ordinary income. At the end of each interim period, we estimate the effective tax rate expected to be applicable for the full fiscal year.
7


Tax-effects of significant, unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.
Tax Receivable Agreement

In connection with the Business Combination Agreement, the Company entered into a Tax Receivable Agreement with SFS Corp. that will obligate the Company to make payments to SFS Corp. of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes as a result of (i) certain increases in tax basis resulting from exchanges of Holdings LLC Common Units; (ii) imputed interest deemed to be paid by the Company as a result of payments it makes under the tax receivable agreement; (iii) certain increases in tax basis resulting from payments the Company makes under the tax receivable agreement; and (iv) disproportionate allocations (if any) of tax benefits to the Company which arise from, among other things, the sale of certain assets as a result of section 704(c) of the Internal Revenue Code of 1986. The Company will retain the benefit of the remaining 15% of these tax savings. The Company recognized a liability of approximately $1.9 million for estimated amounts due under the Tax Receivable Agreement in connection with the business combination transaction.
Related Party Transactions
The Company enters into various transactions with related parties. See Note 15 – Related Party Transactions for additional information.
Public and Private Warrants

As part of Gores Holdings IV, Inc.'s initial public offering in January 2020, Gores Holdings IV, Inc. issued to third party investors 42.5 million units, consisting of one share of Class A common stock of Gores Holdings IV, Inc. and one-fourth of one warrant, at a price of $10.00 per unit. Each whole warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the closing of the IPO, Gores Holdings IV, Inc. completed the private sale of 5.25 million warrants to Gores Holdings IV, Inc.'s sponsor at a purchase price of $2.00 per warrant (the “Private Warrants”). Each Private Warrant allows the sponsor to purchase one share of Class A common stock at $11.50 per share. Subsequent to the business combination transaction, the Company had 10,624,987 Public Warrants and 5,250,000 Private Warrants outstanding.

The Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants were not transferable, assignable or salable until after the completion of the business combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The Company evaluated the Public and Private Warrants under applicable U.S. GAAP and concluded that they do not meet the criteria to be classified in stockholders’ equity due to certain terms of the warrants. Since the Public and Private Warrants meet the definition of derivatives, the Company recorded these warrants as liabilities on the balance sheet at fair value upon the closing of the business combination transaction and as of March 31, 2021 (recorded within "Accounts payable and accrued expenses"), with the change in their respective fair values recognized in the condensed consolidated statement of operations (recorded within "other income/expense") for the period ended March 31, 2021.
Loans Eligible for Repurchase from Ginnie Mae

When the Company has the unilateral right to repurchase Ginnie Mae pool loans it has previously sold (generally loans that are more than 90 days past due) and the call option results in a more than trivial benefit to the Company, the previously sold assets are required to be re-recognized on the consolidated balance sheets. The recognition of previously sold loans does not impact the accounting for the previously recognized MSRs. At March 31, 2021 and December 31, 2020, the Company had recorded the Ginnie Mae pool loans as part of "mortgage loans at fair value" totaling $452.3 million and $451.1 million, respectively, with related purchase liabilities equal to the gross amount of the loan recorded in "accounts payable and accrued expenses." At March 31, 2021 and December 31, 2020, the fair values of the Ginnie Mae pool loans were $448.7 million and $448.5 million, reflecting fair value adjustments of $3.5 million and $2.6 million, respectively.

8


Recently Adopted Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which was subsequently amended by ASU No. 2021-1, Reference Rate Reform (Topic 848): Scope, which was issued in January 2021. This guidance provides practical expedients to address existing guidance on contract modifications due to the expected market transition from the London Inter-bank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The ASU was effective upon issuance on a prospective basis beginning January 1, 2020 and the Company may elect certain practical expedients as reference rate activities occur. The Company will evaluate its debt and other applicable contracts that are modified in the future to ensure they are eligible for modification relief and apply the practical expedients as needed. The Company does not anticipate this will have a material impact on our condensed consolidated financial statements.
In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, which is intended to clarify or correct the unintended application of the Codification of accounting guidance for a wide variety of topics. The Company adopted this ASU on January 1, 2021, with no material effect on the Company's condensed consolidated financial statements and related disclosures.
NOTE 2 – MORTGAGE LOANS AT FAIR VALUE
The table below includes the estimated fair value and unpaid principal balance (“UPB”) of mortgage loans that have contractual principal amounts and for which the Company has elected the fair value option. The fair value option has been elected for mortgage loans, as this accounting treatment best reflects the economic consequences of the Company’s mortgage origination and related hedging and risk management activities. The difference between the UPB and estimated fair value is made up of the premiums paid on mortgage loans, as well as the fair value adjustment as of the balance sheet date. The change in fair value adjustment is recorded in the “Loan production income” line item of the consolidated statement of operations.
(In thousands)March 31,
2021
December 31,
2020
Mortgage loans, unpaid principal balance$5,446,652 $7,620,014 
Premiums paid on mortgage loans56,235 101,949 
Fair value adjustment384 194,552 
Mortgage loans at fair value$5,503,271 $7,916,515 
NOTE 3 – DERIVATIVES
The Company enters into interest rate lock commitments ("IRLCs") to originate residential mortgage loans at specified interest rates and terms within a specified period of time with customers who have applied for a loan and may meet certain credit and underwriting criteria. To determine the fair value of the IRLCs, each contract is evaluated based upon its stage in the application, approval and origination process for its likelihood of consummating the transaction (or “pullthrough”). Pullthrough is estimated based on changes in market conditions, loan stage, and actual borrower behavior using a historical analysis of IRLC closing rates. Generally, the further into the process the more likely the IRLC is to become a loan. The blended average pullthrough rate was 90% and 92%, as of March 31, 2021 and December 31, 2020, respectively. The Company primarily uses forward mortgage backed security contracts, which are known as forward loan sale commitments ("FLSCs"), to economically hedge the IRLCs.
The notional amounts and fair values of derivative financial instruments not designated as hedging instruments were as follows (in thousands):
 March 31, 2021December 31, 2020 
Fair valueFair value
 Derivative
assets
Derivative
liabilities
Notional
Amount
Derivative
assets
Derivative
liabilities
Notional
Amount
 
IRLCs$11,905 $48,878 $18,294,346 (a) $60,248 $670 $10,594,329 
(a) 
FLSCs101,263 6,601 21,466,344 824 65,567 16,602,739  
Total$113,168 $55,479 $61,072 $66,237 
(a)Adjusted for pullthrough rates of 90% and 92%, respectively.
9


NOTE 4 – ACCOUNTS RECEIVABLE, NET
The following summarizes accounts receivable, net (in thousands):
 March 31,
2021
December 31,
2020
Pair-offs receivable$165,853 $438 
Warehouse bank receivable151,536 3,642 
Servicing fees72,598 55,838 
Investor receivables69,061 100,478 
Servicing advances67,742 60,053 
Due from title companies21,026 33,663 
Other receivables2,242 28 
Allowance for doubtful accounts(677)(540)
Total Accounts Receivable, Net$549,381 $253,600 
The Company periodically evaluates the carrying value of accounts receivable balances with delinquent receivables being written-off based on specific credit evaluations and circumstances of the debtor.
NOTE 5 – MORTGAGE SERVICING RIGHTS
Mortgage servicing rights are recognized as assets on the condensed consolidated balance sheets when loans are sold and the associated servicing rights are retained. The Company maintains three classes of MSRs and has elected the fair value option as of January 1, 2021 for all classes. The Company determined its classes of MSRs based on how the Company manages risk. As of March 31, 2021, the Company's MSRs are recorded at fair value, which is determined using a valuation model that calculates the present value of estimated future net servicing fee income. The model includes estimates of prepayment speeds, discount rate, cost to service, float earnings, contractual servicing fee income, and ancillary income and late fees, among others. These estimates are supported by market and economic data collected from various outside sources.
Conforming conventional loans serviced by the Company have previously been sold to Fannie Mae and Freddie Mac on a non-recourse basis, whereby credit losses are generally the responsibility of Fannie Mae and Freddie Mac, and not the Company. Loans serviced for Ginnie Mae are insured by the FHA, guaranteed by the VA, or insured by other applicable government programs. While the above guarantees and insurance are the responsibility of those parties, the Company is still subject to potential losses related to its servicing of these loans. Those estimated losses are incorporated into the valuation of MSRs.
The following table summarizes changes in the MSR assets for the three months ended March 31, 2021:

 For the three months ended March 31, 2021
Balance, at December 31, 2020 under amortization method$1,756,864 
Cumulative effect of adopting fair value method3,440 
Fair value, at January 1, 20211,760,304 
Capitalization of mortgage servicing rights599,389 
Changes in fair value:
Due to changes in valuation inputs or assumptions
197,802 
Due to collection/ realization of cash flows/ other(257,061)
Total changes in fair value(59,259)
Fair value, end of period$2,300,434 

Prior to the election of the fair value option on January 1, 2021, the Company accounted for MSRs based on the lower cost or market using the amortization method. The following table summarizes changes to the MSR assets for the three months ended March 31, 2020 under the amortization method:
10


 For the three months ended March 31, 2020
Balance, beginning of period$731,353 
Capitalization of mortgage servicing rights463,831 
Amortization(39,210)
Loans paid in full(37,166)
Sales(255,229)
Impairment(142,377)
Balance, end of period$721,202 
The following table summarizes the loan servicing income recognized during the three months ended March 31, 2021 and 2020, respectively (in thousands):
Three months ended March 31,
20212020
Contractual servicing fees$122,306 $49,120 
Late, ancillary and other fees1,483 977 
Loan servicing income
$123,789 $50,097 
The key unobservable inputs used in determining the fair value of the Company’s MSRs were as follows at March 31, 2021 and December 31, 2020, respectively:
 March 31,
2021
December 31,
2020
Discount rates9.0 %14.5 %9.0 %14.5 %
Annual prepayment speeds8.3 %40.5 %8.8 %42.2 %
Cost of servicing$75 $121 $75 $126 
The hypothetical effect of an adverse change in these key assumptions would result in a decrease in fair values as follows at March 31, 2021 and December 31, 2020, respectively, (in thousands):
 March 31,
2021
December 31,
2020
Discount rate:
+ 10% adverse change – effect on value$(77,423)$(56,889)
+ 20% adverse change – effect on value(149,634)(110,040)
Prepayment speeds:
+ 10% adverse change – effect on value$(99,119)$(87,752)
+ 20% adverse change – effect on value(191,558)(169,230)
Cost of servicing:
+ 10% adverse change – effect on value$(27,761)$(21,643)
+ 20% adverse change – effect on value(55,522)(43,285)
These sensitivities are hypothetical and should be used with caution. As the table demonstrates, the Company’s methodology for estimating the fair value of MSRs is highly sensitive to changes in assumptions. For example, actual prepayment experience may differ and any difference may have a material effect on MSR fair value. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption of the fair value of the MSRs is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may indicate higher prepayments; however, this may be partially offset by lower prepayments due to other factors such as a borrower’s diminished opportunity to refinance), which may magnify or counteract the sensitivities. Thus, any measurement of MSR fair value is limited by the conditions existing and assumptions made as of a particular point in time. Those assumptions may not be appropriate if they are applied to a different point in time.
11


NOTE 6 – OTHER ASSETS
The following summarizes other assets (in thousands):
March 31,
2021
December 31,
2020
Prepaid insurance$30,893 $35,230 
Prepaid IT service and maintenance22,041 19,827 
Commitment fees739 641 
Deposits475 31 
Other5,245 2,260 
Total other assets$59,393 $57,989 
NOTE 7 – LINE OF CREDIT
The Company had the following amounts outstanding under a line of credit with a financial institution at March 31, 2021 and December 31, 2020, respectively, (in thousands):
 March 31,
2021
December 31,
2020
$400.0 million line of credit agreement expiring December 31, 2022
$400,000 $320,300 
$400,000 $320,300 

The line of credit was collateralized by $1.3 billion and $1.0 billion of MSRs based on carrying value as of March 31, 2021 and December 31, 2020, respectively. Interest on the the line of credit is at variable rates based on a spread to the one month LIBOR rate.
12


NOTE 8 – WAREHOUSE LINES OF CREDIT
The Company had the following warehouse lines of credit with financial institutions as of March 31, 2021 and December 31, 2020, respectively, (in thousands):
Expiration DateMarch 31,
2021
December 31,
2020
Warehouse Lines of Credit
Master Repurchase Agreement ("MRA") Funding:
$150 Million5/25/2021$99,626 $140,237 
$400 Million6/23/2021126,685 287,073 
$2 Billion7/1/2021777,694 499,841 
$200 Million7/7/2021170,241 198,705 
$750 Million9/7/2021170,995 209,138 
$150 Million9/19/20218,897 112,429 
$400 Million9/23/202162,647 248,947 
$925 Million10/29/2021324,691 1,179 
$3 Billion10/29/20211,580,588 1,685,138 
$250 Million11/16/202162,522 249,006 
$250 Million12/23/2021100,603 86,928 
$500 Million12/28/2021192,311 365,577 
$1 Billion1/10/202263,264 769,510 
$2 Billion2/23/2022904,831 1,344,851 
$500 Million3/4/202279,268 666,891 
Early Funding:
$250 Million (ASAP + - see below)No expiration98,877 75,947 
$150 Million (gestation line - see below)No expiration  
All interest rates are variable based on a spread to the one-month LIBOR rate.$4,823,740 $6,941,397 
We are an approved lender for loan early funding facilities with Fannie Mae through its As Soon As Pooled Plus (“ASAP+”) program and Freddie Mac through its Early Funding (“EF”) program. As an approved lender for these early funding programs, we enter into an agreement to deliver closed and funded one-to-four family residential mortgage loans, each secured by related mortgages and deeds of trust, and receive funding in exchange for such mortgage loans in some cases before the lender has grouped them into pools to be securitized by Fannie Mae or Freddie Mac. All such mortgage loans must adhere to a set of eligibility criteria to be acceptable. As of March 31, 2021, the amount outstanding through the ASAP+ program was approximately $98.9 million and no amounts were outstanding under the EF program.
In addition to the arrangements with Fannie Mae and Freddie Mac, we are also party to one early funding (or “gestation”) line with a financial institution. Through this arrangement, we enter into agreements to deliver certified pools consisting of mortgage loans securitized by Ginnie Mae, Fannie Mae, and/or Freddie Mac, as applicable, for the gestation line. As with the ASAP+ and EF programs, all mortgage loans under this gestation line must adhere to a set of eligibility criteria.
The gestation line has a transaction limit of $150.0 million, and it is an evergreen agreement with no stated termination or expiration date that can be terminated by either party upon written notice. As of March 31, 2021, no amount was outstanding under this line.
As of March 31, 2021, the Company had pledged mortgage loans at fair value as collateral under the above warehouse lines of credit. The above agreements also contain covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquidity, maximum debt to net worth ratio, net income, and limitations on additional debt, as defined in the agreements. The Company was in compliance with all debt covenants as of March 31, 2021.
NOTE 9 – SENIOR NOTES
On November 3, 2020, the Company's consolidated subsidiary, UWM, issued $800.0 million in aggregate principal amount of senior unsecured notes due November 15, 2025 (the “2020 Senior Notes”). The 2020 Senior Notes accrue interest at a rate of 5.500% per annum. Interest on the 2020 Senior Notes is due semi-annually on May 15 and November 15 of each year,
13


beginning on May 15, 2021. As of March 31, 2021 and December 31, 2020, the Senior Notes balance was $789.9 million and $789.3 million, respectively, net of discounts and issuance costs.
On or after November 15, 2022, the Company may, at its option, redeem the Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: November 15, 2022 at 102.750%; November 15, 2023 at 101.375%; or November 15, 2024 until maturity at 100.000%, of the principal amount of the Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest. Prior to November 15, 2022, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the Senior Notes originally issued at a redemption price of 105.500% of the principal amount of the Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. In addition, the Company may, at its option, redeem the Senior Notes prior to November 15, 2022 at a price equal to 100% of the principal amount redeemed plus a “make-whole” premium, plus accrued and unpaid interest.
The indenture governing the Senior Notes contains customary terms and restrictions, subject to a number of exceptions and qualifications. The Company was in compliance with the terms of the indenture as of March 31, 2021.
NOTE 10 – COMMITMENTS AND CONTINGENCIES
Representations and Warranties Reserve
Loans sold to investors which the Company believes met investor and agency underwriting guidelines at the time of sale may be subject to repurchase in the event of specific default by the borrower or subsequent discovery that underwriting or documentation standards were not explicitly satisfied. The Company may, upon mutual agreement, indemnify the investor against future losses on such loans or be subject to other guaranty requirements and subject to loss. The Company initially records its exposure under such guarantees at estimated fair value upon the sale of the related loan, within accounts payable and accrued expenses, as well as within loan production income, and continues to evaluate its on-going exposures in subsequent periods. The reserve is estimated based on the Company’s assessment of its contingent and non-contingent obligations, including expected losses, expected frequency, the overall potential remaining exposure, as well as an estimate for a market participant’s potential readiness to stand by to perform on such obligations. The Company repurchased $41.6 million and $5.9 million of loans during the three months ended March 31, 2021 and 2020, respectively, related to the representations and warranties provisions.
The activity of the representations and warranties reserve was as follows (in thousands):
 For the three months ended March 31,
 20212020
Balance, beginning of period$69,542 $46,322 
Reserve charged to operations9,818 7,390 
Losses realized, net(10,063)(4,497)
Balance, end of period$69,297 $49,215 
Commitments to Originate Loans
As of March 31, 2021, the Company had agreed to extend credit to potential borrowers for approximately $25.6 billion. These contracts represent off balance sheet credit risk where the Company may be required to extend credit to these borrowers based on the prevailing interest rates and prices at the time of execution.

NOTE 11 – VARIABLE INTEREST ENTITIES
Upon completion of the business combination transaction described in Note 1, the Company became the managing member of Holdings LLC with 100% of the management and voting power in Holdings LLC. In its capacity as managing member, the Company has the sole authority to make decisions on behalf of Holdings LLC and bind Holdings LLC to signed agreements. Further, Holdings LLC maintains separate capital accounts for its investors as a mechanism for tracking earnings and subsequent distribution rights. Accordingly, management concluded that Holdings LLC is a limited partnership or similar legal entity.
Furthermore, management concluded that the Company is Holdings LLC’s primary beneficiary. As the primary beneficiary, the Company consolidates the results and operations of Holdings LLC for financial reporting purposes under the variable interest consolidation model.
The Company's relationship with Holdings LLC results in no recourse to the general credit of the Company. Holdings LLC and its consolidated subsidiaries represents the Company's sole investment. The Company shares in the income and losses
14


of Holdings LLC in direct proportion to the Company's ownership percentage. Further, the Company has no contractual requirement to provide financial support to Holdings.
The Company's financial position, performance and cash flows effectively represent those of Holdings LLC and its subsidiaries as of and for the period ended March 31, 2021.

NOTE 12 – NON-CONTROLLING INTERESTS
The non-controlling interest balance represents the economic interest in Holdings LLC held by SFS Corp. The following table summarizes the ownership of Units in Holdings LLC as of March 31, 2021:

Common UnitsOwnership Percentage
UWM Holdings Corporation ownership of Class A Common Units 103,104,205 6.4 %
SFS Corp. ownership of Class B Common Units1,502,069,787 93.6 %
Balance at end of period1,605,173,992 100.0 %
The non-controlling interest holders have the right to exchange Common Units, together with a corresponding number of shares of our Class D common stock or Class C common stock (together referred to as “Stapled Interests”), for, at the Company's option, (i) shares of the Company's Class B common stock or Class A common stock or (ii) cash from a substantially concurrent public offering or private sale (based on the price of the Company's Class A common stock). As such, future exchanges of Stapled Interests by non-controlling interest holders will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in-capital or retained earnings when Holdings LLC has positive or negative net assets, respectively. As of March 31, 2021, SFS Corp. has not exchanged any Stapled Interests.

NOTE 13 – REGULATORY NET WORTH REQUIREMENTS
Certain secondary market agencies and state regulators require UWM to maintain minimum net worth and capital requirements to remain in good standing with the agencies. Noncompliance with an agency’s requirements can result in such agency taking various remedial actions up to and including terminating UWM’s ability to sell loans to and service loans on behalf of the respective agency.
In accordance with the regulatory requirements of HUD, governing non-supervised, direct endorsement mortgagees, UWM is required to maintain a minimum net worth (as defined by HUD) of $2.5 million. At March 31, 2021, UWM exceeded the regulatory net worth requirement and had a net worth (as defined by HUD) of $2.8 billion.
UWM is required to maintain a minimum net worth and liquidity by Ginnie Mae, Freddie Mac and Fannie Mae. The most restrictive of the minimum net worth and liquidity requirements, requires UWM to maintain a minimum net worth of $567.4 million and liquidity of $76.5 million as of March 31, 2021. At March 31, 2021 we exceed the net worth and liquidity requirement for all three of these entities.

NOTE 14 – FAIR VALUE MEASUREMENTS
Fair value is the price that would be received if an asset were sold or the price that would be paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. Required disclosures include classification of fair value measurements within a three-level hierarchy (Level 1, Level 2, and Level 3). Classification of a fair value measurement within the hierarchy is dependent on the classification and significance of the inputs used to determine the fair value measurement. Observable inputs are those that are observed, implied from, or corroborated with externally available market information. Unobservable inputs represent the Company’s estimates of market participants’ assumptions.
Fair value measurements are classified in the following manner:
Level 1—Valuation is based on quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2—Valuation is based on either observable prices for identical assets or liabilities in inactive markets, observable prices for similar assets or liabilities, or other inputs that are derived directly from, or through correlation to, observable market data at the measurement date.
Level 3—Valuation is based on the Company’s or others’ models using assumptions at the measurement date that a market participant would use.
15


In determining fair value measurements, the Company uses observable inputs whenever possible. The level of a fair value measurement within the hierarchy is dependent on the lowest level of input that has a significant impact on the measurement as a whole. If quoted market prices are available at the measurement date or are available for similar instruments, such prices are used in the measurements. If observable market data is not available at the measurement date, judgment is required to measure fair value.
The following is a description of measurement techniques for items recorded at fair value on a recurring basis. There were no material items recorded at fair value on a nonrecurring basis as of March 31, 2021 or December 31, 2020.

Mortgage loans at fair value: The Company has elected the fair value option for mortgage loans held for sale. Accordingly, the fair values of mortgage loans are based on valuation models that use the market price for similar loans sold in the secondary market. As these prices are derived from market observable inputs, they are categorized as Level 2.

IRLCs: The Company's interest rate lock commitments are derivative instruments that are recorded at fair
value based on valuation models that use the market price for similar loans sold in the secondary market. The interest rate lock
commitments are then subject to an estimated loan funding probability, or “pullthrough rate”. Given the significant and unobservable nature of the pullthrough rate assumption, IRLCs are classified as Level 3.

MSRs: The fair value of MSRs is determined using a valuation model that calculates the present value of estimated net future cash flows. The model includes estimates of prepayment speeds, discount rate, cost to service, contractual servicing fee income, and ancillary income among others. These fair value measurements are classified as Level 3.

FLSCs: The Company enters into forward loan sales commitments to sell certain mortgage loans which are recorded at fair value based on valuation models. The Company’s expectation of the amount of its interest rate lock commitments that will ultimately close is a factor in determining the position. The valuation models utilize the fair value of related mortgage loans determined using observable market data and therefore the commitments are categorized as Level 2.

Pubic and Private Warrants: The fair value of Public Warrants is based on the price of trades of these securities in active markets and therefore categorized as Level 1. The fair value of the Private Warrants is based on observable market data and therefore categorized as Level 2.

16


Financial Instruments - Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following are the major categories of financial assets and liabilities measured at fair value on a recurring basis (in thousands):
 March 31, 2021
DescriptionLevel 1Level 2Level 3Total
Assets:
Mortgage loans at fair value$ $5,503,271 $ $5,503,271 
IRLCs  11,905 11,905 
FLSCs 101,263  101,263 
Mortgage servicing rights  2,300,434 2,300,434 
Total assets$ $5,604,534 $2,312,339 $7,916,873 
Liabilities:
IRLCs$ $ $48,878 $48,878 
FLSCs 6,601  6,601 
Public and Private Warrants18,912 9,345  28,257 
Total liabilities$18,912 $15,946 $48,878 $83,736 
 December 31, 2020
DescriptionLevel 1Level 2Level 3Total
Assets:
Mortgage loans at fair value$ $7,916,515 $ $7,916,515 
IRLCs  60,248 60,248 
FLSCs 824  824 
Total assets$ $7,917,339 $60,248 $7,977,587 
Liabilities:
IRLCs$ $ $670 $670 
FLSCs 65,567  65,567 
Total liabilities$ $65,567 $670 $66,237 
The following tables present quantitative information about the inputs used in recurring Level 3 fair value financial instruments and the fair value measurements:

Unobservable Input - IRLCsMarch 31, 2021December 31, 2020
Pullthrough rate (weighted avg)90 %92 %

Unobservable Inputs - MSRsMarch 31, 2021December 31, 2020
Discount rates9.0 %14.5 %9.0 %14.5 %
Annual prepayment speeds8.3 %40.5 %8.8 %42.2 %
Cost of servicing$75 $121 $75 $126 
Level 3 Issuances and Transfers
The Company issues IRLCs which are considered derivatives. If the contract converts to a loan, the implied value, which is solely based upon interest rate changes, is incorporated in the basis of the fair value of the loan. If the IRLC does not convert to a loan, the basis is reduced to zero as the contract has no continuing value. The Company does not track the basis of the individual IRLCs that convert to a loan, as that amount has no relevance to the presented consolidated financial statements.
Other Financial Instruments
The fair value of the 2020 Senior Notes approximated $834.0 million and $841.3 million as of March 31, 2021 and December 31, 2020, respectively. The fair value of the 2020 Senior Notes was estimated using Level 2 inputs, including observable trading information in inactive markets.
17


Due to their nature and respective terms (including the variable interest rates on warehouse and operating lines of credit), the carrying value of cash and cash equivalents, receivables, payables, notes payable and warehouse and operating lines of credit approximate their fair value as of March 31, 2021 and December 31, 2020, respectively.

NOTE 15 – RELATED PARTY TRANSACTIONS
The Company has engaged in the following significant related party transactions in the three months ended March 31, 2021 and 2020:
The Company’s corporate campus is located in buildings that are owned by entities controlled by the Company’s founder and its CEO and leased by the Company from these entities;
Legal services are provided to the Company by a law firm in which the Company’s founder is a partner;
The Company leases two aircraft owned by entities controlled by the Company’s CEO to facilitate travel of Company executives for business purposes;
Home appraisal contracting and review services are provided by home appraisal management companies partially owned by the Company’s CEO and his brother; an executive of the Company and a member of the board of directors of UWM Holdings Corporation is also on the board of directors of one of these home appraisal management companies. The CEO's interest was disposed of as of March 31, 2021.
Employee lease agreements (entered into in the first quarter of 2021), pursuant to which the Company’s team members provide certain administrative services to entities controlled by the Company’s founder and its CEO. Under these agreements, these entities will pay the Company approximately $25 thousand per month for the administrative services provided to these entities by the Company’s team members.
For the three months ended March 31, 2021 and 2020, the Company incurred approximately $4.1 million and $3.4 million, respectively, in operating expenses with various companies related through common ownership. The Company incurred expenses of approximately $3.8 million in rent and other occupancy related expenses, $0.2 million in legal fees, $0.1 million primarily related to direct origination costs and $37 thousand in other general and administrative expenses for the three months ended March 31, 2021. The Company incurred expenses of approximately $3.1 million in rent and other occupancy related expenses, $0.2 million in legal fees, $0.1 million primarily related to direct origination costs and $15 thousand in other general and administrative expenses for the three months ended March 31, 2020.
Pursuant to line of credit agreements entered into, primarily in the first quarter of 2020, between the Company, its founder, its CEO, and the CEO’s brother and certain entities controlled by these individuals, the Company borrowed $297.0 million and repaid $197.0 million in the first quarter of 2020. These borrowings and repayments are reflected in the “Borrowings under operating lines of credit” and “Repayments under operating lines of credit” line items within the financing section of the condensed consolidated statement of cash flows for the three month period ended March 31, 2020. As of December 31, 2020, no amount was outstanding under these line of credit agreements, as they were terminated in the second quarter of 2020.

NOTE 16 – INCOME TAXES
The Company’s income tax expense varies from the expense that would be expected based on statutory rates due principally to its organizational structure, under which the net income attributable to the non-controlling interest is not subject to tax. Prior to the completion of the transaction contemplated by the Business Combination Agreement, UWM was owned by SFS Corp. which elected S corporation status for federal income tax purposes. When owned by SFS Corp, UWM was treated as a disregarded entity for federal, and most applicable state and local income tax purposes. The shareholders of SFS Corp, as shareholders of an S corporation, are responsible for the federal and most applicable state and local income tax liabilities. A provision for state income taxes is required for certain jurisdictions that tax S corporations and limited liability companies and for states where the Company is taxed as a C Corporation.
Following the Business Combination Agreement, UWM is treated as single member LLC owned by Holdings LLC. As a single member LLC, all taxable income or loss generated by UWM will pass through and be included in the income or loss of Holdings LLC. As a partnership, Holdings LLC is not subject to U.S. federal and certain state and local incomes taxes. Any taxable income or loss generated by Holdings LLC after the Company’s acquisition of its portion of Holdings LLC is passed through and included in the taxable income or loss of its members, including the Company, in accordance with the terms of the Holdings LLC Agreement. The Company is a C Corporation and is subject to U.S. federal, state and local income taxes with respect to its attributable share of any taxable income of Holdings LLC.
18


The tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision and estimate of the Company’s annual effective tax rate are subject to variation due to several factors including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company conducts business, and tax law developments.
For the three months ended March 31, 2021 the Company’s estimated effective tax rate was 1.31%. The variations between the Company’s estimated effective tax rate and the U.S. statutory rate are primarily due to the portion (approximately 94%) of the Company’s earnings attributable to non-controlling interests, and the fact that the Company's interest in Holdings LLC was acquired as part of the business combination transaction on January 21, 2021. The effective tax rate calculation includes income only from January 21, 2021 to March 31, 2021, which represents the period in which the Company had outstanding Class A common stock.
The Company recognizes deferred tax assets to the extent it believes these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations.
The Company recognizes uncertain income tax positions when it is not more-likely-than-not a tax position will be sustained upon examination. As of March 31, 2021, the Company has not recognized any uncertain tax positions. The Company accrues interest and penalties related to uncertain tax positions as a component of the income tax provision. No interest or penalties were recognized in income tax expense for the three months ended March 31, 2021. The Company may be subject to potential examination by U.S. federal or state jurisdiction authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income amounts in various tax jurisdictions and compliance with U.S. federal or states tax laws. Both 2019 and 2020 remain open under applicable statute of limitations with relevant taxing authorities.

NOTE 17 – EARNINGS PER SHARE
As of March 31, 2021, the Company had two classes of economic shares authorized - Class A and Class B common stock. The Company applies the two-class method for calculating earnings per share for Class A common stock and Class B common stock. In applying the two-class method, the Company allocates undistributed earnings equally on a per share basis between Class A and Class B common stock. According to the Company’s certificate of incorporation, the holders of the Class A and Class B common stock are entitled to participate in earnings equally on a per-share basis, as if all shares of common stock were of a single class, and in such dividends as may be declared by the board of directors. Basic earnings per share of Class A common stock and Class B common stock is computed by dividing net income by the weighted-average number of shares of Class A common stock and Class B common stock outstanding during the period. Diluted earnings per share of Class A common stock and Class B common stock is computed by dividing net income by the weighted-average number of shares of Class A common stock or Class B common stock, respectively, outstanding adjusted to give effect to potentially dilutive securities. See Note 12, Non-controlling Interests for a description of the Stapled Interests. Refer to Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies - for additional information related to the Company's capital structure.
Prior to the business combination transaction with the Company, UWM's ownership structure included equity interests held solely by SFS Corp. The Company analyzed the calculation of earnings per unit for periods prior to the business combination transaction and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. Therefore, earnings per share information has not been presented for the three months ended March 31, 2020. The basic and diluted earnings per share period for the three months ended March 31, 2021, represents only the period from January 21, 2021 to March 31, 2021, which represents the period in which the Company had outstanding Class A common stock. There was no Class B common stock outstanding as of March 31, 2021.
The following table sets for the calculation of the basic and diluted earnings per share for the periods following the business combination transaction for the Company's Class A common stock:
19


For the three months ended March 31, 2021
Net income$860,005 
Net income attributable to non-controlling interests812,020 
Net income attributable to UWMC47,985 
Numerator:
Net income attributable to Class A common shareholders$47,985 
Net income attributable to Class A common shareholders - diluted$524,151 
Denominator:
Weighted average shares of Class A common stock outstanding - basic103,104,205 
Weighted average shares of Class A common stock outstanding - diluted1,605,173,992 
Earnings per share of Class A common stock outstanding - basic$0.47 
Earnings per share of Class A common stock outstanding - diluted$0.33 
Immediately following the business combination transaction, there were 103,104,205 shares of Class A common stock outstanding, and 1,502,069,787 shares of non-economic Class D common stock outstanding (all of which were held by SFS Corp.), and no shares of Class B or Class C common stock outstanding. For purposes of calculating diluted earnings per share, it was assumed that all Class D common stock was exchanged for Class B common stock and converted to Class A common stock under the if-converted method, and it was determined that the conversion would be dilutive. Under the if-converted method, all of the Company's net income for the period from January 21, 2021 through March 31, 2021 is attributable to Class A common shareholders. The net income under the if-converted method is tax effected using a blended statutory rate.
The Public and Private Warrants were not in the money and the triggering events for the issuance of earn-out shares were not met during the first quarter of 2021. Therefore, these potentially dilutive securities were excluded from the computation of diluted earnings per share.

NOTE 18 – SUBSEQUENT EVENTS
The Company's Compensation Committee approved the issuance of equity awards, effective April 2, 2021, of 3.2 million restricted stock units to team members pursuant to the UWM Holdings Corporation 2020 Omnibus Incentive Plan which was approved by stockholders on January 20, 2021. The restricted stock units had a grant date fair value of approximately $25.2 million. The restricted stock units vest over three years, 33% on each of February 1, 2022 and 2023 and 34% on February 1, 2024. Compensation expense will be recognized on a straight-line basis over the vesting term.
On April 7, 2021, the Company's consolidated subsidiary, UWM, issued $700.0 million in aggregate principal amount of senior unsecured notes due April 15, 2029 (the “2021 Senior Notes”). The 2021 Senior Notes accrue interest at a rate of 5.5000% per annum. Interest on the 2021 Senior Notes is due semi-annually on April 15 and October 15 of each year, beginning on October 15, 2021. The Company used a portion of the proceeds from the issuance of the 2021 Senior Notes to pay off and terminate the $400.0 million line of credit (described in Note 7 - Line of Credit), effective April 22, 2021.
On April 23, 2021, UWM and its special purpose subsidiary United Shore Repo Seller 4 LLC entered into a Master Repurchase Agreement with Goldman Sachs Bank USA (the “Goldman MRA”). The Goldman MRA provides for the purchase by Goldman Sachs Bank USA of an aggregate amount of up to $1.0 billion of participation interests in certain residential mortgage loans and the related servicing rights. United Shore Repo Seller 4 LLC’s obligations under the Goldman MRA are guaranteed by UWM. The Goldman MRA has an initial term of two years which may be extended by the parties.
On May 9, 2021, the Company's Board of Directors declared a quarterly dividend of $0.10 per share on the outstanding shares of Class A Common Stock. The dividend is payable on July 6, 2021 to stockholders of record at the close of business on June 10, 2021.
On May 9, 2021, the Company's Board of Directors has authorized a share repurchase program of up to $300.0 million in aggregate value of the Company’s Class A common stock effective May 11, 2021. The share repurchase program authorizes the Company to repurchase shares of the Company’s Class A common stock from time to time, in the open market or through privately negotiated transactions, at management's discretion based on market and business conditions, applicable legal requirements and other factors. Shares purchased will be retired. The new plan will expire on May 11, 2023 unless otherwise modified or terminated by the Company's Board of Directors at any time in the Company's sole discretion.
On May 11, 2021, the Company executed a new lease agreement with entities controlled by its founder and its CEO for land as part of the Company's corporate campus for an initial term of 15 years and total rent of approximately $0.9 million(undiscounted).
20


Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

    The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by reference to, our condensed consolidated financial statements and the related notes and other information included elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”) and our audited financial statements included in Amendment No. 2 of the 8K/A filed with the Securities and Exchange Commission (the “SEC”) on March 22, 2021. This discussion and analysis contains forward-looking statements that involve risks and uncertainties which could cause our actual results to differ materially from those anticipated in these forward-looking statements, including, but not limited to, risks and uncertainties discussed under the heading “Cautionary Note Regarding Forward-Looking Statements,” in this report and in Part I. Item 1A. “Risk Factors” included in our Form 10-K filed with the SEC on March 22, 2021.

Business Overview

On January 21, 2021, we consummated the Business Combination Agreement (the "Business Combination Agreement") by and among us, SFS Holding Corp., a Michigan corporation (“SFS Corp.”), United Wholesale Mortgage, LLC, a Michigan limited liability company (“UWM”), and UWM Holdings, LLC, a newly formed Delaware limited liability company (“Holdings LLC” and, together with SFS Corp. and UWM, the “UWM Entities.”). Upon completion of the business combination transaction, UWM became our indirect subsidiary and our accounting predecessor.

    We are the second largest direct residential mortgage lender and the largest wholesale mortgage lender in the United States, originating mortgage loans exclusively through the wholesale channel. With over 8,000 team members and a culture of continuous innovation of technology and enhanced client experience, we lead our market by building upon our proprietary and exclusively licensed technology platforms, superior service and focused partnership with the independent mortgage advisor community. We originate primarily conforming and government loans across all 50 states and the District of Columbia. For the last six years including the year ended December 31, 2020, we have been the largest wholesale mortgage lender in the United States by closed loan volume, with approximately 34% market share of the wholesale channel as of December 31, 2020.

Our mortgage origination business derives revenue from originating, processing and underwriting primarily GSE-conforming mortgage loans, along with FHA, USDA and VA mortgage loans, which are subsequently pooled and sold in the secondary market. The mortgage origination process generally begins with a borrower entering into an IRLC with us pursuant to which we have committed to enter into a mortgage at specified interest rates and terms within a specified period of time, with a borrower who has applied for a loan and met certain credit and underwriting criteria. As we have committed to providing a mortgage loan at a specific interest rate, we hedge that risk by selling forward-settling mortgage-backed securities and FLSCs in the To Be Announced (TBA) market. When the mortgage loan is closed, we fund the loan with approximately 2-3% of our own funds and the remainder with funds drawn under one of our warehouse facilities. At that point, the mortgage loan is “owned” by our warehouse facility lender and is subject to our repurchase right. When we have identified a pool of mortgage loans to sell to the agencies or non-governmental entities, we repurchase such loans from our warehouse lender and sell the pool of mortgage loans into the secondary market, but retain the mortgage servicing rights, or MSRs, associated with those loans. We retain MSRs for a period of time depending on business and liquidity considerations. When we sell MSRs, we typically sell them in the bulk MSR secondary market.

Our unique model of complete alignment with our clients and superior customer service arising from our investments in people and technology has driven demand for our services from our clients. This has resulted in significant increases in our loan origination volume and market share as our loan production income has materially exceeded our volume increases due to improved market margins. During the quarter ended March 31, 2021, loan origination volume increased by 16% as compared to the first quarter of 2020, while our loan production income increased 165.9% as compared to the first quarter of 2020.

Factors Affecting Comparability

On January 1, 2021, the Company elected to adopt the fair value method to measure its servicing assets and liabilities for all current classes of servicing assets and liabilities subsequent to initial recognition. Management believes that the fair value method is more meaningful for users of the financial statements as it more directly reports the current expected benefits and obligations of the Company's servicing rights. The adoption of the fair value method for a particular class of servicing assets is irrevocable. Prior to January 1, 2021, the Company measured its servicing assets and liabilities after initial recognition using the amortized cost method. This change in accounting resulted in a $3.4 million increase to retained earnings and the MSR asset as of January 1, 2021. Subsequent to the adoption of the fair value method for MSRs, changes in fair value of MSRs are reported as a component of "Total revenue, net" within the condensed consolidated statements of operations.
21



Prior to the adoption of the fair value method, MSRs were amortized in proportion to the estimated future net servicing revenue, and periodically evaluated for impairment. When a mortgage prepaid, the Company permanently reduced the associated MSR in the period of prepayment with a charge to operations. Prior to the adoption of the fair value method, "Amortization, impairment and pay-offs of mortgage servicing rights" was reported as a component of "Total expenses" within the condensed consolidated statements of operations. Refer to Note 1 - Organization, Basis of Presentation and Summary of Significant Accounting Policies for further details.

Recent Developments

Completion of Business Combination Transaction

On