10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2022

☐ 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 1-12434

M/I HOMES, INC.

(Exact name of registrant as specified in it charter)

Ohio	31-1210837
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4131 Worth Avenue, Suite 500, Columbus, Ohio 43219

(Address of principal executive offices) (Zip Code)

(614) 418-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, par value $.01	MHO	New 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer	☒	Accelerated filer	☐
	Non-accelerated filer	☐	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. q

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common shares, par value $.01 per share: 27,428,983 shares outstanding as of October 26, 2022.

M/I HOMES, INC.
FORM 10-Q
TABLE OF CONTENTS
PART 1.	FINANCIAL INFORMATION
	Item 1.	M/I Homes, Inc. and Subsidiaries Unaudited Condensed Consolidated Financial Statements
		Unaudited Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021	3
		Unaudited Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2022 and 2021	4
		Unaudited Condensed Consolidated Statement of Shareholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	5
		Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	6
		Notes to Unaudited Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
	Item 4.	Controls and Procedures	44
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	44
	Item 1A.	Risk Factors	44
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
	Item 3.	Defaults Upon Senior Securities	45
	Item 4.	Mine Safety Disclosures	45
	Item 5.	Other Information	45
	Item 6.	Exhibits	46
Signatures			47

2

M/I HOMES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par values)	September 30, 2022		December 31, 2021
	(unaudited)
ASSETS:
Cash, cash equivalents and restricted cash	$	67,761	$	236,368
Mortgage loans held for sale	183,327		275,655
Inventory	3,016,735		2,452,434
Property and equipment - net	35,217		37,648
Investment in joint venture arrangements	51,700		57,121
Operating lease right-of-use assets	55,388		50,950
Deferred income tax asset	10,251		10,251
Goodwill	16,400		16,400
Other assets	151,134		103,026
TOTAL ASSETS	$	3,587,913	$	3,239,853
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Accounts payable	$	296,326	$	244,505
Customer deposits	126,368		107,864
Operating lease liabilities	56,199		51,497
Other liabilities	252,532		226,969
Community development district obligations	31,991		20,089
Obligation for consolidated inventory not owned	4,778		2,768
Notes payable bank - financial services operations	189,371		266,160
Notes payable - other	429		4,549
Senior notes due 2028 - net	395,911		395,331
Senior notes due 2030 - net	296,235		295,937
TOTAL LIABILITIES	$	1,650,140	$	1,615,669
Commitments and contingencies (Note 6)	—		—
SHAREHOLDERS’ EQUITY:
Common shares - $0.01 par value; authorized 58,000,000 shares at both September 30, 2022 and December 31, 2021;    issued 30,137,141 shares at both September 30, 2022 and December 31, 2021	$	301	$	301
Additional paid-in capital	350,569		347,452
Retained earnings	1,705,588		1,345,321
Treasury shares - at cost - 2,708,158 and 1,637,511 shares at September 30, 2022 and December 31, 2021, respectively	(118,685)		(68,890)
TOTAL SHAREHOLDERS’ EQUITY	$	1,937,773	$	1,624,184
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	3,587,913	$	3,239,853

See Notes to Unaudited Condensed Consolidated Financial Statements.

3

M/I HOMES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share amounts)	2022		2021		2022		2021
Revenue	$	1,012,928	$	904,319	$	2,914,393	$	2,694,135
Costs and expenses:
Land and housing	741,013		682,565		2,145,082		2,028,822
General and administrative	58,247		49,420		162,246		143,703
Selling	46,373		47,114		134,000		143,379
Other loss (income)	—		50		(17)		(145)
Interest expense (income)	701		(74)		2,065		1,554
Loss on early extinguishment of debt	—		9,072		—		9,072
Total costs and expenses	$	846,334	$	788,147	$	2,443,376	$	2,326,385
Income before income taxes	166,594		116,172		471,017		367,750
Provision for income taxes	35,004		25,160		110,750		84,265
Net income	$	131,590	$	91,012	$	360,267	$	283,485
Earnings per common share:
Basic	$	4.76	$	3.11	$	12.86	$	9.72
Diluted	$	4.67	$	3.03	$	12.59	$	9.46
Weighted average shares outstanding:
Basic	27,618		29,250		28,025		29,179
Diluted	28,185		30,028		28,610		29,966

See Notes to Unaudited Condensed Consolidated Financial Statements.

4

M/I HOMES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

	Three Months Ended September 30, 2022
	Common Shares
	Shares Outstanding			Additional Paid-in Capital		Retained Earnings		Treasury Shares		Total Shareholders’ Equity
(Dollars in thousands)		Amount
Balance at June 30, 2022	27,760,583	$	301	$	347,923	$	1,573,998	$	(103,955)	$	1,818,267
Net income	—	—		—		131,590		—		131,590
Stock options exercised	8,400	—		(137)		—		369		232
Stock-based compensation expense	—	—		2,764		—		—		2,764
Repurchase of common shares	(340,000)	—		—		—		(15,099)		(15,099)
Deferral of executive and director compensation	—	—		19		—		—		19
Balance at September 30, 2022	27,428,983	$	301	$	350,569	$	1,705,588	$	(118,685)	$	1,937,773

	Nine Months Ended September 30, 2022
	Common Shares
	Shares Outstanding			Additional Paid-in Capital		Retained Earnings		Treasury Shares		Total Shareholders’ Equity
(Dollars in thousands)		Amount
Balance at December 31, 2021	28,499,630	$	301	$	347,452	$	1,345,321	$	(68,890)	$	1,624,184
Net income	—	—		—		360,267		—		360,267
Stock options exercised	38,800	—		(687)		—		1,689		1,002
Stock-based compensation expense	—	—		6,613		—		—		6,613
Repurchase of common shares	(1,200,000)	—		—		—		(55,334)		(55,334)
Deferral of executive and director compensation	—	—		1,041		—		—		1,041
Executive and director deferred compensation distributions	90,553	—		(3,850)		—		3,850		—
Balance at September 30, 2022	27,428,983	$	301	$	350,569	$	1,705,588	$	(118,685)	$	1,937,773

	Three Months Ended September 30, 2021
	Common Shares
	Shares Outstanding			Additional Paid-in Capital		Retained Earnings		Treasury Shares		Total Shareholders’ Equity
(Dollars in thousands)		Amount
Balance at June 30, 2021	29,318,130	$	301	$	343,301	$	1,140,926	$	(17,984)	$	1,466,544
Net income	—	—		—		91,012		—		91,012
Stock options exercised	24,000	—		(3)		—		614		611
Stock-based compensation expense	—	—		1,794		—		—		1,794
Repurchase of common shares	(242,500)	—		—		—		(15,494)		(15,494)
Balance at September 30, 2021	29,099,630	$	301	$	345,092	$	1,231,938	$	(32,864)	$	1,544,467

	Nine Months Ended September 30, 2021
	Common Shares
	Shares Outstanding			Additional Paid-in Capital		Retained Earnings		Treasury Shares		Total Shareholders’ Equity
(Dollars in thousands)		Amount
Balance at December 31, 2020	28,813,849	$	301	$	339,001	$	948,453	$	(29,057)	$	1,258,698
Net income	—	—		—		283,485		—		283,485
Stock options exercised	452,100	—		1,227		—		10,014		11,241
Stock-based compensation expense	—	—		6,199		—		—		6,199
Repurchase of common shares	(242,500)	—		—		—		(15,494)		(15,494)
Deferral of executive and director compensation	—	—		338		—		—		338
Executive and director deferred compensation distributions	76,181	—		(1,673)		—		1,673		—
Balance at September 30, 2021	29,099,630	$	301	$	345,092	$	1,231,938	$	(32,864)	$	1,544,467

See Notes to Unaudited Condensed Consolidated Financial Statements.

5

M/I HOMES, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30,
(Dollars in thousands)	2022		2021
OPERATING ACTIVITIES:
Net income	$	360,267	$	283,485
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Equity in income from joint venture arrangements	(17)		(145)
Mortgage loan originations	(1,482,628)		(1,630,588)
Proceeds from the sale of mortgage loans	1,567,685		1,647,062
Fair value adjustment of mortgage loans held for sale	7,271		1,962
Fair value adjustment of mortgage servicing rights	—		(162)
Capitalization of originated mortgage servicing rights	(7,090)		(13,596)
Amortization of mortgage servicing rights	1,137		1,106
Depreciation	9,754		9,494
Amortization of debt issue costs	1,933		1,937
Loss on sale of mortgage servicing rights	418		177
Loss on early extinguishment of debt	—		2,040
Stock-based compensation expense	6,613		6,199
Change in assets and liabilities:
Inventory	(533,036)		(412,179)
Other assets	(37,400)		(5,787)
Accounts payable	51,821		41,642
Customer deposits	18,504		42,653
Accrued compensation	(807)		(3,413)
Other liabilities	21,426		(6,228)
Net cash used in operating activities	(14,149)		(34,341)
INVESTING ACTIVITIES:
Purchase of property and equipment	(3,878)		(2,559)
Return of capital from joint venture arrangements	2,046		1,050
Investment in joint venture arrangements	(17,366)		(34,738)
Proceeds from sale of mortgage servicing rights	100		4,324
Net cash used in investing activities	(19,098)		(31,923)
FINANCING ACTIVITIES:
Repayment of senior notes	—		(250,000)
Proceeds from issuance of senior notes	—		300,000
Proceeds from bank borrowings - homebuilding operations	238,900		—
Repayment of bank borrowings - homebuilding operations	(238,900)		—
Net repayments of bank borrowings - financial services operations	(76,789)		(14,353)
(Principal repayments of) proceeds from notes payable - other and community development district bond obligations	(4,119)		1,466
Repurchase of common shares	(55,334)		(15,494)
Debt issue costs	(120)		(6,249)
Proceeds from exercise of stock options	1,002		11,241
Net cash (used in) provided by financing activities	(135,360)		26,611
Net decrease in cash, cash equivalents and restricted cash	(168,607)		(39,653)
Cash, cash equivalents and restricted cash balance at beginning of period	236,368		260,810
Cash, cash equivalents and restricted cash balance at end of period	$	67,761	$	221,157
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest — net of amount capitalized	$	7,683	$	9,167
Income taxes	$	123,118	$	91,546
NON-CASH TRANSACTIONS DURING THE PERIOD:
Community development district infrastructure	$	11,902	$	7,779
Consolidated inventory not owned	$	2,010	$	(5,511)
Distribution of single-family lots from joint venture arrangements	$	20,758	$	26,040

See Notes to Unaudited Condensed Consolidated Financial Statements.

6

M/I HOMES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. Basis of Presentation

The accompanying Unaudited Condensed Consolidated Financial Statements (the “financial statements”) of M/I Homes, Inc. and its subsidiaries (the “Company”) and notes thereto have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. The financial statements include the accounts of the Company. All intercompany transactions have been eliminated. Results for the interim period are not necessarily indicative of results for a full year. In the opinion of management, the accompanying financial statements reflect all adjustments (all of which are normal and recurring in nature) necessary for a fair presentation of financial results for the interim periods presented. These financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during that period. Actual results could differ from these estimates and have a significant impact on the financial condition and results of operations and cash flows. With regard to the Company, estimates and assumptions are inherent in calculations relating to valuation of inventory and investment in unconsolidated joint ventures, property and equipment depreciation, valuation of derivative financial instruments, accounts payable on inventory, accruals for costs to complete inventory, accruals for warranty claims, accruals for self-insured general liability claims, litigation, accruals for health care and workers’ compensation, accruals for guaranteed or indemnified loans, stock-based compensation expense, income taxes, and contingencies. Items that could have a significant impact on these estimates and assumptions include the risks and uncertainties listed in “Item 1A. Risk Factors” in Part I of our 2021 Form 10-K, as the same may be updated from time to time in our subsequent filings with the SEC.

Recently Adopted Accounting Standards

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 is intended to provide temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance became effective on March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), which clarified the scope and application of the original guidance. We fully adopted ASU 2020-04 and ASU 2021-01 in October 2022 after we amended our $90 million mortgage repurchase agreement, dated October 30, 2017, as amended (the “MIF Mortgage Repurchase Facility”), which discontinued the use of LIBOR and replaced it with the One-Month Term SOFR (“SOFR”) rate. The adoption of this guidance did not have a material impact on our consolidated financial statements and disclosures.

Significant Accounting Policies

There have been no significant changes to our significant accounting policies during the quarter ended September 30, 2022 as compared to those disclosed in our 2021 Form 10-K.

NOTE 2. Inventory and Capitalized Interest

Inventory

Inventory is recorded at cost, unless events and circumstances indicate that the carrying value of the inventory is impaired, at which point the inventory is written down to fair value (see Note 4 to our financial statements for additional details relating to our procedures for evaluating our inventories for impairment). Inventory includes the costs of land acquisition, land development and home construction, capitalized interest, real estate taxes, direct overhead costs incurred during development and home construction, and common costs that benefit the entire community, less impairments, if any.

7

A summary of the Company’s inventory as of September 30, 2022 and December 31, 2021 is as follows:

(In thousands)	September 30, 2022		December 31, 2021
Single-family lots, land and land development costs	$	1,230,139	$	1,125,738
Land held for sale	9,174		4,312
Homes under construction	1,624,831		1,187,341
Model homes and furnishings - at cost (less accumulated depreciation: September 30, 2022 - $12,130;    December 31, 2021 - $12,023)	59,145		59,268
Community development district infrastructure	31,991		20,089
Land purchase deposits	56,677		52,918
Consolidated inventory not owned	4,778		2,768
Total inventory	$	3,016,735	$	2,452,434

Single-family lots, land and land development costs include raw land that the Company has purchased to develop into lots, costs incurred to develop the raw land into lots, and lots for which development has been completed, but which have not yet been used to start construction of a home.

Homes under construction include homes that are in various stages of construction. As of September 30, 2022 and December 31, 2021, we had 1,855 homes (with a carrying value of $369.0 million) and 1,266 homes (with a carrying value of $193.2 million), respectively, included in homes under construction that were not subject to a sales contract.

Model homes and furnishings include homes that are under construction or have been completed and are being used as sales models. The amount also includes the net book value of furnishings included in our model homes. Depreciation on model home furnishings is recorded using an accelerated method over the estimated useful life of the assets, which is typically three years.

We own lots in certain communities in Florida that have Community Development Districts (“CDDs”). The Company records a liability for the estimated developer obligations that are probable and estimable and user fees that are required to be paid or transferred at the time the parcel or unit is sold to an end user.  The Company reduces this liability at the time of closing and the transfer of the property.  The Company recorded a $32.0 million liability and a $20.1 million liability related to these CDD bond obligations as of September 30, 2022 and December 31, 2021, respectively, along with the related inventory infrastructure.

Land purchase deposits include both refundable and non-refundable amounts paid to third party sellers relating to the purchase of land. On an ongoing basis, the Company evaluates the land option agreements relating to the land purchase deposits. The Company expenses any deposits and accumulated pre-acquisition costs relating to such agreements in the period when the Company makes the decision not to proceed with the purchase of land under an agreement.

Capitalized Interest

The Company capitalizes interest during land development and home construction.  Capitalized interest is charged to land and housing costs and expensed as the related inventory is delivered to a third party.  A summary of capitalized interest for the three and nine months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Capitalized interest, beginning of period	$	27,049	$	22,304	$	24,343	$	21,329
Interest capitalized to inventory	8,926		9,402		26,495		28,020
Capitalized interest charged to land and housing costs and expenses	(6,683)		(8,212)		(21,546)		(25,855)
Capitalized interest, end of period	$	29,292	$	23,494	$	29,292	$	23,494
Interest incurred	$	9,627	$	9,328	$	28,560	$	29,574

8

NOTE 3. Investment in Joint Venture Arrangements

Investment in Joint Venture Arrangements

In order to minimize our investment and risk of land exposure in a single location, we have periodically partnered with other land developers or homebuilders to share in the land investment and development of a property through joint ownership and development agreements, joint ventures, and other similar arrangements. As of September 30, 2022 and December 31, 2021, our investment in such joint venture arrangements totaled $51.7 million and $57.1 million, respectively, and was reported as Investment in Joint Venture Arrangements on our Unaudited Condensed Consolidated Balance Sheets. The $5.4 million decrease during the nine-month period ended September 30, 2022 was driven primarily by lot distributions from our joint venture arrangements of $20.8 million and return of capital from joint venture arrangements of $2.0 million, offset, in part, by our cash contributions to our joint venture arrangements during the first nine months of 2022 of $17.4 million.

The majority of our investment in joint venture arrangements for both September 30, 2022 and December 31, 2021 consisted of joint ownership and development agreements for which a special purpose entity was not established (“JODAs”). In these JODAs, we own the property jointly with partners which are typically other builders, and land development activities are funded jointly until the developed lots are subdivided for separate ownership by the partners in accordance with the JODA and the approved site plan. As of September 30, 2022 and December 31, 2021, the Company had $46.2 million and $50.6 million, respectively, invested in JODAs.

The remainder of our investment in joint venture arrangements was comprised of joint venture arrangements where a special purpose entity was established to own and develop the property. For these joint venture arrangements, we generally enter into limited liability company or similar arrangements (“LLCs”) with the other partners. These entities typically engage in land development activities for the purpose of distributing or selling developed lots to the Company and its partners in the LLC. As of September 30, 2022 and December 31, 2021, the Company had $5.5 million and $6.5 million, respectively, of equity invested in LLCs. The Company’s percentage of ownership in these LLCs as of both September 30, 2022 and December 31, 2021 ranged from 25% to 50%.

We use the equity method of accounting for investments in LLCs and other joint venture arrangements, including JODAs, over which we exercise significant influence but do not have a controlling interest. Under the equity method, our share of the LLCs’ earnings or loss, if any, is included in our Unaudited Condensed Consolidated Statements of Income. The Company did not have any share of losses from its LLCs for the three months ended September 30, 2022; however, the Company’s share of losses from its LLCs was $0.1 million for the three months ended September 30, 2021. For the nine months ended September 30, 2022 and 2021, the Company’s equity in income relating to earnings from its LLCs was less than $0.1 million and $0.1 million, respectively. Our share of the profit relating to lots we purchase from our LLCs is deferred until homes are delivered by us and title passes to a homebuyer.

We believe that the Company’s maximum exposure related to its investment in these joint venture arrangements as of September 30, 2022 was the amount invested of $51.7 million, which is reported as Investment in Joint Venture Arrangements on our Unaudited Condensed Consolidated Balance Sheets. We expect to invest further amounts in these joint venture arrangements as development of the properties progresses.

The Company assesses its investments in unconsolidated LLCs for recoverability on a quarterly basis. See Note 4 to our financial statements for additional details relating to our procedures for evaluating our investments for impairment.

Variable Interest Entities

With respect to our investments in these LLCs, we are required, under ASC 810-10, Consolidation (“ASC 810”), to evaluate whether or not such entities should be consolidated into our consolidated financial statements. We initially perform these evaluations when each new entity is created and upon any events that require reconsideration of the entity. See Note 1, “Summary of Significant Accounting Policies - Variable Interest Entities” in the Company’s 2021 Form 10-K for additional information regarding the Company’s methodology for evaluating entities for consolidation.

Land Option Agreements

In the ordinary course of business, the Company enters into land option or purchase agreements for which we generally pay non-refundable deposits. Pursuant to these land option agreements, the Company provides a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices.  In accordance with ASC 810, we analyze our land option or purchase agreements to determine whether the corresponding land sellers are variable interest entities (“VIEs”) and, if so, whether we are the primary beneficiary, as further described in Note 1, “Summary of

9

Significant Accounting Policies - Land Option Agreements” in the 2021 Form 10-K. If we are deemed to be the primary beneficiary of the VIE, we will consolidate the VIE in our consolidated financial statements and reflect such assets and liabilities in our Consolidated Inventory Not Owned in our Unaudited Condensed Consolidated Balance Sheets. At both September 30, 2022 and December 31, 2021, we concluded that we were not the primary beneficiary of any VIEs from which we are purchasing land under option or purchase agreements.

NOTE 4. Fair Value Measurements

There are three measurement input levels for determining fair value: Level 1, Level 2, and Level 3. Fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

Assets Measured on a Recurring Basis

The Company measures both mortgage loans held for sale and interest rate lock commitments (“IRLCs”) at fair value. Fair value measurement results in a better presentation of the changes in fair values of the loans and the derivative instruments used to economically hedge them.

In the normal course of business, our financial services segment enters into contractual commitments to extend credit to buyers of single-family homes with fixed expiration dates.  The commitments become effective when the borrowers “lock-in” a specified interest rate within established time frames.  Market risk arises if interest rates move adversely between the time of the “lock-in” of rates by the borrower and the sale date of the loan to an investor.  To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, the Company enters into optional or mandatory delivery forward sale contracts to sell whole loans and mortgage-backed securities to broker/dealers.  The forward sale contracts lock in an interest rate and price for the sale of loans similar to the specific rate lock commitments.  The Company does not engage in speculative trading or derivative activities.  Both the rate lock commitments to borrowers and the forward sale contracts to broker/dealers or investors are undesignated derivatives, and accordingly, are marked to fair value through earnings.  Changes in fair value measurements are included in earnings in the accompanying statements of income.

The fair value of mortgage loans held for sale is estimated based primarily on published prices for mortgage-backed securities with similar characteristics.  To calculate the effects of interest rate movements, the Company utilizes applicable published mortgage-backed security prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount.  The Company applies a fallout rate to IRLCs when measuring the fair value of rate lock commitments.  Fallout is defined as locked loan commitments for which the Company does not close a mortgage loan and is based on management’s judgment and company experience.

The Company sells loans on a servicing released or servicing retained basis and receives servicing compensation.  Thus, the value of the servicing rights included in the fair value measurement is based upon contractual terms with investors and depends on the loan type. Mortgage servicing rights (Level 3 financial instruments as they are measured using significant unobservable inputs such as mortgage prepayment rates, discount rates and delinquency rates) are periodically evaluated for impairment. The amount of impairment is the amount by which the mortgage servicing rights, net of accumulated amortization, exceed their fair value, which is calculated using third-party valuations. Impairment, if any, is recognized through a valuation allowance and a reduction of revenue. Both the carrying value and fair value of our mortgage servicing rights were $14.5 million at September 30, 2022. At December 31, 2021, both the carrying value and fair value of our mortgage servicing rights were $8.4 million.

The fair value of the Company’s forward sales contracts to broker/dealers solely considers the market price movement of the same type of security between the trade date and the balance sheet date.  The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.

Interest Rate Lock Commitments. IRLCs are extended to certain homebuying customers who have applied for a mortgage loan and meet certain defined credit and underwriting criteria. Typically, the IRLCs will have a term of less than six months; however, in certain markets, the term could extend to nine months.

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Some IRLCs are committed to a specific third-party investor through the use of whole loan delivery commitments matching the exact terms of the IRLC loan. Uncommitted IRLCs are considered derivative instruments and are fair value adjusted, with the resulting gain or loss recorded in current earnings.

Forward Sales of Mortgage-Backed Securities. Forward sales of mortgage-backed securities (“FMBSs”) are used to protect uncommitted IRLC loans against the risk of changes in interest rates between the lock date and the funding date. FMBSs related to uncommitted IRLCs and FMBSs related to mortgage loans held for sale are classified and accounted for as non-designated derivative instruments and are recorded at fair value, with gains and losses recorded in current earnings.

Mortgage Loans Held for Sale. Mortgage loans held for sale consists primarily of single-family residential loans collateralized by the underlying property.  Generally, all of the mortgage loans and related servicing rights are sold to third-party investors shortly after origination.  During the period between when a loan is closed and when it is sold to an investor, the interest rate risk is covered through the use of a whole loan contract or by FMBSs.

The table below shows the notional amounts of our financial instruments at September 30, 2022 and December 31, 2021:

Description of Financial Instrument (in thousands)	September 30, 2022		December 31, 2021
Whole loan contracts and related committed IRLCs	$	4,169	$	782
Uncommitted IRLCs	477,065		228,831
FMBSs related to uncommitted IRLCs	476,000		223,000
Whole loan contracts and related mortgage loans held for sale	18,648		3,785
FMBSs related to mortgage loans held for sale	174,000		251,000
Mortgage loans held for sale covered by FMBSs	172,151		263,088

The following table sets forth the amount of gain (loss) recognized, within our revenue in the Unaudited Condensed Consolidated Statements of Income, on assets and liabilities measured on a recurring basis for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
Description (in thousands)	2022		2021		2022		2021
Mortgage loans held for sale	$	(4,396)	$	(1,704)	$	(7,271)	$	(1,962)
Forward sales of mortgage-backed securities	24,952		3,877		22,199		4,893
Interest rate lock commitments	(13,015)		(1,440)		(15,708)		(940)
Whole loan contracts	(209)		49		(97)		413
Total gain (loss) recognized	$	7,332	$	782	$	(877)	$	2,404

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The following tables set forth the fair value of the Company’s derivative instruments and their location within the Unaudited Condensed Consolidated Balance Sheets for the periods indicated (except for mortgage loans held for sale which are disclosed as a separate line item):

	Asset Derivatives			Liability Derivatives
	September 30, 2022			September 30, 2022
Description of Derivatives	Balance Sheet Location	Fair Value (in thousands)		Balance Sheet Location	Fair Value (in thousands)
Forward sales of mortgage-backed securities	Other assets	$	26,676	Other liabilities	$	—
Interest rate lock commitments	Other assets	—		Other liabilities	16,173
Whole loan contracts	Other assets	—		Other liabilities	181
Total fair value measurements		$	26,676		$	16,354

	Asset Derivatives			Liability Derivatives
	December 31, 2021			December 31, 2021
Description of Derivatives	Balance Sheet Location	Fair Value (in thousands)		Balance Sheet Location	Fair Value (in thousands)
Forward sales of mortgage-backed securities	Other assets	$	4,477	Other liabilities	$	—
Interest rate lock commitments	Other assets	—		Other liabilities	487
Whole loan contracts	Other assets	—		Other liabilities	62
Total fair value measurements		$	4,477		$	549

Assets Measured on a Non-Recurring Basis

Inventory. The Company assesses inventory for recoverability on a quarterly basis based on the difference in the carrying value of the inventory and its fair value at the time of the evaluation. Determining the fair value of a community’s inventory involves a number of variables, estimates and projections, which are Level 3 measurement inputs. See Note 1, “Summary of Significant Accounting Policies - Inventory” in the 2021 Form 10-K for additional information regarding the Company’s methodology for determining fair value.

The Company uses significant assumptions to evaluate the recoverability of its inventory, such as estimated average selling price, construction and development costs, absorption rate (reflecting any product mix change strategies implemented or to be implemented), selling strategies, alternative land uses (including disposition of all or a portion of the land owned), or discount rates. Changes in these assumptions could materially impact future cash flow and fair value estimates and may lead the Company to incur additional impairment charges in the future. Our analysis is conducted only if indicators of a decline in value of our inventory exist, which include, among other things, declines in gross margin on sales contracts in backlog or homes that have been delivered, slower than anticipated absorption pace, declines in average sales price or high incentive offers by management to improve absorptions, declines in margins regarding future land sales, or declines in the value of the land itself as a result of third party appraisals. If communities are not recoverable based on the estimated future undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. During the three and nine months ended September 30, 2022 and 2021, the Company did not record any impairment charges on its inventory.

Investment in Unconsolidated Joint Ventures.  We evaluate our investments in unconsolidated joint ventures for impairment on a quarterly basis based on the difference in the investment’s carrying value and its fair value at the time of the evaluation. If the Company has determined that the decline in value is other than temporary, the Company would write down the value of the investment to its estimated fair value. Determining the fair value of investments in unconsolidated joint ventures involves a number of variables, estimates and assumptions, which are Level 3 measurement inputs. See Note 1, “Summary of Significant Accounting Policies - Investment in Unconsolidated Joint Ventures,” in the 2021 Form 10-K for additional information regarding the Company’s methodology for determining fair value. Because of the high degree of judgment involved in developing these assumptions, it is possible that changes in these assumptions could materially impact future cash flow and fair value estimates of the investments which may lead the Company to incur additional impairment charges in the future. During the three and nine months ended September 30, 2022 and 2021, the Company did not record any impairment charges on its investments in unconsolidated joint ventures.

Financial Instruments

Counterparty Credit Risk. To reduce the risk associated with losses that would be recognized if counterparties failed to perform as contracted, the Company limits the entities with whom management can enter into commitments. This risk of

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accounting loss is the difference between the market rate at the time of non-performance by the counterparty and the rate to which the Company committed.

The following table presents the carrying amounts and fair values of the Company’s financial instruments at September 30, 2022 and December 31, 2021. The objective of the fair value measurement is to estimate the price at which an orderly transaction to sell the asset or transfer the liability would take place between market participants at the measurement date under current market conditions.

		September 30, 2022				December 31, 2021
(In thousands)	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash, cash equivalents and restricted cash	Level 1	$	67,761	$	67,761	$	236,368	$	236,368
Mortgage loans held for sale	Level 2	183,327		183,327		275,655		275,655
Forward sales of mortgage-backed securities	Level 2	26,676		26,676		4,477		4,477
Liabilities:
Notes payable - homebuilding operations	Level 2	—		—		—		—
Notes payable - financial services operations	Level 2	189,371		189,371		266,160		266,160
Notes payable - other	Level 2	429		423		4,549		5,015
Senior notes due 2028 (a)	Level 2	400,000		330,500		400,000		414,000
Senior notes due 2030 (a)	Level 2	300,000		217,875		300,000		294,375
Interest rate lock commitments	Level 2	16,173		16,173		487		487
Whole loan contracts for committed IRLCs and mortgage loans held for sale	Level 2	181		181		62		62

(a)Our senior notes are stated at the principal amount outstanding which does not include the impact of premiums, discounts, and debt issuance costs that are amortized to interest cost over the respective terms of the notes.

The following methods and assumptions were used by the Company in estimating its fair value disclosures of financial instruments at September 30, 2022 and December 31, 2021:

Cash, Cash Equivalents and Restricted Cash. The carrying amounts of these items approximate fair value because they are short-term by nature.

Mortgage Loans Held for Sale, Forward Sales of Mortgage-Backed Securities, Interest Rate Lock Commitments, Whole Loan Contracts for Committed IRLCs and Mortgage Loans Held for Sale, Senior Notes due 2028 and Senior Notes due 2030. The fair value of these financial instruments was determined based upon market quotes at September 30, 2022 and December 31, 2021. The market quotes used were quoted prices for similar assets or liabilities along with inputs taken from observable market data by correlation. The inputs were adjusted to account for the condition of the asset or liability.

Notes Payable - Homebuilding Operations. The interest rate available to the Company during the quarter ended September 30, 2022 under the Company’s $550 million unsecured revolving credit facility, dated July 18, 2013, as amended (the “Credit Facility”), fluctuated daily with the one-month LIBOR rate plus a margin of 175 basis points, and thus the carrying value is a reasonable estimate of fair value. See Note 8 to our financial statements for additional information regarding the Credit Facility.

Notes Payable - Financial Services Operations. M/I Financial, LLC, a 100%-owned subsidiary of M/I Homes, Inc. (“M/I Financial”), is a party to two credit agreements: (1) a $200 million secured mortgage warehousing agreement, dated May 27, 2022 (the “MIF Mortgage Warehousing Agreement”); and (2) the MIF Mortgage Repurchase Facility. For each of these credit facilities, the interest rate is based on a variable rate index, and thus their carrying value is a reasonable estimate of fair value. The interest rate available to M/I Financial during the third quarter of 2022 fluctuated with LIBOR or BSBY, as applicable. See Note 8 to our financial statements for additional information regarding the MIF Mortgage Warehousing Agreement and the MIF Mortgage Repurchase Facility.

Notes Payable - Other. The estimated fair value was determined by calculating the present value of the future cash flows using the Company’s current incremental borrowing rate.

NOTE 5. Guarantees and Indemnifications

In the ordinary course of business, M/I Financial enters into agreements that provide a limited-life guarantee on loans sold to certain third-party purchasers of its mortgage loans that M/I Financial will repurchase a loan if certain conditions occur,

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primarily if the mortgagor does not meet the terms of the loan within the first six months after the sale of the loan. Loans totaling approximately $435.9 million and $305.0 million were covered under these guarantees as of September 30, 2022 and December 31, 2021, respectively.  A portion of the revenue paid to M/I Financial for providing the guarantees on these loans was deferred at September 30, 2022, and will be recognized in income as M/I Financial is released from its obligation under the guarantees. The risk associated with the guarantees above is offset by the value of the underlying assets.

M/I Financial has received inquiries concerning underwriting matters from purchasers of its loans regarding certain loans totaling approximately $2.0 million and $0.7 million at September 30, 2022 and December 31, 2021, respectively.

M/I Financial has also guaranteed the collectability of certain loans to third party insurers (U.S. Department of Housing and Urban Development and U.S. Veterans Administration) of those loans for periods ranging from five to thirty years. The maximum potential amount of future payments is equal to the outstanding loan value less the value of the underlying asset plus administrative costs incurred related to foreclosure on the loans, should this event occur.

The Company recorded a liability relating to the guarantees described above totaling $0.6 million and $0.3 million at September 30, 2022 and December 31, 2021, respectively, which is management’s best estimate of the Company’s liability with respect to such guarantees.

NOTE 6. Commitments and Contingencies

Warranty

We use subcontractors for nearly all aspects of home construction. Although our subcontractors are generally required to repair and replace any product or labor defects, we are, during applicable warranty periods, ultimately responsible to the homeowner for making such repairs. As such, we record warranty reserves to cover our exposure to the costs for materials and labor not expected to be covered by our subcontractors to the extent they relate to warranty-type claims. Warranty reserves are established by charging cost of sales and crediting a warranty reserve for each home delivered.  The amounts charged are estimated by management to be adequate to cover expected warranty-related costs under the Company’s warranty programs. Warranty reserves are recorded for warranties under our Home Builder’s Limited Warranty (“HBLW”) and our transferable structural warranty in Other Liabilities on the Company’s Unaudited Condensed Consolidated Balance Sheets.

The warranty reserves for the HBLW are established as a percentage of average sales price and adjusted based on historical payment patterns determined, generally, by geographic area and recent trends. Factors that are given consideration in determining the HBLW reserves include: (1) the historical range of amounts paid per average sales price on a home; (2) type and mix of amenity packages added to the home; (3) any warranty expenditures not considered to be normal and recurring; (4) timing of payments; (5) improvements in quality of construction expected to impact future warranty expenditures; and (6) conditions that may affect certain projects and require a different percentage of average sales price for those specific projects. Changes in estimates for warranties occur due to changes in the historical payment experience and differences between the actual payment pattern experienced during the period and the historical payment pattern used in our evaluation of the warranty reserve balance at the end of each quarter. Actual future warranty costs could differ from our current estimated amount.

Our warranty reserves for our transferable structural warranty programs are established on a per-unit basis. While the structural warranty reserve is recorded as each house is delivered, the sufficiency of the structural warranty per unit charge and total reserve is reevaluated on an annual basis, with the assistance of an actuary, using our own historical data and trends, industry-wide historical data and trends, and other project specific factors. The reserves are also evaluated quarterly and adjusted if we encounter activity that is inconsistent with the historical experience used in the annual analysis. These reserves are subject to variability due to uncertainties regarding structural defect claims for products we build, the markets in which we build, claim settlement history, insurance and legal interpretations, among other factors.

Our warranty reserve amounts are based upon historical experience and geographic location. While we believe that our warranty reserves are sufficient to cover our projected costs, there can be no assurances that historical data and trends will accurately predict our actual warranty costs.

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A summary of warranty activity for the three and nine months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Warranty reserves, beginning of period	$	29,970	$	29,880	$	29,728	$	29,012
Warranty expense on homes delivered during the period	5,373		4,834		15,479		15,246
Changes in estimates for pre-existing warranties	2,342		1,745		3,520		2,356
Settlements made during the period	(6,807)		(6,078)		(17,849)		(16,233)
Warranty reserves, end of period	$	30,878	$	30,381	$	30,878	$	30,381

We have received claims related to stucco installation from homeowners in certain of our communities in our Tampa and Orlando, Florida markets and have been named as a defendant in legal proceedings initiated by certain of such homeowners. These claims primarily relate to homes built prior to 2014 which have second story elevations with frame construction.

During the three and nine month period ended September 30, 2022, we did not record any additional warranty charges or receive any additional recoveries for stucco-related repair costs. The remaining reserve at September 30, 2022 for (1) homes in our Florida communities that we had identified as needing repair but had not yet completed the repair and (2) estimated repair costs for homes in our Florida communities that we had not yet identified as needing repair but that may require repair in the future included within our warranty reserve was $2.1 million. We believe that this amount is sufficient to cover both known and estimated future repair costs as of September 30, 2022. Our remaining stucco-related reserve is gross of any recoveries.

Our estimate of future costs of stucco-related repairs is based on our judgment, various assumptions and internal data. Due to the degree of judgment and the potential for variability in our underlying assumptions and data, we may revise our estimate, including to reflect additional estimated future stucco-related repairs costs, which revision could be material.

Performance Bonds and Letters of Credit

At September 30, 2022, the Company had outstanding approximately $446.4 million of completion bonds and standby letters of credit, some of which were issued to various local governmental entities that expire at various times through November 2027. Included in this total are: (1) $344.8 million of performance and maintenance bonds and $88.3 million of performance letters of credit that serve as completion bonds for land development work in progress; (2) $8.4 million of financial letters of credit, of which $8.0 million represent deposits on land and lot purchase agreements; and (3) $4.9 million of financial bonds.

Land Option Contracts and Other Similar Contracts

At September 30, 2022, the Company also had options and contingent purchase agreements to acquire land and developed lots with an aggregate purchase price of approximately $982.4 million. Purchase of properties under these agreements is contingent upon satisfaction of certain requirements by the Company and the sellers.

Legal Matters

In addition to the legal proceedings related to stucco, the Company and certain of its subsidiaries have been named as defendants in certain other legal proceedings which are incidental to our business. While management currently believes that the ultimate resolution of these other legal proceedings, individually and in the aggregate, will not have a material effect on the Company’s financial position, results of operations and cash flows, such legal proceedings are subject to inherent uncertainties. The Company has recorded a liability to provide for the anticipated costs, including legal defense costs, associated with the resolution of these other legal proceedings. However, the possibility exists that the costs to resolve these legal proceedings could differ from the recorded estimates and, therefore, have a material effect on the Company’s net income for the periods in which they are resolved. At September 30, 2022 and December 31, 2021, we had $0.6 million and $1.2 million reserved for legal expenses, respectively.

NOTE 7. Goodwill

Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired and liabilities assumed in business combinations. In connection with the Company’s acquisition of the homebuilding assets and operations of Pinnacle Homes in Detroit, Michigan in March 2018, the Company recorded goodwill of $16.4 million, which is included as Goodwill in our Consolidated Balance Sheets. This amount was based on the estimated fair values of the acquired assets and liabilities at the date of the acquisition in accordance with ASC 350.

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In accordance with ASC 350, the Company analyzes goodwill for impairment on an annual basis (or more often if indicators of impairment exist). The Company performs a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, a quantitative assessment is performed to determine the reporting unit’s fair value. If the reporting unit’s carrying value exceeds its fair value, then an impairment loss is recognized for the amount of the excess of the carrying amount over the reporting unit’s fair value. The Company performed its annual goodwill impairment analysis during the fourth quarter of 2021, and as no indicators for impairment existed at December 31, 2021, no impairment was recorded. At September 30, 2022, no indicators for impairment existed and therefore no impairment was recorded. However, we will continue to monitor the fair value of the reporting unit in future periods if conditions worsen or other events occur that could impact the fair value of the reporting unit.

NOTE 8. Debt

Notes Payable - Homebuilding

The Credit Facility provides for an aggregate commitment amount of $550 million and also includes an accordion feature pursuant to which the maximum borrowing availability may be increased to an aggregate of $700 million, subject to obtaining additional commitments from lenders. The Credit Facility matures on July 18, 2025. Interest on amounts borrowed under the Credit Facility is payable at a rate which is adjusted daily and is equal to the sum of the one-month LIBOR (subject to a floor of 0.25%) plus a margin of 175 basis points (subject to adjustment in subsequent quarterly periods based on the Company’s leverage ratio). The Credit Facility includes a provision for the replacement of LIBOR under certain circumstances where one-month LIBOR is no longer available. The Credit Facility also contains certain financial covenants. At September 30, 2022, the Company was in compliance with all financial covenants of the Credit Facility.

The available amount under the Credit Facility is computed in accordance with a borrowing base, which is calculated by applying various advance rates for different categories of inventory, and totaled $1.53 billion of availability for additional senior debt at September 30, 2022. As a result, the full $550 million commitment amount of the Credit Facility was available, less any borrowings and letters of credit outstanding. At September 30, 2022, there were no borrowings outstanding and $96.6 million of letters of credit outstanding, leaving a net remaining borrowing availability of $453.4 million. The Credit Facility includes a $150 million sub-facility for letters of credit.

The Company’s obligations under the Credit Facility are guaranteed by all of the Company’s subsidiaries, with the exception of subsidiaries that are primarily engaged in the business of mortgage financing, title insurance or similar financial businesses relating to the homebuilding and home sales business, certain subsidiaries that are not 100%-owned by the Company or another subsidiary, and other subsidiaries designated by the Company as Unrestricted Subsidiaries (as defined in the Credit Facility), subject to limitations on the aggregate amount invested in such Unrestricted Subsidiaries in accordance with the terms of the Credit Facility and the indentures governing the Company’s $300.0 million aggregate principal amount of 3.95% Senior Notes due 2030 (the “2030 Senior Notes”) and the Company’s $400.0 million aggregate principal amount of 4.95% Senior Notes due 2028 (the “2028 Senior Notes”). The guarantors for the Credit Facility (the “Subsidiary Guarantors”) are the same subsidiaries that guarantee the 2030 Senior Notes and the 2028 Senior Notes.

The Company’s obligations under the Credit Facility are general, unsecured senior obligations of the Company and the Subsidiary Guarantors and rank equally in right of payment with all our and the Subsidiary Guarantors’ existing and future unsecured senior indebtedness. Our obligations under the Credit Facility are effectively subordinated to our and the Subsidiary Guarantors’ existing and future secured indebtedness with respect to any assets comprising security or collateral for such indebtedness.

Notes Payable - Financial Services

The MIF Mortgage Warehousing Agreement is used to finance eligible residential mortgage loans originated by M/I Financial. The MIF Mortgage Warehousing Agreement provides for a maximum borrowing availability of $200 million, which increased to $275 million from September 19, 2022 to November 13, 2022 and increases to $300 million from November 14, 2022 through February 6, 2023, which are periods of expected increases in the volume of mortgage originations. The MIF Mortgage Warehousing Agreement expires on May 26, 2023. Interest on amounts borrowed under the MIF Mortgage Warehousing Agreement is payable at a per annum rate equal to the one-month BSBY rate (subject to a floor of 0.25%) plus a spread of 190

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basis points. The MIF Mortgage Warehousing Agreement also contains certain financial covenants. At September 30, 2022, M/I Financial was in compliance with all financial covenants of the MIF Mortgage Warehousing Agreement.

The MIF Mortgage Repurchase Facility is used to finance eligible residential mortgage loans originated by M/I Financial. The MIF Mortgage Repurchase Facility provides for a mortgage repurchase facility with a maximum borrowing availability of $90 million. Before entering into the amendment to the MIF Mortgage Repurchase Facility discussed below, M/I Financial paid interest on each advance under the MIF Mortgage Repurchase Facility at a per annum rate equal to the one-month LIBOR rate (subject to a floor of 0.75% or 0.625% based on the type of loan) plus 175 or 200 basis points depending on the loan type. The MIF Mortgage Repurchase Facility also contains certain financial covenants. At September 30, 2022, M/I Financial was in compliance with all financial covenants of the MIF Mortgage Repurchase Facility. Effective October 24, 2022, M/I Financial entered into an amendment to the MIF Mortgage Repurchase Facility which, among other things, extends the term of the MIF Mortgage Repurchase Facility for an additional year to October 23, 2023, replaces the LIBOR rate with the One-Month Term SOFR (“SOFR”) rate (subject to an all-in floor of 2.375% or 2.75% based on the type of loan) and adjusts certain financial covenant limits.

At September 30, 2022 and December 31, 2021, M/I Financial’s total combined maximum borrowing availability under the two credit facilities was $365.0 million and $325.0 million, respectively. At September 30, 2022 and December 31, 2021, M/I Financial had $189.4 million and $266.2 million, respectively, in borrowings outstanding on a combined basis under its credit facilities.

Senior Notes

As of both September 30, 2022 and December 31, 2021, we had $300.0 million of our 2030 Senior Notes outstanding. The 2030 Senior Notes bear interest at a rate of 3.95% per year, payable semiannually in arrears on February 15 and August 15 of each year, and mature on February 15, 2030. The Company may redeem some or all of the 2030 Senior Notes at any time prior to August 15, 2029 (the date that is six months prior to the maturity of the 2030 Senior Notes), at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date, plus a “make-whole” amount set forth in the indenture governing the 2030 Senior Notes. In addition, on or after August 15, 2029 (the date that is six months prior to the maturity of the 2030 Senior Notes), the Company may redeem some or all of the 2030 Senior Notes at a redemption price equal to 100.000% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

As of both September 30, 2022 and December 31, 2021, we had $400.0 million of our 2028 Senior Notes outstanding. The 2028 Senior Notes bear interest at a rate of 4.95% per year, payable semiannually in arrears on February 1 and August 1 of each year and mature on February 1, 2028. We may redeem all or any portion of the 2028 Senior Notes on or after February 1, 2023 at a stated redemption price, together with accrued and unpaid interest thereon. The redemption price will initially be 103.713% of the principal amount outstanding, but will decline to 102.475% of the principal amount outstanding if redeemed during the 12-month period beginning on February 1, 2024, will further decline to 101.238% of the principal amount outstanding if redeemed during the 12-month period beginning on February 1, 2025 and will further decline to 100.000% of the principal amount outstanding if redeemed on or after February 1, 2026, but prior to maturity.

The 2030 Senior Notes contain certain covenants, as more fully described and defined in the indenture governing the 2030 Senior Notes, which limit the ability of the Company and the restricted subsidiaries to, among other things: incur certain liens securing indebtedness without equally and ratably securing the 2030 Senior Notes and the guarantees thereof; enter into certain sale and leaseback transactions; and consolidate or merge with or into other companies, liquidate or sell or otherwise dispose of all or substantially all of the Company’s assets. These covenants are subject to a number of exceptions and qualifications as described in the indenture governing the 2030 Senior Notes. As of September 30, 2022, the Company was in compliance with all terms, conditions, and covenants under the indenture.

The 2028 Senior Notes contain certain covenants, as more fully described and defined in the indenture governing the 2028 Senior Notes, which limit the ability of the Company and the restricted subsidiaries to, among other things: incur additional indebtedness; make certain payments, including dividends, or repurchase any shares, in an aggregate amount exceeding our “restricted payments basket”; make certain investments; and create or incur certain liens, consolidate or merge with or into other companies, or liquidate or sell or transfer all or substantially all of our assets. These covenants are subject to a number of exceptions and qualifications as described in the indenture governing the 2028 Senior Notes. As of September 30, 2022, the Company was in compliance with all terms, conditions, and covenants under the indenture.

The 2030 Senior Notes and the 2028 Senior Notes are fully and unconditionally guaranteed jointly and severally on a senior unsecured basis by the Subsidiary Guarantors. The 2030 Senior Notes and the 2028 Senior Notes are general, unsecured senior obligations of the Company and the Subsidiary Guarantors and rank equally in right of payment with all our and the Subsidiary

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Guarantors’ existing and future unsecured senior indebtedness.  The 2030 Senior Notes and the 2028 Senior Notes are effectively subordinated to our and the Subsidiary Guarantors’ existing and future secured indebtedness with respect to any assets comprising security or collateral for such indebtedness.

The indenture governing the 2028 Senior Notes limits our ability to pay dividends on, and repurchase, our common shares and any of our preferred shares then outstanding to the amount of the positive balance in our “restricted payments basket,” as defined in the indenture. The “restricted payments basket” is equal to $125.0 million plus (1) 50% of our aggregate consolidated net income (or minus 100% of our aggregate consolidated net loss) from October 1, 2015, excluding income or loss from Unrestricted Subsidiaries (as defined in the indenture), plus (2) 100% of the net cash proceeds from either contributions to the common equity of the Company after December 1, 2015 or the sale of qualified equity interests after December 1, 2015, plus other items and subject to other exceptions. The positive balance in our restricted payments basket was $600.8 million at September 30, 2022 and $487.5 million at December 31, 2021. The determination to pay future dividends on, or make future repurchases of, our common shares will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, capital requirements and compliance with debt covenants, and other factors deemed relevant by our board of directors (see Note 12 to our financial statements for more information).

Notes Payable - Other

The Company had other borrowings, which are reported in Notes Payable - Other in our Unaudited Condensed Consolidated Balance Sheets, totaling $0.4 million and $4.5 million as of September 30, 2022 and December 31, 2021, respectively, which are comprised of notes payable acquired in the normal course of business.

NOTE 9. Earnings Per Share

The table below presents a reconciliation between basic and diluted weighted average shares outstanding, net income, and basic and diluted income per share for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands, except per share amounts)	2022		2021		2022		2021
NUMERATOR
Net income	$	131,590	$	91,012	$	360,267	$	283,485
DENOMINATOR
Basic weighted average shares outstanding	27,618		29,250		28,025		29,179
Effect of dilutive securities:
Stock option awards	248		447		274		474
Deferred compensation awards	319		331		311		313
Diluted weighted average shares outstanding	28,185		30,028		28,610		29,966
Earnings per common share:
Basic	$	4.76	$	3.11	$	12.86	$	9.72
Diluted	$	4.67	$	3.03	$	12.59	$	9.46
Anti-dilutive equity awards not included in the calculation of diluted earnings per common share	908		16		826		7

NOTE 10. Income Taxes

The Inflation Reduction Act (IRA) was enacted on August 16, 2022 to address the high cost of prescription drugs, healthcare availability, climate change and inflation. The IRA extended the energy efficient homes credit through 2032 and, as a result, the Company recognized an $8.4 million year-to-date tax benefit during the third quarter of 2022.

During the three months ended September 30, 2022 and 2021, the Company recorded a tax provision of $35.0 million and $25.2 million, respectively, which reflects income tax expense related to income before income taxes for the periods. The effective tax rate for the three months ended September 30, 2022 and 2021 was 21.0% and 21.7%, respectively. The decrease in the effective rate from the three months ended September 30, 2021 was primarily attributable to a $3.7 million increase in tax benefits from energy efficient home credits for 2022.

During the nine months ended September 30, 2022 and 2021, the Company recorded a tax provision of $110.8 million and $84.3 million, respectively. The effective tax rate for the nine months ended September 30, 2022 and 2021 was 23.5% and

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22.9%, respectively. The increase in the effective rate from the nine months ended September 30, 2021 was primarily attributable to a $2.2 million decrease in tax benefit from equity compensation taken during the first nine months of 2022 compared to the same period in 2021.

NOTE 11. Business Segments

The Company’s chief operating decision makers evaluate the Company’s performance in various ways, including: (1) the results of our individual homebuilding operating segments and the results of our financial services operations; (2) the results of our homebuilding reportable segments; and (3) our consolidated financial results.

In accordance with ASC 280, Segment Reporting (“ASC 280”), we have identified each homebuilding division as an operating segment and have elected to aggregate our operating segments into separate reportable segments as they share similar aggregation characteristics prescribed in ASC 280 in the following regards: (1) long-term economic characteristics; (2) historical and expected future long-term gross margin percentages; (3) housing products, production processes and methods of distribution; and (4) geographical proximity.

The homebuilding operating segments that comprise each of our reportable segments are as follows:

Northern	Southern
Chicago, Illinois	Orlando, Florida
Cincinnati, Ohio	Sarasota, Florida
Columbus, Ohio	Tampa, Florida
Indianapolis, Indiana	Austin, Texas
Minneapolis/St. Paul, Minnesota	Dallas/Fort Worth, Texas
Detroit, Michigan	Houston, Texas
	San Antonio, Texas
	Charlotte, North Carolina
	Raleigh, North Carolina
	Nashville, Tennessee

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The following table shows, by segment, revenue, operating income (loss) and interest expense (income) for the three and nine months ended September 30, 2022 and 2021, as well as the Company’s income before income taxes for such periods:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Revenue:
Northern homebuilding	$	415,741	$	400,564	$	1,242,341	$	1,151,349
Southern homebuilding	577,088		482,960		1,608,468		1,463,707
Financial services (a)	20,099		20,795		63,584		79,079
Total revenue	$	1,012,928	$	904,319	$	2,914,393	$	2,694,135
Operating income (loss):
Northern homebuilding	$	59,623	$	59,009	$	173,917	$	159,975
Southern homebuilding	119,311		72,957		323,628		218,236
Financial services (a)	9,233		10,820		32,774		50,381
Less: Corporate selling, general and administrative expense	(20,872)		(17,566)		(57,254)		(50,361)
Total operating income	$	167,295	$	125,220	$	473,065	$	378,231
Interest expense (income):
Northern homebuilding	$	2	$	—	$	2	$	76
Southern homebuilding	(651)		(381)		(653)		(224)
Financial services (a)	1,350		885		3,169		2,777
Corporate	—		(578)		(453)		(1,075)
Total interest expense (income)	$	701	$	(74)	$	2,065	$	1,554
Other loss (income)	$	—	$	50	$	(17)	$	(145)
Loss on early extinguishment of debt	—		9,072		—		9,072
Income before income taxes	$	166,594	$	116,172	$	471,017	$	367,750

(a)Our financial services operational results should be viewed in connection with our homebuilding business as its operations originate loans and provide title services primarily for our homebuying customers, with the exception of an immaterial amount of mortgage refinancing.

The following tables show total assets by segment at September 30, 2022 and December 31, 2021:

	September 30, 2022
(In thousands)	Northern		Southern			Corporate, Financial Services and Unallocated		Total
Deposits on real estate under option or contract	$	6,939	$	49,738		$	—	$	56,677
Inventory (a)	1,165,675		1,794,383			—		2,960,058
Investments in joint venture arrangements	—		51,700			—		51,700
Other assets	41,927		95,321		(b)	382,230		519,478
Total assets	$	1,214,541	$	1,991,142		$	382,230	$	3,587,913

	December 31, 2021
(In thousands)	Northern		Southern			Corporate, Financial Services and Unallocated		Total
Deposits on real estate under option or contract	$	4,123	$	48,795		$	—	$	52,918
Inventory (a)	987,258		1,412,258			—		2,399,516
Investments in joint venture arrangements	—		57,121			—		57,121
Other assets	37,527		63,844		(b)	628,927		730,298
Total assets	$	1,028,908	$	1,582,018		$	628,927	$	3,239,853

(a)Inventory includes single-family lots, land and land development costs; land held for sale; homes under construction; model homes and furnishings; community development district infrastructure; and consolidated inventory not owned.

(b)Includes development reimbursements from local municipalities.

NOTE 12. Share Repurchase Program

On July 28, 2021, the Company announced that its Board of Directors approved a new share repurchase program pursuant to which the Company may purchase up to $100 million of its outstanding common shares (the “2021 Share Repurchase

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Program”). On February 17, 2022, the Company announced that its Board of Directors approved an increase to its 2021 Share Repurchase Program by an additional $100 million.

Pursuant to the 2021 Share Repurchase Program, the Company may purchase up to $200 million of its outstanding common shares through open market transactions, privately negotiated transactions or otherwise in accordance with all applicable laws. The timing, amount and other terms and conditions of any additional repurchases under the 2021 Share Repurchase Program will be determined by the Company’s management at its discretion based on a variety of factors, including the market price of the Company’s common shares, business considerations, general market and economic conditions and legal requirements. The 2021 Share Repurchase Program does not have an expiration date and the Board may modify, discontinue or suspend it at any time.

During the third quarter 2022, the Company repurchased 0.3 million outstanding common shares at an aggregate purchase price of $15.1 million under the 2021 Share Repurchase Program. As of September 30, 2022, $93.1 million remained available for repurchases under the 2021 Share Repurchase Program.

NOTE 13. Revenue Recognition

Revenue and the related profit from the sale of a home and revenue and the related profit from the sale of land to third parties are recognized in the financial statements on the date of closing if delivery has occurred, title has passed to the buyer, all performance obligations (as defined below) have been met, and control of the home or land is transferred to the buyer in an amount that reflects the consideration we expect to be entitled to receive in exchange for the home or land. If not received immediately upon closing, cash proceeds from home closings are held in escrow for the Company’s benefit, typically for up to three days, and are included in Cash, cash equivalents and restricted cash on the Condensed Consolidated Balance Sheets.

Sales incentives vary by type of incentive and by amount on a community-by-community and home-by-home basis. The costs of any sales incentives in the form of free or discounted products and services provided to homebuyers are reflected in Land and housing costs in the Condensed Consolidated Statements of Income because such incentives are identified in our home purchase contracts with homebuyers as an intrinsic part of our single performance obligation to deliver and transfer title to their home for the transaction price stated in the contracts. Sales incentives that we may provide in the form of closing cost allowances are recorded as a reduction of housing revenue at the time the home is delivered.

We record sales commissions within Selling expenses in the Condensed Consolidated Statements of Income when incurred (i.e., when the home is delivered) as the amortization period is generally one year or less and therefore capitalization is not required as part of the practical expedient for incremental costs of obtaining a contract.

Contract liabilities include customer deposits related to sold but undelivered homes. Substantially all of our home sales are scheduled to close and be recorded to revenue within one year from the date of receiving a customer deposit. Contract liabilities expected to be recognized as revenue, excluding revenue pertaining to contracts that have an original expected duration of one year or less, is not material.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. All of our home purchase contracts have a single performance obligation as the promise to transfer the home is not separately identifiable from other promises in the contract and, therefore, not distinct. Our performance obligation, to deliver the agreed-upon home, is generally satisfied in less than one year from the original contract date. Deferred revenue resulting from uncompleted performance obligations existing at the time we deliver new homes to our homebuyers is not material.

Although our third party land sale contracts may include multiple performance obligations, the revenue we expect to recognize in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, is not material. We do not disclose the value of unsatisfied performance obligations for land sale contracts with an original expected duration of one year or less.

We recognize the majority of the revenue associated with our mortgage loan operations when the mortgage loans are sold and/or related servicing rights are sold to third party investors or retained and managed under a third party sub-service arrangement. The revenue recognized is reduced by the fair value of the related guarantee provided to the investor. The fair value of the guarantee is recognized in revenue when the Company is released from its obligation under the guarantee (note that guarantees are excluded from the scope of ASC 606, Revenue from Contracts with Customers). We recognize financial services revenue associated with our title operations as homes are delivered, closing services are rendered, and title policies are issued, all of

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which generally occur simultaneously as each home is delivered. All of the underwriting risk associated with title insurance policies is transferred to third-party insurers.

The following table presents our revenues disaggregated by revenue source:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2022		2021		2022		2021
Housing	$	986,843	$	878,602	$	2,837,912	$	2,604,387
Land sales	5,986		4,922		12,897		10,669
Financial services (a)	20,099		20,795		63,584		79,079
Total revenue	$	1,012,928	$	904,319	$	2,914,393	$	2,694,135

(a)Revenue includes hedging gains of $13.8 million and hedging losses of $3.1 million for the three months ended September 30, 2022 and 2021, respectively, and hedging gains of $32.1 million and $0.8 million for the nine months ended September 30, 2022 and 2021, respectively. Hedging gains/losses do not represent revenue recognized from contracts with customers.

Refer to Note 11 for presentation of our revenues disaggregated by geography. As our homebuilding operations accounted for over 97% of our total revenues for the three and nine months ended September 30, 2022 and 2021, with most of those revenues generated from home purchase contracts with customers, we believe the disaggregation of revenues as disclosed above and in Note 11 fairly depict how the nature, amount, timing and uncertainty of cash flows are affected by economic factors.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

OVERVIEW

M/I Homes, Inc. and subsidiaries (the “Company” or “we”) is one of the nation’s leading builders of single-family homes having sold over 142,400 homes since commencing homebuilding activities in 1976.  The Company’s homes are marketed and sold primarily under the M/I Homes brand. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Tampa, Sarasota and Orlando, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and Nashville, Tennessee.

Included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are the following topics relevant to the Company’s performance and financial condition:

•Information Relating to Forward-Looking Statements;

•Application of Critical Accounting Estimates and Policies;

•Results of Operations;

•Discussion of Our Liquidity and Capital Resources; and

•Impact of Interest Rates and Inflation.

FORWARD-LOOKING STATEMENTS

Certain information included in this report or in other materials we have filed or will file with the Securities and Exchange Commission (the “SEC”) (as well as information included in oral statements or other written statements made or to be made by us) contains or may contain forward-looking statements, including, but not limited to, statements regarding our future financial performance and financial condition.  Words such as “expects,” “anticipates,” “envisions,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements involve a number of risks and uncertainties.  Any forward-looking statements that we make herein and in future reports and statements are not guarantees of future performance, and actual results may differ materially from those in such forward-looking statements as a result of various risk factors, including, without limitation, factors relating to the economic environment, interest rates, availability of resources, competition, market concentration, land development activities, construction defects, product liability and warranty claims and various governmental rules and regulations.  See “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”), as the same may be updated from time to time in our subsequent filings with the SEC, for more information regarding those risk factors.

Any forward-looking statement speaks only as of the date made. Except as required by applicable law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent reports on Forms 10-K, 10-Q and 8-K should be consulted.  This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995, and all of our forward-looking statements are expressly qualified in their entirety by the cautionary statements contained or referenced in this section.

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APPLICATION OF CRITICAL ACCOUNTING ESTIMATES AND POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.  Management bases its estimates and assumptions on historical experience and various other factors that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.  On an ongoing basis, management evaluates such estimates and assumptions and makes adjustments as deemed necessary.  Actual results could differ from these estimates using different estimates and assumptions, or if conditions are significantly different in the future.  See Note 1 (Summary of Significant Accounting Policies) to our consolidated financial statements included in our 2021 Form 10-K for additional information about our accounting policies.

We believe that there have been no significant changes to our critical accounting policies during the quarter ended September 30, 2022 as compared to those disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2021 Form 10-K.

RESULTS OF OPERATIONS

Our reportable segments are: Northern homebuilding; Southern homebuilding; and financial services operations. The homebuilding operating segments that comprise each of our reportable segments are as follows:

Northern	Southern
Chicago, Illinois	Orlando, Florida
Cincinnati, Ohio	Sarasota, Florida
Columbus, Ohio	Tampa, Florida
Indianapolis, Indiana	Austin, Texas
Minneapolis/St. Paul, Minnesota	Dallas/Fort Worth, Texas
Detroit, Michigan	Houston, Texas
	San Antonio, Texas
	Charlotte, North Carolina
	Raleigh, North Carolina
	Nashville, Tennessee

Overview

During the third quarter of 2022, we continued to experience the weakening in homebuyer demand that started in the latter half of our 2022 second quarter. The robust housing market of the last 18 months began to decline as a result of the uncertain macroeconomic conditions in the broader U.S. economy, particularly the historic rise in mortgage interest rates and the high rate of inflation not experienced since the 1970s. These economic conditions, together with housing affordability issues and consumer fears of an economic recession, have resulted in many potential homebuyers postponing their homebuying decisions. We continue to believe long-term housing market fundamentals remain strong, including favorable demographics and a limited supply of new and resale inventory. Nevertheless, these conditions, along with a lower average community count (173 in 2022 from 176 in 2021) negatively impacted our new contracts which declined 31% for the third quarter of 2022 from the third quarter of 2021. Our home deliveries for the third quarter of 2022 also declined 1% compared to 2021's third quarter primarily due to the impact of Hurricane Ian on our Florida markets.

Despite the challenges mentioned above, we achieved record third quarter revenue, income before income taxes and net income. Our improved profitability is attributable primarily to improved margins and overhead leverage when compared to 2021’s third quarter as consumer demand for housing remained robust in 2021 and early 2022 when the majority of our homes delivered during the third quarter of 2022 were placed under contract, driving record financial results for our business.

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During the third quarter and nine months ended September 30, 2022, we achieved the following results in comparison to the third quarter and nine months ended September 30, 2021:

•Revenue increased 12% to $1.01 billion (a third quarter record) and 8% to $2.91 billion (a year-to-date record), respectively

•Income before income taxes increased 43% to $166.6 million (a third quarter record) and 28% to $471.0 million (a year-to-date record), respectively

•Net income increased 45% to $131.6 million (a third quarter record) and 27% to $360.3 million (a year-to-date record), respectively

Our company-wide absorption pace of sales per community for the third quarter of 2022 declined to 2.6 per month compared to 3.7 per month for the prior year’s third quarter as a result of the declining market conditions described above, the decline in our average communities and the decrease in the number of new contracts during the quarter compared to prior year. Partially as a result of the accelerated sales pace we experienced in 2020 and 2021, our average number of selling communities declined to 173 during the third quarter of 2022 from 176 for the third quarter of 2021. We plan to open a number of new communities in the fourth quarter of 2022, increasing our community count by approximately 10% from the end of third quarter of 2022. However, given the uncertainty in the housing market as a result of current economic conditions, we may choose to delay the development and opening of some new communities to match homebuyer demand in the remainder of 2022 and into 2023.

Summary of Company Financial Results

Income before income taxes for the third quarter of 2022 increased 43% from $116.2 million in the third quarter of 2021 to a third quarter record $166.6 million in 2022. We also achieved a third quarter record net income of $131.6 million, or $4.67 per diluted share, in 2022's third quarter, compared to net income of $91.0 million, or $3.03 per diluted share, in 2021's third quarter. Our effective tax rate was 21.0% in 2022’s third quarter compared to 21.7% in 2021. For the nine months ended September 30, 2022, income before income taxes increased 28.1% from $367.8 million in the nine months ended September 30, 2021 to a year-to-date record $471.0 million in 2022. We achieved year-to-date record net income of $360.3 million, or $12.59 per diluted share, compared to net income of $283.5 million, or $9.46 per diluted share, in the nine months ended September 30, 2021. Our effective tax rate was 23.5% in 2022's first nine months compared to 22.9% in the same period in 2021. Income before income taxes and net income for the third quarter and first nine months of 2021 was unfavorably impacted by a $9.1 million pre-tax charge for loss on early extinguishment of debt related to the redemption of our 2025 Senior Notes.

During the quarter ended September 30, 2022, we recorded third quarter record total revenue of $1.01 billion, of which $986.8 million was from homes delivered, $6.0 million was from land sales and $20.1 million was from our financial services operations. Revenue from homes delivered increased 12% in 2022's third quarter compared to the same period in 2021 driven primarily by a 13% increase in the average sales price of homes delivered ($57,000 per home delivered), which was mainly in response to robust consumer demand in 2021 and early 2022 when the majority of our homes delivered during the quarter were placed under contract, partially offset by a 1% decrease in the number of homes delivered (19 units). The decline in homes delivered was due primarily to delays in deliveries in our Florida markets related to Hurricane Ian as well as construction and supply chain issues. Revenue from land sales increased $1.1 million from the third quarter of 2021 compared to the prior year. Revenue from our financial services segment decreased 3% to $20.1 million in the third quarter of 2022 as a result of a decrease in loans closed and sold as well as lower margins on loans sold during the period compared to the third quarter of 2021, which provided difficult comparisons for the third quarter of 2022. For the nine months ended September 30, 2022, we recorded year-to-date record total revenue of $2.91 billion, of which $2.84 billion was from homes delivered, $12.9 million was from land sales and $63.6 million was from our financial services operations. Revenue from homes delivered increased 9% in the nine months ended September 30, 2022 compared to the same period in 2021 driven primarily by a 15% increase in the average sales price of homes delivered ($62,000 per home delivered), which was primarily in response to robust consumer demand in 2021 and early 2022 when the majority of our homes delivered during the quarter were placed under contract, partially offset by a 5% decrease in the number of homes delivered (340 units), which was due to construction and supply chain issues that created delays in home closings as well as fewer communities delivering homes and increased cycle time compared to prior year. Revenue from land sales increased $2.2 million from the nine months ended September 30, 2021 due to increased land sales in 2022's first nine months compared to the prior year. Revenue from our financial services segment decreased 20% to $63.6 million in the first nine months of 2022 as a result of a decrease in loans closed and sold in the first nine months of 2022, in addition to lower margins on loans sold during the period compared to the prior year, which was a year-to-date record nine months for our financial services segment.

Total gross margin (total revenue less total land and housing costs) increased $50.2 million in the third quarter of 2022 compared to the third quarter of 2021 as a result of a $50.9 million improvement in the gross margin of our homebuilding operations (housing gross margin and land sales gross margin), offset partially by a $0.7 million decrease in the gross margin of

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our financial services operations. With respect to our homebuilding gross margin, our gross margin on homes delivered (housing gross margin) increased $50.9 million primarily as a result of the 13% increase in average sales price of homes delivered, partially offset by the 1% decrease in the number of homes delivered. Our housing gross margin percentage improved 270 basis points from 22.7% in prior year's third quarter to 25.4% in 2022's third quarter, primarily as a result of increased average sales prices. Our gross margin on land sales (land sale gross margin) remained flat in the third quarter of 2022 compared to the third quarter of 2021. The gross margin of our financial services operations decreased $0.7 million in the third quarter of 2022 compared to the third quarter of 2021 as a result of a decrease in the number of loan originations and lower margins on loans sold, partially offset by an increase in the average loan amount during the third quarter of 2022 compared to the third quarter of 2021. Total gross margin increased $104.0 million in the nine months ended September 30, 2022 compared to the same period in 2021 as a result of a $119.5 million improvement in the gross margin of our homebuilding operations, offset partially by a $15.5 million decline in the gross margin of our financial services operations. With respect to our homebuilding gross margin, our gross margin on homes delivered improved $119.1 million as a result of the 15% increase in the average sales price of homes delivered, partially offset by the 5% decrease in the number of homes delivered. Our housing gross margin percentage improved 240 basis points from 22.4% in prior year’s first nine months to 24.8% in 2022's first nine months, primarily as a result of increased average sales prices. Our gross margin on land sales improved $0.3 million in 2022's first nine months compared to the same period in 2021. The gross margin of our financial services operations decreased $15.5 million in the nine months ended September 30, 2022 compared to the same period in 2021 as a result of decreases in the number of loan originations, in addition to lower margins on loans sold during the first nine months of 2022 compared to the nine months ended September 30, 2021. Our housing gross margin may fluctuate from quarter to quarter depending on the mix of communities delivering homes, due to the variation in margin between different communities.

Headwinds from supply chain issues and regulatory delays have impacted development completions and model openings which have delayed planned community openings. We opened 76 new communities during the nine months ended September 30, 2022 and closed 73 communities.

For the three months ended September 30, 2022, selling, general and administrative expense increased $8.1 million, which partially offset the increase in our total gross margin discussed above, but improved as a percentage of revenue from 10.7% in the third quarter of 2021 to 10.3% in the third quarter of 2022 (a third quarter record). General and administrative expense increased $8.8 million compared to the third quarter of 2021 and also increased as a percentage of revenue from 5.5% in the third quarter of 2021 to 5.8% in the third quarter of 2022. The increase in general and administrative expense was primarily due to a $5.2 million increase in compensation-related expenses due to our increased headcount and our strong financial performance during the quarter, a $1.6 million increase in land-related costs and a $2.0 million increase in miscellaneous expenses. Partially offsetting this increase was a decrease in selling expense of $0.7 million from 2021's third quarter. Selling expense improved as a percentage of revenue to 4.6% in 2022's third quarter from 5.2% for the same period in 2021. Variable selling expense for sales commissions contributed $1.8 million to the decrease due to the lower number of homes delivered during the third quarter of 2022, which was partially offset by a $1.1 million increase in non-variable selling expense primarily related to increased costs associated with our sales offices and models. For the nine months ended September 30, 2022, selling, general and administrative expense increased $9.2 million, which partially offset the increase in our gross margin dollars discussed above, but declined as a percentage of revenue from 10.7% in the nine months ended September 30, 2021 to 10.2% in the nine months ended September 30, 2022. General and administrative expense increased $18.5 million compared to the nine months ended September 30, 2021 and also increased as a percentage of revenue from 5.3% in the nine months ended September 30, 2021 to 5.6% in the nine months ended September 30, 2022. The dollar increase in general and administrative expense was primarily due to a $10.1 million increase in compensation-related expenses due to our increased headcount and our strong financial performance during the period, a $2.4 million increase in land-related costs primarily due to write-offs of abandoned land transaction costs and a $6.0 million increase in miscellaneous expenses. Selling expense decreased $9.3 million from the nine months ended September 30, 2021 and improved as a percentage of revenue to 4.6% in 2022's first nine months from 5.3% for the same period in 2021, partially offsetting the increase in general and administrative expense above. Variable selling expense for sales commissions contributed $10.7 million to the decrease due to the lower number of homes delivered during the first nine months of 2022, which was partially offset by a $1.4 million increase in non-variable selling expense primarily related to increased costs associated with our sales offices and models.

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Outlook

Housing market conditions began to decline in the latter half of the second quarter of 2022, and this decline worsened in the third quarter of 2022, resulting in significantly weakened overall demand for new homes. We attribute this decline in demand to various macroeconomic conditions, including steep increases in mortgage rates since January 2022, substantial increases in home prices over the past two years, the high rate of inflation, and economic recession concerns of our potential homebuyers. The extent to which these factors will impact our business is highly uncertain and unpredictable, and our past performance, including the first nine months of 2022, should not be considered indicative of our future results on any metric or set of metrics, given the uncertainty in the U.S. economy.

Despite these negative economic developments, we believe that the homebuilding industry will continue to benefit over the long term from a continued undersupply of available homes, positive consumer demographics, scarcity of rentals and increasing rent prices.

We believe that we are well positioned to manage through these challenging economic conditions with our affordable product offerings, lot supply and planned new community openings. We remain sensitive to the changes in market conditions, and continue to focus on controlling overhead leverage, carefully managing our investment in land and land development spending and offering incentives, including interest rate buy-downs, to retain our backlog and improve our sales pace. Our strong balance sheet and liquidity position should also provide us with the flexibility to operate effectively through changing economic conditions. However, we cannot provide any assurances that the strategic business objectives listed below will remain successful, and we may need to adjust elements of our strategy to effectively address evolving market conditions.

We expect to continue to emphasize the following strategic business objectives throughout the remainder of 2022 and into 2023:

•managing our land spend and inventory levels;

•opening new communities;

•maintaining a strong balance sheet and liquidity levels;

•expanding the availability of our more affordable Smart Series homes; and

•emphasizing customer service, product quality and design, and premier locations.

During the nine months ended September 30, 2022, we invested $289.6 million in land acquisitions and $349.2 million in land development. We continue to closely review all of our land acquisition and land development spending and monitor our ongoing pace of home sales and deliveries, and we may adjust our land and investment spend accordingly. As a result of the unprecedented current market conditions with municipality delays, extended cycle times, and rising mortgage interest rates impacting sales, we are not providing land spending estimates at this time.

We ended the third quarter of 2022 with approximately 46,100 lots under control, which represents approximately a 5.5-year supply of lots based on the past twelve months of homes delivered, including certain lots that we anticipate selling to third parties. This represents a 7% increase from our approximately 43,000 lots under control at the end of last year’s third quarter. We opened 76 communities and closed 73 communities in the nine months ended September 30, 2022, ending the third quarter with 178 active communities, compared to 176 at the end of last year’s third quarter. 87 of our active communities at the end of the third quarter of 2022 offered our more affordable Smart Series designs, which are primarily designed for first-time homebuyers.

Although the timing of opening new communities and closing existing communities is subject to substantial variation, we expect to open a record number of new communities in 2022, growing our community count by approximately 10% by the end of 2022.

We believe that our ability to design and develop attractive homes in desirable locations at an affordable cost, and to grow our business while also leveraging our fixed costs, has enabled us to maintain and improve our strong financial results. While we believe 2023 will be a very challenging year compared to the past few years of historically strong market conditions, we believe that we are well positioned with a strong balance sheet and backlog to manage through the current economic environment and that we will achieve another year of strong results in 2022. However, the challenging macroeconomic conditions described above could materially and negatively affect our performance in 2023, particularly when compared to our performance over the past few years.

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The following table shows, by segment, revenue; gross margin; selling, general and administrative expense; operating income (loss); and interest expense (income) for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Revenue:
Northern homebuilding	$	415,741	$	400,564	$	1,242,341	$	1,151,349
Southern homebuilding	577,088		482,960		1,608,468		1,463,707
Financial services (a)	20,099		20,795		63,584		79,079
Total revenue	$	1,012,928	$	904,319	$	2,914,393	$	2,694,135
Gross margin:
Northern homebuilding	$	89,295	$	88,209	$	260,695	$	246,674
Southern homebuilding	162,521		112,750		445,032		339,560
Financial services (a)	20,099		20,795		63,584		79,079
Total gross margin	$	271,915	$	221,754	$	769,311	$	665,313
Selling, general and administrative expense:
Northern homebuilding	$	29,672	$	29,200	$	86,778	$	86,699
Southern homebuilding	43,210		39,793		121,404		121,324
Financial services (a)	10,866		9,975		30,810		28,698
Corporate	20,872		17,566		57,254		50,361
Total selling, general and administrative expense	$	104,620	$	96,534	$	296,246	$	287,082
Operating income (loss):
Northern homebuilding	$	59,623	$	59,009	$	173,917	$	159,975
Southern homebuilding	119,311		72,957		323,628		218,236
Financial services (a)	9,233		10,820		32,774		50,381
Less: Corporate selling, general and administrative expense	(20,872)		(17,566)		(57,254)		(50,361)
Total operating income	$	167,295	$	125,220	$	473,065	$	378,231
Interest expense (income):
Northern homebuilding	$	2	$	—	$	2	$	76
Southern homebuilding	(651)		(381)		(653)		(224)
Financial services (a)	1,350		885		3,169		2,777
Corporate	—		(578)		(453)		(1,075)
Total interest expense (income)	$	701	$	(74)	$	2,065	$	1,554
Loss on early extinguishment of debt	$	—	$	9,072	$	—	$	9,072
Other loss (income)	—		50		(17)		(145)
Income before income taxes	$	166,594	$	116,172	$	471,017	$	367,750

(a)Our financial services operational results should be viewed in connection with our homebuilding business as its operations originate loans and provide title services primarily for our homebuyers, with the exception of a small amount of mortgage refinancing.

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The following tables show total assets by segment at September 30, 2022 and December 31, 2021:

	At September 30, 2022
(In thousands)	Northern		Southern			Corporate, Financial Services and Unallocated		Total
Deposits on real estate under option or contract	$	6,939	$	49,738		$	—	$	56,677
Inventory (a)	1,165,675		1,794,383			—		2,960,058
Investments in joint venture arrangements	—		51,700			—		51,700
Other assets	41,927		95,321		(b)	382,230		519,478
Total assets	$	1,214,541	$	1,991,142		$	382,230	$	3,587,913

	At December 31, 2021
(In thousands)	Northern		Southern			Corporate, Financial Services and Unallocated		Total
Deposits on real estate under option or contract	$	4,123	$	48,795		$	—	$	52,918
Inventory (a)	987,258		1,412,258			—		2,399,516
Investments in joint venture arrangements	—		57,121			—		57,121
Other assets	37,527		63,844		(b)	628,927		730,298
Total assets	$	1,028,908	$	1,582,018		$	628,927	$	3,239,853

(a)Inventory includes: single-family lots, land and land development costs; land held for sale; homes under construction; model homes and furnishings; community development district infrastructure; and consolidated inventory not owned.

(b)Includes development reimbursements from local municipalities.

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Reportable Segments

The following table presents, by reportable segment, selected operating and financial information as of and for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2022		2021		2022		2021
Northern Region
Homes delivered	850		876		2,610		2,638
New contracts, net	466		772		2,378		2,962
Backlog at end of period	1,658		2,139		1,658		2,139
Average sales price of homes delivered	$	489	$	454	$	475	$	435
Average sales price of homes in backlog	$	517	$	475	$	517	$	475
Aggregate sales value of homes in backlog	$	856,410	$	1,014,981	$	856,410	$	1,014,981
Housing revenue	$	415,740	$	397,922	$	1,240,406	$	1,146,977
Land sale revenue	$	1	$	2,642	$	1,935	$	4,372
Operating income homes (a)	$	59,621	$	58,225	$	173,758	$	158,859
Operating income land	$	2	$	784	$	159	$	1,116
Number of average active communities	90		82		91		85
Number of active communities, end of period	91		85		91		85
Southern Region
Homes delivered	1,176		1,169		3,372		3,684
New contracts, net	883		1,192		3,305		4,378
Backlog at end of period	2,878		3,268		2,878		3,268
Average sales price of homes delivered	$	486	$	411	$	474	$	396
Average sales price of homes in backlog	$	543	$	468	$	543	$	468
Aggregate sales value of homes in backlog	$	1,562,881	$	1,530,983	$	1,562,881	$	1,530,983
Housing revenue	$	571,103	$	480,680	$	1,597,506	$	1,457,410
Land sale revenue	$	5,985	$	2,280	$	10,962	$	6,297
Operating income homes (a)	$	117,963	$	72,396	$	320,879	$	216,831
Operating income land	$	1,348	$	561	$	2,749	$	1,405
Number of average active communities	83		94		83		100
Number of active communities, end of period	87		91		87		91
Total Homebuilding Regions
Homes delivered	2,026		2,045		5,982		6,322
New contracts, net	1,349		1,964		5,683		7,340
Backlog at end of period	4,536		5,407		4,536		5,407
Average sales price of homes delivered	$	487	$	430	$	474	$	412
Average sales price of homes in backlog	$	533	$	471	$	533	$	471
Aggregate sales value of homes in backlog	$	2,419,291	$	2,545,964	$	2,419,291	$	2,545,964
Housing revenue	$	986,843	$	878,602	$	2,837,912	$	2,604,387
Land sale revenue	$	5,986	$	4,922	$	12,897	$	10,669
Operating income homes (a)	$	177,584	$	130,621	$	494,637	$	375,690
Operating income land	$	1,350	$	1,345	$	2,908	$	2,521
Number of average active communities	173		176		174		185
Number of active communities, end of period	178		176		178		176

(a)Includes the effect of total homebuilding selling, general and administrative expense for the region as disclosed in the first table set forth in this “Outlook” section.

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2022		2021		2022		2021
Financial Services
Number of loans originated	1,263		1,554		3,877		4,833
Value of loans originated	$	486,588	$	542,555	$	1,482,628	$	1,630,588
Revenue	$	20,099	$	20,795	$	63,584	$	79,079
Less: Selling, general and administrative expenses	10,866		9,975		30,810		28,698
Less: Interest expense	1,350		885		3,169		2,777
Income before income taxes	$	7,883	$	9,935	$	29,605	$	47,604

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A home is included in “new contracts” when our standard sales contract is executed. “Homes delivered” represents homes for which the closing of the sale has occurred. “Backlog” represents homes for which the standard sales contract has been executed, but which are not included in homes delivered because closings for these homes have not yet occurred as of the end of the period specified.

The composition of our homes delivered, new contracts, net and backlog is constantly changing and may be based on a dissimilar mix of communities between periods as new communities open and existing communities wind down. Further, home types and individual homes within a community can range significantly in price due to differing square footage, option selections, lot sizes and quality and location of lots. These variations may result in a lack of meaningful comparability between homes delivered, new contracts, net and backlog due to the changing mix between periods.

Cancellation Rates

The following table sets forth the cancellation rates for each of our homebuilding segments for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Northern	15.6	%	8.2	%	10.1	%	6.7	%
Southern	17.7	%	7.5	%	11.6	%	7.7	%
Total cancellation rate	17.0	%	7.8	%	11.0	%	7.3	%

Seasonality

Typically, our homebuilding operations experience significant seasonality and quarter-to-quarter variability in homebuilding activity levels. In general, homes delivered increase substantially in the second half of the year compared to the first half of the year. We believe that this seasonality reflects the tendency of homebuyers to shop for a new home in the spring with the goal of closing in the fall or winter, as well as the scheduling of construction to accommodate seasonal weather conditions. Our financial services operations also experience seasonality because loan originations correspond with the delivery of homes in our homebuilding operations.

Year Over Year Comparison

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Northern Region. During the three months ended September 30, 2022, homebuilding revenue in our Northern region increased $15.1 million, from $400.6 million in the third quarter of 2021 to $415.7 million in the third quarter of 2022. This 4% increase in homebuilding revenue was primarily the result of an 8% increase in the average sales price of homes delivered ($35,000 per home delivered), which was primarily in response to robust consumer demand in 2021 and early 2022 when the majority of our homes delivered during the quarter were placed under contract, offset partially by a 3% decrease in the number of homes delivered (26 units) due to construction and supply chain issues that delayed closings. Operating income in our Northern region increased $0.6 million from $59.0 million in the third quarter of 2021 to $59.6 million during the quarter ended September 30, 2022. This increase in operating income was the result of a $1.1 million improvement in our gross margin partially offset by a $0.5 million increase in selling, general and administrative expense. With respect to our homebuilding gross margin, our housing gross margin improved $1.9 million primarily due to the increase in average sales price of homes delivered, offset partially by the decrease in the number of homes delivered noted above. Our housing gross margin percentage declined 50 basis points to 21.5% in the third quarter of 2022 from 22.0% in the prior year’s third quarter. The decline in housing gross margin percentage was primarily due to increased construction and lot costs, offset partially by the increase in average sales price of homes delivered compared to prior year. Our land sale gross margin declined $0.8 million in the third quarter of 2022 compared to the same period in 2021 due to fewer land sales during the period.

Selling, general and administrative expense increased $0.5 million, from $29.2 million for the quarter ended September 30, 2021 to $29.7 million for the quarter ended September 30, 2022, but improved as a percentage of revenue to 7.1% in 2022's third quarter from 7.3% in 2021's third quarter. The increase in selling, general and administrative expense was primarily attributable to a $0.5 million increase in land related expenses.

During the three months ended September 30, 2022, we experienced a 40% decrease in new contracts in our Northern region, from 772 in the third quarter of 2021 to 466 in the third quarter of 2022. Homes in backlog decreased 22% from 2,139 homes at September 30, 2021 to 1,658 homes at September 30, 2022. The decreases in new contracts and backlog were primarily due to

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decreased demand as a result of the macroeconomic conditions described above in our Overview section, in addition to difficult comps versus last year. Average sales price in backlog increased to $517,000 at September 30, 2022 compared to $475,000 at September 30, 2021. During the third quarter of 2022, we opened five new communities in our Northern region compared to 14 during the third quarter of 2021. Our monthly absorption rate in our Northern region declined to 1.7 per community in the third quarter of 2022 compared to 3.1 per community in 2021's third quarter due to the decline in new contracts during the quarter.

Southern Region. During the three month period ended September 30, 2022, homebuilding revenue in our Southern region increased $94.1 million, from $483.0 million in the third quarter of 2021 to $577.1 million in the third quarter of 2022. This 19% increase in homebuilding revenue was the result of an 18% increase in the average sales price of homes delivered ($75,000 per home delivered) and a 1% increase in the number of homes delivered (7 units) which was primarily in response to robust consumer demand in 2021 and early 2022 when the majority of our homes delivered during the quarter were placed under contract, despite the impact of Hurricane Ian on our Florida markets which delayed a number of our deliveries for the quarter. Operating income in our Southern region increased $46.3 million from $73.0 million in the third quarter of 2021 to $119.3 million during the quarter ended September 30, 2022. This increase in operating income was the result of a $49.8 million improvement in our gross margin, offset partially by a $3.4 million increase in selling, general, and administrative expense. With respect to our homebuilding gross margin, our housing gross margin improved $49.0 million, due primarily to the increase in average sales price of homes delivered in addition to the increase in the number of homes delivered noted above. Our housing gross margin percentage improved from 23.3% in prior year’s third quarter to 28.2% in the third quarter of 2022, largely due to the increase in average sales price of homes delivered compared to prior year. Our land sale gross margin improved $0.8 million in the third quarter of 2022 compared to the third quarter of 2021 due to increased land sales during the period.

Selling, general and administrative expense increased $3.4 million from $39.8 million in the third quarter of 2021 to $43.2 million in the third quarter of 2022 but declined as a percentage of revenue to 7.5% from 8.2% in the third quarter of 2021. The increase in selling, general and administrative expense was attributable to a $0.4 million increase in selling expense primarily due to an increase in variable selling expenses resulting from increases in sales commissions produced by the higher number of homes delivered. The increase in selling, general and administrative expense was also attributable to a $3.0 million increase in general and administrative expense, which was primarily related to a $1.4 million increase in compensation-related expenses due to our increased headcount and our strong financial performance during the period, a $1.2 million increase in land-related costs, and a $0.4 million increase in miscellaneous expenses.

During the three months ended September 30, 2022, we experienced a 26% decrease in new contracts in our Southern region, from 1,192 in the third quarter of 2021 to 883 in the third quarter of 2022. Homes in backlog decreased 12% from 3,268 homes at September 30, 2021 to 2,878 homes at September 30, 2022. The decreases in new contracts and backlog were primarily due to our decreased community count compared to prior year and decreased demand as a result of the macroeconomic conditions described above in our Overview section. Average sales price in backlog increased to $543,000 at September 30, 2022 from $468,000 at September 30, 2021. During the three months ended September 30, 2022, we opened 20 new communities in our Southern region compared to opening 12 communities during 2021's third quarter. Our monthly absorption rate in our Southern region declined slightly to 3.6 per community in the third quarter of 2022 compared to 4.3 per community in the third quarter of 2021 as a result of the decline in our average communities and the decrease in the number of new contracts during the quarter compared to prior year.

Financial Services. Revenue from our mortgage and title operations decreased 3% to $20.1 million in the third quarter of 2022 from $20.8 million in the third quarter of 2021 due to a 19% decrease in the number of loan originations from 1,554 in 2021's third quarter to 1,263 in the third quarter of 2022 and lower margins on loans sold during the period compared to prior year’s third quarter, partially offset by an increase in the average loan amount from $349,000 in the quarter ended September 30, 2021 to $385,000 in the quarter ended September 30, 2022.

Our financial services segment experienced a $1.6 million decrease in operating income in the third quarter of 2022 compared to 2021's third quarter, which was primarily due to the decrease in revenue discussed above in addition to a $0.9 million increase in selling, general and administrative expense compared to the third quarter of 2021, which was primarily the result of an increase in compensation-related expenses due to our increase in employee headcount.

At September 30, 2022, M/I Financial provided financing services in all of our markets. Approximately 76% of our homes delivered during the third quarter of 2022 were financed through M/I Financial, compared to 85% in the third quarter of 2021. Capture rate is influenced by financing availability and competition in the mortgage market, and can fluctuate from quarter to quarter.

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Corporate Selling, General and Administrative Expense. Corporate selling, general and administrative expense increased $3.3 million from $17.6 million for the third quarter of 2021 to $20.9 million for the third quarter of 2022. This increase primarily resulted from a $2.3 million increase in compensation-related expenses due to increased headcount and a $1.0 million increase in miscellaneous expenses.

Interest Expense (Income). Interest expense for the Company increased from interest income of $0.1 million for the three months ended September 30, 2021 to interest expense of $0.7 million for the three months ended September 30, 2022. This increase in interest expense was primarily due to an increase in our weighted average borrowings from $728.2 million in 2021's third quarter to $835.0 million in 2022's third quarter.

Loss on Early Extinguishment of Debt. We recognized a loss on early extinguishment of debt of $9.1 million during the quarter ended September 30, 2021 as a result of the write-off of unamortized debt issuance costs and a prepayment premium associated with the redemption of our 2025 Senior Notes.

Income Taxes. Our overall effective tax rate was 21.0% for the three months ended September 30, 2022 and 21.7% for the three months ended September 30, 2021. The decrease in the effective rate from the three months ended September 30, 2021 was due to an increase in tax benefit from energy efficient home credits for 2022.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Northern Region. During the nine months ended September 30, 2022, homebuilding revenue in our Northern region increased $91.0 million, from $1.15 billion in the nine months ended September 30, 2021 to $1.24 billion in the nine months ended September 30, 2022. This 8% increase in homebuilding revenue was primarily the result of a 9% increase in the average sales price of homes delivered ($40,000 per home delivered), offset partially by a 1% decrease in the number of homes delivered (28 units) and a $2.4 million decrease in land sale revenue. Operating income in our Northern region increased $13.9 million, from $160.0 million during the nine months ended September 30, 2021 to $173.9 million during the nine months ended September 30, 2022. The increase in operating income was primarily the result of a $14.0 million increase in our gross margin. With respect to our homebuilding gross margin, our housing gross margin improved $15.0 million, primarily due to the increase in the average sale price of homes delivered. Our housing gross margin percentage declined 40 basis points from 21.4% in the nine months ended September 30, 2021 to 21.0% for the same period in 2022, primarily due to increased construction and lot costs. Our land sale gross margin decreased by $1.0 million in the nine months ended September 30, 2022 compared to the same period in 2021 due to fewer land sales during the period.

Selling, general and administrative expense increased $0.1 million, from $86.7 million for the nine months ended September 30, 2021 to $86.8 million for the nine months ended September 30, 2022, and declined as a percentage of revenue to 7.0% in the first nine months of 2022 compared to 7.5% in the same period in 2021. The increase in selling, general and administrative expense was attributable to a $3.4 million increase in general and administrative expense, which was primarily related to an increase in compensation-related expenses due to our increased headcount and our strong financial performance during the period, partially offset by a $3.3 million decrease in selling expense primarily due to a decrease in variable selling expenses resulting from decreases in sales commissions produced by the lower number of homes delivered.

During the nine months ended September 30, 2022, we experienced a 20% decrease in new contracts in our Northern region, from 2,962 in the nine months ended September 30, 2021 to 2,378 in the first nine months of 2022. Homes in backlog also decreased 22% from 2,139 at September 30, 2021 to 1,658 homes at September 30, 2022. The decreases in new contracts and backlog were partially due to the limitations we imposed on sales in certain of our communities during the first half of the period as well as decreased demand beginning in the latter part of 2022’s second quarter as a result of the macroeconomic conditions described above in our Overview section. Average sales price in backlog increased to $517,000 at September 30, 2022 compared to $475,000 at September 30, 2021. During the nine months ended September 30, 2022, we opened 25 new communities in our Northern region compared to opening 32 during the same period in 2021. Our monthly absorption rate in our Northern region declined to 2.9 per community in the nine months ended September 30, 2022 from 3.9 per community in the same period in 2021 as a result of the decrease in the number of new contracts during the period compared to prior year.

Southern Region. During the nine months ended September 30, 2022, homebuilding revenue in our Southern region increased $144.8 million from $1.46 billion in the nine months ended September 30, 2021 to $1.61 billion in the nine months ended September 30, 2022. This 10% increase in homebuilding revenue was the result of a 20% increase in the average sales price of homes delivered ($78,000 per home delivered) and a $4.7 million increase in land sale revenue, offset partially by an 8% decrease in the number of homes delivered (312 units) which was in part due to the impact of Hurricane Ian on our Florida markets which delayed a number of our deliveries during the third quarter. Operating income in our Southern region increased $105.4 million from $218.2 million in the nine months ended September 30, 2021 to $323.6 million during the nine months

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ended September 30, 2022. This increase in operating income was the result of a $105.5 million improvement in our gross margin, offset partially by a $0.1 million increase in selling, general, and administrative expense. With respect to our homebuilding gross margin, our gross margin on homes delivered improved $104.1 million, due primarily to the increase in average sale price of homes delivered. Our housing gross margin percentage improved 450 basis points from 23.2% in the nine months ended September 30, 2021 to 27.7% in the same period in 2022, largely due to the increase in average sales price of homes delivered compared to prior year. Our land sale gross margin improved $1.3 million in the nine months ended September 30, 2022 compared to the same period in 2021.

Selling, general and administrative expense increased $0.1 million from $121.3 million in the nine months ended September 30, 2021 to $121.4 million in the nine months ended September 30, 2022 but declined as a percentage of revenue to 7.5% from 8.3% for the nine months ended September 30, 2021. The increase in selling, general and administrative expense was attributable to a $6.4 million increase in general and administrative expense, which was primarily related to a $2.7 million increase in land-related expenses primarily due to write-offs of abandoned land transaction costs, a $2.5 million increase in compensation-related expenses due to our increased headcount and our strong financial performance, and a $1.2 million increase in miscellaneous expenses. The increase in general and administrative expense was partially offset by a $6.3 million decrease in selling expense primarily due to a decrease in variable selling expenses resulting from decreases in sales commissions produced by the lower number of homes delivered.

During the nine months ended September 30, 2022, we experienced a 25% decrease in new contracts in our Southern region, from 4,378 in the nine months ended September 30, 2021 to 3,305 in the first nine months of 2022. Homes in backlog decreased 12% from 3,268 homes at September 30, 2021 to 2,878 homes at September 30, 2022. The decreases in new contracts and backlog were primarily due to the decrease in our average number of communities compared to prior year, the limitations we imposed on sales in certain of our communities during the first half of the period, and decreased demand beginning in the latter part of 2022’s second quarter as a result of the macroeconomic conditions described above in our Overview section. Average sales price in backlog increased from $468,000 at September 30, 2021 to $543,000 at September 30, 2022. During the nine months ended September 30, 2022, we opened 51 communities in our Southern region, compared to opening 31 during the nine months ended September 30, 2021. Our monthly absorption rate in our Southern region declined to 4.4 per community in the nine months ended September 30, 2022 from 4.9 per community in the nine months ended September 30, 2021 as a result of the decline in our average communities and the decrease in the number of new contracts during the period compared to prior year.

Financial Services. Revenue from our mortgage and title operations decreased 20% from $79.1 million in the nine months ended September 30, 2021 to $63.6 million in the nine months ended September 30, 2022 due to a 20% decrease in the number of loan originations from 4,833 in the nine months ended September 30, 2021 to 3,877 in the nine months ended September 30, 2022 and lower margins on loans sold during the period compared to 2021's first nine months due to increased competition for sales of loans, offset partially by an increase in the average loan amount from $337,000 in the nine months ended September 30, 2021 to $382,000 in the nine months ended September 30, 2022.

Our financial services segment experienced a $17.6 million decrease in operating income in the nine months ended September 30, 2022 compared to the same period in 2021, which was primarily due to the decrease in revenue discussed above, and a $2.1 million increase in selling, general and administrative expense compared to the nine months ended September 30, 2021. The increase in selling, general and administrative expense was primarily attributable to an increase in compensation-related expenses due to an increase in employee headcount.

At September 30, 2022, M/I Financial provided financing services in all of our markets. Approximately 78% of our homes delivered during the nine months ended September 30, 2022 were financed through M/I Financial, compared to 84% in the nine months ended September 30, 2021. Capture rate is influenced by financing availability and can fluctuate from quarter to quarter.

Corporate Selling, General and Administrative Expense. Corporate selling, general and administrative expense increased $6.9 million from $50.4 million for the nine months ended September 30, 2021 to $57.3 million for the nine months ended September 30, 2022. The increase was primarily due to a $3.4 million increase in compensation-related expenses due to our increased headcount and our strong financial performance and a $3.5 million increase in other miscellaneous expenses.

Interest Expense - Net. Interest expense for the Company increased from $1.6 million in the nine months ended September 30, 2021 to $2.1 million in the nine months ended September 30, 2022. This increase in interest expense was primarily due to an increase in our weighted average borrowings from $712.9 million in 2021's first nine months to $806.5 million in 2022's first nine months.

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Loss on Early Extinguishment of Debt. We recognized a loss on early extinguishment of debt of $9.1 million during the nine months ended September 30, 2021 as a result of the write-off of unamortized debt issuance costs and a prepayment premium associated with the redemption of our 2025 Senior Notes.

Income Taxes. Our overall effective tax rate was 23.5% for the nine months ended September 30, 2022 and 22.9% for the nine months ended September 30, 2021. The increase in the effective rate from the nine months ended September 30, 2021 was due to a decrease in tax benefit from equity compensation for 2022.

LIQUIDITY AND CAPITAL RESOURCES

Overview of Capital Resources and Liquidity.

At September 30, 2022, we had $67.8 million of cash, cash equivalents and restricted cash, with $67.0 million of this amount comprised of unrestricted cash and cash equivalents, which represents a $169.0 million decrease in unrestricted cash and cash equivalents from December 31, 2021. Our principal uses of cash for the nine months ended September 30, 2022 were investment in land and land development, construction of homes, mortgage loan originations, investment in joint ventures, operating expenses, short-term working capital, and debt service requirements, including the repayment of amounts outstanding under our credit facilities, and the repurchase of $55.3 million of our outstanding common shares under our 2021 Share Repurchase Program (as defined below) during the nine months ended September 30, 2022. In order to fund these uses of cash, we used proceeds from home deliveries, as well as excess cash balances, borrowings under our credit facilities, and other sources of liquidity.

The Company is a party to three primary credit agreements: (1) a $550 million unsecured revolving credit facility, dated July 18, 2013, as amended (the “Credit Facility”), with M/I Homes, Inc. as borrower and guaranteed by the Company’s wholly owned homebuilding subsidiaries; (2) a $200 million secured mortgage warehousing agreement, dated May 27, 2022, with M/I Financial as borrower (the “MIF Mortgage Warehousing Agreement”); and (3) a $90 million mortgage repurchase agreement, dated October 30, 2017, as amended most recently on October 24, 2022, with M/I Financial as borrower (the “MIF Mortgage Repurchase Facility”).

As of September 30, 2022, we had outstanding notes payable (consisting primarily of notes payable for our financial services operations, the 2030 Senior Notes and the 2028 Senior Notes) with varying maturities in an aggregate principal amount of $889.4 million, with $189.4 million payable within 12 months. Future interest payments associated with these notes payable totaled $198.4 million as of September 30, 2022, with $16.4 million payable within 12 months.

As of September 30, 2022, there were no borrowings outstanding and $96.6 million of letters of credit outstanding under our $550 million Credit Facility, leaving $453.4 million available. We expect to continue managing our balance sheet and liquidity carefully in 2022 by managing our spending on land acquisition and development and construction of inventory homes, as well as overhead expenditures, relative to our ongoing volume of home deliveries, and we expect to meet our current and anticipated cash requirements in 2022 from cash receipts, excess cash balances and availability under our credit facilities.

During the nine months ended September 30, 2022, we delivered 5,982 homes, started 6,693 homes, and spent $289.6 million on land purchases and $349.2 million on land development.

We are selectively acquiring and developing lots in our markets to replenish our lot supply and will continue to monitor market conditions and our pace of home sales and deliveries and adjust our land spending accordingly. Pursuant to our land option agreements, as of September 30, 2022, we had a total of 21,155 lots under contract, with an aggregate purchase price of approximately $982.4 million, to be acquired during the remainder of 2022 through 2029.

Our off-balance sheet arrangements relating to our homebuilding operations include joint venture arrangements, land option agreements, guarantees and indemnifications associated with acquiring and developing land, and the issuance of letters of credit and completion bonds. We use these arrangements to secure the most desirable lots on which to build homes for our homebuyers in a manner that we believe reduces the overall risk to the Company.

Operating Cash Flow Activities. During the nine-month period ended September 30, 2022, we used $14.1 million of cash in operating activities, compared to using $34.3 million of cash in operating activities during the nine months ended September 30, 2021. The cash used in operating activities in the first nine months of 2022 was primarily a result of a $533.0 million increase in inventory and an increase in other assets of $37.4 million, offset, in part, by net income of $360.3 million, $85.1 million of proceeds from the sale of mortgage loans net of mortgage loan originations, and an increase in accounts payable, customer deposits and other liabilities totaling $91.8 million. The cash used in operating activities in the first nine months of 2021 was primarily a result of a $412.2 million increase in inventory and a decrease in accrued compensation and

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other liabilities of $9.6 million offset, in part, by net income of $283.5 million, $16.5 million of proceeds from the sale of mortgage loans net of mortgage loan originations, and an increase in accounts payable and customer deposits totaling $84.3 million.

Investing Cash Flow Activities. During the nine months ended September 30, 2022, we used $19.1 million of cash from investing activities, compared to using $31.9 million of cash from investing activities during the nine months ended September 30, 2021. The cash used from investing activities in the first nine months of 2022 was primarily a result of a $17.4 million increase in our investment in joint venture arrangements. The cash used from investing activities during the nine months ended September 30, 2021 was primarily a result of a $34.7 million increase in our investment in joint venture arrangements, partially offset by $4.3 million of proceeds from the sale of a portion of our mortgage servicing rights in the nine months ended September 30, 2021.

Financing Cash Flow Activities. During the nine months ended September 30, 2022, we used $135.4 million of cash from financing activities, compared to generating $26.6 million of cash during the nine months ended September 30, 2021. The cash used in financing activities in 2022 was primarily due to repayments of $76.8 million (net of proceeds from borrowings) under our two M/I Financial credit facilities in addition to the repurchase of $55.3 million of our outstanding common shares during the nine months ended September 30, 2022. The cash generated from financing activities in first nine months of 2021 was primarily due to the issuance of $300.0 million of our 2030 Senior Notes, net of debt issuance costs, for $296.0 million, offset partially by the redemption of all $250.0 million of our then outstanding 2025 Senior Notes, and the repurchase of $15.5 million of our outstanding common shares during the nine months ended September 30, 2021.

On July 28, 2021, the Company announced that its Board of Directors authorized a new share repurchase program pursuant to which the Company may purchase up to $100 million of its outstanding common shares (the “2021 Share Repurchase Program”). On February 17, 2022, the Company announced that its Board of Directors approved an increase to its 2021 Share Repurchase Program, for a total of $200 million authorized for repurchases. During the nine months ended September 30, 2022, the Company repurchased 1.2 million outstanding common shares with an aggregate purchase price of $55.3 million under the 2021 Share Repurchase Program which was funded with cash on hand. As of September 30, 2022, the Company is authorized to repurchase an additional $93.1 million of outstanding common shares under the 2021 Share Repurchase Program (see Note 12 to our financial statements for more information).

The timing and amount of any future purchases under the 2021 Share Repurchase Program will be determined by the Company’s management at its discretion based on a variety of factors, including the market price of the Company’s common shares, business considerations, general market and economic conditions and legal requirements.

At September 30, 2022 and December 31, 2021, our ratio of homebuilding debt to capital was 26% and 30%, respectively, calculated as the carrying value of our outstanding homebuilding debt (which consists of borrowings under our Credit Facility, our 2030 Senior Notes, our 2028 Senior Notes, and Notes Payable-Other) divided by the sum of the carrying value of our outstanding homebuilding debt plus shareholders’ equity. We believe that this ratio provides useful information for understanding our financial position and the leverage employed in our operations, and for comparing us with other homebuilders.

We fund our operations with cash flows from operating activities, including proceeds from home deliveries, land sales and the sale of mortgage loans. We believe that these sources of cash, along with our balance of unrestricted cash and borrowings available under our credit facilities, will be sufficient to fund our currently anticipated working capital needs, investment in land and land development, construction of homes, operating expenses, planned capital spending, and debt service requirements for at least the next twelve months. In addition, we routinely monitor current and anticipated operational and debt service requirements, financial market conditions, and credit relationships, and we may choose to seek additional capital by issuing new debt and/or equity securities or engaging in other financial transactions to strengthen our liquidity or our long-term capital structure. The financing needs of our homebuilding and financial services operations depend on anticipated sales and home delivery volume in the current year as well as future years, inventory levels and related turnover, forecasted land and lot purchases, debt maturity dates, and other factors. If we seek such additional capital or engage in such other financial transactions, there can be no assurance that we would be able to obtain such additional capital or consummate such other financial transactions on terms acceptable to us, if at all, and such additional equity or debt financing or other financial transactions could dilute the interests of our existing shareholders, add operational limitations and/or increase our interest costs.

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Included in the table below is a summary of our available sources of cash from the Credit Facility, the MIF Mortgage Warehousing Agreement and the MIF Mortgage Repurchase Facility as of September 30, 2022:

(In thousands)	Expiration Date	Outstanding Balance		Available Amount
Notes payable – homebuilding (a)	(a)	$	—	$	453,371
Notes payable – financial services (b)	(b)	$	189,371	$	2,334

(a)The available amount under the Credit Facility is computed in accordance with the borrowing base calculation under the Credit Facility, which applies various advance rates for different categories of inventory and totaled $1.53 billion of availability for additional senior debt at September 30, 2022. As a result, the full $550 million commitment amount of the facility was available, less any borrowings and letters of credit outstanding. There were no borrowings outstanding and $96.6 million of letters of credit outstanding at September 30, 2022, leaving $453.4 million available. The Credit Facility has an expiration date of July 18, 2025.

(b)The available amount is computed in accordance with the borrowing base calculations under the MIF Mortgage Warehousing Agreement and the MIF Mortgage Repurchase Facility, each of which may be increased by pledging additional mortgage collateral, not to exceed the maximum aggregate commitment amount of M/I Financial’s warehousing agreements, which was $365 million as of September 30, 2022. The MIF Mortgage Warehousing Agreement has an expiration date of May 26, 2023. Subsequent to the quarter ended September 30, 2022, M/I Financial entered into an amendment to the MIF Mortgage Repurchase Facility which extended its term for an additional year to October 23, 2023.

Notes Payable - Homebuilding.  

Homebuilding Credit Facility. The Credit Facility provides for an aggregate commitment amount of $550 million and also includes an accordion feature pursuant to which the maximum borrowing availability may be increased to an aggregate of $700 million, subject to obtaining additional commitments from lenders. The Credit Facility matures on July 18, 2025. Interest on amounts borrowed under the Credit Facility is payable at a rate which is adjusted daily and is equal to the sum of one-month LIBOR (subject to a floor of 0.25%) plus a margin of 175 basis points (subject to adjustment in subsequent quarterly periods based on the Company’s leverage ratio). The Credit Facility includes a provision for the replacement of LIBOR under certain circumstances where one-month LIBOR is no longer available.

Borrowings under the Credit Facility constitute senior, unsecured indebtedness and availability is subject to, among other things, a borrowing base calculated using various advance rates for different categories of inventory. The Credit Facility also provides for a $150 million sub-facility for letters of credit. The Credit Facility contains various representations, warranties and covenants which require, among other things, that the Company maintain (1) a minimum level of Consolidated Tangible Net Worth of $1.26 billion at September 30, 2022 (subject to increase over time based on earnings and proceeds from equity offerings), (2) a leverage ratio not in excess of 60%, and (3) either a minimum Interest Coverage Ratio of 1.5 to 1.0 or a minimum amount of available liquidity. In addition, the Credit Facility contains covenants that limit the Company’s number of unsold housing units and model homes, as well as the amount of Investments in Unrestricted Subsidiaries and Joint Ventures (each as defined in the Credit Facility). On February 16, 2022, the Company amended its Credit Facility to eliminate specified limits on the Company to make investments in its subordinated debt and capital stock. Such investments are subject to the Company’s compliance with the other covenants and provisions in the Credit Facility.

The Company’s obligations under the Credit Facility are guaranteed by all of the Company’s subsidiaries, with the exception of subsidiaries that are primarily engaged in the business of mortgage financing, title insurance or similar financial businesses relating to the homebuilding and home sales business, certain subsidiaries that are not 100%-owned by the Company or another subsidiary, and other subsidiaries designated by the Company as Unrestricted Subsidiaries (as defined in the Credit Facility), subject to limitations on the aggregate amount invested in such Unrestricted Subsidiaries. The guarantors for the Credit Facility are the same subsidiaries that guarantee our 2030 Senior Notes and our 2028 Senior Notes.

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As of September 30, 2022, the Company was in compliance with all covenants of the Credit Facility, including financial covenants. The following table summarizes the most significant restrictive covenant thresholds under the Credit Facility and our compliance with such covenants as of September 30, 2022:

Financial Covenant		Covenant Requirement		Actual
		(Dollars in millions)
Consolidated Tangible Net Worth	≥	$	1,256.1	$	1,846.9
Leverage Ratio	≤	0.60		0.28
Interest Coverage Ratio	≥	1.5 to 1.0		20.7 to 1.0
Investments in Unrestricted Subsidiaries and Joint Ventures	≤	$	554.1	$	5.9
Unsold Housing Units and Model Homes	≤	2,911		1,557

Notes Payable - Financial Services.

MIF Mortgage Warehousing Agreement. The MIF Mortgage Warehousing Agreement is used to finance eligible residential mortgage loans originated by M/I Financial. The MIF Mortgage Warehousing Agreement provides for a maximum borrowing availability of $200 million, which increased to $275 million from September 19, 2022 to November 13, 2022 and increases to $300 million from November 14, 2022 through February 6, 2023, which are periods of expected increases in the volume of mortgage originations. The MIF Mortgage Warehousing Agreement expires on May 26, 2023. Interest on amounts borrowed under the MIF Mortgage Warehousing Agreement is payable at a per annum rate equal to the one-month BSBY rate (subject to a floor of 0.25%) plus a spread of 190 basis points.

The MIF Mortgage Warehousing Agreement is secured by certain mortgage loans originated by M/I Financial that are being “warehoused” prior to their sale to investors. The MIF Mortgage Warehousing Agreement provides for limits with respect to certain loan types that can secure outstanding borrowings. There are currently no guarantors of the MIF Mortgage Warehousing Agreement.

As of September 30, 2022, there was $112.2 million outstanding under the MIF Mortgage Warehousing Agreement and M/I Financial was in compliance with all covenants thereunder. The financial covenants, as more fully described and defined in the MIF Mortgage Warehousing Agreement, are summarized in the following table, which also sets forth M/I Financial’s compliance with such covenants as of September 30, 2022:

Financial Covenant		Covenant Requirement		Actual
		(Dollars in millions)
Leverage Ratio	≤	12.0 to 1.0		6.4 to 1.0
Liquidity	≥	$	10.0	$	46.6
Adjusted Net Income	>	$	0.0	$	22.0
Tangible Net Worth	≥	$	20.0	$	37.1

MIF Mortgage Repurchase Facility. The MIF Mortgage Repurchase Facility is used to finance eligible residential mortgage loans originated by M/I Financial and is structured as a mortgage repurchase facility. The MIF Mortgage Repurchase Facility provides for a maximum borrowing availability of $90 million. The MIF Mortgage Repurchase Facility was scheduled to expire on October 24, 2022. Before entering into the amendment to the MIF Mortgage Repurchase Facility discussed below, M/I Financial paid interest on each advance under the MIF Mortgage Repurchase Facility at a per annum rate equal to the one-month LIBOR rate (subject to a floor of 0.75% or 0.625% based on the type of loan) plus 175 or 200 basis points depending on the loan type.

Subsequent to the quarter ended September 30, 2022, M/I Financial entered into an amendment to the MIF Mortgage Repurchase Facility with an effective date of October 24, 2022. The amendment, among other things, extends the term of the MIF Mortgage Repurchase Facility for an additional year to October 23, 2023, replaces the LIBOR rate with the One-Month Term SOFR (“SOFR”) rate (subject to an all-in floor of 2.375% or 2.75% based on the type of loan), and adjusts certain financial covenant limits.

The covenants in the MIF Mortgage Repurchase Facility are substantially similar to the covenants in the MIF Mortgage Warehousing Agreement. The MIF Mortgage Repurchase Facility provides for limits with respect to certain loan types that can secure outstanding borrowings, which are substantially similar to the restrictions in the MIF Mortgage Warehousing Agreement. There are no guarantors of the MIF Mortgage Repurchase Facility. As of September 30, 2022, there was

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$77.2 million outstanding under the MIF Mortgage Repurchase Facility. M/I Financial was in compliance with all financial covenants under the MIF Mortgage Repurchase Facility as of September 30, 2022.

Senior Notes.

3.95% Senior Notes. On August 23, 2021, the Company issued $300.0 million aggregate principal amount of 3.95% Senior Notes due 2030. The 2030 Senior Notes contain certain covenants, as more fully described and defined in the indenture governing the 2030 Senior Notes, which limit the ability of the Company and the restricted subsidiaries to, among other things: incur certain liens securing indebtedness without equally and ratably securing the 2030 Senior Notes and the guarantees thereof; enter into certain sale and leaseback transactions; and consolidate or merge with or into other companies, liquidate or sell or otherwise dispose of all or substantially all of the Company’s assets. These covenants are subject to a number of exceptions and qualifications as described in the indenture governing the 2030 Senior Notes. As of September 30, 2022, the Company was in compliance with all terms, conditions, and covenants under the indenture.

4.95% Senior Notes. On January 22, 2020, the Company issued $400.0 million aggregate principal amount of 4.95% Senior Notes due 2028. The 2028 Senior Notes contain certain covenants, as more fully described and defined in the indenture governing the 2028 Senior Notes, which limit the ability of the Company and the restricted subsidiaries to, among other things: incur additional indebtedness; make certain payments, including dividends, or repurchase any shares, in an aggregate amount exceeding our “restricted payments basket”; make certain investments; and create or incur certain liens, consolidate or merge with or into other companies, or liquidate or sell or transfer all or substantially all of our assets. These covenants are subject to a number of exceptions and qualifications as described in the indenture governing the 2028 Senior Notes. As of September 30, 2022, the Company was in compliance with all terms, conditions, and covenants under the indenture.

See Note 8 to our financial statements for more information regarding the 2030 Senior Notes and the 2028 Senior Notes.

Supplemental Financial Information.

As of September 30, 2022, M/I Homes, Inc. had $300.0 million aggregate principal amount of its 2030 Senior Notes and $400.0 million aggregate principal amount of its 2028 Senior Notes outstanding.

The 2030 Senior Notes and the 2028 Senior Notes are fully and unconditionally guaranteed, on a joint and several basis, by all of M/I Homes, Inc.’s subsidiaries (the “Subsidiary Guarantors”) with the exception of subsidiaries that are primarily engaged in the business of mortgage financing, title insurance or similar financial businesses relating to the homebuilding and home sales business, certain subsidiaries that are not 100%-owned by M/I Homes, Inc. or another subsidiary, and other subsidiaries designated as Unrestricted Subsidiaries (as defined in the indentures governing the 2030 Senior Notes and the 2028 Senior Notes), subject to limitations on the aggregate amount invested in such Unrestricted Subsidiaries in accordance with the terms of the Credit Facility and the indentures governing the 2030 Senior Notes and the 2028 Senior Notes (the “Non-Guarantor Subsidiaries”). The Subsidiary Guarantors of the 2030 Senior Notes, the 2028 Senior Notes and the Credit Facility are the same.

Each Subsidiary Guarantor is a direct or indirect 100%-owned subsidiary of M/I Homes, Inc. The guarantees are senior unsecured obligations of each Subsidiary Guarantor and rank equally in right of payment with all existing and future unsecured senior indebtedness of such Subsidiary Guarantor. The guarantees are effectively subordinated to any existing and future secured indebtedness of such Subsidiary Guarantor with respect to any assets comprising security or collateral for such indebtedness.

The guarantees are “full and unconditional,” as those terms are used in Regulation S-X, Rule 3-10(b)(3), except that the indentures governing the 2030 Senior Notes and the 2028 Senior Notes provide that a Subsidiary Guarantor’s guarantee will be released if: (1) all of the assets of such Subsidiary Guarantor have been sold or otherwise disposed of in a transaction in compliance with the terms of the applicable indenture; (2) all of the Equity Interests (as defined in the applicable indenture) held by M/I Homes, Inc. and the Restricted Subsidiaries (as defined in the applicable Indenture) of such Subsidiary Guarantor have been sold or otherwise disposed of to any person other than M/I Homes, Inc. or a Restricted Subsidiary in a transaction in compliance with the terms of the applicable indenture; (3) the Subsidiary Guarantor is designated an Unrestricted Subsidiary (or otherwise ceases to be a Restricted Subsidiary (including by way of liquidation or merger)) in compliance with the terms of the applicable indenture; (4) M/I Homes, Inc. exercises its legal defeasance option or covenant defeasance option under the applicable indenture; or (5) all obligations under the applicable indenture are discharged in accordance with the terms of the applicable indenture.

The enforceability of the obligations of the Subsidiary Guarantors under their guarantees may be subject to review under applicable federal or state laws relating to fraudulent conveyance or transfer, voidable preference and similar laws affecting the

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rights of creditors generally. In certain circumstances, a court could void the guarantees, subordinate amounts owing under the guarantees or order other relief detrimental to the holders of the 2030 Senior Notes and the 2028 Senior Notes.

The following tables present summarized financial information on a combined basis for M/I Homes, Inc. and the Subsidiary Guarantors. Transactions between M/I Homes, Inc. and the Subsidiary Guarantors have been eliminated and the summarized financial information does not reflect M/I Homes, Inc.’s or the Subsidiary Guarantors’ investment in, and equity in earnings from, the Non-Guarantor Subsidiaries.

Summarized Balance Sheet Data

(In thousands)	As of September 30, 2022		As of December 31, 2021
Assets:
Cash	$	18,821	$	203,381
Investment in joint venture arrangements	$	46,196	$	50,648
Amounts due from Non-Guarantor Subsidiaries	$	16,245	$	6,455
Total assets	$	3,294,937	$	2,897,385
Liabilities and Shareholders’ Equity
Total liabilities	$	1,410,007	$	1,320,337
Shareholders’ equity	$	1,884,930	$	1,577,048

Summarized Statement of Income Data

	Nine Months Ended
(In thousands)	September 30, 2022
Revenues	$	2,850,809
Land and housing costs	$	2,145,082
Selling, general and administrative expense	$	264,494
Income before income taxes	$	442,337
Net income	$	337,336

Weighted Average Borrowings. For the three months ended September 30, 2022 and 2021, our weighted average borrowings outstanding were $835.0 million and $728.2 million, respectively, with a weighted average interest rate of 4.98% and 5.41%, respectively. The increase in our weighted average borrowings related to increased borrowings under our two M/I Financial credit facilities during the third quarter of 2022 compared to the same period in 2021. The decrease in our weighted average borrowing rate was due to lower interest rates on our credit facilities in 2022 compared to the prior year.

At both September 30, 2022 and December 31, 2021, we had no borrowings outstanding under the Credit Facility. During the nine months ended September 30, 2022, the average daily amount outstanding under the Credit Facility was $7.3 million and the maximum amount outstanding under the Credit Facility was $82.5 million. Based on our currently anticipated spending on home construction, overhead expenses and land acquisition and development during the remainder of 2022, offset by expected cash receipts from home deliveries and other sources, we do not expect the peak amount outstanding under the Credit Facility to exceed approximately $200 million. The actual amount borrowed during the remainder of 2022 and the related timing will be subject to numerous factors, which are subject to significant variation as a result of the timing and amount of land and house construction expenditures, payroll and other general and administrative expenses, and cash receipts from home deliveries. The amount borrowed will also be impacted by other cash receipts and payments, any capital markets transactions or other additional financings by the Company, any repayments or redemptions of outstanding debt, any additional share repurchases under the 2021 Share Repurchase Program and any other extraordinary events or transactions.  The Company may also experience significant variation in cash and Credit Facility balances from week to week due to the timing of such receipts and payments.

There were $96.6 million of letters of credit issued and outstanding under the Credit Facility at September 30, 2022. During the nine months ended September 30, 2022, the average daily amount of letters of credit outstanding under the Credit Facility was $92.7 million and the maximum amount of letters of credit outstanding under the Credit Facility was $107.8 million.

At September 30, 2022, M/I Financial had $112.2 million outstanding under the MIF Mortgage Warehousing Agreement.  During the nine months ended September 30, 2022, the average daily amount outstanding under the MIF Mortgage Warehousing Agreement was $59.1 million and the maximum amount outstanding was $196.8 million, which occurred during January 2022 while the temporary increase provision was in effect and the maximum borrowing availability was $235.0 million.

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At September 30, 2022, M/I Financial had $77.2 million outstanding under the MIF Mortgage Repurchase Facility.  During the nine months ended September 30, 2022, the average daily amount outstanding under the MIF Mortgage Repurchase Facility was $38.1 million and the maximum amount outstanding was $77.2 million, which occurred during September 2022.

Universal Shelf Registration. In June 2022, the Company filed a universal shelf registration statement with the SEC, which registration statement became effective upon filing and will expire in June 2025. Pursuant to the registration statement, the Company may, from time to time, offer debt securities, common shares, preferred shares, depositary shares, warrants to purchase debt securities, common shares, preferred shares, depositary shares or units of two or more of those securities, rights to purchase debt securities, common shares, preferred shares or depositary shares, stock purchase contracts and units. The timing and amount of offerings, if any, will depend on market and general business conditions.

INTEREST RATES AND INFLATION

Our business is significantly affected by general economic conditions within the United States and, particularly, by the impact of interest rates and inflation.  The annual rate of inflation in the United States hit 8.2% in September 2022, as measured by the Consumer Price Index (CPI), down slightly from 9.1% in June 2022, which represented the highest inflation rate in 40 years. As a result, we have experienced an increase in the costs of land, materials and labor that we have been able to pass along to the consumer. However, inflation has also reduced the purchasing power of potential homebuyers and may negatively impact their ability and desire to buy a home and our ability to pass along our increased costs to our homebuyers.

Beginning in the latter part of the second quarter of 2022, the pace of sales across the homebuilding industry declined significantly from the unprecedented levels experienced over the previous 18 months as a result of the sharp increase in mortgage interest rates from approximately 4% in December 2021 to nearly 7% at the end of 2022’s third quarter, the highest rates in over a decade, as well as significant inflation in the broader economy (as discussed above), the substantial rise in home prices and stock market volatility. These macroeconomic trends have pressured housing affordability, negatively impacted homebuyer sentiment and impacted the costs of financing land development activities and housing construction. The higher mortgage interest rates and the high rate of inflation are making it more difficult for homebuyers to qualify for mortgages or to obtain mortgages at interest rates that are acceptable to them. Rising interest rates, as well as increased materials and labor costs, can also reduce gross margins.

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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary market risk results from fluctuations in interest rates. We are exposed to interest rate risk through borrowings under our revolving credit facilities, consisting of the Credit Facility, the MIF Mortgage Warehousing Agreement, and the MIF Mortgage Repurchase Facility which permitted borrowings of up to $915 million as of September 30, 2022, subject to availability constraints. Additionally, M/I Financial is exposed to interest rate risk associated with its mortgage loan origination services.

Interest Rate Lock Commitments: Interest rate lock commitments (“IRLCs”) are extended to certain homebuying customers who have applied for a mortgage loan and meet certain defined credit and underwriting criteria. Typically, the IRLCs will have a duration of less than six months; however, in certain markets, the duration could extend to nine months.

Some IRLCs are committed to a specific third party investor through the use of whole loan delivery commitments matching the exact terms of the IRLC loan. Uncommitted IRLCs are considered derivative instruments and are fair value adjusted, with the resulting gain or loss recorded in current earnings.

Forward Sales of Mortgage-Backed Securities: Forward sales of mortgage-backed securities (“FMBSs”) are used to protect uncommitted IRLC loans against the risk of changes in interest rates between the lock date and the funding date. FMBSs related to uncommitted IRLCs are classified and accounted for as non-designated derivative instruments and are recorded at fair value, with gains and losses recorded in current earnings.

Mortgage Loans Held for Sale: Mortgage loans held for sale consist primarily of single-family residential loans collateralized by the underlying property. During the period between when a loan is closed and when it is sold to an investor, the interest rate risk is covered through the use of a whole loan contract or by FMBSs. The FMBSs are classified and accounted for as non-designated derivative instruments, with gains and losses recorded in current earnings.

The table below shows the notional amounts of our financial instruments at September 30, 2022 and December 31, 2021:

	September 30,		December 31,
Description of Financial Instrument (in thousands)	2022		2021
Whole loan contracts and related committed IRLCs	$	4,169	$	782
Uncommitted IRLCs	477,065		228,831
FMBSs related to uncommitted IRLCs	476,000		223,000
Whole loan contracts and related mortgage loans held for sale	18,648		3,785
FMBSs related to mortgage loans held for sale	174,000		251,000
Mortgage loans held for sale covered by FMBSs	172,151		263,088

The table below shows the measurement of assets and liabilities at September 30, 2022 and December 31, 2021:

	September 30,		December 31,
Description of Financial Instrument (in thousands)	2022		2021
Mortgage loans held for sale	$	183,327	$	275,655
Forward sales of mortgage-backed securities	26,676		4,477
Interest rate lock commitments	(16,173)		(487)
Whole loan contracts	(181)		(62)
Total	$	193,649	$	279,583

The following table sets forth the amount of gain (loss) recognized on assets and liabilities for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
Description (in thousands)	2022		2021		2022		2021
Mortgage loans held for sale	$	(4,396)	$	(1,704)	$	(7,271)	$	(1,962)
Forward sales of mortgage-backed securities	24,952		3,877		22,199		4,893
Interest rate lock commitments	(13,015)		(1,440)		(15,708)		(940)
Whole loan contracts	(209)		49		(97)		413
Total gain (loss) recognized	$	7,332	$	782	$	(877)	$	2,404

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The following table provides the expected future cash flows and current fair values of borrowings under our credit facilities and mortgage loan origination services that are subject to market risk as interest rates fluctuate, as of September 30, 2022. Because the MIF Mortgage Warehousing Agreement and MIF Mortgage Repurchase Facility are effectively secured by certain mortgage loans held for sale which are typically sold within 30 to 45 days, their outstanding balances are included in the most current period presented. The interest rates for our variable rate debt represent the weighted average interest rates in effect at September 30, 2022. For fixed-rate debt, changes in interest rates generally affect the fair market value of the debt instrument, but not our earnings or cash flow. Conversely, for variable-rate debt, changes in interest rates generally do not affect the fair market value of the debt instrument, but do affect our earnings and cash flow. We do not have the obligation to prepay fixed-rate debt prior to maturity, and, as a result, interest rate risk and changes in fair market value should not have a significant impact on our fixed-rate debt until we are required or elect to refinance it.

	Expected Cash Flows by Period													Fair Value
(Dollars in thousands)	2022			2023	2024	2025	2026	Thereafter			Total			9/30/2022
ASSETS:
Mortgage loans held for sale:
Fixed rate	$	187,889		—	—	—	—	—			$	187,889		$	183,327
Weighted average interest rate	5.00		%	—	—	—	—	—			5.00		%
LIABILITIES:
Long-term debt — fixed rate	—			—	—	—	—	$	700,000		$	700,000		$	548,375
Weighted average interest rate	—			—	—	—	—	4.52		%	4.52		%
Short-term debt — variable rate	$	189,371		—	—	—	—	—			$	189,371		$	189,371
Weighted average interest rate	4.99		%	—	—	—	—	—			4.99		%

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ITEM 4:  CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

An evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) was performed by the Company’s management, with the participation of the Company’s principal executive officer and principal financial officer.  Based on that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company’s legal proceedings are discussed in Note 6 to the Company’s Consolidated Financial Statements.

Item 1A. Risk Factors

Except as set forth below, there have been no material changes to the risk factors appearing in our 2021 Form 10-K, other than as follows.

A reduction in the availability of mortgage financing or a significant increase in mortgage interest rates or down payment requirements could adversely affect our business.

Any reduction in the availability of the financing provided by Fannie Mae and Freddie Mac could adversely affect interest rates, mortgage availability and our sales of new homes and origination of mortgage loans.

FHA and VA mortgage financing support remains an important factor in marketing our homes. Any increases in down payment requirements, lower maximum loan amounts, or limitations or restrictions on the availability of FHA and VA financing support could adversely affect interest rates, mortgage availability and our sales of new homes and origination of mortgage loans.

Even if potential customers do not need financing, changes in the availability of mortgage products may make it harder for them to sell their current homes to potential buyers who need financing, which may lead to lower demand for new homes.

Mortgage interest rates increased significantly during the first nine months of 2022 from historical lows. These increases and the additional increases forecasted by the Federal Reserve could increase the costs of owning a home and could reduce the demand for our homes.

Many of our homebuyers obtain financing for their home purchases from M/I Financial. If, due to the factors discussed above, M/I Financial is limited from making or unable to make loan products available to our homebuyers, our home sales and our homebuilding and financial services results of operations may be adversely affected.

We may not be able to offset the impact of inflation through price increases.

Inflation can have a long-term adverse impact on us because if our costs of land, materials and labor increase, we would need to increase the sale prices of our homes to maintain satisfactory margins. As a result of the historically high rates of inflation in 2022, we have experienced, and may continue to experience into 2023, increases in the costs of land, materials and labor. In such a highly inflationary environment, we may not be able to raise home prices enough to keep pace with the increased costs of land and house construction, which could reduce our profit margins. In addition, significant inflation is often accompanied by higher interest rates, which could have a negative impact on demand for our homes, and would likely also increase our cost of capital.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Recent Sales of Unregistered Securities - None.

(b) Use of Proceeds - Not Applicable.

(c) Purchases of Equity Securities

Common shares purchased during the three months ended September 30, 2022 were as follows:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(1)
July 1, 2022 - July 30, 2022	10,000	$	46.24	10,000	$	107,351,523
August 1, 2022 - August 31, 2022	230,000	$	45.72	230,000	$	88,273,043
September 1, 2022 - September 30, 2022	100,000	$	41.20	100,000	$	83,402,168
Quarter ended September 30, 2022	340,000	$	44.41	340,000	$	83,402,168

(1)    On July 28, 2021, the Company announced that its Board of Directors authorized the 2021 Share Repurchase Program. On February 17, 2022, the Company announced that its Board of Directors approved an increase to the 2021 Share Repurchase Program by an additional $100 million. Under the 2021 Share Repurchase Program, the Company may purchase up to $200 million of its outstanding common shares through open market transactions, privately negotiated transactions or otherwise in accordance with all applicable laws, including pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. The 2021 Share Repurchase Program does not have an expiration date and may be modified, suspended or discontinued at any time. See Note 12 to our Condensed Consolidated Financial Statements for additional information.

See Note 8 to our Condensed Consolidated Financial Statements above for more information regarding the limit imposed by the indenture governing our 2028 Senior Notes on our ability to pay dividends on, and repurchase, our common shares and any preferred shares of the Company then outstanding to the amount of the positive balance in our “restricted payments basket,” as defined in the indenture.

The timing, amount and other terms and conditions of any future repurchases under the 2021 Share Repurchase Program will be determined by the Company’s management at its discretion based on a variety of factors, including the market price of the Company’s common shares, business considerations, general market and economic conditions and legal requirements. See Note 12 to the Condensed Consolidated Financial Statements and the “Liquidity and Capital Resources” section above for more information regarding the 2021 Share Repurchase Program.

Item 3. Defaults Upon Senior Securities - None.

Item 4. Mine Safety Disclosures - None.

Item 5. Other Information - None.

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Item 6. Exhibits

The exhibits required to be filed herewith are set forth below.

Exhibit Number	Description
10.1	Fifth Amendment to Second Amended and Restated Master Repurchase Agreement as of October 24, 2022 by and between M/I Financial LLC and Webster Bank, N.A. (Filed herewith).
22	List of Subsidiary Guarantors. (Filed herewith.)
31.1	Certification by Robert H. Schottenstein, Chief Executive Officer, pursuant to Item 601 of Regulation S-K as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
31.2	Certification by Phillip G. Creek, Chief Financial Officer, pursuant to Item 601 of Regulation S-K as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
32.1	Certification by Robert H. Schottenstein, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
32.2	Certification by Phillip G. Creek, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.)
101.INS	XBRL Instance Document. (Furnished herewith.)
101.SCH	XBRL Taxonomy Extension Schema Document. (Furnished herewith.)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document. (Furnished herewith.)
101.LAB	XBRL Taxonomy Extension Label Linkbase Document. (Furnished herewith.)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document. (Furnished herewith.)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. (Furnished herewith.)
104	Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		M/I Homes, Inc.
		(Registrant)
Date:	October 28, 2022	By:	/s/ Robert H. Schottenstein
			Robert H. Schottenstein
			Chairman, Chief Executive Officer and President
			(Principal Executive Officer)
Date:	October 28, 2022	By:	/s/ Ann Marie W. Hunker
			Ann Marie W. Hunker
			Vice President, Chief Accounting Officer and Controller
			(Principal Accounting Officer)

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EX-10.1

Exhibit 10.1

AMENDMENT NO. 5
TO SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Amendment No. 5 to Second Amended and Restated Master Repurchase Agreement, dated as of October 24, 2022 (this “Amendment”), between WEBSTER BANK, N.A. (successor by merger to Sterling National Bank) (the “Buyer”) and M/I FINANCIAL, LLC (the “Seller”).

RECITALS

The Buyer and the Seller are parties to that certain Second Amended and Restated Master Repurchase Agreement, dated as of October 30, 2017 (as amended by that certain Amendment No. 1 to Second Amended and Restated Master Repurchase Agreement, dated as of October 29, 2018, Amendment No. 2 to Second Amended and Restated Master Repurchase Agreement, dated as of October 28, 2019, Amendment No. 3 to Second Amended and Restated Master Repurchase Agreement, dated as of October 26, 2020, and Amendment No. 4 to Second Amended and Restated Master Repurchase Agreement, dated as of October 25, 2021, each by and between the Buyer and the Seller, and this Amendment, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement.

The Buyer and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.

Accordingly, the Buyer and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:

SECTION 1.Buyer Name Change. Buyer has informed Seller that effective as of February 1, 2022, Sterling National Bank merged into and became part of Webster Bank, N.A. (the “Name Change”). Accordingly, the Existing Repurchase Agreement is hereby amended by deleting any and all references to “Sterling National Bank” and replacing them with “Webster Bank, N.A.”.

SECTION 2.Requirements of Law. Section 6 of the Existing Repurchase Agreement is hereby amended by:

2.1deleting subsection (a)(ii) thereof in its entirety and replacing it with the following:

(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of Buyer which is not otherwise included in the determination of the Index Rate hereunder;

2.2deleting subsection (c) thereof in its entirety and replacing it with the following:

(c) Upon the occurrence of an Index Rate Transition Event, the Buyer and the Seller shall endeavor to amend this Agreement to replace the Index Rate with a Successor

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Rate. The Buyer will promptly notify the Seller in writing of any occurrence of an Index Rate Transition Event. Following an Index Rate Transition Event and until this Agreement has been amended to replace the Index Rate with a Successor Rate in accordance with the terms hereof, the Pricing Rate shall be a rate per annum equal to the greater of (a) the Prime Rate and (b) the Pricing Floor (any such rate, a “Successor Rate”).

2.3adding the following new subsection (d) to the end thereof:

(d) To the extent Buyer implements Successor Rate Conforming Changes, it will promptly notify Seller Parties of the effectiveness of any such changes. The adoption of Successor Rate Conforming Changes shall be made by Buyer in a manner substantially consistent with market practice with respect to similarly situated counterparties with substantially similar assets in similar facilities and any such Successor Rate Conforming Changes will become effective without any further action or consent of Seller Parties to this Agreement or the other Program Documents.

SECTION 3.Indemnification and Expenses; Recourse. Section 15(a) of the Existing Repurchase Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

(a)     Each Seller Party agrees to hold Buyer, and its Affiliates and their officers, directors, employees, agents and advisors (each an “Indemnified Party”) harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against such Indemnified Party (collectively, “Costs”), relating to or arising out of this Agreement, any other Program Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Program Document or any transaction contemplated hereby or thereby (including, without limitation, (i) any such liabilities, losses, damages, judgments, costs and expenses arising from any acts or omissions of such party and (ii) any wire fraud or data or systems intrusions which causes Buyer to suffer any such liability, loss, damage, judgment, cost and/or expense), that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct. Without limiting the generality of the foregoing, each Seller Party agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with respect to all Mortgage Loans relating to or arising out of any taxes incurred or assessed in connection with the ownership of the Mortgage Loans, that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct. In any suit, proceeding or action brought by an Indemnified Party in connection with any Mortgage Loan for any sum owing thereunder, or to enforce any provisions of any Mortgage Loan, each Seller Party will save, indemnify and hold such Indemnified Party harmless from and against all expense, loss or damage suffered by reason of any defense, set off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by a Seller Party of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from a Seller Party. Each Seller Party also agrees to reimburse an Indemnified Party as and when billed by such Indemnified Party for all the Indemnified Party’s costs and expenses incurred in connection with the enforcement or the preservation of Buyer’s rights under this Agreement, any other Program Document or any transaction contemplated hereby or thereby, including without limitation the reasonable fees and disbursements of its counsel.

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SECTION 4.Miscellaneous. Section 34(a) of the Existing Repurchase Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

(a)     Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement in a Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Agreement. The parties agree that this Agreement, any addendum or amendment hereto or any other document necessary for the consummation of the transaction contemplated by this Agreement may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature.

SECTION 5.Schedule of Defined Terms. Schedule 1 of the Existing Repurchase Agreement is hereby amended by:

5.1deleting the definitions of “Buyer”, “MERS System” and “Mortgage Loan” in their entirety and replacing them with the following, respectively:

“Buyer” shall mean Webster Bank, N.A., its successors in interest and permitted assigns and, with respect to Section 7, its participants.

“MERS System” shall mean the mortgage electronic registry system operated by MERS that tracks changes in Mortgage ownership, mortgage servicers and servicing rights ownership.

“Mortgage Loan” shall mean any first lien, one-to-four-family residential mortgage loan evidenced by a Mortgage Note and secured by a Mortgage, which Mortgage Loan is subject to a Transaction hereunder, which in no event shall include any mortgage loan which (a) is subject to Section 1026.32 of Regulation Z or any similar state Requirement of Law (relating to high interest rate credit/lending transactions), (b) includes any single premium credit, life or accident and health insurance or disability insurance, or (c) is a High Cost Mortgage Loan.

5.2adding the following new definitions in their proper alphabetical order:

“Pricing Floor” shall have the meaning set forth in the Schedule of Facility Information

“Relevant Governmental Body” shall mean the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York, or any successor of any of the foregoing.

3

“Successor Rate” shall have the meaning specified in Section 6(c) of the Agreement.

“Successor Rate Conforming Changes” shall mean with respect to any proposed Successor Rate, any technical, administrative or operational change (including any change to the timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Buyer reasonably determines may be appropriate to reflect the adoption and implementation of such Successor Rate and to permit the administration thereof by the Buyer in a manner substantially consistent with market practice (or, if the Buyer decides that adoption of any portion of such market practice is not administratively feasible or if the Buyer determines that no market practice for the administration of such Successor Rate exists, in such other manner of administration as the Buyer reasonably determines is reasonably necessary in connection with the administration of this Agreement or any other Program Document).

“UETA” shall mean the Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999.

5.3deleting the definition of “LIBOR Rate” and any and all references thereto in their entirety.

SECTION 6.Termination Date. Section 4 of Schedule 2 to the Existing Repurchase Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

Termination Date. The Termination Date shall mean October 23, 2023, or such other date declared by either Seller or Buyer as contemplated below, or such date as determined by Buyer pursuant to its rights and remedies under the Agreement.

SECTION 7.Price Differential; Pricing Rate; Post-Default Rate. Section 6 of Schedule 2 to the Existing Repurchase Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“Post-Default Rate” shall mean a rate equal to the sum of (a) the Pricing Rate plus (b) three percent (3.00%).

The “Pricing Rate” shall be a rate per annum equal to the greater of (a) the sum of (i) the Index Rate plus (ii) the Pricing Spread and (b) the Pricing Floor. Buyer’s calculations with respect thereto shall be conclusive absent manifest error.

The “Pricing Spread” shall equal:

(a)with respect to Transactions the subject of which are Mortgage Loans which are Conforming Mortgage Loans, Agency High Balance Mortgage Loans, Jumbo Mortgage Loans and Exception Mortgage Loans, 1.50%; or

(b)with respect to Transactions the subject of which are Mortgage Loans which are Aged Mortgage Loans, 2.00%.

4

The “Pricing Floor” shall equal:

(a)with respect to Transactions the subject of which are Mortgage Loans which are Conforming Mortgage Loans, Agency High Balance Mortgage Loans, Jumbo Mortgage Loans and Exception Mortgage Loans, 2.375%; or

(b)with respect to Transactions the subject of which are Mortgage Loans which are Aged Mortgage Loans, 2.75%.

The “Index Rate” shall equal the greater of (a) (i) One-Month Term SOFR or (ii) a Successor Rate and (b) 0%.

An “Index Rate Transition Event” shall mean the date that the Index Rate has either permanently or indefinitely ceased to be provided by the administrator of the Index Rate or that has been announced by the Relevant Governmental Body or a Governmental Authority having jurisdiction over Buyer pursuant to a public statement or publication of information after which the Index Rate shall no longer be made available or used for determining an interest rate of loans.

“CME Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited as administrator of the forward-looking term SOFR (or a successor administrator).

“One-Month Term SOFR” shall mean, with respect to each day or any portion thereof (an “Accrual Day”), the rate per annum determined by Buyer as the forward-looking one-month term rate based on SOFR, as published by the CME Term SOFR Administrator at approximately 5:00 a.m., Chicago time, two (2) U.S. Government Securities Business Days prior to such Accrual Day.Any change in One-Month Term SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Seller.

The “Prime Rate” shall mean, as of any date of determination, the per annum rate of interest last published by the Wall Street Journal as the consensus prime rate among large banks, which Prime Rate shall change simultaneously with any change in such announced rate.

“SOFR” shall mean a rate per annum equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) on its website.

SECTION 8.Certain Financial Condition Covenants. Section 7 of Schedule 2 to the Existing Repurchase Agreement is hereby amended by deleting paragraphs (a), (c), (d) and (g) in their entirety and replacing them with the following, respectively:

(a)    Maintenance of Tangible Net Worth plus Subordinated Debt. The Seller shall maintain a Tangible Net Worth plus Subordinated Debt of not less than $20,000,000.

(c)    Maintenance of Ratio of Indebtedness less Subordinated Debt§ to Tangible Net Worth* plus SubordinatedDebt§. The Seller shall maintain the ratio of (a) Indebtedness less Subordinated Debt§ to (b) Tangible Net Worth* plus Subordinated Debt§ no greater than 12:1.

5

(d)    Maintenance of Profitability. Seller shall not permit, for any Test Period, Net Income for such Test Period, before income taxes for such Test Period and distributions made during such Test Period, to be less than $1.00. “Test Period” shall mean any calendar year.

(g)    Maintenance of Liquidity. The Seller shall ensure that, as of the end of each calendar month, it has Liquidity of an amount not less than $10,000,000.

SECTION 9.Warehouse and Other Fees. Section 12 of Schedule 2 to the Existing Repurchase Agreement is hereby amended by deleting paragraph (a) and in its entirety and replacing it with the following:

(a)    Commitment Fee. Seller shall pay to Buyer in immediately available funds, earned on October 24, 2022 (the “Fifth Amendment Effective Date”), a non-refundable Commitment Fee equal to 0.20% multiplied by the Maximum Purchase Price. The Commitment Fee shall be paid in twelve equal installments, which amounts shall be paid monthly starting on the Fifth Amendment Effective Date, and thereafter on each Payment Date commencing with the Payment Date beginning in November 2022.

SECTION 10.Form of Compliance Certificate. Exhibit F to the Existing Repurchase Agreement is hereby amended by deleting such exhibit in its entirety and replacing it with Annex A hereto.

SECTION 11.Conditions Precedent. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the satisfaction of the following conditions precedent:

11.1Delivered Documents. On the Amendment Effective Date, the Buyer shall have received the following documents, each of which shall be satisfactory to the Buyer in form and substance:

(a)this Amendment, executed and delivered by the duly authorized officers of the Buyer and the Seller;

(b)Amendment No. 1 to Electronic Tracking Agreement, among Buyer, Seller, MERSCORP Holdings, Inc. and Mortgage Electronic Registration Systems, Inc.; and

(c)such other documents as the Buyer or counsel to the Buyer may reasonably request.

SECTION 12.Representations and Warranties. Seller hereby represents and warrants to the Buyer that it is in compliance with all the terms and provisions set forth in the Existing Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred and is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 11 of the Existing Repurchase Agreement.

SECTION 13.Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.

SECTION 14.Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. The parties agree that this Amendment, any addendum or amendment hereto or any other document

6

necessary for the consummation of the transaction contemplated by this Amendment may be accepted, executed or agreed to through the use of an electronic signature in accordance with the Electronic Signatures in Global and National Commerce Act, the Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999 and any applicable state law.  Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature.

SECTION 15.Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

SECTION 16.GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

[Remainder of page intentionally left blank]

7

IN WITNESS WHEREOF, the parties have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.

WEBSTER BANK, N.A., as Buyer

By: /s/ Eddie Othman
Name:Eddie Othman
Title: Senior Managing Director

Signature Page to Amendment No. 5 to Second Amended and Restated Master Repurchase Agreement

M/I FINANCIAL, LLC, as Seller

By:    /s/ Derek J. Klutch
Name:    Derek J. Klutch
Title:     President & CEO

Signature Page to Amendment No. 5 to Second Amended and Restated Master Repurchase Agreement

ANNEX A

EXHIBIT F

FORM OF COMPLIANCE CERTIFICATE

I, ___________________, do hereby certify that I am the [duly elected, qualified and authorized] [CFO/TREASURER/FINANCIAL OFFICER] of M/I Financial, LLC (“Seller”). This Certificate is delivered to you in connection with Section 12(d)(iv) of the Second Amended and Restated Master Repurchase Agreement dated as of October 30, 2017, between M/I Financial, LLC and Webster Bank, N.A. (as amended from time to time, the “Agreement”), as the same may have been amended from time to time. Capitalized terms shall have the meaning set forth in the Agreement. I hereby certify that, as of the date of the financial statements attached hereto and as of the date hereof, M/I Financial, LLC is and has been in compliance with all the terms of the Agreement and, without limiting the generality of the foregoing, I certify that:

Maintenance of Tangible Net Worth plus Subordinated Debt. The Seller has maintained a Tangible Net Worth* plus Subordinated Debt§ of not less than $20,000,000. A detailed summary of the calculation of the Seller’s Tangible Net Worth is set forth on Schedule 1 hereto.

Maintenance of Ratio of Indebtedness to Tangible Net Worth. The Seller has maintained the ratio of (a) Indebtedness less Subordinated Debt to (b) Tangible Net Worth plus Subordinated Debt no greater than 12:1. A detailed summary of the calculation of the Seller’s ratio of Indebtedness to Tangible Net Worth is set forth on Schedule 1 hereto.

Maintenance of Profitability. Seller has not permitted, for any Test Period, Net Income for such Test Period, before income taxes for such Test Period and distributions made during such Test Period, to be less than $1.00. A detailed summary of the calculation of Seller’s Net Income is set forth on Schedule 1 hereto.

Guarantees. Seller has not created, incurred, assumed or suffered to exist any Guarantees, except to the extent reflected in the Seller’s Financial Statements or notes thereto.

Total Warehouse Capacity. Seller has ensured that the Maximum Purchase Price does not exceed 50% of the total aggregate maximum availability under its Warehouse Facilities (whether drawn or undrawn).

Maintenance of Liquidity. The Seller has maintained, as of the end of each calendar month, it has Liquidity in an amount not less than $10,000,000.

Warehouse Lines. All warehouse lines of Seller existing on the date hereof are listed on Schedule 3 hereto.

Limitation on Dividends and Distributions. Upon the occurrence and after the continuance of an Event of Default, Seller has not made any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Seller, whether now or hereafter outstanding, or made any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Seller, either directly or indirectly, whether in cash or property or in obligations of Seller or any of its consolidated Subsidiaries.

Financial Statements. The financial statements attached fairly present in all material respects the financial condition and results of operations of Seller and its consolidated Subsidiaries and the financial condition and results of operations of Seller, in accordance with GAAP, consistently applied, as at the end of, and for, the calendar month ending on [DATE] (subject to normal year-end adjustments).

Originations. Attached hereto as Schedule 2 is a true and correct summary of all Mortgage Loans originated by Seller for the calendar month ending [DATE] and for the year to date ending [DATE].

Documentation. Seller has performed the documentation procedures required by its operational guidelines with respect to endorsements and assignments, including the recordation of assignments, or has verified that such documentation procedures have been performed by a prior holder of such Mortgage Loan.

Compliance. Seller has observed or performed in all material respects all of its covenants and other agreements, and satisfied every condition, contained in the Agreement and the other Program Documents to be observed, performed and satisfied by it. [If a covenant or other agreement or condition has not been complied with, Seller shall describe such lack of compliance and provide the date of any related waiver thereof.]

Regulatory Action. Seller is not currently under investigation or, to best of Seller’s knowledge, no investigation by any federal, state or local government agency is threatened. Seller has not been the subject of any government investigation which has resulted in the voluntary or involuntary suspension of a license, a cease and desist order, or such other action as could adversely impact Seller’s business. [If so, Seller shall describe the situation in reasonable detail and describe the action that Seller has taken or proposes to take in connection therewith.]

No Default. No Default or Event of Default has occurred or is continuing. [If any Default or Event of Default has occurred and is continuing, Seller shall describe the same in reasonable detail and describe the action Seller has taken or proposes to take with respect thereto, and if such Default or Event of Default has been expressly waived by Buyer in writing, Seller shall describe the Default or Event of Default and provide the date of the related waiver.]

IN WITNESS WHEREOF, I have set my hand this _____ day of ________, ________.

M/I Financial, LLC

By:    
Name:    
Title:

SCHEDULE 1 TO OFFICER’S COMPLIANCE CERTIFICATECALCULATIONS OF FINANCIAL COVENANTS

As of the month ended: [Date]

Covenant	Actual	Requirement	Compliance (Y/N)
TNW (including Sub Debt)*		$20,000,000
Leverage**		12:1
Annual Profitability ***		>1
Liquidity ****		$10,000,000
Total Warehouse Covenant*****		< 50% of Maximum Purchase Price

*

TNW Calculation

Book Net Worth

Less:

  Prepaid Expenses

  Intercompany Receivables

  Employee Receivables

  Restricted Cash

  Deposits

  Goodwill

  Other

Tangible Net Worth

**

Leverage:

  Indebtedness (excluding Sub Debt)

  TNW (including Sub Debt)

***

Net Income:

  Monthly

  As of Most Recent Year

****

Liquidity:

  Unrestricted Cash

  Cash Equivalents

  Available Borrowing Capacity

*****

Total Warehouse Covenant

  Total Warehouse Lines

  50% of Maximum Purchase Price

SCHEDULE 2 to OFFICER’S COMPLIANCE CERTIFICATE

PRODUCTION INFORMATION (banked)

	Monthly	Year to Date
Conventional Conforming
FHA/VA
Agency High Balance
Jumbo
TOTAL
% Refinance
% Purchase
% Retail
% Wholesale

SCHEDULE 3 to OFFICER’S COMPLIANCE CERTIFICATE

WAREHOUSE LINES

	Line Amount	Amount Outstanding	Expiration Date
Webster Bank, N.A.
Comerica Bank

EX-22

Exhibit 22

SUBSIDIARY GUARANTORS OF THE COMPANY

1. MHO Holdings, LLC, a Florida limited liability company

2. MHO, LLC, a Florida limited liability company

3. M/I Homes First Indiana LLC, an Indiana limited liability company

4. M/I Homes of Austin, LLC, an Ohio limited liability company

5. M/I Homes of Central Ohio, LLC, an Ohio limited liability company

6. M/I Homes of Charlotte, LLC, a Delaware limited liability company

7. M/I Homes of Chicago, LLC, a Delaware limited liability company

8. M/I Homes of Cincinnati, LLC, an Ohio limited liability company

9. M/I Homes of DC, LLC, a Delaware limited liability company

10. M/I Homes of DFW, LLC, a Delaware limited liability company

11. M/I Homes of Florida, LLC, a Florida limited liability company

12. M/I Homes of Houston, LLC, a Delaware limited liability company

13. M/I Homes of Indiana, L.P., an Indiana limited partnership

14. M/I Homes of Orlando, LLC, a Florida limited liability company

15. M/I Homes of Raleigh, LLC, a Delaware limited liability company

16. M/I Homes of San Antonio, LLC, a Delaware limited liability company

17. M/l Homes of Tampa, LLC, a Florida limited liability company

18. M/I Homes of Ft. Myers/Naples, LLC, a Florida limited liability company

19. M/I Homes Second Indiana LLC, an Indiana limited liability company

20. M/I Homes Service, LLC, an Ohio limited liability company

21. M/I Homes of Delaware, LLC, a Delaware limited liability company

22. Northeast Office Venture, Limited Liability Company, a Delaware limited liability company

23. Prince Georges Utilities, LLC, a Maryland limited liability company

24. The Fields at Perry Hall, L.L.C., a Maryland limited liability company

25. Wilson Farm, L.L.C., a Maryland limited liability company

26. M/I Homes of Minneapolis/St. Paul, LLC, a Delaware limited liability company

27. M/I Homes of Sarasota, LLC, a Delaware limited liability company

28. M/I Homes of Alabama, LLC, a Delaware limited liability company

29. M/I Homes of Michigan, LLC, a Delaware limited liability company

30. M/I Homes of Nashville, LLC, a Delaware limited liability company

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Robert H. Schottenstein, certify that:
1.	I have reviewed this Quarterly Report on Form 10-Q of M/I Homes, Inc. for the fiscal quarter ended September 30, 2022;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/Robert H. Schottenstein	Date:	October 28, 2022
Robert H. Schottenstein
Chairman, Chief Executive Officer and
President

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Phillip G. Creek, certify that:
1.	I have reviewed this Quarterly Report on Form 10-Q of M/I Homes, Inc. for the fiscal quarter ended September 30, 2022;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/Phillip G. Creek	Date:	October 28, 2022
Phillip G. Creek
Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of M/I Homes, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert H. Schottenstein, Chairman, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/Robert H. Schottenstein	Date:	October 28, 2022
Robert H. Schottenstein
Chairman, Chief Executive Officer and
President

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of M/I Homes, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Phillip G. Creek, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/Phillip G. Creek	Date:	October 28, 2022
Phillip G. Creek
Executive Vice President and Chief Financial Officer

XML

Cover Page Cover Page - shares	9 Months Ended
	Sep. 30, 2022	Oct. 26, 2022
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	1-12434
Entity Registrant Name	M/I HOMES, INC.
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	31-1210837
Entity Address, Address Line One	4131 Worth Avenue
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Columbus
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43219
City Area Code	614
Local Phone Number	418-8000
Title of 12(b) Security	Common Shares, par value $.01
Trading Symbol	MHO
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,428,983
Entity Central Index Key	0000799292
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
ASSETS:
Cash, cash equivalents and restricted cash	$ 67,761	$ 236,368
Mortgage loans held for sale	183,327	275,655
Inventory	3,016,735	2,452,434
Property and equipment - net	35,217	37,648
Investment in joint venture arrangements	51,700	57,121
Operating lease right-of-use assets	55,388	50,950
Deferred Income Tax Assets, Net	10,251	10,251
Goodwill	16,400	16,400
Other assets	151,134	103,026
Total assets	3,587,913	3,239,853
LIABILITIES:
Accounts payable	296,326	244,505
Customer deposits	126,368	107,864
Operating lease liabilities	56,199	51,497
Other liabilities	252,532	226,969
Community development district obligations	31,991	20,089
Obligation for consolidated inventory not owned	4,778	2,768
Notes payable bank - homebuilding operations	0
Notes payable bank - financial service operations	189,371	266,160
Notes payable - other	429	4,549
Senior notes due 2028 - net	395,911	395,331
Senior notes due 2030 - net	296,235	295,937
TOTAL LIABILITIES	1,650,140	1,615,669
Commitments and contingencies (Note 6)	0	0
SHAREHOLDERS' EQUITY:
Common shares - $0.01 par value; authorized 58,000,000 shares at both September 30, 2022 and December 31, 2021; issued 30,137,141 shares at both September 30, 2022 and December 31, 2021	301	301
Additional paid-in capital	350,569	347,452
Retained earnings	1,705,588	1,345,321
Treasury shares - at cost - 2,708,158 and 1,637,511 shares at September 30, 2022 and December 31, 2021, respectively	(118,685)	(68,890)
TOTAL SHAREHOLDERS' EQUITY	1,937,773	1,624,184
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 3,587,913	$ 3,239,853

XML

Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	58,000,000	58,000,000
Common Stock, Shares, Issued	30,137,141	30,137,141
Treasury Stock, Shares	2,708,158	1,637,511

XML

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Costs and Expenses [Abstract]
Revenue	$ 1,012,928	$ 904,319	$ 2,914,393	$ 2,694,135
Land and housing	741,013	682,565	2,145,082	2,028,822
General and administrative	58,247	49,420	162,246	143,703
Selling	46,373	47,114	134,000	143,379
Equity in loss (income) from joint venture arrangements	0	50	(17)	(145)
Interest income		(74)
Interest expense	701		2,065	1,554
Loss on Extinguishment of Debt	0	9,072	0	9,072
Total costs and expenses	846,334	788,147	2,443,376	2,326,385
Income before income taxes	166,594	116,172	471,017	367,750
Provision for income taxes	35,004	25,160	110,750	84,265
Net income	$ 131,590	$ 91,012	$ 360,267	$ 283,485
Earnings per common share:
Basic	$ 4.76	$ 3.11	$ 12.86	$ 9.72
Diluted	$ 4.67	$ 3.03	$ 12.59	$ 9.46
Weighted Average Number of Shares Outstanding [Abstract]
Basic	27,618	29,250	28,025	29,179
Diluted	28,185	30,028	28,610	29,966

XML

Condensed Consolidated Statement of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Shares [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Shares [Member]
Shares Outstanding, Beginning Balance at Dec. 31, 2020		28,813,849
Stockholders' Equity, Beginning Balance at Dec. 31, 2020	$ 1,258,698	$ 301	$ 339,001	$ 948,453	$ (29,057)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	283,485			283,485
Stock options exercised, shares		452,100
Stock options exercised	11,241		1,227		10,014
Stock-based compensation expense	6,199		6,199
Repurchase of common shares, shares		(242,500)
Repurchase of common shares	(15,494)				(15,494)
Deferral of executive and director compensation	338		338
Deferred Compensation Arrangement with Individual, Shares Issued		76,181
Deferred Compensation Arrangement with Individual, Distribution Paid	0		(1,673)		1,673
Shares Outstanding, Ending Balance at Sep. 30, 2021		29,099,630
Stockholders' Equity, Ending Balance at Sep. 30, 2021	1,544,467	$ 301	345,092	1,231,938	(32,864)
Shares Outstanding, Beginning Balance at Jun. 30, 2021		29,318,130
Stockholders' Equity, Beginning Balance at Jun. 30, 2021	1,466,544	$ 301	343,301	1,140,926	(17,984)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	91,012			91,012
Stock options exercised, shares		24,000
Stock options exercised	611		(3)		614
Stock-based compensation expense	1,794		1,794
Repurchase of common shares, shares		(242,500)
Repurchase of common shares	(15,494)				(15,494)
Shares Outstanding, Ending Balance at Sep. 30, 2021		29,099,630
Stockholders' Equity, Ending Balance at Sep. 30, 2021	1,544,467	$ 301	345,092	1,231,938	(32,864)
Shares Outstanding, Beginning Balance at Dec. 31, 2021		28,499,630
Stockholders' Equity, Beginning Balance at Dec. 31, 2021	1,624,184	$ 301	347,452	1,345,321	(68,890)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	360,267			360,267
Stock options exercised, shares		38,800
Stock options exercised	1,002		(687)		1,689
Stock-based compensation expense	6,613		6,613
Repurchase of common shares, shares		(1,200,000)
Repurchase of common shares	(55,334)				(55,334)
Deferral of executive and director compensation	1,041		1,041
Deferred Compensation Arrangement with Individual, Shares Issued		90,553
Deferred Compensation Arrangement with Individual, Distribution Paid	0		(3,850)		3,850
Shares Outstanding, Ending Balance at Sep. 30, 2022		27,428,983
Stockholders' Equity, Ending Balance at Sep. 30, 2022	1,937,773	$ 301	350,569	1,705,588	(118,685)
Shares Outstanding, Beginning Balance at Jun. 30, 2022		27,760,583
Stockholders' Equity, Beginning Balance at Jun. 30, 2022	1,818,267	$ 301	347,923	1,573,998	(103,955)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	131,590			131,590
Stock options exercised, shares		8,400
Stock options exercised	232		(137)		369
Stock-based compensation expense	$ 2,764		2,764
Repurchase of common shares, shares	300,000	(340,000)
Repurchase of common shares	$ (15,099)				(15,099)
Deferral of executive and director compensation	19		19
Shares Outstanding, Ending Balance at Sep. 30, 2022		27,428,983
Stockholders' Equity, Ending Balance at Sep. 30, 2022	$ 1,937,773	$ 301	$ 350,569	$ 1,705,588	$ (118,685)

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
OPERATING ACTIVITIES:
Net income	$ 360,267	$ 283,485
Adjustments to reconcile net income to net cash used in operating activities:
Equity in loss (income) from joint venture arrangements	(17)	(145)
Mortgage loan originations	(1,482,628)	(1,630,588)
Proceeds from the sale of mortgage loans	1,567,685	1,647,062
Fair value adjustment of mortgage loans held for sale	7,271	1,962
Fair value adjustment of mortgage servicing rights	0	(162)
Servicing Asset at Fair Value, Additions	(7,090)	(13,596)
Amortization of mortgage servicing rights	1,137	1,106
Depreciation	9,754	9,494
Amortization of debt issue costs	1,933	1,937
Loss on sale of mortgage servicing rights	418	177
Loss on Extinguishment of Debt	0	2,040
Stock-based compensation expense	6,613	6,199
Change in assets and liabilities:
Inventory	(533,036)	(412,179)
Other assets	(37,400)	(5,787)
Accounts payable	51,821	41,642
Customer deposits	18,504	42,653
Accrued compensation	(807)	(3,413)
Other liabilities	21,426	(6,228)
Net cash (used in) provided by operating activities	(14,149)	(34,341)
INVESTING ACTIVITIES:
Purchase of property and equipment	(3,878)	(2,559)
Return of capital from joint venture arrangements	2,046	1,050
Investment in joint venture arrangements	(17,366)	(34,738)
Net proceeds from sale of mortgage servicing rights	100	4,324
Net cash provided by (used in) investing activities	(19,098)	(31,923)
FINANCING ACTIVITIES:
Repayments of senior notes	0	(250,000)
Proceeds from issuance of senior notes	0	300,000
Proceeds from bank borrowings - homebuilding operations	238,900	0
Principal repayments of bank borrowings - homebuilding operations	(238,900)	0
Net repayment of bank borrowings - financial services operations	(76,789)	(14,353)
Proceeds from (principal repayments of) notes payable-other and CDD bond obligations	(4,119)	1,466
Payments for repurchase of common stock	(55,334)	(15,494)
Debt issue costs	(120)	(6,249)
Proceeds from exercise of stock options	1,002	11,241
Net cash (used in) provided by financing activities	(135,360)	26,611
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total	(168,607)	(39,653)
Cash, cash equivalents and restricted cash-Period Start	236,368	260,810
Cash, cash equivalents and restricted cash-Period End	67,761	221,157
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest — net of amount capitalized	7,683	9,167
Income taxes	123,118	91,546
NON-CASH TRANSACTIONS DURING THE PERIOD
Community development district infrastructure	11,902	7,779
Consolidated inventory not owned	2,010	(5,511)
Distribution of single-family lots from joint venture arrangements	$ 20,758	$ 26,040

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Basis of Presentation

9 Months Ended

Sep. 30, 2022

Basis of Presentation [Abstract]

Basis of Accounting [Text Block]

The accompanying Unaudited Condensed Consolidated Financial Statements (the “financial statements”) of M/I Homes, Inc. and its subsidiaries (the “Company”) and notes thereto have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. The financial statements include the accounts of the Company. All intercompany transactions have been eliminated. Results for the interim period are not necessarily indicative of results for a full year. In the opinion of management, the accompanying financial statements reflect all adjustments (all of which are normal and recurring in nature) necessary for a fair presentation of financial results for the interim periods presented. These financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during that period. Actual results could differ from these estimates and have a significant impact on the financial condition and results of operations and cash flows. With regard to the Company, estimates and assumptions are inherent in calculations relating to valuation of inventory and investment in unconsolidated joint ventures, property and equipment depreciation, valuation of derivative financial instruments, accounts payable on inventory, accruals for costs to complete inventory, accruals for warranty claims, accruals for self-insured general liability claims, litigation, accruals for health care and workers’ compensation, accruals for guaranteed or indemnified loans, stock-based compensation expense, income taxes, and contingencies. Items that could have a significant impact on these estimates and assumptions include the risks and uncertainties listed in “Item 1A. Risk Factors” in Part I of our 2021 Form 10-K, as the same may be updated from time to time in our subsequent filings with the SEC.

Recently Adopted Accounting Standards

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 is intended to provide temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance became effective on March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), which clarified the scope and application of the original guidance. We fully adopted ASU 2020-04 and ASU 2021-01 in October 2022 after we amended our $90 million mortgage repurchase agreement, dated October 30, 2017, as amended (the “MIF Mortgage Repurchase Facility”), which discontinued the use of LIBOR and replaced it with the One-Month Term SOFR (“SOFR”) rate. The adoption of this guidance did not have a material impact on our consolidated financial statements and disclosures.

Significant Accounting Policies

There have been no significant changes to our significant accounting policies during the quarter ended September 30, 2022 as compared to those disclosed in our 2021 Form 10-K.

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Inventory and Capitalized Interest

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Inventory

Inventory is recorded at cost, unless events and circumstances indicate that the carrying value of the inventory is impaired, at which point the inventory is written down to fair value (see Note 4 to our financial statements for additional details relating to our procedures for evaluating our inventories for impairment). Inventory includes the costs of land acquisition, land development and home construction, capitalized interest, real estate taxes, direct overhead costs incurred during development and home construction, and common costs that benefit the entire community, less impairments, if any.

A summary of the Company’s inventory as of September 30, 2022 and December 31, 2021 is as follows:

(In thousands)	September 30, 2022		December 31, 2021
Single-family lots, land and land development costs	$	1,230,139	$	1,125,738
Land held for sale	9,174		4,312
Homes under construction	1,624,831		1,187,341
Model homes and furnishings - at cost (less accumulated depreciation: September 30, 2022 - $12,130;    December 31, 2021 - $12,023)	59,145		59,268
Community development district infrastructure	31,991		20,089
Land purchase deposits	56,677		52,918
Consolidated inventory not owned	4,778		2,768
Total inventory	$	3,016,735	$	2,452,434

Single-family lots, land and land development costs include raw land that the Company has purchased to develop into lots, costs incurred to develop the raw land into lots, and lots for which development has been completed, but which have not yet been used to start construction of a home.

Homes under construction include homes that are in various stages of construction. As of September 30, 2022 and December 31, 2021, we had 1,855 homes (with a carrying value of $369.0 million) and 1,266 homes (with a carrying value of $193.2 million), respectively, included in homes under construction that were not subject to a sales contract.

Model homes and furnishings include homes that are under construction or have been completed and are being used as sales models. The amount also includes the net book value of furnishings included in our model homes. Depreciation on model home furnishings is recorded using an accelerated method over the estimated useful life of the assets, which is typically three years.

We own lots in certain communities in Florida that have Community Development Districts (“CDDs”). The Company records a liability for the estimated developer obligations that are probable and estimable and user fees that are required to be paid or transferred at the time the parcel or unit is sold to an end user.  The Company reduces this liability at the time of closing and the transfer of the property.  The Company recorded a $32.0 million liability and a $20.1 million liability related to these CDD bond obligations as of September 30, 2022 and December 31, 2021, respectively, along with the related inventory infrastructure.

Land purchase deposits include both refundable and non-refundable amounts paid to third party sellers relating to the purchase of land. On an ongoing basis, the Company evaluates the land option agreements relating to the land purchase deposits. The Company expenses any deposits and accumulated pre-acquisition costs relating to such agreements in the period when the Company makes the decision not to proceed with the purchase of land under an agreement.

Capitalized Interest

The Company capitalizes interest during land development and home construction.  Capitalized interest is charged to land and housing costs and expensed as the related inventory is delivered to a third party.  A summary of capitalized interest for the three and nine months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Capitalized interest, beginning of period	$	27,049	$	22,304	$	24,343	$	21,329
Interest capitalized to inventory	8,926		9,402		26,495		28,020
Capitalized interest charged to land and housing costs and expenses	(6,683)		(8,212)		(21,546)		(25,855)
Capitalized interest, end of period	$	29,292	$	23,494	$	29,292	$	23,494
Interest incurred	$	9,627	$	9,328	$	28,560	$	29,574

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Investment in Joint Venture Arrangements (Notes)

9 Months Ended

Sep. 30, 2022

Schedule of Equity Method Investments [Line Items]

Equity Method Investments and Joint Venture Arrangements Disclosure [Text Block]

Investment in Joint Venture Arrangements

In order to minimize our investment and risk of land exposure in a single location, we have periodically partnered with other land developers or homebuilders to share in the land investment and development of a property through joint ownership and development agreements, joint ventures, and other similar arrangements. As of September 30, 2022 and December 31, 2021, our investment in such joint venture arrangements totaled $51.7 million and $57.1 million, respectively, and was reported as Investment in Joint Venture Arrangements on our Unaudited Condensed Consolidated Balance Sheets. The $5.4 million decrease during the nine-month period ended September 30, 2022 was driven primarily by lot distributions from our joint venture arrangements of $20.8 million and return of capital from joint venture arrangements of $2.0 million, offset, in part, by our cash contributions to our joint venture arrangements during the first nine months of 2022 of $17.4 million.

The majority of our investment in joint venture arrangements for both September 30, 2022 and December 31, 2021 consisted of joint ownership and development agreements for which a special purpose entity was not established (“JODAs”). In these JODAs, we own the property jointly with partners which are typically other builders, and land development activities are funded jointly until the developed lots are subdivided for separate ownership by the partners in accordance with the JODA and the approved site plan. As of September 30, 2022 and December 31, 2021, the Company had $46.2 million and $50.6 million, respectively, invested in JODAs.

The remainder of our investment in joint venture arrangements was comprised of joint venture arrangements where a special purpose entity was established to own and develop the property. For these joint venture arrangements, we generally enter into limited liability company or similar arrangements (“LLCs”) with the other partners. These entities typically engage in land development activities for the purpose of distributing or selling developed lots to the Company and its partners in the LLC. As of September 30, 2022 and December 31, 2021, the Company had $5.5 million and $6.5 million, respectively, of equity invested in LLCs. The Company’s percentage of ownership in these LLCs as of both September 30, 2022 and December 31, 2021 ranged from 25% to 50%.

We use the equity method of accounting for investments in LLCs and other joint venture arrangements, including JODAs, over which we exercise significant influence but do not have a controlling interest. Under the equity method, our share of the LLCs’ earnings or loss, if any, is included in our Unaudited Condensed Consolidated Statements of Income. The Company did not have any share of losses from its LLCs for the three months ended September 30, 2022; however, the Company’s share of losses from its LLCs was $0.1 million for the three months ended September 30, 2021. For the nine months ended September 30, 2022 and 2021, the Company’s equity in income relating to earnings from its LLCs was less than $0.1 million and $0.1 million, respectively. Our share of the profit relating to lots we purchase from our LLCs is deferred until homes are delivered by us and title passes to a homebuyer.

We believe that the Company’s maximum exposure related to its investment in these joint venture arrangements as of September 30, 2022 was the amount invested of $51.7 million, which is reported as Investment in Joint Venture Arrangements on our Unaudited Condensed Consolidated Balance Sheets. We expect to invest further amounts in these joint venture arrangements as development of the properties progresses.

The Company assesses its investments in unconsolidated LLCs for recoverability on a quarterly basis. See Note 4 to our financial statements for additional details relating to our procedures for evaluating our investments for impairment.

Variable Interest Entities

With respect to our investments in these LLCs, we are required, under ASC 810-10, Consolidation (“ASC 810”), to evaluate whether or not such entities should be consolidated into our consolidated financial statements. We initially perform these evaluations when each new entity is created and upon any events that require reconsideration of the entity. See Note 1, “Summary of Significant Accounting Policies - Variable Interest Entities” in the Company’s 2021 Form 10-K for additional information regarding the Company’s methodology for evaluating entities for consolidation.

Land Option Agreements

In the ordinary course of business, the Company enters into land option or purchase agreements for which we generally pay non-refundable deposits. Pursuant to these land option agreements, the Company provides a deposit to the seller as consideration for the right to purchase land at different times in the future, usually at predetermined prices.  In accordance with ASC 810, we analyze our land option or purchase agreements to determine whether the corresponding land sellers are variable interest entities (“VIEs”) and, if so, whether we are the primary beneficiary, as further described in Note 1, “Summary of

Significant Accounting Policies - Land Option Agreements” in the 2021 Form 10-K. If we are deemed to be the primary beneficiary of the VIE, we will consolidate the VIE in our consolidated financial statements and reflect such assets and liabilities in our Consolidated Inventory Not Owned in our Unaudited Condensed Consolidated Balance Sheets. At both September 30, 2022 and December 31, 2021, we concluded that we were not the primary beneficiary of any VIEs from which we are purchasing land under option or purchase agreements.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Measurements [Abstract]

Fair Value Disclosures [Text Block]

There are three measurement input levels for determining fair value: Level 1, Level 2, and Level 3. Fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

Assets Measured on a Recurring Basis

The Company measures both mortgage loans held for sale and interest rate lock commitments (“IRLCs”) at fair value. Fair value measurement results in a better presentation of the changes in fair values of the loans and the derivative instruments used to economically hedge them.

In the normal course of business, our financial services segment enters into contractual commitments to extend credit to buyers of single-family homes with fixed expiration dates.  The commitments become effective when the borrowers “lock-in” a specified interest rate within established time frames.  Market risk arises if interest rates move adversely between the time of the “lock-in” of rates by the borrower and the sale date of the loan to an investor.  To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, the Company enters into optional or mandatory delivery forward sale contracts to sell whole loans and mortgage-backed securities to broker/dealers.  The forward sale contracts lock in an interest rate and price for the sale of loans similar to the specific rate lock commitments.  The Company does not engage in speculative trading or derivative activities.  Both the rate lock commitments to borrowers and the forward sale contracts to broker/dealers or investors are undesignated derivatives, and accordingly, are marked to fair value through earnings.  Changes in fair value measurements are included in earnings in the accompanying statements of income.

The fair value of mortgage loans held for sale is estimated based primarily on published prices for mortgage-backed securities with similar characteristics.  To calculate the effects of interest rate movements, the Company utilizes applicable published mortgage-backed security prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount.  The Company applies a fallout rate to IRLCs when measuring the fair value of rate lock commitments.  Fallout is defined as locked loan commitments for which the Company does not close a mortgage loan and is based on management’s judgment and company experience.

The Company sells loans on a servicing released or servicing retained basis and receives servicing compensation.  Thus, the value of the servicing rights included in the fair value measurement is based upon contractual terms with investors and depends on the loan type. Mortgage servicing rights (Level 3 financial instruments as they are measured using significant unobservable inputs such as mortgage prepayment rates, discount rates and delinquency rates) are periodically evaluated for impairment. The amount of impairment is the amount by which the mortgage servicing rights, net of accumulated amortization, exceed their fair value, which is calculated using third-party valuations. Impairment, if any, is recognized through a valuation allowance and a reduction of revenue. Both the carrying value and fair value of our mortgage servicing rights were $14.5 million at September 30, 2022. At December 31, 2021, both the carrying value and fair value of our mortgage servicing rights were $8.4 million.

The fair value of the Company’s forward sales contracts to broker/dealers solely considers the market price movement of the same type of security between the trade date and the balance sheet date.  The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.

Interest Rate Lock Commitments. IRLCs are extended to certain homebuying customers who have applied for a mortgage loan and meet certain defined credit and underwriting criteria. Typically, the IRLCs will have a term of less than six months; however, in certain markets, the term could extend to nine months.

Some IRLCs are committed to a specific third-party investor through the use of whole loan delivery commitments matching the exact terms of the IRLC loan. Uncommitted IRLCs are considered derivative instruments and are fair value adjusted, with the resulting gain or loss recorded in current earnings.

Forward Sales of Mortgage-Backed Securities. Forward sales of mortgage-backed securities (“FMBSs”) are used to protect uncommitted IRLC loans against the risk of changes in interest rates between the lock date and the funding date. FMBSs related to uncommitted IRLCs and FMBSs related to mortgage loans held for sale are classified and accounted for as non-designated derivative instruments and are recorded at fair value, with gains and losses recorded in current earnings.

Mortgage Loans Held for Sale. Mortgage loans held for sale consists primarily of single-family residential loans collateralized by the underlying property.  Generally, all of the mortgage loans and related servicing rights are sold to third-party investors shortly after origination.  During the period between when a loan is closed and when it is sold to an investor, the interest rate risk is covered through the use of a whole loan contract or by FMBSs.

The table below shows the notional amounts of our financial instruments at September 30, 2022 and December 31, 2021:

Description of Financial Instrument (in thousands)	September 30, 2022		December 31, 2021
Whole loan contracts and related committed IRLCs	$	4,169	$	782
Uncommitted IRLCs	477,065		228,831
FMBSs related to uncommitted IRLCs	476,000		223,000
Whole loan contracts and related mortgage loans held for sale	18,648		3,785
FMBSs related to mortgage loans held for sale	174,000		251,000
Mortgage loans held for sale covered by FMBSs	172,151		263,088

The following table sets forth the amount of gain (loss) recognized, within our revenue in the Unaudited Condensed Consolidated Statements of Income, on assets and liabilities measured on a recurring basis for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
Description (in thousands)	2022		2021		2022		2021
Mortgage loans held for sale	$	(4,396)	$	(1,704)	$	(7,271)	$	(1,962)
Forward sales of mortgage-backed securities	24,952		3,877		22,199		4,893
Interest rate lock commitments	(13,015)		(1,440)		(15,708)		(940)
Whole loan contracts	(209)		49		(97)		413
Total gain (loss) recognized	$	7,332	$	782	$	(877)	$	2,404

The following tables set forth the fair value of the Company’s derivative instruments and their location within the Unaudited Condensed Consolidated Balance Sheets for the periods indicated (except for mortgage loans held for sale which are disclosed as a separate line item):

	Asset Derivatives			Liability Derivatives
	September 30, 2022			September 30, 2022
Description of Derivatives	Balance Sheet Location	Fair Value (in thousands)		Balance Sheet Location	Fair Value (in thousands)
Forward sales of mortgage-backed securities	Other assets	$	26,676	Other liabilities	$	—
Interest rate lock commitments	Other assets	—		Other liabilities	16,173
Whole loan contracts	Other assets	—		Other liabilities	181
Total fair value measurements		$	26,676		$	16,354

	Asset Derivatives			Liability Derivatives
	December 31, 2021			December 31, 2021
Description of Derivatives	Balance Sheet Location	Fair Value (in thousands)		Balance Sheet Location	Fair Value (in thousands)
Forward sales of mortgage-backed securities	Other assets	$	4,477	Other liabilities	$	—
Interest rate lock commitments	Other assets	—		Other liabilities	487
Whole loan contracts	Other assets	—		Other liabilities	62
Total fair value measurements		$	4,477		$	549

Assets Measured on a Non-Recurring Basis

Inventory. The Company assesses inventory for recoverability on a quarterly basis based on the difference in the carrying value of the inventory and its fair value at the time of the evaluation. Determining the fair value of a community’s inventory involves a number of variables, estimates and projections, which are Level 3 measurement inputs. See Note 1, “Summary of Significant Accounting Policies - Inventory” in the 2021 Form 10-K for additional information regarding the Company’s methodology for determining fair value.

The Company uses significant assumptions to evaluate the recoverability of its inventory, such as estimated average selling price, construction and development costs, absorption rate (reflecting any product mix change strategies implemented or to be implemented), selling strategies, alternative land uses (including disposition of all or a portion of the land owned), or discount rates. Changes in these assumptions could materially impact future cash flow and fair value estimates and may lead the Company to incur additional impairment charges in the future. Our analysis is conducted only if indicators of a decline in value of our inventory exist, which include, among other things, declines in gross margin on sales contracts in backlog or homes that have been delivered, slower than anticipated absorption pace, declines in average sales price or high incentive offers by management to improve absorptions, declines in margins regarding future land sales, or declines in the value of the land itself as a result of third party appraisals. If communities are not recoverable based on the estimated future undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. During the three and nine months ended September 30, 2022 and 2021, the Company did not record any impairment charges on its inventory.

Investment in Unconsolidated Joint Ventures.  We evaluate our investments in unconsolidated joint ventures for impairment on a quarterly basis based on the difference in the investment’s carrying value and its fair value at the time of the evaluation. If the Company has determined that the decline in value is other than temporary, the Company would write down the value of the investment to its estimated fair value. Determining the fair value of investments in unconsolidated joint ventures involves a number of variables, estimates and assumptions, which are Level 3 measurement inputs. See Note 1, “Summary of Significant Accounting Policies - Investment in Unconsolidated Joint Ventures,” in the 2021 Form 10-K for additional information regarding the Company’s methodology for determining fair value. Because of the high degree of judgment involved in developing these assumptions, it is possible that changes in these assumptions could materially impact future cash flow and fair value estimates of the investments which may lead the Company to incur additional impairment charges in the future. During the three and nine months ended September 30, 2022 and 2021, the Company did not record any impairment charges on its investments in unconsolidated joint ventures.

Financial Instruments

Counterparty Credit Risk. To reduce the risk associated with losses that would be recognized if counterparties failed to perform as contracted, the Company limits the entities with whom management can enter into commitments. This risk of

accounting loss is the difference between the market rate at the time of non-performance by the counterparty and the rate to which the Company committed.

The following table presents the carrying amounts and fair values of the Company’s financial instruments at September 30, 2022 and December 31, 2021. The objective of the fair value measurement is to estimate the price at which an orderly transaction to sell the asset or transfer the liability would take place between market participants at the measurement date under current market conditions.

		September 30, 2022				December 31, 2021
(In thousands)	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash, cash equivalents and restricted cash	Level 1	$	67,761	$	67,761	$	236,368	$	236,368
Mortgage loans held for sale	Level 2	183,327		183,327		275,655		275,655
Forward sales of mortgage-backed securities	Level 2	26,676		26,676		4,477		4,477
Liabilities:
Notes payable - homebuilding operations	Level 2	—		—		—		—
Notes payable - financial services operations	Level 2	189,371		189,371		266,160		266,160
Notes payable - other	Level 2	429		423		4,549		5,015
Senior notes due 2028 (a)	Level 2	400,000		330,500		400,000		414,000
Senior notes due 2030 (a)	Level 2	300,000		217,875		300,000		294,375
Interest rate lock commitments	Level 2	16,173		16,173		487		487
Whole loan contracts for committed IRLCs and mortgage loans held for sale	Level 2	181		181		62		62

(a)Our senior notes are stated at the principal amount outstanding which does not include the impact of premiums, discounts, and debt issuance costs that are amortized to interest cost over the respective terms of the notes.

The following methods and assumptions were used by the Company in estimating its fair value disclosures of financial instruments at September 30, 2022 and December 31, 2021:

Cash, Cash Equivalents and Restricted Cash. The carrying amounts of these items approximate fair value because they are short-term by nature.

Mortgage Loans Held for Sale, Forward Sales of Mortgage-Backed Securities, Interest Rate Lock Commitments, Whole Loan Contracts for Committed IRLCs and Mortgage Loans Held for Sale, Senior Notes due 2028 and Senior Notes due 2030. The fair value of these financial instruments was determined based upon market quotes at September 30, 2022 and December 31, 2021. The market quotes used were quoted prices for similar assets or liabilities along with inputs taken from observable market data by correlation. The inputs were adjusted to account for the condition of the asset or liability.

Notes Payable - Homebuilding Operations. The interest rate available to the Company during the quarter ended September 30, 2022 under the Company’s $550 million unsecured revolving credit facility, dated July 18, 2013, as amended (the “Credit Facility”), fluctuated daily with the one-month LIBOR rate plus a margin of 175 basis points, and thus the carrying value is a reasonable estimate of fair value. See Note 8 to our financial statements for additional information regarding the Credit Facility.

Notes Payable - Financial Services Operations. M/I Financial, LLC, a 100%-owned subsidiary of M/I Homes, Inc. (“M/I Financial”), is a party to two credit agreements: (1) a $200 million secured mortgage warehousing agreement, dated May 27, 2022 (the “MIF Mortgage Warehousing Agreement”); and (2) the MIF Mortgage Repurchase Facility. For each of these credit facilities, the interest rate is based on a variable rate index, and thus their carrying value is a reasonable estimate of fair value. The interest rate available to M/I Financial during the third quarter of 2022 fluctuated with LIBOR or BSBY, as applicable. See Note 8 to our financial statements for additional information regarding the MIF Mortgage Warehousing Agreement and the MIF Mortgage Repurchase Facility.

Notes Payable - Other. The estimated fair value was determined by calculating the present value of the future cash flows using the Company’s current incremental borrowing rate.

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Guarantees and Indemnifications

9 Months Ended

Sep. 30, 2022

Guarantees [Abstract]

Guarantees [Text Block]

In the ordinary course of business, M/I Financial enters into agreements that provide a limited-life guarantee on loans sold to certain third-party purchasers of its mortgage loans that M/I Financial will repurchase a loan if certain conditions occur,

primarily if the mortgagor does not meet the terms of the loan within the first six months after the sale of the loan. Loans totaling approximately $435.9 million and $305.0 million were covered under these guarantees as of September 30, 2022 and December 31, 2021, respectively.  A portion of the revenue paid to M/I Financial for providing the guarantees on these loans was deferred at September 30, 2022, and will be recognized in income as M/I Financial is released from its obligation under the guarantees. The risk associated with the guarantees above is offset by the value of the underlying assets.

M/I Financial has received inquiries concerning underwriting matters from purchasers of its loans regarding certain loans totaling approximately $2.0 million and $0.7 million at September 30, 2022 and December 31, 2021, respectively.

M/I Financial has also guaranteed the collectability of certain loans to third party insurers (U.S. Department of Housing and Urban Development and U.S. Veterans Administration) of those loans for periods ranging from five to thirty years. The maximum potential amount of future payments is equal to the outstanding loan value less the value of the underlying asset plus administrative costs incurred related to foreclosure on the loans, should this event occur.

The Company recorded a liability relating to the guarantees described above totaling $0.6 million and $0.3 million at September 30, 2022 and December 31, 2021, respectively, which is management’s best estimate of the Company’s liability with respect to such guarantees.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Warranty

We use subcontractors for nearly all aspects of home construction. Although our subcontractors are generally required to repair and replace any product or labor defects, we are, during applicable warranty periods, ultimately responsible to the homeowner for making such repairs. As such, we record warranty reserves to cover our exposure to the costs for materials and labor not expected to be covered by our subcontractors to the extent they relate to warranty-type claims. Warranty reserves are established by charging cost of sales and crediting a warranty reserve for each home delivered.  The amounts charged are estimated by management to be adequate to cover expected warranty-related costs under the Company’s warranty programs. Warranty reserves are recorded for warranties under our Home Builder’s Limited Warranty (“HBLW”) and our transferable structural warranty in Other Liabilities on the Company’s Unaudited Condensed Consolidated Balance Sheets.

The warranty reserves for the HBLW are established as a percentage of average sales price and adjusted based on historical payment patterns determined, generally, by geographic area and recent trends. Factors that are given consideration in determining the HBLW reserves include: (1) the historical range of amounts paid per average sales price on a home; (2) type and mix of amenity packages added to the home; (3) any warranty expenditures not considered to be normal and recurring; (4) timing of payments; (5) improvements in quality of construction expected to impact future warranty expenditures; and (6) conditions that may affect certain projects and require a different percentage of average sales price for those specific projects. Changes in estimates for warranties occur due to changes in the historical payment experience and differences between the actual payment pattern experienced during the period and the historical payment pattern used in our evaluation of the warranty reserve balance at the end of each quarter. Actual future warranty costs could differ from our current estimated amount.

Our warranty reserves for our transferable structural warranty programs are established on a per-unit basis. While the structural warranty reserve is recorded as each house is delivered, the sufficiency of the structural warranty per unit charge and total reserve is reevaluated on an annual basis, with the assistance of an actuary, using our own historical data and trends, industry-wide historical data and trends, and other project specific factors. The reserves are also evaluated quarterly and adjusted if we encounter activity that is inconsistent with the historical experience used in the annual analysis. These reserves are subject to variability due to uncertainties regarding structural defect claims for products we build, the markets in which we build, claim settlement history, insurance and legal interpretations, among other factors.

Our warranty reserve amounts are based upon historical experience and geographic location. While we believe that our warranty reserves are sufficient to cover our projected costs, there can be no assurances that historical data and trends will accurately predict our actual warranty costs.

A summary of warranty activity for the three and nine months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Warranty reserves, beginning of period	$	29,970	$	29,880	$	29,728	$	29,012
Warranty expense on homes delivered during the period	5,373		4,834		15,479		15,246
Changes in estimates for pre-existing warranties	2,342		1,745		3,520		2,356
Settlements made during the period	(6,807)		(6,078)		(17,849)		(16,233)
Warranty reserves, end of period	$	30,878	$	30,381	$	30,878	$	30,381

We have received claims related to stucco installation from homeowners in certain of our communities in our Tampa and Orlando, Florida markets and have been named as a defendant in legal proceedings initiated by certain of such homeowners. These claims primarily relate to homes built prior to 2014 which have second story elevations with frame construction.

During the three and nine month period ended September 30, 2022, we did not record any additional warranty charges or receive any additional recoveries for stucco-related repair costs. The remaining reserve at September 30, 2022 for (1) homes in our Florida communities that we had identified as needing repair but had not yet completed the repair and (2) estimated repair costs for homes in our Florida communities that we had not yet identified as needing repair but that may require repair in the future included within our warranty reserve was $2.1 million. We believe that this amount is sufficient to cover both known and estimated future repair costs as of September 30, 2022. Our remaining stucco-related reserve is gross of any recoveries.

Our estimate of future costs of stucco-related repairs is based on our judgment, various assumptions and internal data. Due to the degree of judgment and the potential for variability in our underlying assumptions and data, we may revise our estimate, including to reflect additional estimated future stucco-related repairs costs, which revision could be material.

Performance Bonds and Letters of Credit

At September 30, 2022, the Company had outstanding approximately $446.4 million of completion bonds and standby letters of credit, some of which were issued to various local governmental entities that expire at various times through November 2027. Included in this total are: (1) $344.8 million of performance and maintenance bonds and $88.3 million of performance letters of credit that serve as completion bonds for land development work in progress; (2) $8.4 million of financial letters of credit, of which $8.0 million represent deposits on land and lot purchase agreements; and (3) $4.9 million of financial bonds.

Land Option Contracts and Other Similar Contracts

At September 30, 2022, the Company also had options and contingent purchase agreements to acquire land and developed lots with an aggregate purchase price of approximately $982.4 million. Purchase of properties under these agreements is contingent upon satisfaction of certain requirements by the Company and the sellers.

Legal Matters

In addition to the legal proceedings related to stucco, the Company and certain of its subsidiaries have been named as defendants in certain other legal proceedings which are incidental to our business. While management currently believes that the ultimate resolution of these other legal proceedings, individually and in the aggregate, will not have a material effect on the Company’s financial position, results of operations and cash flows, such legal proceedings are subject to inherent uncertainties. The Company has recorded a liability to provide for the anticipated costs, including legal defense costs, associated with the resolution of these other legal proceedings. However, the possibility exists that the costs to resolve these legal proceedings could differ from the recorded estimates and, therefore, have a material effect on the Company’s net income for the periods in which they are resolved. At September 30, 2022 and December 31, 2021, we had $0.6 million and $1.2 million reserved for legal expenses, respectively.

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Goodwill (Notes)	9 Months Ended
	Sep. 30, 2022
Goodwill [Abstract]
Mergers, Acquisitions and Dispositions Disclosures [Text Block]	Goodwill represents the excess of the purchase price paid over the fair value of the net assets acquired and liabilities assumed in business combinations. In connection with the Company’s acquisition of the homebuilding assets and operations of Pinnacle Homes in Detroit, Michigan in March 2018, the Company recorded goodwill of $16.4 million, which is included as Goodwill in our Consolidated Balance Sheets. This amount was based on the estimated fair values of the acquired assets and liabilities at the date of the acquisition in accordance with ASC 350.In accordance with ASC 350, the Company analyzes goodwill for impairment on an annual basis (or more often if indicators of impairment exist). The Company performs a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, a quantitative assessment is performed to determine the reporting unit’s fair value. If the reporting unit’s carrying value exceeds its fair value, then an impairment loss is recognized for the amount of the excess of the carrying amount over the reporting unit’s fair value. The Company performed its annual goodwill impairment analysis during the fourth quarter of 2021, and as no indicators for impairment existed at December 31, 2021, no impairment was recorded. At September 30, 2022, no indicators for impairment existed and therefore no impairment was recorded. However, we will continue to monitor the fair value of the reporting unit in future periods if conditions worsen or other events occur that could impact the fair value of the reporting unit.

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Debt

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Notes Payable - Homebuilding

The Credit Facility provides for an aggregate commitment amount of $550 million and also includes an accordion feature pursuant to which the maximum borrowing availability may be increased to an aggregate of $700 million, subject to obtaining additional commitments from lenders. The Credit Facility matures on July 18, 2025. Interest on amounts borrowed under the Credit Facility is payable at a rate which is adjusted daily and is equal to the sum of the one-month LIBOR (subject to a floor of 0.25%) plus a margin of 175 basis points (subject to adjustment in subsequent quarterly periods based on the Company’s leverage ratio). The Credit Facility includes a provision for the replacement of LIBOR under certain circumstances where one-month LIBOR is no longer available. The Credit Facility also contains certain financial covenants. At September 30, 2022, the Company was in compliance with all financial covenants of the Credit Facility.

The available amount under the Credit Facility is computed in accordance with a borrowing base, which is calculated by applying various advance rates for different categories of inventory, and totaled $1.53 billion of availability for additional senior debt at September 30, 2022. As a result, the full $550 million commitment amount of the Credit Facility was available, less any borrowings and letters of credit outstanding. At September 30, 2022, there were no borrowings outstanding and $96.6 million of letters of credit outstanding, leaving a net remaining borrowing availability of $453.4 million. The Credit Facility includes a $150 million sub-facility for letters of credit.

The Company’s obligations under the Credit Facility are guaranteed by all of the Company’s subsidiaries, with the exception of subsidiaries that are primarily engaged in the business of mortgage financing, title insurance or similar financial businesses relating to the homebuilding and home sales business, certain subsidiaries that are not 100%-owned by the Company or another subsidiary, and other subsidiaries designated by the Company as Unrestricted Subsidiaries (as defined in the Credit Facility), subject to limitations on the aggregate amount invested in such Unrestricted Subsidiaries in accordance with the terms of the Credit Facility and the indentures governing the Company’s $300.0 million aggregate principal amount of 3.95% Senior Notes due 2030 (the “2030 Senior Notes”) and the Company’s $400.0 million aggregate principal amount of 4.95% Senior Notes due 2028 (the “2028 Senior Notes”). The guarantors for the Credit Facility (the “Subsidiary Guarantors”) are the same subsidiaries that guarantee the 2030 Senior Notes and the 2028 Senior Notes.

The Company’s obligations under the Credit Facility are general, unsecured senior obligations of the Company and the Subsidiary Guarantors and rank equally in right of payment with all our and the Subsidiary Guarantors’ existing and future unsecured senior indebtedness. Our obligations under the Credit Facility are effectively subordinated to our and the Subsidiary Guarantors’ existing and future secured indebtedness with respect to any assets comprising security or collateral for such indebtedness.

Notes Payable - Financial Services

The MIF Mortgage Warehousing Agreement is used to finance eligible residential mortgage loans originated by M/I Financial. The MIF Mortgage Warehousing Agreement provides for a maximum borrowing availability of $200 million, which increased to $275 million from September 19, 2022 to November 13, 2022 and increases to $300 million from November 14, 2022 through February 6, 2023, which are periods of expected increases in the volume of mortgage originations. The MIF Mortgage Warehousing Agreement expires on May 26, 2023. Interest on amounts borrowed under the MIF Mortgage Warehousing Agreement is payable at a per annum rate equal to the one-month BSBY rate (subject to a floor of 0.25%) plus a spread of 190

basis points. The MIF Mortgage Warehousing Agreement also contains certain financial covenants. At September 30, 2022, M/I Financial was in compliance with all financial covenants of the MIF Mortgage Warehousing Agreement.

The MIF Mortgage Repurchase Facility is used to finance eligible residential mortgage loans originated by M/I Financial. The MIF Mortgage Repurchase Facility provides for a mortgage repurchase facility with a maximum borrowing availability of $90 million. Before entering into the amendment to the MIF Mortgage Repurchase Facility discussed below, M/I Financial paid interest on each advance under the MIF Mortgage Repurchase Facility at a per annum rate equal to the one-month LIBOR rate (subject to a floor of 0.75% or 0.625% based on the type of loan) plus 175 or 200 basis points depending on the loan type. The MIF Mortgage Repurchase Facility also contains certain financial covenants. At September 30, 2022, M/I Financial was in compliance with all financial covenants of the MIF Mortgage Repurchase Facility. Effective October 24, 2022, M/I Financial entered into an amendment to the MIF Mortgage Repurchase Facility which, among other things, extends the term of the MIF Mortgage Repurchase Facility for an additional year to October 23, 2023, replaces the LIBOR rate with the One-Month Term SOFR (“SOFR”) rate (subject to an all-in floor of 2.375% or 2.75% based on the type of loan) and adjusts certain financial covenant limits.

At September 30, 2022 and December 31, 2021, M/I Financial’s total combined maximum borrowing availability under the two credit facilities was $365.0 million and $325.0 million, respectively. At September 30, 2022 and December 31, 2021, M/I Financial had $189.4 million and $266.2 million, respectively, in borrowings outstanding on a combined basis under its credit facilities.

Senior Notes

As of both September 30, 2022 and December 31, 2021, we had $300.0 million of our 2030 Senior Notes outstanding. The 2030 Senior Notes bear interest at a rate of 3.95% per year, payable semiannually in arrears on February 15 and August 15 of each year, and mature on February 15, 2030. The Company may redeem some or all of the 2030 Senior Notes at any time prior to August 15, 2029 (the date that is six months prior to the maturity of the 2030 Senior Notes), at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date, plus a “make-whole” amount set forth in the indenture governing the 2030 Senior Notes. In addition, on or after August 15, 2029 (the date that is six months prior to the maturity of the 2030 Senior Notes), the Company may redeem some or all of the 2030 Senior Notes at a redemption price equal to 100.000% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

As of both September 30, 2022 and December 31, 2021, we had $400.0 million of our 2028 Senior Notes outstanding. The 2028 Senior Notes bear interest at a rate of 4.95% per year, payable semiannually in arrears on February 1 and August 1 of each year and mature on February 1, 2028. We may redeem all or any portion of the 2028 Senior Notes on or after February 1, 2023 at a stated redemption price, together with accrued and unpaid interest thereon. The redemption price will initially be 103.713% of the principal amount outstanding, but will decline to 102.475% of the principal amount outstanding if redeemed during the 12-month period beginning on February 1, 2024, will further decline to 101.238% of the principal amount outstanding if redeemed during the 12-month period beginning on February 1, 2025 and will further decline to 100.000% of the principal amount outstanding if redeemed on or after February 1, 2026, but prior to maturity.

The 2030 Senior Notes contain certain covenants, as more fully described and defined in the indenture governing the 2030 Senior Notes, which limit the ability of the Company and the restricted subsidiaries to, among other things: incur certain liens securing indebtedness without equally and ratably securing the 2030 Senior Notes and the guarantees thereof; enter into certain sale and leaseback transactions; and consolidate or merge with or into other companies, liquidate or sell or otherwise dispose of all or substantially all of the Company’s assets. These covenants are subject to a number of exceptions and qualifications as described in the indenture governing the 2030 Senior Notes. As of September 30, 2022, the Company was in compliance with all terms, conditions, and covenants under the indenture.

The 2028 Senior Notes contain certain covenants, as more fully described and defined in the indenture governing the 2028 Senior Notes, which limit the ability of the Company and the restricted subsidiaries to, among other things: incur additional indebtedness; make certain payments, including dividends, or repurchase any shares, in an aggregate amount exceeding our “restricted payments basket”; make certain investments; and create or incur certain liens, consolidate or merge with or into other companies, or liquidate or sell or transfer all or substantially all of our assets. These covenants are subject to a number of exceptions and qualifications as described in the indenture governing the 2028 Senior Notes. As of September 30, 2022, the Company was in compliance with all terms, conditions, and covenants under the indenture.

The 2030 Senior Notes and the 2028 Senior Notes are fully and unconditionally guaranteed jointly and severally on a senior unsecured basis by the Subsidiary Guarantors. The 2030 Senior Notes and the 2028 Senior Notes are general, unsecured senior obligations of the Company and the Subsidiary Guarantors and rank equally in right of payment with all our and the Subsidiary

Guarantors’ existing and future unsecured senior indebtedness.  The 2030 Senior Notes and the 2028 Senior Notes are effectively subordinated to our and the Subsidiary Guarantors’ existing and future secured indebtedness with respect to any assets comprising security or collateral for such indebtedness.

The indenture governing the 2028 Senior Notes limits our ability to pay dividends on, and repurchase, our common shares and any of our preferred shares then outstanding to the amount of the positive balance in our “restricted payments basket,” as defined in the indenture. The “restricted payments basket” is equal to $125.0 million plus (1) 50% of our aggregate consolidated net income (or minus 100% of our aggregate consolidated net loss) from October 1, 2015, excluding income or loss from Unrestricted Subsidiaries (as defined in the indenture), plus (2) 100% of the net cash proceeds from either contributions to the common equity of the Company after December 1, 2015 or the sale of qualified equity interests after December 1, 2015, plus other items and subject to other exceptions. The positive balance in our restricted payments basket was $600.8 million at September 30, 2022 and $487.5 million at December 31, 2021. The determination to pay future dividends on, or make future repurchases of, our common shares will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, capital requirements and compliance with debt covenants, and other factors deemed relevant by our board of directors (see Note 12 to our financial statements for more information).

Notes Payable - Other

The Company had other borrowings, which are reported in Notes Payable - Other in our Unaudited Condensed Consolidated Balance Sheets, totaling $0.4 million and $4.5 million as of September 30, 2022 and December 31, 2021, respectively, which are comprised of notes payable acquired in the normal course of business.

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Earnings per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

The table below presents a reconciliation between basic and diluted weighted average shares outstanding, net income, and basic and diluted income per share for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands, except per share amounts)	2022		2021		2022		2021
NUMERATOR
Net income	$	131,590	$	91,012	$	360,267	$	283,485
DENOMINATOR
Basic weighted average shares outstanding	27,618		29,250		28,025		29,179
Effect of dilutive securities:
Stock option awards	248		447		274		474
Deferred compensation awards	319		331		311		313
Diluted weighted average shares outstanding	28,185		30,028		28,610		29,966
Earnings per common share:
Basic	$	4.76	$	3.11	$	12.86	$	9.72
Diluted	$	4.67	$	3.03	$	12.59	$	9.46
Anti-dilutive equity awards not included in the calculation of diluted earnings per common share	908		16		826		7

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Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

The Inflation Reduction Act (IRA) was enacted on August 16, 2022 to address the high cost of prescription drugs, healthcare availability, climate change and inflation. The IRA extended the energy efficient homes credit through 2032 and, as a result, the Company recognized an $8.4 million year-to-date tax benefit during the third quarter of 2022.

During the three months ended September 30, 2022 and 2021, the Company recorded a tax provision of $35.0 million and $25.2 million, respectively, which reflects income tax expense related to income before income taxes for the periods. The effective tax rate for the three months ended September 30, 2022 and 2021 was 21.0% and 21.7%, respectively. The decrease in the effective rate from the three months ended September 30, 2021 was primarily attributable to a $3.7 million increase in tax benefits from energy efficient home credits for 2022.

During the nine months ended September 30, 2022 and 2021, the Company recorded a tax provision of $110.8 million and $84.3 million, respectively. The effective tax rate for the nine months ended September 30, 2022 and 2021 was 23.5% and

22.9%, respectively. The increase in the effective rate from the nine months ended September 30, 2021 was primarily attributable to a $2.2 million decrease in tax benefit from equity compensation taken during the first nine months of 2022 compared to the same period in 2021.

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Business Segments

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

The Company’s chief operating decision makers evaluate the Company’s performance in various ways, including: (1) the results of our individual homebuilding operating segments and the results of our financial services operations; (2) the results of our homebuilding reportable segments; and (3) our consolidated financial results.

In accordance with ASC 280, Segment Reporting (“ASC 280”), we have identified each homebuilding division as an operating segment and have elected to aggregate our operating segments into separate reportable segments as they share similar aggregation characteristics prescribed in ASC 280 in the following regards: (1) long-term economic characteristics; (2) historical and expected future long-term gross margin percentages; (3) housing products, production processes and methods of distribution; and (4) geographical proximity.

The homebuilding operating segments that comprise each of our reportable segments are as follows:

Northern	Southern
Chicago, Illinois	Orlando, Florida
Cincinnati, Ohio	Sarasota, Florida
Columbus, Ohio	Tampa, Florida
Indianapolis, Indiana	Austin, Texas
Minneapolis/St. Paul, Minnesota	Dallas/Fort Worth, Texas
Detroit, Michigan	Houston, Texas
	San Antonio, Texas
	Charlotte, North Carolina
	Raleigh, North Carolina
	Nashville, Tennessee

The following table shows, by segment, revenue, operating income (loss) and interest expense (income) for the three and nine months ended September 30, 2022 and 2021, as well as the Company’s income before income taxes for such periods:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Revenue:
Northern homebuilding	$	415,741	$	400,564	$	1,242,341	$	1,151,349
Southern homebuilding	577,088		482,960		1,608,468		1,463,707
Financial services (a)	20,099		20,795		63,584		79,079
Total revenue	$	1,012,928	$	904,319	$	2,914,393	$	2,694,135
Operating income (loss):
Northern homebuilding	$	59,623	$	59,009	$	173,917	$	159,975
Southern homebuilding	119,311		72,957		323,628		218,236
Financial services (a)	9,233		10,820		32,774		50,381
Less: Corporate selling, general and administrative expense	(20,872)		(17,566)		(57,254)		(50,361)
Total operating income	$	167,295	$	125,220	$	473,065	$	378,231
Interest expense (income):
Northern homebuilding	$	2	$	—	$	2	$	76
Southern homebuilding	(651)		(381)		(653)		(224)
Financial services (a)	1,350		885		3,169		2,777
Corporate	—		(578)		(453)		(1,075)
Total interest expense (income)	$	701	$	(74)	$	2,065	$	1,554
Other loss (income)	$	—	$	50	$	(17)	$	(145)
Loss on early extinguishment of debt	—		9,072		—		9,072
Income before income taxes	$	166,594	$	116,172	$	471,017	$	367,750

(a)Our financial services operational results should be viewed in connection with our homebuilding business as its operations originate loans and provide title services primarily for our homebuying customers, with the exception of an immaterial amount of mortgage refinancing.

The following tables show total assets by segment at September 30, 2022 and December 31, 2021:

	September 30, 2022
(In thousands)	Northern		Southern			Corporate, Financial Services and Unallocated		Total
Deposits on real estate under option or contract	$	6,939	$	49,738		$	—	$	56,677
Inventory (a)	1,165,675		1,794,383			—		2,960,058
Investments in joint venture arrangements	—		51,700			—		51,700
Other assets	41,927		95,321		(b)	382,230		519,478
Total assets	$	1,214,541	$	1,991,142		$	382,230	$	3,587,913

	December 31, 2021
(In thousands)	Northern		Southern			Corporate, Financial Services and Unallocated		Total
Deposits on real estate under option or contract	$	4,123	$	48,795		$	—	$	52,918
Inventory (a)	987,258		1,412,258			—		2,399,516
Investments in joint venture arrangements	—		57,121			—		57,121
Other assets	37,527		63,844		(b)	628,927		730,298
Total assets	$	1,028,908	$	1,582,018		$	628,927	$	3,239,853

(a)Inventory includes single-family lots, land and land development costs; land held for sale; homes under construction; model homes and furnishings; community development district infrastructure; and consolidated inventory not owned.

(b)Includes development reimbursements from local municipalities.

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Share Repurchase Program (Notes)

9 Months Ended

Sep. 30, 2022

Share Repurchase Program [Abstract]

Treasury Stock [Text Block]

On July 28, 2021, the Company announced that its Board of Directors approved a new share repurchase program pursuant to which the Company may purchase up to $100 million of its outstanding common shares (the “2021 Share Repurchase

Program”). On February 17, 2022, the Company announced that its Board of Directors approved an increase to its 2021 Share Repurchase Program by an additional $100 million.

Pursuant to the 2021 Share Repurchase Program, the Company may purchase up to $200 million of its outstanding common shares through open market transactions, privately negotiated transactions or otherwise in accordance with all applicable laws. The timing, amount and other terms and conditions of any additional repurchases under the 2021 Share Repurchase Program will be determined by the Company’s management at its discretion based on a variety of factors, including the market price of the Company’s common shares, business considerations, general market and economic conditions and legal requirements. The 2021 Share Repurchase Program does not have an expiration date and the Board may modify, discontinue or suspend it at any time.

During the third quarter 2022, the Company repurchased 0.3 million outstanding common shares at an aggregate purchase price of $15.1 million under the 2021 Share Repurchase Program. As of September 30, 2022, $93.1 million remained available for repurchases under the 2021 Share Repurchase Program.

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Revenue (Notes)

9 Months Ended

Sep. 30, 2022

Revenue [Abstract]

Revenue from Contract with Customer [Text Block]

Revenue and the related profit from the sale of a home and revenue and the related profit from the sale of land to third parties are recognized in the financial statements on the date of closing if delivery has occurred, title has passed to the buyer, all performance obligations (as defined below) have been met, and control of the home or land is transferred to the buyer in an amount that reflects the consideration we expect to be entitled to receive in exchange for the home or land. If not received immediately upon closing, cash proceeds from home closings are held in escrow for the Company’s benefit, typically for up to three days, and are included in Cash, cash equivalents and restricted cash on the Condensed Consolidated Balance Sheets.

Sales incentives vary by type of incentive and by amount on a community-by-community and home-by-home basis. The costs of any sales incentives in the form of free or discounted products and services provided to homebuyers are reflected in Land and housing costs in the Condensed Consolidated Statements of Income because such incentives are identified in our home purchase contracts with homebuyers as an intrinsic part of our single performance obligation to deliver and transfer title to their home for the transaction price stated in the contracts. Sales incentives that we may provide in the form of closing cost allowances are recorded as a reduction of housing revenue at the time the home is delivered.

We record sales commissions within Selling expenses in the Condensed Consolidated Statements of Income when incurred (i.e., when the home is delivered) as the amortization period is generally one year or less and therefore capitalization is not required as part of the practical expedient for incremental costs of obtaining a contract.

Contract liabilities include customer deposits related to sold but undelivered homes. Substantially all of our home sales are scheduled to close and be recorded to revenue within one year from the date of receiving a customer deposit. Contract liabilities expected to be recognized as revenue, excluding revenue pertaining to contracts that have an original expected duration of one year or less, is not material.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. All of our home purchase contracts have a single performance obligation as the promise to transfer the home is not separately identifiable from other promises in the contract and, therefore, not distinct. Our performance obligation, to deliver the agreed-upon home, is generally satisfied in less than one year from the original contract date. Deferred revenue resulting from uncompleted performance obligations existing at the time we deliver new homes to our homebuyers is not material.

Although our third party land sale contracts may include multiple performance obligations, the revenue we expect to recognize in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, is not material. We do not disclose the value of unsatisfied performance obligations for land sale contracts with an original expected duration of one year or less.

We recognize the majority of the revenue associated with our mortgage loan operations when the mortgage loans are sold and/or related servicing rights are sold to third party investors or retained and managed under a third party sub-service arrangement. The revenue recognized is reduced by the fair value of the related guarantee provided to the investor. The fair value of the guarantee is recognized in revenue when the Company is released from its obligation under the guarantee (note that guarantees are excluded from the scope of ASC 606, Revenue from Contracts with Customers). We recognize financial services revenue associated with our title operations as homes are delivered, closing services are rendered, and title policies are issued, all of

which generally occur simultaneously as each home is delivered. All of the underwriting risk associated with title insurance policies is transferred to third-party insurers.

The following table presents our revenues disaggregated by revenue source:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2022		2021		2022		2021
Housing	$	986,843	$	878,602	$	2,837,912	$	2,604,387
Land sales	5,986		4,922		12,897		10,669
Financial services (a)	20,099		20,795		63,584		79,079
Total revenue	$	1,012,928	$	904,319	$	2,914,393	$	2,694,135

(a)Revenue includes hedging gains of $13.8 million and hedging losses of $3.1 million for the three months ended September 30, 2022 and 2021, respectively, and hedging gains of $32.1 million and $0.8 million for the nine months ended September 30, 2022 and 2021, respectively. Hedging gains/losses do not represent revenue recognized from contracts with customers.

Refer to Note 11 for presentation of our revenues disaggregated by geography. As our homebuilding operations accounted for over 97% of our total revenues for the three and nine months ended September 30, 2022 and 2021, with most of those revenues generated from home purchase contracts with customers, we believe the disaggregation of revenues as disclosed above and in Note 11 fairly depict how the nature, amount, timing and uncertainty of cash flows are affected by economic factors.

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Basis of Presentation Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2022

Policy Text Block [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Standards

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 is intended to provide temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. This guidance became effective on March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), which clarified the scope and application of the original guidance. We fully adopted ASU 2020-04 and ASU 2021-01 in October 2022 after we amended our $90 million mortgage repurchase agreement, dated October 30, 2017, as amended (the “MIF Mortgage Repurchase Facility”), which discontinued the use of LIBOR and replaced it with the One-Month Term SOFR (“SOFR”) rate. The adoption of this guidance did not have a material impact on our consolidated financial statements and disclosures.

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Inventory and Capitalized Interest Inventory (Tables)

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

A summary of the Company’s inventory as of September 30, 2022 and December 31, 2021 is as follows:

(In thousands)	September 30, 2022		December 31, 2021
Single-family lots, land and land development costs	$	1,230,139	$	1,125,738
Land held for sale	9,174		4,312
Homes under construction	1,624,831		1,187,341
Model homes and furnishings - at cost (less accumulated depreciation: September 30, 2022 - $12,130;    December 31, 2021 - $12,023)	59,145		59,268
Community development district infrastructure	31,991		20,089
Land purchase deposits	56,677		52,918
Consolidated inventory not owned	4,778		2,768
Total inventory	$	3,016,735	$	2,452,434

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block]

A summary of capitalized interest for the three and nine months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Capitalized interest, beginning of period	$	27,049	$	22,304	$	24,343	$	21,329
Interest capitalized to inventory	8,926		9,402		26,495		28,020
Capitalized interest charged to land and housing costs and expenses	(6,683)		(8,212)		(21,546)		(25,855)
Capitalized interest, end of period	$	29,292	$	23,494	$	29,292	$	23,494
Interest incurred	$	9,627	$	9,328	$	28,560	$	29,574

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Fair Value Measurements Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Measurements [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]

The table below shows the notional amounts of our financial instruments at September 30, 2022 and December 31, 2021:

Description of Financial Instrument (in thousands)	September 30, 2022		December 31, 2021
Whole loan contracts and related committed IRLCs	$	4,169	$	782
Uncommitted IRLCs	477,065		228,831
FMBSs related to uncommitted IRLCs	476,000		223,000
Whole loan contracts and related mortgage loans held for sale	18,648		3,785
FMBSs related to mortgage loans held for sale	174,000		251,000
Mortgage loans held for sale covered by FMBSs	172,151		263,088

Schedule of Derivative Instruments, (Loss) Gain in Statement of Financial Performance [Table Text Block]

The following table sets forth the amount of gain (loss) recognized, within our revenue in the Unaudited Condensed Consolidated Statements of Income, on assets and liabilities measured on a recurring basis for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
Description (in thousands)	2022		2021		2022		2021
Mortgage loans held for sale	$	(4,396)	$	(1,704)	$	(7,271)	$	(1,962)
Forward sales of mortgage-backed securities	24,952		3,877		22,199		4,893
Interest rate lock commitments	(13,015)		(1,440)		(15,708)		(940)
Whole loan contracts	(209)		49		(97)		413
Total gain (loss) recognized	$	7,332	$	782	$	(877)	$	2,404

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The following tables set forth the fair value of the Company’s derivative instruments and their location within the Unaudited Condensed Consolidated Balance Sheets for the periods indicated (except for mortgage loans held for sale which are disclosed as a separate line item):

	Asset Derivatives			Liability Derivatives
	September 30, 2022			September 30, 2022
Description of Derivatives	Balance Sheet Location	Fair Value (in thousands)		Balance Sheet Location	Fair Value (in thousands)
Forward sales of mortgage-backed securities	Other assets	$	26,676	Other liabilities	$	—
Interest rate lock commitments	Other assets	—		Other liabilities	16,173
Whole loan contracts	Other assets	—		Other liabilities	181
Total fair value measurements		$	26,676		$	16,354

	Asset Derivatives			Liability Derivatives
	December 31, 2021			December 31, 2021
Description of Derivatives	Balance Sheet Location	Fair Value (in thousands)		Balance Sheet Location	Fair Value (in thousands)
Forward sales of mortgage-backed securities	Other assets	$	4,477	Other liabilities	$	—
Interest rate lock commitments	Other assets	—		Other liabilities	487
Whole loan contracts	Other assets	—		Other liabilities	62
Total fair value measurements		$	4,477		$	549

Fair Value, by Balance Sheet Grouping [Table Text Block]

The following table presents the carrying amounts and fair values of the Company’s financial instruments at September 30, 2022 and December 31, 2021. The objective of the fair value measurement is to estimate the price at which an orderly transaction to sell the asset or transfer the liability would take place between market participants at the measurement date under current market conditions.

		September 30, 2022				December 31, 2021
(In thousands)	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash, cash equivalents and restricted cash	Level 1	$	67,761	$	67,761	$	236,368	$	236,368
Mortgage loans held for sale	Level 2	183,327		183,327		275,655		275,655
Forward sales of mortgage-backed securities	Level 2	26,676		26,676		4,477		4,477
Liabilities:
Notes payable - homebuilding operations	Level 2	—		—		—		—
Notes payable - financial services operations	Level 2	189,371		189,371		266,160		266,160
Notes payable - other	Level 2	429		423		4,549		5,015
Senior notes due 2028 (a)	Level 2	400,000		330,500		400,000		414,000
Senior notes due 2030 (a)	Level 2	300,000		217,875		300,000		294,375
Interest rate lock commitments	Level 2	16,173		16,173		487		487
Whole loan contracts for committed IRLCs and mortgage loans held for sale	Level 2	181		181		62		62

(a)Our senior notes are stated at the principal amount outstanding which does not include the impact of premiums, discounts, and debt issuance costs that are amortized to interest cost over the respective terms of the notes.

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Commitments and Contingencies Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2022

Warranty Accrual Rollforward [Abstract]

Schedule of Product Warranty Liability [Table Text Block]

A summary of warranty activity for the three and nine months ended September 30, 2022 and 2021 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Warranty reserves, beginning of period	$	29,970	$	29,880	$	29,728	$	29,012
Warranty expense on homes delivered during the period	5,373		4,834		15,479		15,246
Changes in estimates for pre-existing warranties	2,342		1,745		3,520		2,356
Settlements made during the period	(6,807)		(6,078)		(17,849)		(16,233)
Warranty reserves, end of period	$	30,878	$	30,381	$	30,878	$	30,381

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Earnings per Share Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The table below presents a reconciliation between basic and diluted weighted average shares outstanding, net income, and basic and diluted income per share for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands, except per share amounts)	2022		2021		2022		2021
NUMERATOR
Net income	$	131,590	$	91,012	$	360,267	$	283,485
DENOMINATOR
Basic weighted average shares outstanding	27,618		29,250		28,025		29,179
Effect of dilutive securities:
Stock option awards	248		447		274		474
Deferred compensation awards	319		331		311		313
Diluted weighted average shares outstanding	28,185		30,028		28,610		29,966
Earnings per common share:
Basic	$	4.76	$	3.11	$	12.86	$	9.72
Diluted	$	4.67	$	3.03	$	12.59	$	9.46
Anti-dilutive equity awards not included in the calculation of diluted earnings per common share	908		16		826		7

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Business Segments Business Segments (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The following table shows, by segment, revenue, operating income (loss) and interest expense (income) for the three and nine months ended September 30, 2022 and 2021, as well as the Company’s income before income taxes for such periods:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Revenue:
Northern homebuilding	$	415,741	$	400,564	$	1,242,341	$	1,151,349
Southern homebuilding	577,088		482,960		1,608,468		1,463,707
Financial services (a)	20,099		20,795		63,584		79,079
Total revenue	$	1,012,928	$	904,319	$	2,914,393	$	2,694,135
Operating income (loss):
Northern homebuilding	$	59,623	$	59,009	$	173,917	$	159,975
Southern homebuilding	119,311		72,957		323,628		218,236
Financial services (a)	9,233		10,820		32,774		50,381
Less: Corporate selling, general and administrative expense	(20,872)		(17,566)		(57,254)		(50,361)
Total operating income	$	167,295	$	125,220	$	473,065	$	378,231
Interest expense (income):
Northern homebuilding	$	2	$	—	$	2	$	76
Southern homebuilding	(651)		(381)		(653)		(224)
Financial services (a)	1,350		885		3,169		2,777
Corporate	—		(578)		(453)		(1,075)
Total interest expense (income)	$	701	$	(74)	$	2,065	$	1,554
Other loss (income)	$	—	$	50	$	(17)	$	(145)
Loss on early extinguishment of debt	—		9,072		—		9,072
Income before income taxes	$	166,594	$	116,172	$	471,017	$	367,750

(a)Our financial services operational results should be viewed in connection with our homebuilding business as its operations originate loans and provide title services primarily for our homebuying customers, with the exception of an immaterial amount of mortgage refinancing.

Reconciliation of Assets from Segment to Consolidated

The following tables show total assets by segment at September 30, 2022 and December 31, 2021:

	September 30, 2022
(In thousands)	Northern		Southern			Corporate, Financial Services and Unallocated		Total
Deposits on real estate under option or contract	$	6,939	$	49,738		$	—	$	56,677
Inventory (a)	1,165,675		1,794,383			—		2,960,058
Investments in joint venture arrangements	—		51,700			—		51,700
Other assets	41,927		95,321		(b)	382,230		519,478
Total assets	$	1,214,541	$	1,991,142		$	382,230	$	3,587,913

	December 31, 2021
(In thousands)	Northern		Southern			Corporate, Financial Services and Unallocated		Total
Deposits on real estate under option or contract	$	4,123	$	48,795		$	—	$	52,918
Inventory (a)	987,258		1,412,258			—		2,399,516
Investments in joint venture arrangements	—		57,121			—		57,121
Other assets	37,527		63,844		(b)	628,927		730,298
Total assets	$	1,028,908	$	1,582,018		$	628,927	$	3,239,853

(a)Inventory includes single-family lots, land and land development costs; land held for sale; homes under construction; model homes and furnishings; community development district infrastructure; and consolidated inventory not owned.

(b)Includes development reimbursements from local municipalities.

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Revenue (Tables)

9 Months Ended

Sep. 30, 2022

Disaggregated Revenue [Abstract]

Disaggregation of Revenue [Table Text Block]

The following table presents our revenues disaggregated by revenue source:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2022		2021		2022		2021
Housing	$	986,843	$	878,602	$	2,837,912	$	2,604,387
Land sales	5,986		4,922		12,897		10,669
Financial services (a)	20,099		20,795		63,584		79,079
Total revenue	$	1,012,928	$	904,319	$	2,914,393	$	2,694,135

(a)Revenue includes hedging gains of $13.8 million and hedging losses of $3.1 million for the three months ended September 30, 2022 and 2021, respectively, and hedging gains of $32.1 million and $0.8 million for the nine months ended September 30, 2022 and 2021, respectively. Hedging gains/losses do not represent revenue recognized from contracts with customers.

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Basis of Presentation (Details) $ in Millions	Sep. 30, 2022 USD ($)
Repurchase Agreement-Fifth Amendment to Second Amendment and Restated
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 90

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Inventory and Capitalized Interest Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Single-family lots, land and land development costs	$ 1,230,139	$ 1,125,738
Land held for sale	9,174	4,312
Homes under construction	1,624,831	1,187,341
Model homes and furnishings - at cost (less accumulated depreciation: September 30, 2022 - $12,130; December 31, 2021 - $12,023)	59,145	59,268
Community Development District	31,991	20,089
Land purchase deposits	56,677	52,918
Consolidated Inventory Not Owned	4,778	2,768
Total Inventory	$ 3,016,735	$ 2,452,434

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Inventory and Capitalized Interest Inventory Subsection (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Parantheticals - Inventory [Abstract]
Model Home Accumulated Depreciation	$ 12,130	$ 12,023

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Inventory and Capitalized Interest Other Inventory Items - Homes under construction not subject to a sale contract (Details) $ in Thousands	Sep. 30, 2022 USD ($) homes	Dec. 31, 2021 USD ($)
Other Inventory, Gross [Abstract]
Number of Speculative Homes	1,855	1,266
Speculative Homes Carrying Value	$ 369,000	$ 193,200
Community Development District	$ 31,991	$ 20,089

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Inventory and Capitalized Interest Capitalized Interest (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Real Estate Inventory, Capitalized Interest Costs [Roll Forward]
Capitalized Interest, beginning of period	$ 27,049	$ 22,304	$ 24,343	$ 21,329
Interest capitalized to inventory	8,926	9,402	26,495	28,020
Capitalized interest charged to land and housing costs and expenses	(6,683)	(8,212)	(21,546)	(25,855)
Capitalized Interest, end of period	29,292	23,494	29,292	23,494
Interest incurred	$ 9,627	$ 9,328	$ 28,560	$ 29,574

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Investment in Joint Venture Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Schedule of Equity Method Investments [Line Items]
Investment in joint venture arrangements	$ 51,700		$ 51,700		$ 57,121
Increase (decrease) in investments in unconsolidated joint ventures and other similar arrangements			(5,400)
Distribution of single-family lots from joint venture arrangements			20,758	$ 26,040
Return of capital from joint venture arrangements			2,046	1,050
Investment in joint venture arrangements			17,366	34,738
Company's investment in joint development or similar agreements	46,200		46,200		50,600
Equity invested in LLCs	5,500		5,500		$ 6,500
Equity in loss (income) from joint venture arrangements	$ 0	$ 50	$ (17)	$ (145)
Minimum [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	25.00%		25.00%		25.00%
Maximum [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	50.00%		50.00%		50.00%

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Fair Value Measurements Notional Amount of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Notional Disclosures [Abstract]
Whole loan contracts and related committed IRLCs	$ 4,169	$ 782
Uncommitted IRLCs	477,065	228,831
FMBSs related to uncommitted IRLCs	476,000	223,000
Whole loan contracts and related mortgage loans held for sale	18,648	3,785
FMBSs related to mortgage loans held for sale	174,000	251,000
Mortgage loans held for sale covered by FMBSs	$ 172,151	$ 263,088

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Fair Value Measurements (Loss) Gain On Assets and Liabilities Measured On A Recurring Basis (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Financial Instrument [Line Items]
Gain (Loss) On Assets and Liabilities Measured On A Recurring Basis	$ 7,332	$ 782	$ (877)	$ 2,404
Mortgage Loans Held for Sale [Member]
Financial Instrument [Line Items]
Gain (Loss) On Assets and Liabilities Measured On A Recurring Basis	(4,396)	(1,704)	(7,271)	(1,962)
Forward Sales of Mortgage Backed Securities [Member]
Financial Instrument [Line Items]
Gain (Loss) On Assets and Liabilities Measured On A Recurring Basis	24,952	3,877	22,199	4,893
Interest Rate Lock Commitments [Member]
Financial Instrument [Line Items]
Gain (Loss) On Assets and Liabilities Measured On A Recurring Basis	(13,015)	(1,440)	(15,708)	(940)
Whole Loan Contracts [Member]
Financial Instrument [Line Items]
Gain (Loss) On Assets and Liabilities Measured On A Recurring Basis	$ (209)	$ 49	$ (97)	$ 413

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Fair Value Measurements Balance Sheet Location of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Other Assets [Member]
Financial Insturments, Fair Value [Line Items]
Financial Instrument, Fair Value	$ 26,676	$ 4,477
Other Liabilities [Member]
Financial Insturments, Fair Value [Line Items]
Fair Value Disclosure, Recurring	16,354	549
Forward Sales of Mortgage Backed Securities [Member] | Other Assets [Member]
Financial Insturments, Fair Value [Line Items]
Financial Instrument, Fair Value	26,676	4,477
Forward Sales of Mortgage Backed Securities [Member] | Other Liabilities [Member]
Financial Insturments, Fair Value [Line Items]
Fair Value Disclosure, Recurring	0	0
Interest Rate Lock Commitments [Member] | Other Assets [Member]
Financial Insturments, Fair Value [Line Items]
Financial Instrument, Fair Value	0	0
Interest Rate Lock Commitments [Member] | Other Liabilities [Member]
Financial Insturments, Fair Value [Line Items]
Fair Value Disclosure, Recurring	16,173	487
Whole Loan Contracts [Member] | Other Assets [Member]
Financial Insturments, Fair Value [Line Items]
Financial Instrument, Fair Value	0	0
Whole Loan Contracts [Member] | Other Liabilities [Member]
Financial Insturments, Fair Value [Line Items]
Fair Value Disclosure, Recurring	$ 181	$ 62

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Fair Value Measurements Assets and Liabilities Measured on a Non-Recurring Basis (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Inventory valuation adjustments and abandoned land transaction write-offs	$ 0	$ 0
Equity Method Investment, Other than Temporary Impairment	$ 0	$ 0

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Fair Value Measurements Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Carrying (Reported) Amount, Fair Value Disclosure [Member]
ASSETS:
Servicing Asset	$ 14,500	$ 8,400
Cash, cash equivalents and restricted cash	67,761	236,368
Mortgage loans held for sale	183,327	275,655
Forward sales of mortgage-backed securities	26,676	4,477
LIABILITIES:
Notes payable - homebuilding operations	0	0
Notes payable - financial services operations	189,371	266,160
Notes payable - other	429	4,549
Senior Notes due 2028 (a)	400,000	400,000
Senior Notes due 2030 (a)	300,000	300,000
Commitments to extend real estate loans (Liabilities)	16,173	487
Whole Loan contracts for committed IRLCs and mortgage loans held for sale	181	62
Estimate of Fair Value, Fair Value Disclosure [Member]
ASSETS:
Servicing Asset	14,500	8,400
Cash, cash equivalents and restricted cash	67,761	236,368
Mortgage loans held for sale	183,327	275,655
Forward sales of mortgage-backed securities	26,676	4,477
LIABILITIES:
Notes payable - homebuilding operations	0	0
Notes payable - financial services operations	189,371	266,160
Notes payable - other	423	5,015
Senior Notes due 2028 (a)	330,500	414,000
Senior Notes due 2030 (a)	217,875	294,375
Commitments to extend real estate loans (Liabilities)	16,173	487
Whole Loan contracts for committed IRLCs and mortgage loans held for sale	$ 181	$ 62

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Fair Value Measurements Fair Value of Financial Instrument Assumptions (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Nov. 14, 2022	Sep. 19, 2022
Revolving Credit Facility [Member]
Fair Value of Financial Instrument Assumptions [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 550.0
Line of Credit Facility, Maximum Borrowing Capacity	$ 700.0
Line of Credit Facility, Initiation Date	Jul. 18, 2013
Basis point spread on variable rate under Credit Facility	1.75%
Warehousing Agreement - Third Amended and Restated
Fair Value of Financial Instrument Assumptions [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 200.0	$ 300.0	$ 275.0
Line of Credit Facility, Initiation Date	May 27, 2022
Basis point spread on variable rate under Credit Facility	1.90%

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Guarantees and Indemnifications Guarantees (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Guarantees [Abstract]
Total of Loans Covered by Guarantees	$ 435.9	$ 305.0
Total of Guaranteed Loans Inquired About	2.0	0.7
Loan Repurchase Guarantee Liability	$ 0.6	$ 0.3

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Commitments and Contingencies Warranty Rollforward (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Warranty Accrual Rollforward [Abstract]
Warranty reserves, beginning of period	$ 29,970	$ 29,880	$ 29,728	$ 29,012
Warranty expense on homes delivered during the period	5,373	4,834	15,479	15,246
Changes in estimates for pre-existing warranties	2,342	1,745	3,520	2,356
Settlements made during the period	(6,807)	(6,078)	(17,849)	(16,233)
Warranty reserves, end of period	30,878	$ 30,381	30,878	$ 30,381
Estimated Repair Costs for Affected Homes	$ 2,100		$ 2,100

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Commitments and Contingencies Commitments and Contingencies (Details) $ in Millions	Sep. 30, 2022 USD ($)
Commitments and Contingencies [Abstract]
Letters of credit and completion bonds	$ 446.4
Performance bonds outstanding	344.8
Performance letters of credit outstanding	88.3
Financial letters of credit	8.4
Financial letters of credit representing deposits on land and lot purchase agreements	8.0
Financial Bonds	4.9
Unrecorded conditional purchase obligation	$ 982.4

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Commitments and Contingencies Legal Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Other Liabilities Disclosure [Abstract]
Legal Reserve	$ 0.6	$ 1.2

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Goodwill (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021	Mar. 31, 2018
Business Acquisition [Line Items]
Goodwill	$ 16.4	$ 16.4
Pinnacle Homes [Member]
Business Acquisition [Line Items]
Goodwill			$ 16.4

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Debt Debt (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Line of Credit Facility [Line Items]
Debt Instrument, Unused Borrowing Capacity, Amount	$ 1,530,000
Notes payable bank - homebuilding operations	0
letters of credit outstanding under credit facility	96,600
Maximum borrowing availability subject to limit	453,400
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 550,000
Line of Credit Facility, Expiration Date	Jul. 18, 2025
Line of Credit Facility, Maximum Borrowing Capacity	$ 700,000
Libor Floor	0.25%
Sub-limit for letters of credit	$ 150,000
Basis point spread on variable rate under Credit Facility	1.75%
2028 Senior Notes [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Face Amount	$ 400,000
Debt Instrument, Interest Rate, Stated Percentage	4.95%
2030 Senior Notes
Line of Credit Facility [Line Items]
Debt Instrument, Face Amount	$ 300,000
Debt Instrument, Interest Rate, Stated Percentage	3.95%

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Debt MIF Warehousing Agreement (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Nov. 14, 2022	Sep. 19, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Maximum Borrowing Availability under all Credit Lines	$ 365,000	$ 365,000			$ 325,000
Notes payable bank - financial service operations	189,371	189,371			$ 266,160
Warehousing Agreement - Third Amended and Restated
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 200,000	$ 200,000	$ 300,000	$ 275,000
Basis point spread on variable rate under warehouse	1.90%	1.90%
Libor Floor		0.25%
Repurchase Agreement-Fourth Amendment to Second Amendment and Restated
Debt Instrument [Line Items]
Libor Floor	0.75%
Libor Floor- Loan Type 2	0.625%
Repurchase Agreement-Fifth Amendment to Second Amendment and Restated
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 90,000	$ 90,000
Fifth Amendment to Repurchase Agreement Initiation Date	Oct. 24, 2022
Line of Credit Facility, Expiration Date	Oct. 23, 2023
SOFR - Loan Type 2	2.375%
SOFR	2.75%
Minimum [Member] | Repurchase Agreement-Fourth Amendment to Second Amendment and Restated
Debt Instrument [Line Items]
Basis point spread on variable rate under warehouse	1.75%	1.75%
Maximum [Member] | Repurchase Agreement-Fourth Amendment to Second Amendment and Restated
Debt Instrument [Line Items]
Basis point spread on variable rate under warehouse	2.00%	2.00%

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Debt Senior Notes (Details) - USD ($) $ in Thousands	6 Months Ended	9 Months Ended	12 Months Ended		24 Months Ended	48 Months Ended
	Feb. 15, 2030	Sep. 30, 2022	Jan. 31, 2026	Jan. 31, 2025	Feb. 01, 2028	Jan. 31, 2024	Dec. 31, 2021
Debt Instrument [Line Items]
Restricted Payments Basket		$ 600,800					$ 487,500
2028 Senior Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 400,000
Debt Instrument, Interest Rate, Stated Percentage		4.95%
Debt Instrument, Maturity Date		Feb. 01, 2028
Debt Instrument, Redemption Price, Percentage			101.238%	102.475%	100.00%	103.713%
2030 Senior Notes
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 300,000
Debt Instrument, Interest Rate, Stated Percentage		3.95%
Debt Instrument, Maturity Date		Feb. 15, 2030
Debt Instrument, Redemption Price, Percentage	100.00%
Base of restricted payments basket income calculation [Member]
Debt Instrument [Line Items]
Other Restrictions on Payment of Dividends		$ 125,000
Percentage of our aggregate consolidated net income added to base amount of calculation [Member]
Debt Instrument [Line Items]
Percent restrictions on payment of dividends		50.00%
Percentage of our aggregate consolidated net income subtracted from base amount of calculation [Member]
Debt Instrument [Line Items]
Percent restrictions on payment of dividends		100.00%
Percentage of net cash proceeds from sale of qualified equity interests added to base and income/loss amount in calculation [Member]
Debt Instrument [Line Items]
Percent restrictions on payment of dividends		100.00%

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Debt Notes Payable Other (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Notes payable - other	$ 429	$ 4,549

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Earnings per Share Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net Income (Loss) Attributable to Parent	$ 131,590	$ 91,012	$ 360,267	$ 283,485
Dilutive Securities, Effect on Basic Earnings Per Share [Abstract]
Weighted Average Number of Shares Outstanding, Basic	27,618	29,250	28,025	29,179
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract]
Incremental Common Shares Attributable to Stock Options	248	447	274	474
Deferred Compensation Awards	319	331	311	313
Diluted Weighted Average Number of Shares Outstanding	28,185	30,028	28,610	29,966
Earnings Per Share, Basic	$ 4.76	$ 3.11	$ 12.86	$ 9.72
Earnings Per Share, Diluted	$ 4.67	$ 3.03	$ 12.59	$ 9.46
Anti-dilutive stock equivalent awards not included in the calculation of diluted loss per share	908	16	826	7

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Income Taxes Income Tax (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Valuation Allowance [Line Items]
Provision for income taxes	$ 35,004	$ 25,160	$ 110,750	$ 84,265
Effective Income Tax Rate Reconciliation, Percent	21.00%	21.70%	23.50%	22.90%
Effective Income Tax Rate Reconciliation, Tax Credit, Amount	$ 3,700		$ 8,400
Share-based Payment Arrangement, Expense, Tax Benefit			$ 2,200

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Business Segments Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Revenue	$ 1,012,928	$ 904,319	$ 2,914,393	$ 2,694,135
Operating Income	167,295	125,220	473,065	378,231
Interest expense	701		2,065	1,554
Interest income		(74)
Equity in loss (income) from joint venture arrangements	0	50	(17)	(145)
Loss on Extinguishment of Debt	0	9,072	0	9,072
Income before income taxes	166,594	116,172	471,017	367,750
Northern Homebuilding [Member]
Segment Reporting Information [Line Items]
Revenue	415,741	400,564	1,242,341	1,151,349
Operating Income	59,623	59,009	173,917	159,975
Interest expense	2	0	2	76
Southern Homebuilding [Member]
Segment Reporting Information [Line Items]
Revenue	577,088	482,960	1,608,468	1,463,707
Operating Income	119,311	72,957	323,628	218,236
Interest income	(651)	(381)	(653)	(224)
Financial Service
Segment Reporting Information [Line Items]
Revenue	20,099	20,795	63,584	79,079
Operating Income	9,233	10,820	32,774	50,381
Interest expense	1,350	885	3,169	2,777
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Selling, general and administrative expenses	(20,872)	(17,566)	(57,254)	(50,361)
Interest Income	$ 0	$ (578)	$ (453)	$ (1,075)

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Business Segments Business Segments - Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Deposits on real estate under option or contract	$ 56,677	$ 52,918
Inventory	2,960,058	2,399,516
Investment in joint venture arrangements	51,700	57,121
Other assets	519,478	730,298
Total assets	3,587,913	3,239,853
Northern Homebuilding [Member]
Segment Reporting Information [Line Items]
Deposits on real estate under option or contract	6,939	4,123
Inventory	1,165,675	987,258
Investment in joint venture arrangements	0	0
Other assets	41,927	37,527
Total assets	1,214,541	1,028,908
Southern Homebuilding [Member]
Segment Reporting Information [Line Items]
Deposits on real estate under option or contract	49,738	48,795
Inventory	1,794,383	1,412,258
Investment in joint venture arrangements	51,700	57,121
Other assets	95,321	63,844
Total assets	1,991,142	1,582,018
Corporate, Financial Services and Unallocated [Member]
Segment Reporting Information [Line Items]
Deposits on real estate under option or contract	0	0
Inventory	0	0
Investment in joint venture arrangements	0	0
Other assets	382,230	628,927
Total assets	$ 382,230	$ 628,927

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Share Repurchase Program (Details) - USD ($) $ in Thousands, shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Feb. 17, 2022	Dec. 31, 2021
Share Repurchase Program [Abstract]
Stock Repurchase Program, Authorized Amount	$ 200,000		$ 200,000			$ 100,000
Repurchase of common shares, shares	0.3
Repurchase of common shares	$ 15,099	$ 15,494	55,334	$ 15,494
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 93,100		$ 93,100
Stock Repurchase Program, Authorized Amount increase/decrease					$ 100,000

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Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 1,012,928	$ 904,319	$ 2,914,393	$ 2,694,135
Gain (Loss) on Hedging Activity	$ 13,800	$ (3,100)	$ 32,100	$ 800
Homebuilding operations percent of total revenue	98.00%	98.00%	98.00%	97.00%
Construction [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 986,843	$ 878,602	$ 2,837,912	$ 2,604,387
Land [Member]
Disaggregation of Revenue [Line Items]
Revenues	5,986	4,922	12,897	10,669
Financial Service
Disaggregation of Revenue [Line Items]
Revenues	$ 20,099	$ 20,795	$ 63,584	$ 79,079