Notes Receivable

6 Months Ended

Jun. 30, 2014

Notes Receivable

Notes Receivable

Occasionally, we purchase loans made by others to finance the sale of homes to our customers (“Chattel Loans”). The Chattel Loans receivable require monthly principal and interest payments and are collateralized by homes at certain of the Properties. As of June 30, 2014 and December 31, 2013, we had approximately $20.6 million and $21.9 million, respectively, of these Chattel Loans included in notes receivable. As of June 30, 2014, the Chattel Loans receivable had a stated per annum average rate of approximately 7.8%, with a yield of 19.5%, and had an average term remaining of approximately 12 years . These Chattel Loans are recorded net of allowances of approximately $0.4 million as of June 30, 2014 and December 31, 2013.

During the six months ended June 30, 2014, we received principal payment of approximately $1.0 million on a previously reserved loan.

We also provide financing for non-refundable sales of new or upgrades to existing right-to-use contracts (“Contracts Receivable”). As of June 30, 2014 and December 31, 2013, we had approximately $17.5 million and $17.2 million, respectively, of Contracts Receivable, net of allowances of approximately $0.2 million and $0.6 million, respectively. These Contracts Receivable represent loans to customers who have entered into right-to-use contracts. The Contracts Receivable have an average stated interest rate of 15.9% per annum, have a weighted average term remaining of approximately three years and require monthly payments of principal and interest.