UMH 10-K & 10-Q changes, risk factors and insider trading

The termination of our third-party lending program could adversely affect us. S&F currently relies exclusively on its third-party lending program for all loan origination and servicing activity. As a result, the termination of our third-party lending program could impact our ability to continue with our home financing activities. In the event the third-party lending program is terminated, either by the third party or by us, we would seek to develop an internal lending program so that we could continue to offer home financing to prospective residents of our communities. Such an internal lending program could expose us to additional risks, including additional risks associated with non-compliance with requirements imposed by federal and state consumer finance laws and regulations.

Rent control legislation may harm our ability to increase rents. State and local rent control laws in certain jurisdictions may limit our ability to increase rents and to recover increases in operating expenses and the costs of capital improvements. In 2019, the State of New York enacted the Housing Stability and Tenant Protection Act of 2019, which, among other things, set maximum collectible rent increases. Rent control also currently affects three of our manufactured home communities in New Jersey.Jersey and, effective March 1, 2026, statewide rent control will limit rent increases on all of our New Jersey manufactured home communities. Enactment of such laws has been considered considered at various times in other jurisdictions. We presently expect to continue to maintain properties, and may purchase additional properties, properties, in markets that are either subject to rent control or in which rent relatedrent-related legislation exists or may be enacted.

Our joint venture relationship with Nuveen Real Estate may subject us to risks, including limitations on our decision-making authority and the risk of disputes, which could adversely affect us. We have entered into joint venture arrangements with Nuveen Real Estate tounder acquirewhich we operate three manufactured home communities that are recently developed or under development.developed. It is possible that our joint venture partner, Nuveen Real Estate, may have business interests, goals, priorities or concerns that are different from our business interests, goals, priorities or concerns. Although we manage the joint venture entities and their properties, we do not have full control over decisions and require approval of Nuveen Real Estate for major decisions. As a result, we may face the risk of disputes, including potential deadlocks in making decisions. In addition, the joint venture agreements provide that until the capital contributions to the joint venture entities are fully funded or the joint ventureventures isare terminated, and unless Nuveen declines an acquisition proposed by us, the joint ventureventures will be the exclusive vehicle for us to acquire any manufactured home communities that meet the joint venture’s investment guidelines. Nuveen Real Estate will have the right to remove and replace us as managing member of the joint venture entities and manager of the joint venture’s properties if we breach certain obligations or certain events occur, in which event Nuveen Real Estate may elect to buy out our interest in the applicable joint venture entity at 98% of its value. There are also significant restrictions on our ability to to exit the joint venture.ventures. Any of these provisions could adversely affect us.

We are subject to risks associated with the current interest rate environment, and changes in interest rates may affect our cost of capital and, consequently, our financial results. Changing interest rates may have unpredictable effects on markets, may result in heightened market volatility, may slow economic growth and/or cause a recession, and may affect our ability to complete potential acquisitions. Because a portion of our debt bears interest at variable rates, in periods of rising interest rates, such as the current interest rate environment, our cost of funds would increase, which could adversely affect our cash flows, financial condition and results of operations, ability to make distributions to shareholders, and the cost of refinancing. refinancing and reduce our access to the debt or equity capital markets. Increased interest rates could also adversely affect the value of our properties to the extent that it decreases the amount buyers may be willing to pay for our properties and could result in the decline of the market price of our Series D Preferred Stock and Common Stock and any other securities we issue, which may adversely impact our ability and willingness to raise equity capital on favorable terms, including through our At-the-Market Sale Programs (as defined below). Additionally, if we choose to hedge any interest rate risk, we cannot assure that any such hedge will be effective or that our hedging counterparty will meet its obligations to us. As a result, increased interest rates, including any future increases in interest rates, could adversely affect us.

We may be adversely affected if we fail to qualify as a REIT. If we fail to qualify as a REIT, we will not be allowed to deduct distributions to shareholders in computing our taxable income and will be subject to federal income tax at regular corporate rates rates and possibly increased state and local taxes. In addition, we might be barred from qualification as a REIT for the four years following following the year of disqualification. The additional tax incurred at regular corporate rates would reduce significantly the cash flow available for distribution to shareholders and for debt service. Furthermore, we would no longer be required to make any distributions to our shareholders as a condition to REIT qualification. Any distributions to shareholders would be taxable as ordinary income to the extent of our current and accumulated earnings and profits, although such dividend distributions to non-corporate shareholders would be subject to a maximum federal income tax rate of 20% (and potentially a federal tax on net investment income of 3.8%), provided applicable requirements of the Code are satisfied. Furthermore, corporate shareholders may be eligible for the dividends received deduction on the distributions, subject to limitations under the Code. Additionally, if we fail to qualify as a REIT, non-corporate shareholders would no longer be able to deduct up to 20% of ourcertain qualified REIT dividends (other than capital gain dividends and dividends treated as qualified dividend income), asthat wouldis available under current law. otherwiseWhile generallyinitially bescheduled permittedto forexpire taxablein years2025, beginningrecent afterlegislation Decemberhas 31,made 2017this anddeduction before January 1, 2026.permanent.

There is a risk of changes in the tax law applicable to REITs. Because the IRS, the U.S. Treasury Department and Congress frequently frequently review federal income tax legislation, we cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Numerous changes to the U.S. federal income tax laws are proposed on a regular basis. Any of such legislative action may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us and/or our investors. Additionally, the REIT rules are continually under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department, which may result in revisions to regulations and interpretations in addition to statutory changes. Furthermore, members oflegislative the U.S. Congress and the Trump administration have expressed intentproposals to pass legislation to change or repeal parts of currentlyincrease enacted tax law, including, in particular, legislation that will increase corporate tax rates fromor otherwise modify the currentU.S. flatfederal rateincome tax system are periodically introduced. The timing, likelihood and content of 21%.any If enacted,such certainlegislation proposedare uncertain, and any enacted changes could haveadversely an adverse impact onaffect our businessbusiness, financial condition and financialresults results.of operations. Importantly, legislation has been proposed in several states specifically taxing REITs. If such legislation were to be enacted, our income from such states would be adversely impacted.

Global and regional economic conditions could materially adversely affect our business, results of operations, financial condition and growth. Adverse macroeconomic conditions, including inflation, slower growth or recession, tighter credit, higher interest rates and high unemployment could materially adversely impact our business, results of operations, financial condition and growth. In addition, uncertainty about, or a decline in, global or regional economic conditions could have a significant impact on our suppliers. Further, our business and properties could be materially adversely affected by changes in national and international political, environmental and socioeconomic circumstances and/or conflicts (including wars, terrorist acts or security operationsoperations, such as the ongoing disruption in the Middle East), the possibility of such conflicts widening, and their impact on macroeconomic conditions. Coupled with changes in Federal Reserve policies on interest rates and other economic disruptions, such circumstances may exacerbate inflation and adversely affect economic and market conditions, the level and volatility of real estate and securities prices and the liquidity of our investments. As military conflicts and related economic sanctions continue to evolve, it has become increasingly difficult to predict the impact of these events.

Third-party expectations relating to environmental,sustainability social and governance factorsinitiatives may impose additional costs and expose us to new risks. There is an increasing focus from certain investors concerning corporate responsibility, specifically related to environmental,sustainability social and governance factors.initiatives. In addition, there is an increased focus on such matters by various regulatory authorities, including the SEC, and the activities and expense required to comply with new regulations or standards may be significant. Some investors may use these factors to guide their investment strategies and, in some cases, may choose not to invest in us if they believe our policies relating to corporate responsibility are inadequate. Third-party providers of corporate responsibility ratings and reports on companies have increased in number, resulting in varied and in some cases inconsistent standards. In addition, the criteria by which companies’ corporate responsibility practices are assessed and the regulations applicable thereto are evolving, which could result in greater expectations of us and cause us to undertake costly initiatives or activities to satisfy such new criteria or regulations. Further, if we elect not to or are unable to satisfy such new criteria or do not meet the criteria of a specific third-party provider, some investors may conclude that our policies with respect to corporate responsibility are inadequate. We may face reputational damage in the event that our corporate responsibility procedures or standards do not meet the standards set by various constituencies. Furthermore, if our competitors’ corporate responsibility performance is perceived to be superior to ours, potential or current investors may elect to invest in our competitors instead of us. In addition, we could fail, or be perceived to fail, in our achievement of our initiatives and goals with respect to environmental, social and governance matters, or we could be criticized for the scope of such initiatives or goals. If we fail to satisfy the expectations of investors, our initiatives are not executed as planned, or we do not satisfy our goals, our reputation and financial results could be adversely affected.

Dividends on our capital stock do not qualify for the reduced federal tax rates available for some dividends (i.e., they are not qualified dividends). Income from “qualified dividends” payable to U.S. shareholders that are individuals, trusts and estates are generally subject subject to tax at preferential rates. Dividends payable by REITs, however, generally are not eligible for the preferential tax rates applicable applicable to qualified dividend income. Although these rules do not adversely affect our taxation or the dividends payable by us, to the extent that the preferential rates continue to apply to regular corporate qualified dividends, investors who are individuals, trusts and estates may perceive an investment in us to be relatively less attractive than an investment in the stock of a non-REIT corporation that pays qualified dividends, which could materially and adversely affect the value of the shares of, and per share trading price of, our capital stock. It should be noted that the TCJA provides for a deduction from income for individuals, trusts and estates up to 20% of certain REIT dividends, which reduces the effective tax rate on such dividends below the effective tax rate on interest, though the deduction is generally not as favorable as the preferential rate on qualified dividends. TheWhile initially scheduled to expire in 2025, recent legislation has made this deduction for certain REIT dividends, unlike the favorable rate for qualified dividends, currently expires after 2025.permanent.

We face risks relating to cybersecurity attacks which could adversely affect our business, cause loss of confidential information and disrupt operations. We rely extensively on information technology to process transactions and manage our business. In the ordinary course of our business, we collect and store sensitive data, including our business information and that of our tenants, clients, vendors and employees on our network. This data is hosted on internal, as well as external, computer systems. Our external systems are hosted by third-party service providers that may have access to such information in connection with providing necessary information technology and security and other business services to us. This information may include personally identifiable information such as social security numbers, banking information and credit card information. We employ a number of measures to prevent, detect and mitigate potential breaches or disclosure of this confidential information. We have established a Cybersecurity Subcommittee of our Audit Committee to review and provide high level guidance on cybersecurity related issues of importance to the Company. We also maintain cyber risk insurance to provide some coverage for certain risks arising out of data and network breaches. While we continue to improve our cybersecurity and take measures to protect our business, we and our third-party service providers may be vulnerable to attacks by hackers (including through malware, ransomware, computer viruses, and email phishing schemes) or breached due to employee error, malfeasance, fire, flood or other physical event, or other disruptions. Any such breach or disruption could compromise the confidential information of our employees, customers and vendors to the extent such information exists on our systems or on the systems of third-party service providers. We may be unable to identify, investigate or remediate cyber events or incidents because attackers are increasingly using sophisticated techniques and tools (including generative artificial intelligence and other machine learning techniques) that can avoid detection, circumvent security controls, and even remove or obfuscate forensic evidence. Such an incident could result in potential liability or a loss of confidence and legal claims or proceedings; damage our reputation, competitiveness, stock price and long-term value; increase remediation, cybersecurity protection and insurance premium costs; disrupt and affect our business operations; or have material adverse effects on our business. There can be no assurance that our security measures taken to manage the risk of a security breach, cyber-attack or disruption will be effective or that attempted security breaches, cyber-attacks or disruptions would not be successful or damaging.

As new technologies, including tools that harness generative artificial intelligence and other machine learning techniques,AI, rapidly develop and become accessible, the use of such new technologies by us will present additional known and unknown risks, including, among others, the risk that confidential information may be stolen, misappropriated or disclosed and the risk that we may rely on incorrect, unclear or biased outputs generated by such technologies, any of which could have an adverse impact on us and our business.

We operate in an intensely competitive business environment. We may not be as successful as our competitors in keeping pace with developments in technology, including incorporating generative artificial intelligence and machine learning into our business, or adapting to a rapidly changing marketplace. Our business continues to demand the use of sophisticated systems, software and technology, including AI. These systems, software and technologies must be refined, updated and replaced on a regular basis in order for us to meet our business requirements, our customers’ demands and expectations, and regulatory requirements. If we are unable to do so on a timely basis or at a reasonable cost, our business and/or operating results could be adversely affected. Our competitors may be larger, more diversified, better funded, and have access to more advanced technology, including AI. These competitive advantages may enable our competition to innovate better and more quickly, to compete more effectively, causing us to lose business and profitability. Burgeoning interest in AI may increase our competition and disrupt our business model. AI may lower barriers to entry in our industry and we may be unable to effectively compete with the products or services offered by new competitors. AI-related changes to the products and services may affect our customers’ expectations, requirements, or tastes in ways we cannot adequately anticipate or adapt to, causing our business to lose market share or affect our ability to operate profitably and sustainably.

Our OZ Fund may fail to qualify for the tax benefits available for investments in qualified opportunity zones under the detailed rules adopted adopted by the Internal Revenue Service. Some aspects of the qualified opportunity zone rules adopted by the Internal Revenue Service remain uncertain. Legislation may be needed to clarify certain of the provisions in the qualified opportunity zone rules and to give proper effect to Congressional intent as expressed in the TCJA. No assurance can be provided that additional legislation will be enacted, and even if enacted, that such additional legislation will clearly address all items that require or would benefit from clarification. It is unclear ifwhether additional guidance will be released, or in what manner the Treasury Department will resolve any remaining areas of uncertainty. uncertainty. Accordingly, there can be no guarantee that our OZ Fund will qualify under the qualified opportunity zone rules as a qualified opportunity opportunity zone fund or that the Company will be able to realize, through its investment in the fund, any of the desired tax benefits.

Occupancy in our properties, as well as our ability to increase rental rates, directly affects revenues. In 2024,2025, total income increased 9% from from the prior year due to our rental program, rent increases and the growth of our sales business. Community NOI (as defined below belowunder Non-U.S. GAAP Measures) increased 10%9% from the prior year. Overall occupancy increased 6080 basis points from 86.7%87.3% as of December 31, 20232024 to 87.3%88.1% as of of December 31, 2024.2025. Same property occupancy, which includes communities owned and operated as of January 1, 2023,2024, increased 7080 basis points from 87.1%87.5% as of December 31, 20232024 to 87.8%88.3% as of December 31, 2024.2025. (Unless expressly indicated, information in this report with with respect to the Company’s properties, including financial and operating results for the year ended December 31, 2024,2025, does not include the properties owned by the Company’s joint ventureventures with Nuveen.)

The macro-economic environment and current housing fundamentals continue to favor home rentals. DueAlthough to30-year highfixed rate mortgage rates have shown signs of stabilizing, they are still approximately 6%. Housing inventory has improved but affordability remains a challenge for many prospective buyers, especially lower and lackmiddle-income of inventory, the higher cost of buying a home versus renting one is at its most extreme since 1996. According to the National Association of Realtors, reported sales of existing homes fell to 4.06 million in 2024, the lowest level in nearly 30 years.households. We believe rental homes in a manufactured home community allow the resident to obtain the efficiencies of factory-built housing and the amenities of community living for less than the cost of other forms of affordable housing. We continue to see strong demand for rental homes. During 2024,2025, our portfolio of rental homes increased by 364571 homes, net of rental home sales. Occupied rental homes represent approximately 43.0%43.6% of total occupied sites. Occupancy in rental homes continues to be strong and registered at 94.0% 93.8% as of December 31, 2024.2025. Our manufactured home communities compare favorably with other types of rental housing, including apartments, and we will continue to allocate capital to rental home purchases, as demand dictates.

The Company holds a portfolio of marketable equity securities of other REITs with a fair value of $31.9$23.8 million as of December 31, 2024,2025, representing 1.6%1.1% of our undepreciated assets (total assets excluding accumulated depreciation). The REIT securities portfolio provides provides the Company with additional diversification, liquidity and income. As of December 31, 2024,2025, 99%97% of the Company’s portfolio consisted of REIT common stocks and 1% of the Company’s portfolio3% consisted of REIT preferred stocks. TheOther than purchasing marketable equity securities through automatic dividend reinvestments, the Company has not made any purchases of REIT securities during 2023, 2024 and 2025 and the Company does not intend to increase its investment in the REIT securities portfolio.

The Company’s Company invests in these REIT securities and, from time to time, may use margin debt when an adequate yield spread can be obtained. The Company’s weighted average yield on the securities portfolio was approximately 4.5%5.2% at December 31, 2024.2025. At December 31, 2024, 2025, the Company had net unrealized losses of $38.5$40.8 million in its REIT securities portfolio. During 2024,2025, the Company sold positions in securities, generating generating a net realized loss of $3.8 million.$221,000.

The Company continues to strengthen its balance sheet. During the year ended December 31, 2024,2025, through an at-the-market sale program for our Common Stock that was established in March 2024 (the “March 2024 Common ATM Program”), an at-the-market sale program for our Common Stock that was established in September 2024 (the “September 2024 Common ATM Program”) and a prior at-the-market sale program for our Common Stock established in 2023 (collectively,, the “Common ATM Programs”), the Company issued and sold a total of 12.52.6 million shares of our Common Stock, generating gross proceeds of $224.5$45.1 million and net proceeds of $220.6$44.1 million, after offering expenses. Additionally, during 20242025 the Company raised approximately $10.2$9.3 million in new capital through the Dividend Reinvestment and Stock Purchase Plan (“DRIP”).

During the year ended December 31, 2024,2025, through an at-the-market sale program for our Preferred Stock that was established in January 2023 (the “2023 Preferred ATM Program,Program”), and togetheran withat-the-market sale program for our Preferred Stock that was established in March 2025 (the Common“2025 Preferred ATM Programs, the “At-the-Market Sale ProgramsProgram”), the Company issued and sold a total of approximately 1.2 million93,000 shares of our Series D Preferred Stock, generating gross proceeds of $28.5$2.1 million and net proceeds of $28.0$2.0 million, after offering expenses.

On December 31, 2024,2025, the Company had approximately $99.7$72 million in cash and cash equivalents and $260 million available on our credit facility.facility, with a potential total availability of up to $500 million pursuant to an accordion feature. We also had $138$129 million available on our revolving lines of credit for the financing of home sales and the purchase of inventory and $55 million available on our lines of credit secured by rental homes and rental home leases.

The Company intends to continue to increase its real estate investments. Our business plan includes acquiring communities that over time are expected to yield in excess of our cost of funds and then investing in physical improvements, including adding rental homes onto otherwise vacant sites. As part of this plan, we intend to continue to seek opportunities, through ouropportunity OZzone Fund,funds, to acquire communities that require substantial capital investment and are located in qualified opportunity zones. In addition, on behalf of our joint venture arrangementarrangements with Nuveen Real Estate, we will continue to seek opportunities to acquire manufactured home communities that are under development and/or newly developed and meet certain other investment guidelines. There is no guarantee that any of these additional opportunities will continue to materialize or that the Company will be able to take advantage of such opportunities. The growth of our real estate portfolio and success of the joint ventureventures depends on the availability of suitable properties which meet the Company’s investment criteria and appropriate financing. Competition in the market areas in which the Company operates is significant. To the extent that funds or appropriate communities are not available, fewer acquisitions will be made.

Acquisitions in 2024 and 20232025

Rental and related income increased from $189.7 million for the year ended December 31, 2023 to $207.0 million for the year ended December 31, 2024, or 9%. This increase was due to increases in rental rates, same property occupancy and additional rental homes. During 2024, the Company raised rental rates by 5% to 6% at most communities. Rent increases vary depending on overall market conditions and demand. Occupancy, as well as the ability to increase rental rates, directly affects revenues. The Company has been acquiring communities with vacant sites that that can potentially be occupied and earn income in the future. Overall occupancy was 87.3% and 86.7% at December 31, 2024 and 2023, respectively. Demand for rental homes continues to be strong. As of December 31, 2024, we had approximately 10,300 rental homes with an occupancy rate of 94.0%. We continue to evaluate the demand for rental homes and will invest in additional homes as demand dictates.

Community NOI increased from $108.4 million for the year ended December 31, 2023 to $119.7 million for the year ended December 31, 2024, or 10%. This increase was primarily due to the increases in rental rates, occupancy and rental homes. The operating expense ratio (defined as community operating expenses divided by rental and related income) improved 70 basis points from 42.9% in 2023 to 42.2% for 2024. Many recently acquired communities have deferred maintenance requiring higher than normal expenditures in the first few years of ownership. Since most of the community expenses consist of fixed costs, as occupancy rates increase, these expense ratios are expected to continue to improve. Due to the Company’s ability to increase its rental rates annually (subject to limitations on rent increases in certain jurisdictions), increasing costs due to inflation and changing prices have generally not had a material effect on revenue and income from continuing operations.

Sales of manufactured homes increased from $31.2 million for the year ended December 31, 2023 to $33.5 million for the year ended December 31, 2024, or 8%. The total number of homes sold increased 16% from 341 homes in 2023 to 394 homes in 2024. Cost of sales of manufactured manufactured homes increased from $21.1 million for the year ended December 31, 2023 to $21.9 million for the year ended December 31, 2024, or 4%. The gross profit percentage was 35% and 32% for the years ended December 31, 2024 and 2023, respectively. Selling expenses remained relatively stable for the years ended December 31, 2023 and 2024. Gain from the sales operations, excluding interest on the financing of inventory, increased 53% and amounted to a gain of $4.8 million and $3.1 million for the years ended December 31, 2024 and 2023, respectively. Many of the costs associated with sales, such as salaries, and to an extent, advertising and promotion, are fixed. Despite high mortgage rates, home prices have continued to rise as fewer sellers are listing homes and inventories decline resulting in the inherent relative affordability of our property type becoming more and more apparent, which should result in increased demand. The Company continues to be optimistic about future sales and rental prospects given the fundamental need for affordable housing. The Company believes that sales of new homes produce new rental revenue and represent an investment in the upgrading of our communities.

The Company recognized a realized loss on sales of marketable securities of $3.8 million for the year ended December 31, 2024. The Company recognized a realized gain on sales of marketable securities of $183,000 for the year ended December 31, 2023. The increase (decrease)change in fair value of marketable securities amounted to an increase of $1.2 million and a decrease of $3.6 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, the Company had total net unrealized losses of $38.5 million in its REIT securities portfolio.

In addition to the results reported in accordance with U.S. GAAP, management’s discussion and analysis of financial condition and results of operations include certain non-U.S. GAAP financial measures that in management’s view of the business we believe are meaningful as they allow the investor the ability to understand key operating details of our business both with and without regard to certain accounting conventions or items that may not always be indicative of recurring annual cash flowflows of the portfolio. These non-U.S. GAAP financial measures as determined and presented by us may not be comparable to related or similarly titled measures reported by other companies, and include Community Net Operating Income (“Community NOI”), Funds from Operations Attributable to Common Shareholders (“FFO”) and Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”).

We assess and measure our overall operating results based upon FFO, an industry performance measure which management believes is a useful indicator of our operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. FFO, as defined by Nareit, represents net income (loss) attributable to common shareholders, as defined by accounting principles generally accepted in the U.S. (“U.S. GAAP”), excluding certain gains or losses from sales of previously depreciated real estate estate assets, impairment charges related to depreciable real estate assets, the change in the fair value of marketable securities, and the the gain or loss on the sale of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization. Included in the Nareit FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation of Nareit FFO to make an election to include or exclude gains and losses on the sale of these assets, such as marketable equity securities, and include or exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the change in the fair value of marketable securities from our FFO calculation. Nareit created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance. We define Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), as FFO, excluding certain one-time charges. FFO and Normalized FFO should be considered as supplemental measures of operating performance used by REITs. FFO and Normalized FFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However, other REITs may use different methodologies to calculate FFO and Normalized FFO and, accordingly, our FFO and Normalized FFO may not be comparable to all other REITs. The items excluded from FFO and Normalized FFO are significant components in understanding the Company’s financial performance.

The Company operates as a REIT deriving its income primarily from real estate rental operations. The Company’s principal liquidity demands have historically been, and are expected to continue to be, distributions to the Company’s shareholders, acquisitions, capital improvements, development and expansions of properties, debt service, purchases of manufactured home inventory and rental homes, financing of manufactured home sales and payments of expenses relating to real estate operations. The Company’s ability to generate cash adequate to meet these demands is dependent primarily on income from its real estate investments and marketable securities portfolio, the sale of real estate investments and marketable securities, refinancing of mortgage debt, leveraging of real estate investments, availability of bank borrowings, lines of credit, and other incurrence of indebtedness, proceeds from the DRIP, and access to the capital markets, including sales of Common Stock and Series D Preferred Stock through its At-the-Market Sale Programs. InThe additionCompany’s operating cash flows are expected to cashbe generated through operations, the Company uses a variety of sourcessufficient to fund itsrecurring cashoperating needs,expenses and required distributions to maintain REIT qualification. Access to the capital markets, including the Company’s at-the-market programs, acquisitions.is primarily utilized to fund growth initiatives, acquisitions, development, and balance sheet management rather than to support recurring operating expenses. The Company may sell marketable securities from its investment portfolio, borrow on its unsecured credit facility or lines of credit, incur other indebtedness, finance and refinance its properties, and/or raise capital through the DRIP and capital markets, including through the Company’s At-the-Market Sale Programs. In order to provide continued financial flexibility to opportunistically access the capital markets, on March 12, 2024, the Company implemented its March 2024 Common ATM Program which allowed the Company to offer and sell shares of the Company’s Common Stock, having an aggregate sales price of up to $150 million, from time to time through the distribution agents. In addition, on September 16, 2024, the Company terminated the use of its successful then-existing March 2024at-the-market Common ATMStock Programprogram and implemented a new September 2024 Common ATM ProgramProgram, which allows the Company to to offer and sell shares of the Company’s Common Stock, having an aggregate sales price of up to $150 million, from time to time through the distribution agents.agents thereunder. Additionally, duringon 2024March 5, 2025, the Company expandedterminated its successful then-existing 2023 Preferred ATM Program and implemented a new 2025 Preferred ATM Program which allows the borrowingCompany capacityto onoffer itsand unsecuredsell revolvingshares of Series D Preferred creditStock facilityhaving an aggregate sales price of up to $100 million from $180 million in available borrowingstime to $260time millionthrough inB. availableRiley, borrowings.as distribution agent.

The Company intends to continue to increase its real estate investments. Our business plan includes acquiring communities that over time are expected to yield in excess of our cost of funds and then investing in physical improvements, including adding rental homes onto otherwise vacant sites. As part of this plan, we intend to continue to seek opportunities, through our opportunity zone fund,funds, to acquire communities that require substantial capital investment and are located in qualified opportunity zones. In addition, on behalf of our joint ventureventures with Nuveen Real Estate, we will continue to seek opportunities to acquire manufactured home communities that are under development and/or newly developed and meet certain other investment guidelines. There is no guarantee that any of these additional opportunities will materialize or that the Company will be able to take advantage of such opportunities. The growth of our real estate portfolio and success of our joint venture depends on the availability of suitable properties which meet the Company’s investment criteria and appropriate financing. Competition in the market areas in which the Company operates is significant. To the extent that funds or appropriate communities are not available, fewer acquisitions will be made.

The Company continues to strengthen its capital and liquidity positions. During the year ended December 31, 2024,2025, the Company issued and sold 12.52.6 million shares of Common Stock through our September 2024 Common ATM ProgramsProgram at a weighted average price of $17.92$17.59 per share, generating gross proceeds of $224.5$45.1 million and net proceeds of $220.6$44.1 million, after offering expenses.

Through our 2023 Preferred ATM Program,Programs, the Company issued and sold a total of 1.2 million93,000 shares of our Series D Preferred Stock generating gross proceeds of $28.5$2.1 million and net proceeds after offering expenses of $28.0$2.0 million during the year ended December 31, 2024. 2025.

As of December 31, 2024,2025, $89.8$44.6 million of Common Stock remained available for sale under the September 2024 Common ATM Program and $17.6 $99.0 million in shares of Series D Preferred Stock remained available for sale under the 20232025 Preferred ATM Program. Subsequent to year end, the Company issued and sold 270,000 shares of Common Stock under the September 2024 Common ATM Program for gross proceeds of $4.9 million. Subsequent to year end, the Company issued and sold a total of 49,00066,000 shares of Preferred Stock under the 20232025 Preferred ATM Program for gross proceeds of $1.1 $1.5 million.

As of December 31, 2024,2025, the Company had $99.7$72.1 million of cash and cash equivalents and marketable securities of $31.9$23.8 million. The Company operated 139145 communities (including 137142 communities in which the Company owned either a 100% interest or a majority interest and twothree communities owned by the Company’s joint ventureventures with Nuveen), of which 5263 are unencumbered. Except for the 30 communities in the borrowing base for our unsecured credit facility, these unencumbered communities can be used to raise additional funds. Our marketable securities, unencumbered properties, and lines of credit provide the Company with additional liquidity. The Company holds a 40% equity interest in the entities formed under its joint ventureventures with Nuveen, which owns two three newly developed communities that are unencumbered and one community in the process of being developed that is also unencumbered.

The Company’s focus is on real estate investments. The Company has historically financed purchases of real estate primarily through mortgages. During 2024,2025, total investment property, including rental homes, increased 8%12% or $130.1$200.3 million. WeSee have also expanded three communities for a total of 190 additional home sites. See Note 3 of the Notes to Consolidated Financial Statements for additional information on our acquisitions and Note 7 of the Notes to Consolidated Financial Statements for related debt transactions. The Company continues to evaluate acquisition opportunities. The funds for these acquisitions (including the Company’s 40% share of acquisition costs that may be incurred pursuant to its joint ventureventures with Nuveen Real Estate) may come from bank borrowings, proceeds from the DRIP, and private placements or public offerings of debt, Common Stock or Preferred Stock, including under the September 2024 Common ATM Program or the 20232025 Preferred ATM Program or any other at-the-market sale programs that the Company may commence. To the extent that funds or appropriate properties are not available, fewer acquisitions will be made.

The Company owned approximately 10,30010,900 rental homes, not including rental homes in the joint venture communities, or approximately 40%41% of our total homesites as of December 31, 2024.2025. During 2024, 2025, our rental home portfolio increased by 565a net of 571 homes and we sold 201163 rental homes, representing a net increase of $49.8$65.4 million. The Company markets these rental homes for sale to existing residents. The Company estimates that in 20252026 it will order approximately 700 to 800 manufactured homes to use as rental units at its properties for a total invoice cost of approximately $55 million to $60 million. Rental home rates on new homes range from approximately $850 to $2,000 per month, including lot rent, depending on size, location and market conditions. During 2024, 2025, the Company also invested approximately $42 $49 million in other improvements to its communities.

Net cash provided by operating activities remained relatively stable from 2025 compared to 2024. Net cash provided by (used in) operating activities decreased by $38.5 million in 2024 primarily due to an increase in Community NOI and an increase in inventory. Net cash provided by (used in) operating activities increased by $127.3 million in 2023 primarily due to a decrease in inventory.

Cash flows were primarily used for capital improvements, payment of dividends, purchase of inventory and rental homes, loans to customers for the sales of manufactured homes, and expansion of existing communities. The Company meets maturing mortgage obligations by using a combination of positive cash flows and refinancing. The dividend payments were primarily made from cash flows from operations. Excluding expansions and rental home purchases, the Company is budgeting approximately $30 to $40 million in capital improvements for 2026.

As of December 31, 2024,2025, the Company had total assets of $1.6$1.7 billion and total liabilities of $647.8$791.8 million. Our net debt (net of cash and cash equivalents) to total market capitalization decreased 32% and as of December 31, 20242025 and 20232024 was approximately 21%28% and 31%, 21%, respectively. Our net debt, less securities (net of cash and cash equivalents and marketable securities) to total market capitalization decreased 37% and as of December 31, 20242025 and 20232024 was approximately 19%27% and 30%,19%, respectively. As of December 31, 2024,2025, the Company hashad 23six mortgages totaling $115.2 $38.2 million due within the next 12 months, of which 10 mortgages totaling $45.9 million are due in the first and second quarters of 2025. We are in the process of refinancing these mortgages with Fannie Mae. We believe that proceeds from these refinancings will exceed their current balances.months.

As of MarchJune 31,30, 2026, the Company operated a portfolio of 145 manufactured home communities, of which 142 are majority owned and are included in our consolidated operations with the remaining three owned through our joint ventures with Nuveen Real Estate in which the Company has a 40% interest. One of these joint ventures owns two communities in Florida (Sebring Square and Rum Runner) and one joint venture owns one community in Pennsylvania (Honey Ridge). Of the 142 majority owned communities, 140 are owned 100% by the Company with the remaining two owned by the Company’s Opportunity Zone Fund, in which the Company has a 77% interest. The Company’s portfolio of 145 communities contain a total ofcontains approximately 27,100 developed homesites, of which 11,200 contain rental homes that are leased to residents. These These 145 communities are located in twelve states consisting of New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Maryland, Michigan, Michigan, Alabama, South Carolina, Florida and Georgia. In addition, the Company has over 1,000 self-storage units that are available for leasing by residents. UMH has continued to execute our growth strategy of purchasing well-located communities in our target markets, including including the energy-rich Marcellus and Utica Shale regions.

The Company intends to continue to increase its real estate investments and investments in expansions. Our business plan includes acquiring communities that over time are expected to yield in excess of our cost of funds and then investing in physical improvements, including adding rental homes onto otherwise vacant sites. This has resulted in increased occupancy rates and improved operating results. For the three and six months ended MarchJune 31,30, 2026, rental and related income increased 9% from the prior year period and Community Net Operating Income Income (“NOI”), as defined below, increased 8%. Same property NOI, which includes communities owned and operated as of January 1, 1, 2025 (excluding Memphis Blues, Duck River Estates and River Bluff Estates), increased 7%9% and 8% for the three and six months ended MarchJune 31,30, 20262026, respectively, over the the prior year period driven by a 110 basis point increase in occupancy, to 89.0%,89.4%, and rental rate increases of 5.0%.5.3%. We have been positioning ourselves for future growth and will continue to seek opportunistic investments. In addition, on behalf of our joint venture arrangements with Nuveen Real Estate, we will seek opportunities to acquire manufactured home communities that are under development and/or newly developed and meet certain other investment guidelines. We will also seek additional opportunities, through our opportunity zone fund, to acquire communities that require substantial capital investment and are located in qualified opportunity zones.

The macro-economic environment and current housing fundamentals continue to favor home rentals. Although 30-year fixed rate mortgage rates have shown signs of stabilizing, they are still approximately 6%.6.6%. Housing inventory has improved but affordability remains a challenge for many prospective buyers, especially lower and middle-income households. We believe rental homes in a manufactured home community allow the resident to obtain the efficiencies of factory-built housing and the amenities of community living for less than the cost of other forms of affordable housing. We continue to see strong demand for rental homes. During the threesix months ended MarchJune 31,30, 2026, our portfolio of rental homeshomes, including the joint venture entities, increased by 121192 homes, net of rental home sales. Occupied rental homes represent approximately 44.2%44.8% of total occupied sites. Occupancy in rental homes continues to be strong and registered at 94.6%95.3% as of MarchJune 31,30, 2026. Our manufactured home communities communities compare favorably with other types of rental housing, including apartments, and we will continue to allocate capital to rental home purchases, as demand dictates.

In addition to the results reported in accordance with U.S. GAAP, management’s discussion and analysis of financial condition and results of operations include certain non-U.S. GAAP financial measures that in management’s view of the business we believe are meaningful as they allow the investor the ability to understand key operating details of our business both with and without regard to certain accounting conventions or items that may not always be indicative of recurring annual cash flows of the portfolio. These non-U.S. GAAP financial measures as determined and presented by us may not be comparable to related or similarly titled measures reported by other companies,companies and include Community Net Operating Income (“Community NOI”), Funds from Operations Attributable to Common Shareholders (“FFO”) and Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”).

TheA Company’sreconciliation of Net Income Attributable to Common Shareholders to Community NOI for the three and six months ended MarchJune 31,30, 2026 and 2025 is calculated as follows (in thousands):

A reconciliation of Net Income Attributable to Common Shareholders to The Company’s FFO and Normalized FFOFFO, attributable to common shareholders for the three and six months ended MarchJune 31,30, 2026 and 2025 are calculated as follows (in thousands):

The following are the cash flows provided by (used in) operating, investing and financing activities for the threesix months ended MarchJune 31,30, 2026 2026 and 2025 (in thousands):

Net Income (Loss) Attributable to Common Shareholders increased $2.9$1.9 million from a net loss of $271,000 for the three months ended March 31, 2025, to net income of $2.6$2.5 million for the three months ended MarchJune 31,30, 2025, to net income of $4.4 million for the three months ended June 30, 2026. ThisNet increaseIncome wasAttributable to Common Shareholders increased $4.7 million from net income of $2.3 million for the six months ended June 30, 2025, to net income of $7.0 million for the six months ended June 30, 2026. The increases for both the three and six months ended from June 30, 2025 to June 30, 2026, were due to an increase in Community NOI and a net gain on our securities portfolioportfolio, partially offset by increases in interest expense and depreciation expense.

Rental and related income increased 9% from $54.6$56.2 million for the three months ended MarchJune 31,30, 2025 to $59.5$61.1 million for the three months ended endedJune March 31,30, 2026. ThisRental increaseand wasrelated income increased 9% from $110.7 million for the six months ended June 30, 2025 to $120.6 million for the six months ended June 30, 2026. These increases were due to acquisitions made in 2025, increases in rental rates and same property occupancy and and additional rental homes. Same property occupancy has increased 110 basis points from 87.9%88.3% as of MarchJune 31,30, 2025 to 89.0%89.4% at MarchJune 30, 31, 2026. Occupied rental homes increased 6%7% from approximately 9,90010,000 homes at MarchJune 31,30, 2025 to 10,40010,700 homes at MarchJune 31, 30, 2026.

Community operating expenses increased 10% from $23.0 million for the three months ended MarchJune 31,30, 2025 to $25.3 million for the three months ended June 30, 2026. Community operating expenses increased 10% from $46.1 million for the six months ended MarchJune 31,30, 2025 to $50.6 million for the six months ended June 30, 2026. These increases were due to acquisitions made in 2025 and an increase in payroll and related costs, real estate taxestaxes, insurance and water and sewer costs.

Community NOI increased 8% from $31.5$33.1 million for the three months ended MarchJune 31,30, 2025 to $34.2$35.8 million for the three months ended MarchJune 31,30, 2026. Community NOI increased 8% from $64.7 million for the six months ended June 30, 2025 to $70.0 million for the six months ended June 30, 2026. These increases were primarily due to increases in rental rates, occupancy and rental homes. The Company’s operating expense ratio ratio (defined as community operating expenses divided by rental and related income) was 42.2%41.3% and 42.6%41.9% for the three and six months ended June 30, 2026, respectively, and 41.0% and 41.6% for the three and six months ended MarchJune 31, 202530, and 2026,2025, respectively. Many recently acquired communities have deferred maintenance requiring higher than normal expenditures in the first few years of ownership. Since most of the community expenses consist of fixed costs, as occupancy rates increase, these expense ratios are expected to continue to improve. Due to the Company’s ability to increase its rental rates annually (subject to limitations on rent increases in certain jurisdictions), increasing costs due to inflation and changing prices have generally not had a material effect on revenue and income from continuing operations.

Sales of manufactured homes decreasedincreased 4%1% from $6.7$10.5 million, or 71102 homes, for the three months ended MarchJune 31,30, 2025 to $6.4$10.6 million, or 73101 homes, homes, for the three months ended MarchJune 31,30, 2026. The average sales price was $87,000$104,000 and $94,000$103,000 for the three months ended MarchJune 31,30, 2026 2026 and 2025, respectively. Cost of sales of manufactured homes amounted to $4.1$6.8 million and $4.3$7.1 million for the three months ended June March 31,30, 2026 and 2025, respectively. The gross profit percentage was 36% and 35%32% for the three months ended MarchJune 31,30, 2026 and 2025, respectively. respectively. Selling expenses, which includes salaries, commissions, advertising and other miscellaneous expenses, amounted to $1.9$2.3 million and $1.6$1.8 million million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Gain from the sales operations (defined as sales of manufactured homes, less cost of sales of manufactured homes, less selling expenses),expenses, excludingless interest on the financing of inventory, inventory) amounted to $426,000 $1.3 million or 7% of total sales and $691,000 or 10%13% of total sales for the three months ended MarchJune 31,30, 2026 and 2025. Gain from the sales operations, excluding interest on the financing of inventory, amounted to $1.4 million or 13% of total sales and $1.5 million or 14% of total sales for the three months ended June 30, 2026 and 2025, respectively. Many of the costs associated with sales, such as salaries, and to an extent, advertising and promotion, are fixed.

InterestIncluding expense,sales includingfrom amortizationour Joint Ventures with Nuveen Real Estate, which includes sales at our Honey Ridge community, sales of financingmanufactured costs,homes increased 53%10% from $5.9 $10.5 million for the three months ended MarchJune 31,30, 2025 to $9.1 $11.5 million for the three months ended MarchJune 31,30, 2026.2026 The average balance of our total debtand increased 8% from $610.5$17.1 million atfor Marchthe 31,six 2025 tomonths $760.5ended millionJune at March 31, 2026. The weighted average interest rate on our total debt increased from 4.4% at March 31,30, 2025 to 4.9% at$18.6 Marchmillion 31,for 2026,the respectively.six months ended June 30, 2026.

Total investment property increased 1%3% or $21.4$51.8 million during the threesix months ended MarchJune 31,30, 2026. In addition to adding 121180 rental homes, net of 4084 rental homes sold,sold to its communities during the mostsix recentmonths quarter,ended June 30, 2026, the Company is preparing sites for additional homes to be added during the year. Occupied rentals increased by 203481 rental homes from December 31, 2025 to MarchJune 31,30, 2026. The Company’s occupancy rate on its rental homes portfolio increased 80150 basis points and was 94.6%95.3% at MarchJune 31,30, 2026 as compared to 93.8% at December 31, 2025.

Marketable securities increased 11%25% or $2.7$5.9 million during the threesix months ended MarchJune 31,30, 2026 due to the net increase in the fair value.

Land development costs increased 25%59% or $9.8$23.5 million during the threesix months ended MarchJune 31,30, 2026 due to an increase in expansion projects. projects. Since 2018, the Company has built 1,056 expansion sites in 16 communities. Occupancy levels at these sites are at approximately 54%. 55%. Once fully occupied, these sites will contribute to increased community operating income. The Company currently has approximately 1,044 expansion sites in the approval process, including one greenfield development in Coxsackie, NY for approximately 360 sites.

Mortgages payable, net of unamortized debt issuance costs, remaineddecreased relatively2% stableor $10.8 million during the threesix months ended MarchJune 31,30, 2026.2026, due to mortgage payoffs of approximately $6.7 million and principal payments.

In addition to cash generated through operations, the Company uses a variety of sources to fund its cash needs, including acquisitions. The Company may sell marketable securities from its investment portfolio, borrow on its unsecured credit facility or lines of credit, credit, incur other indebtedness, finance and refinance its properties, and/or raise capital through the DRIP and capital markets, including including through the Company’s ATM Programs. In order to provide financial flexibility to opportunistically access the capital markets, the Company implemented a September 2024 Common ATM Program which allows the Company to offer and sell shares of the Company’s common stock, having an aggregate sales price of up to $150 million, from time to time through the Distribution Agents. As of MarchJune 31, 30, 2026, $44.6 million of common stock remained eligible for sale under the September 2024 Common ATM Program. Additionally, the Company implemented a 2025 Preferred ATM Program which allows the Company to offer and sell shares of the Company’s Series D Preferred Stock having an aggregate sales price of up to $100 million from time to time through B. Riley, as Distribution Agent. AsOn ofMay March11, 31, 2026, $97.5the millionCompany ofamended Seriesand Drestated Preferredits Stockexisting remainedat-market eligible forissuance sale underagreement for the 2025 Preferred ATM Program.Program with B. Riley Securities, Inc. to add Cantor Fitzgerald & Co. and Maxim Group LLC (each, a “Distribution Agent” and, collectively with B. Riley Securities, Inc., the “Distribution Agents”). The Distribution Agents are not required to sell any specific number or dollar amount of securities, but will use their commercially reasonable efforts consistent with their normal trading and sales practices, on mutually agreed terms between the Distribution Agents and the Company.

The Company continues to strengthen its capital and liquidity positions. During the threesix months ended MarchJune 31,30, 2026, the Company issued and and sold 66,000419,000 shares of Series D Preferred Stock through our 2025 Preferred ATM Program, at a weighted average price of $22.51$21.75 per share, share, generating gross proceeds of $9.1 million and net proceeds,proceeds of $8.6 million, after offering expenses, of $1.5 million.expenses. During the threesix months ended March 31,June 30, 2026, the Company did not sell any shares of common stock under our September 2024 Common ATM Program. Furthermore, the Company has not sold any shares under the September 2024 Common ATM Program since September 2025.

The Company also raised $2.4$4.6 million from the issuance of common stock in the DRIP during the threesix months ended MarchJune 31,30, 2026, which included dividend reinvestments of $1.1$2.0 million. Dividends paid on the common stock for the threesix months ended MarchJune 31,30, 2026 were $19.1$38.3 million, including the $1.1$2.0 million reinvested. Dividends paid on the Series D Preferred Stock for the threesix months ended MarchJune 31,30, 2026 totaled $10.4 $5.2 million.

Net cash provided by operating activities amounted to $20.8$45.6 million and $12.8$37.2 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. As of MarchJune 31,30, 2026, the Company had cash and cash equivalents of $37.4$28.6 million, marketable securities of $26.4$29.7 million million and $260$220 million available on our credit facility, with a potential total availability of up to $500$600 million pursuant to an accordion feature. We also had approximately $128$129 million available on our revolving lines of credit for the financing of home sales and purchases of inventory and $55 million available on our linelines of credit secured by rental homes and rental homes leases.

The Company owns a portfolio of 145 manufactured home communities, of which 142 are majority owned and are included in our consolidated operations with the remaining three owned through our joint ventures with Nuveen Real Estate. Of the 142 majority owned communities, 140 are owned 100% by the Company, of which 60 are unencumbered. Exceptunencumbered forand communitiesare eligible to be included in the borrowingunencumbered baseasset forpool under our unsecured revolving credit facility,facility. We may choose to exclude any of these communities from the unencumbered communitiesasset pool so that we can be used to raise additional funds.funds by obtaining community level mortgage debt on these communities. Our marketable securities, unencumbered properties, and lines of credit provide the Company with additional liquidity. The Company holds a 40% equity interest in the entities formed under its joint ventures with Nuveen, which owns three newly developed communities that are unencumbered.

As of MarchJune 31,30, 2026, the Company had total assets of $1.7 billion and total liabilities of $791.6$821.0 million. The Company’s net debt (net of unamortized debt issuance costs and cash and cash equivalents) to total market capitalization as of MarchJune 31,30, 2026 was approximately 31%32% and the Company’s net debt, less securities to total market capitalization as of MarchJune 31,30, 2026 was approximately 30%. As of MarchJune 31,30, 2026, the Company had sevensix mortgages totaling $49.6$56.3 million due within the next 12 months. The Company believes that it has the the ability to meet its obligations and to generate funds for new investments.