MHO MI Homes Inc.

Risks

• Increased competition levels in the homebuilding and mortgage lending industries could result in a reduction in our new contracts and homes delivered, along with decreases in the average sales prices of sold and delivered homes and/or decreased mortgage originations, which would have a negative impact on our results of operations.
• 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.
• If land is not available at reasonable prices or terms, our homes sales revenue and results of operations could be negatively impacted and/or we could be required to scale back our operations in a given market.
• Our land investment exposes us to significant risks, including potential impairment charges, that could negatively impact our profits if the market value of our inventory declines.
• Supply shortages and risks related to the demand for skilled labor and building materials could increase costs and delay deliveries.
• Tax law changes could make home ownership more expensive and/or less attractive.
• We may not be able to offset the impact of inflation through price increases.
• Our limited geographic diversification could adversely affect us if the demand for new homes in our markets declines.
• Changes in energy prices may have an adverse effect on the economies in certain markets we operate in and our cost of building homes.
• We may write-off intangible assets, such as goodwill.
• We have financial needs that we meet through the capital markets, including the debt and secondary mortgage markets, and disruptions in these markets could have an adverse impact on our results of operations, financial position and/or cash flows.
• The M/I Financial warehouse facilities will expire in 2020.
• Reduced numbers of home sales may force us to absorb additional carrying costs.
• If our ability to resell mortgages to investors is impaired, we may be required to broker loans.
• Mortgage investors could seek to have us buy back loans or compensate them for losses incurred on mortgages we have sold based on claims that we breached our limited representations or warranties.
• Our results of operations, financial condition and cash flows could be adversely affected if pending or future legal claims against us are not resolved in our favor.
• The terms of our indebtedness may restrict our ability to operate and, if our financial performance declines, we may be unable to maintain compliance with the covenants in the documents governing our indebtedness.
• Our indebtedness could adversely affect our financial condition, and we and our subsidiaries may incur additional indebtedness, which could increase the risks created by our indebtedness.
• In the ordinary course of business, we are required to obtain performance bonds from surety companies, the unavailability of which could adversely affect our results of operations and/or cash flows.
• We can be injured by failures of persons who act on our behalf to comply with applicable regulations and guidelines.
• We could be adversely affected by efforts to impose joint employer liability on us for labor law violations committed by our subcontractors.
• Because of the seasonal nature of our business, our quarterly operating results can fluctuate.
• Homebuilding is subject to construction defect, product liability and warranty claims that can be significant and costly.
• Our subcontractors can expose us to warranty and other risks.
• Damage to our corporate reputation or brands from negative publicity could adversely affect our business, financial results and/or stock price.
• Natural disasters and severe weather conditions could delay deliveries, increase costs and decrease demand for homes in affected areas.
• We are subject to extensive government regulations, which could restrict our business and cause us to incur significant expense.
• Information technology failures and data security breaches could harm our business.
• We are dependent on the services of certain key employees, and the loss of their services could hurt our business.