MHO M/I Homes, Inc. - 10-K

Item 1A. RISK FACTORS

Our future business, results of operations, financial condition, prospects and cash flows and the market price for our securities are subject to numerous risks, many of which are driven by factors that we cannot control. The following cautionary discussion of risks, uncertainties and assumptions relevant to our business includes factors we believe could cause our actual results to differ materially from expected and historical results. Other factors beyond those listed below, including factors unknown to us and factors known to us which we have not currently determined to be material, could also adversely affect our business, results of operations, financial condition, prospects and cash flows and the market price for our securities. Also see “Special Note of Caution Regarding Forward-Looking Statements” above.

Risks Related to Our Business and Industry

A deterioration in homebuilding industry conditions or in broader economic conditions could have adverse effects on our business and results of operations.

The homebuilding industry is cyclical and affected by changes in general economic, real estate and other business conditions that could adversely affect our results of operations, financial condition and cash flows. Certain economic, real estate and other business conditions that have significant effects on the homebuilding industry include:

• employment levels and job and personal income growth;

• the supply of and prices for available new or existing homes (including lender-owned homes acquired through foreclosures and short sales) and other housing alternatives, such as apartments and other residential rental property;

• availability and pricing of financing for homebuyers;

• short and long-term interest rates;

• overall consumer confidence and the confidence of potential homebuyers in particular;

• demographic trends;

• changes in energy prices;

• population growth, household formations and other demographic changes that may be driven by, among other factors, birth rate changes or U.S. immigration changes;

• U.S. and global financial system and credit market stability;

• private party and governmental residential consumer mortgage loan programs, and federal and state regulation of lending and appraisal practices;

• federal and state personal income tax rates and provisions, including provisions for the deduction of residential consumer mortgage loan interest payments and other expenses;

• homebuyer interest in our current or new product designs and community locations, and general consumer interest in purchasing a home compared to choosing other housing alternatives; and

• real estate taxes.

These above conditions, among others, are complex and interrelated. Adverse changes in such business conditions may have a significantly negative impact on our business and results of operations. The negative impact may be national in scope but may also negatively affect some of the regions or markets in which we operate more than others. When such adverse conditions affect any of our larger markets, those conditions could have a proportionately greater impact on us than on some other homebuilding companies. We cannot predict their occurrence or severity, nor can we provide assurance that our strategic responses to their impacts would be successful.

Housing market conditions were challenging in 2025 and consumer confidence weakened as affordability concerns were exacerbated by elevated mortgage interest rates and uncertain trade policies. Declines in the homebuilding and mortgage lending industries and overall economy could decrease the market value of our inventory which could have a negative impact on our gross margins from home sales as we experienced in 2025 compared to 2024. We recorded an aggregate charge of $47.7 million during 2025 that included $11.8 million of write-offs of land deposits and pre-acquisition costs for land we no longer intend to purchase and $35.9 million of inventory impairments. Of these charges, $6.7 million and $41.0 million were attributable to the Northern homebuilding operating segment and the Southern homebuilding operating segment, respectively. A reduction in our gross margins from home sales could have a significantly negative impact on our financial position and results of operations. Additional external factors, such as foreclosure rates, mortgage availability, high inflation, competition and unemployment rates, could also negatively impact our results.

Increased mortgage interest rates have made it increasingly difficult for potential customers to qualify for sufficient financing, which is contributing to the affordability issues negatively impacting the homebuilding and mortgage lending industries. Customers may be less willing or able to buy our homes if these conditions continue to impact the homebuilding industry. We closely monitor our sales prices and offer sales incentives and mortgage rate buydown programs and adjust base sales prices in

certain circumstances and in certain communities, which negatively impacted our sales prices and gross margins in 2025. We may or may not continue to offer these incentives in 2026. In the future, our pricing strategies may be limited by market conditions. We may be unable to change the mix of our home offerings, reduce the costs of the homes we build or offer more affordable homes to maintain our gross margins or satisfactorily address changing market conditions in other ways. In addition, cancellations of home sales contracts in backlog may increase.

Our absorption rate and new contracts declined in 2025 compared to prior year while our cancellation rate increased year over year. Any further decline in sales activity could adversely affect our results of operations, financial condition and cash flows.

Our financial services business is closely related to our homebuilding business as it originates mortgage loans principally on behalf of purchasers of the homes we build. If demand for our homes declines in the future, the financial results of our financial services segment may also decline.

Additionally, we may be subject to increased counterparty risks, including purchasers of mortgages originated by M/I Financial being unwilling or unable to perform their obligations to us. To the extent a third party is unwilling or unable to perform such obligations, our financial condition, results of operations and/or cash flows could be negatively impacted.

Increased competition in the homebuilding and mortgage lending industries could reduce our new contracts and homes delivered, decrease the average sales prices of homes delivered and decrease mortgage originations, which would have a negative impact on our results of operations.

The homebuilding industry is fragmented and highly competitive. We compete with numerous public and private homebuilders, including some that are substantially larger than us and may have greater financial resources than we do. We also compete with community developers and land development companies, some of which are also homebuilders or affiliates of homebuilders. Homebuilders compete for customers, land, building materials, subcontractor labor and financing. Competition for new home orders is primarily based upon home sales price, location of property, home style, financing available to prospective homebuyers, quality of homes built, customer service and general reputation in the community, and may vary by market, sub-market and even by community. Additionally, competition within the homebuilding industry can be impacted by an excess supply of new and existing homes available for sale resulting from a number of factors including, among other things, increases in unsold started homes available for sale and increases in home foreclosures. Increased competition may cause us to decrease our home sales prices and/or increase home sales incentives in an effort to generate new home sales and maintain homes in backlog until they close. Increased competition can also result in us selling fewer homes or experiencing a higher number of cancellations by homebuyers. If, for example, prices for new homes decline, competitors increase their use of sales incentives, mortgage interest rates increase, the availability of mortgage financing diminishes, current homeowners find it difficult to sell their current homes, homebuyers are concerned about rising inflation, or there is a downturn in local or regional economies or in the national economy, homebuyers may choose to terminate their existing home purchase contracts with us in order to negotiate for a lower price or because they cannot, or will not, complete the purchase and our remedies generally do not extend beyond the retention of deposits. These competitive pressures may negatively impact our future financial and operating results.

Through our financial services operations, we also compete with numerous banks and other mortgage bankers and brokers, some of which are larger than us and may have greater financial resources than we do. Competitive factors that affect our financial services operations include pricing, mortgage loan terms, underwriting criteria and customer service. To the extent that we are unable to adequately compete with other companies that originate mortgage loans, the results of operations of our mortgage operations may be negatively impacted.

Reductions in the availability of mortgage financing, continued elevated mortgage interest rates for prolonged periods and further increases in mortgage interest rates or down payment requirements could adversely affect our business.

Mortgage interest rates have remained elevated since rising in 2022 after a period of historical low rates, which has increased the costs of owning a home and reduced the demand for our homes. Despite the Federal Reserve reducing rates by an additional 75 basis points during 2025, mortgage rates continue to hover between 6% and 7%. Any rate increases by the Federal Reserve could further increase the costs of owning a home and reduce the demand for our homes. Demand for new homes may also further decline or fail to improve if mortgage interest rates remain elevated for a longer period of time.

In addition, any reduction in the availability of the financing provided by Fannie Mae and Freddie Mac could adversely affect mortgage 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 mortgage 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 reduce demand for new 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 believe that the availability of mortgage financing, including through federal government agencies or government-sponsored enterprises (such as Freddie Mac, Fannie Mae, FHA and VA financing), is an important factor in marketing many of our homes. Any limitations or restrictions on the availability of mortgage financing could reduce our sales. In addition, if we are unable to originate mortgages for any reason, our customers may experience significant mortgage loan funding issues, which could have a material impact on our homebuilding and financial services results of operations.

If land is unavailable 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 operations depend on our ability to obtain land for the development of our communities at reasonable prices and with terms that meet our underwriting criteria. Our ability to obtain land for new communities may be adversely affected by changes in the general availability of land, the willingness of land sellers to sell land at reasonable prices, competition for available land, availability of financing to acquire land, zoning, regulations that limit housing density and other market conditions. If the supply of land, and especially developed lots, appropriate for development of communities is limited because of these factors, or for any other reason, the number of homes that we build and sell may decline. To the extent that we are unable to timely purchase land or enter into new contracts for the purchase of land at reasonable prices, our 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.

We must anticipate demand for new homes several years before actually selling homes to homeowners. There are significant risks inherent in controlling or purchasing land, especially as the demand for new homes fluctuates and land purchases become more competitive, which can increase the costs of land. There is often a significant time lag between when we acquire land for development and when we sell homes in neighborhoods we have planned, developed and constructed. The value of undeveloped land, lots and housing inventories can fluctuate significantly as a result of changing market conditions. In addition, inventory carrying costs can be significant, and fluctuations in value can reduce profits. Economic conditions could require us to sell homes or land at a loss, hold land in inventory longer than planned or walk away from land that we no longer intend to purchase resulting in write-offs of land deposits, which could significantly impact our financial condition, results of operations, cash flows and stock performance. Additionally, we are required to periodically evaluate our inventory for potential impairment, which may result in valuation adjustments that could be significant and negatively impact our results of operations and financial condition. We recorded an aggregate charge of $47.7 million during 2025 that included $11.8 million of write-offs of land deposits and pre-acquisition costs for land we no longer intend to purchase as a result of our efforts to right-size our land portfolio and $35.9 million of inventory impairments. We cannot make any assurances that the measures we employ to manage inventory risks and costs will be successful or that we will not record additional inventory impairment charges or write-offs of land deposits and pre-acquisition costs.

Supply shortages and risks related to the demand for labor and building materials could increase costs and delay deliveries.

The residential construction industry experiences labor and material shortages and risks from time to time, including: work stoppages; labor disputes; shortages in qualified subcontractors and construction personnel; lack of availability of adequate utility infrastructure and services; our need to rely on local subcontractors who may not be adequately capitalized or insured; and delays in availability, or fluctuations in prices of building materials. These labor and material shortages and risks can be more severe during periods of strong demand for housing or during periods when the markets in which we operate experience natural disasters that have a significant impact on existing residential and commercial structures. Any of these circumstances could delay the start or completion of our communities, increase the cost of developing one or more of our communities and increase the construction cost of our homes. If labor and building material shortages and cost increases return, our gross margins and results of operations could be adversely affected if we are unable to continue to increase prices or achieve other cost savings.

We depend on the continued availability of and satisfactory performance of subcontracted labor for the construction of our homes and to provide related materials. We have experienced, and may continue to experience, labor shortages in certain of our markets. The cost of labor may also be adversely affected by shortages of qualified subcontractors and construction personnel (including as a result of the trade population), changes in laws and regulations relating to union activity and changes in immigration laws and trends in labor migration. We cannot provide any assurance that there will be a sufficient supply of, or satisfactory performance by, these unaffiliated third-party subcontractors, which could have a material adverse effect on our business.

Tax law changes could make home ownership more expensive and/or less attractive.

If the federal government or a state government changes its income tax laws by eliminating or substantially reducing the income tax benefits associated with homeownership, such as personal tax deductions for mortgage loan interest and real estate taxes, the after-tax cost of owning a home could measurably increase. Any such increases, in addition to increases in personal income tax rates, could adversely impact demand for and/or selling prices of new homes, including our homes, and the effect on our consolidated financial statements could be adverse and material. At the same time, favorable tax law changes will not necessarily increase demand or allow for higher selling prices for homes generally or for the homes we sell.

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. Although inflation declined in 2025 compared to the past several years, many of the increases in costs that we experienced from 2022 through 2024 have persisted. We may experience high rates of inflation in the future, and in a high 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.

Our limited geographic diversification could adversely affect us if the demand for new homes in our markets declines.

We have operations in Ohio, Indiana, Illinois, Michigan, Minnesota, North Carolina, Florida, Tennessee and Texas. Our limited geographic diversification could adversely impact us if the demand for new homes or the level of homebuilding activity in our current markets declines, since there may not be a balancing opportunity in a stronger market in other geographic regions. Moreover, certain insurance companies doing business in states in which we operate could restrict, curtail or suspend the issuance of homeowners’ insurance policies on single-family homes. This could both reduce the availability of hurricane, fire and other types of natural disaster insurance, in general, and increase the cost of such insurance to prospective purchasers of homes. Mortgage financing for a new home is conditioned, among other things, on the availability of adequate homeowners’ insurance.

We may write off intangible assets, such as goodwill.

We recorded goodwill in connection with our acquisition of the assets and operations of Pinnacle Homes. On an ongoing basis, we evaluate whether facts and circumstances indicate any impairment of the value of intangible assets. As circumstances change, we cannot provide any assurance that we will realize the value of these intangible assets. If we determine that a significant impairment has occurred, we will be required to write off the impaired portion of intangible assets, which could have a material adverse effect on our results of operations in the period in which the write-off occurs.

Homebuilding is subject to construction defect, product liability and warranty claims that can be significant and costly.

As a homebuilder, we are subject to construction defect, product liability and warranty claims in the ordinary course of business. These claims are common in the homebuilding industry and can be significant and costly. We and many of our subcontractors have general liability, property, workers compensation and other business insurance. This insurance is intended to protect us against a portion of our risk of loss from claims, subject to certain self-insured retentions, deductibles and other coverage limits. The availability of insurance for construction defects, and the scope of the coverage, are currently limited and the policies that can be obtained are costly and often include exclusions. There can be no assurance that coverage will not be further restricted or become more costly. Also, at times we have waived certain provisions of our customary subcontractor insurance requirements, which increases our and our insurers’ exposure to claims and increases the possibility that our insurance will not cover all the costs we incur.

We record warranty and other reserves for the homes we sell based on a number of factors, including historical experience in our markets, insurance and actuarial assumptions and our judgment with respect to the qualitative risks associated with the types of homes we build. We recorded $11.2 million in additional warranty claims in 2025 in two communities in Florida primarily relating to attic ventilation issues. Because of the high degree of judgment required in determining these liability

reserves, our actual future liability could differ significantly from our reserves. Given the inherent uncertainties, we cannot provide assurance that our insurance coverage, our subcontractor arrangements and our reserves will adequately address all of our construction defect, product liability and warranty claims. If the costs to resolve these claims exceed our estimates, our results of operations, financial condition and cash flows could be adversely affected.

Our subcontractors can expose us to warranty and other risks.

We rely on subcontractors to construct our homes, and in many cases, select and obtain building materials. Despite our detailed specifications and quality control procedures, in some cases, it may be determined that subcontractors used improper construction processes or defective materials in the construction of our homes. Although our subcontractors have principal responsibility for defects in the work they do, we have ultimate responsibility to the homebuyers. When we identify these defects, we repair them in accordance with our warranty obligations. As mentioned above, we recorded an additional $11.2 million for warranty claims in two or our Florida communities primarily relating to attic ventilation issues. Improper construction processes and defective products widely used in the homebuilding industry can result in the need to perform extensive repairs to large numbers of homes. The cost of complying with our warranty obligations may be significant if we are unable to recover the cost of repairs from subcontractors, materials suppliers and insurers.

We also can suffer damage to our reputation, and may be exposed to possible liability, if subcontractors fail to comply with applicable laws, including laws involving matters that are not within our control. When we learn about potentially improper practices by subcontractors, we try to cause the subcontractors to discontinue them. However, we may not always be able to cause our subcontractors to discontinue potentially improper practices, and even when we can, we may not be able to avoid claims against us for personal injury, property damage or other losses relating to prior actions of our subcontractors.

Risks Related to Indebtedness and Financing

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 $900 million unsecured revolving credit facility dated July 18, 2013, as amended, with M/I Homes, Inc. as borrower and guaranteed by the Company's wholly-owned homebuilding subsidiaries (the “Credit Facility”), the indenture governing our 3.95% Senior Notes due 2030 (the “2030 Senior Notes”) and the indenture governing our 4.95% Senior Notes due 2028 (the “2028 Senior Notes”) impose restrictions on our operations and activities. These restrictions and/or our failure to comply with the terms of our indebtedness could have a material adverse effect on our results of operations, financial condition and ability to operate our business.

Under the terms of the Credit Facility, we are required, among other things, to maintain compliance with various covenants, including financial covenants relating to a minimum consolidated tangible net worth, a minimum interest coverage ratio or liquidity, and a maximum leverage ratio. Failure to comply with these covenants or any of the other restrictions of the Credit Facility, whether because of a decline in our operating performance or otherwise, could result in a default under the Credit Facility. If a default occurs, the affected lenders could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable, which could cause a default under the documents governing any of our other indebtedness that is then outstanding if we are not able to repay such indebtedness from other sources. If this happens and we are unable to obtain waivers from the required lenders, the lenders could exercise their rights under the documents governing our indebtedness, including forcing us into bankruptcy or liquidation.

The indentures governing the 2030 Senior Notes and the 2028 Senior Notes also contain covenants that may restrict our ability to operate our business and may prohibit or limit our ability to grow our operations or take advantage of potential business opportunities as they arise. Failure to comply with these covenants or any of the other restrictions or covenants contained in the indentures governing the 2030 Senior Notes and/or the 2028 Senior Notes could result in a default under the applicable indenture, in which case holders of the 2030 Senior Notes and/or the 2028 Senior Notes may be entitled to cause the sums evidenced by such notes to become due immediately. This acceleration of our obligations under the 2030 Senior Notes and the 2028 Senior Notes could force us into bankruptcy or liquidation and we may be unable to repay those amounts without selling substantial assets, which might be at prices well below the long-term fair values and carrying values of the assets. Our ability to comply with the foregoing restrictions and covenants may be affected by events beyond our control, including prevailing economic, financial and industry conditions.

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.

As of December 31, 2025, we had approximately $696.3 million of indebtedness (net of debt issuance costs), excluding issuances of letters of credit, our $200 million mortgage repurchase facility, with M/I Financial as borrower (the “MIF Mortgage Repurchase Facility”) and our $100 million master repurchase facility, with M/I Financial as borrower (the “MIF Master Repurchase Facility), and we had $806.8 million of remaining availability for borrowings under the Credit Facility. In addition, under the terms of the Credit Facility, the indentures governing the 2030 Senior Notes and the 2028 Senior Notes and the documents governing our other indebtedness, we have the ability, subject to applicable debt covenants, to incur additional indebtedness. Our incurrence of additional indebtedness could magnify other risks related to us and our business. Our indebtedness and any future indebtedness we may incur could have a significant adverse effect on our future financial condition.

For example:

• a significant portion of our cash flow may be required to pay principal and interest on our indebtedness, which could reduce the funds available for working capital, capital expenditures, acquisitions or other purposes;

• borrowings under the Credit Facility bear, and borrowings under any new facility could bear, interest at floating rates, which could result in higher interest expense in the event of an increase in mortgage interest rates;

• the terms of our indebtedness could limit our ability to borrow additional funds or sell assets to raise funds, if needed, for working capital, capital expenditures, acquisitions or other purposes;

• our debt level and the various covenants contained in the Credit Facility, the indentures governing our 2030 Senior Notes and 2028 Senior Notes and the documents governing our other indebtedness could place us at a relative competitive disadvantage compared to some of our competitors; and

• the terms of our indebtedness could prevent us from raising the funds necessary to repurchase all of the 2030 Senior Notes and the 2028 Senior Notes tendered to us upon the occurrence of a change of control, which, in each case, would constitute a default under the applicable indenture, which in turn could trigger a default under the Credit Facility and the documents governing our other 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.

As is customary in the homebuilding industry, we are often required to provide surety bonds to secure our performance under construction contracts, development agreements and other arrangements. Our ability to obtain surety bonds primarily depends upon our credit rating, capitalization, working capital, past performance, management expertise and certain external factors, including the overall capacity of the surety market and the underwriting practices of surety bond issuers. The ability to obtain surety bonds also can be impacted by the willingness of insurance companies and sureties to issue performance bonds. If we cannot obtain surety bonds when required, our results of operations and/or cash flows could be adversely impacted.

The M/I Financial repurchase facilities will expire in 2026.

M/I Financial uses the MIF Mortgage Repurchase Facility and the MIF Master Repurchase Facility to finance eligible residential mortgage loans originated by M/I Financial. These facilities will expire on October 20, 2026. If we are unable to renew or replace the MIF Mortgage Repurchase Facility or the MIF Master Repurchase Facility when they mature, the activities of our financial services segment could be impeded and our home sales and homebuilding and financial services results of operations may be adversely affected.

Capital allocation strategies could adversely affect our operating results and shareholder value.

Our goal is to allocate capital to maximize our overall long-term returns. This includes growing profitability, improving balance sheet efficiency and generating returns above our cost of capital. If we do not properly allocate our capital, we may fail to produce optimal financial results and we may experience a reduction in shareholder value, including increased volatility in the price of our common shares.

As part of our capital allocation strategy, from time to time we have returned, and may continue to return, value to our shareholders through share repurchases. For example, during 2025 we repurchased 1.6 million outstanding common shares under our share repurchase programs at an aggregate purchase price of $202.0 million. In addition, in November 2025 we announced a new share repurchase program that authorizes the Company to purchase up to $250 million of its outstanding common shares through open market transactions, privately negotiated transactions or otherwise in accordance with all applicable laws (the “Second 2025 Share Repurchase Program”). The timing, amount and other terms and conditions of any

additional repurchases under the Second 2025 Share Repurchase Program is 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.

Decisions with respect to share repurchases are subject to the discretion of our Board of Directors and are based on a variety of factors, including the price and availability of our shares, trading volume, our earnings and financial condition, general market conditions and other capital allocation opportunities. The share repurchase program may be suspended or discontinued at any time in the future without prior notice. Repurchases under our share repurchase program may reduce the market liquidity for our common shares, potentially affecting its trading volatility and price. Future share repurchases may also diminish our cash reserves, which may also impact our ability to pursue other opportunities.

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 condition and/or cash flows.

We have financial needs that we meet through the capital markets, including the debt and secondary mortgage markets. Our requirements for additional capital, whether to finance operations or to service or refinance our existing indebtedness, fluctuate as market conditions and our financial performance and operations change. We cannot provide assurances that we will maintain cash reserves and generate cash flow from operations in an amount sufficient to enable us to service our debt or to fund other liquidity needs.

The availability of additional capital, whether from private capital sources or the public capital markets, fluctuates as our financial condition and general market conditions change. There may be times when the private capital markets and the public debt or equity markets lack sufficient liquidity or when our securities cannot be sold at attractive prices, in which case we would not be able to access capital from these sources. In addition, a weakening of our financial condition or deterioration in our credit ratings could adversely affect our ability to obtain necessary funds. Even if financing is available, it could be costly or have other adverse consequences.

There are a limited number of third-party purchasers of mortgage loans originated by our financial services operations. The exit of third-party purchasers of mortgage loans from the business, reduced investor demand for mortgage loans and mortgage-backed securities in the secondary mortgage markets and increased investor yield requirements for those loans and securities may have an adverse impact on our results of operations, financial condition and/or cash flows.

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.

M/I Financial originates mortgages, primarily for our homebuilding customers. A portion of the mortgage loans originated are sold on a servicing released, non-recourse basis, although M/I Financial remains liable for certain limited representations and warranties, such as fraud, and warranties related to loan sales. Accordingly, mortgage investors have in the past and could in the future 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. There can be no assurance that we will not have significant liabilities in respect of such claims in the future, which could exceed our reserves, or that the impact of such claims on our results of operations will not be material.

If our ability to resell mortgages to investors is impaired, we may be required to broker loans.

M/I Financial sells a portion of the loans originated on a servicing released, non-recourse basis, although M/I Financial remains liable for certain limited representations and warranties related to loan sales and for repurchase obligations in certain limited circumstances. If M/I Financial is unable to sell loans to viable purchasers in the marketplace, our ability to originate and sell mortgage loans at competitive prices could be limited which would negatively affect our operations and our profitability. Additionally, if the secondary mortgage market declines significantly, our ability to sell mortgages could be adversely impacted and we would be required to make arrangements with banks or other financial institutions to fund our buyers’ closings. If we became unable to sell loans into the secondary mortgage market or directly to Fannie Mae and Freddie Mac or issue Ginnie Mae securities, we would have to modify our origination model, which, among other things, could significantly reduce our ability to sell homes.

The inability of our lenders to satisfy their obligations under our credit facilities could adversely affect our liquidity and financial condition.

The failure of banks or financial institutions could have an adverse effect on our liquidity or consolidated financial statements if we have deposits at the failed banks or financial institutions, or if the failed banks or financial institutions, or any substitute or additional banks or financial institutions, participate in our Credit Facility. Under our Credit Facility, non-defaulting lenders remain obligated to fund amounts up to their commitment level under the Credit Facility. However, non-defaulting lenders are not obligated to cover or acquire a defaulting lender’s respective commitment to fund loans or to issue letters of credit and may be unwilling to issue additional letters of credit if we do not enter into arrangements to address the risk with respect to the defaulting lender (which may include cash collateral). If the non-defaulting lenders are unable or unwilling to cover or acquire a defaulting lender’s respective commitment, the borrowing and letter of credit capacities under our Credit Facility may be more limited. In addition, if a buyer under the MIF Mortgage Repurchase Facility or the MIF Master Repurchase Facility, which M/I Financial uses to fund mortgage originations, fails or is unable or unwilling to fulfill its obligations, M/I Financial’s borrowing capacity under the MIF Mortgage Repurchase Facility or the MIF Master Repurchase Facility may be limited and have an adverse effect on our liquidity and ability to provide mortgage loans to our homebuyers.

Regulatory and Legal Risks

We can be injured by failures of persons who act on our behalf to comply with applicable regulations and guidelines.

There are instances in which subcontractors or others through whom we do business engage in practices that do not comply with applicable regulations or guidelines. When we become aware of practices relating to homes we build or financing we provide that do not comply with applicable laws, rules or regulations, we actively move to stop the non-complying practices as soon as possible. However, regardless of the steps we take after we become aware of practices that do not comply with applicable laws, rules or regulations, we can in some instances be subject to fines or other governmental penalties, and our reputation can be injured, due to the occurrence of the practices. Further, a health and safety incident relating to our operations could be costly in terms of potential liability and reputational damage. Any failure in health and safety performance may result in penalties for non-compliance with relevant regulatory requirements, and a failure that results in a major or significant health and safety incident is likely to be costly and could expose us to liability that could be costly. Such an incident could generate significant negative publicity and have a corresponding impact on our reputation, our relationships with relevant regulatory agencies or governmental authorities, and our ability to attract customers and employees, which in turn could have a material adverse effect on our results of operations, financial condition and liquidity.

We could be adversely affected by efforts to impose joint employer liability on us for labor law violations committed by our subcontractors.

Our homes are constructed by employees of subcontractors and other parties. We have limited ability to control what these parties pay their employees or the rules they impose on their employees. However, various governmental agencies may seek to hold parties like us responsible for violations of wage and hour laws and other labor laws by subcontractors. The National Labor Relations Board (“NLRB”) has revised its joint employer standard a number of times over the last few years and may do so again in future periods. Future rulings by the NLRB or other courts or governmental agencies could make us responsible for labor violations committed by our subcontractors. Governmental rulings that hold us responsible for labor practices of our subcontractors could create substantial exposures for us under our subcontractor relationships.

We are subject to extensive government regulations, which could restrict our business and cause us to incur significant expense.

The homebuilding industry is subject to numerous local, state, and federal statutes, ordinances, rules, and regulations concerning building, zoning, sales, consumer protection, and similar matters. This regulation affects construction activities as well as sales activities, mortgage lending activities, land availability and other dealings with homebuyers. These statutes, ordinances, rules, and regulations, and any failure to comply therewith, could give rise to additional liabilities or expenditures and have an adverse effect on our results of operations, financial condition or business.

We are also subject to various local, state, and federal statutes, ordinances, rules and regulations concerning the protection of health and the environment, including the emission or discharge of materials into the environment, storm water and surface water management, soil, groundwater and wetlands protection, subsurface conditions and air quality protection and enhancement. The environmental regulations applicable to each community in which we operate vary greatly depending on the location of the community site, the site’s environmental conditions and the present and former use of the site. These statutes, ordinances, rules and regulations may cause delays, may cause us to incur substantial compliance, remediation or other costs, and can prohibit or severely restrict development and homebuilding activity. In addition, any failure to comply therewith could

give rise to fines, penalties or other liabilities, obligations to remediate, permit revocations or other sanctions and have an adverse effect on our results of operations, financial condition or business.

We must also obtain licenses, permits and approvals from various governmental authorities in connection with our development activities, and these governmental authorities often have broad discretion in exercising their approval authority. During 2024 and 2025, we experienced delays in receiving governmental and municipality approvals in certain of our community locations, and we expect that we may experience a similar level of delays in 2026. Governmental authorities may also restrict or place moratoriums on the availability of utilities, such as water and sewer taps. In some areas, governmental authorities may enact growth control initiatives, which restrict the number of building permits available in a given year. In addition, we may be required to apply for additional approvals or modify our existing approvals because of changes in local circumstances or applicable law. If governmental authorities in locations in which we operate take actions like these, it could have an adverse effect on our business by causing delays, increasing our costs, or limiting our ability to operate in the applicable area.

We incur substantial costs related to compliance with legal and regulatory requirements. Any increase in legal and regulatory requirements may cause us to incur substantial additional costs or, in some cases, cause us to determine that certain property is not feasible for development.

Changes in U.S. trade policies and retaliatory responses from other countries may substantially increase the costs or limit supplies of building materials and products used in our homes.

Our business is impacted by international or cross-border trade, including the import and export of products and goods into and out of the United States and trade tensions among nations. The shipping of goods across national borders is often more expensive and complicated than domestic shipping. Political and economic tensions between governments create uncertainty with respect to tariffs, taxes and trade policies. During the past several years, the U.S. government has imposed new, or increased existing, tariffs on an array of imported materials and products that are used in the homes we build, including but not limited to, lumber, steel, aluminum and washing machines, which increases the costs of those items. Changes in U.S. administrative policy may strain international trade relations and lead to the imposition of non-tariff barriers or domestic preference procurement requirements and/or the imposition of retaliatory tariffs and other reactionary measures by foreign countries, including but not limited to Mexico, Canada, China and European countries. Any existing, new or increased tariffs could increase the cost of, and reduce the demand for, homes we build and any cost increases will either require us to increase prices or negatively impact our margins. New or increased tariffs could also negatively affect U.S. national or regional economies, which could negatively affect the demand for our homes.

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 Company and certain of its subsidiaries have been named as defendants in certain legal proceedings which are incidental to our business. While management currently believes that the ultimate resolution of these legal proceedings, individually and in the aggregate, will not have a material adverse effect on the Company’s results of operations, financial condition or 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 legal proceedings. However, the costs to resolve these legal proceedings ultimately may exceed the recorded estimates and, therefore, have a material adverse effect on the Company’s results of operations, financial condition, and cash flows.

Similarly, if additional legal proceedings are filed against us in the future, the negative outcome of one or more of such legal proceedings could have a material adverse effect on our results of operations, financial condition and cash flows.

General Risk Factors

Because of the seasonal nature of our business, our quarterly operating results can fluctuate.

We have historically experienced seasonality and quarter-to-quarter variability in homebuilding activity levels. In general, the number of homes delivered and associated home sales revenue have increased during the third and fourth quarters, compared with the first and second quarters. We believe that this type of seasonality reflects the historical tendency of homebuyers to purchase new homes in the spring and summer with deliveries scheduled in the fall or winter, as well as the scheduling of construction to accommodate seasonal weather conditions in certain markets. There can be no assurance that this seasonality pattern will continue to exist in future reporting periods. In addition, as a result of such variability, our historical performance may not be a meaningful indicator of future results.

Damage to our corporate reputation or brand from negative publicity could adversely affect our business, financial results and/or stock price.

Adverse publicity related to our company, industry, personnel, operations or business performance may cause damage to our corporate reputation or brand and may generate negative sentiment, potentially affecting the performance of our business or our stock price, regardless of its accuracy. Negative publicity can be disseminated rapidly through digital platforms, including social media, websites, blogs and newsletters. Customers and other interested parties value readily available information and often act on such information without further investigation and without regard to its accuracy. The harm may be immediate without affording us an opportunity for redress or correction, and our success in preserving our brand image depends on our ability to recognize, respond to and effectively manage negative publicity in a rapidly changing environment. Adverse publicity or unfavorable commentary from any source could damage our reputation, reduce the demand for our homes or negatively impact the morale and performance of our employees, which could adversely affect our business.

Natural disasters and severe weather conditions could delay deliveries, increase costs and decrease demand for homes in affected areas.

Several of our markets, specifically our operations in Florida, North Carolina and Texas, are situated in geographical areas that are regularly impacted by severe storms, including hurricanes, flooding and tornadoes. In addition, the operations of our Northern homebuilding segment can be impacted by severe storms, including tornadoes. Also, the physical impacts of climate change may cause these occurrences to increase in frequency, severity and duration. The occurrence of these or other natural disasters can cause delays in the completion of, or increase the cost of, developing one or more of our communities, and as a result could materially and adversely impact our results of operations. In addition to our costs, natural disasters and severe weather conditions may increase the cost of homeowner’s insurance which could reduce the number of potential buyers who can afford, or who are willing to purchase homes we build in these affected areas, which could result in reduced demand for our homes in these markets.

Information technology failures and data security breaches could harm our business.

We use information technology, digital communications and other computer resources to carry out important operational and marketing activities and to maintain our business records. We have implemented systems and processes intended to address ongoing and evolving cybersecurity risks, secure our information technology, applications and computer systems, and prevent unauthorized access to or loss of sensitive, confidential and personal data. We adhere to the National Institute of Standards and Technology (“NIST”) CSF Framework to ensure we have proper controls in place to reduce our risk to cyber security threats. We also depend on various partners and providers, and our mortgage and title service software partners, to secure our home buyers’ personal identifiable and confidential information. We provide regular personnel awareness training regarding potential cyber security threats, including the use of internal tips, reminders and phishing assessments, to help ensure employees remain diligent in identifying potential risks. In addition, we have deployed monitoring capabilities to support early detection, internal and external escalation, and effective responses to potential anomalies. However, cyberattacks or other security breaches may remain undetected over an extended period of time and may not be addressed in a timely manner to minimize the impact, which could result in substantial costs. Many of our information technology and other computer resources are provided to us and/or maintained on our behalf by third-party service providers pursuant to agreements that specify to varying degrees certain security and service standards. We also rely on our third-party service providers to maintain effective cyber security measures to keep our information secure and to carry cyber insurance. Although we and our service providers employ what we believe are adequate security, disaster recovery and other preventative and corrective measures, our security measures, taken as a whole, may not be sufficient for all possible situations and may be vulnerable to, among other things, hacking, employee error, system error and faulty password management.

Our ability to conduct our business may be impaired if these information technology and computer resources, including our website and customer-facing applications, are compromised, degraded or damaged or if they fail, whether due to a virus or other harmful circumstance, intentional penetration or disruption of our information technology resources by a third party, natural disaster, hardware or software corruption or failure or error (including a failure of security controls incorporated into or applied to such hardware or software), telecommunications system failure, service provider error or failure or intentional or unintentional personnel actions (including the failure to follow our security protocols), or lost connectivity to our networked resources. A significant disruption in the functioning of these resources, or breach thereof, including our website, could damage our reputation and cause us to lose customers, sales and revenue.

In addition, breaches of our information technology systems or data security systems, including cyberattacks and malicious uses of artificial intelligence, could result in the unintended and/or unauthorized public disclosure or the misappropriation of proprietary, personal identifying and confidential information (including information we collect and retain in connection with

our business about our homebuyers, business partners and employees), and require us to incur significant expense (that we may not be able to recover in whole or in part from our service providers or responsible parties, or their or our insurers) to address and remediate or otherwise resolve. The unintended and/or unauthorized public disclosure or the misappropriation of proprietary, personal identifying or confidential information may also lead to litigation or other proceedings against us by affected individuals and/or business partners and/or by regulators, and the outcome of such proceedings, which could include losses, penalties, fines, injunctions, expenses and charges recorded against our earnings, could have a material and adverse effect on our financial condition, results of operations and cash flows and harm our reputation. In addition, the costs of maintaining adequate protection against such threats, based on considerations of their evolution, increasing sophistication, pervasiveness and frequency and/or increasingly demanding government-mandated standards or obligations regarding information security and privacy, could be material to our consolidated financial statements in a particular period or over various periods.

We depend on the services of certain key employees, and the loss of their services could hurt our business.

Our success depends, in part, on our ability to attract, train and retain skilled personnel. If we are unable to retain our key employees or attract, train and retain other skilled personnel in the future, our operations could be materially and adversely impacted, and we may incur additional expenses to identify and train new personnel.

Our business could be materially and adversely disrupted by an epidemic, pandemic or similar public health issue, or fear of such an event, and the measures that international, federal, state and local public health and governmental authorities implement to address it.

An epidemic, pandemic or similar public health issue, or fear of such an event, and the measures undertaken by governmental authorities to address it, could significantly disrupt or prevent us from operating our business in the ordinary course for an extended period and, together with any associated economic and social instability or distress, have a material adverse effect on our business, results of operations, financial condition and/or cash flows.

The impact of an epidemic, pandemic or similar public health issue on our business will depend on future developments, including whether governmental authorities impose additional health and safety measures, the duration and severity of the public health issue, the acceptance and effectiveness of treatments including vaccines, and the impact of the public health issue on our employees, customers, and building partners. These developments are highly uncertain and outside of our control. To the extent an epidemic, pandemic or similar public health issue has a significant adverse effect on the U.S. economy, our business, results of operations, financial condition and/or cash flows could be materially adversely affected.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

OVERVIEW

M/I Homes, Inc. together with its subsidiaries is one of the nation’s leading builders of single-family homes, having sold over 168,200 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; Fort Myers/Naples, 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:

• Application of Critical Accounting Estimates and Policies;

• Results of Operations;

• Discussion of Our Liquidity and Capital Resources; and

• Impact of Interest Rates and Inflation.

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 “Special Note of Caution Regarding Forward - Looking Statements” above in Part I.

Listed below are those estimates and policies that we believe are critical and require the use of complex judgment in their application. Our critical accounting estimates should be read in conjunction with the Notes to our Consolidated Financial Statements.

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 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 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 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, are 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 primary 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 any other 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. 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.

See Note 1 to our Consolidated Financial Statements for additional information related to our revenues disaggregated by geography and revenue source.

Inventory. 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. Land acquisition, land development and common costs (both incurred and estimated to be incurred) are typically allocated to individual lots based on the total number of lots expected to be closed in each community or phase, or based on the relative fair value, the relative sales value or the front footage method of each lot. Any changes to the estimated total development costs of a community or phase are allocated proportionately to the homes remaining in the community or phase and homes previously closed. The cost of individual lots is transferred to homes under construction when home construction begins. Home construction costs are accumulated on a specific identification basis. Costs of home deliveries include the specific construction cost of the home and the allocated lot costs. Such costs are charged to cost of sales simultaneously with revenue recognition, as discussed above. When a home is closed, we typically have not yet paid all incurred costs necessary to complete the home. As homes close, we compare the home construction budget to actual recorded costs to date to estimate the additional costs to be incurred from our subcontractors related to the home. We record a liability and a corresponding charge to cost of sales for the amount we estimate will ultimately be paid related to that home. We monitor the accuracy of such estimates by comparing actual costs incurred in subsequent months to the estimate. Although actual costs to complete a home in the future could differ from our estimates, our method has historically produced consistently accurate estimates of actual costs to complete closed homes.

Inventory is recorded at cost, unless events and circumstances indicate that the carrying value of the land is impaired, at which point the inventory is written down to fair value as required by Accounting Standards Codification (“ASC”) 360-10, Property, Plant and Equipment (“ASC 360”). The Company assesses inventory for recoverability on a quarterly basis if events or changes in local or national economic conditions indicate that the carrying amount of an asset may not be recoverable. In conducting our quarterly review for indicators of impairment on a community level, we evaluate, among other things, margins on sales contracts in backlog, the margins on homes that have been delivered, expected changes in margins with regard to future home sales over the life of the community, expected changes in margins with regard to future land sales, the value of the land itself as well as any results from third-party appraisals. From the review of all of these factors, we identify communities whose carrying values may exceed their estimated undiscounted future cash flows and run a test for recoverability. For those communities whose carrying values exceed the estimated undiscounted future cash flows and which are deemed to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the communities exceeds the estimated fair value. Due to the fact that the Company’s cash flow models and estimates of fair values are based upon management estimates and assumptions, unexpected changes in market conditions and/or changes in management’s intentions with respect to the inventory may lead the Company to incur additional impairment charges in the future. Because each inventory asset is unique, there are numerous inputs and assumptions used in our valuation techniques, including estimated average selling price, construction and development costs, absorption pace (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, which could materially impact future cash flow and fair value estimates.

If communities are not recoverable based on 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. The fair value of a community is estimated by discounting management’s cash flow projections using an appropriate risk-adjusted interest rate. As of December 31, 2025, we utilized discount rates ranging from 13% to 16% in our valuations. The discount rate used in determining each asset’s estimated fair value reflects the inherent risks associated with the related estimated cash flow stream, as well as current risk-free rates available in the market and estimated market risk premiums.

Our quarterly assessments reflect management’s best estimates. Due to the inherent uncertainties in management’s estimates and uncertainties related to our operations and our industry as a whole as further discussed in “Item 1A. Risk Factors” in Part I of this Annual Report on Form 10-K, we are unable to determine at this time if and to what extent future impairments will occur. Additionally, due to the volume of possible outcomes that can be generated from changes in the various model inputs for each community, we do not believe it is possible to create a sensitivity analysis that can provide meaningful information for the users of our financial statements.

Warranty Reserves. 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 warranty reserves for the Company’s Home Builder’s Limited Warranty (“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 30-year (offered on all homes sold after April 25, 1998 and on or before December 1, 2015 in all of our markets except our Texas markets), 15-year (offered on all homes sold after December 1, 2015 and on or before December 31, 2021 in all of our markets except our Texas markets) and 10-year (offered on all homes sold in our Texas markets and in all of our markets beginning January 1, 2022) 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. During 2025, our warranty reserves have been adversely affected by warranty repairs in two of our Florida communities primarily related to attic ventilation issues. See Note 1 and Note 8 to our Consolidated Financial Statements for additional information related to our warranty reserves.

RESULTS OF OPERATIONS

Overview

In 2025, the housing industry faced headwinds including elevated mortgage interest rates, inflationary pressures, affordability issues and overall economic uncertainty. These conditions softened homebuyer demand and resulted in declines across several financial and operational metrics in 2025 when compared to 2024, including new contracts which decreased 4% compared to 2024. In 2025, our annual gross margin percentage declined 360 basis points to 23.0%. Our revenue decreased 2% due to 1% decreases in both our homes delivered and average sales price in 2025 compared to 2024. Despite the challenging conditions facing the housing industry, we had strong cash flow and liquidity in 2025 and ended the year with low leverage.

Our results for the year ended December 31, 2025 in comparison to the year ended December 31, 2024 were as follows:

• Homes delivered decreased 1% to 8,921

• Revenue decreased 2% to $4.4 billion

• Pre-tax income decreased 28% to $526.6, 11.9% of revenue

• Net income decreased 29% to $402.9 million

• New contracts decreased 4% to 8,199

• Absorption pace of sales per community declined to 3.0 per month compared to 3.3 per month

• Average community count increased 6% with 232 active communities at the end of 2025

• Shareholders’ equity increased 8% to $3.2 billion, an all-time record high for our Company

• Book value per common share increased to a record high $123 per share

• Homebuilding debt to capital ratio improved to 18%

In addition to the results described above, our financial services operations recorded a $4.8 million increase in operating income in 2025 compared to 2024 as a result of increases in closings and average loan amount.

Our company-wide absorption pace of sales per community in 2025 declined from 3.3 per month in 2024 to 3.0 per month in 2025 as a result of lower homebuyer demand which resulted in a 4% decrease in new contracts during 2025 compared to prior year. Our average community count did increase from 216 in 2024 to 229 in 2025. We plan to open additional new communities during 2026 and increase our average community count by about 5% compared to 2025.

Income before income taxes for the twelve months ended December 31, 2025 decreased 28% from $733.6 million for the year ended December 31, 2024 to $526.6 million for the year ended December 31, 2025. In 2025, our net income was $402.9 million, or $14.74 per diluted share, compared to net income of $563.7 million, or $19.71 per diluted share in 2024. Our effective tax rate was 23.5% in 2025 compared to 23.2% in 2024.

In 2025, we recorded total revenue of $4.42 billion, of which $4.29 billion was from homebuilding and $125.5 million was from our financial services operations. Revenue from homes delivered decreased 2% from 2024 driven primarily by a 1% decrease in both the number of homes delivered in 2025 (134 units) and the average sales price of homes delivered (decreased $4,000 per home). Our revenue and average sales price reflect a $200.0 million reduction for incentives and closing costs in 2025 compared to a $131.3 million reduction for incentives and closing costs in 2024. Revenue from our financial services segment increased 8% to $125.5 million in 2025 as a result of increases in loans closed and sold during the year and the average loan amount.

Total gross margin (total revenue less total land and housing costs) decreased $181.7 million in 2025 compared to 2024 as a result of a $190.9 million decrease in the gross margin of our homebuilding operations partially offset by a $9.3 million improvement in the gross margin of our financial services operations. Our homebuilding gross margin declined $190.9 million and homebuilding gross margin percentage declined 390 basis points from 24.7% in the prior year to 20.8% in 2025. The decline in gross margin dollars primarily resulted from the decreases in homes delivered and average sales price, which included a $53.3 million increase in mortgage interest rate buydowns offered, $64.9 million increase in lot costs, $47.7 million for inventory charges and $11.2 million in warranty claims in two of our Florida communities primarily relating to attic ventilation issues. The improvement in the gross margin of our financial services operations is attributable to an increase in the number of loan originations, higher margins on loans sold, and an increase in the average loan amount during 2025 compared to prior year.

We opened 81 new communities during 2025. We sell a variety of home types in various communities and markets, each of which yields a different gross margin. The timing of the openings of new replacement communities as well as underlying lot costs varies from year to year. The mix of communities delivering homes may cause fluctuations in our new contracts and housing gross margin from year to year.

For 2025, selling, general and administrative expense increased $17.9 million, and increased as a percentage of revenue to 11.6% in 2025 from 10.9% in 2024. Selling expense increased $13.5 million from 2024 and increased as a percentage of revenue to 5.6% from 5.2% in 2024. Realtor commissions contributed $7.7 million to the increase in selling expense in 2025 due to higher realtor commissions paid during the period compared to prior year. In addition to commissions, costs associated with our sales offices, including compensation-related expenses and models, increased $5.8 million in 2025 due to our increased community count. General and administrative expense increased $4.3 million in 2025 compared to 2024 and also increased as a percentage of revenue from 5.7% in 2024 to 5.9% in 2025. The dollar increase in general and administrative expense was primarily due to a $1.2 million increase in compensation-related expenses, a $1.2 million increase in costs associated with information systems, and a $1.9 million increase in miscellaneous expenses.

Outlook

Looking ahead to 2026, we expect housing affordability challenges, elevated mortgage interest rates and tepid homebuyer sentiment to continue to put pressure on homebuyer demand. Although certain industry forecasts are projecting a gradual moderation in mortgage interest rates, we anticipate that affordability challenges are likely to persist until consumer incomes, housing prices, and financing costs are more aligned. In this environment, we may experience further margin pressure as we continue to promote targeted incentives at the community level, including mortgage interest rate buydowns, to stimulate homebuyer demand.

We intend to manage our land spending consistent with our long‑term growth objectives and focus on opportunities that meet our operating returns and location requirements. Our inventory home strategy, construction cadence, and efforts to improve overhead efficiency will remain central to our operating approach.

As we enter our 50th year of business, we continue to believe that long‑term industry fundamentals—including limited new and resale housing supply, favorable demographic trends, and the belief that consumers want to own a home—remain supportive of future demand. We also believe that our strong balance sheet, prudent execution of our strategies, and diverse product offerings will position us well for growth when market conditions normalize. We will continue to monitor evolving market dynamics, maintain disciplined cost management, and invest strategically in land and development for future growth. However, we recognize that our ability to achieve our strategic objectives and performance goals for 2026 and beyond may be limited if macroeconomic conditions continue to negatively impact homebuyer demand.

In 2026, as we celebrate our 50th year of delivering high quality communities and homes, we expect to prioritize the following business strategies:

• Employ incentives to promote sales.

• Manage inventory home levels to meet homebuyer demand;

• Manage land spend and maintain disciplined cost management;

• Open new communities aligned with long‑term growth objectives.

• Maintain a strong balance sheet and liquidity levels, and low leverage.

• Continue emphasizing product quality, customer service, and premier community locations.

During 2025, we invested $523.7 million in land acquisitions and $645.6 million in land development. We invested more in land development than in land acquisitions in order to finish lots needed to start homes and allow us to open new communities. 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 will adjust our land and investment spend accordingly.

We ended 2025 with approximately 50,000 lots under control, which represents a 5.6-year supply of lots based on 2025 homes delivered, including certain lots that we anticipate selling to third parties. This represents a 4% decrease from our approximately 52,200 lots under control at the end of 2024.

We opened 81 communities and closed 69 communities in 2025, ending the year with a total of 232 communities, compared to 220 at the end of 2024. Although the timing of opening new communities and closing out existing communities is subject to substantial variation, we expect to grow our 2026 average community count by about 5% compared to 2025.

Segment Reporting

We have determined 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

Fort Myers/Naples, Florida

Minneapolis/St. Paul, Minnesota

Austin, Texas

Detroit, Michigan

Dallas/Fort Worth, Texas

Houston, Texas

San Antonio, Texas

Charlotte, North Carolina

Raleigh, North Carolina

Nashville, Tennessee

The following table shows, by segment: revenue; selling, general and administrative expense; operating income (loss); interest (income) expense; and income before income taxes for the years ended December 31, 2025, 2024 and 2023:

Year Ended December 31,

(In thousands)

Revenue:

Northern homebuilding

Southern homebuilding

Financial services (a)

Total revenue

Cost of Sales:

Northern homebuilding

Southern homebuilding

Financial services (a)

Total cost of sales (b)

General and administrative expense:

Northern homebuilding

Southern homebuilding

Financial services (a)

Segment general and administrative expense

Corporate and unallocated general and administrative expense

Total general and administrative expense

Selling expense:

Northern homebuilding

Southern homebuilding

Financial services (a)

Segment selling expense

Corporate and unallocated selling expense

Total selling expense:

Operating income (loss):

Northern homebuilding

Southern homebuilding

Financial services (a)

Segment operating income

Corporate selling, general and administrative expense

Total operating income (a) (b)

Interest (income) expense - net:

Northern homebuilding

Southern homebuilding

Financial services (a)

Segment interest (income) expense - net

Corporate interest (income) expense - net

Total interest (income) expense - net

Other income (c)

Income before income taxes

(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.

(b) For the year ended December 31, 2025, total cost of sales and operating income were reduced by $47.7 million in inventory impairment charges and write-offs of land deposits and pre-acquisition costs taken during the period. $6.7 million and $41.0 million of these charges and write-offs were attributable to the Northern homebuilding operating segment and the Southern homebuilding operating segment, respectively. Additionally, total cost of sales and operating income in the Southern homebuilding operating segment were reduced by $11.2 million for warranty charges in two of our Florida communities primarily relating to attic ventilation issues (See Note 8 ).

(c) Other income is comprised of the equity in (income) loss from joint venture arrangements.

The following table shows supplemental segment information regarding depreciation and amortization expense for years ended December 31, 2025, 2024 and 2023:

Year Ended December 31,

(In thousands)

Depreciation and amortization:

Northern homebuilding

Southern homebuilding

Financial services

Segment depreciation and amortization

Corporate

Total depreciation and amortization

The following tables show total assets by segment at December 31, 2025 and 2024:

December 31, 2025

(In thousands)

Northern

Southern

Financial Services

Segment Total

Corporate and unallocated

Total

Deposits on real estate under option or contract

Inventory (a)

Investments in joint venture arrangements

Other assets

Total assets

December 31, 2024

(In thousands)

Northern

Southern

Financial Services

Segment Total

Corporate and unallocated

Total

Deposits on real estate under option or contract

Inventory (a)

Investments in joint venture arrangements

Other assets

Total assets

(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.

Reportable Segments

The following table presents, by reportable segment, selected operating and financial information as of and for the years ended December 31, 2025, 2024 and 2023:

Year Ended December 31,

(Dollars in thousands)

Northern Region

Homes delivered

New contracts, net

Backlog at end of period

Average sales price of homes delivered

Average sales price of homes in backlog

Aggregate sales value of homes in backlog

Housing revenue

Land sale revenue

Operating income homes (a)(b)

Operating income land

Number of average active communities

Number of active communities, end of period

Southern Region

Homes delivered

New contracts, net

Backlog at end of period

Average sales price of homes delivered

Average sales price of homes in backlog

Aggregate sales value of homes in backlog

Housing revenue

Land sale revenue

Operating income homes (a)(b)

Operating income land

Number of average active communities

Number of active communities, end of period

Total Homebuilding Regions

Homes delivered

New contracts, net

Backlog at end of period

Average sales price of homes delivered

Average sales price of homes in backlog

Aggregate sales value of homes in backlog

Housing revenue

Land sale revenue

Operating income homes (a)(b)

Operating income land

Number of average active communities

Number of active communities, end of period

(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.

(b) Includes $47.7 million of inventory impairment charges and write-offs of land deposits and pre-acquisition costs taken during the year ended December 31, 2025. $6.7 million and $41.0 million of these charges and write-offs were attributed to the Northern homebuilding operating segment and the Southern homebuilding operating segment, respectively. Additionally, total cost of sales and operating income in the Southern homebuilding operating segment were reduced by $11.2 million for warranty charges in two of our Florida communities primarily relating to attic ventilation issues.

Year Ended December 31,

(Dollars in thousands)

Financial Services

Number of loans originated

Value of loans originated

Revenue

Less: Selling, general and administrative expenses

Less: Interest expense

Income before income taxes

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 years ended December 31, 2025, 2024 and 2023:

Year Ended December 31,

Northern

Southern

Total cancellation rate

Year Over Year Comparisons

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Northern Region. During the twelve months ended December 31, 2025, homebuilding revenue in our Northern region decreased $9.6 million, from $1.90 billion in 2024 to $1.89 billion in 2025. This 1% decrease in homebuilding revenue was the result of a 4% decrease in the number of homes delivered (157 units), offset in part by a 3% increase in the average sales price of homes delivered ($17,000 per home delivered) and a $5.1 million increase in land sales. Operating income in our Northern region decreased $3.0 million, from $281.1 million in 2024 to $278.1 million in 2025. The decrease in operating income was primarily the result of a $4.6 million decrease in our homebuilding gross margin offset in part by a $1.6 million decrease in selling, general, and administrative expense. Our homebuilding gross margin percentage declined 10 basis points from 22.1% in 2024 to 22.0% in 2025. The decline in our homebuilding gross margin was primarily due to fewer home closings offset in part by a 3% increase in the average sales price of homes delivered and a more favorable mix of homes closed. The average sales price in 2025 declined by $6,500 per home when compared to 2024 due to increased in homebuyer incentive costs including mortgage interest rate buydowns when compared to 2024.

Selling, general and administrative expense decreased $1.6 million from $138.6 million in 2024 to $137.0 million in 2025 and decreased as a percentage of revenue to 7.2% in 2025 from 7.3% in 2024. The decrease in selling, general and administrative expense was attributable to a $1.8 million decrease in general and administrative expense that resulted from a $2.3 million decrease in land related expense and a $0.9 million decrease in professional fees offset in part by a $1.3 million increase in compensation-related expenses and $0.1 million increase in miscellaneous expense. The decrease in general and administrative expense was partially offset by a $0.2 million increase in selling expense, due to a $1.4 million increase primarily related to costs associated with compensation-related expenses and models partially offset by a $1.2 million decrease in sales and realtor commissions.

During 2025, we experienced a 9% decrease in new contracts in our Northern region, from 3,761 in 2024 to 3,416 in 2025. Backlog decreased 26% from 1,136 homes at December 31, 2024 to 836 homes at December 31, 2025 as a result of more

inventory homes sold in 2025 and a decrease in new contracts. The decrease in new contracts was primarily due to a decline in homebuyer demand and increased popularity of inventory homes when compared to 2024. Inventory homes that were sold and delivered in the fourth quarter represented 34% and 24% of the total homes delivered in the fourth quarter of 2025 and 2024, respectively. Average sales price in backlog increased to $569,000 at December 31, 2025 compared to $561,000 at December 31, 2024 primarily due to the mix of homes being sold offset in part by increased homebuyer incentives ($6,600 per home) compared to 2024. During the twelve months ended December 31, 2025, we opened 37 new communities in our Northern region compared to 21 during 2024. Our monthly absorption rate in our Northern region declined to 3.0 per community in 2025 compared to 3.3 per community in 2024 as a result of the decrease in the number of new contracts and the increase in the number of average active communities during 2025 compared to 2024.

Southern Region. For the twelve months ended December 31, 2025, homebuilding revenue in our Southern region decreased $86.6 million, from $2.49 billion in 2024 to $2.40 billion in 2025. This 3% decrease in homebuilding revenue was primarily the result of a 4% decrease in the average sales price of homes delivered ($18,000 per home delivered) partially offset by a slight increase in the number of homes delivered (23 units). Operating income in our Southern region decreased $200.6 million from $450.6 million in 2024 to $250.0 million in 2025. This decrease in operating income was the result of a $186.3 million decline in our homebuilding gross margin and a $14.3 million increase in selling, general, and administrative expense. Our homebuilding gross margin percentage declined 680 basis points from 26.6% in 2024 to 19.8% in 2025. The decline in our homebuilding gross margin was primarily due to the decrease in the average sales price of homes delivered, a $49.6 million increase in lot costs and the unfavorable impacts of $30.9 million in inventory impairment charges, $10.0 million in write-offs of land deposits and pre-acquisition costs and $11.2 million in warranty claims in two of our Florida communities primarily relating to attic ventilation issues taken in 2025. Increased homebuyer incentive costs, including mortgage interest rate buydowns, decreased the average sales price of homes delivered by $8,800 per home when compared to 2024.

Selling, general and administrative expense increased $14.3 million from $212.4 million in 2024 to $226.7 million in 2025 and increased as a percentage of revenue to 9.4% in 2025 from 8.5% in 2024. The increase in selling, general and administrative expense was attributable to a $13.3 million increase in selling expense and a $1.1 million increase in general and administrative expense. Selling expense increased $13.3 million due to an $8.9 million increase in realtor commissions and a $4.3 million increase in costs related to our sales offices and models due to our increased community count. General and administrative expense increased $1.1 million due to a $2.4 million increase in land-related expenses and a $0.7 million increase in miscellaneous expenses offset in part by $2.0 million decrease in compensation related expenses due to incentive compensation due to our financial performance during the period.

During 2025, we experienced a 1% decrease in new contracts in our Southern region, from 4,823 in 2024 to 4,783 in 2025, which was primarily due to a decrease in demand compared to prior year. Backlog decreased 30% from 1,395 homes at December 31, 2024 to 973 homes at December 31, 2025. The decrease in backlog was primarily due to a decline in homebuyer demand and increased popularity of inventory homes when compared to 2024. Inventory homes that were sold and delivered in the fourth quarter represented 44% and 32% of the total homes delivered in the fourth quarter of 2025 and 2024, respectively. Average sales price in backlog decreased to $528,000 at December 31, 2025 from $547,000 at December 31, 2024 primarily due to increased homebuyer incentives ($9,500 per home) compared to 2024 and the mix of homes in backlog. During 2025, we opened 44 communities in our Southern region compared to 51 in 2024. The decrease in the number of new communities opened primarily related to delays in 2023 that were pushed to 2024. Our monthly absorption rate in our Southern region declined to 3.0 per community in 2025 from 3.3 per community in 2024 due to the increase in average community count.

Financial Services. Revenue from our mortgage and title operations increased $9.3 million, or 8%, from $116.2 million for the twelve months ended December 31, 2024 to $125.5 million for the twelve months ended December 31, 2025 as a result of an increase in the number of loan originations from 6,731 in 2024 to 7,117 in 2025 and an increase in the average loan amount from $399,000 in 2024 to $407,000 in 2025. The increase in our loan originations primarily resulted from mortgage rate buy down incentives that we offered to our homebuyers via our financial services operation.

The operating income of our financial service operations increased $4.8 million in 2025 compared to 2024, which was primarily due to the increase in revenue discussed above, partially offset by a $4.5 million increase in selling, general and administrative expense compared to 2024. The increase in selling, general and administrative expense was primarily attributable to a $2.5 million increase in compensation related expense, a $0.8 million increase in computer-related costs, and a $1.2 million increase in miscellaneous expenses.

At December 31, 2025, M/I Financial provided financing services in all of our markets. Approximately 93% of our homes delivered during 2025 were financed through M/I Financial, compared to 89% during 2024. Capture rate is influenced by financing availability and can fluctuate from quarter to quarter.

Corporate Selling, General and Administrative Expenses. Corporate selling, general and administrative expense increased $0.6 million, from $89.0 million in 2024 to $89.6 million in 2025. The increase was primarily due to a $0.5 million increase related to costs associated with information systems and a $0.8 million increase in miscellaneous expenses offset in part by a $0.7 million decrease in compensation expense due to our financial performance during the period.

Interest (Income) Expense - net. The Company earned $20.0 million of interest income - net in the twelve months ended December 31, 2025 compared to earning $27.5 million of interest income - net in the twelve months ended December 31, 2024. The reduction in interest income in 2025 was primarily due to a lower average cash balance on hand compared to prior year.

Income Taxes. Our overall effective tax rate was 23.5% for the year ended December 31, 2025 and 23.2% for the year ended December 31, 2024 (see Note 14 to our Consolidated Financial Statements for more information).

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

For a comparison of our results of operations for the fiscal years ended December 31, 2024 and December 31, 2023, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 14, 2025.

LIQUIDITY AND CAPITAL RESOURCES

Overview of Capital Resources and Liquidity

At December 31, 2025, we had $689.2 million of cash, cash equivalents and restricted cash (all of which was comprised of unrestricted cash and cash equivalents), which represents a $132.3 million decrease in unrestricted cash and cash equivalents from December 31, 2024. The decrease in cash is primarily due to decreased net income and home deliveries in 2025 and the timing of land spend compared to prior year. Our principal uses of cash during 2025 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 $202.0 million of our outstanding common shares under the 2024 and both 2025 Share Repurchase Programs compared to $177.0 million repurchased under the 2024 and 2021 Share Repurchase Programs in 2024. In order to fund these uses of cash, we used proceeds from home deliveries, the sale of mortgage loans, the sale of mortgage servicing rights, 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 $900 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 mortgage repurchase agreement, dated October 24, 2023, as amended most recently on October 21, 2025 (the “MIF Mortgage Repurchase Facility”), with M/I Financial as borrower; and (3) an uncommitted $100 million mortgage repurchase agreement dated October 21, 2025 (the “MIF Master Repurchase Facility”), with M/I Financial as borrower.

As of December 31, 2025, 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 $977 million, with $277 million payable within 12 months. Future interest payments associated with these notes payable totaled $103 million as of December 31, 2025, with $32 million payable within 12 months.

As of December 31, 2025, there were no borrowings outstanding and $93.2 million of letters of credit outstanding under our Credit Facility, leaving $806.8 million available. We expect to continue managing our balance sheet and liquidity carefully in 2026 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 2026 from cash receipts, excess cash balances and availability under our credit facilities.

During the year ended December 31, 2025, we delivered 8,921 homes, started 8,697 homes, ended the year with approximately 4,500 homes under construction compared to approximately 4,700 at the end of last year, and spent $523.7 million on land purchases and $645.6 million on land development.

We are actively 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 December 31, 2025, we had a total of 24,329 lots under contract, with an aggregate purchase price of approximately $1.6 billion, to be acquired from 2026 through 2031.

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. See Note 6 to our Consolidated Financial Statements for more information regarding these arrangements.

Operating Cash Flow Activities . During 2025, we generated $137.3 million of cash from operating activities, compared to generating $179.7 million of cash from operating activities in 2024. The cash generated by operating activities in 2025 was primarily a result of net income of $402.9 million and a $36.7 million increase in other liabilities, offset partially by a $313.5 million increase in inventory, loan originations that exceeded proceeds from the sale of mortgage loans by $20.7 million, a $16.0 million decrease in other assets and a $35.9 million increase in accounts payable and customer deposits. The cash generated by operating activities in 2024 was primarily a result of net income of $563.7 million and a $23.1 million increase in other liabilities, offset partially by a $297.7 million increase in inventory, loan originations that exceeded proceeds from the sale of mortgage loans by $114.0 million, a $23.8 million increase in other assets and a $21.9 million decrease in accounts payable and customer deposits. Net cash provided by operating activities decreased by $42.4 million compared to 2024 primarily as a result of the $160.8 million decline in net income and the $11.7 million reduction in the fair value adjustment of mortgage loans held for sale partially offset by the $93.3 million reduction in the amount by which the sale of mortgage loans exceeded mortgage loan originations, inventory charges and write-offs of land deposits and pre-acquisition costs of $47.7 million, and a $7.1 million increase in deferred income tax expense.

Investing Cash Flow Activities. During 2025, we used $59.7 million of cash in investing activities, compared to using $54.9 million of cash in investing activities during 2024. This $4.8 million increase in cash usage was primarily due to a $5.1 million increase in cash contributions to our joint venture arrangements compared to prior year.

Financing Cash Flow Activities. During 2025, we used $210.0 million of cash in financing activities, compared to using $36.1 million of cash in financing activities during 2024. The increase in cash used in financing activities in 2025 was primarily due to the repurchase of $202.0 million of our outstanding common shares during 2025, repayments of $9.3 million (net of proceeds from borrowings) under the MIF credit facilities and $7.0 million of debt issue costs offset, in part, by $8.4 million in proceeds from the exercise of stock options during 2025. The cash used in financing activities in 2024 was primarily due to the repurchase of $177.0 million of our outstanding common shares during 2024, offset, in part, by proceeds of $120.3 million (net of repayments of borrowings) under the MIF Mortgage Repurchase Facility and $21.3 million in proceeds from the exercise of stock options during 2024.

On November 12, 2025, the Company announced that its Board of Directors authorized a new share repurchase program pursuant to which the Company may purchase up to $250 million of its outstanding common shares (the “Second 2025 Share Repurchase Program”), which replaced the 2025 Share Repurchase Program. During 2025, the Company repurchased 1.6 million outstanding common shares for an aggregate purchase price of $202.0 million under the two 2025 Share Repurchase Programs and the 2024 Share Repurchase Program which was funded with cash on hand. As of December 31, 2025, the Company was authorized to repurchase an additional $220.4 million of outstanding common shares under the Second 2025 Share Repurchase Program (see Note 16 to our Consolidated Financial Statements).

Based on current market conditions, expected capital needs and availability, and the current market price of the Company’s common shares, we expect to continue repurchasing shares during 2026. The timing and amount of any future purchases under the Second 2025 Share Repurchase Program will be 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 December 31, 2025 and December 31, 2024, our ratio of homebuilding debt to capital was 18% and 19%, respectively, calculated as the carrying value of our outstanding homebuilding debt (which consists of borrowings under our Credit Facility, our 2030 Senior Notes and our 2028 Senior Notes) 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.

Included in the table below is a summary of our available sources of cash from the Credit Facility and the MIF Mortgage Repurchase Facility as of December 31, 2025:

(In thousands)

Expiration

Date

Outstanding

Balance

Available

Amount

Notes payable – homebuilding (a)

Notes payable – financial services (b)

(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 $2.4 billion of availability for additional senior debt at December 31, 2025. As a result, the full $900 million commitment amount of the facility was available, less any borrowings and letters of credit outstanding. There were no borrowings outstanding and $93.2 million of letters of credit outstanding at December 31, 2025, leaving $806.8 million available. The Credit Facility has an expiration date of September 18, 2030.

(b) The available amount is computed in accordance with the borrowing base calculations under the MIF Mortgage Repurchase Facility, which may be increased by pledging additional mortgage collateral, not to exceed the maximum aggregate commitment amount of the MIF Mortgage Repurchase Facility as of December 31, 2025, which is $200 million. The MIF Mortgage Repurchase Facility has an expiration date of October 20, 2026. In addition, M/I Financial entered into a new MIF Master Repurchase Facility which provides for an uncommitted maximum borrowing availability of $100 million to expire on October 20, 2026.

Notes Payable - Homebuilding

Homebuilding Credit Facility . The Credit Facility provides for an aggregate commitment amount of $900 million and also includes an accordion feature pursuant to which the maximum borrowing availability may be increased to an aggregate of $1.05 billion, subject to obtaining additional commitments from lenders. The Credit Facility matures on September 18, 2030. Interest on amounts borrowed under the Credit Facility is payable at an adjusted term SOFR margin of 150 basis points (subject to adjustment in subsequent quarterly periods based on the Company’s leverage ratio).

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 $250 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 $2.2 billion at December 31, 2025 (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 amount of Investments in Unrestricted Subsidiaries and Joint Ventures (each as defined 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.

As of December 31, 2025, 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 December 31, 2025:

Financial Covenant

Covenant Requirement

Actual

(Dollars in millions)

Consolidated Tangible Net Worth

Leverage Ratio

Interest Coverage Ratio

Investments in Unrestricted Subsidiaries and Joint Ventures

Notes Payable - Financial Services.

MIF Mortgage Repurchase Facility. The MIF Mortgage Repurchase Facility is used to finance eligible residential mortgage loans originated by M/I Financial. On October 21, 2025, M/I Financial entered into an amendment to the MIF Mortgage Repurchase Facility that extends the term of the MIF Mortgage Repurchase Facility for an additional year to October 20, 2026 and decreases the aggregate commitment amount from $300 million to $200 million for the entire remaining term.

The MIF Mortgage Repurchase Facility is used to finance eligible residential mortgage loans originated by M/I Financial. M/I Financial pays interest on each advance under the MIF Mortgage Repurchase Facility at a per annum rate based on Daily Simple SOFR plus a margin as defined in the MIF Mortgage Repurchase Facility. The MIF Mortgage Repurchase Facility provides for limits with respect to certain loan types that can secure outstanding borrowings. The MIF Mortgage Repurchase Facility also contains certain financial covenants each of which is defined in the MIF Mortgage Repurchase Facility. There are no guarantors of the MIF Mortgage Repurchase Facility.

As is typical for similar credit facilities in the mortgage origination industry, at closing, the expiration of the MIF Mortgage Repurchase Facility was set at approximately one year and is under consideration for extension annually by the participating lenders. We expect to extend the MIF Mortgage Repurchase Facility on or prior to the current expiration date of October 20, 2026, but we cannot provide any assurance that we will be able to obtain such an extension.

As of December 31, 2025, there was $198.2 million outstanding under the MIF Mortgage Repurchase Facility and M/I Financial was in compliance with all covenants thereunder. The financial covenants, as more fully described and defined in the MIF Mortgage Repurchase Facility, are summarized in the following table, which also sets forth M/I Financial’s compliance with such covenants as of December 31, 2025:

Financial Covenant

Covenant Requirement

Actual

(Dollars in millions)

Leverage Ratio

Liquidity

Adjusted Net Income

Tangible Net Worth

MIF Master Repurchase Facility. The MIF Master Repurchase Facility which provides for an uncommitted maximum borrowing availability of $100 million and expires on October 20, 2026 or upon agent demand with a 30 day notice. The MIF Master Repurchase Facility is used to finance eligible residential mortgage loans originated by M/I Financial. M/I Financial pays interest on each advance under the MIF Master Repurchase Facility at a per annum rate based on Daily Simple SOFR plus a margin as defined in the MIF Master Repurchase Facility. The MIF Master Repurchase Facility contains the same financial covenants as the MIF Mortgage Repurchase Facility.

As of December 31, 2025, there was $78.7 million outstanding under the MIF Master Repurchase Facility and M/I Financial was in compliance with all covenants thereunder.

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 December 31, 2025, 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 December 31,

2025, the Company was in compliance with all terms, conditions, and covenants under the indenture.

See Note 11 to our Consolidated Financial Statements for more information regarding the 2030 Senior Notes and the 2028 Senior Notes.

Supplemental Financial Information.

As of December 31, 2025, 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 and are listed on Exhibit 22 to this Form 10-K.

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 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)

December 31, 2025

Assets:

Cash

Investment in joint venture arrangements

Amounts due from Non-Guarantor Subsidiaries

Total assets

Liabilities and Shareholders’ Equity:

Total liabilities

Shareholders’ equity

Summarized Statement of Income Data

Year Ended

(In thousands)

December 31, 2025

Revenues

Land and housing costs

Selling, general and administrative expense

Income before income taxes

Net income

Weighted Average Borrowings. In 2025 and 2024, our weighted average borrowings outstanding were $725.3 million and $723.4 million, respectively, with a weighted average interest rate of 5.37% and 5.32%, respectively. The increase in our weighted average borrowings related to increased borrowings under our then-outstanding M/I Financial credit facilities during 2025 compared to 2024.

At both December 31, 2025 and December 31, 2024, we had no borrowings outstanding under the Credit Facility. To the extent we elect to borrow under the Credit Facility during 2026, the actual amount borrowed 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 Second 2025 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 $93.2 million of letters of credit issued and outstanding under the Credit Facility at December 31, 2025. During 2025, the average daily amount of letters of credit outstanding under the Credit Facility was $82.8 million and the maximum amount of letters of credit outstanding under the Credit Facility was $94.5 million.

At December 31, 2025, M/I Financial had $198.2 million outstanding under the MIF Mortgage Repurchase Facility. During 2025, the average daily amount outstanding under our MIF Mortgage Repurchase Facility was $18.9 million and the maximum amount outstanding was $286.2 million, which occurred during January. At December 31, 2025, M/I Financial also had $78.7 million outstanding under the MIF Master Repurchase Facility. During 2025, the average daily amount outstanding under our then-outstanding MIF credit facilities was $20.0 million and the maximum amount outstanding was $78.7 million, which occurred during December.

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. These macroeconomic trends have pressured housing affordability, negatively impacted homebuyer sentiment and impacted the costs of financing land development activities and housing construction.

The annual rate of inflation in the United States was 2.7% in December 2025, as measured by the Consumer Price Index, down slightly from the prior quarter and from 2.9% in December 2024. As the rate of inflation has declined from 2022’s historic levels, our costs have stabilized. However, continued increases in inflation rates could impact our costs, potentially reduce our gross margins, reduce the purchasing power of potential homebuyers, and negatively impact their ability and desire to buy a home.

Mortgage interest rates remained elevated since the end of 2023, although slightly lower rates began to appear in the second half of 2025. During 2025, the Federal Reserve reduced interest rates by 75 basis points. High mortgage interest rates have made it more difficult for homebuyers to qualify for mortgages or to obtain mortgages at interest rates that are acceptable to them. We plan to help combat high interest costs in 2026 by offering mortgage interest rate buydowns to potential homebuyers. We believe that offering mortgage interest rate buydown incentives may cause otherwise hesitant potential homebuyers to decide to enter the homebuying market due to the improved affordability of obtaining a mortgage, and we believe we are well prepared to address increased demand in our markets with our current land position and open communities. However, offering sales incentives, such as mortgage interest rate buydowns, may further reduce our margins.