D.R. Horton Inc., a leading homebuilding company, has executed a significant amendment to its Fourth Amended and Restated Master Repurchase Agreement, effective May 8, 2025. This updated Amended Repurchase Facility now increases the maximum aggregate commitment to \(1.4 billion, with an ability to expand up to \)2.0 billion depending on increased commitments from existing buyers or new buyers. The facility extends liquidity and financing options for its wholly-owned subsidiary, DHI Mortgage Company, Ltd., facilitating seamless purchase transactions of eligible loans.
Who is involved? DHI Mortgage, U.S. Bank National Association as the Administrative Agent and other buyers (collectively termed the Buyers). What has changed? The maximum commitment amount under the repurchase facility has increased, with flexible expansion. When does it last? The facility runs through May 6, 2026, or earlier if commitments are terminated by government authority or law. Where? This financial arrangement impacts operations primarily in the United States, supported by D.R. Horton’s Arlington, Texas headquarters.
This agreement represents a strategic liquidity enhancement, underpinning DHI Mortgage’s ability to finance and manage its loan portfolio effectively. Significant to note, amounts outstanding under this facility are not guaranteed by D.R. Horton or its subsidiaries related to homebuilding, rental, or Forestar operations, isolating risk and strengthening financial discipline.
In context of D.R. Horton’s recent financial performance, the company has demonstrated robust capital efficiency and shareholder returns. As of the second quarter ending June 30, 2024, the company’s consolidated leverage was maintained at 18.8%, well within its targeted leverage range. The stockholders’ equity stood at \(24.7 billion with a book value per share increasing 18% year over year to \)75.32.
Operationally, the homebuilding segment proved resilient amid inflationary pressures and elevated mortgage interest rates. For the first nine months of 2024, D.R. Horton generated \(972 million in cash flow from homebuilding operations and a consolidated cash flow of \)228 million. Key performance metrics include a homebuilding return on inventory of 29.5% and a return on equity of 21.5% for the trailing twelve months ending June 30, 2024.
The company expects to close approximately 90,000 to 90,500 homes in fiscal 2024, targeting consolidated revenues between \(36.8 billion and \)37.2 billion, with projected cash flows of about \(3 billion from homebuilding operations. Alongside, D.R. Horton plans an aggressive share repurchase program, with \)1.8 billion earmarked for repurchases in 2024 plus dividend payments approximating $400 million, highlighting the strong capital allocation strategy aimed at enhancing shareholder value.
Forward-looking statements from recent earnings calls reveal confidence in maintaining market share growth and increased operating cash flows in fiscal 2025. Management highlights the favorable demographic trends and limited affordable housing supply as critical factors supporting demand, despite ongoing economic uncertainties like inflation and mortgage rate fluctuations.
In summary, the Fourth Amendment to the Master Repurchase Agreement aligns strategically with D.R. Horton’s disciplined financial management and operational prowess. It reinforces liquidity, supports mortgage financing activities, and complements the company’s broad homebuilding and rental operations. Investors should note the ongoing share repurchase and dividend plans underpin robust capital returns, signaling management’s confidence in sustainable earnings and cash flow growth.
For a complete review, please refer to the official source document: https://sec.gov/Archives/edgar/data/882184/000088218425000028/dhi-20250508.htm
This comprehensive update showcases DHI’s proactive financial strategy amidst challenging economic dynamics, leveraging its market leadership and operational excellence to deliver consistent returns and expand its footprint in the U.S. housing market.