UMH PROPERTIES Q2 FY26 earnings call UMH

UMH Properties has consistently focused on three key areas since 1987: managing inventory of vacant lots for sales and rental income growth, financing homes for retail customers, and improving manufactured home products. The company emphasizes that its pipeline of vacant and approved lots, built over nearly 40 years, represents significant value not fully reflected in current financial statements, as operating expenses for these sites are already being expensed.

The recently passed ROAD to Housing Act is expected to dramatically improve potential for financing home sales, increase design flexibility by allowing chassis-free, two-story HUD code homes, and encourage development. UMH, in partnership with Champion Homes, will showcase two-story HUD code homes at the Innovative Housing Showcase. The company believes this legislation will address past issues of limited retail financing and lack of places to put homes, which previously constrained industry growth.

The rental home program continues to drive occupancy gains and operates efficiently. In Q2 FY26, UMH added 193 new rental homes, bringing the total inventory to approximately 11,200 units with a 95.3% occupancy rate. The program maintains an annual turnover rate of approximately 20% and generates a 10% return on additional investment in rental homes, even as older units are sold and replaced.

UMH has approximately 500 vacant expansion sites that have been developed and paid for, which are expected to substantially improve earnings as they are filled. The company plans to start construction on 315 new sites in FY26, with 111 already underway and 98 more commencing soon. Management anticipates maintaining a pace of 200 to 400 new expansion sites per year, with favorable government reactions to expansion requests.

Anna Chew retired as CFO after 35 years of service but will remain in an advisory role and on the Board of Directors. Kevin Miller, former CFO of Monmouth Real Estate Investment Corporation and CFO of UMH's OZ Fund, has been appointed as the new Chief Financial Officer. The company expresses confidence in its leadership team and its ability to continue growing the company internally and externally.

UMH launched a new zero down payment lending program for veterans through a third-party loan origination program with Triad Financial. While early, the program has received positive feedback and successfully closed a handful of deals. There is potential for the VA to adopt and fund a similar program, which would significantly benefit the manufactured housing industry by increasing accessibility for veterans.