UMH Properties, Inc. (UMH) Earnings

Management highlights

- Core Long-Term Strategic Priorities * Manage inventory of vacant and fully approved lots to grow sales and rental income; management notes this pipeline of developed vacant lots is undervalued by current market pricing based on FFO alone * Finance home purchases for retail customers; pivoted to a rental-focused home model after 2009 financing disruptions, and the newly passed Road to Housing Act is expected to dramatically expand access to customer financing and boost home sales * Improve product offerings: the Road to Housing Act enables chassis-free, two-story HUD-code manufactured homes, which UMH will showcase at the September 2026 Innovative Housing Showcase in Washington D.C. alongside supplier Champion Homes - Q2 2026 Operational Performance * Normalized funds from operations (FFO) per diluted share was $0.25, up 9% YoY from $0.23; net income attributable to common shareholders was $4.4 million ($0.05 per diluted share), up 75% YoY on a dollar basis * Same property revenue grew 8% ($4.5 million) driven by 5% site rent increases and 430 net new occupied units YoY; 193 new rental homes were added in the quarter, bringing total rental inventory to ~11,200 units * 500 completed, paid-for vacant expansion sites are currently available for occupancy, with an additional ~3,200 total vacant approved sites and 2,400 acres of undeveloped vacant land across the portfolio - Capital Structure Update * Expanded and extended the unsecured revolving credit facility to a total potential size of $600 million, maturing in 2030, with an interest rate reduction of 35-40 bps; $220 million is currently available on the facility, plus an additional $184 million available on other lines of credit * Ended the quarter with $789 million in total debt, 94% of which is fixed-rate, with a weighted average interest rate of 4.92% and weighted average mortgage maturity of 5.7 years; net debt to adjusted EBITDA was 5.6x, with $28.6 million in cash on hand * Leadership transition: former CFO Anna Chew retired in June 2026 after 35 years of service, succeeded by Kevin Miller, former CFO of Monmouth Real Estate Investment Corporation - Industry and Social Positioning * UMH provides high-quality affordable housing, addressing the national housing shortage; communities in the Marcellus and Utica Shale regions continue to see strong demand tailwinds from regional energy investment * Launched a new zero-down-payment home lending program for U.S. veterans via a partnership with Triad Financial

Guidance

- Normalized FFO per share guidance for full-year 2026 is maintained at $0.98 to $1.04, with a midpoint of $1.01; year-to-date FFO of $0.48 is exactly on track with internal planning, and guidance assumes no new common share issuance under the ATM program and no unplanned acquisitions - UMH reaffirms its target to add 800 new rented manufactured homes in 2026, with upside potential to exceed this target; 360 new rentals were completed in the first half of the year, with 150 homes ready for occupancy, 300 being set up, and 330 currently on order - Full-year same property NOI growth is expected to hit the high single-digit range, in line with prior guidance; second quarter 2026 same property NOI grew 8.8% YoY, with third and fourth quarter growth expected to match or exceed this pace - Annual same property operating expenses are expected to land in the 6% to 7% range for 2026, within the historical 5% to 7% budget range - UMH expects to develop ~315 new expansion lots in 2026, and projects a long-term run rate of 200 to 400 new developed lots per year going forward

Segment performance

UMH Properties operates two core business segments: manufactured home community rental and manufactured home sales. 1. Rental and related income: $61.1 million in Q2 2026, a 9% increase year-over-year (YoY), accounting for approximately 84.1% of total quarterly revenue. Same property net operating income (NOI) grew 9% YoY to $37.2 million, with total portfolio community NOI increasing 8% YoY. Overall portfolio occupancy reached 89%, up 97 units from the prior quarter, and the rental home sub-segment (11,200 total units) held a 95.3% occupancy rate. 2. Manufactured home sales: $11.5 million in Q2 2026, a 10% YoY increase that set a new quarterly record, accounting for approximately 15.9% of total quarterly revenue.

Risks & headwinds

- Forward-looking results are subject to risks and uncertainties that could cause actual outcomes to differ materially from guidance, with detailed risk factors disclosed in the company's SEC filings; management does not commit to updating forward-looking statements after the call - Higher-than-expected same property operating expenses could pressure margins; after an elevated first quarter, second quarter expenses came in just below 7% (the high end of the target range), and unforeseen events such as extreme weather could push full-year expenses above target - The full impact of the Road to Housing Act, including state-level implementation and customer adoption of new financing and home products, remains uncertain, with timing of material sales growth dependent on regulatory and market adoption - Filling of existing vacant developed lots depends on sustained consumer demand for manufactured housing, which could be impacted by broader economic and housing market conditions

Analyst Q&A

• Q: What has early uptake looked like for the new veteran zero-down lending program, and what progress has been made on state-level implementation of chassis-free home rules under the Road to Housing Act? /

  A: The program launched only one month prior to the call, so it is too early to measure full volume impact, but it has already generated positive feedback, with a handful of deals closed and more in the pipeline. VA leadership is considering adopting the program using VA capital, which would be a major industry-wide benefit. For chassis-free homes, the Road to Housing Act preempts state and local zoning rules, so municipalities cannot reject two-story HUD-code homes, creating new capacity in tight housing markets.

• Q: What drives the full-year FFO guidance range, given that year-to-date results annualize to below the lower end of the guidance range, and is high single-digit same-store NOI growth still on track? /

  A: The company hits quarterly FFO exactly in line with its internal full-year plan, which assumes 5% annual rent increases, 800 new rental homes, and no unplanned acquisitions or new common share issuance. High single-digit same-store NOI growth remains on track: Q2 2026 came in at 8.8% YoY, and Q2 home sales hit a new record, with July sales already $1 million above last year's pace and a $5 million sales pipeline pointing to another strong third quarter.

• Q: Why was net rental unit growth only 59 units in Q2, and does this change the 800 new rental unit full-year target? /

  A: The 59 unit net figure includes sales of existing older rental homes and reclassification of unit types, not just new additions. The 800 unit target counts only brand new installed and rented homes, and the company remains on track to hit or exceed this target, with 360 new units already added in the first half. Selling 15-year-old existing rental homes to residents via new Title I loans generates immediate cash profit that can be reinvested in new, higher-value replacement homes, improving program profitability.

• Q: Does expanded retail home financing change the company's preference between the owned home model and the rental home model going forward? /

  A: The company will continue to grow both models: rental homes serve short-term tenants and introduce new customers to manufactured housing communities, so 800 new rental additions per year will continue. Sales have been artificially suppressed since 2009 due to lack of low-dollar financing, a problem the Road to Housing Act solves, so UMH expects substantial sales growth from its large existing pipeline of vacant lots and developable land, with no change to core rental growth plans.