United Homes Group, Inc. (‘UHG’) designs, builds and sells homes in high growth markets, including South Carolina, North Carolina, and Georgia.
UHG employs a land-light operating strategy, with a focus on the design, construction, and sale of entry-level, first, second, and third move-up single-family houses. The company principally builds detached single-family houses, and, to a lesser extent, attached single-family houses, including duplex houses and townhouses.
UHG is organized into three s...
United Homes Group, Inc. (‘UHG’) designs, builds and sells homes in high growth markets, including South Carolina, North Carolina, and Georgia.
UHG employs a land-light operating strategy, with a focus on the design, construction, and sale of entry-level, first, second, and third move-up single-family houses. The company principally builds detached single-family houses, and, to a lesser extent, attached single-family houses, including duplex houses and townhouses.
UHG is organized into three segments:
GSH South Carolina - This segment represents GSH’s homebuilding operations in South Carolina, and a small amount of operations in Georgia. The main products for GSH South Carolina include entry-level and first-move-up homes, catering to a wide range of buyers transitioning into homeownership, or seeking to upgrade from their initial purchase.
Rosewood - This segment consists of UHG’s operations focused on delivering second and third move-up homes in the South Carolina market. These homes cater to buyers seeking more luxurious and customized living spaces, and typically feature larger floor plans, high-end finishes, and premium amenities.
Other - This segment includes the company’s homebuilding operations in Raleigh, NC, and mortgage operations conducted through a mortgage banking joint venture, Homeowners Mortgage, LLC (‘Homeowners Mortgage’).
Pursuant to the company’s land-light business model, finished lots are typically purchased through lot option contracts from third-party and related-party land developers, or land bank partners. This lot acquisition strategy reduces up-front capital requirements, and generally provides for ‘just-in-time’ lot delivery, which closely aligns with home starts and sales pace. This lot acquisition strategy reduces operating and financial risk relative to other homebuilders that own a higher percentage of their land supply on balance sheet. As of December 31, 2024, 98% of approximately 7,700 controlled lots were controlled through lot option contracts.
Market Opportunity
UHG presently operates in three major market regions in South Carolina: Midlands, Upstate, and Coastal, as well as Augusta, Georgia, and Raleigh, North Carolina.
Growth and Operations
The company’s strategies are to continue to leverage key macro housing trends, capitalize on strong growth in core markets, pursue accretive mergers and acquisitions (M&A), build-to-rent (BTR) relationships, and explore ancillary revenue growth opportunities.
UHG Products and Customers
UHG’s Homes and Homebuyers
UHG’s homebuilding business is driven by its commitment to building high-quality homes at affordable prices in attractive locations, while delivering excellent customer service. The company empowers its customers with flexibility to personalize their desirable open floor plans with a wide array of finishes, options, and upgrades to best fit their distinctive tastes and unique needs.
In the company’s portfolio of home plans, UHG offers a series of single-family detached and attached homes. The homes are targeted for entry-level buyers, first, second, and third-time move-ups, and some custom builds. Entry-level homebuyers are typically seeking an economical path to homeownership, and desire square footage, quality design, and construction at affordable prices. First-time move-up homebuyers generally desire the opportunity to select and upgrade features in their homes. Second-time move-up homebuyers generally seek larger floorplans with a higher level of finish, with the ability to upgrade additional features. Third-time move-up homebuyers are similar to second-time move-ups but desire a higher level of finish, and top-shelf options and upgrades.
Land Acquisition Strategy
UHG remains focused on controlling anywhere from 4 to 5 years of high-quality land positions in its markets. The company operates a land-light business model which minimizes its upfront capital commitment to a deposit, and seeks to avoid the financial commitment of land development, which requires significant capital expenditures over an extended timeframe. UHG utilizes a comprehensive land underwriting process, and will continue to add to its land acquisition teams. The company has increased the use of data and analytics to better align its investments with market demands. Due to UHG’s extensive history, the company has strong relationships with both local landowners and developers in its markets.
The company’s land acquisition process is headed by UHG’s local division leadership, with the collaboration of various resources across the company. The Land Investment Committee (‘LIC’) is responsible for the approval of all new investments.
The company considers a lot controlled when it is under contract to acquire the land, holds an option to acquire the applicable lot for the relevant timeframe set forth in the option contract, or the lot is owned or controlled by related parties, and UHG expects to obtain the contractual right to acquire. Finished lots are typically purchased through lot option contracts with third-party developers, related-party developers, or land bank partners. The company typically posts deposits of 15 to 20% of the total purchase price of the finished lots, and has a staggered takedown schedule designed to match the expected sales pace for the community. For contracts with land bank partners, UHG typically pays the development costs, and is reimbursed the following month from the land bank partner.
While the company intends to grow its controlled lot position over time to support long-term growth of the business, shorter-term fluctuations in lot count are typical for the company and the industry through the normal course of ongoing acquisition, underwriting, and due diligence activities.
Homebuilding, Marketing and Sales Process
UHG is a production builder, primarily focused on entry-level, first, and second move-up homebuyers, with some third move-up and custom construction. The company bases the decision on what type of home to build according to its market analysis of potential homebuyers. Home construction ranges from attached single-family products, such as townhomes and duplexes, to detached single-family homes up to five-bedroom two-story products, primarily using plans designed in-house by UHG. The UHG build-on-demand market entails a homebuyer selecting a lot in a UHG development, and picking from a selection of pre-designed home plans and options. UHG does some limited custom home construction as well.
The company uses a variety of marketing tools to reach potential homebuyers, but online marketing has become a key strength of the UHG business model, allowing it to reach a broad range of potential homebuyers at relatively low expense compared to traditional advertising platforms. The digital marketing methods that UHG employs include strategic e-marketing efforts to its current database of potential customers, internet advertising enhanced by search engine marketing, search engine optimization, and campaigns and promotions across an array of social media platforms. UHG has also had measurable success utilizing its online digital chat function to assist with inquiries, and direct traffic directly to its onsite sales representatives. One area of strength in UHG’s digital marketing has been to leverage virtual home tours of inventory and model homes, which has been particularly effective in selling homes to buyers moving into UHG’s markets from other regions of the country.
While digital marketing is a key component of the UHG home sales process, most homebuyers will ultimately want to visit a UHG product in person prior to purchasing. The company maintains model homes in most developments for potential buyers to see in-person the quality and design features of UHG’s homes, as well as the different options that may be available. Onsite sales representatives are present seven days a week in UHG developments to answer questions and provide potential homebuyers with a point-of-sale contact. While efficient marketing methods are important, real estate remains a complicated sales transaction, and providing a potential buyer with access to a dedicated onsite sales representative who is an expert on the community is key to the success of UHG’s sales process. Onsite sales representatives are typically local realtors who have contracted with UHG to provide this service. The company also puts a great deal of effort into maintaining good relationships with local real estate professionals in its target markets.
Materials, Procurement and Construction
UHG uses various materials and components, and is dependent upon building material suppliers for a continuous flow of raw materials. It typically takes UHG between 90 and 120 days to construct a single-family home, and typically longer for certain second move-up and higher-end homes. UHG has numerous national distribution arrangements in place for framing supplies, plumbing fixtures, appliances, heating, ventilation, and air conditioning systems, roofing, and other supplies.
The company has extensive experience managing all phases of the construction process. Although UHG does not employ its own skilled tradespeople, such as plumbers, electricians, and carpenters, it does employ project managers, area construction managers, and EVPs of construction to manage the construction process. UHG’s enterprise resource planning system and integrated construction scheduling software, along with a third-party scheduling software, allow its project managers to closely monitor the construction progress of each of their homes. The company’s software also enables its project managers to monitor the completion of work, which in turn expedites payments to their subcontractors.
Seasonality
UHG and the homebuilding industry tend to experience more new orders in the first half of a calendar year, and increased closings and revenue recognition in the second half of a calendar year (year ended December 31, 2024).
In all of the company’s markets, UHG has historically experienced similar variability in its results of operations and capital requirements from quarter to quarter due to the seasonal nature of the homebuilding industry.
Governmental Regulation and Environmental, Health and Safety Matters
As a licensed builder in South Carolina, Georgia, and North Carolina, UHG is subject to each state’s statutes and regulations governing licensure, as well as other federal, state, and local laws and ordinances that govern the construction of homes in the relevant jurisdictions in which UHG operates. Homes built by UHG in South Carolina, Georgia, and North Carolina are required to be built to conform to the standards established by the latest edition of the International Residential Code (‘IRC’) (as adopted and modified by each state). The construction of homes to the IRC standards is closely monitored by local authorities, and homes built by UHG must pass inspection at multiple stages of the construction process.
Homeowners Mortgage, UHG’s joint-venture mortgage brokerage company, is subject to a wide array of federal and state statutes and regulations. As a mortgage broker, Homeowners Mortgage is primarily regulated by state financial services regulators: the South Carolina Department of Consumer Affairs (SCDCA), the South Carolina Board of Financial Institutions (SCBOFI), the North Carolina Commissioner of Banks (NCCOB), and the Georgia Department of Banking and Finance (GADBF). In addition, federal enforcement authority is vested with the Federal Trade Commission (FTC) and the United States Consumer Financial Protection Bureau (CFPB). Homeowners Mortgage is subject to both federal and state law, including regulations promulgated by federal financial regulators (mainly, the CFPB and Federal Reserve Board) and the state financial regulators, which implement these laws. State financial regulators oversee the licensing of Homeowners Mortgage as a mortgage broker. Homeowners Mortgage maintains a Mortgage Broker License in North Carolina and South Carolina, and a Mortgage Broker/Processor License/Registration in Georgia. Homeowners Mortgage’s activities, advertising, disclosures to consumers, and its relationship with mortgage loan originators (MLOs) are subject to numerous federal laws, including the Real Estate Settlement Practices Act (RESPA) and its implementing regulation, Regulation X; the Truth in Lending Act (TILA) and Regulation Z; the Equal Credit Opportunity Act (ECOA) and Regulation B; the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act); the Home Mortgage Disclosure Act (HMDA) and Regulation C; the Gramm-Leach-Bliley Act (GLBA) and Regulation P; the Fair Credit Reporting Act (FCRA) and Regulation V; and the Mortgage Acts and Practices—Advertising Rule (MAP Rule) and Regulation N. Some of these laws and regulations directly apply to Homeowners Mortgage, while other obligations apply indirectly through its relationship with the MLOs. The states in which Homeowners Mortgage operates have corollary legal and regulatory regimes, as well as additional restrictions on the conduct of mortgage brokerage businesses that are specific to transactions within the given state. Beyond these laws and regulations, Homeowners Mortgage is subject to compliance with the terms of various governmental and government-sponsored enterprise (GSE) underwriting and compliance guides. These programs, such as those operated by the Federal Housing Administration (FHA), the Veterans Benefits Administration (VA), the United States Department of Agriculture (USDA), the Federal National Mortgage Association (FNMA/Fannie Mae), the Government National Mortgage Association (GNMA/Ginnie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC/Freddie Mac) promulgate regulations and guidelines pursuant to which they will originate or guarantee mortgage loans.
History
United Homes Group, Inc., a Delaware corporation, was founded in 2004.
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