Businessweek

M/I Homes, Inc. engages in the construction and sale of single-family residential properties. The company concentrates its activities principally in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Tampa and Orlando, Florida; Austin, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and the Virginia and Maryland suburbs of Washington, D.C. Business Strategy The company's business strategy is to profitably grow its presence in its existing markets; and strategically invest in new markets. Segments The company operates in two segments, Homebuilding and Financial Services. Homebuilding operations are further aggregated into three segments: the Midwest, Mid-Atlantic, and Southern regions. Homebuilding The Homebuilding segment designs, markets, constructs, and sells single-family homes, attached townhomes, and condominiums to first-time, move-up, empty-nester and luxury buyers, with a particular focus on first-time and value-focused buyers. It also purchases undeveloped land to develop into finished lots for future construction of single-family homes and, on a limited basis, for sale to others. The company’s residential communities are located in suburban areas that are easily accessible through public and personal transportation. It offers homes for sale in 131 communities within 11 markets located in 9 states. As of December 31, 2012, the company had 2,725 developed lots and 629 lots under development in inventory. The company offers homes ranging from approximately 1,500 to 5,500 square feet. In addition to single-family detached homes, the company also offers attached townhomes in majority of its markets, as well as condominiums in its Columbus and Washington, D.C. markets. It offers approximately 550 different floor plans designed to reflect latest lifestyles and design trends. Financial Services The Financial Services segment conducts mortgage financing activities through a wholly-owned subsidiary, M/I Financial Corp. (M/I Financial), which originates mortgage loans for purchasers of the company’s homes. M/I Financial provides customers with financing, and coordinates and expedites the loan origination transaction through the steps of loan application, loan approval, and closing and title services. M/I Financial provides financing services in all of its housing markets. In addition to financing the purchase of new homes, M/I Financial also provides refinance options for both previous M/I Homes purchasers and the general public. The mortgage loans originated by M/I Financial are sold either individually or against forward commitments to institutional investors, including banks, mortgage banking firms, and savings and loan associations. The company also offers specialized mortgage financing programs through M/I Financial to assist its homebuyers. M/I Financial offers conventional financing options along with Federal Housing Administration (FHA), U.S. Veterans Administration (VA), the United States Department of Agriculture (USDA), and state housing bond programs. The company also provides title services to purchasers of homes through wholly-owned subsidiaries, TransOhio Residential Title Agency Ltd. and M/I Title Agency Ltd., and its majority-owned subsidiary, Washington Metro Residential Title Agency, LLC. Through these entities, the company serves as a title insurance agent by providing title insurance policies, examination and closing services to purchasers of its homes in all of its housing markets except Raleigh, Charlotte, Chicago, and Houston. Regulation and Environmental Matters The company’s mortgage company and title insurance agencies must comply with various federal and state laws and regulations. These include eligibility and other requirements for participation in the programs offered by the Federal Housing Administration, VA, Government National Mortgage Association (Ginnie Mae), Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac). M/I Financial has been approved by the U.S. Department of Housing and Urban Development, the VA, and the USDA to originate mortgages that are insured and/or guaranteed by these entities. In addition, M/I Financial has been approved by Freddie Mac and by Fannie Mae as a seller and servicer of mortgages; and as a Ginnie Mae issuer. Seasonality The company’s homebuilding operations experience significant seasonality and quarter-to-quarter (period ended December 31, 2012) variability in homebuilding activity levels. In general, homes delivered increase substantially in the second half of the year. The company’s seasonality reflects the tendency of homebuyers to shop for a new home in the spring with the goal of closing in the fall or winter, as well as the scheduling of construction to accommodate seasonal weather conditions. The company’s financial services operations also experience seasonality because their loan originations correspond with the delivery of homes in its homebuilding operations. History The company was founded in 1973. It was incorporated, through predecessor entities, in 1973 and commenced homebuilding activities in 1976.