Horizon Residential Income Fund I

The Horizon team is pleased to present an updated fund overview for mid-April.

Horizon Fund Capital Overview

In the past 30 days, the Fund has seen continued progress across all aspects of its portfolio. The Fund has purchased six new loans, bringing the Fund’s total purchased loan amount to $24.5M. Additionally, the Fund had nine loans fully repaid, with a total of ~$2.63M in principal coming back to the Fund. The team has also reviewed and approved 14 new construction draws and disbursed ~$480K to developers for newly completed work. As of April 16th, the Fund holds a remaining construction draw liability of $3.8M, which will be funded through the combination of equity and levered capital from our senior partner. The Fund’s Manager, along with the Servicing team, remain focused on loan performance, and our Investment Committee continues to explore opportunities to purchase new loans, with plans of expanding Horizon's portfolio over the next 30 days.

Below is the monthly breakdown of the Fund’s total equity, loan balances, and levered capital.

Portfolio Composition & Risk Management

When looking at portfolio composition and risk management for Horizon, a few of the main portfolio metrics the Horizon team considers are geographic location, weighted average leverage metrics, and project type. We underwrite and monitor these different metrics to ensure we are maintaining a balanced portfolio that aligns with our overall investment strategies.

As of mid-April, the portfolio's top markets were Florida (26.17%), North Carolina (22.62%), and Ohio (10.61%). Below you will find visuals that display Horizon’s full state concentration by gross loan amount, as of 4/16/2025. As the Fund has only purchased 10 new loans in the past six months, recent geographic shifts in the portfolio are mainly due to loan repayments, with 17 loans fully repaid in the last 60 days. Currently, 31% of all projects in the Fund’s portfolio are 100% complete and an additional 26% are 90-99% complete.
As the Fund continues to buy new loans over the next 30 days, we will be selective in certain geographies to ensure the portfolio’s state exposures begin to balance back towards our targeted exposure of 20%.

Horizon State Exposure – % of Total Portfolio as of 4/16/2025

Florida . . . . . . . . . . . . . . . . . . . . 26.17%	South Carolina . . . . . 4.32%
North Carolina. . . . . . . . . . . . 22.62%	New Jersey. . . . . . . . . . 3.81%
Ohio . . . . . . . . . . . . . . . . . . . . . . . 10.61%	Maryland . . . . . . . . . . . 3.59%
Alabama . . . . . . . . . . . . . . . . . . . . 8.36%	Georgia . . . . . . . . . . . . . 2.18%
Indiana . . . . . . . . . . . . . . . . . . . . 7.44%	Other . . . . . . . . . . . . . . . 4.30%
Texas . . . . . . . . . . . . . . . . . . . . . . . 6.59%

Horizon’s loan leverage metrics are also a vital piece to the portfolio’s overall health. These leverage ratios are what protect each loan against any potential downside risk. Below is a breakdown of each metric:

Loan to As-Is Value (LTAIV): We have set a maximum LTAIV constraint per loan of 70%, and are targeting a portfolio below 65% LTAIV.
Loan to Cost (LTC): We have set a maximum LTC constraint for any loan within the portfolio at 90%, while targeting a weighted portfolio makeup below 85%.
Loan to After Repair Value (LTARV): The Horizon team has set a 70% maximum LTARV constraint for each loan and for the entire portfolio.

In the below table, Horizon’s month-over-month changes in WAVG loan leverage metrics are presented. All three portfolio metrics have remained at or below their target mark through mid-April.

Additional Horizon Portfolio Composition
Project Type – % of Total Book (4/16/2025)

Loan Performance & Delinquencies

Delinquency management is a core focus at Upright, beginning with rigorous underwriting practices and supported by our Servicing and Asset Management teams, which employ industry-leading strategies for effective recovery. These strategies include relationship-based borrower management, timely issuance of Notices of Default, and loss mitigation evaluations after 61 days of delinquency. Given the short-term nature of our asset class, understanding delinquency rates is crucial, as performing loans typically repay within 10 months on average, while delinquent loans may require longer resolution periods.

Over the past 60 days, the Fund has experienced a slight increase in its overall delinquency rate. As of 4/16, the Fund’s total DQ rate was 46%, which was a 7% increase from 3/16. This uptick in delinquency, however, is not solely indicative of deteriorating overall loan performance, but rather a reduction of total loans outstanding. In the past 90 days, the Fund’s loan portfolio has shrunk from 96 loans outstanding to a current portfolio size of 78 (reduction in UPB of ~$2.4M), while the total count of delinquent loans has also decreased from 39 to 33 loans. The Fund’s increase in total delinquency rate reflects the repayment of performing loans and the reduction of the Fund’s outstanding principal balance, which our delinquency rates are calculated on. This increase in the overall delinquency rate is generally expected when a limited amount of new assets are being added to the Fund’s book.
Looking at the Fund’s current delinquencies, the team is currently managing four total loans across the 31-60 bucket and 61-90 bucket. The team continues to communicate with these borrowers daily and we are hopeful that we could have all loans in these two buckets cured by the end of April.
Loans in the 91+ bucket have also improved slightly over the past 30 days. As of 3/16, the Fund held 30 loans that were 91+ days delinquent and have since had one loan in this bucket fully repaid, with no new loans entering. Additionally, of the 29 loans in the 91+ bucket, 26 are actively working through foreclosure, with two loans still standing in their 45 day Notice of Default window. Assuming these borrowers do not bring the loans current, our Asset Management team will immediately pursue next steps in the foreclosure process as soon as the notices expire.
The Fund also still holds one property in REO and continues to receive offers, but a final sale has not been reached. We are also anticipating that a few additional loans could complete the foreclosure process and move to REO in May. The team continues to work with all delinquent developers daily in hopes that a resolution can be reached to bring these loans current.

Below is a chart displaying the Fund's delinquency rates over the past 90 days, presenting both the total count and the percentage of the active book based on the Unpaid Principal Balance of delinquent loans. This detailed transparency reflects our commitment to rigorous reporting standards and aligns with the MBA’s approach, while also providing an expanded view of our delinquency performance.