United Development Funding IV Finances Acquisition Of Scott Felder Homes

United Development Funding IV ("UDF " or the "Trust")

announced today a strategic financing transaction with BR Homebuilding Group, L.P., a newly formed holding company founded by long-time homebuilding veteran Bobby Ray. Under the terms of the agreement, UDF will provide a portion of the acquisition financing required to support BR Homebuilding Group's acquisition of award winning homebuilder Scott Felder Homes, with operations in Austin and San Antonio, Texas. UDF is providing a subordinated loan with a maturity date in September 2021, which can be converted at the Trust's option into an equity interest of up to 25% in Scott Felder Homes. UDF Chairman and CEO Hollis Greenlaw commented, "The two biggest challenges for homebuilders in this economic recovery are land and capital. This strategic financing aligns UDF with another prominent regional homebuilder, Scott Felder Homes, in two of the strongest homebuilding markets in the country, as well as forming a strategic relationship with BR Homebuilding Group. The strategic relationship with BR Homebuilding Group will provide UDF shareholders the potential to participate in the growth of regional homebuilders in addition to the strong, stable distribution they already enjoy." UDF COO Stacey Dwyer added, "Participating in the acquisition financing with BR Homebuilding Group allows UDF to remain focused on its core lending business, while the conversion feature also provides our shareholders the potential upside of a homebuilder investment. We continue to believe that the homebuilding industry is in a multi-year recovery that will be driven by jobs and economic improvement, dynamics that are already in place in the Austin and San Antonio markets. Scott Felder Homes represents the best in the industry and reflects the quality of our relationships." The BR Homebuilding Group, L.P., was formed in 2014 to conduct homebuilding operations in the largest homebuilding markets of Texas, Florida, North Carolina, South Carolina and Georgia. The acquisition of Scott Felder Homes is the first acquisition made by BR Homebuilding Group, L.P. and is expected to provide a platform for its future growth in Texas. Scott Felder Homes builds in 19 communities throughout Austin and San Antonio, Texas and was named Homebuilder of the Year in Texas in 2012 and 2013 and was named Homebuilder of the Year in Austin in 2012, 2013, and 2014. Bobby Ray, President of BR Homebuilding Group, L.P., is a trustee of UDF IV, and Hollis Greenlaw, the CEO and a trustee of UDF IV, is an investor in BR Homebuilding Group, L.P. UDF IV will provide a guarantee for $25 million of additional bank financing for the acquisition of Scott Felder Homes.