UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF
1934
Date
of Report (Date of earliest event reported): January 8,
2010
United Development Funding
IV
(Exact
Name of Registrant as Specified in Its Charter)
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Maryland
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333-152760
(1933 Act)
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26-2775282
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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1301
Municipal Way, Suite 100, Grapevine, Texas
76051
(Address
of principal executive offices)
(Zip
Code)
(214) 370-8960
(Registrant’s
telephone number, including area code)
None
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Item
1.01 Entry into a
Material Definitive Agreement.
Effective
January 8, 2010, United Development Funding IV, a Maryland real estate
investment trust (“UDF IV”) entered into a Loan Participation Agreement (the
“Participation Agreement”) with United Development Funding III, LP, a Delaware
limited partnership (“UDF III”), pursuant to which UDF IV purchased a
participation interest in a finished lot loan (the “Loan”) from UDF III, as the
lender, to Buffington Land, Ltd., a Texas limited partnership and Len-Buf Land
Acquisitions of Texas, L.P., a Texas limited partnership, as co-borrowers
(collectively, “Buffington”). The Loan is evidenced and secured by a
first lien deed of trust recorded against approximately 67 finished residential
lots in the Bridges at Bear Creek residential subdivision in the City of Austin,
Travis County, Texas, a promissory note, assignments of certain lot sale
contracts and earnest money, and other loan documents.
Pursuant
to the Participation Agreement, UDF IV is entitled to receive repayment of
94.74163% of the $5,007,144 outstanding principal amount of the Loan, plus its
proportionate share of accrued interest thereon (the “Participation
Interest”). The purchase price for the Participation Interest is
$4,743,850. UDF IV has no obligations to advance funds to Buffington
under the Loan or to increase its Participation Interest in the
Loan. The interest rate under the Loan is the lower of 14% or the
highest rate allowed by law. UDF IV’s Participation Interest is
repaid as Buffington repays the Loan. Buffington is required to pay
interest monthly and to repay a portion of principal upon the sale of
residential lots covered by the deed of trust. The Loan is due in
payable in full on June 30, 2011. United Mortgage Trust, a Maryland
real estate investment trust (“UMT”), also owns a participation interest in the
Loan.
UDF III
will continue to manage and control the Loan. Pursuant to the
Participation Agreement, UDF IV has appointed UDF III as its agent to act on its
behalf with respect to all aspects of the Loan, including the control and
management of the Loan and the enforcement of rights and remedies available to
the lender under the Loan.
UMTH
General Services, L.P., a Delaware limited partnership (“UMTH GS”), is UDF IV’s
advisor and is responsible for managing UDF IV’s affairs on a day-to-day basis.
UMTH GS also serves as the advisor for UMT. UMTH GS has engaged UMTH
Land Development, L.P., a Delaware limited partnership (UMTH LD), as UDF IV’s
asset manager. The asset manager has organized an Investment Committee with the
principal function of overseeing the investment and finance activities of the
United Development Funding programs managed and advised by our advisor and UMTH
LD. UDF IV’s and UDF III’s investment and finance activates are
overseen by UMTH LD.
FORWARD
LOOKING STATEMENTS
This
Current Report on Form 8-K contains forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 under Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking
statements include statements with respect to our beliefs, plans, objectives,
goals, expectations, anticipations, assumptions, estimates, intentions, and
future performance, and involve known and unknown risks, uncertainties and other
factors, which may be beyond our control, and which may cause our actual
results, performance or achievements to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. All statements other than statements of historical
fact are statements that could be forward-looking statements. You can identify
these forward-looking statements through our use of words such as "may," "will,"
"can" "anticipate," "assume," "should," "indicate," "would," "believe,"
"contemplate," "expect," "seek," "estimate," "continue," "plan," "point to,"
"project," "predict," "could," "intend," "target," "potential," and other
similar words and expressions of the future. Forward-looking statements may not
be realized due to a variety of factors, including, without limitation, future
economic, competitive and market conditions, regulatory framework, and future
business decisions, and the other factors referenced in our Prospectus, which
contains a list of specific risk factors that could cause actual results to
differ materially from those indicated by our forward-looking statements made in
this Current Report on Form 8-K.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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United
Development Funding IV
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Dated:
January 14, 2010
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By:
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/s/
Hollis M. Greenlaw
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Name: Hollis
M. Greenlaw
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Title: Chief
Executive Officer
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