MORTGAGES RECEIVABLE |
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| Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MORTGAGES RECEIVABLE |
3. MORTGAGES RECEIVABLE
The Company offers loans to purchasers in connection with the sale of real estate lots. The loans bear interest at 7.2% per annum and terms generally range from to ten years. Principal and interest for each loan is billed and receivable on a monthly basis. The loans are secured by a first mortgage lien on the property purchased by the borrower. The Company records a credit loss reserve for unsecured amounts of past due mortgages receivable. Mortgages receivable include the related interest receivable and are presented at amortized cost, less the reserve for expected credit losses, in the accompanying condensed consolidated financial statements.
Management evaluates each loan individually on a quarterly basis, to assess collectability and estimate a reserve for past due amounts. Past due principal and interest in the aggregate amounts of $929,069 and $815,674 are included in mortgages receivable, current as of September 30, 2024 and December 31, 2023, respectively, of which $37,330 and $17,295, respectively represents amounts past due from an owner of more than 10% of the Company’s common stock. The total allowance for uncollectable mortgages is $1,673,366 and $1,436,981 as of September 30, 2024 and December 31, 2023, respectively.
The following represents the maturities of mortgages receivable as of September 30, 2024:
As of each of September 30, 2024 and December 31, 2023, two borrowers had past-due loans outstanding representing 11% and 10% of the total balance of mortgages receivable. A reserve is established for the unsecured portion of these receivables.
The Company recorded interest income from its mortgages receivable of $813 and $51,593 for the three months ended September 30, 2024 and 2023, respectively, and recorded interest income of $10,376 and $161,409 for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31, 2023, there is $168,794 and $190,967, respectively, of interest receivable included in mortgages receivable on the accompanying condensed consolidated balance sheets.
GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
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