United Development Funding IV (UDF) – Odd Lot Tender Offer – $89 Gain

Current Price – $19.6

Offer Price – $20.5

Upside – 4.6% or $89 for Odd Lot holders

Expiration date – July 2, 2014

Odd Lot holders (less than 100 shares) are not subject to proration

SEC Filling

Trading Strategy:

Buy 99 shares of UDF below $20.5 and tender all your shares before July 2, 2014.

Summary:

United Development Funding IV, a Maryland real estate investment trust, is offering to purchase for cash up to 1,707,317 common shares of beneficial interest, par value $0.01 per share, at a price of $20.50 per Common Share, net to the tendering shareholders in cash, less any applicable withholding taxes and without interest, upon the terms and subject to the conditions described in this Offer to Purchase and the related Letter of Transmittal. If a total of 1,707,317 Common Shares is purchased, the amount of consideration paid to shareholders will be approximately $35 million.

If the Offer is fully subscribed, we will purchase 1,707,317 Common Shares, which would represent approximately 5.28% of the issued and outstanding Common Shares as of immediately after the listing of the Common Shares on the NASDAQ on June 4, 2014.

No proration for Odd Lot holders:

If you own, beneficially or of record, fewer than 100 Common Shares in the aggregate, you properly tender all of these Common Shares prior to the Expiration Date and you complete the section entitled “Odd Lots” in the Letter of Transmittal, and if applicable, in the Notice of Guaranteed Delivery, and all conditions to the Offer are satisfied or waived, we will purchase all of your Common Shares without subjecting them to proration.

Source of Funds:

We intend to fund any purchase of Common Shares pursuant to the Offer, including the related fees and expenses, from cash on hand and borrowings under our revolving credit facilities. The Offer is not subject to a financing contingency. As of May 30, 2014, we had approximately $20.5 million of available cash and approximately $37.1 million available under the four revolving credit facilities.