United Development Funding

In the event of a conflict between the interests of the GP's stockholders and the Limited Partners, the GP is expressly authorized to resolve such conflict in favor of its stockholders, and LP interests may be subordinated.

“for so long as the General Partner directly owns a controlling interest in the Partnership, any such conflict that the General Partner, in its sole and absolute discretion, determines cannot be resolved in a manner not adverse to either its stockholders or the Limited Partners shall be resolved in favor of its stockholders. The General Partner shall not be liable for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with such decisions, provided that the General Partner has acted in good faith.”

The General Partner and its affiliates are expressly permitted to engage in business activities competitive with the Partnership, including employing affiliates as advisors, managers, brokers, lenders and other service providers at compensation the General Partner deems fair and reasonable, without arm's-length negotiation.

“Any Affiliate of the General Partner may be employed or retained by the Partnership and may otherwise deal with the Partnership (whether as an advisor, buyer, lessor, lessee, manager, property management agent, asset manager, furnisher of goods or services, broker, agent, lender or otherwise) and may receive from the Partnership any compensation, price, or other payment therefor which the General Partner determines to be fair and reasonable.”

In any conflict between the interests of the General Partner's stockholders and the Limited Partners, the General Partner has sole and absolute discretion to resolve it in favor of its stockholders, with no liability to Limited Partners for resulting losses.

“for so long as the General Partner directly owns a controlling interest in the Partnership, any such conflict that the General Partner, in its sole and absolute discretion, determines cannot be resolved in a manner not adverse to either its stockholders or the Limited Partners shall be resolved in favor of its stockholders. The General Partner shall not be liable for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with such decisions, provided that the General Partner has acted in good faith.”

The Original Limited Partner (UDFH Land Development, L.P.) is an affiliate of the General Partner (United Development Funding Income Fund V), both controlled by Hollis M. Greenlaw, creating intra-UDF-family related-party relationships within the operating partnership.

“ORIGINAL LIMITED PARTNER: UDFH LAND DEVELOPMENT, L.P. By: /s/ Hollis M. Greenlaw Name: Hollis M. Greenlaw Title: Co-President”

The Partnership pays a 0.8% monthly Marketing Support Fee to UMTH Funding Services, LP, an affiliate sharing the same address (1702 N. Collins Blvd, Suite 100, Richardson TX) as the General Partner UMTH Land Development, L.P., creating a related-party economic arrangement whereby an affiliate is compensated out of gross offering proceeds.

“The Partnership shall pay UMTH Funding a monthly Marketing Support Fee in an amount equal to 0.8% of the gross proceeds received by the Partnership in connection with the Offering during the preceding month, provided however, that no Marketing Support Fee will be paid with respect to proceeds to the Partnership from the sale of units of limited partnership interest under the Partnership's distribution reinvestment plan”

The Original Limited Partner (UMTH Land Development, L.P.) and the Advisor (UMTH General Services, L.P.) are both UMTH affiliates sharing the same address (1301 Municipal Way, Suite 100, Grapevine, Texas) as the General Partner, creating a related-party relationship between the GP, the LP, and the advisor. The GP may employ or retain any Affiliate for any role and pay compensation it determines fair and reasonable without independent negotiation.

“Any Affiliate of the General Partner may be employed or retained by the Partnership and may otherwise deal with the Partnership (whether as an advisor, buyer, lessor, lessee, manager, property management agent, asset manager, furnisher of goods or services, broker, agent, lender or otherwise) and may receive from the Partnership any compensation, price, or other payment therefor which the General Partner determines to be fair and reasonable.”