Greystone Housing Impact Investors 10Q 2021 Q2 Quarterly report

0001059142 atax:GreystoneSelectMember 2021-04-01 2021-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-24843

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

(Exact name of registrant as specified in its charter)

Delaware		47-0810385
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

14301 FNB Parkway, Suite 211, Omaha, Nebraska		68154
(Address of principal executive offices)		(Zip Code)

(402) 952-1235
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Beneficial Unit Certificates representing assignments of limited partnership interests in America First Multifamily Investors, L.P.	ATAX	The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of June 30, 2021, the registrant had 60,468,403 Beneficial Unit Certificates representing assignments of limited partnership interests in America First Multifamily Investors, L.P. outstanding.

INDEX

PART I – FINANCIAL INFORMATION

Forward-Looking Statements

This Quarterly Report (including, but not limited to, the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. When used, statements which are not historical in nature, including those containing words such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions, are intended to identify forward-looking statements. We have based forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. This report also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves several assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties contained in this report, and accordingly, we cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the heading “Risk Factors” in Item 1A of America First Multifamily Investors, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2020 and in this report.

These forward-looking statements are subject, but not limited, to various risks and uncertainties, including those relating to:

•

defaults on the mortgage loans securing our mortgage revenue bonds (“MRBs”) and governmental issuer loans (“GILs”);

•

the competitive environment in which we operate;

•

risks associated with investing in multifamily, student, senior citizen residential properties and commercial properties;

•

changes in business conditions and the general economy, including the current and future impact of the novel coronavirus (“COVID-19”) on business operations, employment and government-mandated relief and mitigation measures;

•

changes in interest rates;

•

our ability to access debt and equity capital to finance our assets;

•

current maturities of our financing arrangements and our ability to renew or refinance such financing arrangements;

•

potential exercising of redemption rights by the holders of the Series A Preferred Units;

•

local, regional, national and international economic and credit market conditions;

•

recapture of previously issued Low Income Housing Tax Credits (“LIHTCs”) in accordance with Section 42 of the Internal Revenue Code (“IRC”);

•

geographic concentration within the MRB and GIL portfolio held by the Partnership; and

•

changes in the U.S. corporate tax code and other government regulations affecting our business.

Other risks, uncertainties and factors could cause our actual results to differ materially from those projected in any forward-looking statements we make. We are not obligated to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.

All references to “we,” “us,” “our” and the “Partnership” in this report mean America First Multifamily Investors, L.P. (“ATAX”), its wholly owned subsidiaries and its consolidated variable interest entities. See Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this report for additional details.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30, 2021			December 31, 2020
Assets:
Cash and cash equivalents	$	52,065,319		$	44,495,538
Restricted cash		83,804,035			78,495,048
Interest receivable, net		9,773,967			8,212,076
Mortgage revenue bonds held in trust, at fair value (Note 6)		760,538,644			768,468,644
Mortgage revenue bonds, at fair value (Note 6)		17,451,452			25,963,841
Governmental issuer loans held in trust (Note 7)		130,404,790			64,863,657
Real estate assets: (Note 8)
Land and improvements		10,464,403			4,875,265
Buildings and improvements		72,373,113			72,316,152
Real estate assets before accumulated depreciation		82,837,516			77,191,417
Accumulated depreciation		(19,506,937	)		(18,150,215	)
Net real estate assets		63,330,579			59,041,202
Investments in unconsolidated entities (Note 9)		91,790,880			106,878,570
Property loans, net of loan loss allowance (Note 10)		17,449,265			12,920,719
Other assets (Note 12)		7,376,928			5,908,584
Total Assets	$	1,233,985,859		$	1,175,247,879

Liabilities:
Accounts payable, accrued expenses and other liabilities (Note 13)	$	10,664,337		$	9,949,565
Distribution payable		8,087,541			3,686,283
Unsecured lines of credit (Note 14)		-			7,475,000
Secured line of credit (Note 15)		6,500,000			-
Debt financing, net (Note 16)		741,532,707			673,957,640
Mortgages payable and other secured financing, net (Note 17)		26,964,324			25,984,872
Total Liabilities		793,748,909			721,053,360

Commitments and Contingencies (Note 19)

Redeemable Series A Preferred Units, approximately $94.5 million redemption value, 9.5 million issued and outstanding, net (Note 20)		94,440,502			94,422,477
Redeemable Series A-1 Preferred Units, 0 issued and outstanding (Note 20)		-			-

Partnersʼ Capital:
General Partner (Note 1)		808,774			934,892
Beneficial Unit Certificates ("BUCs," Note 1)		344,987,674			358,837,150
Total Partnersʼ Capital		345,796,448			359,772,042
Total Liabilities and Partnersʼ Capital	$	1,233,985,859		$	1,175,247,879

The accompanying notes are an integral part of the condensed consolidated financial statements.

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2021			2020			2021			2020
Revenues:
Investment income	$	14,297,626		$	12,401,819		$	26,685,867		$	23,945,242
Property revenues		1,788,173			1,856,954			3,482,697			3,809,201
Contingent interest income		-			-			-			12,043
Other interest income		320,697			219,646			625,420			448,068
Total revenues		16,406,496			14,478,419			30,793,984			28,214,554
Expenses:
Real estate operating (exclusive of items shown below)		760,525			854,424			1,768,365			2,029,798
Provision for credit loss (Note 6)		900,080			464,675			900,080			1,822,356
Provision for loan loss (Note 10)		330,116			-			330,116			-
Impairment charge on real estate assets		-			25,200			-			25,200
Depreciation and amortization		684,884			712,081			1,368,344			1,421,519
Interest expense		5,358,096			4,889,316			10,584,571			10,907,284
General and administrative		3,463,912			2,846,371			6,749,620			5,744,897
Total expenses		11,497,613			9,792,067			21,701,096			21,951,054
Other Income:
Gain on sale of securities		-			-			-			1,416,023
Gain on sale of investments in unconsolidated entities		5,463,484			-			8,272,590			-
Income before income taxes		10,372,367			4,686,352			17,365,478			7,679,523
Income tax expense		107,687			98,004			107,944			109,418
Net income		10,264,680			4,588,348			17,257,534			7,570,105
Redeemable Series A Preferred Unit distributions and accretion		(717,763	)		(717,762	)		(1,435,526	)		(1,435,525	)
Net income available to Partners	$	9,546,917		$	3,870,586		$	15,822,008		$	6,134,580

Net income (loss) available to Partners allocated to:
General Partner	$	1,406,706		$	38,706		$	2,143,642		$	(14,698	)
Limited Partners - BUCs		8,115,042			3,806,395			13,641,244			6,118,611
Limited Partners - Restricted units		25,169			25,485			37,122			30,667
	$	9,546,917		$	3,870,586		$	15,822,008		$	6,134,580
BUC holders' interest in net income per BUC, basic and diluted	$	0.13		$	0.06		$	0.22		$	0.10
Weighted average number of BUCs outstanding, basic		60,576,537			60,545,204			60,633,700			60,649,692
Weighted average number of BUCs outstanding, diluted		60,576,537			60,545,204			60,633,700			60,649,692

The accompanying notes are an integral part of the condensed consolidated financial statements.

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021			2020
Net income	$	10,264,680	$	4,588,348	$	17,257,534		$	7,570,105
Reversal of net unrealized gains on sale of securities		-		-		-			(1,408,804	)
Reversal of net unrealized loss on securities to provision for credit loss		-		-		-			372,169
Unrealized gain (loss) on securities		1,933,172		20,971,649		(14,365,625	)		13,913,913
Unrealized gain (loss) on bond purchase commitments		81,606		-		(39,364	)		-
Comprehensive income	$	12,279,458	$	25,559,997	$	2,852,545		$	20,447,383

The accompanying notes are an integral part of the condensed consolidated financial statements.

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(UNAUDITED)

	General Partner			# of BUCs - Restricted and Unrestricted			BUCs - Restricted and Unrestricted			Total			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2020	$	934,892			60,823,674		$	358,837,150		$	359,772,042		$	132,594,007
Distributions paid or accrued ($0.09 per BUC):
Regular distribution		(34,013	)		-			(3,367,301	)		(3,401,314	)		-
Distribution of Tier 2 income (Note 3)		(702,277	)		-			(2,106,829	)		(2,809,106	)		-
Net income allocable to Partners		736,936			-			5,538,155			6,275,091			-
Restricted unit compensation expense		781			-			77,333			78,114			-
Unrealized loss on securities		(162,988	)		-			(16,135,809	)		(16,298,797	)		(16,298,797	)
Unrealized loss on bond purchase commitments		(1,210	)		-			(119,760	)		(120,970	)		(120,970	)
Balance as of March 31, 2021		772,121			60,823,674			342,722,939			343,495,060			116,174,240
Distributions paid or accrued ($0.11 per BUC):
Regular distribution		(26,241	)		-			(2,597,816	)		(2,624,057	)		-
Distribution of Tier 2 income (Note 3)		(1,365,870	)		-			(4,097,614	)		(5,463,484	)		-
Net income allocable to Partners		1,406,706			-			8,140,211			9,546,917			-
Repurchase of BUCs		-			(222,459	)		(1,363,736	)		(1,363,736	)		-
Restricted units awarded		-			266,324			-			-			-
Restricted unit compensation expense		1,910			-			189,060			190,970			-
Unrealized gain on securities		19,332			-			1,913,840			1,933,172			1,933,172
Unrealized gain on bond purchase commitments		816			-			80,790			81,606			81,606
Balance as of June 30, 2021	$	808,774		$	60,867,539		$	344,987,674		$	345,796,448		$	118,189,018

	General Partner			# of BUCs - Restricted and Unrestricted			BUCs - Restricted and Unrestricted			Total			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2019	$	735,128			60,835,204		$	341,203,135		$	341,938,263		$	99,308,677
Distributions paid or accrued ($0.125 per BUC):
Regular distribution		(80,501	)		-			(7,969,618	)		(8,050,119	)		-
Distribution of Tier 2 loss (Note 3)		80,501			-			365,218			445,719			-
Net income (loss) allocable to Partners		(53,404	)		-			2,317,398			2,263,994			-
Repurchase of BUCs		-			(290,000	)		(2,106,673	)		(2,106,673	)		-
Restricted units awarded		-			290,000			-			-			-
Restricted unit compensation expense		391			-			38,677			39,068			-
Unrealized loss on securities		(70,577	)		-			(6,987,159	)		(7,057,736	)		(7,057,736	)
Reversal of net unrealized gains on sale of securities		(14,088	)		-			(1,394,716	)		(1,408,804	)		(1,408,804	)
Reversal of net unrealized loss on securities to provision for credit loss		3,722			-			368,447			372,169			372,169
Balance as of March 31, 2020		601,172			60,835,204			325,834,709			326,435,881			91,214,306
Distributions paid or accrued ($0.06 per BUC):
Regular distribution		(36,870	)		-			(3,650,112	)		(3,686,982	)		-
Net income allocable to Partners		38,706			-			3,831,880			3,870,586			-
Restricted unit compensation expense		2,962			-			293,306			296,268			-
Unrealized gain on securities		209,716			-			20,761,933			20,971,649			20,971,649
Balance as of June 30, 2020	$	815,686			60,835,204		$	347,071,716		$	347,887,402		$	112,185,955

The accompanying notes are an integral part of the condensed consolidated financial statements.

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Six Months Ended June 30,
	2021			2020
Cash flows from operating activities:
Net income	$	17,257,534		$	7,570,105
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		1,368,344			1,421,519
Provision for loan loss		330,116			-
Gain on sale of investment in securities		-			(1,416,023	)
Provision for credit loss		900,080			1,822,356
Gain on sale of investments in an unconsolidated entities		(8,272,590	)		-
Contingent interest realized on investing activities		-			(12,043	)
Impairment charge on real estate assets		-			25,200
(Gain) loss on derivatives, net of cash paid		131			(18,915	)
Restricted unit compensation expense		269,084			335,336
Bond premium/discount amortization		(68,961	)		(48,021	)
Debt premium amortization		(20,276	)		(20,229	)
Amortization of deferred financing costs		454,433			791,026
Deferred income tax expense (benefit) & income tax payable/receivable		(27,960	)		90,927
Change in preferred return receivable from unconsolidated entities, net		3,877,357			(1,260,261	)
Changes in operating assets and liabilities
Increase in interest receivable		(1,561,891	)		(104,356	)
Decrease in other assets		408,450			362,468
Increase (decrease) in accounts payable and accrued expenses		649,332			(597,859	)
Net cash provided by operating activities		15,563,183			8,941,230
Cash flows from investing activities:
Capital expenditures		(2,522,704	)		(116,887	)
Acquisition of mortgage revenue bonds		(8,951,500	)		(7,489,950	)
Advances on governmental issuer loans		(65,541,133	)		(40,000,000	)
Advances on taxable governmental issuer loans		(1,000,000	)		-
Contributions to unconsolidated entities		(13,066,359	)		(11,163,709	)
Advances on property loans		(4,858,662	)		(1,667,776	)
Principal payments received on mortgage revenue bonds		10,239,992			5,904,044
Proceeds from sale of PHC Certificates		-			43,349,357
Proceeds from sale of investments in an unconsolidated entities		29,433,391			7,762,166
Principal payments received on taxable mortgage revenue bonds		4,729			4,324
Principal payments received on property loans and contingent interest		-			12,043
Net cash used in investing activities		(56,262,246	)		(3,406,388	)
Cash flows from financing activities:
Distributions paid		(11,314,203	)		(16,629,884	)
Repurchase of BUCs		(1,363,736	)		(2,106,673	)
Proceeds from debt financing		70,577,000			91,386,000
Principal payments on debt financing		(2,697,767	)		(88,985,375	)
Principal borrowing on mortgages payable		1,440,000			-
Principal payments on mortgages payable		(439,618	)		(419,128	)
Principal borrowing on unsecured lines of credit		15,172,445			7,475,000
Principal payments on unsecured lines of credit		(22,647,445	)		(1,980,000	)
Principal borrowing on secured line of credit		6,500,000			-
(Increase) decrease in security deposit liability related to restricted cash		51,624			(50,617	)
Debt financing and other deferred costs		(1,700,469	)		(285,425	)
Net cash provided by (used in) financing activities		53,577,831			(11,596,102	)
Net increase (decrease) in cash, cash equivalents and restricted cash		12,878,768			(6,061,260	)
Cash, cash equivalents and restricted cash at beginning of period		122,990,586			43,185,981
Cash, cash equivalents and restricted cash at end of period	$	135,869,354		$	37,124,721

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	9,769,631		$	10,226,352
Cash paid during the period for income taxes		135,904			18,491
Supplemental disclosure of noncash investing and financing activities:
Distributions declared but not paid for BUCs and General Partner	$	8,087,541		$	3,686,982
Distributions declared but not paid for Series A Preferred Units		708,750			708,750
Investment in previously unconsolidated entity consolidated as land		3,115,891			-
Capital expenditures financed through accounts payable		7,504			-
Deferred financing costs financed through accounts payable		(1,400	)		55,557

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the total of such amounts shown in the condensed consolidated statements of cash flows:

	June 30, 2021		June 30, 2020
Cash and cash equivalents	$	52,065,319	$	36,143,639
Restricted cash		83,804,035		981,082
Total cash, cash equivalents and restricted cash	$	135,869,354	$	37,124,721

The accompanying notes are an integral part of the condensed consolidated financial statements.

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Basis of Presentation

America First Multifamily Investors, L.P. (the “Partnership”) was formed on April 2, 1998, under the Delaware Revised Uniform Limited Partnership Act for the purpose of acquiring, holding, selling and otherwise dealing with a portfolio of mortgage revenue bonds (“MRBs”) that have been issued to provide construction and/or permanent financing for affordable multifamily and student housing residential properties and commercial properties. The Partnership has also invested in governmental issuer loans (“GILs”), which are similar to MRBs, to provide construction financing for affordable multifamily properties. We generally refer to affordable multifamily and residential properties associated with our MRBs and GILs as “Residential Properties.” The Partnership expects and believes the interest earned on these MRBs and GILs is excludable from gross income for federal income tax purposes. The Partnership may also invest in other types of securities, including taxable MRBs and taxable GILs, that may or may not be secured by real estate and may make property loans to multifamily residential properties which may or may not be financed by MRBs or GILs held by the Partnership. The Partnership may acquire real estate securing its MRBs, GILs, or property loans through foreclosure in the event of a default or through the receipt of a fee simple deed in lieu of foreclosure. In addition, the Partnership may acquire interests in multifamily, student and senior citizen residential properties (“MF Properties”) in order to position itself for future investments in MRBs that finance these properties or to operate the MF Properties until their “highest and best use” can be determined by management.

The Partnership’s sole general partner is America First Capital Associates Limited Partnership Two (“AFCA 2” or “General Partner”). The general partner of AFCA 2 is Greystone AF Manager LLC (“Greystone Manager”), an affiliate of Greystone & Co., Inc. (collectively with its affiliates, “Greystone”).

The Partnership has issued Beneficial Unit Certificates (“BUCs”) representing assigned limited partner interests to investors (“BUC holders”). The Partnership has also issued non-cumulative, non-voting, non-convertible Series A Preferred Units (“Series A Preferred Units”) that represent limited partnership interests under the Partnership’s First Amended and Restated Agreement of Limited Partnership dated September 15, 2015, as further amended (the “Partnership Agreement”). The Series A Preferred Units were issued pursuant to subscription agreements with five financial institutions and are redeemable in the future (Note 20). The holders of the BUCs and Series A Preferred Units are referred to herein collectively as “Unitholders.” The Partnership has designated but not yet issued non-cumulative, non-voting, non-convertible Series A-1 Preferred Units (“Series A-1 Preferred Units”) that represent limited partnership interests in the Partnership under the Partnership Agreement.

2. Summary of Significant Accounting Policies

Consolidation

The “Partnership,” as used herein, includes America First Multifamily Investors, L.P., its consolidated subsidiaries and consolidated variable interest entities (Note 5). All intercompany transactions are eliminated. The consolidated subsidiaries of the Partnership for the periods presented consist of:

•

ATAX TEBS I, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the M24 Tax Exempt Bond Securitization (“TEBS”) Financing (“M24 TEBS Financing”) with the Federal Home Loan Mortgage Corporation (“Freddie Mac”);

•

ATAX TEBS II, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the “M31 TEBS Financing” with Freddie Mac;

•

ATAX TEBS III, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the “M33 TEBS Financing” with Freddie Mac;

•

ATAX TEBS IV, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the “M45 TEBS Financing” with Freddie Mac;

•

ATAX TEBS Holdings, LLC, a wholly owned subsidiary of the Partnership, which has issued secured notes (“the Secured Notes”) to Mizuho Capital Markets LLC (“Mizuho”);

•

ATAX Vantage Holdings, LLC, a wholly owned subsidiary of the Partnership, which is committed to loan money or provide equity for the development of multifamily properties;

•

NaN wholly owned corporation (“the Greens Hold Co”), which owns 100% of The 50/50 MF Property, a real estate asset, and certain property loans; and

•

Lindo Paseo LLC, a wholly owned limited liability company, which owns 100% of the Suites on Paseo MF Property.

The Partnership also consolidates variable interest entities (“VIEs”) in which the Partnership is deemed to be the primary beneficiary.

Restricted Cash

Restricted cash is legally restricted as to its use. The Partnership is required to maintain restricted cash collateral related to its secured line of credit (Note 15) and its two total return swap transactions (Note 18). In addition, the Partnership is required to maintain restricted cash balances related to the TEBS Financing facilities (Note 16), resident security deposits, required maintenance reserves, escrowed funds, and property rehabilitation. Restricted cash is presented with cash and cash equivalents on the Partnership’s condensed consolidated statement of cash flows.

Impairment of Mortgage Revenue Bonds

The Partnership periodically reviews its MRBs for impairment. The Partnership evaluates whether unrealized losses are considered other-than-temporary impairments based on various factors including, but not necessarily limited to, the following:

•

The duration and severity of the decline in fair value;

•

The Partnership’s intent to hold and the likelihood of it being required to sell the security before its value recovers;

•

Adverse conditions specifically related to the security, its collateral, or both;

•

Volatility of the fair value of the security;

•

The likelihood of the borrower being able to make scheduled interest and principal payments;

•

Failure of the issuer to make scheduled interest or principal payments; and

•

Recoveries or additional declines in fair value after the balance sheet date.

While the Partnership evaluates all available information, it focuses specifically on whether the security’s estimated fair value is below amortized cost. If a MRB’s estimated fair value is below amortized cost, and the Partnership has the intent to sell or may be required to sell the MRB prior to the time that its value recovers or until maturity, the Partnership will record an other-than-temporary impairment through earnings equal to the difference between the MRB’s carrying value and its fair value. If the Partnership does not expect to sell an other-than-temporarily impaired MRB, only the portion of the other-than-temporary impairment related to credit losses is recognized through earnings as a provision for credit loss, with the remainder recognized as a component of other comprehensive income. In determining the provision for credit loss, the Partnership compares the present value of cash flows expected to be collected to the MRB’s amortized cost basis.

The recognition of other-than-temporary impairment, provision for credit loss, and the potential impairment analysis are subject to a considerable degree of judgment, the results of which, when applied under different conditions or assumptions, could have a material impact on the Partnership’s consolidated financial statements. If the Partnership experiences deterioration in the values of its MRB portfolio, the Partnership may incur other-than-temporary impairments or provision for credit losses that could negatively impact the Partnership’s financial condition, cash flows, and reported earnings.

Investment in Governmental Issuer Loans and Taxable Governmental Issuer Loans

The Partnership accounts for its investment in governmental issuer loans (“GILs”) and taxable GILs under the accounting guidance for certain investments in debt and equity securities. The Partnership’s investment in these instruments are classified as held-to-maturity debt securities and are reported at amortized cost.

The Partnership periodically reviews its GILs and taxable GILs for impairment. The Partnership evaluates whether unrealized losses are considered other-than-temporary impairments based on various factors including, but not necessarily limited to, the following:

•

The duration and severity of the decline in fair value;

•

The Partnership’s intent to hold and the likelihood of it being required to sell the security before its value recovers;

•

Adverse conditions specifically related to the security, its collateral, or both;

•

Volatility of the fair value of the security;

•

The likelihood of the borrower being able to make scheduled interest and principal payments;

•

The failure of the borrower to make scheduled interest or principal payments; and

•

Recoveries or additional declines in fair value after the balance sheet date.

While the Partnership evaluates all available information, it focuses specifically on whether the security’s estimated fair value is below amortized cost. If the estimated fair value of a GIL or taxable GIL is below amortized cost, and the Partnership does not expect to recover its entire amortized cost, only the portion of the other-than-temporary impairment related to credit losses is recognized through earnings as a provision for credit loss, with the remainder recognized as a component of other comprehensive income (loss).

The recognition of other-than-temporary impairment, provision for credit loss, and the potential impairment analysis are subject to a considerable degree of judgment, the results of which, when applied under different conditions or assumptions, could have a material impact on the Partnership’s condensed consolidated financial statements. If the Partnership experiences deterioration in the value of its GILs or taxable GILs, the Partnership may incur other-than-temporary impairments or provision for credit losses that could negatively impact the Partnership’s financial condition, cash flows, and reported earnings.

Estimates and assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Partnership to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such SEC rules and regulations, although the Partnership believes that the disclosures are adequate to make the information presented not misleading.

The Partnership’s condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2020. These condensed consolidated financial statements and notes have been prepared consistently with the 2020 Form 10-K. In the opinion of management, all adjustments (consisting of normal and recurring accruals) necessary to present fairly the Partnership’s financial position as of June 30, 2021, and the results of operations for the interim periods presented, have been made. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated balance sheet as of December 31, 2020 was derived from the audited annual consolidated financial statements but does not contain all the footnote disclosures from the annual consolidated financial statements.

Risks and Uncertainties

The business and economic uncertainty resulting from the COVID-19 pandemic has made estimates and assumptions more difficult to calculate. The extent of the impact of COVID-19 on the Partnership’s future operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, the impact on the underlying borrowers of MRBs and GILs, tenants at the MF Properties and operations of the Partnership’s investments in unconsolidated entities. In addition, market volatility may cause fluctuations in the valuation of the Partnership’s MRBs, taxable MRBs, GILs, taxable GILs, property loans, MF Properties and investments in unconsolidated entities. The extent to which COVID-19 will impact the Partnership’s financial condition or results of operations in the future is uncertain and actual results and outcomes could differ from current estimates.

The Partnership has noted slight declines in occupancy and operating results at Residential Properties securing its MRBs due to the COVID-19 pandemic. However, the Partnership has yet to observe a significant decline at such Residential Properties, with the exception of properties securing the Provision Center 2014-1 and Live 929 Apartments MRBs. See Note 6 for further discussion of the Provision Center 2014-1 MRB. The Live 929 Apartments MRB is operating under a forbearance agreement related to certain debt covenants and deferral of contractual MRB principal payments through December 2021 and no additional impairment of the MRB has been recognized during 2021. Furthermore, the Partnership has evaluated the impacts of COVID-19 on its investments in MF Properties, properties related to its GILs, and investments in unconsolidated entities and noted no indications of impairment of such investments.

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326).” ASU 2016-13 enhances the methodology of measuring expected credit losses for financial assets to include the use of reasonable and supportable forward-looking information to better estimate credit losses. ASU 2016-13 also includes changes to the impairment model for available-for-sale debt securities such as the Partnership’s MRBs and taxable MRBs. In November 2019, the FASB issued ASU 2019-10 which amended the mandatory effective dates of certain ASUs, including ASU 2016-13, based on an entity’s filing status. As a smaller reporting company, ASU 2016-13 is effective for the Partnership on January 1, 2023. The Partnership has completed an initial assessment and determined that its GILs, the interest receivable on GILs, property loans, the interest receivable on property loans, receivables reported within other assets, financial guarantees and commitments are within the scope of ASU 2016-13. Furthermore, the Partnership has begun developing data collection processes, assessment procedures and internal controls required to implement ASU 2016-13. The Partnership will continue to develop data collection processes, assessment procedures and internal controls that will be required when it does implement ASU 2016-13, and to evaluate the impact on the Partnership’s condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform—Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional guidance for a limited period meant to ease the potential burden in accounting for, or recognizing the effects of, reform to LIBOR and certain other reference rates. The standard is effective for all entities from March 12, 2020 through December 31, 2022. ASU 2020-04 is only applicable to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform, and that were entered into or evaluated prior to January 1, 2023. The Partnership has evaluated its population of instruments indexed, either directly or indirectly, to LIBOR and is currently evaluating the impact that the adoption of ASU 2020-04 will have on its condensed consolidated financial statements.

3. Partnership Income, Expenses and Cash Distributions

The Partnership Agreement contains provisions for the distribution of Net Interest Income, Net Residual Proceeds and Liquidation Proceeds, for the allocation of income or loss from operations, and for the allocation of income and loss arising from a repayment, sale, or liquidation of investments. Income and losses will be allocated to each Unitholder on a periodic basis, as determined by the General Partner, based on the number of Series A Preferred Units and BUCs held by each Unitholder as of the last day of the period for which such allocation is to be made. Distributions of Net Interest Income and Net Residual Proceeds will be made to each Unitholder of record on the last day of each distribution period based on the number of Series A Preferred Units and BUCs held by each Unitholder on that date. Cash distributions are currently made on a quarterly basis.

For purposes of the Partnership Agreement, income and cash received by the Partnership from its investments in MF Properties, investments in unconsolidated entities, and property loans will be included in the Partnership’s Net Interest Income, and cash distributions received by the Partnership from the sale or redemption of such investments will be included in the Partnership’s Net Residual Proceeds.

The holders of the Series A Preferred Units are entitled to distributions at a fixed rate of 3.0% per annum prior to payment of distributions to other Unitholders.

Net Interest Income (Tier 1) is allocated 99% to the limited partners and BUC holders as a class and 1% to the General Partner. Net Interest Income (Tier 2) and Net Residual Proceeds (Tier 2) are allocated 75% to the limited partners and BUC holders as a class and 25% to the General Partner. Net Interest Income (Tier 2) and Net Residual Proceeds (Tier 2) in excess of the maximum allowable amount as set forth in the Partnership Agreement are considered Net Interest Income (Tier 3) and Net Residual Proceeds (Tier 3) and are allocated 100% to the limited partners and BUC holders as a class.

4. Net income per BUC

The Partnership has disclosed basic and diluted net income per BUC on the Partnership’s condensed consolidated statements of operations. The unvested Restricted Unit Awards (“RUAs”) issued under the Partnership’s 2015 Equity Incentive Plan (the “Plan”) are considered participating securities. There were 0 dilutive BUCs for the three and six months ended June 30, 2021 and 2020.

5. Variable Interest Entities

Consolidated Variable Interest Entities (“VIEs”)

The Partnership has determined the Tender Option Bond (“TOB”), Term TOB and TEBS financings are VIEs and the Partnership is the primary beneficiary (Note 16). In determining the primary beneficiary of each such VIE, the Partnership considered which party

has the power to control the activities of the VIE which most significantly impact its financial performance, the risks that the entity was designed to create, and how each risk affects the VIE. The agreements related to the TOB, Term TOB and TEBS financings stipulate the Partnership has the sole right to cause the trusts to sell the underlying assets. If the underlying assets were sold, the extent to which the VIEs will be exposed to gains or losses would result from decisions made by the Partnership.

As the primary beneficiary, the Partnership reports the TOB, Term TOB and TEBS financings on a consolidated basis. The Partnership reports the Floater Certificates related to the TOB financings, and the Class A Certificates related to the Term TOB and TEBS financings as secured debt financings on the Partnership’s condensed consolidated balance sheets. The MRBs, GILs, property loans and taxable GIL secured by the TOB, Term TOB and TEBS financings, are reported as assets on the Partnership’s condensed consolidated balance sheets (Notes 6, 7 and 10).

The Partnership has determined its investments in Vantage at Hutto and Vantage at Fair Oaks are VIEs and the Partnership is the primary beneficiary (Notes 8, 9 and 17). The Partnership may currently require the managing member of each VIE to purchase the Partnership’s equity investment in the VIE at a price equal to the Partnership’s carrying value. If the Partnership were to redeem its investment, the underlying assets of the project would likely need to be sold. If the underlying assets were sold, the extent to which the VIE will be exposed to gains or losses would result from decisions made by the Partnership. The Partnership’s option to redeem its investment in Vantage at Hutto was not effective until the second quarter of 2021.

As the primary beneficiary, the Partnership reports the assets and liabilities of Vantage at Hutto and Vantage at Fair Oaks on a consolidated basis, which consist of investments in real estate assets and a mortgage payable (Notes 8 and 17). If certain events were to occur in the future, the Partnership’s option to redeem each investment will terminate and each such investment may be deconsolidated.

Non-Consolidated VIEs

The Partnership has variable interests in various entities in the form of MRBs, GILs, property loans, a taxable GIL and investments in unconsolidated entities. These variable interests do not allow the Partnership to direct the activities that most significantly impact the economic performance of such VIEs. As a result, the Partnership is not considered the primary beneficiary and does not consolidate the financial statements of these VIEs in the Partnership’s condensed consolidated financial statements.

The Partnership held variable interests in 26 and 21 non-consolidated VIEs as of June 30, 2021 and December 31, 2020, respectively. The following table summarizes the Partnership’s maximum exposure to loss associated with its variable interests as of June 30, 2021 and December 31, 2020:

	Maximum Exposure to Loss
	June 30, 2021		December 31, 2020
Mortgage revenue bonds	$	22,258,000	$	20,763,500
Governmental issuer loans		130,404,790		64,863,657
Property loans		9,855,888		5,327,342
Taxable governmental issuer loan		1,000,000		-
Investment in unconsolidated entities		91,790,880		106,878,570
	$	255,309,558	$	197,833,069

The maximum exposure to loss for the MRBs is equal to the cost adjusted for paydowns. The difference between an MRB’s carrying value on the Partnership’s condensed consolidated balance sheets and the maximum exposure to loss is a function of the unrealized gains or losses on the MRB.

The maximum exposure to loss for the GILs, property loans, taxable GIL and investments in unconsolidated entities is equal to the Partnership’s carrying value.

6. Mortgage Revenue Bonds

The Partnership’s MRBs provide construction and/or permanent financing for Residential Properties and a commercial property. MRBs are either held directly by the Partnership or are held in trusts created in connection with debt financing transactions (Note 16). The Partnership had the following investments in MRBs as of June 30, 2021 and December 31, 2020:

	June 30, 2021
Description of Mortgage Revenue Bonds Held in Trust	State	Cost Adjusted for Paydowns and Allowances		Cumulative Unrealized Gain		Cumulative Unrealized Loss		Estimated Fair Value
Courtyard - Series A ⁽⁴⁾	CA	$	10,016,252	$	2,077,713	$	-	$	12,093,965
Glenview Apartments - Series A ⁽³⁾	CA		4,456,638		945,069		-		5,401,707
Harmony Court Bakersfield - Series A ⁽⁴⁾	CA		3,652,065		725,064		-		4,377,129
Harmony Terrace - Series A ⁽⁴⁾	CA		6,760,931		1,443,669		-		8,204,600
Harden Ranch - Series A ⁽²⁾	CA		6,580,568		1,366,435		-		7,947,003
Las Palmas II - Series A ⁽⁴⁾	CA		1,657,062		354,284		-		2,011,346
Montclair Apartments - Series A ⁽³⁾	CA		2,414,410		511,997		-		2,926,407
Montecito at Williams Ranch Apartments - Series A ⁽⁶⁾	CA		7,597,708		2,071,062		-		9,668,770
Montevista - Series A ⁽⁶⁾	CA		6,720,000		2,150,547		-		8,870,547
Ocotillo Springs - Series A ⁽⁶⁾	CA		6,825,000		234,033		-		7,059,033
San Vicente - Series A ⁽⁴⁾	CA		3,416,775		715,295		-		4,132,070
Santa Fe Apartments - Series A ⁽³⁾	CA		2,924,967		610,906		-		3,535,873
Seasons at Simi Valley - Series A ⁽⁴⁾	CA		4,213,075		1,082,286		-		5,295,361
Seasons Lakewood - Series A ⁽⁴⁾	CA		7,201,861		1,537,822		-		8,739,683
Seasons San Juan Capistrano - Series A ⁽⁴⁾	CA		12,125,582		2,479,899		-		14,605,481
Summerhill - Series A ⁽⁴⁾	CA		6,288,796		1,193,069		-		7,481,865
Sycamore Walk - Series A ⁽⁴⁾	CA		3,496,551		728,452		-		4,225,003
The Village at Madera - Series A ⁽⁴⁾	CA		3,020,541		626,564		-		3,647,105
Tyler Park Townhomes - Series A ⁽²⁾	CA		5,731,581		796,065		-		6,527,646
Vineyard Gardens - Series A ⁽⁶⁾	CA		3,954,528		984,597		-		4,939,125
Westside Village Market - Series A ⁽²⁾	CA		3,745,579		756,160		-		4,501,739
Brookstone ⁽¹⁾	IL		7,355,181		1,903,798		-		9,258,979
Copper Gate Apartments ⁽²⁾	IN		4,955,000		543,079		-		5,498,079
Renaissance - Series A ⁽³⁾	LA		10,802,523		4,112,764		-		14,915,287
Live 929 Apartments ⁽⁶⁾	MD		36,201,898		-		-		36,201,898
Woodlynn Village ⁽¹⁾	MN		4,093,000		54,672		-		4,147,672
Jackson Manor Apartments ⁽⁶⁾	MS		4,150,000		-		-		4,150,000
Gateway Village⁽⁶⁾	NC		2,600,000		133,379		-		2,733,379
Greens Property - Series A⁽²⁾	NC		7,775,000		469,569		-		8,244,569
Lynnhaven Apartments ⁽⁶⁾	NC		3,450,000		174,788		-		3,624,788
Silver Moon - Series A ⁽³⁾	NM		7,664,307		1,945,185		-		9,609,492
Village at Avalon - Series A ⁽⁵⁾	NM		16,130,094		4,295,649		-		20,425,743
Ohio Properties - Series A ⁽¹⁾	OH		13,652,000		-		-		13,652,000
Bridle Ridge ⁽¹⁾	SC		7,190,000		801		-		7,190,801
Columbia Gardens ⁽⁴⁾	SC		12,812,644		2,516,514		-		15,329,158
Companion at Thornhill Apartments ⁽⁴⁾	SC		10,990,877		1,855,889		-		12,846,766
Cross Creek ⁽¹⁾	SC		6,129,339		2,058,249		-		8,187,588
Rosewood Townhomes - Series A ⁽⁶⁾	SC		9,259,206		578,254		-		9,837,460
South Pointe Apartments - Series A ⁽⁶⁾	SC		21,551,600		1,345,935		-		22,897,535
The Palms at Premier Park Apartments ⁽²⁾	SC		18,504,146		2,505,025		-		21,009,171
Village at River's Edge ⁽⁴⁾	SC		9,765,972		2,104,832		-		11,870,804
Willow Run ⁽⁴⁾	SC		12,635,325		2,440,011		-		15,075,336
Arbors at Hickory Ridge ⁽²⁾	TN		10,834,440		2,331,028		-		13,165,468
Avistar at Copperfield - Series A ⁽⁶⁾	TX		13,748,038		2,679,071		-		16,427,109
Avistar at the Crest - Series A ⁽²⁾	TX		9,082,300		1,964,023		-		11,046,323
Avistar at the Oaks - Series A ⁽²⁾	TX		7,342,493		1,651,642		-		8,994,135
Avistar at the Parkway - Series A ⁽³⁾	TX		12,651,455		2,498,397		-		15,149,852
Avistar at Wilcrest - Series A ⁽⁶⁾	TX		5,210,228		901,310		-		6,111,538
Avistar at Wood Hollow - Series A ⁽⁶⁾	TX		39,561,143		7,418,638		-		46,979,781
Avistar in 09 - Series A ⁽²⁾	TX		6,339,959		1,373,222		-		7,713,181
Avistar on the Boulevard - Series A ⁽²⁾	TX		15,472,678		3,222,376		-		18,695,054
Avistar on the Hills - Series A ⁽²⁾	TX		5,026,836		1,151,856		-		6,178,692
Bruton Apartments ⁽⁴⁾	TX		17,604,256		4,282,821		-		21,887,077
Concord at Gulfgate - Series A ⁽⁴⁾	TX		18,703,168		4,360,042		-		23,063,210
Concord at Little York - Series A ⁽⁴⁾	TX		13,102,454		3,165,305		-		16,267,759
Concord at Williamcrest - Series A ⁽⁴⁾	TX		20,297,105		4,817,332		-		25,114,437
Crossing at 1415 - Series A ⁽⁴⁾	TX		7,293,344		1,632,719		-		8,926,063
Decatur Angle ⁽⁴⁾	TX		22,174,093		5,004,687		-		27,178,780
Esperanza at Palo Alto ⁽⁴⁾	TX		19,146,081		5,396,061		-		24,542,142
Heights at 515 - Series A ⁽⁴⁾	TX		6,677,182		1,521,291		-		8,198,473
Heritage Square - Series A ⁽³⁾	TX		10,518,412		1,968,618		-		12,487,030
Oaks at Georgetown - Series A⁽⁴⁾	TX		12,081,489		2,135,841		-		14,217,330
Runnymede ⁽¹⁾	TX		9,740,000		100,274		-		9,840,274
Southpark ⁽¹⁾	TX		11,498,636		1,580,994		-		13,079,630
15 West Apartments ⁽⁴⁾	WA		9,568,829		2,808,514		-		12,377,343
Mortgage revenue bonds held in trust		$	644,143,201	$	116,395,443	$	-	$	760,538,644

⁽¹⁾	MRBs owned by ATAX TEBS I, LLC (M24 TEBS), Note 16

⁽²⁾	MRBs owned by ATAX TEBS II, LLC (M31 TEBS), Note 16

⁽³⁾	MRBs owned by ATAX TEBS III, LLC (M33 TEBS), Note 16

⁽⁴⁾	MRBs owned by ATAX TEBS IV, LLC (M45 TEBS), Note 16

⁽⁵⁾	MRB held by Morgan Stanley in a debt financing transaction, Note 16

⁽⁶⁾	MRBs held by Mizuho Capital Markets, LLC in a debt financing transaction, Note 16

	June 30, 2021
Description of Mortgage Revenue Bonds held by the Partnership	State	Cost Adjusted for Paydowns		Cumulative Unrealized Gain		Cumulative Unrealized Loss		Estimated Fair Value
Solano Vista - Series A	CA	$	2,657,964	$	818,994	$	-	$	3,476,958
Greens Property - Series B	NC		923,195		77,093		-		1,000,288
Ohio Properties - Series B	OH		3,475,730		-		-		3,475,730
Rosewood Townhomes - Series B	SC		469,781		-		-		469,781
South Pointe Apartments - Series B	SC		1,099,487		-		-		1,099,487
Provision Center 2014-1	TN		5,259,343		-		-		5,259,343
Avistar at the Crest - Series B	TX		733,353		123,370		-		856,723
Avistar at the Oaks - Series B	TX		536,880		89,559		-		626,439
Avistar at the Parkway - Series B	TX		123,791		40,149		-		163,940
Avistar in 09 - Series B	TX		442,878		73,878		-		516,756
Avistar on the Boulevard - Series B	TX		435,761		70,246		-		506,007
Mortgage revenue bonds held by the Partnership		$	16,158,163	$	1,293,289	$	-	$	17,451,452

	December 31, 2020
Description of Mortgage Revenue Bonds Held in Trust	State	Cost Adjusted for Paydowns		Cumulative Unrealized Gain		Cumulative Unrealized Loss		Estimated Fair Value
Courtyard - Series A ⁽⁴⁾	CA	$	10,061,161	$	2,487,317	$	-	$	12,548,478
Glenview Apartments - Series A ⁽³⁾	CA		4,483,154		1,010,425		-		5,493,579
Harmony Court Bakersfield - Series A ⁽⁴⁾	CA		3,668,439		889,216		-		4,557,655
Harmony Terrace - Series A ⁽⁴⁾	CA		6,791,096		1,724,350		-		8,515,446
Harden Ranch - Series A ⁽²⁾	CA		6,621,823		1,606,690		-		8,228,513
Las Palmas II - Series A ⁽⁴⁾	CA		1,664,566		400,431		-		2,064,997
Montclair Apartments - Series A ⁽³⁾	CA		2,428,775		572,671		-		3,001,446
Montecito at Williams Ranch Apartments - Series A ⁽⁶⁾	CA		7,626,287		2,350,276		-		9,976,563
Montevista - Series A ⁽⁶⁾	CA		6,720,000		2,404,771		-		9,124,771
Ocotillo Springs - Series A ⁽⁶⁾	CA		2,023,500		215,633		-		2,239,133
San Vicente - Series A ⁽⁴⁾	CA		3,432,246		809,327		-		4,241,573
Santa Fe Apartments - Series A ⁽³⁾	CA		2,942,370		724,678		-		3,667,048
Seasons at Simi Valley - Series A ⁽⁴⁾	CA		4,236,876		1,180,122		-		5,416,998
Seasons Lakewood - Series A ⁽⁴⁾	CA		7,233,993		1,836,808		-		9,070,801
Seasons San Juan Capistrano - Series A ⁽⁴⁾	CA		12,179,682		2,973,846		-		15,153,528
Summerhill - Series A ⁽⁴⁾	CA		6,316,993		1,470,689		-		7,787,682
Sycamore Walk - Series A ⁽⁴⁾	CA		3,517,919		888,485		-		4,406,404
The Village at Madera - Series A ⁽⁴⁾	CA		3,034,084		735,450		-		3,769,534
Tyler Park Townhomes - Series A ⁽²⁾	CA		5,767,938		939,214		-		6,707,152
Vineyard Gardens - Series A ⁽⁶⁾	CA		3,969,173		1,226,058		-		5,195,231
Westside Village Market - Series A ⁽²⁾	CA		3,769,337		859,860		-		4,629,197
Brookstone ⁽¹⁾	IL		7,374,252		2,201,663		-		9,575,915
Copper Gate Apartments ⁽²⁾	IN		4,955,000		641,581		-		5,596,581
Renaissance - Series A ⁽³⁾	LA		10,870,681		4,293,328		-		15,164,009
Live 929 Apartments ⁽⁶⁾	MD		36,234,756		-		-		36,234,756
Woodlynn Village ⁽¹⁾	MN		4,120,000		56,458		-		4,176,458
Gateway Village⁽⁶⁾	NC		2,600,000		136,612		-		2,736,612
Greens Property - Series A⁽²⁾	NC		7,829,000		663,781		-		8,492,781
Lynnhaven Apartments ⁽⁶⁾	NC		3,450,000		178,960		-		3,628,960
Silver Moon - Series A ⁽³⁾	NM		7,697,891		1,995,694		-		9,693,585
Village at Avalon - Series A ⁽⁵⁾	NM		16,189,074		4,879,623		-		21,068,697
Ohio Properties - Series A ⁽¹⁾	OH		13,724,000		61,243		-		13,785,243
Bridle Ridge ⁽¹⁾	SC		7,235,000		153,657		-		7,388,657
Columbia Gardens ⁽⁴⁾	SC		12,898,904		2,689,886		-		15,588,790
Companion at Thornhill Apartments ⁽⁴⁾	SC		11,055,254		2,208,446		-		13,263,700
Cross Creek ⁽¹⁾	SC		6,136,261		2,277,289		-		8,413,550
Rosewood Townhomes - Series A ⁽⁶⁾	SC		9,259,206		578,247		-		9,837,453
South Pointe Apartments - Series A ⁽⁶⁾	SC		21,551,600		1,345,919		-		22,897,519
The Palms at Premier Park Apartments ⁽²⁾	SC		18,619,081		2,906,879		-		21,525,960
Village at River's Edge ⁽⁴⁾	SC		9,802,479		1,353,745		-		11,156,224
Willow Run ⁽⁴⁾	SC		12,720,560		2,650,995		-		15,371,555
Arbors at Hickory Ridge ⁽²⁾	TN		10,910,733		2,704,295		-		13,615,028
Avistar at Copperfield - Series A ⁽⁶⁾	TX		13,815,817		3,189,896		-		17,005,713
Avistar at the Crest - Series A ⁽²⁾	TX		9,140,656		2,376,580		-		11,517,236
Avistar at the Oaks - Series A ⁽²⁾	TX		7,388,262		1,854,785		-		9,243,047
Avistar at the Parkway - Series A ⁽³⁾	TX		12,721,014		2,790,208		-		15,511,222
Avistar at Wilcrest - Series A ⁽⁶⁾	TX		5,235,915		1,084,347		-		6,320,262
Avistar at Wood Hollow - Series A ⁽⁶⁾	TX		39,756,184		8,703,609		-		48,459,793
Avistar in 09 - Series A ⁽²⁾	TX		6,379,479		1,601,535		-		7,981,014
Avistar on the Boulevard - Series A ⁽²⁾	TX		15,572,093		3,779,139		-		19,351,232
Avistar on the Hills - Series A ⁽²⁾	TX		5,058,171		1,292,513		-		6,350,684
Bruton Apartments ⁽⁴⁾	TX		17,674,167		3,792,253		-		21,466,420
Concord at Gulfgate - Series A ⁽⁴⁾	TX		18,796,773		4,888,537		-		23,685,310
Concord at Little York - Series A ⁽⁴⁾	TX		13,168,029		3,543,909		-		16,711,938
Concord at Williamcrest - Series A ⁽⁴⁾	TX		20,398,687		5,397,326		-		25,796,013
Crossing at 1415 - Series A ⁽⁴⁾	TX		7,331,821		1,810,458		-		9,142,279
Decatur Angle ⁽⁴⁾	TX		22,270,729		5,600,721		-		27,871,450
Esperanza at Palo Alto ⁽⁴⁾	TX		19,218,417		5,955,488		-		25,173,905
Heights at 515 - Series A ⁽⁴⁾	TX		6,712,409		1,600,836		-		8,313,245
Heritage Square - Series A ⁽³⁾	TX		10,579,057		2,095,871		-		12,674,928
Oaks at Georgetown - Series A⁽⁴⁾	TX		12,135,392		2,597,201		-		14,732,593
Runnymede ⁽¹⁾	TX		9,805,000		105,634		-		9,910,634
Southpark ⁽¹⁾	TX		11,462,172		1,917,286		-		13,379,458
15 West Apartments ⁽⁴⁾	WA		9,604,680		3,257,826		-		12,862,506
Mortgage revenue bonds held in trust			637,948,068		130,520,576		-		768,468,644

⁽¹⁾	MRBs owned by ATAX TEBS I, LLC (M24 TEBS), Note 16

⁽²⁾	MRBs owned by ATAX TEBS II, LLC (M31 TEBS), Note 16

⁽³⁾	MRBs owned by ATAX TEBS III, LLC (M33 TEBS), Note 16

⁽⁴⁾	MRBs owned by ATAX TEBS IV, LLC (M45 TEBS), Note 16

⁽⁵⁾	MRB held by Morgan Stanley in a debt financing transaction Note 16

⁽⁶⁾	MRB held by Mizuho Capital Markets, LLC in a debt financing transaction, Note 16

	December 31, 2020
Description of Mortgage Revenue Bonds held by the Partnership	State	Cost Adjusted for Paydowns		Cumulative Unrealized Gain		Cumulative Unrealized Loss		Estimated Fair Value
Solano Vista - Series A	CA	$	2,665,000	$	891,612	$	-	$	3,556,612
Greens Property - Series B	NC		925,607		107,347		-		1,032,954
Arby Road Apartments - Series A	NV		7,385,000		15,059		-		7,400,059
Ohio Properties - Series B	OH		3,485,690		13,578		-		3,499,268
Rosewood Townhomes - Series B	SC		469,781		2,549		-		472,330
South Pointe Apartments - Series B	SC		1,099,487		5,967		-		1,105,454
Provision Center 2014-1	TN		6,161,954		-		-		6,161,954
Avistar at the Crest - Series B	TX		735,974		144,746		-		880,720
Avistar at the Oaks - Series B	TX		538,723		100,668		-		639,391
Avistar at the Parkway - Series B	TX		123,973		43,650		-		167,623
Avistar in 09 - Series B	TX		444,398		83,042		-		527,440
Avistar on the Boulevard - Series B	TX		437,318		82,718		-		520,036
Mortgage revenue bonds held by the Partnership		$	24,472,905	$	1,490,936	$	-	$	25,963,841

See Note 23 for a description of the methodology and significant assumptions used in determining the fair value of the MRBs. Unrealized gains or losses on the MRBs are recorded in the Partnership’s condensed consolidated statements of comprehensive income to reflect changes in their estimated fair values resulting from market conditions and fluctuations in the present value of the expected cash flows from the MRBs.

During the three and six months ended June 30, 2021, the Partnership recognized a provision for credit loss of approximately $900,000 related to the Provision Center 2014-1 MRB in its condensed consolidated statements of operations. The borrower of the Provision Center 2014-1 MRB filed for Chapter 11 bankruptcy in December 2020 and has ceased making contractual principal and interest payments. The additional credit loss was driven primarily by operational and collateral information obtained during the bankruptcy process.

During the three and six months ended June 30, 2020, the Partnership recognized a provision for credit loss of approximately $465,000 and $1.8 million, respectively, related to the Provision Center 2014-1 MRB in its condensed consolidated statements of operations. The credit loss for these periods was primarily driven by debt service shortfalls by the underlying commercial property, the borrower’s request for forbearance (prior to filing for bankruptcy protection), and the general creditworthiness of proton therapy centers in the United States, including the impact on them of the COVID-19 pandemic.

MRB Activity in the First Six Months of 2021

Acquisitions:

The following MRB was acquired at a price that approximated the principal outstanding plus accrued interest during the six months ended June 30, 2021:

Property Name

Month

Acquired

Property Location

Units

Maturity Date

Interest Rate

Principal Acquired

Jackson Manor Apartments ⁽¹⁾

April

Jackson, MS

5/1/2038

5.00

4,150,000

⁽¹⁾

The Partnership has committed to provide total funding of the MRB up to $6.9 million during the acquisition and rehabilitation phase of the property on a drawdown basis. Upon stabilization of the property, the MRB will be partially repaid and the maximum balance of the MRB after stabilization will not exceed $4.8 million.

Redemptions:

The following MRBs were redeemed at a price that approximated the Partnership’s carrying value plus accrued interest during the six months ended June 30, 2021:

Property Name	Month Redeemed	Property Location	Units		Original Maturity Date	Interest Rate			Principal Outstanding at Date of Redemption
Arby Road Apartments - Series A ⁽¹⁾	March	Las Vegas, NV		180	10/1/2027		5.35	%	$	1,600,000
Arby Road Apartments - Series A ⁽¹⁾	March	Las Vegas, NV		180	4/1/2041		5.50	%		5,785,000
									$	7,385,000

⁽¹⁾	Both MRBs are part of the same series but had different interest rates and maturity dates.

MRB Activity in the First Six Months of 2020

Acquisitions:

The following MRBs were acquired at prices that approximated the principal outstanding plus accrued interest during the six months ended June 30, 2020:

Property Name	Month Acquired	Property Location	Units	Maturity Date	Interest Rate			Principal Acquired
Arby Road Apartments - Series A⁽¹⁾	June	Las Vegas, NV	180	10/1/2027		5.35	%	$	1,690,000
Arby Road Apartments - Series A⁽¹⁾	June	Las Vegas, NV	180	4/1/2041		5.50	%		5,785,000
								$	7,475,000

⁽¹⁾	Both MRBs are part of the same series but have different interest rates and maturity dates.

Redemptions:

The following MRB was redeemed at a price that approximated the Partnership’s carrying value plus accrued interest during the six months ended June 30, 2020:

Property Name

Month

Redeemed

Property Location

Units

Original Maturity Date

Interest Rate

Principal

Outstanding at Date

of Redemption

Solano Vista - Series B

January

Vallejo, CA

1/1/2021

5.85

3,103,000

The following table summarizes the changes in the Partnership’s allowance for credit losses for the three and six months ended June 30, 2021 and 2020:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Balance, beginning of period	$	7,319,000	$	1,358,000		7,319,000		0
Provision for credit loss		900,000		465,000		900,000		1,823,000
Balance, end of period ⁽¹⁾	$	8,219,000	$	1,823,000	$	8,219,000	$	1,823,000

⁽¹⁾	The allowance for credit losses as of June 30, 2021 is related to the Provision Center 2014-1 MRB and the Live 929 Apartments MRB.

7. Governmental Issuer Loans

Governmental issuer loans (“GILs”) owned by the Partnership are issued by state or local governmental authorities to provide construction financing for affordable multifamily properties. The Partnership expects and believes the interest earned on the GILs is excludable from gross income for federal income tax purposes. The GILs do not constitute an obligation of any government, agency or authority and no government, agency or authority is liable for them, nor is the taxing power of any government pledged to the payment of principal or interest on the GILs. The GILs are secured by the borrower’s non-recourse obligation evidenced by a mortgage on all real and personal property associated with the underlying property. The GILs share a first mortgage lien position with the associated property loans (Note 10) or taxable GIL (Note 12) also owned by the Partnership. The sole source of the funds to pay principal and interest on the GILs is the net cash flow or the sale or refinancing proceeds from the underlying property. Affiliates of the borrowers have guaranteed limited-to-full payment of principal and interest on the GILs. The GILs are held in trust in connection with TOB Trust financings (Note 16).

At the closing of each GIL, Freddie Mac, through a servicer, has forward committed to purchase the GIL at maturity if the property has reached stabilization and other conditions are met.

The Partnership has committed to provide total funding for certain GILs on a draw-down basis during construction. The Partnership had the following investments and remaining funding commitments related to its GILs as of June 30, 2021 and December 31, 2020:

							As of June 30, 2021
Property Name	Month Acquired	Property Location	Units	Maturity Date ⁽²⁾	Variable Interest Rate		Current Interest Rate	Amortized Cost		Maximum Remaining Commitment
Scharbauer Flats Apartments ⁽¹⁾	June 2020	Midland, TX	300	1/1/2023	SIFMA + 3.10%		3.13%	$	40,000,000	$	-
Oasis at Twin Lakes ⁽¹⁾	July 2020	Roseville, MN	228	8/1/2023	SIFMA + 3.25%	^(3),(4)	3.75%		34,000,000		-
Centennial Crossings ⁽¹⁾	August 2020	Centennial, CO	209	9/1/2023	SIFMA + 2.75%	⁽⁴⁾	3.25%		22,994,534		10,085,466
Legacy Commons at Signal Hills ⁽¹⁾	January 2021	St. Paul, MN	247	2/1/2024	SOFR + 3.07%	⁽⁴⁾	3.57%		14,817,037		19,802,963
Hilltop at Signal Hills ⁽¹⁾	January 2021	St. Paul, MN	146	8/1/2023	SOFR + 3.07%	⁽⁴⁾	3.57%		6,920,774		17,529,226
Hope on Avalon	January 2021	Los Angeles, CA	88	2/1/2023	SIFMA + 3.75%	⁽⁴⁾	4.60%		7,981,200		15,408,800
Hope on Broadway	January 2021	Los Angeles, CA	49	2/1/2023	SIFMA + 3.75%	⁽⁴⁾	4.60%		3,691,245		8,414,378
								$	130,404,790	$	71,240,833

⁽¹⁾	The Freddie Mac servicer that has forward committed to purchase the GIL at maturity is an affiliate of the Partnership (Note 22).

⁽²⁾	The borrower may elect to extend the maturity date to for a period ranging between six and twelve months upon meeting certain conditions, including payment of a non-refundable extension fee.

⁽³⁾	The variable rate decreases to SIFMA plus 2.25% upon completion of construction.

⁽⁴⁾	The variable index interest rate component is subject to a floor.

As of December 31, 2020

Property Name

Month

Acquired

Property Location

Units

Maturity

Date ⁽²⁾

Variable Interest Rate

Current Interest Rate

Amortized

Cost

Scharbauer Flats Apartments ⁽¹⁾

June 2020

Midland, TX

300

1/1/2023

SIFMA + 3.10%

3.19%

40,000,000

Oasis at Twin Lakes ⁽¹⁾

July 2020

Roseville, MN

228

8/1/2023

SIFMA + 3.25%

^(3),(4)

3.75%

14,403,000

Centennial Crossings ⁽¹⁾

August 2020

Centennial, CO

209

9/1/2023

SIFMA + 2.75%

⁽⁴⁾

3.25%

10,460,657

64,863,657

⁽¹⁾	The Freddie Mac servicer that has forward committed to purchase the GIL at maturity is an affiliate of the Partnership (Note 22).

⁽²⁾	The borrower may elect to extend the maturity date to for a period ranging between six and twelve months upon payment of a non-refundable extension fee.

⁽³⁾	The variable rate decreases to SIFMA plus 2.25% upon completion of construction.

⁽⁴⁾	The variable index interest rate component is subject to a floor.

Activity in the First Six Months of 2021

Acquisitions:

During January 2021, the Partnership entered into multiple GIL commitments to provide construction financing for the underlying property on a draw-down basis as summarized below. See above tables for additional information associated with the GIL commitments.

•

$34.6 million commitment related to Legacy Commons at Signal Hills;

•

$24.5 million commitment related to Hilltop at Signal Hills;

•

$23.4 million commitment related to Hope on Avalon;

•

$12.1 million commitment related to Hope on Broadway.

Activity in the First Six Months of 2020

Acquisitions:

During June 2020, the Partnership entered into a $40.0 million GIL commitment to provide construction financing for Scharbauer Flats Apartments.

8. Real Estate Assets

The following tables summarize information regarding the Partnership’s real estate assets as of June 30, 2021 and December 31, 2020:

Real Estate Assets as of June 30, 2021
Property Name	Location	Number of Units		Land and Land Improvements		Buildings and Improvements		Carrying Value
Suites on Paseo	San Diego, CA		384	$	3,199,268	$	39,412,805	$	42,612,073
The 50/50 MF Property	Lincoln, NE		475		-		32,960,308		32,960,308
Vantage at Hutto	Hutto, TX	⁽¹⁾			3,115,891		-		3,115,891
Vantage at Fair Oaks	Boerne, TX	⁽¹⁾			2,473,247		-		2,473,247
Land held for development		⁽²⁾			1,675,997		-		1,675,997
								$	82,837,516
Less accumulated depreciation									(19,506,937	)
Net real estate assets								$	63,330,579

⁽¹⁾ The land is owned by a consolidated VIE for future development of a market-rate multifamily property. See Note 5 for further information.

⁽²⁾Land held for development consists of land and development costs for parcels in Gardner, KS; Richland County, SC and Omaha, NE.

Real Estate Assets as of December 31, 2020
Property Name	Location	Number of Units		Land and Land Improvements		Buildings and Improvements		Carrying Value
Suites on Paseo	San Diego, CA		384	$	3,199,268	$	39,375,298	$	42,574,566
The 50/50 MF Property	Lincoln, NE		475		-		32,940,854		32,940,854
Land held for development		⁽¹⁾			1,675,997		-		1,675,997
								$	77,191,417
Less accumulated depreciation									(18,150,215	)
Net real estate assets								$	59,041,202

⁽¹⁾	Land held for development consists of land and development costs for parcels in Gardner, KS; Richland County, SC and Omaha, NE.

Activity in the First Six Months of 2021

As of June 30, 2021, the land held for development in Gardner, KS was listed for sale.

In June 2021, Vantage at Fair Oaks, a consolidated VIE (Note 5), purchased a parcel of land in Boerne, TX for approximately $2.5 million for potential future development of a market-rate multifamily property.

Activity in the First Six Months of 2020

In June 2020, the Partnership determined that the land held for development in Gardner, Kansas was impaired. The Partnership recorded an impairment charge of $25,200 in the second quarter of 2020, which represents the difference between the Partnership’s carrying value and the estimated fair value of the land.

9. Investments in Unconsolidated Entities

ATAX Vantage Holdings, LLC, a wholly owned subsidiary of the Partnership, has equity investment commitments and has made equity investments in unconsolidated entities. The carrying value of the equity investments represents the Partnership’s maximum exposure to loss. ATAX Vantage Holdings, LLC is the only limited equity investor in the unconsolidated entities. An affiliate of the unconsolidated entities guarantees ATAX Vantage Holdings, LLC’s return on its investments through a date approximately two to three years after construction completion. The return on these investments earned by the Partnership is reported as “Investment income” on the Partnership’s condensed consolidated statements of operations.

The following table provides the details of the investments in unconsolidated entities as of June 30, 2021 and December 31, 2020 and remaining equity commitment amounts as of June 30, 2021:

Property Name	Location	Units		Month Commitment Executed	Construction Completion Date	Carrying Value as of June 30, 2021		Carrying Value as of December 31, 2020		Maximum Remaining Equity Commitment as of June 30, 2021
Vantage at Powdersville	Powdersville, SC		288	November 2017	February 2020		-		12,295,801		-
Vantage at Stone Creek	Omaha, NE		294	March 2018	April 2020		7,840,500		7,840,500		-
Vantage at Bulverde	Bulverde, TX		288	March 2018	August 2019		10,570,000		10,570,000		-
Vantage at Germantown	Germantown, TN		288	June 2018	March 2020		-		12,425,000		-
Vantage at Murfreesboro	Murfreesboro, TN		288	September 2018	October 2020		12,240,000		14,640,000		-
Vantage at Coventry	Omaha, NE		294	September 2018	February 2021		9,007,435		9,007,435		-
Vantage at Conroe	Conroe, TX		288	April 2019	January 2021		10,938,202		10,406,895		-
Vantage at O'Connor	San Antonio, TX		288	October 2019	June 2021		8,666,870		8,245,890		-
Vantage at Westover Hills	San Antonio, TX		288	January 2020	N/A		8,431,070		8,021,544		-
Vantage at Tomball	Tomball, TX		288	August 2020	N/A		11,240,890		9,280,134		-
Vantage at Hutto ⁽¹⁾	Hutto, TX		288	November 2020	N/A		-		3,163,676		7,359,952
Vantage at San Marcos	San Marcos, TX		288	November 2020	N/A		1,031,813		981,695		8,943,914
Vantage at Loveland	Loveland, CO		288	April 2021	N/A		7,044,939		-		9,409,484
Vantage at Helotes	Helotes, TX		288	May 2021	N/A		4,779,161		-		7,869,399
			4,044			$	91,790,880	$	106,878,570	$	33,582,749

⁽¹⁾ The property became a consolidated VIE effective during the second quarter of 2021 (Note 5).

Activity in the First Six Months of 2021

In March 2021, Vantage at Germantown sold substantially all assets to an unrelated third party and ceased operations. The Partnership received cash of approximately $16.1 million upon sale. The Partnership recognized approximately $862,000 of “Investment income” and approximately $2.8 million as “Gain on sale of investment in an unconsolidated entity” associated with the sale.

In April 2021, the Partnership executed a $16.3 equity commitment to fund the construction of the Vantage at Loveland multifamily property. The Partnership may increase its equity commitment to $18.2 million based upon the occurrence of certain events.

In May 2021, the Partnership executed a $12.6 equity commitment to fund the construction of the Vantage at Helotes multifamily property.

In May 2021, Vantage at Powdersville sold substantially all assets to an unrelated third party and ceased operations. The Partnership received cash of approximately $20.1 million upon sale. The Partnership recognized approximately $2.4 million of “Investment income” and approximately $5.5 million as “Gain on sale of investment in an unconsolidated entity” associated with the sale.

Activity in the First Six Months of 2020

In January 2020, the Partnership executed a $7.3 million equity commitment to fund construction of the Vantage at Westover Hills multifamily property.

In June 2020, Vantage at Waco sold substantially all assets to an unrelated third party and ceased operations. The Partnership received cash of approximately $10.3 million upon sale. As of June 30, 2020, the Partnership recognized approximately $931,000 of “Investment income” associated with the sale. The Partnership recognized additional “Investment income” of approximately $373,000 and $201,000 in the third and fourth quarters of 2020, respectively, upon the resolution of certain gain contingencies.

The following table provides combined summary financial information for the Partnership’s investments in unconsolidated entities for the three and six months ended June 30, 2021 and 2020:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Property Revenues	$	5,475,906	$	2,987,106	$	10,958,776	$	5,470,711
Gain on sale of property	$	15,659,445	$	6,262,992	$	24,626,692	$	6,262,992
Net income	$	13,579,814	$	4,356,453	$	20,510,948	$	1,837,288

10. Property Loans, Net of Loan Loss Allowances

The following tables summarize the Partnership’s property loans, net of loan loss allowances, as of June 30, 2021 and December 31, 2020:

	June 30, 2021
	Outstanding Balance		Loan Loss Allowance			Property Loan Principal, net of allowance
Arbors at Hickory Ridge	$	191,264	$	-		$	191,264
Avistar (February 2013 portfolio)		201,972		-			201,972
Avistar (June 2013 portfolio)		251,622		-			251,622
Centennial Crossings ^{(1) (2)}		3,017,729		-			3,017,729
Cross Creek		11,101,887		(7,393,814	)		3,708,073
Greens Property		850,000		-			850,000
Hilltop at Signal Hills ^{(1) (2)}		1,000,000		-			1,000,000
Legacy Commons at Signal Hills ^{(1) (2)}		1,000,000		-			1,000,000
Live 929 Apartments		1,241,348		(1,241,348	)		-
Oasis at Twin Lakes ^{(1) (2)}		2,528,546		-			2,528,546
Ohio Properties		2,390,446		-			2,390,446
Scharbauer Flats Apartments ^{(1) (2)}		2,309,613		-			2,309,613
Total	$	26,084,427	$	(8,635,162	)	$	17,449,265

⁽¹⁾	The property loan is held in trust in connection with a TOB financing (Note 16).

⁽²⁾	The property loan and associated GIL are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property. Affiliates of the borrower have guaranteed limited-to-full payment of principal and accrued interest on the property loan.

	December 31, 2020
	Outstanding Balance		Loan Loss Allowance			Property Loan Principal, net of allowance
Arbors at Hickory Ridge	$	191,264	$	-		$	191,264
Avistar (February 2013 portfolio)		201,972		-			201,972
Avistar (June 2013 portfolio)		251,622		-			251,622
Centennial Crossings ^{(1) (2)}		3,017,729		-			3,017,729
Cross Creek		11,101,887		(7,393,814	)		3,708,073
Greens Property		850,000		-			850,000
Live 929 Apartments		911,232		(911,232	)		-
Ohio Properties		2,390,446		-			2,390,446
Scharbauer Flats Apartments ^{(1) (2)}		2,309,613		-			2,309,613
Total	$	21,225,765	$	(8,305,046	)	$	12,920,719

⁽¹⁾	The property loan is held in trust in connection with a TOB financing (Note 16).

⁽²⁾	The property loan and associated GIL are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property. Affiliates of the borrower have guaranteed limited-to-full payment of principal and accrued interest on the property loan.

The Partnership recognized a provision for loan loss and associated loan loss allowance of approximately $330,000 for the three and six months ended June 30, 2021 related to the Live 929 Apartments property loan as the Partnership determined it was probable the outstanding balance will not be collectible. The interest to be earned on the Live 929 Apartments and Cross Creek property loans was in nonaccrual status for the three and six months ended June 30, 2021. The discounted cash flow method used by management to establish the net realizable value of these property loans determined the collection of the interest accrued was not probable. In addition, for the three and six months ended June 30, 2021 and 2020, interest to be earned on approximately $983,000 of property loan principal for the Ohio Properties was in nonaccrual status as, in management’s opinion, the interest was not considered collectible.

Activity in the First Six Months of 2021

Concurrent with the acquisition of GILs (Note 7), the Partnership has committed to provide property loans for the construction of the underlying properties on a draw-down basis. The following is a summary of the property loans commitments entered into during the six months ended June 30, 2021:

Property Name	Date Committed	Maturity Date ⁽¹⁾	Outstanding Balance
Legacy Commons at Signal Hills	January 2021	2/1/2024	$	1,000,000
Hilltop at Signal Hills	January 2021	8/1/2023		1,000,000
			$	2,000,000

⁽¹⁾	The borrower has the option to extend the maturity date up to six months.

In March 2021, the Partnership amended the secured property loan with Live 929 Apartments to increase the total available loan amount to $1.5 million from $1.0 million. The property loan is subordinate to the MRBs associated with the property.

Activity in the First Six Months of 2020

Concurrent with the acquisition of a GIL (Note 7), the Partnership has committed to provide a property loan for the construction of the underlying property on a draw-down basis. The following is a summary of the property loan commitment entered into during the six months ended June 30, 2020:

Property Name		Date Committed		Maturity Date		Outstanding Balance
Scharbauer Flats Apartments		June 2020		1/1/2023 ⁽¹⁾		$	1,667,776

⁽¹⁾ The borrower has the option to extend the maturity date up to 12 months.

The following table summarizes the Partnership’s outstanding property loan commitments as of June 30, 2021:


	Maximum Remaining Commitment
Centennial Crossings		21,232,271
Hilltop at Signal Hills		20,197,939
Legacy Commons at Signal Hills		31,233,972
Oasis at Twin Lakes		25,175,634
Scharbauer Flats Apartments		21,850,387
Total	$	119,690,203

11. Income Tax Provision

The Partnership recognizes current income tax expense for federal, state, and local income taxes incurred by the Greens Hold Co, which owns The 50/50 MF Property and certain property loans. The following table summarizes income tax expense (benefit) for the three and six months ended June 30, 2021 and 2020:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2021			2020			2021			2020
Current income tax expense	$	127,129		$	98,964		$	143,614		$	141,299
Deferred income tax benefit		(19,442	)		(960	)		(35,670	)		(31,881	)
Total income tax expense	$	107,687		$	98,004		$	107,944		$	109,418

The Partnership evaluated whether it is more likely than not that its deferred income tax assets will be realizable. There was 0 valuation allowance recorded as of June 30, 2021 and December 31, 2020.

12. Other Assets

The following table summarizes the other assets as of June 30, 2021 and December 31, 2020:

	June 30, 2021		December 31, 2020
Deferred financing costs, net	$	1,291,123	$	390,649
Fair value of derivative instruments (Note 18)		321,372		321,503
Taxable mortgage revenue bonds, at fair value		1,462,862		1,510,437
Taxable governmental issuer loan held in trust		1,000,000		-
Bond purchase commitments, at fair value (Note 19)		392,515		431,879
Operating lease right-of-use assets, net		1,634,200		1,648,742
Other assets		1,274,856		1,605,374
Total other assets	$	7,376,928	$	5,908,584

As of June 30, 2021 and December 31, 2020, the operating lease right-of-use assets consisted primarily of a ground lease at the 50/50 MF Property (Note 13).

See Note 23 for a description of the methodology and significant assumptions for determining the fair value of derivative instruments, taxable MRBs and bond purchase commitments. Unrealized gains or losses on derivative instruments are reported as “Interest expense” on the Partnership’s condensed consolidated statements of operations. Unrealized gain or losses on taxable MRBs and bond purchase commitments are recorded in the Partnership’s condensed consolidated statements of comprehensive income to reflect changes in their estimated fair values resulting from market conditions and fluctuations in the present value of the expected cash flows from the assets.

Concurrent with the acquisition of the Hope on Avalon GIL (Note 7), the Partnership entered into a taxable GIL to provide construction financing for the underlying property on a draw-down basis. The GIL and taxable GIL are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property. The taxable GIL is held in trust in connection with a TOB Trust financing (Note 16). The following table includes details of the taxable GIL, and the remaining funding commitment, that was entered into during the six months ended June 30, 2021:

Property Name

Date Committed

Maturity Date

Outstanding Balance

Maximum Remaining Commitment

Hope on Avalon

January 2021

2/1/2023 ⁽¹⁾

1,000,000

9,573,000

⁽¹⁾	The borrower has the option to extend the maturity up to six months upon payment of a non-refundable extension fee.

13. Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the accounts payable, accrued expenses and other liabilities as of June 30, 2021 and December 31, 2020:

	June 30, 2021		December 31, 2020
Accounts payable	$	333,300	$	94,674
Accrued expenses		2,704,528		2,755,010
Accrued interest expense		3,791,711		3,433,247
Operating lease liabilities		2,150,982		2,149,001
Other liabilities		1,683,816		1,517,633
Total accounts payable, accrued expenses and other liabilities	$	10,664,337	$	9,949,565

The 50/50 MF Property has a ground lease with the University of Nebraska-Lincoln with an initial lease term expiring in March 2048. The Partnership has an option to extend the lease for an additional five-year period, which has not been factored into the calculation of the ROU asset and lease liability. Annual lease payments are $100 per year. The Partnership is also required to make monthly payments, when cash is available at The 50/50 MF Property, to the University of Nebraska-Lincoln. Payment amounts are based on The 50/50 MF Property’s revenues, subject to an annual guaranteed minimum amount. As of June 30, 2021, the minimum aggregate annual payment due under the agreement is approximately $135,000. The minimum aggregate annual payment increases 2% annually until July 31, 2034 and increases 3% annually thereafter. The 50/50 MF Property will be required to make additional payments under the agreement if its gross revenues exceed certain thresholds. The Partnership recognized expenses related to the ground lease of approximately $42,000 and $84,000 for the three and six months ended June 30, 2021 and 2020, respectively, and are reported within “Real estate operating expenses” on the Partnership’s condensed consolidated statements of operations.

The following table summarizes future contractual payments for the Partnership’s operating leases and a reconciliation to the carrying value of operating lease liabilities as of June 30, 2021:

Remainder of 2021	$	69,710
2022		141,119
2023		143,561
2024		144,706
2025		147,598
Thereafter		4,369,676
Total		5,016,370
Less: Amount representing interest		(2,865,388	)
Total operating lease liabilities	$	2,150,982

14. Unsecured Lines of Credit

The following tables summarize the unsecured lines of credit (“LOC” or “LOCs”) as of June 30, 2021 and December 31, 2020:

Unsecured Line of Credit

Outstanding as of June 30, 2021

Total

Commitment

Maturity

Variable /

Fixed

Reset

Frequency

Period End

Rate

Bankers Trust non-operating

50,000,000

June 2022

Variable ⁽¹⁾

Monthly

2.65

⁽¹⁾	The variable rate is indexed to LIBOR plus an applicable margin.

Unsecured Lines of Credit	Outstanding as of December 31, 2020		Total Commitment		Commitment Maturity	Variable / Fixed	Reset Frequency	Period End Rate
Bankers Trust non-operating	$	7,475,000	$	50,000,000	June 2022	Variable ⁽¹⁾	Monthly		2.65	%
Bankers Trust operating		-		10,000,000	June 2022	Variable⁽¹⁾	Monthly		3.40	%
Total unsecured lines of credit	$	7,475,000	$	60,000,000

⁽¹⁾	The variable rate is indexed to LIBOR plus an applicable margin.

The principal amount of each acquisition advance from the non-operating LOC is due on the 270th day following the advance date and may be extended for up to three additional 90-day periods by making partial repayments in accordance with the Credit Agreement. The non-operating LOC contains a covenant, among others, that the Partnership’s ratio of the lender’s senior debt will not exceed 75% of the market value of the Partnership’s assets, as defined in the Credit Agreement. The Partnership was in compliance with all covenants as of June 30, 2021.

The Partnership and Bankers Trust agreed to terminate the $10 million operating LOC upon closing of the new secured LOC in June 2021 (Note 15). There was 0 outstanding principal or accrued interest as of the termination date.

15. Secured Line of Credit

The following table summarizes the secured LOC as of June 30, 2021:

Outstanding as of June 30, 2021

Total Commitment

Commitment Maturity

Variable /

Fixed

Reset

Frequency

Period End

Rate

Secured line of credit

6,500,000

40,000,000

June 2023 ⁽¹⁾

Variable ⁽²⁾

Monthly

3.50

⁽¹⁾

The secured LOC contains 2 one-year extensions subject to certain conditions and payment of a 0.25% extension fee. The first extension request by the Partnership will be granted by the Administrative Agent if all such conditions are met. Any subsequent extension requested by the Partnership will be granted or denied in the sole discretion of the Lenders.

⁽²⁾	The variable rate is equal to LIBOR + 3.25%, subject to a floor of 3.50%.

In June 2021, the Partnership entered into a secured Credit Agreement (“Secured Credit Agreement”) of up to $40,000,000 with BankUnited, N.A. and Bankers Trust Company (collectively, the “Lenders”), and the sole lead arranger and administrative agent, BankUnited, N.A. The aggregate available commitment cannot exceed a borrowing base calculation, that is equal to 40% multiplied by the aggregate value of a pool of eligible encumbered assets. Eligible encumbered assets consist of (i) the net book value of the Suites on Paseo MF Property, and (ii) 100% of the Partnership’s capital contributions to equity investments, subject to certain restrictions. The proceeds of the secured LOC will be used by the Partnership to purchase additional investments and to meet general working capital and liquidity requirements. The Partnership may borrow, prepay and reborrow amounts at any time through the maturity date, subject to the limitations of the borrowing base.

The secured LOC is secured by first priority security interests in the Partnership’s investments in unconsolidated entities, a mortgage and assignment of leases and rents of the Suites on Paseo MF Property, and a security interest in a bank account at BankUnited, N.A., in which the Partnership must maintain a balance of not less than $5.0 million. In addition, an affiliate of the Partnership, Greystone Select Holdings LLC (“Greystone Select”), has provided a deficiency guaranty of the Partnership’s obligations under the Secured Credit Agreement. Greystone Select is subject to certain covenants and was in compliance with such covenants as of June 30, 2021. No fees were paid to Greystone Select related to the deficiency guaranty agreement.

The Partnership is subject to various affirmative and negative covenants that, among others, require the Partnership to maintain a minimum liquidity of not less than $5.0 million, maintain a minimum consolidated tangible net worth of $100.0 million, and to notify the Administrative Agent if the Partnership’s consolidated net worth declines by (a) more than 20% from the immediately preceding quarter, or (b) more than 35% from the date at the end of two consecutive calendar quarters ending immediately thereafter. The Partnership was in compliance with all covenants as of June 30, 2021.

16. Debt Financing

The following tables summarize the Partnership’s debt financings, net of deferred financing costs, as of June 30, 2021 and December 31, 2020:

	Outstanding Debt Financings as of June 30, 2021, net		Restricted Cash		Year Acquired	Stated Maturities	Reset Frequency	Variable Rate Index	Index Based Rates	Spread/ Facility Fees	Period End Rates
TEBS Financings
Fixed - M24	$	39,552,847	$	204,000	2010	May 2027	N/A	N/A	N/A	N/A	3.05%
Variable - M31 ⁽¹⁾		77,655,139		4,999	2014	July 2024	Weekly	SIFMA	0.06%	1.34%	1.40%
Fixed - M33		30,497,949		2,606	2015	September 2030	N/A	N/A	N/A	N/A	3.24%
Fixed - M45 ⁽²⁾		214,892,281		5,000	2018	July 2034	N/A	N/A	N/A	N/A	3.82%

Secured Notes
Variable - Notes		102,944,935		77,530,500	2020	September 2025	Monthly	3-month LIBOR	0.12%	9.00%	9.12% ⁽³⁾

TOB Trusts Securitization
Mizuho Capital Markets:
Variable - TOB		6,102,623		-	2020	July 2022	Weekly	SIFMA	0.23%	0.89%	1.12%
Variable - TOB		9,213,676		-	2021	February 2023	Weekly	SIFMA	0.23%	1.42%	1.65%
Variable - TOB		3,486,987		-	2021	April 2023	Weekly	SIFMA	0.23%	1.27%	1.50%
Variable - TOB		122,503,096		-	2019	July 2023	Weekly	SIFMA	0.23% - 0.28%	1.17% - 1.67%	1.40% - 1.95%
Variable - TOB		91,897,806		-	2020	September 2023	Weekly	OBFR	0.33%	0.89%	1.22%
Variable - TOB		5,683,115		-	2020	December 2023	Weekly	SIFMA	0.23%	1.27%	1.50%
Variable - TOB		24,132,417		-	2021	January 2024	Weekly	OBFR	0.33%	0.89%	1.22%
Morgan Stanley:
Fixed - Term TOB		12,969,836		-	2019	May 2024	N/A	N/A	N/A	N/A	1.98%
Total Debt Financings	$	741,532,707

⁽¹⁾	Facility fees have a variable component.

⁽²⁾	The M45 TEBS has an initial interest rate of 3.82% through July 31, 2023. From August 1, 2023 through the stated maturity date, the interest rate is 4.39%. These rates are inclusive of credit enhancement fees payable to Freddie Mac.

⁽³⁾

The Partnership has entered into 2 total return swap transactions with the Secured Notes as the reference security and notional amounts totaling the outstanding principal on the Secured Notes. The total return swaps effectively net down the interest rate on the Secured Notes. Considering the effect of the total return swaps, the effective net interest rate is 4.25% for approximately $39.8 million of the Secured Notes and 1.00% for approximately $63.5 million of the Secured Notes as of June 30, 2021. See Note 18 for further information on the total return swaps.

	Outstanding Debt Financings as of December 31, 2020		Restricted Cash		Year Acquired	Stated Maturities	Reset Frequency	Variable Rate Index	Index Based Rates	Spread/ Facility Fees	Period End Rates
TEBS Financings
Fixed - M24	$	39,825,019	$	238,760	2010	May 2027	N/A	N/A	N/A	N/A	3.05%
Variable - M31 ⁽¹⁾		78,272,018		4,999	2014	July 2024	Weekly	SIFMA	0.12%	1.34%	1.46%
Fixed - M33		30,796,097		2,606	2015	September 2030	N/A	N/A	N/A	N/A	3.24%
Fixed - M45 ⁽²⁾		215,825,022		5,000	2018	July 2034	N/A	N/A	N/A	N/A	3.82%

Secured Notes
Variable - Notes		103,086,756		77,500,000	2020	September 2025	Monthly	3-month LIBOR	0.22%	9.00%	9.22% ⁽³⁾

TOB Trusts Securitization
Mizuho Capital Markets:
Variable - TOB		1,765,167		-	2020	July 2022	Weekly	SIFMA	0.29%	0.89%	1.18%
Variable - TOB		122,724,862		-	2019	July 2023	Weekly	SIFMA	0.29% - 0.39%	1.17% - 1.67%	1.46% - 2.06%
Variable - TOB		62,992,845		-	2020	September 2023	Weekly	OBFR	0.33%	0.89%	1.22%
Variable - TOB		5,668,324		-	2020	December 2023	Weekly	SIFMA	0.29%	1.27%	1.56%
Morgan Stanley:
Fixed - Term TOB		13,001,530		-	2019	May 2022	N/A	N/A	N/A	N/A	3.53%
Total Debt Financings	$	673,957,640

⁽¹⁾	Facility fees have a variable component.

⁽²⁾	The M45 TEBS has an initial interest rate of 3.82% through July 31, 2023. From August 1, 2023 through the stated maturity date, the interest rate is 4.39%. These rates are inclusive of credit enhancement fees payable to Freddie Mac.

⁽³⁾

The Partnership has entered into 2 total return swap transactions with the Secured Notes as the reference security and notional amounts totaling the outstanding principal on the Secured Notes. The total return swaps effectively net down the interest rate on the Secured Notes. Considering the effect of the total return swaps, the effective net interest rate is 4.25% for approximately $40.0 million of the Secured Notes and 1.00% for approximately $63.5 million of the Secured Notes as of December 31, 2020. See Note 18 for further information on the total return swaps.

The TOB, Term TOB and TEBS financing arrangements are consolidated VIE’s to the Partnership (Note 5). The Partnership is the primary beneficiary due to its rights to the underlying assets. Accordingly, the Partnership consolidates the TOB, Term TOB and TEBS financings in the Partnership’s condensed consolidated financial statements. See Note 6 for information regarding the MRBs securitized within each TOB, Term TOB and TEBS financing, Note 7 for information regarding the GILs securitized within each TOB Trust financing, Note 10 for information regarding the property loans securitized within each TOB Trust financing and Note 12 for information regarding the taxable GIL securitized within a TOB Trust financing. As the residual interest holder, the Partnership may be required to make certain payments or contribute certain assets to the VIEs if certain events occur. Such events include, but are not limited to, a downgrade in the investment rating of the senior securities issued by the VIEs, a ratings downgrade of the liquidity provider for the VIEs, increases in short term interest rates beyond pre-set maximums, an inability to re-market the senior securities or an inability to obtain liquidity for the senior securities. If such an event occurs in an individual VIE, the underlying collateral may be sold and, if the proceeds are not sufficient to pay the principal amount of the senior securities plus accrued interest and other trust expenses, the Partnership will be required to fund any such shortfall. If the Partnership does not fund the shortfall, the default and liquidation provisions will be invoked against the Partnership. The Partnership has never been, and does not expect in the future, to be required to reimburse the VIEs for any shortfall.

As of June 30, 2021 and December 31, 2020, the Partnership posted restricted cash as contractually required under the terms of the four TEBS financings. The restricted cash associated with the Secured Notes is collateral posted with Mizuho according to the terms of 2 total return swaps that have the Secured Notes as the reference security (Note 18). The Partnership may also be required to post collateral, typically in cash, related to the TOB Trusts with Mizuho. The amount of collateral posting required is dependent on the valuation of the underlying MRBs, GILs and property loans in relation to thresholds set by Mizuho. There was no requirement to post collateral for the TOB Trusts with Mizuho as of June 30, 2021 and December 31, 2020.

The Partnership has entered into various TOB Trust financings with Mizuho secured by MRBs, GILs, property loans and a taxable GIL. The Mizuho TOB Trusts require that the Partnership’s residual interest in the TOB Trusts maintain a certain value in relation to the total assets in each Trust. In addition, the Master Trust Agreement with Mizuho requires the Partnership’s partners’ capital, as defined, to maintain a certain threshold and that the Partnership remains listed on the NASDAQ. If the Partnership is not in compliance with any of these covenants, a termination event of the financing facility would be triggered, which would require the

Partnership to purchase a portion or all of the senior interests issued by each TOB Trust. The Partnership was in compliance with these covenants as of June 30, 2021.

The Term TOB Trust with Morgan Stanley is subject to a Trust Agreement and other related agreements that contain covenants with which the Partnership or the underlying MRB are required to comply. The underlying property must maintain certain occupancy and debt service covenants. A termination event will occur if the Partnership’s net assets, as defined, decrease by 25% in one quarter or 35% over one year; requires the Partnership’s partners’ capital, as defined, to maintain a certain threshold and that the Partnership remains listed on a nationally recognized stock exchange. If the Partnership is not in compliance with any of these covenants, a termination event of the financing facility would be triggered, which would require the Partnership to purchase a portion or all of the Class A Certificates held by Morgan Stanley. The Partnership was in compliance with all covenants as of June 30, 2021.

The Partnership’s variable rate debt financing arrangements include maximum interest rate provisions that prevent the debt service on the debt financings from exceeding the cash flows from the underlying securitized assets.

Activity in the First Six Months of 2021

New Debt Financings:

The following is a summary of the Mizuho TOB Trust financings that were entered into during the six months ended June 30, 2021:

TOB Trusts Securitization

Initial TOB

Trust Financing

Stated Maturity

Reset

Frequency

Variable Rate Index

Facility Fees

TOB Trust 2021-XF2926 ⁽¹⁾

16,190,000

January 2024

Weekly

OBFR

0.89%

Hope on Avalon GIL

5,064,000

February 2023

Weekly

SIFMA

1.42%

Hope on Broadway GIL

2,953,000

February 2023

Weekly

SIFMA

1.42%

Jackson Manor Apartments MRB

3,528,000

April 2023

Weekly

SIFMA

1.27%

Total TOB Trust Financings

27,735,000

⁽¹⁾	The TOB Trust is securitized by the Legacy Commons at Signal Hills GIL and property loan, Hilltop at Signal Hills GIL and property loan, Oasis at Twin Lakes property loan and Hope on Avalon taxable GIL.

In June 2021, the Partnership extended the maturity date of the Morgan Stanley Term TOB financing from May 2022 to May 2024 and the interest rate was reduced to 1.98% from 3.53%.

Activity in the First Six Months of 2020

In January 2020, the variable rate TOB Trust financings associated with the PHC Certificates were collapsed and all principal and interest were paid in full in conjunction with the Partnership’s sale of the PHC Certificates to an unrelated party.

In April 2020, the Partnership terminated its Master Trust Agreement and collapsed its Term TOB Trust and all Term A/B Trust financings with Deutsche Bank. As of the termination, the Partnership is no longer subject to the debt covenants in the Master Trust Agreement. All outstanding principal and interest related to the Term A/B Trust financings were paid off in full, and the Partnership paid a one-time fee of approximately $454,000 to terminate the trusts.

The following is a summary of the Deutsche Bank Term A/B Trust and TOB Trust financings that were collapsed and paid off in April 2020:

Debt Financing	Debt Facility	Month	Paydown Applied
Avistar at Copperfield - Series A	Term A/B Trust	April 2020	$	8,417,739
Avistar at Wilcrest - Series A	Term A/B Trust	April 2020		3,162,435
Avistar at Wood Hollow - Series A	Term A/B Trust	April 2020		26,860,536
Gateway Village	Term A/B Trust	April 2020		2,262,000
Lynnhaven	Term A/B Trust	April 2020		3,001,500
Pro Nova 2014-1	Term TOB	April 2020		8,010,000
			$	51,714,210

The following is a summary of the Mizuho TOB Trust financings that were entered into during the six months ended June 30, 2020:

TOB Trusts Securitization

Outstanding TOB

Trust Financing

Stated Maturity

Reset

Frequency

Variable Rate Index

Facility Fees

Avistar at Copperfield - Series A

11,818,000

May 2021 ⁽¹⁾

Weekly

SIFMA

1.67%

Avistar at Wilcrest - Series A

4,479,000

May 2021 ⁽¹⁾

Weekly

SIFMA

1.67%

Avistar at Wood Hollow - Series A

34,007,000

May 2021 ⁽¹⁾

Weekly

SIFMA

1.67%

Gateway Village

2,184,000

May 2021 ⁽¹⁾

Weekly

SIFMA

1.67%

Lynnhaven

2,898,000

May 2021 ⁽¹⁾

Weekly

SIFMA

1.67%

Scharbauer Flats Apartments

36,000,000

July 2023

Weekly

SIFMA

0.89%

Total TOB Trust Financing

91,386,000

⁽¹⁾ In July 2020, the Partnership extended the maturity date to July 2023.

Future Maturities

The Partnership’s contractual maturities of borrowings as of June 30, 2021 for the twelve-month periods ending December 31^st for the next five years and thereafter are as follows:

Remainder of 2021	$	3,075,795
2022		12,921,689
2023		237,464,816
2024		125,103,152
2025		11,363,784
Thereafter		354,283,139
Total		744,212,375
Unamortized deferred financing costs and debt premium		(2,679,668	)
Total debt financing, net	$	741,532,707

17. Mortgages Payable and Other Secured Financing

The following tables summarize the Partnership’s mortgages payable and other secured financing, net of deferred financing costs, as of June 30, 2021 and December 31, 2020:

Property Mortgage Payables	Outstanding Mortgage Payable as of June 30, 2021, net		Outstanding Mortgage Payable as of December 31, 2020, net		Year Acquired or Refinanced	Stated Maturity	Variable / Fixed	Period End Rate
The 50/50 MF Property--TIF Loan	$	2,335,034	$	2,521,308	2020	March 2025	Fixed		4.40	%
The 50/50 MF Property--Mortgage		23,210,393		23,463,564	2020	April 2027	Fixed		4.35	%
Vantage at Fair Oaks--Mortgage ⁽¹⁾		1,418,897		-	2021	June 2022	Fixed		4.15	%
Total Mortgage Payable\Weighted Average Period End Rate	$	26,964,324	$	25,984,872					4.34	%

⁽¹⁾ The mortgage payable relates to a consolidated VIE for future development of a market-rate multifamily property (Note 5).

Activity in the First Six Months of 2021

In June 2021, Vantage at Fair Oaks, a consolidated VIE (Note 5), entered into a mortgage payable arrangement to fund the purchase of a parcel of land for potential future development of a market-rate multifamily property.

Activity in the First Six Months of 2020

In February 2020, the Partnership refinanced The 50/50 MF Property Mortgage loan with its existing lender. The Mortgage loan maturity date was extended seven years to April 2027, and the interest rate decreased to a fixed interest rate of 4.35%.

In February 2020, the Partnership refinanced The 50/50 MF Property TIF loan with its existing lender. The TIF loan maturity date was extended by five years to March 2025, and the interest rate decreased to 4.40%.

Future Maturities

The Partnership’s contractual maturities of borrowings as of June 30, 2021 for the twelve-month periods ending December 31^st for the next five years and thereafter are as follows:

Remainder of 2021	$	419,830
2022		2,310,678
2023		909,690
2024		947,733
2025		1,747,343
Thereafter		20,651,621
Total		26,986,895
Unamortized deferred financing costs		(22,571	)
Total mortgages payable and other secured financings, net	$	26,964,324

18. Derivative Financial Instruments

The following table summarizes the terms of the Partnership’s total return swaps as of June 30, 2021 and December 31, 2020:

Purchase Date

Notional

Amount

Effective

Date

Termination Date

Period End

Variable

Rate

Paid

Period End

Variable

Rate

Received

Variable Rate

Index

Counterparty

Fair Value as of

June 30, 2021

Sept 2020

39,791,732

Sept 2020

Sept 2025

4.25% ⁽¹⁾

9.12%⁽³⁾

3-month LIBOR

Mizuho Capital Markets

80,725

Sept 2020

63,500,000

Sept 2020

Mar 2022

1.00% ⁽²⁾

9.12%⁽³⁾

3-month LIBOR

Mizuho Capital Markets

214,813

295,538

⁽¹⁾	Variable rate equal to 3-month LIBOR + 3.75%, subject to a floor of 4.25%.

⁽²⁾	Variable rate equal to 3-month LIBOR + 0.50%, subject to a floor of 1.00%.

⁽³⁾	Variable rate equal to 3-month LIBOR + 9.00%.

Purchase Date

Notional

Amount

Effective

Date

Termination Date

Period End

Variable

Rate

Paid

Period End

Variable

Rate

Received

Variable Rate

Index

Counterparty

Fair Value as of

December 31, 2020

Sept 2020

39,970,485

Sept 2020

Sept 2025

4.25% ⁽¹⁾

9.22%⁽³⁾

3-month LIBOR

Mizuho Capital Markets

77,995

Sept 2020

63,500,000

Sept 2020

Mar 2022

1.00% ⁽²⁾

9.22%⁽³⁾

3-month LIBOR

Mizuho Capital Markets

215,631

293,626

⁽¹⁾	Variable rate equal to 3-month LIBOR + 3.75%, subject to a floor of 4.25%.

⁽²⁾	Variable rate equal to 3-month LIBOR + 0.50%, subject to a floor of 1.00%.

⁽³⁾	Variable rate equal to 3-month LIBOR + 9.00%.

Each of the total return swaps has the Partnership’s Secured Notes with Mizuho as the specified reference security (Note 16). The combined notional amount of the total return swaps is $103.3 million, which is the same as the principal balance of the Secured Notes. The rate received on each total return swap is equal to the interest rate on the Secured Notes such that they offset one another, resulting in a net interest cost equal to the rate paid on each total return swap. Under the total return swaps, the Partnership is liable for any decline in the value of the Secured Notes. If the fair value of the underlying Secured Notes is less than the outstanding principal balance, the Partnership is required to post additional cash collateral equal to the amount of the deficit. Such a deficit will also be reflected in the fair value of the total return swaps.

The Partnership was required to initially fund cash collateral with Mizuho for each total return swap. The total return swap with a notional amount of $39.8 million, requires the Partnership to maintain cash collateral equal to 35% of the notional amount, which was approximately $14.0 million as of June 30, 2021. The second total return swap with a notional amount of $63.5 million, requires the Partnership to maintain cash collateral equal to 100% of the notional amount, which was approximately $63.5 million as of June 30, 2021. Through March 2022, the Partnership has the option to allocate notional amounts from the second total return swap to the first total return swap, in minimum increments of $10.0 million, and receive net cash proceeds of approximately 65% of the reallocated notional amount. The second total return swap terminates in March 2022 and any remaining cash collateral will be used to pay down the principal balance of the Secured Notes.

The following tables summarize the Partnership’s interest rate cap agreements as of June 30, 2021 and December 31, 2020:

Purchase

Date

Notional Amount

Maturity

Date

Effective

Capped

Rate ⁽¹⁾

Index

Variable Debt

Financing

Hedged ⁽¹⁾

Counterparty

Fair Value as of

June 30, 2021

Aug 2019

77,300,192

Aug 2024

4.5

SIFMA

M31 TEBS

Barclays Bank PLC

25,834

Purchase

Date

Notional Amount

Maturity

Date

Effective

Capped

Rate ⁽¹⁾

Index

Variable Debt

Financing

Hedged ⁽¹⁾

Counterparty

Fair Value as of

December 31, 2020

Aug 2019

77,979,924

Aug 2024

4.5

SIFMA

M31 TEBS

Barclays Bank PLC

27,877

⁽¹⁾	See Notes 16 and 23 for additional details.

The Partnership’s derivative financial instruments are not designated as hedging instruments and are recorded at fair value. Changes in fair value are included in current period earnings as “Interest expense” on the Partnership’s condensed consolidated statements of operations. See Note 23 for a description of the methodology and significant assumptions for determining the fair value of the derivatives. The derivative financial instruments are presented within “Other assets” on the Partnership’s condensed consolidated balance sheets.

19. Commitments and Contingencies

Legal Proceedings

The Partnership, from time to time, is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are frequently covered by insurance. If it has been determined that a loss is probable to occur, the estimated amount of the loss is accrued in the Partnership’s condensed consolidated financial statements. While the resolution of these matters cannot be predicted with certainty, the Partnership currently believes the outcome of such matters will not have a material effect on the Partnership’s condensed consolidated financial statements.

Bond Purchase Commitments

The Partnership may enter into bond purchase commitments related to MRBs to be issued and secured by properties under construction. Upon execution of the bond purchase commitment, the proceeds from the MRBs will be used to pay off the construction related debt. The Partnership bears no construction or stabilization risk during the commitment period. The Partnership accounts for its bond purchase commitments as available-for-sale securities and reports the asset or liability at fair value. Changes in the fair value of bond purchase commitments are recorded in other comprehensive income. The following table summarizes the Partnership’s bond purchase commitment as of June 30, 2021:

Bond Purchase Commitments

Commitment Date

Maximum

Committed

Amounts

Remaining

Rate

Estimated Closing

Date

Fair Value as of

June 30, 2021

CCBA Senior Garden Apartments

July 2020

3,807,000

4.50

Q3 2022

392,515

Mortgage Revenue Bond and Taxable Mortgage Revenue Bond Commitments

The Partnership has committed to fund additional proceeds related to the Ocotillo Springs Series A MRB (Note 6) and a taxable MRB (Note 12) while the related property is under construction. The Partnership’s remaining maximum commitments related to the Series A MRB and the taxable MRB totaled approximately $8.2 million and $7.0 million, respectively, as of June 30, 2021.

The Partnership has committed to fund additional proceeds related to the Jackson Manor Apartments MRB (Note 6) while the related property is under rehabilitation. The Partnership’s remaining maximum commitment related to the MRB totaled approximately $2.8 million as of June 30, 2021.

Governmental Issuer Loan and Taxable Governmental Issuer Loan Commitments

The Partnership has outstanding commitments to fund the proceeds related to the GILs and taxable GILs while the related properties are under construction. Disclosures of remaining maximum commitment for GILs and a taxable GIL are in Note 7 and Note 12, respectively.

Equity Investment Commitments

ATAX Vantage Holdings, LLC, a wholly owned subsidiary of the Partnership, has outstanding commitments to contribute equity to unconsolidated entities. See Note 9 for disclosure of remaining maximum commitments.

Property Loan Commitments

The Partnership has outstanding commitments to fund the proceeds related to property loans while certain properties are under construction. See Note 10 for disclosure of remaining maximum commitments.

Construction Loan Guarantees

The Partnership has entered into guaranty agreements for loans related to certain investments in unconsolidated entities. The Partnership will only have to perform on the guarantees if a default by the borrower were to occur. The Partnership has not accrued any amount for these contingent liabilities because the likelihood of guarantee claims is remote. The following table summarizes the Partnership’s maximum exposure under these guarantee agreements as of June 30, 2021:

Borrower	Year the Guarantee was Executed	Maximum Balance Available on Loan		Loan Balance as of June 30, 2021		Partnership's Maximum Exposure as of June 30, 2021		Guarantee Terms
Vantage at Stone Creek	2018	$	30,824,000	$	30,501,955	$	15,250,978	(1)
Vantage at Coventry	2018		31,500,000		31,029,296		15,514,648	(1)
Vantage at Murfreesboro	2021		30,500,000		30,500,000		15,250,000	(2)

(1)

The Partnership’s guaranty was initially for the entire amount of the loan and will decrease based on the achievement of certain events or financial ratios. The Partnership’s maximum exposure will decrease to 25% of the loan balance when certain debt service coverage levels are achieved by the borrower.

(2)

The Partnership’s guaranty is for 50% of the loan balance. The Partnership has guaranteed up to 100% of the outstanding loan balance upon the occurrence of fraud or other willful misconduct by the borrower or if the borrower voluntarily files for bankruptcy. The guaranty agreement requires the Partnership to maintain a minimum net worth and maintain liquid assets of not less than $5.0 million. The Partnership was in compliance with these requirements as of June 30, 2021. The Partnership has also provided indemnification to the lender for costs related to environmental non-compliance and remediation during the term.

Other Guarantees and Commitments

The Partnership has entered into guarantee agreements with unaffiliated entities under which the Partnership has guaranteed certain obligations of the general partners of certain limited partnerships upon the occurrence of a “repurchase event.” Potential repurchase events include LIHTC tax credit recapture and foreclosure. The Partnership’s maximum exposure is limited to 75% of the equity contributed by the limited partner to each limited partnership. No amount has been accrued for these guarantees because the likelihood of repurchase events is remote. The following table summarizes the Partnership’s maximum exposure under these guarantee agreements as of June 30, 2021:

Limited Partnership(s)

Year the Guarantee

was Executed

End of Guarantee

Period

Partnership's Maximum Exposure

as of June 30, 2021

Ohio Properties

2011

2026

3,011,522

Greens of Pine Glen, LP

2012

2027

2,046,028

20. Redeemable Series A Preferred Units and Redeemable Series A-1 Preferred Units

The Partnership has issued non-cumulative, non-voting, non-convertible Series A Preferred Units via a private placement to five financial institutions. The Partnership has designated but not yet issued Series A-1 Preferred Units as of June 30, 2021.

The Series A Preferred Units and Series A-1 Preferred Units represent limited partnership interests of the Partnership. The Series A Preferred Units and Series A-1 Preferred Units have no stated maturity, are not subject to any sinking fund requirements, and will remain outstanding indefinitely unless redeemed by the Partnership or by the holder. Upon the sixth anniversary of the closing of the sale or issuance of Series A Preferred Units or Series A-1 Preferred Units to a subscriber, and upon each anniversary thereafter, the Partnership and each holder have the right to redeem, in whole or in part, the Series A Preferred Units or Series A-1 Preferred Units held by such holder at a per unit redemption price equal to $10.00 per unit plus an amount equal to all declared and unpaid distributions through the date of the redemption.

In the event of any liquidation, dissolution, or winding up of the Partnership, the holders of the Series A Preferred Units and Series A-1 Preferred Units are entitled to a liquidation preference in connection with their investments. With respect to anticipated quarterly distributions and rights upon liquidation, dissolution, or the winding-up of the Partnership’s affairs, the Series A Preferred Units and Series A-1 Preferred Units will rank: (a) senior to the Partnership’s BUCs and to any other class or series of Partnership interests or securities expressly designated as ranking junior to the Series A Preferred Units or Series A-1 Preferred Units; (b) junior to all of the Partnership’s existing indebtedness (including indebtedness outstanding under the Partnership’s senior bank credit facility) and other liabilities with respect to assets available to satisfy claims against the Partnership; and (c) junior to any other class or series of Partnership interests or securities expressly designated as ranking senior to the Series A Preferred Units or Series A-1 Preferred Units.

The following table summarizes the outstanding Series A Preferred Units as of June 30, 2021 and December 31, 2020:

Month Issued	Units		Purchase Price		Distribution Rate			Redemption Price per Unit		Earliest Redemption Date
March 2016		1,000,000	$	10,000,000		3.00	%	$	10.00	March 2022
May 2016		1,386,900		13,869,000		3.00	%		10.00	May 2022
September 2016		1,000,000		10,000,000		3.00	%		10.00	September 2022
December 2016		700,000		7,000,000		3.00	%		10.00	December 2022
March 2017		1,613,100		16,131,000		3.00	%		10.00	March 2023
August 2017		2,000,000		20,000,000		3.00	%		10.00	August 2023
October 2017		1,750,000		17,500,000		3.00	%		10.00	October 2023
Series A Preferred Units outstanding as of June 30, 2021 and December 31, 2020		9,450,000	$	94,500,000

21. Restricted Unit Awards

The Partnership’s Plan permits the grant of restricted units and other awards to the employees of Greystone Manager, the Partnership, or any affiliate of either, and members of the Board of Managers of Greystone Manager for up to 3.0 million BUCs. RUAs have historically been granted with vesting conditions ranging from three months to up to three years. Unvested RUAs are typically entitled to receive distributions during the restriction period. The Plan provides for accelerated vesting of the RUAs if there is a change in control related to the Partnership, the General Partner, or the general partner of the General Partner, or upon death or disability of the Plan participant. In December 2020, the Board of Managers of Greystone Manager vested 50,000 of the Partnership’s previous CEO’s unvested restricted unit awards and all related compensation expense was recognized immediately.

The fair value of each RUA is estimated on the grant date based on the Partnership’s exchange-listed closing price of the BUCs. The Partnership recognizes compensation expense for the RUAs on a straight-line basis over the requisite vesting period. The compensation expense for RUAs totaled approximately $191,000 and $296,000 for the three months ended June 30, 2021 and 2020, respectively. The compensation expense for RUAs totaled approximately $269,000 and $335,000 for the six months ended June 30, 2021 and 2020, respectively. Compensation expense is reported within “General and administrative expenses” on the Partnership’s condensed consolidated statements of operations.

The following table summarizes the RUA activity as of and for the six months ended June 30, 2021 and for the year ended December 31, 2020:

	Restricted Units Awarded			Weighted average Grant-date Fair Value
Nonvested as of January 1, 2020		-		$	-
Granted		290,000			4.98
Vested		(154,386	)		4.98
Forfeited		(2,802	)		4.98
Nonvested as of December 31, 2020		132,812		$	4.98
Granted		266,324			6.49
Nonvested as of June 30, 2021		399,136		$	5.99

The unrecognized compensation expense related to nonvested RUAs granted under the Plan was approximately $1.9 million as of June 30, 2021. The remaining compensation expense is expected to be recognized over a weighted average period of 1.2 years. The total intrinsic value of unvested RUAs was approximately $2.7 million as of June 30, 2021.

22. Transactions with Related Parties

The Partnership incurs costs for services and makes contractual payments to AFCA 2, AFCA 2’s general partner, and their affiliates. The costs are reported either as expenses or capitalized costs depending on the nature of each item. The following table summarizes transactions with related parties that are reflected in the Partnership’s condensed consolidated financial statements for the three and six months ended June 30, 2021 and 2020:

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
Partnership administrative fees paid to AFCA 2 ⁽¹⁾	$	987,000	$	866,000	$	1,953,000	$	1,731,000
Reimbursable franchise margin taxes incurred on behalf of unconsolidated entities ⁽²⁾		16,000		33,000		27,000		41,000

⁽¹⁾

AFCA 2 is entitled to receive an administrative fee from the Partnership equal to 0.45% per annum of the outstanding principal balance of any of its MRBs, GILs, property loans collateralized by real property, and other investments for which the owner of the financed property or other third party is not obligated to pay such administrative fee directly to AFCA 2. The disclosed amounts represent administrative fees paid or accrued during the periods specified and are reported within “General and administrative expenses” on the Partnership’s condensed consolidated statements of operations.

⁽²⁾

The Partnership pays franchise margin taxes on revenues in Texas related to its investments in unconsolidated entities. Such taxes are paid by the Partnership as the unconsolidated entities are required by tax regulations to be included in the Partnership’s group tax return. Since the Partnership is reimbursed for the franchise margin taxes paid on behalf of the unconsol

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. sophomore Avg

Item 1	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income	6
	Condensed Consolidated Statements of Partners’ Capital	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3	Quantitative and Qualitative Disclosures About Market Risk	70
Item 4	Controls and Procedures	72

PART II – OTHER INFORMATION
Item 1A	Risk Factors	73
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	73
Item 6	Exhibits	74
SIGNATURES		75

Greystone Housing Impact Investors (GHI) 10-Q2021 Q2 Quarterly report

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