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America First Multifamily Investors (ATAX)

Filed: 4 Nov 21, 8:46am
0001059142 atax:TOBTrustMember atax:MizuhoCapitalMarketsLLCMember atax:TrustTwentyTwentyOneXFTwoThousandNineHundredAndThirtyNineMember 2021-01-01 2021-09-30

 

 

 

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 September 30, 2021  

OR

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 September 30, 2021, the registrant had 65,930,903 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)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

91,542,566

 

 

$

44,495,538

 

Restricted cash

 

 

83,257,569

 

 

 

78,495,048

 

Interest receivable, net

 

 

9,718,518

 

 

 

8,212,076

 

Mortgage revenue bonds held in trust, at fair value (Note 6)

 

 

727,826,133

 

 

 

768,468,644

 

Mortgage revenue bonds, at fair value (Note 6)

 

 

15,812,184

 

 

 

25,963,841

 

Governmental issuer loans (Note 7)

 

 

165,986,438

 

 

 

64,863,657

 

Real estate assets: (Note 8)

 

 

 

 

 

 

 

 

Land and improvements

 

 

7,991,156

 

 

 

4,875,265

 

Buildings and improvements

 

 

72,421,529

 

 

 

72,316,152

 

Real estate assets before accumulated depreciation

 

 

80,412,685

 

 

 

77,191,417

 

Accumulated depreciation

 

 

(20,181,951

)

 

 

(18,150,215

)

Net real estate assets

 

 

60,230,734

 

 

 

59,041,202

 

Investments in unconsolidated entities (Note 9)

 

 

89,644,649

 

 

 

106,878,570

 

Property loans, net of loan loss allowances (Note 10)

 

 

31,678,426

 

 

 

12,920,719

 

Other assets (Note 12)

 

 

8,804,302

 

 

 

5,908,584

 

Total Assets

 

$

1,284,501,519

 

 

$

1,175,247,879

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses and other liabilities (Note 13)

 

$

12,186,546

 

 

$

9,949,565

 

Distribution payable

 

 

7,831,176

 

 

 

3,686,283

 

Unsecured lines of credit (Note 14)

 

 

-

 

 

 

7,475,000

 

Secured lines of credit (Note 15)

 

 

6,500,000

 

 

 

-

 

Debt financing, net (Note 16)

 

 

760,632,414

 

 

 

673,957,640

 

Mortgages payable and other secured financing, net (Note 17)

 

 

25,429,450

 

 

 

25,984,872

 

Total Liabilities

 

 

812,579,586

 

 

 

721,053,360

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (Note 19)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Preferred Units, approximately $94.5 million redemption value, 9.5 million

   issued and outstanding, net (Note 20)

 

 

94,449,515

 

 

 

94,422,477

 

 

 

 

 

 

 

 

 

 

Partnersʼ Capital:

 

 

 

 

 

 

 

 

General Partner (Note 1)

 

 

813,097

 

 

 

934,892

 

Beneficial Unit Certificates ("BUCs," Note 1)

 

 

376,659,321

 

 

 

358,837,150

 

Total Partnersʼ Capital

 

 

377,472,418

 

 

 

359,772,042

 

Total Liabilities and Partnersʼ Capital

 

$

1,284,501,519

 

 

$

1,175,247,879

 

 

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

4


 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income

 

$

13,619,994

 

 

$

12,043,313

 

 

$

40,305,861

 

 

$

35,988,555

 

Property revenues

 

 

1,811,778

 

 

 

1,548,931

 

 

 

5,294,475

 

 

 

5,358,132

 

Contingent interest income

 

 

1,848,825

 

 

 

-

 

 

 

1,848,825

 

 

 

12,043

 

Other interest income

 

 

401,304

 

 

 

238,185

 

 

 

1,026,724

 

 

 

686,253

 

Other income

 

 

-

 

 

 

9,518

 

 

 

-

 

 

 

9,518

 

Total revenues

 

 

17,681,901

 

 

 

13,839,947

 

 

 

48,475,885

 

 

 

42,054,501

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate operating (exclusive of items shown below)

 

 

1,239,614

 

 

 

1,454,985

 

 

 

3,007,979

 

 

 

3,484,783

 

Provision for credit loss (Note 6)

 

 

-

 

 

 

3,463,253

 

 

 

900,080

 

 

 

5,285,609

 

Provision for loan loss (Note 10)

 

 

-

 

 

 

811,706

 

 

 

330,116

 

 

 

811,706

 

Impairment charge on real estate assets

 

 

-

 

 

 

-

 

 

 

-

 

 

 

25,200

 

Depreciation and amortization

 

 

680,925

 

 

 

719,783

 

 

 

2,049,269

 

 

 

2,141,302

 

Interest expense

 

 

5,663,452

 

 

 

5,105,432

 

 

 

16,248,023

 

 

 

16,012,716

 

General and administrative

 

 

4,145,317

 

 

 

3,513,024

 

 

 

10,894,937

 

 

 

9,257,921

 

Total expenses

 

 

11,729,308

 

 

 

15,068,183

 

 

 

33,430,404

 

 

 

37,019,237

 

Other Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,416,023

 

Gain on sale of investments in unconsolidated entities

 

 

6,954,649

 

 

 

-

 

 

 

15,227,239

 

 

 

-

 

Income (loss) before income taxes

 

 

12,907,242

 

 

 

(1,228,236

)

 

 

30,272,720

 

 

 

6,451,287

 

Income tax expense (benefit)

 

 

(81,142

)

 

 

(68,219

)

 

 

26,802

 

 

 

41,199

 

Net income (loss)

 

 

12,988,384

 

 

 

(1,160,017

)

 

 

30,245,918

 

 

 

6,410,088

 

Redeemable Preferred Unit distributions and accretion

 

 

(717,762

)

 

 

(717,763

)

 

 

(2,153,288

)

 

 

(2,153,288

)

Net income (loss) available to Partners

 

$

12,270,622

 

 

$

(1,877,780

)

 

$

28,092,630

 

 

$

4,256,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) available to Partners allocated to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General Partner

 

$

579,266

 

 

$

(18,778

)

 

$

2,722,908

 

 

$

(33,476

)

Limited Partners - BUCs

 

 

11,627,197

 

 

 

(1,879,096

)

 

 

25,268,441

 

 

 

4,239,515

 

Limited Partners - Restricted units

 

 

64,159

 

 

 

20,094

 

 

 

101,281

 

 

 

50,761

 

 

 

$

12,270,622

 

 

$

(1,877,780

)

 

$

28,092,630

 

 

$

4,256,800

 

BUC holders' interest in net income (loss) per BUC, basic and diluted

 

$

0.19

 

 

$

(0.03

)

 

$

0.42

 

 

$

0.07

 

Weighted average number of BUCs outstanding, basic

 

 

60,646,528

 

 

 

60,545,204

 

 

 

60,637,976

 

 

 

60,614,862

 

Weighted average number of BUCs outstanding, diluted

 

 

60,646,528

 

 

 

60,545,204

 

 

 

60,637,976

 

 

 

60,614,862

 

 

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

 

5


 

 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net income (loss)

 

$

12,988,384

 

 

$

(1,160,017

)

 

$

30,245,918

 

 

$

6,410,088

 

Reversal of net unrealized gains on sale of securities

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,408,804

)

Reversal of net unrealized loss on securities to

  provision for credit loss

 

 

-

 

 

 

280,711

 

 

 

-

 

 

 

652,880

 

Unrealized gain (loss) on securities

 

 

(4,586,145

)

 

 

18,000,520

 

 

 

(18,951,770

)

 

 

31,914,433

 

Unrealized gain (loss) on bond purchase commitments

 

 

8,708

 

 

 

256,222

 

 

 

(30,656

)

 

 

256,222

 

Comprehensive income

 

$

8,410,947

 

 

$

17,377,436

 

 

$

11,263,492

 

 

$

37,824,819

 

 

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

 

6


 

 

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

 

Distributions paid or accrued ($0.11 per BUC):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution of Tier 2 income (Note 3)

 

 

(534,873

)

 

 

-

 

 

 

(1,604,615

)

 

 

(2,139,488

)

 

 

-

 

Distribution of Tier 3 income (Note 3)

 

 

-

 

 

 

-

 

 

 

(5,691,689

)

 

 

(5,691,689

)

 

 

-

 

Net income allocable to Partners

 

 

579,266

 

 

 

-

 

 

 

11,691,356

 

 

 

12,270,622

 

 

 

-

 

Sale of BUCs, net of issuance costs

 

 

-

 

 

 

5,462,500

 

 

 

31,243,495

 

 

 

31,243,495

 

 

 

-

 

Restricted unit compensation expense

 

 

5,705

 

 

 

-

 

 

 

564,762

 

 

 

570,467

 

 

 

-

 

Unrealized loss on securities

 

 

(45,862

)

 

 

-

 

 

 

(4,540,283

)

 

 

(4,586,145

)

 

 

(4,586,145

)

Unrealized gain on bond purchase commitments

 

 

87

 

 

 

-

 

 

 

8,621

 

 

 

8,708

 

 

 

8,708

 

Balance as of September 30, 2021

 

$

813,097

 

 

 

66,330,039

 

 

$

376,659,321

 

 

$

377,472,418

 

 

$

113,611,581

 

 

 

 

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

 

Distributions paid or accrued ($0.06 per BUC):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regular distribution

 

 

(36,870

)

 

 

-

 

 

 

(3,650,113

)

 

 

(3,686,983

)

 

 

-

 

Net loss allocable to Partners

 

 

(18,778

)

 

 

-

 

 

 

(1,859,002

)

 

 

(1,877,780

)

 

 

-

 

Restricted unit compensation expense

 

 

2,996

 

 

 

-

 

 

 

296,528

 

 

 

299,524

 

 

 

-

 

Unrealized gain on securities

 

 

180,005

 

 

 

-

 

 

 

17,820,515

 

 

 

18,000,520

 

 

 

18,000,520

 

Unrealized gain on bond purchase commitments

 

 

2,562

 

 

 

-

 

 

 

253,660

 

 

 

256,222

 

 

 

256,222

 

Reversal of net unrealized loss on securities to

  provision for credit loss

 

 

2,807

 

 

 

-

 

 

 

277,904

 

 

 

280,711

 

 

 

280,711

 

Balance as of September 30, 2020

 

$

948,408

 

 

 

60,835,204

 

 

$

360,211,208

 

 

$

361,159,616

 

 

$

130,723,408

 

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

7


 

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

For the Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

30,245,918

 

 

$

6,410,088

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

2,049,269

 

 

 

2,141,302

 

Amortization of deferred financing costs

 

 

823,212

 

 

 

1,288,044

 

Gain on sale of investments in unconsolidated entities

 

 

(15,227,239

)

 

 

-

 

Gain on sale of investment in securities

 

 

-

 

 

 

(1,416,023

)

Contingent interest realized on investing activities

 

 

(1,848,825

)

 

 

(12,043

)

Provision for credit loss

 

 

900,080

 

 

 

5,285,609

 

Provision for loan loss

 

 

330,116

 

 

 

811,706

 

Impairment charge on real estate assets

 

 

-

 

 

 

25,200

 

(Gain) loss on derivatives, net of cash paid

 

 

9,702

 

 

 

(144,546

)

Restricted unit compensation expense

 

 

839,551

 

 

 

634,860

 

Bond premium/discount amortization

 

 

(103,292

)

 

 

(82,975

)

Debt premium amortization

 

 

(30,419

)

 

 

(30,353

)

Deferred income tax expense (benefit) & income tax payable/receivable

 

 

(154,553

)

 

 

2,036

 

Change in preferred return receivable from unconsolidated entities, net

 

 

4,589,760

 

 

 

(2,414,759

)

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Increase in interest receivable

 

 

(1,506,442

)

 

 

(922,686

)

Decrease in other assets

 

 

134,595

 

 

 

327,508

 

Increase in accounts payable and accrued expenses

 

 

2,247,730

 

 

 

738,652

 

Net cash provided by operating activities

 

 

23,299,163

 

 

 

12,641,620

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(106,415

)

 

 

(319,757

)

Acquisition of mortgage revenue bonds

 

 

(12,946,500

)

 

 

(9,513,450

)

Acquisition of taxable mortgage revenue bonds

 

 

(1,000,000

)

 

 

-

 

Advances on governmental issuer loans

 

 

(101,122,781

)

 

 

(62,085,000

)

Advances on taxable governmental issuer loans

 

 

(1,000,000

)

 

 

-

 

Advances on property loans

 

 

(19,279,087

)

 

 

(5,733,331

)

Contributions to unconsolidated entities

 

 

(20,232,531

)

 

 

(17,542,465

)

Proceeds from sale of PHC Certificates

 

 

-

 

 

 

43,349,357

 

Proceeds from sale of investments in unconsolidated entities

 

 

44,988,040

 

 

 

7,762,166

 

Principal payments received on mortgage revenue bonds and contingent interest

 

 

45,908,244

 

 

 

13,836,006

 

Principal payments received on taxable mortgage revenue bonds

 

 

7,174

 

 

 

6,560

 

Principal payments received on property loans and contingent interest

 

 

191,264

 

 

 

12,043

 

Net cash used in investing activities

 

 

(64,592,592

)

 

 

(30,227,871

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Distributions paid

 

 

(20,110,495

)

 

 

(21,025,617

)

Repurchase of BUCs

 

 

(1,363,736

)

 

 

(2,106,673

)

Proceeds from the sale of BUCs

 

 

33,321,250

 

 

 

-

 

Payment of offering costs related to the sale of BUCs

 

 

(2,077,755

)

 

 

-

 

Proceeds from debt financing

 

 

116,800,000

 

 

 

277,231,000

 

Principal payments on debt financing

 

 

(29,749,667

)

 

 

(146,126,658

)

Principal payments on mortgages payable

 

 

(555,680

)

 

 

(535,233

)

Principal borrowing on unsecured lines of credit

 

 

15,172,445

 

 

 

10,492,728

 

Principal payments on unsecured lines of credit

 

 

(22,647,446

)

 

 

(11,849,728

)

Principal borrowing on secured line of credit

 

 

6,500,000

 

 

 

-

 

(Increase) decrease in security deposit liability related to restricted cash

 

 

66,694

 

 

 

(123,286

)

Debt financing and other deferred costs

 

 

(2,252,632

)

 

 

(1,093,484

)

Net cash provided by financing activities

 

 

93,102,978

 

 

 

104,863,049

 

Net increase in cash, cash equivalents and restricted cash

 

 

51,809,549

 

 

 

87,276,798

 

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

 

$

174,800,135

 

 

$

130,462,779

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for interest

 

$

14,884,920

 

 

$

14,481,578

 

Cash paid during the period for income taxes

 

 

181,356

 

 

 

36,927

 

Supplemental disclosure of noncash investing and financing activities:

 

 

 

 

 

 

 

 

Distributions declared but not paid for BUCs and General Partner

 

$

7,831,176

 

 

$

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

 

 

1,970

 

 

 

60,572

 

Deferred financing costs financed through accounts payable

 

 

(2,540

)

 

 

285,108

 

 

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:

 

 

 

September 30, 2021

 

 

September 30, 2020

 

Cash and cash equivalents

 

$

91,542,566

 

 

$

51,160,770

 

Restricted cash

 

 

83,257,569

 

 

 

79,302,009

 

Total cash, cash equivalents and restricted cash

 

$

174,800,135

 

 

$

130,462,779

 

 

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

 

 

8


 

 

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. The Partnership generally refers to affordable multifamily and residential properties associated with 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 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 and may or may not be secured by real estate.   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 is governed by the First Amended and Restated Agreement of Limited Partnership dated September 15, 2015, as further amended (the “Partnership Agreement”)

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 designated 3 series of non-cumulative, non-voting, non-convertible preferred units (collectively, the “Preferred Units”) that represent limited partnership interests in the Partnership consisting of the Series A Preferred Units, the Series A-1 Preferred Units, and the Series B Preferred Units. The Series A Preferred Units were previously issued pursuant to subscription agreements with five financial institutions and are redeemable in the future (Note 20). The Partnership has not yet issued Series A-1 Preferred Units or Series B Preferred Units. The holders of the BUCs and Preferred Units are referred to herein collectively as “Unitholders.” 

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

9


 

 

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 one secured line of credit (Note 15) and 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 in the 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 to the condensed 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;

10


 

 

 

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 to the 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 September 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 COVID-19 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, variation 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, but not significant, declines in occupancy and operating results at multifamily Residential Properties securing its MRBs due to COVID-19. The Partnership has observed significant declines at properties securing the Provision Center 2014-1 MRB, a commercial property, and Live 929 Apartments MRB, a student housing property (see Note 6 for further discussion). 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.

 


11


 

 

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 regularly assesses its assets that are within the scope of ASU 2016-13 and has determined that the GILs, taxable GIL, property loans, receivables reported within other assets, financial guarantees, financial commitments, and an interest receivable related to such assets, 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 to the 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 to the 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 in the 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 nine months ended September 30, 2021 and 2020.

 

 

12


 

 

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 in the condensed consolidated balance sheets. The MRBs, taxable MRB, GILs, taxable GIL and property loans secured by the TOB, Term TOB and TEBS financings, are reported as assets in the condensed consolidated balance sheets (Notes 6, 7, 10 and 12).

The Partnership has determined its investment in Vantage at Hutto is a VIE and the Partnership is the primary beneficiary. The Partnership may currently require the managing member of the 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 of Vantage at Hutto on a consolidated basis, which consist of a real estate asset investment (Note 8). If certain events occur in the future, the Partnership’s option to redeem the investment will terminate and the investment may be deconsolidated.

The Partnership’s right to require the managing member of the Vantage at Fair Oaks to purchase the Partnership’s equity investment at a price equal to the Partnership’s carrying value was terminated in September 2021. As such, the Partnership is no longer the primary beneficiary and the Vantage at Fair Oaks VIE is not reported on a consolidated basis as of September 30, 2021.

Non-Consolidated VIEs

The Partnership has variable interests in various entities in the form of MRBs, a taxable MRB, GILs, a taxable GIL, property loans 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 condensed consolidated financial statements.

The Partnership held variable interests in 29 and 21 non-consolidated VIEs as of September 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 September 30, 2021 and December 31, 2020:

 

 

 

Maximum Exposure to Loss

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Mortgage revenue bonds

 

$

26,208,000

 

 

$

20,763,500

 

Taxable mortgage revenue bond

 

 

1,000,000

 

 

 

-

 

Governmental issuer loans

 

 

165,986,438

 

 

 

64,863,657

 

Taxable governmental issuer loan

 

 

1,000,000

 

 

 

-

 

Property loans

 

 

24,276,313

 

 

 

5,327,342

 

Investments in unconsolidated entities

 

 

89,644,649

 

 

 

106,878,570

 

 

 

$

308,115,400

 

 

$

197,833,069

 

 

The maximum exposure to loss for the MRBs and taxable MRB is equal to the cost adjusted for paydowns. The difference between an MRB’s carrying value in the 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, taxable GIL, property loans and investments in unconsolidated entities is equal to the Partnership’s carrying value.

 

13


 

 

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 September 30, 2021 and December 31, 2020:

 

 

 

September 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

 

$

9,993,374

 

 

$

2,104,001

 

 

$

-

 

 

$

12,097,375

 

Glenview Apartments - Series A (3)

 

CA

 

 

4,443,092

 

 

 

908,843

 

 

 

-

 

 

 

5,351,935

 

Harmony Court Bakersfield - Series A (4)

 

CA

 

 

3,643,723

 

 

 

735,305

 

 

 

-

 

 

 

4,379,028

 

Harmony Terrace - Series A (4)

 

CA

 

 

6,745,564

 

 

 

1,461,331

 

 

 

-

 

 

 

8,206,895

 

Harden Ranch - Series A (2)

 

CA

 

 

6,559,492

 

 

 

1,375,319

 

 

 

-

 

 

 

7,934,811

 

Las Palmas II - Series A (4)

 

CA

 

 

1,653,240

 

 

 

338,062

 

 

 

-

 

 

 

1,991,302

 

Montclair Apartments - Series A (3)

 

CA

 

 

2,407,071

 

 

 

492,371

 

 

 

-

 

 

 

2,899,442

 

Montecito at Williams Ranch Apartments - Series A (6)

 

CA

 

 

7,583,121

 

 

 

1,986,677

 

 

 

-

 

 

 

9,569,798

 

Montevista - Series A (6)

 

CA

 

 

6,712,763

 

 

 

2,094,223

 

 

 

-

 

 

 

8,806,986

 

Ocotillo Springs - Series A (6)

 

CA

 

 

10,070,000

 

 

 

211,967

 

 

 

-

 

 

 

10,281,967

 

San Vicente - Series A (4)

 

CA

 

 

3,408,893

 

 

 

682,336

 

 

 

-

 

 

 

4,091,229

 

Santa Fe Apartments - Series A (3)

 

CA

 

 

2,916,076

 

 

 

596,489

 

 

 

-

 

 

 

3,512,565

 

Seasons at Simi Valley - Series A (4)

 

CA

 

 

4,200,917

 

 

 

1,032,960

 

 

 

-

 

 

 

5,233,877

 

Seasons Lakewood - Series A (4)

 

CA

 

 

7,185,492

 

 

 

1,556,635

 

 

 

-

 

 

 

8,742,127

 

Seasons San Juan Capistrano - Series A (4)

 

CA

 

 

12,098,022

 

 

 

2,620,866

 

 

 

-

 

 

 

14,718,888

 

Summerhill - Series A (4)

 

CA

 

 

6,274,432

 

 

 

1,184,799

 

 

 

-

 

 

 

7,459,231

 

Sycamore Walk - Series A (4)

 

CA

 

 

3,485,656

 

 

 

735,059

 

 

 

-

 

 

 

4,220,715

 

The Village at Madera - Series A (4)

 

CA

 

 

3,013,642

 

 

 

634,491

 

 

 

-

 

 

 

3,648,133

 

Tyler Park Townhomes - Series A (2)

 

CA

 

 

5,713,008

 

 

 

765,866

 

 

 

-

 

 

 

6,478,874

 

Vineyard Gardens - Series A (6)

 

CA

 

 

3,947,054

 

 

 

997,673

 

 

 

-

 

 

 

4,944,727

 

Westside Village Market - Series A (2)

 

CA

 

 

3,733,442

 

 

 

727,207

 

 

 

-

 

 

 

4,460,649

 

Brookstone (1)

 

IL

 

 

7,344,918

 

 

 

1,847,424

 

 

 

-

 

 

 

9,192,342

 

Copper Gate Apartments (2)

 

IN

 

 

4,955,000

 

 

 

495,838

 

 

 

-

 

 

 

5,450,838

 

Renaissance - Series A (3)

 

LA

 

 

10,767,672

 

 

 

3,942,658

 

 

 

-

 

 

 

14,710,330

 

Live 929 Apartments (6)

 

MD

 

 

36,185,509

 

 

 

-

 

 

 

-

 

 

 

36,185,509

 

Woodlynn Village (1)

 

MN

 

 

4,093,000

 

 

 

14,225

 

 

 

-

 

 

 

4,107,225

 

Jackson Manor Apartments (6)

 

MS

 

 

4,900,000

 

 

 

-

 

 

 

-

 

 

 

4,900,000

 

Gateway Village (6)

 

NC

 

 

2,600,000

 

 

 

132,943

 

 

 

-

 

 

 

2,732,943

 

Greens Property - Series A (2)

 

NC

 

 

7,748,000

 

 

 

378,239

 

 

 

-

 

 

 

8,126,239

 

Lynnhaven Apartments (6)

 

NC

 

 

3,450,000

 

 

 

176,406

 

 

 

-

 

 

 

3,626,406

 

Silver Moon - Series A (3)

 

NM

 

 

7,647,135

 

 

 

1,797,774

 

 

 

-

 

 

 

9,444,909

 

Village at Avalon - Series A (5)

 

NM

 

 

16,099,958

 

 

 

4,093,405

 

 

 

-

 

 

 

20,193,363

 

Ohio Properties - Series A (1)

 

OH

 

 

13,616,000

 

 

 

-

 

 

 

-

 

 

 

13,616,000

 

Bridle Ridge (1)

 

SC

 

 

7,145,000

 

 

 

73,927

 

 

 

-

 

 

 

7,218,927

 

Columbia Gardens (4)

 

SC

 

 

12,769,035

 

 

 

2,149,253

 

 

 

-

 

 

 

14,918,288

 

Companion at Thornhill Apartments (4)

 

SC

 

 

10,957,982

 

 

 

1,913,654

 

 

 

-

 

 

 

12,871,636

 

Cross Creek (1)

 

SC

 

 

6,125,082

 

 

 

1,953,483

 

 

 

-

 

 

 

8,078,565

 

The Palms at Premier Park Apartments (2)

 

SC

 

 

18,445,321

 

 

 

2,419,261

 

 

 

-

 

 

 

20,864,582

 

Village at River's Edge (4)

 

SC

 

 

9,747,304

 

 

 

2,034,411

 

 

 

-

 

 

 

11,781,715

 

Willow Run (4)

 

SC

 

 

12,592,729

 

 

 

2,005,382

 

 

 

-

 

 

 

14,598,111

 

Arbors at Hickory Ridge (2)

 

TN

 

 

10,795,450

 

 

 

3,772,762

 

 

 

-

 

 

 

14,568,212

 

Avistar at Copperfield - Series A (6)

 

TX

 

 

13,713,412

 

 

 

2,499,600

 

 

 

-

 

 

 

16,213,012

 

Avistar at the Crest - Series A (2)

 

TX

 

 

9,052,461

 

 

 

1,874,594

 

 

 

-

 

 

 

10,927,055

 

Avistar at the Oaks - Series A (2)

 

TX

 

 

7,319,090

 

 

 

1,578,486

 

 

 

-

 

 

 

8,897,576

 

Avistar at the Parkway - Series A (3)

 

TX

 

 

12,615,887

 

 

 

2,369,577

 

 

 

-

 

 

 

14,985,464

 

Avistar at Wilcrest - Series A (6)

 

TX

 

 

5,197,106

 

 

 

748,346

 

 

 

-

 

 

 

5,945,452

 

Avistar at Wood Hollow - Series A (6)

 

TX

 

 

39,461,504

 

 

 

6,913,829

 

 

 

-

 

 

 

46,375,333

 

Avistar in 09 - Series A (2)

 

TX

 

 

6,319,751

 

 

 

1,311,792

 

 

 

-

 

 

 

7,631,543

 

Avistar on the Boulevard - Series A (2)

 

TX

 

 

15,421,844

 

 

 

3,074,231

 

 

 

-

 

 

 

18,496,075

 

Avistar on the Hills - Series A (2)

 

TX

 

 

5,010,813

 

 

 

1,101,075

 

 

 

-

 

 

 

6,111,888

 

Bruton Apartments (4)

 

TX

 

 

17,568,495

 

 

 

4,511,584

 

 

 

-

 

 

 

22,080,079

 

Concord at Gulfgate - Series A (4)

 

TX

 

 

18,655,305

 

 

 

4,168,584

 

 

 

-

 

 

 

22,823,889

 

Concord at Little York - Series A (4)

 

TX

 

 

13,068,923

 

 

 

3,027,488

 

 

 

-

 

 

 

16,096,411

 

Concord at Williamcrest - Series A (4)

 

TX

 

 

20,245,162

 

 

 

4,606,709

 

 

 

-

 

 

 

24,851,871

 

Crossing at 1415 - Series A (4)

 

TX

 

 

7,273,669

 

 

 

1,586,241

 

 

 

-

 

 

 

8,859,910

 

Decatur Angle (4)

 

TX

 

 

22,124,707

 

 

 

5,058,303

 

 

 

-

 

 

 

27,183,010

 

Esperanza at Palo Alto (4)

 

TX

 

 

19,109,120

 

 

 

5,252,121

 

 

 

-

 

 

 

24,361,241

 

Heights at 515 - Series A (4)

 

TX

 

 

6,659,170

 

 

 

1,452,231

 

 

 

-

 

 

 

8,111,401

 

Heritage Square - Series A (3)

 

TX

 

 

10,487,401

 

 

 

1,878,152

 

 

 

-

 

 

 

12,365,553

 

Oaks at Georgetown - Series A (4)

 

TX

 

 

12,054,029

 

 

 

2,173,762

 

 

 

-

 

 

 

14,227,791

 

Runnymede (1)

 

TX

 

 

9,740,000

 

 

 

1,119

 

 

 

-

 

 

 

9,741,119

 

Southpark (1)

 

TX

 

 

11,516,868

 

 

 

1,424,311

 

 

 

-

 

 

 

12,941,179

 

15 West Apartments (4)

 

WA

 

 

9,550,479

 

 

 

2,832,108

 

 

 

-

 

 

 

12,382,587

 

Mortgage revenue bonds held in trust

 

 

 

$

615,938,365

 

 

$

111,887,768

 

 

$

-

 

 

$

727,826,133

 

(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

14


 

 

 

 

 

September 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

 

$

2,653,659

 

 

$

796,897

 

 

$

-

 

 

$

3,450,556

 

Greens Property - Series B

 

NC

 

 

921,935

 

 

 

62,330

 

 

 

-

 

 

 

984,265

 

Ohio Properties - Series B

 

OH

 

 

3,470,560

 

 

 

-

 

 

 

-

 

 

 

3,470,560

 

Provision Center 2014-1

 

TN

 

 

5,258,078

 

 

 

-

 

 

 

-

 

 

 

5,258,078

 

Avistar at the Crest - Series B

 

TX

 

 

731,998

 

 

 

117,989

 

 

 

-

 

 

 

849,987

 

Avistar at the Oaks - Series B

 

TX

 

 

535,927

 

 

 

85,705

 

 

 

-

 

 

 

621,632

 

Avistar at the Parkway - Series B

 

TX

 

 

123,696

 

 

 

38,527

 

 

 

-

 

 

 

162,223

 

Avistar in 09 - Series B

 

TX

 

 

442,092

 

 

 

70,699

 

 

 

-

 

 

 

512,791

 

Avistar on the Boulevard - Series B

 

TX

 

 

434,955

 

 

 

67,137

 

 

 

-

 

 

 

502,092

 

Mortgage revenue bonds held by the Partnership

 

 

 

$

14,572,900

 

 

$

1,239,284

 

 

$

-

 

 

$

15,812,184

 

 

15


 

 

 

 

 

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

 

 

 

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 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 nine months ended September 30, 2021, the Partnership recognized a provision for credit loss of 0 and approximately $900,000, respectively, 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 credit loss was driven primarily by operational and collateral information obtained during the bankruptcy process.

During the three months ended September 30, 2020, the Partnership recognized a provision for credit loss of approximately $3.5 million related to the Live 929 Apartments MRB in the condensed consolidated statements of operations. During the nine months ended September 30, 2020, the Partnership recognized a provision for credit loss of approximately $5.3 million related to the Live 929 Apartments MRB and the Provision Center 2014-1 MRB in its condensed consolidated statements of operations. The provision for credit loss related to the Live 929 Apartments MRB was due to operational results, the borrower’s continued covenant forbearance, and a decline in debt service coverage. The change in operating results at the Live 929 Apartments was primarily driven by the impact of COVID-19, which had a significant impact on the student housing industry. The provision for credit loss related to the Provision Center 2014-1 MRB 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 from COVID-19.


17


 

MRB Activity in the First Nine Months of 2021

 

Acquisitions:

 

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

 

Property Name

 

Month

Acquired

 

Property Location

 

Units

 

Maturity Date

 

Interest Rate

 

 

Initial Principal Acquired

 

Jackson Manor Apartments (1)

 

April

 

Jackson, MS

 

60

 

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 nine months ended September 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

 

Rosewood Townhomes - Series A

 

July

 

Goose Creek, SC

 

 

100

 

 

7/1/2055

 

 

5.75

%

 

 

9,259,206

 

Rosewood Townhomes - Series B

 

July

 

Goose Creek, SC

 

 

100

 

 

8/1/2055

 

 

12.00

%

 

 

469,781

 

South Pointe Apartments - Series A

 

July

 

Hanahan, SC

 

 

256

 

 

7/1/2055

 

 

5.75

%

 

 

21,551,600

 

South Pointe Apartments - Series B

 

July

 

Hanahan, SC

 

 

256

 

 

8/1/2055

 

 

12.00

%

 

 

1,099,487

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

39,765,074

 

 

(1)

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

 

 

The Rosewood Townhomes - Series A and South Pointe Apartments - Series A MRBs were redeemed at 106% of par value plus accrued interest in July 2021. The redemption premium of approximately $1.8 million is reported as “Contingent interest income” in the condensed consolidated statement of operations. All other MRBs were redeemed at a price that approximated the Partnership’s carrying value plus accrued interest.

 

MRB Activity in the First Nine Months of 2020

 

Acquisitions:

 

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

 

Property Name

 

Month

Acquired

 

Property Location

 

Units

 

Maturity Date

 

Interest Rate

 

 

Initial 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

 

Ocotillo Springs - Series A (2)

 

July

 

Brawley, CA

 

75

 

8/1/2037

 

 

4.55

%

(3)

 

2,023,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

9,498,500

 

(1)

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

(2)

The Partnership has committed to provide total funding of the MRB up to $15.0 million during construction and lease-up 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 is approximately $3.5 million.

(3)

The MRB has a variable interest rate equal to 1-month LIBOR plus 3.25%, subject to a floor of 4.55%, during construction of the project until stabilization. After stabilization, the MRB will convert to a fixed interest rate of 4.35%.

 

18


 

 

Redemptions:

 

The following MRB was redeemed at a price that approximated the Partnership’s carrying value plus accrued interest during the nine months ended September 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

 

96

 

 

1/1/2021

 

 

5.85

%

 

$

3,103,000

 

Montevista - Series B

 

August

 

San Pablo, CA

 

 

82

 

 

7/1/2021

 

 

8.00

%

 

$

6,480,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

9,583,000

 

 

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

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Balance, beginning of period

 

$

8,219,000

 

 

$

1,823,000

 

 

 

7,319,000

 

 

 

0

 

Provision for credit loss

 

 

0

 

 

 

3,463,000

 

 

 

900,000

 

 

 

5,286,000

 

Balance, end of period (1)

 

$

8,219,000

 

 

$

5,286,000

 

 

$

8,219,000

 

 

$

5,286,000

 

(1)

The allowance for credit losses as of September 30, 2021 and 2020 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 primary 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.

 

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 GILs were held in trust in connection with TOB Trust financings (Note 16), with the exception of Willow Place Apartments, as of September 30, 2021. All GILs were held in trust in connection with TOB Trust financings as of December 31, 2020.

 


19


 

 

The Partnership has committed to provide additional 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 September 30, 2021 and December 31, 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 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%

 

3.15%

 

 

$

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%

 

 

 

31,894,945

 

 

 

1,185,055

 

Legacy Commons at Signal Hills (1)

 

January 2021

 

St. Paul, MN

 

247

 

2/1/2024

 

SOFR + 3.07%

(4)

3.57%

 

 

 

26,862,183

 

 

 

7,757,817

 

Hilltop at Signal Hills (1)

 

January 2021

 

St. Paul, MN

 

146

 

8/1/2023

 

SOFR + 3.07%

(4)

3.57%

 

 

 

14,995,969

 

 

 

9,454,031

 

Hope on Avalon

 

January 2021

 

Los Angeles, CA

 

88

 

2/1/2023

 

SIFMA + 3.75%

(4)

4.60%

 

 

 

8,981,200

 

 

 

14,408,800

 

Hope on Broadway

 

January 2021

 

Los Angeles, CA

 

49

 

2/1/2023

 

SIFMA + 3.75%

(4)

4.60%

 

 

 

3,691,245

 

 

 

8,414,378

 

Osprey Village (1)

 

July 2021

 

Kissimmee, FL

 

383

 

8/1/2024

 

SOFR + 3.07%

(4)

3.57%

 

 

 

3,589,110

 

 

 

56,410,890

 

Willow Place Apartments (1)

 

September 2021

 

McDonough, GA

 

182

 

10/1/2024

 

SOFR + 3.30%

(4)

3.55%

 

 

 

1,971,786

 

 

 

23,028,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

165,986,438

 

 

$

120,659,185

 

(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 Nine Months of 2021

 

Acquisitions:

 

During the nine months ended September 30, 2021, the Partnership entered into multiple GIL commitments to provide construction financing for the underlying properties 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;

 

$60.0 million commitment related to Osprey Village;

 

$25.0 million commitment related to Willow Place Apartments.

 

20


 

 

Activity in the First Nine Months of 2020

 

Acquisitions:

 

During the nine months ended September 30, 2020, the Partnership entered into multiple GIL commitments to provide construction financing for the underlying properties on a draw-down basis as summarized below. See above tables for additional information associated with the GIL commitments.

 

$40.0 million commitment related to Scharbauer Flats Apartments;

 

$34.0 million commitment related to Oasis at Twin Lakes;

 

$33.1 million commitment related to Centennial Crossings.

 

8. Real Estate Assets

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

 

Real Estate Assets as of September 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

 

 

$

39,456,777

 

 

$

42,656,045

 

The 50/50 MF Property

 

Lincoln, NE

 

 

475

 

 

 

-

 

 

 

32,964,752

 

 

 

32,964,752

 

Vantage at Hutto

 

Hutto, TX

 

(1)

 

 

 

3,115,891

 

 

 

-

 

 

 

3,115,891

 

Land held for development

 

 

 

(2)

 

 

 

1,675,997

 

 

 

-

 

 

 

1,675,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

80,412,685

 

Less accumulated depreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(20,181,951

)

Net real estate assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

60,230,734

 

 

(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 Nine Months of 2021

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

Activity in the First Nine 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 represented the difference between the Partnership’s carrying value and the estimated fair value of the land.

 

 


21


 

 

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” in the condensed consolidated statements of operations.

 

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

 

Property Name

 

Location

 

Units

 

 

Month

Commitment

Executed

 

Construction

Completion

Date

 

Carrying Value as of September 30, 2021

 

 

Carrying Value as of December 31, 2020

 

 

Maximum

Remaining

Equity Commitment as of September 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

 

 

 

-

 

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

 

 

11,164,625

 

 

 

10,406,895

 

 

 

-

 

Vantage at O'Connor

 

San Antonio, TX

 

 

288

 

 

October 2019

 

June 2021

 

 

8,885,353

 

 

 

8,245,890

 

 

 

-

 

Vantage at Westover Hills

 

San Antonio, TX

 

 

288

 

 

January 2020

 

July 2021

 

 

8,643,608

 

 

 

8,021,544

 

 

 

-

 

Vantage at Tomball

 

Tomball, TX

 

 

288

 

 

August 2020

 

N/A

 

 

11,524,260

 

 

 

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

 

 

1,057,823

 

 

 

981,695

 

 

 

8,943,914

 

Vantage at Loveland

 

Loveland, CO

 

 

288

 

 

April 2021

 

N/A

 

 

7,970,362

 

 

 

-

 

 

 

8,633,831

 

Vantage at Helotes

 

Helotes, TX

 

 

288

 

 

May 2021

 

N/A

 

 

6,932,720

 

 

 

-

 

 

 

5,833,703

 

Vantage at Fair Oaks

 

Boerne, TX

 

 

288

 

 

June 2021

 

N/A

 

 

4,377,963

 

 

 

-

 

 

 

6,656,422

 

 

 

 

 

 

4,332

 

 

 

 

 

 

$

89,644,649

 

 

$

106,878,570

 

 

$

37,427,822

 

 

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

Activity in the First Nine 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 million 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 million 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.

In August 2021, Vantage at Bulverde sold substantially all assets to an unrelated third party and ceased operations.  The Partnership received cash of approximately $18.9 million upon sale. The Partnership recognized approximately $1.4 million of “Investment income” and approximately $7.0 million as “Gain on sale of investment in an unconsolidated entity” associated with the sale.

22


 

In September 2021, Vantage at Fair Oaks ceased to be a consolidated VIE (Note 5) and the Partnership executed a $11.0 million commitment to fund the construction of the property.

Activity in the First Nine 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 $10.6 million upon sale. The Partnership recognized approximately $1.3 million of “Investment income” associated with the sale. The Partnership recognized additional “Investment income” of approximately $201,000 in the fourth quarter of 2020 upon the resolution of certain gain contingencies.

In August 2020, the Partnership executed a $10.4 million equity commitment to fund construction of the Vantage at Tomball multifamily property.

 

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

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Property Revenues

 

$

6,486,029

 

 

$

3,501,288

 

 

$

17,444,805

 

 

$

8,971,999

 

Gain on sale of property

 

$

17,646,543

 

 

$

372,974

 

 

$

42,273,235

 

 

$

6,635,966

 

Net income (loss)

 

$

17,591,694

 

 

$

(1,495,383

)

 

$

38,102,642

 

 

$

341,905

 

 

10. Property Loans, Net of Loan Loss Allowances

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

 

 

 

September 30, 2021

 

 

 

Outstanding

Balance

 

 

Loan Loss

Allowance

 

 

Property Loan Principal,

net of allowance

 

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)

 

 

13,948,971

 

 

 

-

 

 

 

13,948,971

 

Ohio Properties

 

 

2,390,446

 

 

 

-

 

 

 

2,390,446

 

Osprey Village (1)(2)

 

 

1,000,000

 

 

 

-

 

 

 

1,000,000

 

Scharbauer Flats Apartments (1) (2)

 

 

3,309,613

 

 

 

-

 

 

 

3,309,613

 

Willow Place Apartments (2)

 

 

1,000,000

 

 

 

-

 

 

 

1,000,000

 

Total

 

$

40,313,588

 

 

$

(8,635,162

)

 

$

31,678,426

 

(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.

 

23


 

 

 

 

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 0 and approximately $330,000 for the three and nine months ended September 30, 2021, respectively, related to the Live 929 Apartments property loan as the Partnership determined it was probable the outstanding balance will not be collectible.

 

The Partnership recognized a provision for loan loss and associated loan loss allowance of approximately $812,000 for the three and nine months ended September 30, 2020 related to 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 nine months ended September 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 nine months ended September 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 Nine Months of 2021

 

Concurrent with the acquisition of GILs (Note 7), the Partnership committed to provide property loans for the construction of the underlying properties on a draw-down basis for Legacy Commons at Signal Hills, Hilltop at Signal Hills, Osprey Village, and Willow Place Apartments. Property loan commitments for these properties total $100.3 million.

 

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.

 

In August 2021, the Partnership received approximately $328,000 as payment in full for outstanding principal and interest on a note receivable due from Arbors at Hickory Ridge.

 

Activity in the First Nine Months of 2020

 

Concurrent with the acquisition of GILs (Note 7), the Partnership committed to provide property loans for the construction of the underlying properties on a draw-down basis for Scharbauer Flats Apartments, Oasis at Twin Lakes, and Centennial Crossings. Property loan commitments for these properties total $76.1 million.

 

During the third quarter of 2020, the Partnership advanced Live 929 Apartments approximately $406,000 under the secured property loan entered into in August 2019.

 

 


24


 

 

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

 

 

 

Maturity Date (1)

 

Interest Rate

 

Maximum Remaining Commitment

 

Centennial Crossings

 

9/1/2023

 

LIBOR + 2.50%

(2)

 

21,232,271

 

Hilltop at Signal Hills

 

8/1/2023

 

SOFR + 3.07%

(2)

 

20,197,939

 

Legacy Commons at Signal Hills

 

2/1/2024

 

SOFR + 3.07%

(2)

 

31,233,972

 

Oasis at Twin Lakes

 

8/1/2023

 

LIBOR + 2.50%

(2)

 

13,755,209

 

Scharbauer Flats Apartments

 

1/1/2023

 

LIBOR + 2.85%

 

 

20,850,387

 

Osprey Village

 

8/1/2024

 

SOFR + 3.07%

(2)

 

24,500,000

 

Willow Place Apartments

 

10/1/2024

 

SOFR + 3.30%

(3)

 

20,351,328

 

Total

 

 

 

 

 

$

152,121,106

 

 

(1)

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

(2)

The index is subject to a floor of 0.5%.

(3)

The index is subject to a floor of 0.25%.

 

 

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 nine months ended September 30, 2021 and 2020:

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Current income tax expense (benefit)

 

$

(39,131

)

 

$

(33,618

)

 

$

104,483

 

 

$

107,681

 

Deferred income tax benefit

 

 

(42,011

)

 

 

(34,601

)

 

 

(77,681

)

 

 

(66,482

)

Total income tax expense (benefit)

 

$

(81,142

)

 

$

(68,219

)

 

$

26,802

 

 

$

41,199

 

 

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 September 30, 2021 and December 31, 2020.

 

12. Other Assets

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

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Deferred financing costs, net

 

$

1,419,806

 

 

$

390,649

 

Fair value of derivative instruments (Note 18)

 

 

311,801

 

 

 

321,503

 

Taxable mortgage revenue bonds, at fair value

 

 

2,435,954

 

 

 

1,510,437

 

Taxable governmental issuer loan held in trust

 

 

1,000,000

 

 

 

-

 

Bond purchase commitments, at fair value (Note 19)

 

 

401,223

 

 

 

431,879

 

Operating lease right-of-use assets, net

 

 

1,626,953

 

 

 

1,648,742

 

Other assets

 

 

1,608,565

 

 

 

1,605,374

 

Total other assets

 

$

8,804,302

 

 

$

5,908,584

 

 

As of September 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” in the condensed consolidated statements of operations.  Unrealized gain or losses on taxable MRBs and bond purchase commitments are recorded in the 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.

 

25


 

 

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 total funding commitment, that was entered into during the nine months ended September 30, 2021:

 

Property Name

 

Date Committed

 

Maturity Date

 

Initial Outstanding Balance

 

 

Total Commitment

 

Hope on Avalon

 

January 2021

 

2/1/2023 (1)

 

$

1,000,000

 

 

$

10,573,000

 

(1)

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

 

The following table includes details of the taxable MRB, and the total funding commitment, that was entered into during the nine months ended September 30, 2020:

 

Property Name

 

Date Committed

 

Maturity Date

 

Initial Outstanding Balance

 

 

Total Commitment

 

Ocotillo Springs - Series A-T

 

July 2020

 

8/1/2022 (1)

 

$

-

 

(2)

$

7,000,000

 

 

(1)

The borrower has the option to extend the maturity up to one year.

(2)

The Partnership had advanced 0 and $1.0 million as of December 31, 2020 and September 30, 2021, respectively.

13. Accounts Payable, Accrued Expenses and Other Liabilities

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

 

 

 

 

September 30, 2021

 

 

December 31, 2020

 

Accounts payable

 

$

214,525

 

 

$

94,674

 

Accrued expenses

 

 

4,121,562

 

 

 

2,755,010

 

Accrued interest expense

 

 

3,961,834

 

 

 

3,433,247

 

Operating lease liabilities

 

 

2,151,595

 

 

 

2,149,001

 

Other liabilities

 

 

1,737,030

 

 

 

1,517,633

 

Total accounts payable, accrued expenses and other liabilities

 

$

12,186,546

 

 

$

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 September 30, 2021, the minimum aggregate annual payment due under the agreement is approximately $138,000. 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 $126,000 for the three and nine months ended September 30, 2021 and 2020, respectively, and are reported within “Real estate operating expenses” in the 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 September 30, 2021:

 

Remainder of 2021

 

$

34,968

 

2022

 

 

141,119

 

2023

 

 

143,561

 

2024

 

 

144,706

 

2025

 

 

147,598

 

Thereafter

 

 

4,369,676

 

Total

 

 

4,981,628

 

Less:  Amount representing interest

 

 

(2,830,033

)

Total operating lease liabilities

 

$

2,151,595

 

 

26


 

 

14. Unsecured Lines of Credit

The following table summarizes the unsecured lines of credit (“LOC” or “LOCs”) as of December 31, 2020:

 

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.

 

In June 2021, the Partnership and Bankers Trust agreed to terminate the $10 million unsecured operating LOC upon closing of a new $40 million secured LOC with BankUnited, N.A. and Bankers Trust (Note 15).  There was 0 outstanding principal or accrued interest outstanding as of the termination date.  

In August 2021, the Partnership and Bankers Trust Company (“Bankers Trust”) agreed to terminate the $50 million unsecured non-operating LOC and was replaced with a secured line of credit (Note 15).  There was 0 outstanding principal on the unsecured non-operating LOC as of the termination date.

 

 

15. Secured Lines of Credit

 

The following table summarizes the secured LOCs as of September 30, 2021:

 

Secured Line of Credit

 

Outstanding as of September 30, 2021

 

 

Total Commitment

 

 

Commitment Maturity

 

Variable /

Fixed

 

Reset

Frequency

 

Period End

Rate

 

BankUnited general

 

$

6,500,000

 

 

$

40,000,000

 

 

June 2023 (1)

 

Variable (2)

 

Monthly

 

 

3.50

%

Bankers Trust acquisition

 

 

-

 

 

 

50,000,000

 

 

June 2023

 

Variable (3)

 

Monthly

 

 

3.10

%

 

 

$

6,500,000

 

 

$

90,000,000

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The General 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%.  

(3)

The variable rate is equal to the greater of (i) the Prime Rate or (ii) 3.25% per annum; plus or minus a margin varying from 0.35% to (0.65%) depending upon the ratio of the Partnership’s senior debt to market value of assets.

 

In June 2021, the Partnership entered into a secured Credit Agreement (“Secured Credit Agreement”) of up to $40 million with BankUnited, N.A. and Bankers Trust Company, and the sole lead arranger and administrative agent, BankUnited, N.A, for a general secured line of credit (“General LOC”).  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 General 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 General 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 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 September 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 under the Secured Credit Agreement that, among others, require the Partnership to maintain a minimum liquidity of not less than $5 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 September 30, 2021.

27


 

In August 2021, the Partnership and Bankers Trust entered into an amended and restated credit agreement for a secured non-operating line of credit (“Acquisition LOC”) with a maximum commitment of up to $50 million. The Acquisition LOC replaces the Partnership’s previous unsecured non-operating line of credit (Note 14). The Acquisition LOC may be used to fund purchases of multifamily real estate, tax-exempt or taxable MRBs, and tax-exempt or taxable loans issued to finance the acquisition, rehabilitation, or construction of affordable housing or which are otherwise secured by real estate or mortgage-backed securities (collectively, the “financed assets”). The financed assets acquired with the proceeds of the Acquisition LOC will be held in a custody account and the outstanding balances of the Acquisition LOC will be secured by a first priority interest in the financed assets and will be maintained in the custody account until released by Bankers Trust.

 

Advances on the Acquisition LOC are due on the 270th day following the advance date but may be extended for up to three additional 90-day periods, but in no event later than the maturity date by providing Bankers Trust with a written request for such extension together with a principal payment of 5% of the principal amount of the original acquisition advance for the first such extension, 10% for the second such extension, and 20% for the third such extension. The Acquisition LOC documents contains a covenant, among others, that the Partnership’s ratio of the lender’s senior debt will not exceed a specified percentage 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 September 30, 2021.

 

16. Debt Financing

 

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

 

 

 

Outstanding Debt

Financings as of September 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

 

$

39,435,294

 

 

$

4,000

 

 

2010

 

May 2027

 

N/A

 

N/A

 

N/A

 

 

N/A

 

 

3.05%

 

Variable - M31 (1)

 

 

77,340,279

 

 

 

4,999

 

 

2014

 

July 2024

 

Weekly

 

SIFMA

 

0.05%

 

 

1.27%

 

 

1.32%

 

Fixed - M33

 

 

30,345,610

 

 

 

2,606

 

 

2015

 

September 2030

 

N/A

 

N/A

 

N/A

 

 

N/A

 

 

3.24%

 

Fixed - M45 (2)

 

 

214,415,750

 

 

 

5,000

 

 

2018

 

July 2034

 

N/A

 

N/A

 

N/A

 

 

N/A

 

 

3.82%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured Notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variable - Notes

 

 

102,872,192

 

 

 

77,530,879

 

 

2020

 

September 2025

 

Monthly

 

3-month LIBOR

 

0.12%

 

 

9.00%

 

 

9.12% (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOB Trust Securitizations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mizuho Capital Markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variable - TOB

 

 

9,034,467

 

 

 

-

 

 

2020

 

July 2022

 

Weekly

 

SIFMA

 

0.21%

 

 

0.89%

 

 

1.10%

 

Variable - TOB

 

 

10,032,675

 

 

 

-

 

 

2021

 

February 2023

 

Weekly

 

SIFMA

 

0.21%

 

 

1.42%

 

 

1.63%

 

Variable - TOB

 

 

4,127,846

 

 

 

-

 

 

2021

 

April 2023

 

Weekly

 

SIFMA

 

0.21%

 

 

1.27%

 

 

1.48%

 

Variable - TOB

 

 

96,716,042

 

 

 

-

 

 

2019

 

July 2023

 

Weekly

 

SIFMA

 

0.21% - 0.25%

 

 

1.17% - 1.67%

 

 

1.38% - 1.92%

 

Variable - TOB

 

 

100,813,059

 

 

 

-

 

 

2020

 

September 2023

 

Weekly

 

OBFR

 

0.26%

 

 

0.89%

 

 

1.15%

 

Variable - TOB

 

 

5,680,103

 

 

 

-

 

 

2020

 

December 2023

 

Weekly

 

SIFMA

 

0.21%

 

 

1.27%

 

 

1.48%

 

Variable - TOB

 

 

52,531,175

 

 

 

-

 

 

2021

 

January 2024

 

Weekly

 

OBFR

 

0.26%

 

 

0.89%

 

 

1.15%

 

Variable - TOB

 

 

4,351,664

 

 

 

-

 

 

2021

 

July 2024

 

Weekly

 

OBFR

 

0.26%

 

 

1.16%

 

 

1.42%

 

Morgan Stanley:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed - Term TOB

 

 

12,936,258

 

 

 

-

 

 

2019

 

May 2024

 

N/A

 

N/A

 

N/A

 

 

N/A

 

 

1.98%

 

Total Debt Financings

 

$

760,632,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 $39.7 million of the Secured Notes and 1.00% for approximately $63.5 million of the Secured Notes as of September 30, 2021. See Note 18 for further information on the total return swaps.

28


 

 

 

 

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 Trust Securitizations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 VIEs of 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 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 September 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 aggregate valuation of the underlying MRBs, taxable MRB, GILs, taxable GIL 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 September 30, 2021 or December 31, 2020.

 


29


 

 

The Partnership has entered into various TOB Trust financings with Mizuho secured by MRBs, a taxable MRB, GILs, a taxable GIL, and property loans. 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 September 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 September 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 Nine Months of 2021

 

 

 

New Debt Financings:

 

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

 

TOB Trusts Securitization

 

Initial TOB

Trust Financing (1)

 

 

Stated Maturity

 

Reset

Frequency

 

Variable Rate Index

 

Facility Fees

 

TOB Trust 2021-XF2926 (2)

 

$

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%

 

TOB Trust 2021-XF2939 (3)

 

 

4,085,000

 

 

July 2024

 

Weekly

 

OBFR

 

1.16%

 

Total TOB Trust Financings

 

$

31,820,000

 

 

 

 

 

 

 

 

 

 

 

(1)

Amounts shown are the initial funding into the respective TOB Trusts. The balances will increase based upon subsequent fundings of the related securitized assets and the current outstanding balances are contained in the summarized debt financing table above.

(2)

The TOB Trust is a securitization of 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.

(3)

The TOB Trust is a securitization of the Osprey Village GIL and property loan and the Ocotillo Spring Series A-T taxable MRB.

 

 

Redemptions:

 

The following is a summary of the TOB Trust financings that were collapsed and all principal and interest were paid in full during the nine months ended September 30, 2021:

 

Debt Financing

 

Debt Facility

 

Month

 

Paydown Applied

 

Rosewood Townhomes - Series A

 

TOB Trust

 

July 2021

 

$

7,700,000

 

South Pointe Apartments - Series A

 

TOB Trust

 

July 2021

 

 

17,990,000

 

 

 

 

 

 

 

$

25,690,000

 

 

Refinancing Activity:

 

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%.


30


 

 

Activity in the First Nine Months of 2020

 

New Debt Financings:

 

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

 

TOB Trusts Securitization

 

Initial TOB

Trust Financing (1)

 

 

Stated Maturity

 

Reset

Frequency

 

Variable Rate Index

 

Facility Fees

 

Avistar at Copperfield - Series A

 

$

11,818,000

 

 

May 2021 (2)

 

Weekly

 

SIFMA

 

1.67%

 

Avistar at Wilcrest - Series A

 

 

4,479,000

 

 

May 2021 (2)

 

Weekly

 

SIFMA

 

1.67%

 

Avistar at Wood Hollow - Series A

 

 

34,007,000

 

 

May 2021 (2)

 

Weekly

 

SIFMA

 

1.67%

 

Gateway Village

 

 

2,184,000

 

 

May 2021 (2)

 

Weekly

 

SIFMA

 

1.67%

 

Lynnhaven

 

 

2,898,000

 

 

May 2021 (2)

 

Weekly

 

SIFMA

 

1.67%

 

Ocotillo Springs - Series A

 

 

100,000

 

 

July 2022

 

Weekly

 

SIFMA

 

0.89%

 

Oasis at Twin Lakes GIL (3)

 

 

10,440,000

 

 

July 2023

 

Weekly

 

SIFMA

 

0.89%

 

Scharbauer Flats Apartments GIL (3)

 

 

36,000,000

 

 

July 2023

 

Weekly

 

SIFMA

 

0.89%

 

Centennial Crossings GIL (3)

 

 

8,707,000

 

 

August 2023

 

Weekly

 

SIFMA

 

0.89%

 

TOB Trust 2020-XF2907 (3)

 

 

55,870,000

 

 

September 2023

 

Weekly

 

OBFR

 

0.89%

 

TOB Trust 2020-XF2908

 

 

4,790,000

 

 

September 2023

 

Weekly

 

OBFR

 

0.89%

 

Total TOB Trust Financings

 

$

171,293,000

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Amounts shown are the initial funding into the respective TOB Trusts. The balances will increase based upon subsequent fundings of the related securitized assets and the current outstanding balances are contained in the summarized debt financing table above.

(2)

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

(3)

NaN TOB Trust financings associated with individual GILs were originated and subsequently collapsed during 2020. The three related GILs were then combined and re-securitized into a single TOB Trust financing in September 2020. The new TOB Trust financing was created to take advantage of lower interest rate spread adjustments compared to the previous TOB Trust financings. The termination of the single-GIL TOB Trust financings were treated as extinguishments for accounting purposes and the Partnership expensed approximately $364,000 of deferred financings costs.

 

In September 2020, ATAX TEBS Holdings, LLC, a wholly owned subsidiary of the Partnership, issued Secured Notes to Mizuho with an aggregate principal amount of $103.5 million. The Secured Notes are secured by the Partnership’s residual certificates associated with its four TEBS Financings. The Secured Notes bear interest at a variable rate equal to the 3-month LIBOR plus 9.00%, payable monthly. Concurrent with the issuance of the Notes, the Partnership entered into two total return swap transactions with Mizuho to reduce the net interest cost related to the Secured Notes (Note 18). Of the $103.5 million of proceeds from the Secured Notes, approximately $26.0 million was received in cash by the Partnership, and approximately $77.5 million was deposited with Mizuho as collateral for the total return swaps.

 

Redemptions:

 

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

 

31


 

 

Future Maturities

 

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

 

Remainder of 2021

 

$

1,653,516

 

2022

 

 

15,604,689

 

2023

 

 

222,409,816

 

2024

 

 

158,068,152

 

2025

 

 

11,363,784

 

Thereafter

 

 

354,283,518

 

Total

 

 

763,383,475

 

Unamortized deferred financing costs and debt premium

 

 

(2,751,061

)

Total debt financing, net

 

$

760,632,414

 

 

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 September 30, 2021 and December 31, 2020:

 

Property Mortgage Payables

 

Outstanding Mortgage

Payable as of

September 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

 

$

2,335,094

 

 

$

2,521,308

 

 

2020

 

March 2025

 

Fixed

 

 

4.40

%

The 50/50 MF Property--Mortgage

 

 

23,094,356

 

 

 

23,463,564

 

 

2020

 

April 2027

 

Fixed

 

 

4.35

%

Total Mortgage Payable\Weighted

   Average Period End Rate

 

$

25,429,450

 

 

$

25,984,872

 

 

 

 

 

 

 

 

 

4.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Activity in the First Nine 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 a fixed interest rate of 4.40%.

Future Maturities

 

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

 

Remainder of 2021

 

$

292,299

 

2022

 

 

870,162

 

2023

 

 

909,151

 

2024

 

 

947,168

 

2025

 

 

1,746,754

 

Thereafter

 

 

20,665,299

 

Total

 

 

25,430,833

 

Unamortized deferred fin