10-Q

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 March 31, 2022


☐	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 April 30, 2022, the registrant had approximately 22,017,914 Beneficial Unit Certificates representing assignments of limited partnership interests outstanding.

INDEX

PART I – FINANCIAL INFORMATION


Item 1	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income (Loss)	6
	Condensed Consolidated Statements of Partners’ Capital	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
Item 3	Quantitative and Qualitative Disclosures About Market Risk	67
Item 4	Controls and Procedures	70

PART II – OTHER INFORMATION
Item 1A	Risk Factors	71
Item 6	Exhibits	71
SIGNATURES		72

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, 2021 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;

•

general economic, geopolitical, and financial conditions, including the current and future impact of changing interest rates, inflation, international conflicts, and the novel coronavirus (“COVID-19”) on business operations, employment, and financial conditions;

•

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 of properties related to our investments; 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)


	March 31, 2022			December 31, 2021
Assets:
Cash and cash equivalents	$	118,330,462		$	68,285,501
Restricted cash		44,125,301			83,646,969
Interest receivable, net		7,001,608			9,234,412
Mortgage revenue bonds held in trust, at fair value (Note 6)		714,524,298			750,934,848
Mortgage revenue bonds, at fair value (Note 6)		20,431,600			42,574,996
Governmental issuer loans (Note 7)		201,649,588			184,767,450
Real estate assets: (Note 8)
Land and improvements		7,411,079			7,411,079
Buildings and improvements		73,062,928			72,998,475
Real estate assets before accumulated depreciation		80,474,007			80,409,554
Accumulated depreciation		(21,379,622	)		(20,701,922	)
Net real estate assets		59,094,385			59,707,632
Investments in unconsolidated entities (Note 9)		107,679,013			107,793,522
Property loans, net of loan loss allowances (Note 10)		104,350,527			68,101,268
Other assets (Note 12)		18,715,506			10,862,885
Total Assets	$	1,395,902,288		$	1,385,909,483

Liabilities:
Accounts payable, accrued expenses and other liabilities (Note 13)	$	12,537,279		$	13,664,212
Distribution payable		9,721,430			12,757,459
Secured lines of credit (Note 14)		30,199,000			45,714,000
Debt financing, net (Note 15)		882,453,664			820,078,714
Mortgages payable and other secured financing, net (Note 16)		26,683,361			26,824,543
Total Liabilities		961,594,734			919,038,928

Commitments and Contingencies (Note 18)

Redeemable Preferred Units, $94.5 million redemption value, 9.5 million issued and outstanding, net (Note 19)		94,467,522			94,458,528

Partnersʼ Capital:
General Partner (Note 1)		588,267			765,550
Beneficial Unit Certificates ("BUCs," Note 1)		339,251,765			371,646,477
Total Partnersʼ Capital		339,840,032			372,412,027
Total Liabilities and Partnersʼ Capital	$	1,395,902,288		$	1,385,909,483

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

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	For the Three Months Ended March 31,
	2022				2021
Revenues:
Investment income	$	14,403,403			$	12,388,241
Property revenues		1,927,001				1,694,524
Other interest income		2,875,967				304,723
Total revenues		19,206,371				14,387,488
Expenses:
Real estate operating (exclusive of items shown below)		1,064,562				1,007,840
Depreciation and amortization		683,662				683,460
Interest expense		3,937,131				5,226,475
General and administrative		3,681,838				3,285,708
Total expenses		9,367,193				10,203,483
Other Income:
Gain on sale of investments in unconsolidated entities		16,439,750				2,809,106
Income before income taxes		26,278,928				6,993,111
Income tax expense		14,910				257
Net income		26,264,018				6,992,854
Redeemable Preferred Unit distributions and accretion		(717,744	)			(717,763	)
Net income available to Partners	$	25,546,274			$	6,275,091

Net income available to Partners allocated to:
General Partner	$	2,737,044			$	736,936
Limited Partners - BUCs		22,729,198				5,526,202
Limited Partners - Restricted units		80,032				11,953
	$	25,546,274			$	6,275,091
BUC holders' interest in net income per BUC, basic and diluted	$	1.03		*	$	0.27		*
Weighted average number of BUCs outstanding, basic		22,016,636		*		20,230,287		*
Weighted average number of BUCs outstanding, diluted		22,016,636		*		20,230,287		*

* On April 1, 2022, the Partnership effected a one-for-three reverse unit split of its outstanding BUCs. The amounts indicated in the Condensed Consolidated Statements of Operations have been adjusted to reflect the one-for-three reverse unit split on a retroactive basis.

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

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


	For the Three Months Ended March 31,
	2022			2021
Net income	$	26,264,018		$	6,992,854
Unrealized loss on securities		(47,751,656	)		(16,298,797	)
Unrealized loss on bond purchase commitments		(819,081	)		(120,970	)
Comprehensive income (loss)	$	(22,306,719	)	$	(9,426,913	)

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

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(UNAUDITED)


	General Partner			# of BUCs - Restricted and Unrestricted		BUCs - Restricted and Unrestricted			Total			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2021	$	765,550			22,094,159	$	371,646,477		$	372,412,027		$	114,040,260
Distributions paid or accrued ($0.33 per BUC):*
Distribution of Tier 2 income (Note 3)		(2,430,358	)		-		(7,291,072	)		(9,721,430	)		-
Net income allocable to Partners		2,737,044			-		22,809,230			25,546,274			-
Restricted unit compensation expense		1,739			-		172,159			173,898			-
Unrealized loss on securities		(477,517	)		-		(47,274,139	)		(47,751,656	)		(47,751,656	)
Unrealized loss on bond purchase commitments		(8,191	)		-		(810,890	)		(819,081	)		(819,081	)
Balance as of March 31, 2022	$	588,267