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, 2023


☐	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: 001-41564

GREYSTONE HOUSING IMPACT INVESTORS LP

(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 Greystone Housing Impact Investors LP	GHI	The New York Stock Exchange

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 March 31, 2023, the registrant had 22,728,299 Beneficial Unit Certificates representing assignments of limited partnership interests outstanding.

INDEX

PART I – FINANCIAL INFORMATION


Item 1	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Income (Loss)	7
	Condensed Consolidated Statements of Partners’ Capital	8
	Condensed Consolidated Statements of Cash Flows	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	56
Item 3	Quantitative and Qualitative Disclosures About Market Risk	87
Item 4	Controls and Procedures	91

PART II – OTHER INFORMATION
Item 1A	Risk Factors	92
Item 6	Exhibits	92
SIGNATURES		93

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 Greystone Housing Impact Investors LP’s Annual Report on Form 10-K for the year ended December 31, 2022 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, and international conflicts on business operations, employment, and financial conditions;

•

current financial conditions within the banking industry, including the effects of recent failures of financial institutions, liquidity levels, and responses by the Federal Reserve, Department of the Treasury, and the Federal Deposit Insurance Corporation to address these issues;

•

uncertain conditions within the domestic and international macroeconomic environment, including monetary and fiscal policy and conditions in the investment, credit, interest rate, and derivatives markets;

•

adverse reactions in U.S. financial markets related to actions of foreign central banks or the economic performance of foreign economies, including in particular China, Japan, the European Union, and the United Kingdom;

•

the general condition of the real estate markets in the regions in which we operate, which may be unfavorably impacted by increases in mortgage interest rates, slowing economic growth, persistent elevated inflation levels, and other factors;

•

changes in interest rates and credit spreads, as well as the success of any hedging strategies we may undertake in relation to such changes, and the effect such changes may have on the relative spreads between the yield on our investments and our cost of financing;

•

persistent inflationary trends, spurred by multiple factors including expansionary monetary and fiscal policy, higher commodity prices, a tight labor market, and low residential vacancy rates, which may result in further interest rate increases and lead to increased market volatility;

•

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;

•

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 Greystone Housing Impact Investors LP, its wholly owned subsidiaries and our consolidated Variable Interest Entities ("VIE" or "VIEs"). 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.

GREYSTONE HOUSING IMPACT INVESTORS LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	March 31, 2023			December 31, 2022
Assets:
Cash and cash equivalents	$	52,105,214		$	51,188,416
Restricted cash		36,212,909			41,448,840
Interest receivable, net		14,614,935			11,628,173
Mortgage revenue bonds held in trust, at fair value (Note 6)		848,532,258			763,208,945
Mortgage revenue bonds, at fair value (Note 6)		18,851,364			36,199,059
Governmental issuer loans
Governmental issuer loans held in trust (Note 7)		317,607,738			300,230,435
Allowance for credit losses (Note 13)		(2,080,000	)		-
Governmental issuer loans, net		315,527,738			300,230,435
Property loans
Property loans (Note 8)		165,231,455			175,604,711
Allowance for credit losses (Note 13)		(2,450,000	)		(495,000	)
Property loans, net		162,781,455			175,109,711
Investments in unconsolidated entities (Note 9)		111,135,056			115,790,841
Real estate assets, net (Note 10)		35,672,782			36,550,478
Other assets (Note 12)		37,236,398			35,774,667
Total Assets	$	1,632,670,109		$	1,567,129,565

Liabilities:
Accounts payable, accrued expenses and other liabilities (Note 14)	$	23,407,989		$	21,733,506
Distribution payable		10,835,021			10,899,677
Secured lines of credit (Note 15)		6,500,000			55,500,000
Debt financing, net (Note 16)		1,143,735,172			1,058,903,952
Mortgages payable and other secured financing, net (Note 17)		1,690,000			1,690,000
Total Liabilities		1,186,168,182			1,148,727,135

Commitments and Contingencies (Note 19)

Redeemable Preferred Units, $102.5 million redemption value, 10.3 million issued and outstanding, net (Note 20)		102,429,876			94,446,913

Partnersʼ Capital:
General Partner (Note 1)		486,762			285,571
Beneficial Unit Certificates ("BUCs," Note 1)		343,585,289			323,669,946
Total Partnersʼ Capital		344,072,051			323,955,517
Total Liabilities and Partnersʼ Capital	$	1,632,670,109		$	1,567,129,565

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

GREYSTONE HOUSING IMPACT INVESTORS LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	For the Three Months Ended March 31,
	2023			2022
Revenues:
Investment income	$	19,302,685		$	14,403,403
Property revenues		1,225,620			1,927,001
Other interest income		4,409,665			2,875,967
Total revenues		24,937,970			19,206,371
Expenses:
Real estate operating (exclusive of items shown below)		602,253			1,064,562
Provision for credit losses (Note 13)		(545,000	)		-
Depreciation and amortization		404,981			683,662
Interest expense		17,971,498			3,937,131
General and administrative		5,072,587			3,681,838
Total expenses		23,506,319			9,367,193
Other Income:
Gain on sale of investments in unconsolidated entities		15,366,929			16,439,750
Income before income taxes		16,798,580			26,278,928
Income tax expense		7,358			14,910
Net income		16,791,222			26,264,018
Redeemable Preferred Unit distributions and accretion		(746,650	)		(717,744	)
Net income available to Partners	$	16,044,572		$	25,546,274

Net income available to Partners allocated to:
General Partner	$	2,479,058		$	2,737,044
Limited Partners - BUCs		13,490,834			22,729,198
Limited Partners - Restricted units		74,680			80,032
	$	16,044,572		$	25,546,274
BUC holders' interest in net income per BUC, basic and diluted	$	0.60		$	1.01		*
Weighted average number of BUCs outstanding, basic		22,538,928			22,480,077		*
Weighted average number of BUCs outstanding, diluted		22,538,928			22,480,077		*

* On April 1, 2022, the Partnership effected a one-for-three reverse unit split of its outstanding BUCs (the “Reverse Unit Split”). On October 31, 2022, the Partnership completed a distribution in the form of additional BUCs at a ratio of 0.01044 BUCs for each BUC outstanding as of September 30, 2022 (the “Third Quarter BUCs Distribution”). On January 31, 2023, the Partnership completed a distribution in the form of additional BUCs at a ratio of 0.0105 BUCs for each BUC outstanding as of December 30, 2022 (the “Fourth Quarter BUCs Distribution”, collectively with the Third Quarter BUCs Distribution, the “BUCs Distributions”). The amounts indicated in the Condensed Consolidated Statements of Operations have been adjusted to reflect both the Reverse Unit Split and the BUCs Distributions on a retroactive basis.

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

GREYSTONE HOUSEING IMPACT INVESTORS LP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


	For the Three Months Ended March 31,
	2023		2022
Net income	$	16,791,222	$	26,264,018
Unrealized gain (loss) on securities		20,397,542		(47,751,656	)
Unrealized gain (loss) on bond purchase commitments		112,547		(819,081	)
Comprehensive income (loss)	$	37,301,311	$	(22,306,719	)

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

GREYSTONE HOUSING IMPACT INVESTORS LP

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, 2022	$	285,571			22,626,363		$	323,669,946		$	323,955,517		$	43,748,239
Cumulative effect of accounting change (Note 2)		(59,490	)		-			(5,889,510	)		(5,949,000	)		-
Distributions paid or accrued ($0.37 per BUC):
Regular distribution		(11,756	)		-			(1,163,807	)		(1,175,563	)		-
Distribution of Tier 2 income (Note 3)		(2,415,221	)		-			(7,245,663	)		(9,660,884	)		-
Cash paid in lieu of fractional BUCs		-			-			(2,639	)		(2,639	)		-
Net income allocable to Partners		2,479,058			-			13,565,514			16,044,572			-
Restricted units awarded		-			102,087			-			-			-
Rounding of BUCs related to BUCs Distributions		-			(151	)		-			-			-
Restricted unit compensation expense		3,500			-			346,459			349,959			-
Unrealized gain on securities		203,975			-			20,193,567			20,397,542			20,397,542
Unrealized gain on bond purchase commitments		1,125			-			111,422			112,547			112,547
Balance as of March 31, 2023	$	486,762		$	22,728,299		$	343,585,289		$	344,072,051		$	64,258,328


	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			22,557,600	$	371,646,477		$	372,412,027		$	114,040,260
Distributions paid or accrued ($0.323 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		$	22,557,600	$	339,251,765		$	339,840,032		$	65,469,523

* On April 1, 2022, the Partnership effected a one-for-three Reverse Unit Split of its outstanding BUCs. On October 31, 2022, the Partnership completed the Third Quarter BUCs Distribution at a ratio of 0.01044 BUCs for each BUC outstanding as of September 30, 2022. On January 31, 2023, the Partnership completed the Fourth Quarter BUCs Distribution at a ratio of 0.0105 BUCs for each BUC outstanding as of December 30, 2022. The amounts indicated in the Condensed Consolidated Statements of Partners' Capital have been adjusted to reflect both the Reverse Unit Split and the BUCs Distributions on a retroactive basis.

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

GREYSTONE HOUSING IMPACT INVESTORS LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	For the Three Months Ended March 31,
	2023			2022
Cash flows from operating activities:
Net income	$	16,791,222		$	26,264,018
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		404,981			683,662
Amortization of deferred financing costs		1,005,767			451,472
Gain on sale of investments in unconsolidated entities		(15,366,929	)		(16,439,750	)
Provision for credit losses		(545,000	)		-
Recovery of prior credit loss		(16,967	)		(5,279	)
(Gain) loss on derivative instruments, net of cash paid		3,476,097			(2,394,986	)
Restricted unit compensation expense		349,959			173,898
Bond premium, discount and origination fee amortization		(54,476	)		(109,021	)
Debt premium amortization		(10,145	)		(10,148	)
Deferred income tax expense & income tax payable/receivable		7,358			14,909
Change in preferred return receivable from unconsolidated entities, net		(1,934,065	)		(191,505	)
Changes in operating assets and liabilities
(Increase) decrease in interest receivable		(2,986,762	)		2,231,487
Increase in other assets		(237,767	)		(233,754	)
Decrease in accounts payable, accrued expenses and other liabilities		(683,869	)		(1,127,714	)
Net cash provided by operating activities		199,404			9,307,289
Cash flows from investing activities:
Capital expenditures		(171,670	)		(64,453	)
Proceeds from sale of land held for development		441,714			-
Advances on mortgage revenue bonds		(60,622,813	)		(69,365,000	)
Advances on taxable mortgage revenue bonds		(1,805,000	)		(6,325,000	)
Advances on governmental issuer loans		(17,377,303	)		(16,882,138	)
Advances on taxable governmental issuer loans		(3,000,000	)		-
Advances on property loans		(7,942,324	)		(38,638,389	)
Contributions to unconsolidated entities		(4,705,639	)		(12,776,841	)
Proceeds from sale of investments in unconsolidated entities		27,659,480			28,679,750
Return of investments in unconsolidated entities		-			842,855
Principal payments received on mortgage revenue bonds and contingent interest		13,303,739			79,635,980
Principal payments received on taxable mortgage revenue bonds		2,797			2,558
Principal payments received on property loans		18,315,580			3,250,980
Net cash used in investing activities		(35,901,439	)		(31,639,698	)
Cash flows from financing activities:
Distributions paid		(11,612,492	)		(13,466,209	)
Proceeds from debt financing		126,381,000			109,330,000
Principal payments on debt financing		(41,786,351	)		(46,527,429	)
Principal payments on mortgages payable		-			(141,268	)
Principal borrowing on secured lines of credit		45,000,000			-
Principal payments on secured lines of credit		(94,000,000	)		(15,515,000	)
Decrease in security deposit liability related to restricted cash		(5,887	)		(6,259	)
Proceeds upon issuance of Redeemable Preferred Units		8,000,000			-
Debt financing and other deferred costs paid		(593,368	)		(818,133	)
Net cash provided by financing activities		31,382,902			32,855,702
Net increase (decrease) in cash, cash equivalents and restricted cash		(4,319,133	)		10,523,293
Cash, cash equivalents and restricted cash at beginning of period		92,637,256			151,932,470
Cash, cash equivalents and restricted cash at end of period	$	88,318,123		$	162,455,763

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	12,869,770		$	5,470,198
Supplemental disclosure of noncash investing and financing activities:
Distributions declared but not paid for BUCs and General Partner		10,835,021			9,721,430
Distributions declared but not paid for Preferred Units		739,417			708,750
Exchange of Redeemable Preferred Units		7,000,000			-
Non-cash contribution to unconsolidated entity		997,062			-
Deferred financing costs financed through accounts payable		58,000			7,040

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:


	March 31, 2023		March 31, 2022
Cash and cash equivalents	$	52,105,214	$	118,330,462
Restricted cash		36,212,909		44,125,301
Total cash, cash equivalents and restricted cash	$	88,318,123	$	162,455,763

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

GREYSTONE HOUSING IMPACT INVESTORS LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Basis of Presentation

The Partnership was formed on April 2, 1998, under the Delaware Revised Uniform Limited Partnership Act primarily 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 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 also makes noncontrolling equity investments in unconsolidated entities for the construction, stabilization, and ultimate sale of market-rate multifamily properties. The Partnership is entitled to distributions if, and when, cash is available for distribution either through operations, a refinance or a sale of the property. In addition, the Partnership may acquire and hold interests in multifamily, student and senior citizen residential properties (“MF Properties”) until the “highest and best use” can be determined by management.

The Partnership has issued Beneficial Unit Certificates (“BUCs”) representing assigned limited partnership interests to investors (“BUC holders”). The Partnership has designated three 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 outstanding Series A Preferred Units and Series A-1 Preferred Units are redeemable in the future (Note 20). The Partnership had not yet issued Series B Preferred Units as of March 31, 2023. The holders of the BUCs and Preferred Units are referred to herein collectively as “Unitholders."

On December 5, 2022, America First Capital Associates Limited Partnership Two (the “General Partner” or “AFCA 2”), in its capacity as the general partner of the Partnership, and Greystone ILP, Inc. (the “Initial Limited Partner”), in its capacity as the initial limited partner of the Partnership, entered into the Greystone Housing Impact Investors LP Second Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”). Mortgage investments, as defined in the Partnership Agreement, consist of MRBs, taxable MRBs, GILs, taxable GILs and property loans. The Partnership Agreement authorizes the Partnership to make investments in tax-exempt securities other than mortgage investments provided that the tax-exempt investments are rated in one of the four highest rating categories by a national securities rating agency. The Partnership Agreement also allows the Partnership to invest in other securities whose interest may be taxable for federal income tax purposes. Total tax-exempt investments and other investments cannot exceed 25% of the Partnership's total assets at the time of acquisition as required under the Partnership Agreement. Tax-exempt investments and other investments primarily consist of real estate assets and investments in unconsolidated entities. In addition, the amount of other investments is limited based on the conditions to the exemption from registration under the Investment Company Act of 1940.

AFCA 2 is the sole general partner of the Partnership. Greystone Manager, the general partner of AFCA 2, an affiliate of Greystone & Co. II LLC (collectively with its affiliates, “Greystone”).

All disclosures of the number of rental units for properties related to MRBs, GILs, property loans and MF Properties are unaudited.

2. Summary of Significant Accounting Policies

Consolidation

The “Partnership,” as used herein, includes Greystone Housing Impact Investors LP, 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 provide equity for the development of multifamily properties

•

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

•

ATAX Senior Housing Holdings I, LLC, a wholly owned subsidiary of the Partnership, which is committed to provide equity for the development of seniors housing properties;

•

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

•

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

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

Investments in Mortgage Revenue Bonds and Taxable Mortgage Revenue Bonds

The Partnership accounts for its investments in MRBs and taxable MRBs under the accounting guidance for certain investments in debt and equity securities. The Partnership’s investments in these instruments are classified as available-for-sale debt securities and are reported at estimated fair value. The net unrealized gains or losses on these investments are reflected on the Partnership’s condensed consolidated statements of comprehensive income. Unrealized gains and losses do not affect the cash flow of the bonds, distributions to Unitholders, or the characterization of the interest income. See Note 23 for a description of the Partnership’s methodology for estimating the fair value of MRBs and taxable MRBs. The Partnership reports interest receivables for MRBs and taxable MRBs separately from the reported fair value within “Interest receivable, net” on the condensed consolidated balance sheets.

Investments in Government 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, which is net of unamortized loan origination costs, discounts, and allowance for credit losses. The Partnership evaluates its outstanding principal and interest receivable balances associated with its GILs for collectability. If collection of these balances is not probable, the loan is placed on non-accrual status and either an allowance for credit loss will be recognized or the outstanding balance will be written off. The Partnership reports interest receivables for GILs and taxable GILs separately from the amortized cost basis within “Interest receivable, net” on the condensed consolidated balance sheets.

Property Loans

The Partnership invests in property loans made to the owners of certain multifamily, student housing and skilled nursing properties. The property loans are considered held-for-investment and are reported at amortized cost, which is net of unamortized loan origination costs, discounts, and allowance for credit losses. Most property loans have been made to multifamily properties that secure MRBs and GILs owned by the Partnership. The Partnership recognizes interest income on the property loans as earned and the interest income is reported within “Other interest income” on the Partnership’s condensed consolidated statements of operations. Interest income is not recognized for property loans that are deemed to be in nonaccrual status. If collection of outstanding principal and interest receivable balances is not probable, the loan is placed on non-accrual status and either an allowance for credit loss will be recognized or the outstanding balance will be written off. Interest income is recognized upon the repayment of these property loans and accrued interest which is dependent largely on the cash flows or proceeds upon sale or refinancing of the related property. The Partnership reports interest receivables for property loans separately from the amortized cost basis within “Interest receivable, net” on the condensed consolidated balance sheets.

Allowance for Credit Losses

On January 1, 2023, the Partnership adopted Accounting Standard Update (“ASU”) 2016-13, Financial Instruments-Credit Losses, and subsequent related amendments (“ASC 326”), which replaced the incurred loss methodology with an expected loss model known as the Current Expected Credit Loss (“CECL”) model. The CECL model establishes a single allowance framework for financial assets carried at amortized cost which reflects an estimate of credit losses over the remaining expected life of financial assets. The adoption of the ASU 2016-13 requires a cumulative-effect adjustment to Partners’ Capital upon adoption. Additionally, ASU 2016-13 requires enhanced disclosures, included additional disclosures regarding credit quality. The allowance for credit losses is presented as a valuation reserve to the corresponding assets on the Partnership’s condensed consolidated balance sheets. Expected credit losses related to non-cancelable unfunded commitments and financial guaranties are accounted for as separate liabilities and are included in “Accounts payable, accrued expenses and other liabilities” on the Partnership’s condensed consolidated balance sheets. Upon adoption on January 1, 2023, the Partnership recorded a cumulative effect of accounting change of approximately $5.9 million as a direct reduction to Partners’ Capital. Subsequent changes to the allowance for credit losses are recognized through “Provision for credit losses” on the Partnership’s condensed consolidated statements of operations.

Held-to-Maturity Debt Securities, Held-for-Investment Loans and Related Unfunded Commitments

The Partnership estimates allowances for credit losses for its GILs, taxable GILs, property loans and related non-cancelable funding commitments using a Weighted Average Remaining Maturity (“WARM”) method loss-rate model, combined with qualitative factors that are sensitive to changes in forecasted economic conditions. The Partnership applies qualitative factors related to risk factors and changes in current economic conditions that may not be adequately reflected in quantitatively derived results, or other relevant factors to ensure the allowance for credit losses reflects the Partnership’s best estimate of current expected credit losses. The WARM method pools assets sharing similar characteristics and utilizes a historical annual charge-off rate which is applied to the outstanding asset balances over the remaining weighted average life of the pool, adjusted for certain qualitative factors to estimate expected credit losses. The Partnership has minimal history with GILs, taxable GILs, and property loans to date and has had minimal historical credit losses to date. As such, the Partnership uses historical annual charge-off data for similar assets from publicly available loan data through the Federal Financial Institution Examination Council (“FFEIC”). The Partnership adjusts for current conditions and the impact of qualitative forecasts that are reasonable and supportable. The Partnership assesses qualitative adjustments related to, but not limited to, credit quality changes in the asset portfolio, general economic conditions, changes in the affordable multifamily real estate markets, changes in lending policies and underwriting, and underlying collateral values.

The Partnership will elect to separately evaluate an asset if it no longer shares the same risk characteristics as the respective pool or the specific investment attributes do not lend to analysis with a model-based approach. For collateral-dependent assets when foreclosure is probable, the Partnership will apply a practical expedient to estimate current expected credit losses as the difference between the fair value of collateral and the amortized cost of the asset.

Charge-offs to the allowance for credit losses occur when losses are confirmed through the receipt of cash or other consideration from the completion of a sale, when a modification or restructuring takes place in which the Partnership grants a concession to a borrower or agrees to a discount in full or partial satisfaction of the asset, when the Partnership takes ownership and control of the underlying collateral in full satisfaction of the asset, or when significant collection efforts have ceased and it is highly likely that a loss has been realized.

The Partnership has elected to not measure an allowance for credit losses on accrued interest receivables related to its GILs, taxable GILs and property loans because uncollectable accrued interest receivable is written off in a timely manner pursuant to policies for placing assets on non-accrual status.

Available-for-Sale Debt Securities

The Partnership periodically determines if allowances of credit losses are needed for its MRBs and taxable MRBs under the applicable guidance for available-for-sale debt securities. The Partnership evaluates whether unrealized losses are considered impairments based on various factors including, but not necessarily limited to, the following:

•

The 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;

•

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

•

Failure of the borrower to make scheduled interest or principal payments.

While the Partnership evaluates all available information, it focuses specifically on whether the estimated fair value of the security is below amortized cost. If the estimated fair value of an MRB 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 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 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 amortized cost basis of the MRB and records any provision for credit losses as an adjustment to the allowance for credit losses. The Partnership has elected to not measure an allowance for credit losses on accrued interest receivables related to its MRBs and taxable MRBs because uncollectable accrued interest receivable is written off in a timely manner pursuant to policies for placing assets on non-accrual status.

The recognition of an impairment, provision for credit loss, and the potential impairment analysis are subject to a considerable degree of judgment, the results of which, when applied under different conditions or assumptions, could have a material impact on the Partnership's condensed consolidated financial statements. If the Partnership experiences deterioration in the values of its MRB portfolio, the Partnership may incur impairments or provisions for credit losses that could negatively impact the Partnership’s financial condition, cash flows, and reported earnings. The Partnership periodically reviews any previously impaired MRBs for indications of a recovery of value. If a recovery of value is identified, the Partnership will report the recovery of prior credit losses through its allowance for credit losses as a provision for credit losses (recoveries). For MRB impairment recoveries identified prior to the adoption of the CECL model, the Partnership will accrete the recovery of prior credit losses into investment income over the remaining term of the MRB.

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 most significant estimates and assumptions include those used in determining: (i) the fair value of MRBs and taxable MRBs; (ii) investment impairments; (iii) impairment of real estate assets; and (iv) allowances for credit losses.

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, 2022. These condensed consolidated financial statements and notes have been prepared consistently with the 2022 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 March 31, 2023, 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, 2022 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 Federal Reserve announced seven increases in short-term interest rates totaling 425 basis points during 2022 and additional increases totaling 50 basis points in February and March 2023. The Federal Reserve has signaled further future short-term interest rate increases may be needed to combat inflation in the broader economy. In addition, geopolitical conflicts continue to impact the general global economic environment. These factors have caused volatility in the fixed income markets, which has impacted the value of some of the Partnership’s investment assets, particularly those with fixed interest rates. In addition, increases in short-term interest rates will generally result in increases in the interest cost associated with the Partnership’s variable rate debt financing arrangements and for construction debt of properties underlying our investments in unconsolidated entities. The extent to which general economic, geopolitical, and financial conditions 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 current inflationary environment in the United States may increase operating expenses at properties securing the Partnership’s investments and general operations, which may reduce net operating results of the related properties and result in lower debt service coverage or higher than anticipated capitalized interest requirements for properties under construction. Such occurrences may negatively

impact the value of the Partnership’s investments. Higher general and administrative expenses of the Partnership and real estate operating expenses of the MF Properties may adversely affect the Partnership’s operating results, including a reduction in net income.

Furthermore, the potential for an economic recession either globally or locally in the U.S. or other economies could further impact the valuation of our investment assets, limit the Partnership’s ability to obtain additional debt financing from lenders, and limit opportunities for additional investments.

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, which 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. In general, the allowance for credit losses is expected to increase when changing from an incurred loss to expected loss methodology. 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. ASU 2016-13 became effective for the Partnership on January 1, 2023 and was adopted through a cumulative-effect adjustment to Partners’ Capital as of that date. See the Allowance for Credit Losses accounting policy above and Note 13 for further details.

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, 2024. 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 does not currently expect the adoption of ASU 2020-04 to have a material impact on the Partnership's condensed consolidated financial statements.

3. Partnership Income, Expenses and 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 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 Preferred Units and BUCs held by each Unitholder on that date. Cash distributions are currently made on a quarterly basis. The holders of the Preferred Units are entitled to distributions at a fixed rate per annum prior to payment of distributions to other Unitholders.

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.

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 Partnership's condensed consolidated statements of operations. The unvested RUAs issued under the Plan are considered participating securities and are potentially dilutive. There were no dilutive BUCs for the three months ended March 31, 2023 and 2022.

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 where the Partnership is the primary beneficiary. In determining the primary beneficiary of each 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 senior securities related to the TOB, term TOB, and TEBS financings as secured debt financings on the Partnership's condensed consolidated balance sheets (Note 16). The investment assets securing the TOB, Term TOB and TEBS financings are reported as assets on the Partnership's condensed consolidated balance sheets (Notes 6, 7, 8 and 12).

The Partnership has determined its investment in Vantage at San Marcos 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 property 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 San Marcos became effective beginning in the fourth quarter of 2021. As the primary beneficiary, the Partnership reports the assets and liabilities of Vantage at San Marcos on a consolidated basis, which consist of a real estate asset investment (Note 10), mortgage payable (Note 17), and current liabilities associated with the construction costs of a market-rate multifamily property (Note 14). If certain events occur in the future, the Partnership’s option to redeem the investment will terminate and the VIE may be deconsolidated.

Non-Consolidated VIEs

The Partnership has variable interests in various VIEs in the form of MRBs, taxable MRBs, GILs, taxable GILs, 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 Partnership's condensed consolidated financial statements.

The Partnership held variable interests in 31 and 35 non-consolidated VIEs as of March 31, 2023 and December 31, 2022, respectively. The following table summarizes the Partnership’s maximum exposure to loss associated with its variable interests as of March 31, 2023 and December 31, 2022:


	Maximum Exposure to Loss of Non-consolidated VIEs
	March 31, 2023		December 31, 2022
Mortgage revenue bonds	$	77,127,750	$	71,629,581
Taxable mortgage revenue bonds		4,038,780		3,044,829
Governmental issuer loans		244,527,738		300,230,435
Taxable governmental issuer loans		11,000,000		8,000,000
Property loans		128,173,126		169,002,497
Investments in unconsolidated entities		111,135,056		115,790,841
	$	576,002,450	$	667,698,183

The Partnership’s maximum exposure to loss for non-consolidated VIEs associated with MRBs and taxable MRBs as of March 31, 2023 is equal to the Partnership’s cost adjusted for paydowns. The difference between the MRB carrying value in the Partnership's condensed consolidated balance sheets and the maximum exposure to loss is a function of the unrealized gains or losses. The Partnership has future MRB and taxable MRB funding commitments related to non-consolidated VIEs totaling $102.5 million and $25.9 million, respectively, as of March 31, 2023 (Note 19).

The Partnership’s maximum exposure to loss for non-consolidated VIEs associated with GILs, taxable GILs, property loans and investments in unconsolidated entities as of March 31, 2023 is equal to the Partnership’s carrying value. The Partnership has future GIL, taxable GIL, property loan and investment in unconsolidated entities funding commitments related to non-consolidated VIEs totaling $87.5 million, $56.2 million, $49.1 million, and $32.9 million, respectively, as of March 31, 2023 (Note 19).

6. Mortgage Revenue Bonds

The Partnership’s MRBs provide construction and/or permanent financing for income-producing multifamily rental 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 MRBs predominantly bear interest at fixed interest rates and require regular principal and interest payments on either a monthly or semi-annual basis. The Partnership had the following investments in MRBs as of March 31, 2023 and December 31, 2022:


	March 31, 2023
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	$	9,849,947	$	1,087,127	$	-		$	10,937,074
Glenview Apartments - Series A (3)	CA		4,357,607		371,120		-			4,728,727
Harmony Court Bakersfield - Series A (4)	CA		3,591,428		347,292		-			3,938,720
Harmony Terrace - Series A (4)	CA		6,649,226		761,012		-			7,410,238
Harden Ranch - Series A (2)	CA		6,426,485		620,378		-			7,046,863
Las Palmas II - Series A (4)	CA		1,629,277		173,217		-			1,802,494
Lutheran Gardens (7), (8)	CA		10,352,000		-		(30,868	)		10,321,132
Montclair Apartments - Series A (3)	CA		2,360,759		221,592		-			2,582,351
Montecito at Williams Ranch Apartments - Series A (6)	CA		7,491,273		1,002,626		-			8,493,899
Montevista - Series A (6)	CA		6,644,416		1,106,804		-			7,751,220
Ocotillo Springs - Series A (6), (9)	CA		11,090,000		-		(142,720	)		10,947,280
Residency at Empire - Series BB-1 (6)	CA		14,118,500		1,389,537		-			15,508,037
Residency at Empire - Series BB-2 (6)	CA		4,000,000		430,868		-			4,430,868
Residency at the Entrepreneur - Series J-1 (6)	CA		9,088,272		174,524		-			9,262,796
Residency at the Entrepreneur - Series J-2 (6)	CA		7,500,000		218,996		-			7,718,996
Residency at the Entrepreneur - Series J-3 (6)	CA		4,900,000		696,071		-			5,596,071
Residency at the Mayer - Series A (6)	CA		29,565,978		-		-			29,565,978
San Vicente - Series A (4)	CA		3,359,484		323,116		-			3,682,600
Santa Fe Apartments - Series A (3)	CA		2,859,971		243,572		-			3,103,543
Seasons at Simi Valley - Series A (4)	CA		4,124,186		579,812		-			4,703,998
Seasons Lakewood - Series A (4)	CA		7,082,871		810,644		-			7,893,515
Seasons San Juan Capistrano - Series A (4)	CA		11,925,242		1,282,002		-			13,207,244
Summerhill - Series A (4)	CA		6,184,380		271,726		-			6,456,106
Sycamore Walk - Series A (4)	CA		3,417,200		242,738		-			3,659,938
The Village at Madera - Series A (4)	CA		2,970,390		307,465		-			3,277,855
Tyler Park Townhomes - Series A (2)	CA		5,595,802		261,392		-			5,857,194
Vineyard Gardens - Series A (6)	CA		3,899,988		607,120		-			4,507,108
Westside Village Market - Series A (2)	CA		3,656,848		318,591		-			3,975,439
Brookstone (1)	IL		7,272,720		1,260,408		-			8,533,128
Copper Gate Apartments (2)	IN		4,840,000		96,546		-			4,936,546
Renaissance - Series A (3)	LA		10,547,250		1,087,763		-			11,635,013
Live 929 Apartments - Series 2022A (6)	MD		58,163,081		2,955,764		-			61,118,845
Jackson Manor Apartments (6)	MS		6,900,000		-		-			6,900,000
Silver Moon - Series A (3)	NM		7,538,527		1,047,812		-			8,586,339
Village at Avalon (5)	NM		15,909,691		2,173,819		-			18,083,510
Columbia Gardens (4)	SC		12,495,686		1,034,559		-			13,530,245
Companion at Thornhill Apartments (4)	SC		10,750,304		786,529		-			11,536,833
The Ivy Apartments (6)	SC		30,574,501		2,497,005		-			33,071,506
The Palms at Premier Park Apartments (2)	SC		18,072,451		781,887		-			18,854,338
The Park at Sondrio - Series 2022A (6)	SC		38,100,000		3,419,850		-			41,519,850
The Park at Vietti - Series 2022A (6)	SC		26,985,000		2,585,218		-			29,570,218
Village at River's Edge (4)	SC		9,629,238		619,396		-			10,248,634
Willow Run (4)	SC		12,322,456		1,019,204		-			13,341,660
Windsor Shores Apartments - Series A (6)	SC		21,545,000		1,947,217		-			23,492,217
Arbors at Hickory Ridge (2)	TN		10,549,160		2,100,532		-			12,649,692
Avistar at Copperfield - Series A (6)	TX		13,494,899		1,183,942		-			14,678,841
Avistar at the Crest - Series A (2)	TX		8,863,735		1,120,331		-			9,984,066
Avistar at the Oaks - Series A (2)	TX		7,171,072		846,035		-			8,017,107
Avistar at the Parkway - Series A (3)	TX		12,390,934		1,023,277		-			13,414,211
Avistar at Wilcrest - Series A (6)	TX		5,114,293		326,464		-			5,440,757
Avistar at Wood Hollow - Series A (6)	TX		38,832,712		3,198,610		-			42,031,322
Avistar in 09 - Series A (2)	TX		6,191,941		730,518		-			6,922,459
Avistar on the Boulevard - Series A (2)	TX		15,100,333		1,542,244		-			16,642,577
Avistar on the Hills - Series A (2)	TX		4,909,476		610,623		-			5,520,099
Bruton Apartments (4)	TX		17,342,117		-		-			17,342,117
Concord at Gulfgate - Series A (4)	TX		18,352,583		2,049,948		-			20,402,531
Concord at Little York - Series A (4)	TX		12,856,852		1,476,614		-			14,333,466
Concord at Williamcrest - Series A (4)	TX		19,916,642		2,287,433		-			22,204,075
Crossing at 1415 - Series A (4)	TX		7,149,233		717,470		-			7,866,703
Decatur Angle (4)	TX		21,812,768		-		-			21,812,768
Esperanza at Palo Alto (4)	TX		18,875,771		2,614,493		-			21,490,264
Heights at 515 - Series A (4)	TX		6,545,246		714,161		-			7,259,407
Heritage Square - Series A (3)	TX		10,291,273		762,083		-			11,053,356
Oaks at Georgetown - Series A (4)	TX		11,881,878		991,761		-			12,873,639
Runnymede (1)	TX		9,535,000		-		-			9,535,000
Southpark (1)	TX		11,274,797		1,271,619		-			12,546,416
15 West Apartments (4)	WA		9,434,170		1,751,049		-			11,185,219
Mortgage revenue bonds held in trust		$	784,224,320	$	64,481,526	$	(173,588	)	$	848,532,258

(1)

MRB owned by ATAX TEBS I, LLC (M24 TEBS), Note 16. The TEBS financing has contractual limitations on the Partnership’s ability to sell the MRB.

(2)

MRB owned by ATAX TEBS II, LLC (M31 TEBS), Note 16. The TEBS financing has contractual limitations on the Partnership’s ability to sell the MRB.

(3)

MRB owned by ATAX TEBS III, LLC (M33 TEBS), Note 16. The TEBS financing has contractual limitations on the Partnership’s ability to sell the MRB.

(4)

MRB owned by ATAX TEBS IV, LLC (M45 TEBS), Note 16. The TEBS financing has contractual limitations on the Partnership’s ability to sell the MRB.

(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.

(7)

MRB held by Barclays Capital Inc. in a debt financing transaction, Note 16.

(8)

As of the date presented, the Partnership determined that the unrealized loss on the MRB is a result of increasing market interest rates and is not considered a credit loss. As of March 31, 2023, the MRB has been in an unrealized loss position for less than 12 months.

(9)


	March 31, 2023
Description of Mortgage Revenue Bonds held by the Partnership	State	Cost Adjusted for Paydowns and Allowances		Cumulative Unrealized Gain		Cumulative Unrealized Loss			Estimated Fair Value
CCBA Senior Garden Apartments	CA	$	3,783,991	$	173,162	$	-		$	3,957,153
Residency at Empire - Series BB-3	CA		55,000		815,481		-			870,481
Residency at the Entrepreneur - Series J-5	CA		1,000,000		-		-			1,000,000
Solano Vista - Series A	CA		2,626,469		417,917		-			3,044,386
Meadow Valley (1)	MI		7,835,000		-		(1,227,422	)		6,607,578
Provision Center 2014-1	TN		930,270		-		-			930,270
Avistar at the Crest - Series B	TX		723,197		64,509		-			787,706
Avistar at the Oaks - Series B	TX		529,739		42,391		-			572,130
Avistar at the Parkway - Series B	TX		123,063		23,296		-			146,359
Avistar in 09 - Series B	TX		436,987		34,969		-			471,956
Avistar on the Boulevard - Series B	TX		429,726		33,619		-			463,345
Mortgage revenue bonds held by the Partnership		$	18,473,442	$	1,605,344	$	(1,227,422	)	$	18,851,364

(1)

The Partnership has a remaining MRB funding commitment of $36.3 million as of March 31, 2023. The MRB and the unfunded MRB commitment are accounted for as available-for-sale securities and reported at fair value. The reported unrealized loss includes the unrealized loss on the current MRB carrying value (based on current fair value) as well as the unrealized loss on the Partnership’s remaining $36.3 million funding commitment outstanding as of March 31, 2023 (also based on current fair value). The Partnership determined the unrealized loss is a result of increasing market interest rates and that the cumulative unrealized loss is not considered a credit loss. As of March 31, 2023, the MRB has been in an unrealized loss position for more than 12 months.


	December 31, 2022
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	$	9,874,603	$	888,242	$	-		$	10,762,845
Glenview Apartments - Series A (3)	CA		4,372,370		309,570		-			4,681,940
Harmony Court Bakersfield - Series A (4)	CA		3,600,418		274,456		-			3,874,874
Harmony Terrace - Series A (4)	CA		6,665,787		625,752		-			7,291,539
Harden Ranch - Series A (2)	CA		6,449,455		581,466		-			7,030,921
Las Palmas II - Series A (4)	CA		1,633,397		140,681		-			1,774,078
Lutheran Gardens (7)	CA		10,352,000		127,107		-			10,479,107
Montclair Apartments - Series A (3)	CA		2,368,757		199,617		-			2,568,374
Montecito at Williams Ranch Apartments - Series A (6)	CA		7,507,111		834,292		-			8,341,403
Montevista - Series A (6)	CA		6,656,219		902,690		-			7,558,909
Ocotillo Springs - Series A (6), (8)	CA		11,090,000		-		(331,311	)		10,758,689
Residency at the Entrepreneur - Series J-1 (6)	CA		9,088,496		122,815		-			9,211,311
Residency at the Entrepreneur - Series J-2 (6)	CA		7,500,000		176,092		-			7,676,092
Residency at the Entrepreneur - Series J-3 (6)	CA		3,900,000		726,834		-			4,626,834
Residency at the Mayer - Series A (6)	CA		26,067,585		-		-			26,067,585
San Vicente - Series A (4)	CA		3,367,978		255,787		-			3,623,765
Santa Fe Apartments - Series A (3)	CA		2,869,660		216,000		-			3,085,660
Seasons at Simi Valley - Series A (4)	CA		4,137,438		522,910		-			4,660,348
Seasons Lakewood - Series A (4)	CA		7,100,512		666,562		-			7,767,074
Seasons San Juan Capistrano - Series A (4)	CA		11,954,944		1,038,904		-			12,993,848
Summerhill - Series A (4)	CA		6,199,861		265,296		-			6,465,157
Sycamore Walk - Series A (4)	CA		3,428,986		124,598		-			3,553,584
The Village at Madera - Series A (4)	CA		2,977,825		247,354		-			3,225,179
Tyler Park Townhomes - Series A (2)	CA		5,616,043		264,300		-			5,880,343
Vineyard Gardens - Series A (6)	CA		3,908,104		514,719		-			4,422,823
Westside Village Market - Series A (2)	CA		3,670,075		267,369		-			3,937,444
Brookstone (1)	IL		7,286,052		1,286,871		-			8,572,923
Copper Gate Apartments (2)	IN		4,840,000		117,014		-			4,957,014
Renaissance - Series A (3)	LA		10,585,375		645,412		-			11,230,787
Live 929 Apartments - Series 2022A (6)	MD		58,107,262		2,217,857		-			60,325,119
Jackson Manor Apartments (6)	MS		6,900,000		-		-			6,900,000
Greens Property - Series A (2)	NC		7,599,000		597		-			7,599,597
Silver Moon - Series A (3)	NM		7,557,312		863,401		-			8,420,713
Village at Avalon (5)	NM		15,942,560		1,727,010		-			17,669,570
Columbia Gardens (4)	SC		12,542,207		968,469		-			13,510,676
Companion at Thornhill Apartments (4)	SC		10,786,181		709,979		-			11,496,160
The Palms at Premier Park Apartments (2)	SC		18,137,042		808,555		-			18,945,597
The Park at Sondrio - Series 2022A (6)	SC		38,100,000		-		-			38,100,000
The Park at Vietti - Series 2022A (6)	SC		26,985,000		-		-			26,985,000
Village at River's Edge (4)	SC		9,649,659		590,962		-			10,240,621
Willow Run (4)	SC		12,368,964		953,988		-			13,322,952
Arbors at Hickory Ridge (2)	TN		10,591,726		2,005,029		-			12,596,755
Avistar at Copperfield - Series A (6)	TX		13,532,636		919,463		-			14,452,099
Avistar at the Crest - Series A (2)	TX		8,896,378		975,504		-			9,871,882
Avistar at the Oaks - Series A (2)	TX		7,196,674		717,701		-			7,914,375
Avistar at the Parkway - Series A (3)	TX		12,429,842		950,930		-			13,380,772
Avistar at Wilcrest - Series A (6)	TX		5,128,595		170,370		-			5,298,965
Avistar at Wood Hollow - Series A (6)	TX		38,941,304		2,645,832		-			41,587,136
Avistar in 09 - Series A (2)	TX		6,214,048		619,707		-			6,833,755
Avistar on the Boulevard - Series A (2)	TX		15,155,942		1,290,551		-			16,446,493
Avistar on the Hills - Series A (2)	TX		4,927,003		523,079		-			5,450,082
Bruton Apartments (4)	TX		17,381,296		281,271		-			17,662,567
Concord at Gulfgate - Series A (4)	TX		18,404,942		1,842,303		-			20,247,245
Concord at Little York - Series A (4)	TX		12,893,533		1,249,523		-			14,143,056
Concord at Williamcrest - Series A (4)	TX		19,973,464		1,935,645		-			21,909,109
Crossing at 1415 - Series A (4)	TX		7,170,756		605,369		-			7,776,125
Decatur Angle (4)	TX		21,866,672		77,837		-			21,944,509
Esperanza at Palo Alto (4)	TX		18,916,082		2,209,462		-			21,125,544
Heights at 515 - Series A (4)	TX		6,564,951		573,569		-			7,138,520
Heritage Square - Series A (3)	TX		10,325,196		671,790		-			10,996,986
Oaks at Georgetown - Series A (4)	TX		11,911,472		746,300		-			12,657,772
Runnymede (1)	TX		9,535,000		45,577		-			9,580,577
Southpark (1)	TX		11,257,062		1,352,726		-			12,609,788
15 West Apartments (4)	WA		9,454,318		1,534,060		-			10,988,378
Mortgage revenue bonds held in trust		$	718,413,130	$	45,127,126	$	(331,311	)	$	763,208,945

(1)

MRB owned by ATAX TEBS I, LLC (M24 TEBS), Note 16. The TEBS financing has contractual limitations on the Partnership’s ability to sell the MRB.

(2)

MRB owned by ATAX TEBS II, LLC (M31 TEBS), Note 16. The TEBS financing has contractual limitations on the Partnership’s ability to sell the MRB.

(3)

MRB owned by ATAX TEBS III, LLC (M33 TEBS), Note 16. The TEBS financing has contractual limitations on the Partnership’s ability to sell the MRB.

(4)

MRB owned by ATAX TEBS IV, LLC (M45 TEBS), Note 16. The TEBS financing has contractual limitations on the Partnership’s ability to sell the MRB.

(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.

(7)

MRB held by Barclays Capital Inc. in a debt financing transaction, Note 16.

(8)

As of the date presented, the Partnership determined that the unrealized loss on the MRB is a result of increasing market interest rates and is not considered a credit loss.


	December 31, 2022
Description of Mortgage Revenue Bonds held by the Partnership	State	Cost Adjusted for Paydowns and Allowances		Cumulative Unrealized Gain		Cumulative Unrealized Loss			Estimated Fair Value
CCBA Senior Garden Apartments	CA	$	3,792,700	$	42,672	$	-		$	3,835,372
Residency at Empire - Series BB-1	CA		14,118,500		-		-			14,118,500
Residency at Empire - Series BB-2	CA		4,000,000		-		-			4,000,000
Residency at Empire - Series BB-3	CA		55,000		-		-			55,000
Solano Vista - Series A	CA		2,631,168		297,861		-			2,929,029
Meadow Valley (1)	MI		4,833,437		-		(1,193,085	)		3,640,352
Greens Property - Series B	NC		915,039		122		-			915,161
Provision Center 2014-1	TN		4,294,939		-		-			4,294,939
Avistar at the Crest - Series B	TX		724,747		53,132		-			777,879
Avistar at the Oaks - Series B	TX		530,829		33,406		-			564,235
Avistar at the Parkway - Series B	TX		123,176		22,510		-			145,686
Avistar in 09 - Series B	TX		437,886		27,557		-			465,443
Avistar on the Boulevard - Series B	TX		430,647		26,816		-			457,463
Mortgage revenue bonds held by the Partnership		$	36,888,068	$	504,076	$	(1,193,085	)	$	36,199,059

(1)

The Partnership has a remaining MRB funding commitment of $39.3 million as of December 31, 2022. The MRB and the unfunded MRB commitment are accounted for as available-for-sale securities and reported at fair value. The reported unrealized loss includes the unrealized loss on the current MRB carrying value (based on current fair value) as well as the unrealized loss on the Partnership’s remaining $39.3 million funding commitment outstanding as of December 31, 2022 (also based on current fair value). The Partnership determined the unrealized loss is a result of increasing market interest rates and that the cumulative unrealized loss is not considered a credit loss.

The Partnership has accrued interest receivable related to its MRBs of $5.1 million and $4.3 million as of March 31, 2023 and December 31, 2022, respectively, that is reported as interest receivable, net in the Partnership's condensed consolidated balance sheets.

The Partnership has committed to provide funding for certain MRBs on a draw-down basis during construction and/or rehabilitation of the secured properties as of March 31, 2023. See Note 19 for additional information regarding the Partnership’s MRB funding commitments.

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

On January 1, 2023, the Partnership adopted ASU 2016-13 which made certain changes to the determination of allowances for MRBs. See Note 13 for information regarding the Partnership’s allowance for credit losses.

MRB Activity in the First Three Months of 2023

Acquisitions:

The following MRBs were acquired at prices that approximated the principal outstanding plus accrued interest during the three months ended March 31, 2023:


Property Name	Month Acquired	Property Location	Units		Maturity Date	Interest Rate				Initial Principal Funding
Windsor Shores Apartments - Series A	January	Columbia, SC		176	2/1/2030		6.50	%		$	21,545,000
The Ivy Apartments	January	Greenville, SC		212	2/1/2030		6.50	%			30,500,000
Residency at the Entrepreneur J-5 - MRB (1)	February	Los Angeles, CA		200	4/1/2025	SOFR + 3.60%			(2)		1,000,000
										$	53,045,000

(1)

The Partnership has committed to provide funding for the Series J-5 MRB totaling $5.0 million. See Note 19.

(2)

The interest rate is subject to an all-in floor of 3.87%.

Redemptions:

The following MRBs were redeemed at prices that approximated the Partnership’s carrying value plus accrued interest during the three months ended March 31, 2023:


Property Name	Month Redeemed	Property Location	Units		Original Maturity Date	Interest Rate			Principal Outstanding at Date of Redemption
Greens Property - Series A	February 2023	Durham, NC		168	10/1/2047		6.50	%	$	7,579,000
Greens Property - Series B	February 2023	Durham, NC		168	10/1/2047		12.00	%		914,040
									$	8,493,040

MRB Activity in the First Three Months of 2022

Restructurings:

In January 2022, the Live 929 Apartments property completed a restructuring of the Partnership’s MRBs and property loan. The Partnership’s Live 929 Apartments – 2014 Series A and Live 929 Apartments – 2014 Series B MRBs were redeemed at par plus accrued interest. The following tables summarizes the terms of the MRBs upon redemption:


Property Name	Month Restructured	Property Location	Units		Original Maturity Date	Interest Rate			Principal Outstanding at Date of Restructuring
Live 929 Apartments - 2014 Series A	January	Baltimore, MD		575	7/1/2049		5.78	%	$	39,445,000
Live 929 Apartments - 2014 Series B	January	Baltimore, MD		575	7/1/2039		1.60	%		21,610,000
									$	61,055,000

Upon restructuring, the Partnership used the proceeds of the redeemed MRBs plus additional cash to acquire a new series of MRB secured by the Live 929 Apartments property, the Series 2022A MRB. The following tables summarizes the MRB that was acquired as part of the restructuring of the Live 929 Apartments MRBs:

Property Name

Month
Acquired

Property Location

Units

Maturity Date

Interest Rate

Principal Acquired

Live 929 Apartments - Series 2022A

January

Baltimore, MD

575

1/1/2060

4.30

66,365,000

In addition, a portion of the Live 929 Apartments property loan was redeemed as part of the restructuring, with proceeds used to acquire the new Live 929 Apartments Series 2022A MRB. The Partnership also acquired a taxable MRB which is reported in Other Assets (Note 12). The redemption of the prior Live 929 Apartments – 2014 Series A and 2014 Series B MRBs and property loan and acquisition of the new Live 929 Apartments Series 2022A MRB were accounted for as a troubled debt restructuring.

Redemptions:

The following MRBs were redeemed at a price that approximated the Partnership’s carrying value plus accrued interest during the three months ended March 31, 2022:


Property Name	Month Redeemed	Property Location	Units		Original Maturity Date	Interest Rate			Principal Outstanding at Date of Redemption
Ohio Properties - Series A	March	(1)		362	6/1/2050		7.00	%	$	13,544,000
Ohio Properties - Series B	March	(1)		362	6/1/2050		10.00	%		3,459,840
									$	17,003,840

(1)

The Ohio Properties consist of Crescent Village, located in Cincinnati, Ohio, Willow Bend, located in Columbus (Hilliard), Ohio and Postwoods, located in Reynoldsburg, Ohio.

Acquisitions:

There were no MRBs acquired during the three months ended March 31, 2022.

7. Governmental Issuer Loans

The Partnership invests in GILs that are issued by state or local governmental authorities to finance the construction of 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 state government pledged to the payment of principal or interest on the GILs. Each GIL is secured by a mortgage on all real and personal property of the affordable multifamily property. The GILs share first mortgage lien positions with property loans and/or taxable GILs owned by the Partnership (Notes 8 and 12). Sources of the funds to pay principal and interest on a GIL consist of the net cash flow or the sale or refinancing proceeds from the secured property and limited-to-full payment guaranties provided by affiliates of the borrower. The Partnership has committed to provide total funding for certain GILs on a draw-down basis during construction.

All GILs were held in trust in connection with TOB trust financings as of March 31, 2023 and December 31, 2022 (Note 16). At the closing of each GIL, Freddie Mac, through a servicer, has forward committed to purchase the GIL at maturity at par if the property has reached stabilization and other conditions are met.

The Partnership had the following GIL investments as of March 31, 2023 and December 31, 2022:

As of March 31, 2023

Property Name

Month 
Acquired

Property
Location

Units

Maturity
Date (1)

Interest Rate (2)

Current Interest
Rate

Amortized
Cost

Scharbauer Flats Apartments (3)

June 2020

Midland, TX

300

7/1/2023

SIFMA + 3.10%

7.07%

40,000,000

Oasis at Twin Lakes (3)

July 2020

Roseville, MN

228

8/1/2023

SIFMA + 2.25%

6.22%

34,000,000

Centennial Crossings (3)

August 2020

Centennial, CO

209

9/1/2023

SIFMA + 2.75%

6.72%

33,080,000

Legacy Commons at Signal Hills (3)

January 2021

St. Paul, MN

247

2/1/2024

SOFR + 3.07%

7.90%

34,620,000

Hilltop at Signal Hills (3)

January 2021

St. Paul, MN

146

8/1/2023

SOFR + 3.07%

7.90%

24,450,000

Hope on Avalon

January 2021

Los Angeles, CA

88

8/1/2023

SIFMA + 3.75%

7.72%

23,390,000

Hope on Broadway

January 2021

Los Angeles, CA

49

8/1/2023

SIFMA + 3.75%

7.72%

13,105,623

Osprey Village (3)

July 2021

Kissimmee, FL

383

8/1/2024

SOFR + 3.07%

7.62%

47,624,815

Willow Place Apartments (3)

September 2021

McDonough, GA

182

10/1/2024

SOFR + 3.30%

7.85%

25,000,000

Magnolia Heights (3)

June 2022

Covington, GA

200

7/1/2024

SOFR + 3.85%

8.40%

20,400,000

Poppy Grove I (3), (4)

September 2022

Elk Grove, CA

147

4/1/2025

6.78%

6.78%

8,846,000

Poppy Grove II (3), (4)

September 2022

Elk Grove, CA

82

4/1/2025

6.78%

6.78%

4,541,300

Poppy Grove III (3), (4)

September 2022

Elk Grove, CA

158

4/1/2025

6.78%

6.78%

8,550,000

2,419

317,607,738

(1)

The borrowers may elect to extend the maturity dates by six months upon meeting certain conditions, which may include payment of a non-refundable extension fee.

(2)

The variable index interest rate components are typically subject to floors that range from 0% to 0.85%.

(3)

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

(4)

The Partnership has agreed to provide a subordinate GIL after the execution of Freddie Mac’s forward purchase commitment if needed by the property. The potential subordinate GIL amounts are up to $3.8 million, $2.2 million, and $4.2 million for Poppy Grove I, Poppy Grove II, and Poppy Grove III, respectively.

As of December 31, 2022

Property Name

Month 
Acquired

Property
Location

Units

Maturity
Date (1)

Variable Interest
Rate (2)

Current Interest
Rate

Amortized
Cost

Scharbauer Flats Apartments (3)

June 2020

Midland, TX

300

7/1/2023

SIFMA + 3.10%

6.76%

40,000,000

Oasis at Twin Lakes (3)

July 2020

Roseville, MN

228

8/1/2023

SIFMA + 2.25%

5.91%

34,000,000

Centennial Crossings (3)

August 2020

Centennial, CO

209

9/1/2023

SIFMA + 2.75%

6.41%

33,080,000

Legacy Commons at Signal Hills (3)

January 2021

St. Paul, MN

247

2/1/2024

SOFR + 3.07%

7.37%

34,620,000

Hilltop at Signal Hills (3)

January 2021

St. Paul, MN

146

8/1/2023

SOFR + 3.07%

7.37%

24,450,000

Hope on Avalon

January 2021

Los Angeles, CA

88

8/1/2023

SIFMA + 3.75%

7.41%

23,390,000

Hope on Broadway

January 2021

Los Angeles, CA

49

8/1/2023

SIFMA + 3.75%

7.41%

12,105,623

Osprey Village (3)

July 2021

Kissimmee, FL

383

8/1/2024

SOFR + 3.07%

6.88%

39,893,040

Willow Place Apartments (3)

September 2021

McDonough, GA

182

10/1/2024

SOFR + 3.30%

7.11%

17,354,472

Magnolia Heights (3)

June 2022

Covington, GA

200

7/1/2024

SOFR + 3.85%

7.66%

20,400,000

Poppy Grove I (3), (4)

September 2022

Elk Grove, CA

147

4/1/2025

6.78%

6.78%

7,846,000

Poppy Grove II (3), (4)

September 2022

Elk Grove, CA

82

4/1/2025

6.78%

6.78%

4,541,300

Poppy Grove III (3), (4)

September 2022

Elk Grove, CA

158

4/1/2025

6.78%

6.78%

8,550,000

2,419

300,230,435

(1)

The borrowers may elect to extend the maturity dates by six months upon meeting certain conditions, which may include payment of a non-refundable extension fee.

(2)

The variable index interest rate components are typically subject to floors that range from 0% to 0.85%.

(3)

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

(4)

The Partnership has accrued interest receivable related to its GILs of $6.4 million and $3.8 million as of March 31, 2023 and December 31, 2022, respectively, that is reported as interest receivable, net in the Partnership's condensed consolidated balance sheets.

Two entities that are affiliates of certain GIL borrowers have provided limited-to-full payment guaranties for GILs with total outstanding principal of $238.8 million and for property loans with total outstanding principal of $109.8 million (Note 8) as of March 31, 2023. The guaranties relate to the Partnership’s investments in Scharbauer Flats Apartments, Oasis at Twin Lakes, Centennial Crossings, Legacy Commons at Signal Hills, Hilltop at Signal Hills, Osprey Village, and Willow Place Apartments.

The Partnership has remaining commitments to provide additional funding of certain GILs during construction and/or rehabilitation of the secured properties as of March 31, 2023. See Note 19 for further information regarding the Partnership’s remaining GIL funding commitments.

On January 1, 2023, the Partnership adopted ASU 2016-13 which replaced the incurred loss methodology with an expected loss model known as the CECL model. The Partnership’s allowance for credit losses associated with its GILs was approximately $2.1 million as of March 31, 2023. See Note 13 for information regarding the Partnership’s allowance for credit losses.

8. Property Loans

The following tables summarize the Partnership’s property loans, net of asset-specific loan loss allowances, as of March 31, 2023 and December 31, 2022:


	March 31, 2023
	Outstanding Balance		Asset-Specific Allowance for Credit Losses			Property Loan Principal, net of allowance		Maturity Date	Interest Rate
Senior Construction Financing (1)
Centennial Crossings	$	17,557,656	$	-		$	17,557,656	9/1/2023	LIBOR + 2.50%
Hilltop at Signal Hills		20,458,137		-			20,458,137	8/1/2023	SOFR + 3.07%
Legacy Commons at Signal Hills		30,716,905		-			30,716,905	2/1/2024	SOFR + 3.07%
Magnolia Heights		10,300,000		-			10,300,000	7/1/2024	SOFR + 3.85%
Oasis at Twin Lakes		24,018,657		-			24,018,657	8/1/2023	LIBOR + 2.50%
Osprey Village		1,000,000		-			1,000,000	8/1/2024	SOFR + 3.07%
Scharbauer Flats Apartments		13,386,764		-			13,386,764	7/1/2023	LIBOR + 2.85%
Willow Place Apartments		2,679,427		-			2,679,427	10/1/2024	SOFR + 3.30%
Subtotal		120,117,546		-			120,117,546

Mezzanine Financing (2)
SoLa Impact Opportunity Zone Fund	$	39,000,000	$	-		$	39,000,000	12/30/2024	7.875%
Subtotal		39,000,000		-			39,000,000

Other
The 50/50 MF Property	$	5,165,315	$	-		$	5,165,315	3/11/2048	9.00%
Avistar (February 2013 portfolio)		201,972		-			201,972	6/26/2024	12.00%
Avistar (June 2013 portfolio)		251,622		-			251,622	6/26/2024	12.00%
Live 929 Apartments		495,000		(495,000	)		-	7/31/2049	8.00%
Subtotal		6,113,909		(495,000	)		5,618,909

Total	$	165,231,455	$	(495,000	)	$	164,736,455

(1)

The property loans are held in trust in connection with TOB trust financings (Note 16). The property loans and associated GILs are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property. Affiliates of the borrowers have guaranteed limited-to-full payment of principal and accrued interest on the property loans. The borrowers may elect to extend the maturity dates for periods ranging between six and twelve months upon meeting certain conditions, which may include payment of a non-refundable extension fee. The variable index interest rate components are typically subject to floors that range from 0% to 0.50%.

(2)

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


	December 31, 2022
	Outstanding Balance		Asset-Specific Allowance for Credit Losses			Property Loan Principal, net of allowance		Maturity Date	Interest Rate
Senior Construction Financing (1)
Centennial Crossings	$	24,250,000	$	-		$	24,250,000	9/1/2023	LIBOR + 2.50%
Hilltop at Signal Hills		19,718,334		-			19,718,334	8/1/2023	SOFR + 3.07%
Legacy Commons at Signal Hills		29,666,905		-			29,666,905	2/1/2024	SOFR + 3.07%
Magnolia Heights		6,188,601		-			6,188,601	7/1/2024	SOFR + 3.85%
Oasis at Twin Lakes		24,018,657		-			24,018,657	8/1/2023	LIBOR + 2.50%
Osprey Village		1,000,000		-			1,000,000	8/1/2024	SOFR + 3.07%
Scharbauer Flats Apartments		24,160,000		-			24,160,000	7/1/2023	LIBOR + 2.85%
Willow Place Apartments		1,000,000		-			1,000,000	10/1/2024	SOFR + 3.30%
Subtotal		130,002,497		-			130,002,497

Mezzanine Financing
SoLa Impact Opportunity Zone Fund	$	39,000,000	$	-		$	39,000,000	12/30/2024	7.875%
Subtotal		39,000,000		-			39,000,000

Other
The 50/50 MF Property	$	4,803,620	$	-		$	4,803,620	3/11/2048	9.00%
Avistar (February 2013 portfolio)		201,972		-			201,972	6/26/2024	12.00%
Avistar (June 2013 portfolio)		251,622		-			251,622	6/26/2024	12.00%
Greens Property		850,000		-			850,000	9/1/2046	10.00%
Live 929 Apartments		495,000		(495,000	)		-	7/31/2049	8.00%
Subtotal		6,602,214		(495,000	)		6,107,214

Total	$	175,604,711	$	(495,000	)	$	175,109,711

(1)

The Partnership has accrued interest receivable related to its property loans of $2.6 million and $3.2 million as of March 31, 2023 and December 31, 2022, respectively, that is reported as interest receivable, net in the Partnership's condensed consolidated balance sheets.

The Partnership has remaining commitments to provide additional funding of certain property loans during construction of the secured properties as of March 31, 2023. See Note 19 for further information regarding the Partnership’s remaining property loan funding commitments.

On January 1, 2023, the Partnership adopted ASU 2016-13 which replaced the incurred loss methodology with an expected loss model known as the CECL model. The Partnership allowances for credit losses associated with its property loans was approximately $2.5 million as of March 31, 2023. See Note 13 for information regarding the Partnership’s allowance for credit losses related to its property loans.

Activity in the First Three Months of 2023

In February 2023, the Greens Property loan was repaid in full. The partnership received proceeds of approximately $2.4 million representing outstanding principal and accrued interest upon redemption.

In February 2023, the Partnership received a principal paydown of approximately $10.8 million on the Scharbauer Flats property loan.

In March 2023, the Partnership received a principal paydown of approximately $6.7 million on the Centennial Crossings property loan.

Activity in the First Three Months of 2022

In January 2022, the Partnership received approximately $1.0 million of principal and interest due on the Live 929 Apartments property loan upon restructuring of the outstanding debt of Live 929 Apartments. The principal payment and related loan loss allowance were considered in the troubled debt restructuring of the Partnership’s investments in Live 929 Apartments discussed further in Note 6.

In March 2022, the Ohio Properties property loans were repaid in full. The Partnership received approximately $2.4 million of principal and approximately $4.3 million of accrued interest upon redemption, of which $1.7 million was recognized as other interest income.

9. Investments in Unconsolidated Entities

The Partnership has non-controlling investments in unconsolidated entities. The Partnership applies the equity method of accounting by initially recording these investments at cost, subsequently adjusted for accrued preferred returns, the Partnership’s share of earnings (losses) of the unconsolidated entities, cash contributions, and distributions. The carrying value of the equity investments represents the Partnership’s maximum exposure to loss. The Partnership is entitled to a preferred return on invested capital in each unconsolidated entity. The Partnership’s preferred return is reported as “Investment income” on the Partnership’s condensed consolidated statements of operations.

An affiliate of the Vantage unconsolidated entities guarantees a preferred return on the Partnership’s Vantage investments through a date approximately five years after commencement of construction.

The following table provides the details of the investments in unconsolidated entities as of March 31, 2023 and December 31, 2022:


Property Name	Location	Units			Construction Commencement Date	Construction Completion Date	Carrying Value as of March 31, 2023		Carrying Value as of December 31, 2022
Current Investments
Vantage at Conroe	Conroe, TX		288		April 2019	January 2021		10,424,625		10,424,625
Vantage at Tomball	Tomball, TX		288		August 2020	April 2022		13,235,090		13,051,936
Vantage at Hutto	Hutto, TX		288		December 2021	N/A		12,907,679		12,590,292
Vantage at Loveland	Loveland, CO		288		April 2021	N/A		18,474,179		18,109,568
Vantage at Helotes	Helotes, TX		288		May 2021	November 2022		14,311,487		14,029,032
Vantage at Fair Oaks	Boerne, TX		288		September 2021	N/A		12,241,907		12,000,297
Vantage at McKinney Falls	McKinney Falls, TX		288		December 2021	N/A		12,500,461		12,253,749
Freestone Greeley	Greeley, CO		296		N/A	N/A		4,867,201		4,775,708
Freestone Cresta Bella	San Antonio, TX		296		February 2023	N/A		7,905,183		6,263,083
Valage Senior Living Carson Valley	Minden, NV		88	(1)	February 2023	N/A		4,267,244		-
Subtotal								111,135,056		103,498,290

Previously Sold Investments
Vantage at Stone Creek	Omaha, NE		294		March 2018	April 2020	$	-	$	5,465,967
Vantage at Coventry	Omaha, NE		294		September 2018	February 2021		-		6,826,584
Subtotal								-		12,292,551

							$	111,135,056	$	115,790,841

(1)

Valage Senior Living Carson Valley is a seniors housing property with 88 units and 102 beds.

The Partnership has remaining commitments to provide additional equity funding for certain unconsolidated entities as of March 31, 2023. See Note 19 for further information regarding the Partnership’s remaining equity funding commitments.

Activity in the First Three Months of 2023

Sales Activity:

The following table summarizes sales information of the Partnership’s investments in unconsolidated entities during the three months ended March 31, 2023:


Property Name	Location	Units		Month Sold	Gross Proceeds to the Partnership			Investment Income		Gain (loss) on Sale
Vantage at Stone Creek	Omaha, NE		294	January 2023	$	14,689,244		$	108,295		9,114,980
Vantage at Coventry	Omaha, NE		294	January 2023		13,220,218			135,501		6,258,133
Vantage at Murfreesboro	Murfreesboro, TN		288	(1)		(6,185	)		-		(6,184	)
					$	27,903,277		$	243,796	$	15,366,929

(1)

In February 2023, the Partnership paid additional cash of approximately $6,200 associated with final settlements of the Vantage at Murfreesboro sale in March 2022. The Partnership recognized the full amount in "Gain on sale of investment in an unconsolidated entity" on the Partnership’s condensed consolidated statements of operations.

New Equity Commitments:

In February 2023, the Partnership executed a $8.2 million equity commitment to fund the construction of Valage Senior Living Carson Valley.

Activity in the First Three Months of 2022

Sales Activity:

The following table summarizes sales information of the Partnership’s investments in unconsolidated entities during the three months ended March 31, 2022:


Property Name	Location	Units		Month Sold	Gross Proceeds to the Partnership		Investment Income		Gain on Sale
Vantage at Murfreesboro	Murfreesboro, TN		288	March 2022	$	29,258,279	$	657,937	$	16,360,343
Vantage at Bulverde	Bulverde, TX		288	(1)		75,000		-		75,000
Vantage at Germantown	Germantown, TN		288	(2)		4,407		-		4,407
					$	29,337,686	$	657,937	$	16,439,750

(1)

In March 2022, the Partnership received cash of approximately $75,000 associated with final settlements of the Vantage at Bulverde sale in August 2021. The Partnership recognized the full amount as "Gain on sale of investment in an unconsolidated entity" on the Partnership’s condensed consolidated statements of operations.

(2)

In March 2022, the Partnership received cash of approximately $4,000 associated with final settlements of the Vantage at Germantown sale in March 2021. The Partnership recognized the full amount as "Gain on sale of investment in an unconsolidated entity" on the Partnership’s condensed consolidated statements of operations

Summarized Unconsolidated Entity Level Financial Data

The following table provides combined summary financial information for the properties underlying the Partnership’s investments in unconsolidated entities for the three months ended March 31, 2023 and 2022:


	For the Three Months Ended March 31,
	2023		2022
Property Revenues	$	3,749,443	$	6,681,291
Gain on sale of property	$	38,104,333	$	38,171,003
Net income	$	37,742,938	$	38,730,562

10. Real Estate Assets

The following tables summarize information regarding the Partnership’s real estate assets as of March 31, 2023 and December 31, 2022:


Real Estate Assets as of March 31, 2023
Property Name	Location	Number of Units		Land and Land Improvements		Buildings and Improvements		Carrying Value
Suites on Paseo	San Diego, CA		384	$	3,199,244	$	39,752,127	$	42,951,371
Vantage at San Marcos	San Marcos, TX	(1)			2,660,615		1,003,857		3,664,472
Land held for development		(2)			1,109,482		-		1,109,482
								$	47,725,325
Less accumulated depreciation									(12,052,543	)
Real estate assets, net								$	35,672,782

(1)

The assets are 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 a parcel of land in Richland County, SC.


Real Estate Assets as of December 31, 2022
Property Name	Location	Number of Units		Land and Land Improvements		Buildings and Improvements		Carrying Value
Suites on Paseo	San Diego, CA		384	$	3,199,244	$	39,799,082	$	42,998,326
Vantage at San Marcos	San Marcos, TX	(1)			2,660,615		1,003,857		3,664,472
Land held for development		(2)			1,551,196		-		1,551,196
								$	48,213,994
Less accumulated depreciation									(11,663,516	)
Real estate assets, net								$	36,550,478

(1)

The assets are 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 of land in Richland County, SC and Omaha, NE.

In January 2023, the Partnership sold the land held for development in Omaha, NE and received proceeds of $442,000 which is approximately the Partnership's carrying value.

In December 2022, the Partnership sold 100% of its ownership interest in The 50/50 MF Property to an unrelated non-profit organization. The Partnership received an unsecured property loan upon sale (Note 8) payable from future net cash flows of the property. The buyer assumed two mortgages payable associated with the property and the Partnership agreed to provide certain recourse support for the assumed mortgages. The remainder of the purchase price was funded by the issuance of a seller financing property loan to the Partnership in the amount of $4.8 million (Note 8). As a result of the sale, the Partnership deconsolidated The 50/50 MF Property assets and liabilities in its consolidated financial statements. The Partnership incurred costs of approximately $404,000 related to the sale which reduced the Partnership's gain on sale. The Partnership has deferred its entire gain on sale of approximately $6.6 million which is reported within accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheets. The Partnership will recognize the deferred gain upon collection of principal of the unsecured property loan (Note 14).

Net loss, exclusive of the gains on sale, related to The 50/50 MF Property for the three months ended March 31, 2023, and 2022 is as follows:


	For the Three Months Ended March 31,
	2023		2022
Net loss	$	-	$	222,439

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 owned The 50/50 MF Property until December 2022, and also owns certain property loans. The following table summarizes income tax expense (benefit) for the three months ended March 31, 2023 and 2022:


	For the Three Months Ended March 31,
	2023			2022
Current income tax expense	$	8,340		$	7,644
Deferred income tax expense (benefit)		(982	)		7,266
Total income tax expense	$	7,358		$	14,910

The Partnership evaluated whether it is more likely than not that its deferred income tax assets will be realizable. There was no valuation allowance recorded as of March 31, 2023 and December 31, 2022.

12. Other Assets

The following table summarizes the Partnership's other assets as of March 31, 2023 and December 31, 2022:


	March 31, 2023			December 31, 2022
Deferred financing costs, net	$	805,813		$	964,266
Derivative instruments at fair value (Note 18)		5,284,329			7,530,438
Taxable mortgage revenue bonds, at fair value		18,146,540			16,531,896
Taxable governmental issuer loans:
Taxable governmental issuer loans		11,000,000			8,000,000
Allowance for credit losses (Note 13)		(89,000	)		-
Taxable governmental issuer loans, net		10,911,000			8,000,000
Bond purchase commitments, at fair value (Note 19)		211,476			98,929
Other assets		1,877,240			2,649,138
Total other assets	$	37,236,398		$	35,774,667

The Partnership has remaining commitments to provide additional funding of the taxable GILs and taxable MRBs during construction and/or rehabilitation of the secured properties as of March 31, 2023. See Note 19 for further information regarding the Partnership’s remaining taxable GIL and taxable MRB funding commitments.

On January 1, 2023, the Partnership adopted ASU 2016-13 which replaced the incurred loss methodology with an expected loss model known as the CECL model. See Note 13 for information regarding the Partnership’s allowance for credit losses related to its taxable GILs.

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 Partnership's condensed consolidated statements of operations. Unrealized gain or losses on taxable MRBs and bond purchase commitments are recorded in the Partnership's condensed consolidated statements of comprehensive income to reflect changes in their estimated fair values resulting from market conditions and fluctuations in the present value of the expected cash flows from the assets.

As of March 31, 2023, two taxable MRBs and four taxable GILs with a reported value totaling $20.0 million were held in trust in connection with TOB trust financings (Note 16).

Activity in the First Three Months of 2023

The following table includes details of the taxable MRB acquired during the three months ended March 31, 2023:

Property Name

Month
Acquired

Property Location

Units

Maturity Date

Interest Rate

Initial Principal Funding

Taxable MRBs

Windsor Shores Apartments - Series B

January 2023

Columbia, SC

176

2/1/2030

6.50%

805,000

Activity in the First Three Months of 2022

The following table includes details of the taxable MRB acquired during the three months ended March 31, 2022:

Property Name

Date Committed

Maturity Date

Initial Principal Funding

Total Commitment

Taxable MRBs

Live 929 Apartments - Series 2022B

January 2022

1/1/2029

3,625,000

3,625,000

13. Allowance for Credit Losses

On January 1, 2023, the Partnership adopted ASU 2016-13 which replaced the incurred loss methodology with an expected loss model known as the CECL model. See Note 2 for further discussion of the Partnership’s Allowance for Credit Losses accounting policy.

Held-to-Maturity Debt Securities, Held-for-Investment Loans and Related Unfunded Commitments

The Partnership considers key credit quality indicators when estimating expected credit losses for assets recorded at amortized cost. Such assets primarily finance the construction or rehabilitation of affordable multifamily properties. The GILs are primarily repaid through a conversion to permanent financing pursuant to a forward commitment from Freddie Mac dependent on completion of construction and various other conditions that each property must meet. The property loans related to GILs are primarily to be repaid from future equity contributions by investors and other forward financing commitments provided by various parties. If Freddie Mac is not required to purchase the GIL and payment of the property loans from available sources is not made, the GIL and associated property loan will have defaulted, and the Partnership has the right to foreclose on the underlying property, the associated low income housing tax credits, and enforce the guaranty provisions against affiliates of the individual property borrower. Accordingly, the Partnership’s key credit quality indicators include, but are not limited to, construction status of the property, financial strength of borrowers and guarantors, adequacy of capitalized interest reserves, lease up and occupancy of the property, the status of other conversion conditions, and operating results of the underlying property. The property loans secured by other multifamily properties are repaid through property operations or future sales proceeds.

As a result of the adoption of ASU 2016-13 effective date of January 1, 2023, there is a lack of comparability in both the allowance and provisions for credit losses for the periods presented. Results for reporting periods beginning after January 1, 2023 are presented using the CECL methodology, while comparative period information continues to be reported in accordance with the incurred loss methodology in effect for prior years.

The following table summarizes the changes in the Partnership’s allowance for credit losses as of March 31, 2023:


	For the Three Months Ended March 31, 2023
	Governmental Issuer Loans			Taxable Governmental Issuer Loans		Property Loans			Unfunded Commitments			Total
Balance, beginning of period		-			-	$	495,000			-			495,000
Cumulative-effect adjustment upon adoption	$	2,145,000		$	79,000		2,108,000		$	1,617,000		$	5,949,000
Current provision for expected credit losses		(65,000	)		10,000		(153,000	)		(337,000	)		(545,000	)
Balance, end of period	$	2,080,000		$	89,000	$	2,450,000		$	1,280,000		$	5,899,000

At adoption, on January 1, 2023, the Partnership recorded an allowance for credit losses of approximately $5.9 million as a reduction to Partners’ Capital, or approximately 0.85% of the Partnerships carrying value of GILs, taxable GILs and property loans and total unfunded commitments. This amount does not include the Live 929 Apartments property loan that had a previous asset-specific allowance of $495,000.

The Partnership recorded a recovery of provision for credit losses of approximately $545,000 for the three months ended March 31, 2023, which caused a decrease in the allowance for credit losses by the same amount. The decrease for the three months ended March 31, 2023 is primarily due to a decrease in the weighted average life of the asset portfolio and updates of market data used as quantitative assumptions in the Partnership’s model to estimate the allowance for credit losses.

Risk Ratings

The Partnership evaluates all GILs, taxable GILs and property loans on a quarterly basis and assigns a risk rating based upon management’s assessment of the borrower’s ability to pay debt service and the likelihood of repayment through the GIL’s conversion to Freddie Mac financing and the property loan’s payment from future equity contribution commitments. The assessment is subjective and based on multiple factors, including but not limited to, construction status of the property, financial strength of borrowers and guarantors, adequacy of capitalized interest reserves, lease up and occupancy of the property, the status of other conversion conditions, and operating results of the underlying property. The credit risk analysis and rating assignment is performed quarterly in conjunction with the Partnership’s assessment of its allowance for credit losses. The Partnership uses the following definitions for its risk ratings:

•

Performing – The underlying property currently meets or exceeds management’s performance expectations and metrics. There are currently no material indicators that current debt service or repayment of the GILs and property loans is at risk.

•

Watch – The underlying property associated with the GILs and property loans currently has certain performance or other risk factors that require specific attention from management. The Partnership could experience loss if these factors are not resolved in a timely or satisfactory manner. The Partnership currently estimates that such factors will be adequately resolved and that current debt service and final repayment of the GILs and property loans is not at material risk.

•

Nonperforming – The underlying property associated with the GILs and property loans is not current on debt service payments and/or has material performance or other risk factors. The Partnership currently believes that full collection of debt service and final repayment is questionable and/or improbable.

The following table summarizes the Partnership’s carrying value by origination year, grouped by risk rating as of March 31, 2023:


	March 31, 2023
	2023		2022		2021		2020		2019		Prior		Total
Governmental Issuer Loans
Performing	$	-	$	42,337,300	$	168,190,438	$	107,080,000	$	-	$	-	$	317,607,738
Watch		-		-		-		-		-		-		-
Nonperforming		-		-		-		-		-		-		-
Subtotal		-		42,337,300		168,190,438		107,080,000		-		-		317,607,738

Taxable Governmental Issuer Loans
Performing	$	-	$	3,000,000	$	8,000,000	$	-	$	-	$	-	$	11,000,000
Watch		-		-		-		-		-		-		-
Nonperforming		-		-		-		-		-		-		-
Subtotal		-		3,000,000		8,000,000		-		-		-		11,000,000

Property Loans
Performing	$	-	$	54,465,315	$	54,854,469	$	54,963,077		-	$	453,594	$	164,736,455
Watch		-		-		-		-		-		-		-
Nonperforming		-		-		-		-	$	495,000		-		495,000
Subtotal		-		54,465,315		54,854,469		54,963,077		495,000		453,594		165,231,455

Unfunded Commitments
Performing	$	-	$	128,700,000	$	60,376,955	$	3,685,523	$	-	$	-	$	192,762,478
Watch		-		-		-		-		-		-		-
Nonperforming		-		-		-		-		-		-		-
Subtotal		-		128,700,000		60,376,955		3,685,523		-		-		192,762,478

Total	$	-	$	228,502,615	$	291,421,862	$	165,728,600	$	495,000	$	453,594	$	686,601,671

The Partnership evaluates its outstanding principal and interest receivable balances associated with its GILs and property loans for collectability. If collection of these balances is not probable, the loan is placed on non-accrual status and either an asset-specific allowance for credit loss will be recognized or the outstanding balance will be written off. There are no GILs, taxable GILs, or property loans that are currently past due on contractual debt service payments and the Partnership considered all GILs, taxable GILs and property loans to be performing as of March 31, 2023, except as noted below. The Partnership currently has two property loans on nonaccrual status.

During the three months ended March 31, 2023 and 2022, the interest to be earned on the Live 929 Apartments property loan was in nonaccrual status. The discounted cash flow method used by management to establish the net realizable value of the property loan determined the collection of the interest accrued was not probable and the loan is considered to be nonperforming. The Live 929 Apartments property loan has outstanding principal of approximately $495,000 as of March 31, 2023 and December 31, 2022, which was fully reserved with an asset-specific allowance.

In December 2022, the Partnership received a property loan in exchange for the sale of its 100% interest in The 50/50 MF Property in the amount of $4.8 million. See Note 10 for further information on the property sale. The property loan is unsecured, will be repaid from net cash flows of the property, and is subordinate to the mortgage debt of the property which was assumed by the buyer as described in Note 10. The property loan is in non-accrual status as of March 31, 2023 because payments under the loan are not required immediately and are expected to be paid from future net cash flows of the property as previously described in Note 10. As such, the loan is considered to be performing. The property loan associated with the 50/50 MF Property had outstanding principal of approximately $5.2 million and $4.8 million as of March 31, 2023 and December 31, 2022, respectively.

Available-for-Sale Debt Securities

The Partnership will record an impairment for MRBs and taxable MRBs through allowance for credit losses for the portion of the difference between the estimated fair value and amortized cost that is related to expected credit losses. The following table summarizes the changes in the Partnership’s allowance for credit losses for the three months ended March 31, 2023 and 2022:


	For the Three Months Ended March 31,
	2023			2022
Balance, beginning of period	$	9,978,891		$	9,175,482
Other additions (1)		-			860,533
Recovery of prior credit loss (2)		(16,967	)