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 June 30, 2024


☐	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 June 30, 2024, the registrant had 23,290,442 Beneficial Unit Certificates representing assignments of limited partnership interests outstanding.

INDEX

PART I – FINANCIAL INFORMATION


Item 1	Financial Statements (Unaudited)	7
	Condensed Consolidated Balance Sheets	7
	Condensed Consolidated Statements of Operations	8
	Condensed Consolidated Statements of Comprehensive Income (Loss)	9
	Condensed Consolidated Statements of Partners’ Capital	10
	Condensed Consolidated Statements of Cash Flows	12
	Notes to Condensed Consolidated Financial Statements	13
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	58
Item 3	Quantitative and Qualitative Disclosures About Market Risk	93
Item 4	Controls and Procedures	96

PART II – OTHER INFORMATION
Item 1A	Risk Factors	97
Item 6	Exhibits	97
SIGNATURES		98

Defined Terms

The following acronyms and defined terms are used in various sections of this Quarterly Report on Form 10-Q, including the Notes to Consolidated Financial Statements in Item 1 and Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this report. 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 VIEs.

Acquisition LOC - The amended and restated credit agreement for a secured non-operating line of credit between the Partnership and Bankers Trust Company.

Agent(s) - JonesTrading Institutional Services LLC and BTIG, LLC as named agents under the Sales Agreement.

AMI - Area median income, as calculated by the United States Department of Housing and Urban Development.

ASU - Accounting standards update issued by the Financial Accounting Standards Board.

BankUnited - BankUnited, N.A.

BUC(s) - Beneficial Unit Certificate(s) representing assigned limited partnership interests of the Partnership.

BUCs Distributions - The Second Quarter 2023 BUCs Distribution, the Third Quarter 2023 BUCs Distribution, the Fourth Quarter 2023 BUCs Distribution and the First Quarter 2024 BUCs Distribution, collectively.

BUC Holder(s) - A beneficial owner of BUCs.

CAD - Cash Available for Distribution, a non-GAAP measure reported by the Partnership.

C-PACE - Commercial Property Assessed Clean Energy.

CRA - Community Reinvestment Act of 1977.

DEI - Diversity, equity, and inclusion.

FASB - The Financial Accounting Standards Board.

First Quarter 2024 BUCs Distribution - A distribution completed on April 30, 2024 in the form of additional BUCs at a ratio of 0.00417 BUCs for each BUC outstanding as of March 28, 2024.

Fourth Quarter 2023 BUCs Distribution - A distribution completed on January 31, 2024 in the form of additional BUCs at a ratio of 0.00415 BUCs for each BUC outstanding as of December 29, 2023.

Freddie Mac - The Federal Home Loan Mortgage Corporation.

GAAP - Accounting principles generally accepted in the United States of America.

General LOC - A general secured line of credit with three financial institutions and the sole lead arranger and administrative agent, BankUnited.

General Partner - America First Capital Associates Limited Partnership Two.

GIL(s) - Governmental issuer loan(s).

Greens Hold Co – Greens of Pine Glen - AmFirst LP Holding Corporation., a wholly owned corporation of the Partnership.

Greystone - Greystone & Co. II LLC, collectively with its affiliates.

Greystone Manager – Greystone AF Manager LLC, which is the general partner of the General Partner.

Greystone Select - Greystone Select Incorporated, an affiliate of the Partnership.

Initial Limited Partner - Greystone ILP, Inc.

IRC - Internal Revenue Code.

JV Equity Investment(s) - A noncontrolling equity investment in an unconsolidated entity owned by the Partnership.

Leverage Ratio - An overall 80% maximum leverage level, as established by the Board of Managers of Greystone Manager.

LIHTC(s) - Low Income Housing Tax Credit(s).

LOC(s) - Line(s) of credit.

MF Property – A multifamily, student, or senior citizen residential property owned by the Partnership.

Mizuho - Mizuho Capital Markets LLC.

MRB(s) - Mortgage revenue bond(s).

Partnership - Greystone Housing Impact Investors LP, its consolidated subsidiaries and consolidated variable interest entities.

Partnership Agreement - Greystone Housing Impact Investors LP Second Amended and Restated Agreement of Limited Partnership dated as of December 5, 2022, as further amended.

Plan - The Amended and Restated Greystone Housing Impact Investors LP 2015 Equity Incentive Plan.

Preferred Unit(s) - Collectively, the three series of non-cumulative, non-voting, non-convertible 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.

QAP - Qualified allocation plan.

RUA – Restricted unit award issued under the Plan.

SEC - Securities and Exchange Commission.

Sales Agreement - The Amended and Restated Capital on DemandTM Sales Agreement with JonesTrading Institutional Services LLC and BTIG, LLC, as agents.

Second Quarter 2023 BUCs Distribution - A distribution completed on July 31, 2023 in the form of additional BUCs at a ratio of 0.00448 BUCs for each BUC outstanding as of June 30, 2023.

Secured Credit Agreement - The secured credit agreement with three financial institutions and the sole lead arranger and administrative agent, BankUnited, in connection with the General LOC.

Secured Notes - Secured notes issued by ATAX TEBS Holdings, LLC to Mizuho Capital Markets LLC.

Shelf Registration Statement - The Partnership’s Registration Statement on Form S-3 declared effective by the SEC in December 2022.

TEBS - Tax Exempt Bond Securitization financing with Freddie Mac.

TEBS Residual Financing – A securitization transaction to finance the Partnership’s residual interests in the M31, M33 and M45 TEBS financings.

TOB - Tender Option Bond.

Term SOFR – The one-month forward looking term Secured Overnight Financing Rate as published by CME Group Benchmark Administration Limited.

Third Quarter 2023 BUCs Distribution - A distribution completed on October 31, 2023 in the form of additional BUCs at a ratio of 0.00418 BUCs for each BUC outstanding as of September 29, 2023.

Unitholder(s) - Holder(s) of BUCs and/or Preferred Units.

VIE(s) - Variable interest entity.

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, 2023, 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 MRBs and 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 (including the Russia-Ukraine war and the Israel-Hamas war) 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;

•

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

•

recapture of previously issued LIHTCs in accordance with Section 42 of the 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 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)


	June 30, 2024			December 31, 2023
Assets:
Cash and cash equivalents	$	34,036,426		$	37,918,237
Restricted cash		16,860,718			9,815,909
Interest receivable, net		7,193,344			8,265,901
Mortgage revenue bonds held in trust, at fair value (Note 4)		990,067,074			883,030,786
Mortgage revenue bonds, at fair value (Note 4)		11,984,951			47,644,509
Governmental issuer loans
Governmental issuer loans held in trust (Note 5)		214,557,300			222,947,300
Allowance for credit losses (Note 10)		(1,111,000	)		(1,294,000	)
Governmental issuer loans, net		213,446,300			221,653,300
Property loans
Property loans (Note 6)		63,306,149			122,556,204
Allowance for credit losses (Note 10)		(1,948,000	)		(2,048,000	)
Property loans, net		61,358,149			120,508,204
Investments in unconsolidated entities (Note 7)		157,940,664			136,653,246
Real estate assets, net (Note 8)		4,716,140			4,716,140
Other assets (Note 9)		31,037,954			43,194,470
Total Assets (1)	$	1,528,641,720		$	1,513,400,702

Liabilities:
Accounts payable, accrued expenses and other liabilities (Note 11)	$	21,215,235		$	22,958,088
Distribution payable		8,704,438			8,584,292
Secured lines of credit (Note 12)		41,250,000			33,400,000
Debt financing, net (Note 13)		1,052,526,098			1,015,030,066
Mortgages payable, net (Note 14)		1,690,000			1,690,000
Total Liabilities (1)		1,125,385,771			1,081,662,446

Commitments and Contingencies (Note 16)

Redeemable Preferred Units, $77.5 million redemption value, 7.8 million issued and outstanding, net (Note 17)		77,395,065			82,431,548

Partnersʼ Capital:
General Partner (Note 1)		294,615			543,977
Beneficial Unit Certificates (Note 1)		325,566,269			348,762,731
Total Partnersʼ Capital		325,860,884			349,306,708
Total Liabilities and Partnersʼ Capital	$	1,528,641,720		$	1,513,400,702

(1)

The consolidated balance sheets include assets of consolidated VIEs that can only be used to settle obligations of these VIEs that totaled $1,281,485,410 and $1,247,819,817 as of June 30, 2024 and December 31, 2023, respectively. The consolidated balance sheets include liabilities of the consolidated VIEs for which creditors do not have recourse to the general credit of the Partnership that totaled $372,228,109 and $374,992,803 as of June 30, 2024 and December 31, 2023, respectively. See Note 3 - Variable Interest Entities for further detail.

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 June 30,					For the Six Months Ended June 30,
	2024		2023			2024			2023
Revenues:
Investment income	$	19,827,388	$	22,415,771		$	39,099,733		$	41,718,456
Other interest income		2,070,487		4,646,347			5,074,325			9,056,012
Property revenues		-		1,108,356			-			2,333,976
Other income		71,296		133,467			165,767			133,467
Total revenues		21,969,171		28,303,941			44,339,825			53,241,911
Expenses:
Real estate operating (exclusive of items shown below)		-		614,692			-			1,216,945
Provision for credit losses (Note 10)		19,692		(774,000	)		(786,308	)		(1,319,000	)