ATAX 10-Q 0313

This 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 a number of 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 and contained in this report and, accordingly, we cannot guarantee their accuracy or completeness.

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 as a result of new information, future events or otherwise. 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 headings “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and in Item 1A of Part II of this document.



	March 31, 2013			December 31, 2012
Assets
Cash and cash equivalents	$	13,336,312		$	30,172,773
Restricted cash	4,595,649			5,471,522
Interest receivable	10,851,898			8,473,360
Tax-exempt mortgage revenue bonds held in trust, at fair value (Notes 4 & 10)	130,391,760			99,534,082
Tax-exempt mortgage revenue bonds, at fair value (Note 4)	76,467,415			45,703,294
Public housing capital fund trusts, at fair value (Note 5)	64,613,713			65,389,298
Mortgage-backed securities, at fair value (Note 6)	34,115,328			32,121,412
Real estate assets: (Note 7)
Land	11,221,298			11,202,876
Buildings and improvements	96,004,727			93,615,479
Real estate assets before accumulated depreciation	107,226,025			104,818,355
Accumulated depreciation	(20,519,236		)	(19,330,063		)
Net real estate assets	86,706,789			85,488,292
Other assets (Note 8)	11,004,379			8,216,295
Assets of discontinued operations (Note 9)	9,963,239			32,580,427
Total Assets	$	442,046,482		$	413,150,755

Liabilities
Accounts payable, accrued expenses and other liabilities	$	5,445,866		$	5,013,947
Distribution payable	5,400,621			5,566,908
Debt financing (Note 10)	194,267,900			177,948,000
Mortgages payable (Note 11)	46,558,021			39,119,507
Liabilities of discontinued operations (Note 9)	115,668			1,531,462
Total Liabilities	251,788,076			229,179,824

Commitments and Contingencies (Note 16)

Partners' Capital
General Partner (Note 2)	69,728			(430,087		)
Beneficial Unit Certificate holders	214,252,021			207,383,087
Unallocated deficit of Consolidated VIEs	(25,276,767		)	(25,035,808		)
Total Partners' Capital	189,044,982			181,917,192
Noncontrolling interest (Note 7)	1,213,424			2,053,739
Total Capital	190,258,406			183,970,931
Total Liabilities and Partners' Capital	$	442,046,482		$	413,150,755



	For the Three Months Ended,
	March 31, 2013			March 31, 2012
Revenues:
Property revenues	$	3,732,807		$	2,960,400
Investment income	7,716,617			2,371,404
Other interest income	1,244,985			39,345
Other income	250,000			—
Total revenues	12,944,409			5,371,149
Expenses:
Real estate operating (exclusive of items shown below)	2,057,036			1,615,376
Provision for loss on receivables	238,175			238,175
Depreciation and amortization	1,581,376			1,063,767
Interest	1,536,273			1,268,816
General and administrative	970,491			650,579
Total expenses	6,383,351			4,836,713
Income from continuing operations	6,561,058			534,436
Income from discontinued operations (including gain on sale of MF Properties of $1,775,527 in 2013)	1,933,019			235,148
Net income	8,494,077			769,584
Net income attributable to noncontrolling interest	172,651			139,152
Net income - America First Tax Exempt Investors, L.P.	$	8,321,426		$	630,432

Net income (loss) allocated to:
General Partner	$	511,751		$	8,703
Limited Partners - Unitholders	8,050,634			861,588
Unallocated loss of Consolidated Property VIEs	(240,959		)	(239,859		)
Noncontrolling interest	172,651			139,152
	$	8,494,077		$	769,584
Unitholders' interest in net income per unit (basic and diluted):
Income from continuing operations	$	0.15		$	0.03
Income from discontinued operations	0.04			—
Net income, basic and diluted, per unit	$	0.19		$	0.03
Weighted average number of units outstanding, basic and diluted	42,772,928			30,122,928



	General Partner			# of Units	Beneficial Unit Certificate Holders			Unallocated Deficit of Consolidated VIEs			Non- controlling Interest			Total			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2013	$	(430,087	)	42,772,928	$	207,383,087		$	(25,035,808	)	$	2,053,739		$	183,970,931		$	7,161,381
Deconsolidation of Ohio Properties	14,064				1,392,303			—			(1,012,966		)	393,401			1,406,367
Distributions paid or accrued	(54,006		)		(5,346,616		)	—			—			(5,400,622		)	—
Net income (loss)	511,751				8,050,634			(240,959		)	172,651			8,494,077			—
Unrealized gain on securities	28,006				2,772,613			—			—			2,800,619			2,800,619
Balance at March 31, 2013	$	69,728		42,772,928	$	214,252,021		$	(25,276,767	)	$	1,213,424		$	190,258,406		$	11,368,367

	General Partner			# of Units	Beneficial Unit Certificate Holders			Unallocated Deficit of Consolidated VIEs			Non- controlling Interest			Total			Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2012	$	(354,006	)	30,122,928	$	154,911,228		$	(23,512,962	)	$	544,785		$	131,589,045		$	95,894
Noncontrolling interest contribution	—				—			—			4,037			4,037			—
Distributions paid or accrued	(38,034		)		(3,765,366		)	—			—			(3,803,400		)	—
Net income (loss)	8,703				861,588			(239,859		)	139,152			769,584			—
Unrealized gain on securities	28,476				2,819,131			—			—			2,847,607			2,847,607
Balance at March 31, 2012	$	(354,861	)	30,122,928	$	154,826,581		$	(23,752,821	)	$	687,974		$	131,406,873		$	2,943,501



	For Three Months Ended,
	March 31, 2013			March 31, 2012
Cash flows from operating activities:
Net income	$	8,494,077		$	769,584
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	1,585,605			1,511,315
Provision for loss from receivables	238,175			238,175
Non-cash loss on derivatives	104,658			329,340
Bond discount and premium amortization and accretion	(83,638		)	(105,140		)
Gain on the sale of the Ohio Properties	(1,775,527		)	—
Changes in operating assets and liabilities, net of effect of acquisitions
Increase in interest receivable	(2,616,713		)	(1,526,134		)
(Increase) decrease in other assets	(652,147		)	13,550
Decrease in accounts payable and accrued expenses	(2,248,190		)	(449,445		)
Net cash provided operating activities	3,046,300			781,245
Cash flows from investing activities:
Capital expenditures	(1,645,272		)	(1,823,562		)
Acquisition of tax-exempt mortgage revenue bonds	(38,400,000		)	—
Proceeds from the sale of Ohio Properties	16,195,000			—
Investment in the Ohio Properties' bonds	(18,313,000		)	—
Cash received from taxable loans receivable - Ohio Properties	4,064,089			—
Acquisition of mortgage-backed securities	(2,557,373		)	—
Acquisition of taxable bonds	(804,000		)	—
Decrease in restricted cash	137,443			225,705
Restricted cash - debt collateral released (paid)	644,833			650,833
Change in restricted cash - Greens Property sale	2,097,691			—
Principal payments received on tax-exempt and taxable mortgage revenue bonds	684,763			71,317
Net cash used by investing activities	(37,895,826		)	(875,707		)
Cash flows from financing activities:
Distributions paid	(5,566,909		)	(3,911,340		)
Proceeds from debt financing	16,705,000			1,673,579
Principal borrowings on mortgages payable	7,500,000			—
Principal payments on debt and mortgage financing	(562,486		)	(186,302		)
Decrease in liabilities related to restricted cash	(137,443		)	(225,705		)
Debt financing costs	(32,942		)	(34,188		)
Sale of LP Interests	—			4,037
Net cash provided (used) by financing activities	17,905,220			(2,679,919		)
Net decrease in cash and cash equivalents	(16,944,306		)	(2,774,381		)
Cash and cash equivalents at beginning of period, including cash and cash equivalents of discontinued operations of $158,727 and $126,572, respectively	30,331,500			20,213,413
Cash and cash equivalents at end of period, including cash and cash equivalents of discontinued operations of $50,882 and $24,632, respectively	$	13,387,194		$	17,439,032

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	1,286,483		$	881,291
Distributions declared but not paid	$	5,400,622		$	3,803,400
Supplemental disclosure of non cash activities:
Cash borrowed for financing costs	$	115,900		$	—
Capital expenditures financed through accounts and notes payable	$	2,006,159		$	42,929
Deconsolidation of the Ohio Properties - noncontrolling interest	$	1,012,966		$	—
Taxable loans receivable - Ohio Properties	$	1,236,236		$	—

America First Tax Exempt Investors, L.P. (the “Partnership”) was formed on April 2, 1998, under the Delaware Revised Uniform Limited Partnership Act for the primary purpose of acquiring, holding, selling and otherwise dealing with a portfolio of federally tax-exempt mortgage revenue bonds which have been issued to provide construction and/or permanent financing of multifamily residential properties. Interest on these bonds is excludable from gross income for federal income tax purposes. As a result, most of the income earned by the Partnership is exempt from federal income taxes. The Partnership may also invest in other types of tax-exempt securities that may or may not be secured by real estate and may make taxable mortgage loans secured by multifamily properties which are financed by tax-exempt mortgage revenue bonds held by the Partnership. The Partnership generally does not seek to acquire direct interests in real property as long term or permanent investments. The Partnership may, however, acquire real estate securing its tax-exempt mortgage revenue bonds or taxable mortgage loans through foreclosure in the event of a default. In addition, the Partnership may acquire interests in multifamily apartment properties (“MF Properties”) in order to position itself for future investments in tax-exempt mortgage revenue bonds issued to finance these properties. The Partnership expects to sell its interest in these MF Properties in connection with the future syndication of low income housing tax credits under Section 42 of the Internal Revenue Code ("LIHTCs") or to a tax-exempt organization and to acquire tax-exempt mortgage revenue bonds on these properties to provide debt financing to the new owners.

The "Company" refers to the consolidated financial statements reported in this Form 10-Q which include the assets, liabilities, and results of operations of the Partnership, its Consolidated Subsidiaries (defined below) and three entities in which the Partnership does not hold an ownership interest but which own multifamily apartment properties financed with tax-exempt mortgage revenue bonds held by the Partnership and which are treated as variable interest entities ("VIEs") of which the Partnership has been determined to be the primary beneficiary (the “Consolidated VIEs”). The Consolidated Subsidiaries of the Partnership consist of:

Stand alone financial information of the Partnership reported in this Form 10-Q includes only the assets, liabilities, and results of operations of the Partnership and its Consolidated Subsidiaries (hereafter the “Partnership”) without the Consolidated VIEs. In the Company’s consolidated financial statements, all transactions and accounts between the Partnership, the Consolidated Subsidiaries and the Consolidated VIEs have been eliminated in consolidation. The Partnership does not believe that the consolidation of VIEs for reporting under accounting principles generally accepted in the United States of America (“GAAP”) affects the Partnership’s status as a partnership for federal income tax purposes or the status of unitholders as partners of the Partnership, the treatment of the tax-exempt mortgage revenue bonds on the properties owned by Consolidated VIEs as debt, the tax-exempt nature of the interest payments received on bonds secured by the properties owned by Consolidated VIEs or the manner in which the Partnership’s income is reported to unitholders on IRS Form K-1.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at 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 according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted according to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. These condensed consolidated financial statements and notes have been prepared consistently with the 2012 Form 10-K. In the opinion of management, all adjustments (consisting of normal and recurring accruals) necessary to present fairly the financial position as of March 31, 2013, and the results of operations for the interim periods presented have been made. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year.

The Agreement of Limited Partnership of the Partnership 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 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 BUCs held by each unitholder as of such date. For purposes of the Agreement of Limited Partnership, cash distributions, if any, received by the Partnership from its indirect interest in MF Properties (Note 7) will be included in the Partnership’s Interest Income and cash distributions received by the Partnership from the sale of such properties will be included in the Partnership Residual Proceeds.

Cash distributions are currently made on a quarterly basis but may be made on a monthly or semiannual basis at the election of AFCA 2. On each distribution date, Net Interest Income is distributed 99% to the unitholders and 1% to AFCA 2 and Net Residual Proceeds are distributed 100% to unitholders except that Net Interest Income and Net Residual Proceeds representing contingent interest in an amount equal to 0.9% per annum of the principal amount of the tax-exempt mortgage revenue bonds on a cumulative basis (defined as Net Interest Income (Tier 2) and Net Residual Proceeds (Tier 2), respectively) are distributed 75% to the unitholders and 25% to AFCA 2.

In June 2010, the Company completed a sales transaction whereby four of the MF Properties, Crescent Village, Post Woods (I and II), and Willow Bend apartments in Ohio (the “Ohio Properties”), were sold to three new ownership entities controlled by an unaffiliated not-for-profit entity and in October 2011, the three limited partnerships that own the Ohio Properties admitted two entities that are affiliates of Boston Capital ("BC Partners") as new limited partners as part of a syndication of LIHTCs. The BC Partners agreed to contribute equity to these limited partnerships, subject to the Ohio Properties meeting certain debt service coverage ratios specified in the applicable limited partnership agreements. The Company acquired 100% of the $18.3 million tax-exempt mortgage revenue bonds issued by the Ohio Housing Finance Agency as part of a plan of financing for the acquisition and rehabilitation of the Ohio Properties. The tax-exempt mortgage revenue bonds secured by the Ohio Properties were acquired by the Company at par and consisted of two series. The Series A bond had a par value of $14.7 million and bears interest at an annual rate of 7.0%. The Series B bond had a par value of $3.6 million and bears interest at an annual interest rate of 10.0%. Both series of bonds mature in June 2050. The BC Partners agreed to contribute equity to these limited partnerships, subject to the Ohio Properties meeting certain debt service coverage ratios specified in the applicable limited partnership agreements. As such, there was not sufficient equity invested at closing by the not-for-profit or BC Partners into the Ohio Properties to allow the Company to recognize a real estate sale.

The deposit method of accounting for real estate sales required both the deferral of the gain from the real estate sale and also did not allow recognition of the tax-exempt interest payments by the Ohio Properties to the Company between June 2010 and the date of the equity contribution by BC Partners. In conjunction with the recognition of the real estate sale, approximately $3.5 million of tax-exempt interest has been recognized within investment income in the first quarter of 2013 which represents the tax-exempt interest payments received from the Ohio Properties between June 2010 and December 2012. In addition, the Partnership reported

The Partnership invests in federally tax-exempt mortgage revenue bonds which have been issued to provide construction and/or permanent financing of multifamily residential apartments. The Partnership owns 100% of these bonds and each bond is secured by a first mortgage on the property. In certain cases, the Partnership has also made taxable loans to the property owners which are secured by second mortgages on these properties. Although each multifamily property financed with tax-exempt mortgage revenue bonds held by the Partnership is owned by a separate entity in which the Partnership has no equity ownership interest, the debt financing provided by the Partnership creates a variable interest in these ownership entities that may require the Partnership to report the assets, liabilities, and results of operations of these entities on a consolidated basis under GAAP.

The Partnership determined it is the primary beneficiary of the following properties at March 31, 2013: Bent Tree, Fairmont Oaks, and Lake Forest. The capital structure of Bent Tree, Fairmont Oaks, and Lake Forest consists of senior debt, subordinated debt, and equity capital. The senior debt is in the form of a tax-exempt mortgage revenue bonds and accounts for the majority of each VIE's total capital. As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents. The equity ownership of the consolidated VIEs is ultimately held by corporations which are owned by four individuals, two of which are related parties. Additionally, each of these properties is managed by an affiliate of the Partnership, America First Properties Management Company, LLC (“Properties Management”) which is an affiliate of Burlington Capital Group, LLC ("Burlington").

In August 2012, the EAT (Maples on 97th), a wholly-owned subsidiary of a Title Company which owned a multi-family property located in Omaha, Nebraska, executed a Master Lease Agreement and Construction Management Agreement with the Partnership. These two agreements gave the Partnership the rights and obligations to manage this property as well as the rehabilitation during the six month hold period which contractually ended in February 2013. The Partnership determined that it was the primary beneficiary of the EAT (Maples on 97th) and consolidated the EAT as a VIE as of December 31, 2012. Based on the terms of the Master Lease Agreement, the Partnership reported the rental income and related real estate operating expenses for the Maples on 97th property during the six month holding period as an MF Property since it had all the rights and obligations of landlord for the property. In February 2013, title to the Maples on 97th property transferred to the Partnership from the EAT (Maples on 97th) and the property is reported as an MF Property in the consolidated balance sheet as of March 31, 2013.

In determining the primary beneficiary of these VIEs, the Partnership considered the activities of the VIE which most significantly impact the VIEs' economic performance, who has the power to control such activities, the risks which the entities were designed to create, the variability associated with those risks and the interests which absorb such variability. The Partnership also considered the related party relationship of the entities involved in the VIEs. It was determined that the Partnership, as part of the related party group, met both of the primary beneficiary criteria and was the most closely associated with the VIEs and; therefore, was determined to be the primary beneficiary.

The Company does not consolidate two VIE entities, Ashley Square and Cross Creek. In determining the primary beneficiary of these VIEs, the Partnership considered the activities of each VIE which most significantly impact the VIEs' economic performance, who has the power to control such activities, the risks which the entities were designed to create, the variability associated with those risks and the interests which absorb such variability. The significant activities of the VIE that impact the economic performance of the entity include leasing and maintaining apartments, determining if the property is to be sold, decisions relating to debt refinancing, the selection of or replacement of the property manager and the approval of the operating and capital budgets. As discussed below, while the capital structures of these VIEs resulted in the Partnership holding a majority of the variable interests in these VIEs, the Partnership determined it does not have the power to direct the activities of these VIEs that most significantly impact the VIEs’ economic performance and, as a result, is not the primary beneficiary of these VIEs.

Ashley Square – Ashley Square Housing Cooperative acquired the ownership of the Ashley Square Apartments in December 2008 from Ashley Square LLC through a warranty deed of transfer and an assumption of debt. This transfer of ownership constituted a reconsideration event as outlined in the consolidation guidance which triggered a re-evaluation of the holders of variable interests to determine the primary beneficiary of the VIE. The capital structure of the VIE consists of senior debt, subordinated loans and equity capital. The senior debt is in the form of tax-exempt mortgage revenue bonds that are 100% owned by the Partnership and account for the majority of the VIE’s total capital. As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents. The VIE is organized as a housing cooperative and the 99% equity owner of this VIE is The Foundation for Affordable Housing (“FAH”), an unaffiliated Nebraska not-for-profit organization. Additionally, this property is managed by Properties Management.

Cross Creek – Cross Creek Apartments Holdings LLC is the owner of the Cross Creek Apartments. On January 1, 2010, Cross Creek Apartment Holdings LLC entered into a new operating agreement and admitted three new members. These new members committed approximately $2.2 million of capital payable in three installments including $563,000 on January 1, 2010. The new operating agreement and admission of new owner members constituted a reconsideration event as outlined in the consolidation guidance which triggered a re-evaluation of the holders of variable interests to determine the primary beneficiary of the VIE. The capital structure of the VIE consists of senior debt, subordinated loans, and equity capital at risk. The senior debt is in the form of tax-exempt mortgage revenue bonds that are 100% owned by the Partnership and account for the majority of the VIE’s total capital. As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents. The three newly admitted members of this VIE are each unaffiliated with the Partnership and have contributed significant equity capital to the VIE. These members collectively control a 99% interest in the VIE. The other 1% member of this VIE is FAH, which is also unaffiliated with the Partnership. Additionally, this property is managed by Properties Management.

The tax-exempt mortgage revenue bonds are classified on the balance sheet as available for sale investments and are carried at fair value while property loans are presented on the balance sheet as Other assets and are carried at the unpaid principal and interest less any loan loss reserves. See Note 4 for additional information regarding the bonds and Note 8 for additional information regarding the property loans. The maximum exposure to loss for the bonds is equal to the unpaid principal balance as of March 31, 2013. The difference between the tax-exempt mortgage revenue bond's carrying value and the maximum exposure to loss is a function of the fair value of the bond. The difference between the property loan's carrying value and the maximum exposure is the value of loan loss reserves that have been previously recorded against the outstanding loan balances.



	Partnership as of March 31, 2013			Consolidated VIEs as of March 31, 2013			Consolidation - Elimination as of March 31, 2013			Total as of March 31, 2013
Assets
Cash and cash equivalents	$	13,312,928		$	23,384		$	—		$	13,336,312
Restricted cash	3,690,160			905,489			—			4,595,649
Interest receivable	16,837,415			—			(5,985,517		)	10,851,898
Tax-exempt mortgage revenue bonds held in trust, at fair value	155,347,034			—			(24,955,274		)	130,391,760
Tax-exempt mortgage revenue bonds, at fair value	76,467,415			—			—			76,467,415
Public housing capital fund trusts, at fair value	64,613,713			—			—			64,613,713
Mortgage-backed securities, at fair value	34,115,328			—			—			34,115,328
Real estate assets:
Land	7,971,254			3,250,044			—			11,221,298
Buildings and improvements	64,014,909			31,989,818			—			96,004,727
Real estate assets before accumulated depreciation	71,986,163			35,239,862			—			107,226,025
Accumulated depreciation	(6,450,506		)	(14,068,730		)	—			(20,519,236		)
Net real estate assets	65,535,657			21,171,132			—			86,706,789
Other assets	19,850,322			735,448			(9,581,391		)	11,004,379
Assets of discontinued operations	9,963,239			—			—			9,963,239
Total Assets	$	459,733,211		$	22,835,453		$	(40,522,182	)	$	442,046,482

Liabilities
Accounts payable, accrued expenses and other liabilities	$	4,558,345		$	27,214,033		$	(26,326,512	)	$	5,445,866
Distribution payable	5,400,621			—			—			5,400,621
Debt financing	194,267,900			—			—			194,267,900
Mortgages payable	46,558,021			24,092,000			(24,092,000		)	46,558,021
Liabilities of discontinued operations	115,668			—			—			115,668
Total Liabilities	250,900,555			51,306,033			(50,418,512		)	251,788,076
Partners' Capital
General Partner	69,728			—			—			69,728
Beneficial Unit Certificate holders	207,549,504			—			6,702,517			214,252,021
Unallocated deficit of Consolidated VIEs	—			(28,470,580		)	3,193,813			(25,276,767		)
Total Partners' Capital	207,619,232			(28,470,580		)	9,896,330			189,044,982
Noncontrolling interest	1,213,424			—			—			1,213,424
Total Capital	208,832,656			(28,470,580		)	9,896,330			190,258,406
Total Liabilities and Partners' Capital	$	459,733,211		$	22,835,453		$	(40,522,182	)	$	442,046,482



	Partnership as of December 31, 2012			Consolidated VIEs as of December 31, 2012			Consolidation -Elimination as of December 31, 2012			Total as of December 31, 2012
Assets
Cash and cash equivalents	$	30,123,447		$	49,326		$	—		$	30,172,773
Restricted cash	4,538,071			933,451			—			5,471,522
Interest receivable	14,131,063			—			(5,657,703		)	8,473,360
Tax-exempt mortgage revenue bonds held in trust, at fair value	124,149,600			—			(24,615,518		)	99,534,082
Tax-exempt mortgage revenue bonds, at fair value	45,703,294			—			—			45,703,294
Public housing capital fund trusts, at fair value	65,389,298			—			—			65,389,298
Mortgage-backed securities, at fair value	32,121,412			—			—			32,121,412
Real estate assets:
Land	6,798,407			4,404,469			—			11,202,876
Buildings and improvements	55,776,753			37,838,726			—			93,615,479
Real estate assets before accumulated depreciation	62,575,160			42,243,195			—			104,818,355
Accumulated depreciation	(5,458,961		)	(13,871,102		)	—			(19,330,063		)
Net real estate assets	57,116,199			28,372,093			—			85,488,292
Other assets	22,923,356			852,321			(15,559,382		)	8,216,295
Assets of discontinued operations	32,580,427			—			—			32,580,427
Total Assets	$	428,776,167		$	30,207,191		$	(45,832,603	)	$	413,150,755

Liabilities
Accounts payable, accrued expenses and other liabilities	$	2,330,852		$	28,529,405		$	(25,846,310	)	$	5,013,947
Distribution payable	5,566,908			—			—			5,566,908
Debt financing	177,948,000			—			—			177,948,000
Mortgages payable	39,119,507			24,158,000			(24,158,000		)	39,119,507
Liabilities of discontinued operations	1,531,462			—			—			1,531,462
Total Liabilities	226,496,729			52,687,405			(50,004,310		)	229,179,824
Partners' Capital
General Partner	(430,087		)	—			—			(430,087		)
Beneficial Unit Certificate holders	200,655,786			—			6,727,301			207,383,087
Unallocated deficit of Consolidated VIEs	—			(22,480,214		)	(2,555,594		)	(25,035,808		)
Total Partners' Capital	200,225,699			(22,480,214		)	4,171,707			181,917,192
Noncontrolling interest	2,053,739			—			—			2,053,739
Total Capital	202,279,438			(22,480,214		)	4,171,707			183,970,931
Total Liabilities and Partners' Capital	$	428,776,167		$	30,207,191		$	(45,832,603	)	$	413,150,755



	Partnership For the Three Months Ended March 31, 2013		Consolidated VIEs For the Three Months Ended March 31, 2013			Consolidation - Elimination For the Three Months Ended March 31, 2013			Total For the Three Months Ended March 31, 2013
Revenues:
Property revenues	$	2,519,738	$	1,213,069		$	—		$	3,732,807
Investment income	8,094,326		—			(377,709		)	7,716,617
Other interest income	1,244,985		—			—			1,244,985
Other income	250,000		—			—			250,000
Total revenues	12,109,049		1,213,069			(377,709		)	12,944,409
Expenses:
Real estate operating (exclusive of items shown below)	1,323,634		733,402			—			2,057,036
Provision for loss on receivables	238,175		—			—			238,175
Depreciation and amortization	1,238,459		353,736			(10,819		)	1,581,376
Interest	1,536,273		819,163			(819,163		)	1,536,273
General and administrative	970,491		—			—			970,491
Total expenses	5,307,032		1,906,301			(829,982		)	6,383,351
Income (loss) from continuing operations	6,802,017		(693,232		)	452,273			6,561,058
Income from discontinued operations (including gain on sale of MF Properties of $1,775,527 in 2013)	1,933,019		—			—			1,933,019
Net income (loss)	8,735,036		(693,232		)	452,273			8,494,077
Net income attributable to noncontrolling interest	172,651		—			—			172,651
Net income (loss) - America First Tax Exempt Investors, L. P.	$	8,562,385	$	(693,232	)	$	452,273		$	8,321,426



	Partnership For the Three Months Ended March 31, 2012		Consolidated VIEs For the Three Months Ended March 31, 2012			Consolidation - Elimination For the Three Months Ended March 31, 2012			Total For the Three Months Ended March 31, 2012
Revenues:
Property revenues	$	1,765,491	$	1,194,909		$	—		$	2,960,400
Investment income	2,753,077		—			(381,673		)	2,371,404
Other interest income	39,345		—			—			39,345
Total revenues	4,557,913		1,194,909			(381,673		)	5,371,149
Expenses:
Real estate operating (exclusive of items shown below)	907,335		708,041			—			1,615,376
Provision for loss on receivables	238,175		—			—			238,175
Depreciation and amortization	718,713		355,986			(10,932		)	1,063,767
Interest	1,268,816		799,142			(799,142		)	1,268,816
General and administrative	650,579		—			—			650,579
Total expenses	3,783,618		1,863,169			(810,074		)	4,836,713
Income (loss) from continuing operations	774,295		(668,260		)	428,401			534,436
Income from discontinued operations	235,148		—			—			235,148
Net income (loss)	1,009,443		(668,260		)	428,401			769,584
Net income attributable to noncontrolling interest	139,152		—			—			139,152
Net income (loss) - America First Tax Exempt Investors, L. P.	$	870,291	$	(668,260	)	$	428,401		$	630,432

The tax-exempt mortgage revenue bonds owned by the Company have been issued to provide construction and/or permanent financing of multifamily residential properties and do not include the tax-exempt mortgage revenue bonds issued with respect to properties owned by Consolidated VIEs or the Greens Property which is presented as a discontinued operation at March 31, 2013 and December 31, 2012. In addition, at December 31, 2012, the bonds secured by the Ohio Properties were not included as tax-exempt mortgage revenue bonds but were presented as part of discontinued operations (Note 2 and Note 9). Tax-exempt mortgage revenue bonds are either held directly by the Company or are held in trusts created in connection with debt financing transactions (Note 10). The Company had the following investments in tax-exempt mortgage revenue bonds as of dates shown:



	March 31, 2013
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Arbors at Hickory Ridge ⁽²⁾	$	11,580,166	$	1,226,315	$	—		$	12,806,481
Ashley Square ⁽¹⁾	5,248,000		335,342		—			5,583,342
Autumn Pines ⁽²⁾	12,227,249		1,390,673		—			13,617,922
Bella Vista ⁽¹⁾	6,600,000		141,570		—			6,741,570
Bridle Ridge ⁽¹⁾	7,740,000		273,377		—			8,013,377
Brookstone ⁽¹⁾	7,456,317		1,655,477		—			9,111,794
Cross Creek ⁽¹⁾	6,014,381		2,152,683		—			8,167,064
Lost Creek ⁽¹⁾	16,018,015		3,835,262		—			19,853,277
Ohio Bonds A Bonds ⁽¹⁾	14,561,000		1,328,300		—			15,889,300
Runnymede ⁽¹⁾	10,605,000		851,157		—			11,456,157
Southpark ⁽¹⁾	11,924,697		2,767,047		—			14,691,744
Woodlynn Village ⁽¹⁾	4,460,000		—		(268		)	4,459,732
Tax-exempt mortgage revenue bonds held in trust	$	114,434,825	$	15,957,203	$	(268	)	$	130,391,760

	March 31, 2013
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Avistar on the Boulevard	$	16,976,000	190,396		—			$	17,166,396
Avistar at Chase Hill	10,965,000		121,539		—			11,086,539
Avistar at the Crest	10,459,000		—		(100,011		)	10,358,989
Iona Lakes	15,535,000		651,851		—			16,186,851
Ohio B Bonds	3,590,600		316,027		—			3,906,627
Vantage at Judson	6,049,000		131,747		—			6,180,747
Woodland Park	15,662,000		—		(4,080,734		)	11,581,266
Tax-exempt mortgage revenue bonds	$	79,236,600	$	1,411,560	$	(4,180,745	)	$	76,467,415



	December 31, 2012
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gains		Unrealized Loss			Estimated Fair Value
Ashley Square ⁽¹⁾	$	5,260,000	$	246,981	$	—		$	5,506,981
Autumn Pines ⁽²⁾	12,217,004		953,024		—			13,170,028
Bella Vista ⁽¹⁾	6,600,000		93,324		—			6,693,324
Bridle Ridge ⁽¹⁾	7,765,000		108,632		—			7,873,632
Brookstone ⁽¹⁾	7,453,246		1,459,408		—			8,912,654
Cross Creek⁽¹⁾	6,004,424		1,994,911		—			7,999,335
Lost Creek ⁽¹⁾	15,987,744		3,467,182		—			19,454,926
Runnymede ⁽¹⁾	10,605,000		491,330		—			11,096,330
Southpark ⁽¹⁾	11,904,968		2,462,350		—			14,367,318
Woodlynn Village ⁽¹⁾	4,460,000		—		(446		)	4,459,554
Tax-exempt mortgage revenue bonds held in trust	$	88,257,386	$	11,277,142	$	(446	)	$	99,534,082

	December 31, 2012
Description of Tax-Exempt Mortgage Revenue Bonds	Cost adjusted for pay-downs		Unrealized Gain		Unrealized Loss			Estimated Fair Value
Arbors at Hickory Ridge	$	11,581,485	$	610,785	$	—		$	12,192,270
Iona Lakes	15,535,000		554,910		—			16,089,910
Vantage at Judson	6,049,000		—		(847		)	6,048,153
Woodland Park	15,662,000		—		(4,289,039		)	11,372,961
Tax-exempt mortgage revenue bonds	$	48,827,485	$	1,165,695	$	(4,289,886	)	$	45,703,294

In February 2013, the Partnership acquired six tax-exempt bonds secured by three properties located in San Antonio, Texas. The bond purchases are as follows: approximately $13.8 million par value Series A and approximately $3.2 million par value Series B tax-exempt mortgage revenue bonds secured by the Avistar on the Boulevard, a 344 unit multifamily apartment complex; approximately $9.0 million Series A and approximately $2.0 million Series B tax-exempt mortgage revenue bonds secured by the Avistar at Chase Hill, a 232 unit multifamily apartment complex; and approximately $8.8 million Series A and approximately $1.7 million Series B tax-exempt mortgage revenue bonds secured by Avistar at the Crest, a 200 unit multifamily apartment complex. The three Series A tax-exempt mortgage revenue bonds each carry an annual interest rate of 6.0% and mature on March 1, 2050. The three Series B tax-exempt mortgage revenue bonds each carry a cash interest rate of 9.0% and mature on April 1, 2050. The Partnership also acquired approximately $804,000 of taxable bonds which also carry a base interest rate of 9.0% and mature on April 1, 2050. The Company has determined that the entity which owns the three Avistar properties is an unrelated not-for-profit which under the accounting guidance is not subject to applying the VIE consolidation guidance. As a result, the properties' financial statements are not consolidated into the consolidated financial statements of the Company.

In December 2012, the Partnership purchased a $6,049,000 subordinate tax-exempt mortgage revenue bond and a $934,000 subordinate taxable bond both secured by the Vantage at Judson apartments. This property is located in San Antonio, Texas and is currently under construction. Both bonds mature on February 1, 2053 and carry an annual cash interest rate of 9.0% plus allow for an additional 3.0% of interest calculated on the property's cash flows after debt service. The Vantage at Judson apartments has a construction loan with an unrelated bank and the Partnership's bonds are second lien borrowings to that construction loan. The property will have 288 units when construction is completed in the spring of 2014. The Company has determined that the entity which owns Vantage at Judson apartments is an unrelated not-for-profit which under the accounting guidance is not subject to applying the VIE consolidation guidance. As a result, the property's financial statements are not consolidated into the consolidated financial statements of the Company.

Under the terms of a Forward Delivery Bond Purchase Agreement, the Partnership has agreed to purchase a new tax-exempt mortgage revenue bond of up to $26,687,000 (“Series B Bonds”) secured by the Vantage at Judson apartments which will be delivered by the tax-exempt mortgage revenue bond issuer once the property meets specific obligations and occupancy rates. The Series B Bonds will have a stated annual interest rate of 6.0% and bond proceeds must be used to pay off the construction loan to the Bank and all or a portion of the $6,049,000 subordinate tax-exempt mortgage revenue bond. If the property does not meet its specific obligations and required occupancy rate before January 1, 2015, the Partnership has the right to terminate the purchase commitment. The Partnership accounts for the Bond Purchase Agreement as an available-for-sale security and, as such, records the estimated value of the forward purchase commitment as an asset or liability with changes in such valuation recorded in other comprehensive income. As of March 31, 2013, the Partnership has concluded there is no material value to the forward purchase commitment.

In June 2012, the Partnership acquired a $10.0 million par value tax-exempt mortgage revenue bond secured by Arbors at Hickory Ridge Apartments, a 348 unit multifamily apartment complex located in Memphis, Tennessee, which represented 100% of the bond issuance for approximately $10.2 million. In December 2012, the tax-exempt mortgage revenue bond secured by Arbors at Hickory Ridge Apartments was restructured to an $11.5 million par value tax-exempt mortgage revenue bond with an annual interest rate of 6.25% and maturity of December 1, 2049. The Partnership then purchased 100% of this bond issuance plus a taxable loan of approximately $191,000 for a payment of approximately $1,041,000 made at closing.

In October 2012, the Company acquired 100% of the $9.5 million tax-exempt mortgage revenue bonds issued by the North Carolina Housing Finance Agency as part of a plan of financing for the acquisition and rehabilitation of the Greens Property. The tax-exempt mortgage revenue bonds secured by the Greens Property were acquired by the Company at par and consisted of two series. The Series A bond has a par value of approximately $8.5 million and bears interest at an annual rate of 6.5%. The Series B bond has a par value of approximately $1.0 million and bears interest at an annual interest rate of 12.0%. Both series of bonds mature on October 1, 2047. In connection with the bond financing transaction, ownership of the Greens Property was conveyed by the Company to a new ownership entity controlled by an unaffiliated not-for-profit entity. However, because the new ownership entity did not have sufficient equity capital at the time of purchase and the property operations are the sole source of debt service on the Company's bonds, the Company is required to continue to account for the Greens Property as if it is the owner of real estate rather than as a secured lender. As such, the Company continues to report the results from the Greens Property as discontinued operations in its financial statements as of March 31, 2013 which, among other things, results in the elimination of the bonds in consolidation (Note 9).

Valuation - As all of the Company’s investments in tax-exempt mortgage revenue bonds are classified as available-for-sale securities, they are carried on the balance sheet at their estimated fair values. Due to the limited market for the tax-exempt mortgage revenue bonds, these estimates of fair value do not necessarily represent what the Company would actually receive in a sale of the bonds. There is no active trading market for the bonds and price quotes for the bonds are not generally available. As of March 31, 2013, all of the Company’s tax-exempt mortgage revenue bonds were valued using discounted cash flow and yield to maturity analyses performed by management. Management’s valuation encompasses judgment in its application. The key assumption in management’s yield to maturity analysis is the range of effective yields on the individual bonds. The effective yield analysis for each bond considers the current market yield on similar bonds as well as the debt service coverage ratio of each underlying property serving as collateral for the bond. At March 31, 2013, the range of effective yields on the individual bonds was 5.5% to 8.3%. At December 31, 2012, the range of effective yields on the individual bonds was 5.7% to 8.4%. Additionally, the Company calculated the sensitivity of the key assumption used in calculating the fair values of these bonds. Assuming a 10% adverse change in the key assumption, the effective yields on the individual bonds would increase to a range of 6.0% to 9.1% and would result in additional unrealized losses on the bond portfolio of approximately $15.5 million. This sensitivity analysis is hypothetical and is as of a specific point in time. The results of the sensitivity analysis may not be indicative of actual changes in fair value and should be used with caution. If available, the general partner may also consider price quotes on similar bonds or other information from external sources, such as pricing services. Pricing services, broker quotes and management’s analyses provide indicative pricing only.

The Partnership, as sole bondholder, previously directed the bond trustee to file a foreclosure action on the Woodland Park tax-exempt mortgage revenue bond. On February 28, 2013, the court granted Summary Judgment in the bond trustee's favor confirming that the tax-exempt mortgage bond is senior to mechanic's liens filed on the property. Subsequently, the court ordered a sale of the Woodland Park property and on April 23, 2013, the Partnership made a bid to purchase the property for the amount of the outstanding principal and interest it is owed which was the winning bid. The Partnership's Motion of Confirmation was approved by the court on May 2, 2013. The bond trustee assigned its right to the property to the Partnership on May 8, 2013 and the Partnership expects to receive and record the Sheriff's deed conveying title to a wholly-owned subsidiary of the Partnership within the next seven days. Upon receipt of the Sheriff's deed, the Partnership will have the option of (i) requesting the bond issuer to remove the Land Use Restriction Agreement (LURA) on the property and thereby be free to convert it to 100% market-rate rents or (ii) allow the LURA to remaining in place, maintaining the property as a rent restricted property, and seek to place new tax-exempt financing on the property and acquire the bonds. The Partnership is still assessing its long-term strategy for this property.

As of December 31, 2012, the property had 211 units leased out of total available units of 236, or 89% physical occupancy. As of March 31, 2013, occupancy had decreased to 208 units leased, or 88% physical occupancy. America First Properties Management Company, LLC, an affiliate of AFCA 2, provides management for this property. Measures have been implemented that we believe will increase the physical occupancy of this property at approximately 89% in 2013, which will ensure that net operating income is in line with what had been projected for 2013 in the most recent evaluation for other than temporary impairment. Based on this evaluation, the current unrealized loss on this bond is considered to be temporary.

In July 2012, the Company purchased 100% of the residual participation receipts (“LIFERs”) in tender option bond trusts (“PHC TOB Trusts”) for approximately $16 million. The PHC TOB Trusts own approximately $65.3 million of Public Housing Capital Fund Certificates (“PHC Certificates”) issued by three trusts ("PHC Trusts") sponsored by Deutsche Bank ("DB"). The assets held by the PHC Trusts consist of custodial receipts evidencing loans made to a number of local public housing authorities. Principal and interest on these loans are payable by the respective public housing authorities out of annual appropriations to be made to the public housing authorities by the United States Department of Housing and Urban Development (“HUD”) under HUD's Capital Fund Program established under Quality Housing and Work Responsibility Act of 1998 (the “Capital Fund Program”). The PHC Trusts have a first lien on these annual Capital Fund Program payments to secure the public housing authorities' respective obligations to pay principal and interest on their loans. The loans payable by the public housing authorities are not debts, nor guaranteed by the United States of America or HUD. Interest payable on the public housing authority debt held by the PHC Trusts is exempt from federal income taxes. The PHC Certificates issued by each of the PHC Trusts have been rated investment grade by Standard & Poor's.

The Company determined that the three PHC TOB trusts are variable interest entities and that the Company was the primary beneficiary of each of the three PHC TOB trusts. As a result, the Company reports the PHC TOB Trusts on a consolidated basis and the SPEARS as debt financing. In determining the primary beneficiary of these specific VIEs, the Company considered who has the power to control the activities of the VIEs which most significantly impact their financial performance, the risks that the entity was designed to create, and how each risk affects the VIE. The indenture for the PHC TOB trusts stipulates that the Company has the sole right to cause the PHC TOB trusts to sell the PHC Certificates. If they were sold, the extent to which the VIEs will be exposed to gains or losses associated with variability in the PHC Certificates' fair value arising from changes in municipal bond market rates therefore would result from decisions made by the Company.

Valuation - As all of the Company’s investments in PHC Certificates are classified as available-for-sale securities, they are carried on the balance sheet at their estimated fair values. Due to the limited market for the PHC Certificates, these estimates of fair value do not necessarily represent what the Company would actually receive in a sale of the certificates. The estimates of the fair values of these PHC certificates is based on a yield to maturity analysis which begins with the current market yield rate for a “AAA” rated tax-free municipal bond for a term consistent with the weighted-average life of each of the Public Housing Capital Fund trusts adjusted largely for unobservable inputs the General Partner believes would be used by market participants. Management’s valuation encompasses judgment in its application and pricing as determined by pricing services, when available, is compared to Management's estimates. The PHC Certificates are AA and BBB rated. At March 31, 2013, the range of effective yields on the individual bonds was 4.8% to 6.0%. At December 31, 2012, the range of effective yields on the individual bonds was 4.6% to 5.9%. Additionally, the Company calculated the sensitivity of the key assumption used in calculating the fair values of these bonds. Assuming a 10% adverse change in the key assumption, the effective yields on the individual bonds would increase to a range of 5.2% to 6.6% and would result in additional unrealized losses on the bond portfolio of approximately $2.9 million. This sensitivity analysis is hypothetical and is as of a specific point in time. The results of the sensitivity analysis may not be indicative of actual changes in fair value and should be used with caution. If available, the general partner may also consider other information from external sources, such as pricing services. Pricing services and management’s analysis provide indicative pricing only.

During the fourth quarter of 2012, the Company purchased 100% of the LIFERs in five MBS TOB Trusts which securitized state issued MBS with a par value of $31.6 million. The Company purchased the LIFERS issued by the MBS TOB Trust for approximately $6.5 million and pledged the LIFERS to the trustee to secure certain reimbursement obligations of the Company as the holder of LIFERS. The MBS TOB Trusts have issued SPEARS of approximately $26.7 million to unaffiliated investors as of March 31, 2013. The SPEARS represent senior interests in the MBS TOB Trusts and have been credit enhanced by DB. The LIFERS entitle the Company to all principal and interest payments received by the MBS TOB Trust on the securitized MBS after payments due to the holders of the SPEARs and trust costs. The SPEARS bear interest at a variable rate based on Securities Industry and Financial Markets Association ("SIFMA").

The Company determined that the five MBS TOB trusts are variable interest entities and that the Company was the primary beneficiary of each of them. As a result, the Company reports the MBS TOB Trusts on a consolidated basis and the SPEARS as debt financing. In determining the primary beneficiary of these specific VIEs, the Company considered who has the power to control the activities of the VIEs which most significantly impact their financial performance, the risks that the entity was designed to create, and how each risk affects the VIE. The indenture for the MBS TOB trusts stipulates that the Company has the sole right to cause the MBS TOB trusts to sell the MBS. If they were sold, the extent to which the MBS TOB Trusts will be exposed to gains or losses associated with variability in the MBS' fair value arising from changes in municipal bond market rates therefore would result from decisions made by the Company.

Valuation - The Company values each MBS based upon prices obtained from a third party pricing service, which are indicative of market activity. The valuation methodology of the Company's third party pricing service incorporates commonly used market pricing methods, incorporates trading activity observed in the market place, and other data inputs. The methodology also considers the underlying characteristics of each security, which are also observable inputs, including: coupon; maturity date; loan age; reset date; collateral type; geography; and prepayment speeds. Management analyzes pricing data received from the third party pricing service by comparing it to valuation information obtained from at least one other third party pricing service and ensuring they are within a tolerable range of difference which the Company estimates as 7.5%. Management also looks at observations of trading activity observed in the market place when available. At March 31, 2013 and December 31, 2012, the range of effective yields on the individual MBS was 3.6% to 5.4%. Additionally, the Company calculated the sensitivity of the key assumption used in calculating the fair values of the MBS which is the effective yield on new issuances of similarly rated MBS. Assuming a 10% adverse change in that key assumption, the effective yields on the MBS would increase to a range of 4.0% to 5.9% and would result in additional unrealized losses on the bond portfolio of approximately $2.6 million. This sensitivity analysis is hypothetical and is as of a specific point in time. The results of the sensitivity analysis may not be indicative of actual changes in fair value and should be used with caution. Pricing services and management’s analysis provide indicative pricing only. The MBS have been in an unrealized loss position for less than twelve months.

To facilitate its investment strategy of acquiring additional tax-exempt mortgage revenue bonds secured by MF Properties, the Company has acquired through its various subsidiaries 99% limited partner positions in three limited partnerships and 100% member positions in four limited liability companies that own the MF Properties. The financial statements of these properties are consolidated with those of the Company. The general partners of these partnerships are unaffiliated parties and their 1% ownership interest in these limited partnerships is reflected in the Company’s consolidated financial statements as noncontrolling interests. The Company expects each of these MF Properties to eventually be sold either to a not-for-profit entity or in connection with a syndication of LIHTCs. The Company expects to purchase tax-exempt mortgage revenue bonds issued by the new property owners as part of the restructuring.

In August 2012, the Company closed on the purchase of the Maples on 97^th property, a 258 unit facility located in Omaha, Nebraska, for a purchase price of approximately $5.5 million through the execution of a Qualified Exchange Accommodation Agreement that assigned the right to acquire and own the Maples on 97^th property to a wholly-owned subsidiary of a Title Company, (EAT (Maples on 97th)), for a period not to exceed six months. The Company lent the EAT (Maples on 97th) the necessary funds to purchase the replacement property; there was no other capital within that entity. The EAT (Maples on 97th) then executed a Master Lease Agreement and Construction Management Agreement with the Company. These two agreements gave the Company the rights and obligations to manage the replacement property as well as the rehabilitation during the six month hold period. During this six month holding period, the Partnership completed the majority of the rehabilitation of the property. At December 31, 2012 the EAT (Maples on 97th) was reported as a VIE. In February 2013, title to the Maples on 97th property transferred to the Partnership from the EAT (Maples on 97th) and the property is reported as an MF Property as of March 31, 2013.

In March 2013, a wholly-owned subsidiary of the Company executed a 35-year ground lease with the University of Nebraska - Lincoln (“Lessor”) with an annual lease payment of $100. The leased property will have a mixed-use development consisting of a 1,605 stall parking garage and 475 bed student housing complex constructed on it. The Lessor will own the parking garage for which it will contribute approximately $16.7 million to its construction. The Company will own the student housing and currently estimates that construction will cost approximately $34.0 million. The Company has executed a guaranteed maximum price contract with the general contractor for the construction on the mixed-use development. The Company expects to restructure its ownership of the student housing development into a tax-exempt mortgage bond holding after the construction is completed (which is estimated as August 1, 2014 and the project has a sufficient history of operating results. The Company has secured approximately $29.8 million in financing facilities to cover the majority of the construction costs (Note 16).



MF Properties
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at March 31, 2013
Arboretum	Omaha, NE	145	$	1,720,740	$	19,025,725	$	20,746,465
Eagle Village	Evansville, IN	511	564,726		12,283,270		12,847,996
Glynn Place	Brunswick, GA	128	743,996		4,770,776		5,514,772
Maples on 97th	Omaha, NE	258	905,000		7,258,372		8,163,372
Meadowview	Highland Heights, KY	118	688,539		5,221,301		5,909,840
Residences of DeCordova	Granbury, TX	110	680,852		8,391,701		9,072,553
Residences of Weatherford	Weatherford, TX	76	533,000		7,078,220		7,611,220
Construction work in process	Lincoln, NE	N/A	—		2,119,944		2,119,945
							71,986,163
Less accumulated depreciation (depreciation expense of approximately $849,000 in 2013)							(6,450,506		)
Balance at March 31, 2013							$	65,535,657



MF Properties
Property Name	Location	Number of Units	Land		Buildings and Improvements		Carrying Value at December 31, 2012
Arboretum	Omaha, NE	145	$	1,720,740	$	18,997,550	$	20,718,290
Eagle Village	Evansville, IN	511	564,726		12,277,210		12,841,936
Glynn Place	Brunswick, GA	128	743,996		4,750,267		5,494,263
Meadowview	Highland Heights, KY	118	688,539		5,214,306		5,902,845
Residences of DeCordova	Granbury, TX	110	680,852		8,389,721		9,070,573
Residences of Weatherford	Weatherford, TX	76	533,000		7,077,420		7,610,420
Construction work in process	Lincoln, NE	N/A	—		936,833		936,833
							62,575,160



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

1004 Farnam Street, Suite 400	Omaha, Nebraska 68102
(Address of principal executive offices)	(Zip Code)
(402) 444-1630
(Registrant's telephone number, including area code)



Large accelerated filer o	Accelerated filer x	Non- accelerated filer o	Smaller reporting company o
		(do not check if a smaller reporting company)



Item 1	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Partners’ Capital	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3	Quantitative and Qualitative Disclosures About Market Risk	53
Item 4	Controls and Procedures	54



	Balance Sheet Classification	Carrying Value		Maximum Exposure to Loss
Ashley Square Apartments
Tax Exempt Mortgage Revenue Bond	Bond Investment	$	5,583,342	$	5,248,000
Property Loan	Other Asset	1,298,000		6,671,364
		$	6,881,342	$	11,919,364
Cross Creek Apartments
Tax Exempt Mortgage Revenue Bond	Bond Investment	$	8,167,064	$	6,014,381
Property Loans	Other Asset	3,448,615		3,448,615
		$	11,615,679	$	9,462,996



Description of Public Housing Capital Fund Trust Certificates	Cost adjusted for amortization of premium and discounts		Unrealized Gain		Unrealized Loss			Estimated Fair Value

Public Housing Capital Fund Trust I	$	28,084,264	$	—	$	(286,080	)	$	27,798,184
Public Housing Capital Fund Trust II	17,453,830		—		(458,374		)	16,995,456
Public Housing Capital Fund Trust III	20,405,410		—		(585,337		)	19,820,073
	$	65,943,504	$	—	$	(1,329,791	)	$	64,613,713


•	defaults on the mortgage loans securing our tax-exempt mortgage revenue bonds;


•	risks associated with investing in multifamily apartments, including changes in business conditions and the general economy;


•	changes in government regulations affecting our business; and


•	changes in the appropriation amounts received by the Public Housing Authorities from the United States Department of Housing and Development Capital Fund Program which are used by the Public Housing Authorities to make interest and principal payments for the Public Housing Capital Fund Trusts' Certificates.



	For Three Months Ended March 31,
	2013			2012
Net income	$	8,494,077		$	769,584
Unrealized gain on securities	2,800,619			2,847,607
Comprehensive income - America First Tax Exempt Investors, L.P.	$	11,294,696		$	3,617,191

Comprehensive income (loss) allocated to:
General Partner	539,757			37,179
Limited Partners - Unitholders	$	10,823,247		$	3,680,719
Unallocated loss of Consolidated Property VIEs	$	(240,959	)	$	(239,859	)
Noncontrolling interest	$	172,651		$	139,152
Comprehensive income - America First Tax Exempt Investors, L.P.	$	11,294,696		$	3,617,191


•	ATAX TEBS I, LLC, a special purpose entity owned and controlled by the Partnership, created to hold tax-exempt mortgage revenue bonds in order to facilitate the Tax Exempt Bond Securitization (“TEBS”) Financing with Freddie Mac (Note 10).


•	Seven multifamily apartments ("MF Properties") which are either wholly or majority owned by subsidiaries of the Partnership.


•	One apartment property, the Greens of Pine Glen ("Greens Property")which is reported as discontinued operations (Note 9).



	Weighted Average Lives (Years)	Investment Rating	Weighted Average Interest Rate over Life		Principal Outstanding
Public Housing Capital Fund Trust Certificate I	12.75	AA-	5.330	%	$	26,406,558
Public Housing Capital Fund Trust Certificate II	12.3	AA-	4.240	%	17,959,713
Public Housing Capital Fund Trust Certificate III	13.3	BBB	5.410	%	20,898,432
Total Public Housing Capital Fund Trust Certificates					$	65,264,703



Agency Rating of MBS ⁽¹⁾	Cost adjusted for amortization of premium		Unrealized Gain		Unrealized Loss			Estimated Fair Value
"AAA"	$	13,121,934	$	—	$	(174,041	)	$	12,947,893
"AA"	21,509,965		—		(342,530		)	21,167,435
	$	34,631,899	$	—	$	(516,571	)	$	34,115,328



Agency Rating of MBS	Principal Outstanding March 31, 2013		Weighted Average Maturity Date	Weighted Average Coupon Interest Rate


"AAA"	$	12,675,000	January 14, 2036	4.22	%
"AA"	20,990,000		January 18, 2036	4.00	%
	$	33,665,000