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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q

x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to
Commission File Number:  000-24843

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
(Exact name of registrant as specified in its charter)

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

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  x NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES  x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES  o  NO x


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INDEX

PART I – FINANCIAL INFORMATION

Financial Statements (Unaudited)
 
 
 
Condensed Consolidated Balance Sheets
 
Condensed Consolidated Statements of Operations
 
Condensed Consolidated Statements of Comprehensive Income (Loss)
 
Condensed Consolidated Statements of Partners’ Capital
 
Condensed Consolidated Statements of Cash Flows
 
Notes to Condensed Consolidated Financial Statements
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Controls and Procedures

PART II – OTHER INFORMATION

Risk Factors
 
Exhibits
 


 
 


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Forward-Looking Statements

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 which are contained in this report and, accordingly, we cannot guarantee their accuracy or completeness.  

These forward-looking statements are subject to various risks and uncertainties, including those relating to:

•
current maturities of our financing arrangements and our ability to renew or refinance such financing arrangements;
•
defaults on the mortgage loans securing our mortgage revenue bonds and mortgage-backed securities;
•
risks associated with investing in multifamily apartments, including changes in business conditions and the general economy;
•
changes in short-term interest rates;
•
our ability to use borrowings to finance our assets;
•
current uncertain economic and credit market conditions
•
changes in the United States Department of Housing and Development Capital Fund Program; and
•
changes in 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 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, 2013 and in Item 1A of Part II of this document.


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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
 
June 30,
2014
 
December 31,
2013
Assets
 
 
 
 
Cash and cash equivalents
 
$
43,266,484

 
$
11,318,015

Restricted cash
 
5,119,621

 
6,845,543

Interest receivable
 
3,759,641

 
3,342,038

Mortgage revenue bonds held in trust, at fair value (Notes 4 & 10)
 
232,306,334

 
216,371,801

Mortgage revenue bonds, at fair value (Note 4)
 
124,006,732

 
68,946,370

Public housing capital fund trusts, at fair value (Note 5)
 
64,997,717

 
62,056,379

Mortgage-backed securities, at fair value (Note 6)
 
37,878,708

 
37,845,661

Real estate assets: (Note 7)
 
 
 
 
Land and improvements
 
11,081,992

 
11,081,992

Buildings and improvements
 
127,458,737

 
111,195,695

Real estate assets before accumulated depreciation
 
138,540,729

 
122,277,687

Accumulated depreciation
 
(21,584,793
)
 
(19,128,753
)
Net real estate assets
 
116,955,936

 
103,148,934

Other assets (Note 8)
 
25,054,159

 
24,358,291

Total Assets
 
$
653,345,332

 
$
534,233,032

 
 
 
 
 
Liabilities
 
 
 
 
Accounts payable, accrued expenses and other liabilities
 
$
11,718,809

 
$
5,450,694

Distribution payable
 
7,819,372

 
6,446,076

Due upon settlement of Live 929 Apartments (Note 4)
 
35,000,000

 
—

Debt financing (Note 10)
 
244,468,000

 
257,274,000

Mortgages payable (Note 11)
 
69,547,725

 
57,087,320

Bond purchase commitment - fair value adjustment (Notes 4 & 16)
 
—

 
4,852,177

Total Liabilities
 
368,553,906

 
331,110,267

 
 
 
 
 
Commitments and Contingencies (Note 16)
 


 


 
 
 
 
 
Partners' Capital
 
 
 
 
General Partner (Note 2)
 
323,019

 
16,671

Beneficial Unit Certificate holders
 
305,190,555

 
223,573,312

Unallocated deficit of Consolidated VIEs
 
(20,710,349
)
 
(20,455,896
)
Total Partners' Capital
 
284,803,225

 
203,134,087

Noncontrolling interest (Note 7)
 
(11,799
)
 
(11,322
)
Total Capital
 
284,791,426

 
203,122,765

Total Liabilities and Partners' Capital
 
$
653,345,332

 
$
534,233,032


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


2
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AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 
 
For the Three Months Ended,
 
For the Six Months Ended,
 
 
June 30, 2014
 
June 30, 2013
 
June 30, 2014
 
June 30, 2013
Revenues:
 
 
 
 
 
 
 
 
Property revenues
 
$
3,919,772

 
$
3,952,046

 
$
7,870,988

 
$
7,684,853

Investment income
 
6,241,475

 
4,595,197

 
12,447,033

 
12,311,814

Gain on mortgage revenue bonds - sale and redemption
 
849,655

 
—

 
3,684,898

 
—

Contingent interest income
 
—

 
6,497,160

 
—

 
6,497,160

Other interest income
 
242,077

 
96,180

 
450,900

 
1,341,165

Other income
 
—

 
—

 
—

 
250,000

Total revenues
 
11,252,979

 
15,140,583

 
24,453,819

 
28,084,992

Expenses:
 
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
 
2,270,170

 
2,315,325

 
4,370,463

 
4,372,361

Realized loss on taxable property loan
 
—

 
4,557,741

 
—

 
4,557,741

Provision for loan loss
 
—

 
96,000

 
—

 
96,000

Provision for loss on receivables
 
—

 
3,523

 
—

 
241,698

Depreciation and amortization
 
1,524,996

 
1,661,082

 
3,138,342

 
3,242,458

Interest
 
2,400,851

 
1,426,349

 
4,570,400

 
2,962,622

General and administrative
 
1,398,879

 
1,141,444

 
2,669,805

 
2,111,935

Total expenses
 
7,594,896

 
11,201,464

 
14,749,010

 
17,584,815

Income from continuing operations
 
3,658,083

 
3,939,119

 
9,704,809

 
10,500,177

Income from discontinued operations (including gain on sale of MF Properties of $1,775,527 in 2013)
 
—

 
166,887

 
—

 
2,099,906

Net income
 
3,658,083

 
4,106,006

 
9,704,809

 
12,600,083

Net (loss) income attributable to noncontrolling interest
 
(374
)
 
150,846

 
(477
)
 
323,497

Net income - America First Mulitfamily Investors, L.P.
 
$
3,658,457

 
$
3,955,160

 
$
9,705,286

 
$
12,276,586

 
 
 
 
 
 
 
 
 
Net income (loss) allocated to:
 
 
 
 
 
 
 
 
General Partner
 
$
247,564

 
$
508,033

 
$
989,619

 
$
1,019,784

Limited Partners - Unitholders
 
3,552,575

 
3,749,266

 
8,970,120

 
11,799,900

Unallocated loss of Consolidated Property VIEs
 
(141,682
)
 
(302,139
)
 
(254,453
)
 
(543,098
)
Noncontrolling interest
 
(374
)
 
150,846

 
(477
)
 
323,497

 
 
$
3,658,083

 
$
4,106,006

 
$
9,704,809

 
$
12,600,083

Unitholders' interest in net income per unit (basic and diluted):
 
 
 
 
 
 
 
 
Income from continuing operations
 
$
0.05

 
$
0.09

 
$
0.15

 
$
0.23

Income from discontinued operations
 
—

 
—

 
—

 
0.05

Net income, basic and diluted, per unit
 
$
0.05

 
$
0.09

 
$
0.15

 
$
0.28

Distributions declared, per unit
 
$
0.125

 
$
0.125

 
$
0.25

 
$
0.25

Weighted average number of units outstanding, basic and diluted
 
60,252,928

 
42,772,928

 
58,595,469

 
42,772,928


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

3
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AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)


 
 
For the Three Months Ended,
 
For the Six Months Ended,
 
 
June 30, 2014
 
June 30, 2013
 
June 30, 2014
 
June 30, 2013
Net income
 
$
3,658,083

 
$
4,106,006

 
$
9,704,809

 
$
12,600,083

Unrealized gain (loss) on securities
 
15,715,046

 
(8,276,828
)
 
33,756,771

 
(5,476,209
)
Unrealized gain on bond purchase commitments
 
1,697,307

 
—

 
5,186,544

 
—

Comprehensive income (loss) - America First Multifamily Investors, L.P.
 
$
21,070,436

 
$
(4,170,822
)
 
$
48,648,124

 
$
7,123,874

 
 
 
 
 
 
 
 
 
Comprehensive (loss) income allocated to:
 
 
 
 
 
 
 
 
General Partner
 
$
421,688

 
$
425,265

 
$
1,379,052

 
$
965,022

Limited Partners - Unitholders
 
20,790,804

 
(4,444,794
)
 
47,524,002

 
6,378,453

Unallocated loss of Consolidated Property VIEs
 
(141,682
)
 
(302,139
)
 
(254,453
)
 
(543,098
)
Noncontrolling interest
 
(374
)
 
150,846

 
(477
)
 
323,497

Comprehensive income (loss) - America First Multifamily Investors, L.P.
 
$
21,070,436

 
$
(4,170,822
)
 
$
48,648,124

 
$
7,123,874


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



4
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AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 2014 and 2013
(UNAUDITED)

 
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, 2014
$
16,671

 
51,052,928

 
$
223,573,312

 
$
(20,455,896
)
 
$
(11,322
)
 
$
203,122,765

 
$
(20,128,314
)
Sale of beneficial unit certificates


 
9,200,000

 
51,288,699

 
 
 
 
 
51,288,699

 
 
Redemption and sale of mortgage revenue bonds
(24,137
)
 
 
 
(2,389,576
)
 
—

 
—

 
(2,413,713
)
 
(2,413,713
)
Sale of MBS
2,599

 
 
 
257,350

 
—

 
—

 
259,949

 
259,949

Distributions paid or accrued
(1,051,166
)
 
 
 
(15,063,232
)
 
—

 
—

 
(16,114,398
)
 
—

Net income (loss)
989,619

 
 
 
8,970,120

 
(254,453
)
 
(477
)
 
9,704,809

 
—

Unrealized gain on securities
337,568

 
 
 
33,419,203

 
—

 
—

 
33,756,771

 
33,756,771

Unrealized gain on bond purchase commitment
51,865

 
 
 
5,134,679

 
—

 
—

 
5,186,544

 
5,186,544

Balance at June 30, 2014
$
323,019

 
60,252,928

 
$
305,190,555

 
$
(20,710,349
)
 
$
(11,799
)
 
$
284,791,426

 
$
16,661,237

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
General Partner
 
# of Units
 
Beneficial Unit Certificate Holders
 
Unallocated Deficit of Consolidated VIEs
 
Non- controlling Interest
 
Total
 
Accumulated Other Comprehensive Income
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

Redemption of mortgage revenue bond
(6,518
)
 
 
 
(645,331
)
 
—

 
—

 
(651,849
)
 
(651,849
)
Bond foreclosure
40,807

 
 
 
4,039,927

 
—

 
—

 
4,080,734

 
4,080,734

Distributions paid or accrued
(578,174
)
 
 
 
(10,693,232
)
 
—

 
—

 
(11,271,406
)
 
—

Net income (loss)
1,019,784

 
 
 
11,799,900

 
(543,098
)
 
323,497

 
12,600,083

 
—

Unrealized loss on securities
(54,762
)
 
 
 
(5,421,447
)
 
—

 
—

 
(5,476,209
)
 
(5,476,209
)
Balance at June 30, 2013
$
5,114

 
42,772,928

 
$
207,855,207

 
$
(25,578,906
)
 
$
1,364,270

 
$
183,645,685

 
$
6,520,424

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


5
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AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
 
For Six Months Ended,
 
 
June 30, 2014
 
June 30, 2013
Cash flows from operating activities:
 
 
 
 
Net income
 
$
9,704,809

 
$
12,600,083

Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
 
 
 
 
Depreciation and amortization expense
 
3,138,342

 
3,250,911

Provision for loss from receivables
 
—

 
241,698

Non-cash loss (gain) on derivatives
 
456,813

 
(136,246
)
Bond premium/discount amortization
 
(103,519
)
 
(166,811
)
Gain on mortgage revenue bonds - sale and redemption
 
(3,684,898
)
 
—

Gain on the sale of discontinued operations
 
—

 
(1,775,527
)
Contingent interest income
 
—

 
(6,497,160
)
Realized loss on taxable property loan
 
—

 
4,557,741

Changes in operating assets and liabilities, net of effect of acquisitions
 
 
 
 
Increase in interest receivable
 
(490,040
)
 
(638,417
)
Increase (decrease) in other assets
 
(463,950
)
 
(2,942,459
)
Decrease in accounts payable and accrued expenses
 
(2,082,745
)
 
(2,585,429
)
Net cash provided by operating activities
 
6,474,812

 
5,908,384

Cash flows from investing activities:
 
 
 
 
 Capital expenditures
 
(13,219,624
)
 
(4,723,977
)
 Acquisition of mortgage revenue bonds
 
(36,385,127
)
 
(62,210,000
)
Acqusition of interest rate derivative
 
(391,500
)
 
—

 Proceeds from mortgage revenue bonds and MBS - sale and redemptions
 
35,483,230

 
21,935,343

 Increase (decrease) in cash collateral deposits
 
1,999,973

 
(2,321,608
)
 Principal payments received on mortgage revenue bonds
 
2,369,132

 
1,402,947

 (Increase) decrease in restricted cash
 
(83,717
)
 
26,811

 Proceeds from the sale of discontinued operations
 
—

 
16,195,000

 Investment in bonds due to the sale recognition of discontinued operations
 
—

 
(18,313,000
)
Cash received from taxable property loans receivable - Ohio Properties
 
—

 
4,064,089

Change in restricted cash - Greens Property sale
 
—

 
2,546,362

 Acquisition of mortgage-backed securities
 
—

 
(12,629,888
)
 Acquisition of taxable bonds
 
—

 
(1,635,000
)
Net cash used in investing activities
 
(10,227,633
)
 
(55,662,921
)
Cash flows from financing activities:
 
 
 
 
Distributions paid
 
(14,741,101
)
 
(10,967,531
)
Proceeds from the sale of beneficial unit certificates
 
54,740,000

 
—

Payment of offering costs related to the sale of beneficial unit certificates
 
(3,451,301
)
 
—

Proceeds from debt financing
 
17,250,000

 
42,530,000

Principal borrowings on mortgages payable
 
14,652,293

 
7,500,000

Principal payments on debt financing
 
(30,056,000
)
 
1,151,000

Principal payments on mortgages payable
 
(2,191,887
)
 
(133,044
)
Net change in line of credit
 
—

 
6,000,000

Increase (decrease) in liabilities related to restricted cash
 
83,717

 
(26,811
)
Debt financing costs
 
(584,431
)
 
(334,308
)
Net cash provided by financing activities
 
35,701,290

 
43,417,306

Net increase (decrease) in cash and cash equivalents
 
31,948,469

 
(6,337,231
)
Cash and cash equivalents at beginning of period, including cash and cash equivalents of discontinued operations of $0 and $158,727, respectively
 
11,318,015

 
30,331,500

Cash and cash equivalents at end of period, including cash and cash equivalents of discontinued operations of $0 and $8,544, respectively
 
$
43,266,484

 
$
23,994,269


                                      




6
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AMERICA FIRST MULTIFAMILY INVESTORS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(UNAUDITED)

 
 
For Six Months Ended,
 
 
June 30, 2014
 
June 30, 2013
Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid during the period for interest
 
$
4,015,785

 
$
2,913,874

Distributions declared but not paid
 
7,819,373

 
5,870,784

Supplemental disclosure of non cash activities:
 
 
 
 
Capital expenditures financed through accounts and notes payable
 
3,100,135

 
1,460,185

Commitment obligation for Live 929 Apartments
 
40,270,000

 
—

Conversion of Woodland Park mortgage revenue bond to MF Property
 
—

 
15,662,000

Deconsolidation of the discontinued operations - noncontrolling interest
 
—

 
1,012,966

Recognition of taxable property loans receivable - discontinued operations
 
—

 
1,236,236


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


7
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2014
(UNAUDITED)

1.  Basis of Presentation

General
 
America First Multifamily 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 mortgage revenue bonds which have been issued to provide construction and/or permanent financing of multifamily residential properties.  The Partnership expects and believes the interest earned on these mortgage revenue 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 securities that may or may not be secured by real estate and may make taxable property loans secured by multifamily properties which are financed by 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 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 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 mortgage revenue bonds on these properties to provide debt financing to the new owners.
 
Our general partner is America First Capital Associates Limited Partnership Two (“AFCA 2” or “General Partner”).  The general partner of AFCA2 is The Burlington Capital Group LLC (“Burlington”). The Partnership has issued Beneficial Unit Certificates (“BUCs”) representing assigned limited partner interests to investors (“unitholders”).  The Partnership will terminate on December 31, 2050, unless terminated earlier under provisions of its Agreement of Limited Partnership.
 
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 two entities in which the Partnership does not hold an ownership interest but which own multifamily apartment properties financed with 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”). On June 30, 2014, the Consolidated Subsidiaries of the Partnership consist of:

•
ATAX TEBS I, LLC, a special purpose entity owned and controlled by the Partnership, created to hold mortgage revenue bonds in order to facilitate the Tax Exempt Bond Securitization (“TEBS”) Financing with Freddie Mac (Note 10).
•
Nine multifamily apartments (“MF Properties”) which are either wholly or majority owned by subsidiaries of the Partnership.

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 mortgage revenue bonds on the properties owned by Consolidated VIEs as debt, the nature of the interest payments, which it believes to be tax-exempt, received on the mortgage revenue 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 unallocated deficit of the Consolidated VIEs is primarily comprised of the accumulated historical net losses of the Consolidated VIEs since the applicable consolidation date. The unallocated deficit of the VIEs and the VIEs’ net losses subsequent to that date are not allocated to the General Partner and unitholders as such activity is not contemplated by, or addressed in, the Agreement of Limited Partnership.


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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, 2013. These condensed consolidated financial statements and notes have been prepared consistently with the 2013 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 June 30, 2014, 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.

Subsequent to the issuance of the Company’s financial statements on Form 10-K for the period ended December 31, 2013, certain amounts included in the Consolidated Balance Sheet have been restated to correct an error related to the presentation of interest receivable on taxable loans.  Such correction recorded the loan loss reserve related to interest receivable against the interest receivable line of the consolidated balance sheet rather than against the other assets line, which includes the principle amount of taxable loans.   This correction resulted in a decrease in interest receivable and an increase in other assets of approximately $6.2 million.  This correction did not have an impact on total assets as reported in the Consolidated Balance Sheets and did not have an impact on the Consolidated Statements of Operations for all periods presented.

2.  Partnership Income, Expenses and Cash Distributions
 
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’s 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 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.

3.  Variable Interest Entities

The Partnership invests in mortgage revenue bonds which have been issued to provide construction and/or permanent financing of multifamily residential apartments.  The Partnership owns 100% of these mortgage revenue bonds and each bond is secured by a first mortgage on the property.  In certain cases, the Partnership has also made taxable property loans to the property owners which are secured by second mortgages on these properties.  Although each multifamily property financed with 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.   

At June 30, 2014 and December 31, 2013, the Partnership determined that four of the entities financed by mortgage revenue bonds owned by the Partnership were held by VIEs.  These VIEs were Ashley Square, Bent Tree, Cross Creek, and Fairmont Oaks. The Partnership then determined that it is the primary beneficiary of two of these VIEs; Bent Tree and Fairmont Oaks and has continued to consolidate these entities. As of June 30, 2013, a fifth entity, Lake Forest, which is also financed by a mortgage revenue bond owned by the Partnership, was held by a VIE. Effective December 1, 2013, the ownership of Lake Forest became a not-for-profit entity and Lake Forest ceased to be reported as a Consolidated VIE.


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The Partnership does not hold an equity interest in these VIEs and, therefore, the assets of the VIEs cannot be used to settle the general commitments of the Partnership and the Partnership is not responsible for the commitments and liabilities of the VIEs.  The primary risks to the Partnership associated with these VIEs relate to the entities’ ability to meet debt service obligations to the Partnership and the valuation of the underlying multifamily apartment property which serves as bond collateral.

The following is a discussion of the significant judgments and assumptions made by the Partnership in determining the primary beneficiary of the VIE and, therefore, whether the Partnership must consolidate the VIE.

Consolidated VIEs

In determining the primary beneficiary of these VIEs, the Partnership considers 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 considers the related party relationship of the entities involved in the VIEs.  At June 30, 2014 and December 31, 2013, the Partnership determined it is the primary beneficiary of the Bent Tree and Fairmont Oaks VIEs. The capital structure of Bent Tree and Fairmont Oaks VIEs consists of senior debt, subordinated debt, and equity capital. The senior debt is in the form of a mortgage revenue bond and accounts for the majority of the VIEs’ 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”).

Non-Consolidated VIEs

The Company did not consolidate two VIE entities, Ashley Square and Cross Creek as of June 30, 2014 based on its determination of the primary beneficiary of these two VIE entities. 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 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 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.









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Table of Contents

The following table presents information regarding the carrying value and classification of the assets held by the Partnership as of June 30, 2014 which constitute a variable interest in Ashley Square and Cross Creek.
 
Balance Sheet Classification
 
 Carrying Value
 
 Maximum Exposure to Loss
Ashley Square Apartments
 
 
 
 
 
Mortgage Revenue Bond
Bond Investment
 
$
5,496,609

 
$
5,188,000

Taxable Property Loan
Other Asset
 
1,482,000

 
7,292,126

 
 
 
$
6,978,609

 
$
12,480,126

Cross Creek Apartments
 
 
 
 
 
Mortgage Revenue Bond
Bond Investment
 
$
8,133,565

 
$
6,059,256

Taxable Property Loans
Other Asset
 
3,515,615

 
3,515,615

 
 
 
$
11,649,180

 
$
9,574,871


The mortgage revenue bonds are classified on the balance sheet as available for sale investments and are carried at fair value while taxable 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 mortgage revenue bonds and Note 8 for additional information regarding the taxable property loans.  The maximum exposure to loss for the mortgage revenue bonds is equal to the unpaid principal balance as of June 30, 2014.  The difference between the 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 taxable property loan’s carrying value and the maximum exposure is the value of loan loss reserves that have been previously recorded against the outstanding taxable property loan balances.


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Table of Contents

The following tables present the effects of the consolidation of the Consolidated VIEs on the Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations.

Condensed Consolidating Balance Sheets as of June 30, 2014 and December 31, 2013:
 
 
 
Partnership as of June 30, 2014
 
 Consolidated VIEs as of June 30, 2014
 
 Consolidation -Elimination as of June 30, 2014
 
 Total as of June 30, 2014
Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
43,206,550

 
$
59,934

 
$
—

 
$
43,266,484

Restricted cash
 
4,553,239

 
566,382

 
—

 
5,119,621

Interest receivable
 
4,757,988

 
—

 
(998,347
)
 
3,759,641

Mortgage revenue bonds held in trust, at fair value
 
247,995,145

 
—

 
(15,688,811
)
 
232,306,334

Mortgage revenue bonds, at fair value
 
124,006,732

 
—

 
—

 
124,006,732

Public housing capital fund trusts, at fair value
 
64,997,717

 
—

 
—

 
64,997,717

Mortgage-backed securities, at fair value
 
37,878,708

 
—

 
—

 
37,878,708

Real estate assets:
 
 
 
 
 
 
 
 
Land and improvements
 
9,245,592

 
1,836,400

 
—

 
11,081,992

Buildings and improvements
 
106,420,002

 
21,038,735

 
—

 
127,458,737

Real estate assets before accumulated depreciation
 
115,665,594

 
22,875,135

 
—

 
138,540,729

Accumulated depreciation
 
(11,404,346
)
 
(10,180,447
)
 
—

 
(21,584,793
)
Net real estate assets
 
104,261,248

 
12,694,688

 
—

 
116,955,936

Other assets
 
35,288,634

 
355,921

 
(10,590,396
)
 
25,054,159

Total Assets
 
$
666,945,961

 
$
13,676,925

 
$
(27,277,554
)
 
$
653,345,332

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Accounts payable, accrued expenses and other liabilities
 
$
11,305,071

 
$
21,290,825

 
$
(20,877,087
)
 
$
11,718,809

Distribution payable
 
7,819,372

 
—

 
—

 
7,819,372

Due upon settlement of Live 929 Apartments
 
35,000,000

 
—

 
—

 
35,000,000

Debt financing
 
244,468,000

 
—

 
—

 
244,468,000

Mortgages payable
 
69,547,725

 
14,819,000

 
(14,819,000
)
 
69,547,725

Total Liabilities
 
368,140,168

 
36,109,825

 
(35,696,087
)
 
368,553,906

Partners' Capital
 
 
 
 
 
 
 
 
General Partner
 
323,019

 
—

 
—

 
323,019

Beneficial Unit Certificate holders
 
298,494,573

 
—

 
6,695,982

 
305,190,555

Unallocated deficit of Consolidated VIEs
 
—

 
(22,432,900
)
 
1,722,551

 
(20,710,349
)
Total Partners' Capital
 
298,817,592

 
(22,432,900
)
 
8,418,533

 
284,803,225

Noncontrolling interest
 
(11,799
)
 
—

 
—

 
(11,799
)
Total Capital
 
298,805,793

 
(22,432,900
)
 
8,418,533

 
284,791,426

Total Liabilities and Partners' Capital
 
$
666,945,961

 
$
13,676,925

 
$
(27,277,554
)
 
$
653,345,332

 


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Table of Contents

 
 
 Partnership as of December 31, 2013
 
 Consolidated VIEs as of December 31, 2013
 
 Consolidation -Elimination as of December 31, 2013
 
 Total as of December 31, 2013
Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
11,292,039

 
$
25,976

 
$
—

 
$
11,318,015

Restricted cash
 
6,344,666

 
500,877

 
—

 
6,845,543

Interest receivable
 
5,281,398

 
—

 
(1,939,360
)
 
3,342,038

Mortgage revenue bonds held in trust, at fair value
 
230,885,864

 
—

 
(14,514,063
)
 
216,371,801

Mortgage revenue bonds, at fair value
 
68,946,370

 
—

 
—

 
68,946,370

Public housing capital fund trusts, at fair value
 
62,056,379

 
—

 
—

 
62,056,379

Mortgage-backed securities, at fair value
 
37,845,661

 
—

 
—

 
37,845,661

Real estate assets:
 
 
 
 
 
 
 
 
Land and improvements
 
9,245,592

 
1,836,400

 
—

 
11,081,992

Buildings and improvements
 
90,253,256

 
20,942,439

 
—

 
111,195,695

Real estate assets before accumulated depreciation
 
99,498,848

 
22,778,839

 
—

 
122,277,687

Accumulated depreciation
 
(9,386,811
)
 
(9,741,942
)
 
—

 
(19,128,753
)
Net real estate assets
 
90,112,037

 
13,036,897

 
—

 
103,148,934

Other assets
 
33,488,744

 
456,087

 
(9,586,540
)
 
24,358,291

Total Assets
 
$
546,253,158

 
$
14,019,837

 
$
(26,039,963
)
 
$
534,233,032

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Accounts payable, accrued expenses and other liabilities
 
$
4,963,653

 
$
20,634,613

 
$
(20,147,572
)
 
$
5,450,694

Distribution payable
 
6,446,076

 
—

 
—

 
6,446,076

Debt financing
 
257,274,000

 
—

 
—

 
257,274,000

Mortgages payable
 
57,087,320

 
14,897,000

 
(14,897,000
)
 
57,087,320

Bond purchase commitment at fair value
 
4,852,177
 
—

 
—

 
4,852,177
Total Liabilities
 
330,623,226

 
35,531,613

 
(35,044,572
)
 
331,110,267

Partners' Capital
 
 
 
 
 
 
 
 
General Partner
 
16,671

 
—

 
—

 
16,671

Beneficial Unit Certificate holders
 
215,624,583

 
—

 
7,948,729

 
223,573,312

Unallocated deficit of Consolidated VIEs
 
—

 
(21,511,776
)
 
1,055,880

 
(20,455,896
)
Total Partners' Capital
 
215,641,254

 
(21,511,776
)
 
9,004,609

 
203,134,087

Noncontrolling interest
 
(11,322
)
 
—

 
—

 
(11,322
)
Total Capital
 
215,629,932

 
(21,511,776
)
 
9,004,609

 
203,122,765

Total Liabilities and Partners' Capital
 
$
546,253,158

 
$
14,019,837

 
$
(26,039,963
)
 
$
534,233,032





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Table of Contents

Condensed Consolidating Statements of Operations for the six months ended June 30, 2014 and 2013:

 
 Partnership For the Three Months Ended June 30, 2014
 
 Consolidated VIEs For the Three Months Ended June 30, 2014
 
 Consolidation -Elimination For the Three Months Ended June 30, 2014
 
 Total For the Three Months Ended June 30, 2014
Revenues:
 
 
 
 
 
 
 
Property revenues
$
3,134,220

 
$
785,552

 
$
—

 
$
3,919,772

Investment income
6,474,140

 
—

 
(232,665
)
 
6,241,475

Gain on mortgage revenue bond sale
849,655

 
—

 
—

 
849,655

Other interest income
242,077

 
—

 
—

 
242,077

Total revenues
10,700,092

 
785,552

 
(232,665
)
 
11,252,979

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
1,807,044

 
463,126

 
—

 
2,270,170

Depreciation and amortization
1,293,553

 
238,145

 
(6,702
)
 
1,524,996

Interest
2,400,851

 
561,308

 
(561,308
)
 
2,400,851

General and administrative
1,398,879

 
—

 
—

 
1,398,879

Total expenses
6,900,327

 
1,262,579

 
(568,010
)
 
7,594,896

Net income (loss)
3,799,765

 
(477,027
)
 
335,345

 
3,658,083

Net loss attributable to noncontrolling interest
(374
)
 
—

 
—

 
(374
)
Net income (loss) - America First Multifamily Investors, L. P.
$
3,800,139

 
$
(477,027
)
 
$
335,345

 
$
3,658,457


 
 Partnership For the Three Months Ended June 30, 2013
 
 Consolidated VIEs For the Three Months Ended June 30, 2013
 
 Consolidation -Elimination For the Three Months Ended June 30, 2013
 
 Total For the Three Months Ended June 30, 2013
Revenues:
 
 
 
 
 
 
 
Property revenues
$
2,731,740

 
$
1,220,306

 
$
—

 
$
3,952,046

Investment income
4,971,873

 
—

 
(376,676
)
 
4,595,197

Contingent interest income
6,497,160

 
—

 
—

 
6,497,160

Other interest income
96,180

 
—

 
—

 
96,180

Total revenues
14,296,953

 
1,220,306

 
(376,676
)
 
15,140,583

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
1,515,316

 
800,009

 
—

 
2,315,325

Realized loss on taxable property loan
4,557,741

 
—

 
—

 
4,557,741

Provision for loan loss
96,000

 
—

 
—

 
96,000

Provision for loss on receivables
3,523

 
—

 
—

 
3,523

Depreciation and amortization
1,315,322

 
356,550

 
(10,790
)
 
1,661,082

Interest
1,426,349

 
825,466

 
(825,466
)
 
1,426,349

General and administrative
1,141,444

 
—

 
—

 
1,141,444

Total expenses
10,055,695

 
1,982,025

 
(836,256
)
 
11,201,464

Income (loss) from continuing operations
4,241,258

 
(761,719
)
 
459,580

 
3,939,119

Income (loss) from discontinued operations
166,887

 
—

 
—

 
166,887

Net income (loss)
4,408,145

 
(761,719
)
 
459,580

 
4,106,006

Net income attributable to noncontrolling interest
150,846

 
—

 
—

 
150,846

Net income (loss) - America First Multifamily Investors, L. P.
$
4,257,299

 
$
(761,719
)
 
$
459,580

 
$
3,955,160


14
Table of Contents

 
 
 
 
 
 
 
 
 
 Partnership For the Six Months Ended June 30, 2014
 
 Consolidated VIEs For the Six Months Ended June 30, 2014
 
 Consolidation -Elimination For the Six Months Ended June 30, 2014
 
 Total For the Six Months Ended June 30, 2014
Revenues:
 
 
 
 
 
 
 
Property revenues
$
6,284,564

 
$
1,586,424

 
$
—

 
$
7,870,988

Mortgage revenue bond investment income
12,912,975

 
—

 
(465,942
)
 
12,447,033

Gain on mortgage revenue bonds - sale and redemption
3,684,898

 
—

 
—

 
3,684,898

Other interest income
450,900

 
—

 
—

 
450,900

Total revenues
23,333,337

 
1,586,424

 
(465,942
)
 
24,453,819

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
3,457,691

 
912,772

 
—

 
4,370,463

Depreciation and amortization
2,676,179

 
475,585

 
(13,422
)
 
3,138,342

Interest
4,570,400

 
1,119,192

 
(1,119,192
)
 
4,570,400

   General and administrative
2,669,805

 
—

 
—

 
2,669,805

Total expenses
13,374,075

 
2,507,549

 
(1,132,614
)
 
14,749,010

Net income (loss)
9,959,262

 
(921,125
)
 
666,672

 
9,704,809

  Net income attributable to noncontrolling interest
(477
)
 
—

 
—

 
(477
)
Net income (loss) - America First Multifamily Investors, L. P.
$
9,959,739

 
$
(921,125
)
 
$
666,672

 
$
9,705,286

 
 
 
 
 
 
 
 
 
 Partnership For the Six Months Ended June 30, 2013
 
 Consolidated VIEs For the Six Months Ended June 30, 2013
 
 Consolidation -Elimination For the Six Months Ended June 30, 2013
 
 Total For the Six Months Ended June 30, 2013
Revenues:
 
 
 
 
 
 
 
Property revenues
$
5,251,478

 
$
2,433,375

 
$
—

 
$
7,684,853

Investment income
13,066,199

 
—

 
(754,385
)
 
12,311,814

Contingent tax-exempt interest income
6,497,160

 
—

 
—

 
6,497,160

Other interest income
1,341,165

 
—

 
—

 
1,341,165

Other income
250,000

 
—

 
—

 
250,000

Total revenues
26,406,002

 
2,433,375

 
(754,385
)
 
28,084,992

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
2,838,950

 
1,533,411

 
—

 
4,372,361

Realized loss on taxable property loan
4,557,741

 
—

 
—

 
4,557,741

Provision for loan loss
96,000

 
—

 
—

 
96,000

Provision for loss on receivables
241,698

 
—

 
—

 
241,698

Depreciation and amortization
2,553,781

 
710,286

 
(21,609
)
 
3,242,458

Interest
2,962,622

 
1,644,629

 
(1,644,629
)
 
2,962,622

General and administrative
2,111,935

 
—

 
—

 
2,111,935

Total expenses
15,362,727

 
3,888,326

 
(1,666,238
)
 
17,584,815

Income (loss) from continuing operations
11,043,275

 
(1,454,951
)
 
911,853

 
10,500,177

Income from discontinued operations (including gain on sale of MF Properties of $1,775.527 in first quarter 2013)
2,099,906

 
—

 
—

 
2,099,906

Net income (loss)
13,143,181

 
(1,454,951
)
 
911,853

 
12,600,083

 Net income attributable to noncontrolling interest
323,497

 
—

 
—

 
323,497

Net income (loss) - America First Multifamily Investors, L. P.
$
12,819,684

 
$
(1,454,951
)
 
$
911,853

 
$
12,276,586



15
Table of Contents

4.  Investments in Mortgage Revenue Bonds

The 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 mortgage revenue bonds issued with respect to properties owned by Consolidated VIEs at June 30, 2014 and December 31, 2013. 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 mortgage revenue bonds as of dates shown:
 
 
June 30, 2014
Description of Mortgage Revenue Bonds
 
Cost adjusted for pay-downs
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
Arbors at Hickory Ridge (2)
 
$
11,573,571

 
$
1,198,224

 
$
—

 
$
12,771,795

Ashley Square (1)
 
5,188,000

 
308,609

 
—

 
5,496,609

Avistar at Chase Hill A Bond (2)
 
10,000,000

 
72,700

 
—

 
10,072,700

Avistar at the Crest A Bond (2)
 
9,700,000

 
290,030

 
—

 
9,990,030

Avistar at the Oaks (2)
 
8,354,000

 
—

 
(3,526
)
 
8,350,474

Avistar in 09 (2)
 
7,192,000

 
148,206

 
—

 
7,340,206

Avistar on the Boulevard A Bond (2)
 
16,525,000

 
881,774

 
—

 
17,406,774

Avistar on the Hills (2)
 
5,389,000

 
246,008

 
—

 
5,635,008

Bella Vista (1)
 
6,490,000

 
183,537

 
—

 
6,673,537

Bridle Ridge (1)
 
7,685,000

 
158,926

 
—

 
7,843,926

Brookstone (1)
 
7,466,934

 
952,394

 
—

 
8,419,328

Cross Creek (1)
 
6,059,256

 
2,074,309

 
—

 
8,133,565

Decatur-Angle (2)
 
23,000,000

 
—

 
(352,820
)
 
22,647,180

Greens Property A Bonds (2)
 
8,401,470

 
538,100

 
—

 
8,939,570

Lake Forest (1)
 
8,943,000

 
607,386

 
—

 
9,550,386

Ohio Properties A Bonds (1)
 
14,455,000

 
1,294,812

 
—

 
15,749,812

Runnymede (1)
 
10,485,000

 
667,999

 
—

 
11,152,999

Southpark (1)
 
11,918,045

 
2,764,111

 
—

 
14,682,156

The Suites on Paseo (2)
 
35,750,000

 
1,292,720

 
—

 
37,042,720

Woodlynn Village (1)
 
4,408,000

 
—

 
(441
)
 
4,407,559

Mortgage revenue bonds held in trust
 
$
218,983,276

 
$
13,679,845

 
$
(356,787
)
 
$
232,306,334

 
 
June 30, 2014
Description of Mortgage Revenue Bonds
 
Cost adjusted for pay-downs
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
Avistar at Chase Hill B Bond
 
$
965,000

 
$
—

 
$
(5,346
)
 
$
959,654

Avistar at the Crest B Bond
 
759,000

 
46,663

 
—

 
805,663

Avistar on the Boulevard B Bond
 
451,000

 
35,855

 
—

 
486,855

Copper Gate Apartments
 
5,220,000

 
182,961

 
—

 
5,402,961

Greens Property B Bond
 
947,277

 
309,453

 
—

 
1,256,730

Harden Ranch
 
9,300,000

 
152,953

 
—

 
9,452,953

Live 929 Apartments
 
40,270,000

 
—

 
—

 
40,270,000

Ohio Properties B Bonds
 
3,578,640

 
425,912

 
—

 
4,004,552

Renaissance
 
12,060,127

 
445,694

 
—

 
12,505,821

The Palms at Premier Park Apartments
 
20,152,000

 
1,843,908

 
—

 
21,995,908

Tyler Park Apartments
 
8,100,000

 
—

 
(38,353
)
 
8,061,647

Vantage at Harlingen
 
6,692,000

 
337,478

 
—

 
7,029,478

Vantage at Judson
 
6,049,000

 
304,991

 
—

 
6,353,991

Westside Village Market
 
5,400,000

 
20,519

 
—

 
5,420,519

Mortgage revenue bonds
 
$
119,944,044

 
$
4,106,387

 
$
(43,699
)
 
$
124,006,732

(1) Bonds owned by ATAX TEBS I, LLC, Note 10
(2) Bond held by Deutsche Bank in a secured financing transaction, Note 10


16
Table of Contents

 
 
December 31, 2013
Description of Mortgage Revenue Bonds
 
Cost adjusted for pay-downs
 
Unrealized Gains
 
Unrealized Loss
 
Estimated Fair Value
Arbors at Hickory Ridge (2)
 
$
11,576,209

 
$
225,690

 
$
—

 
$
11,801,899

Ashley Square (1)
 
5,212,000

 
—

 
—

 
5,212,000

Autumn Pines (2)
 
12,147,873

 
—

 
(195,355
)
 
11,952,518

Avistar at Chase Hill A Bond (2)
 
8,960,000

 
—

 
(850,752
)
 
8,109,248

Avistar at the Crest A Bond (2)
 
8,759,000

 
—

 
(1,298,785
)
 
7,460,215

Avistar at the Oaks (2)
 
8,354,000

 
—

 
(1,103,115
)
 
7,250,885

Avistar in 09 (2)
 
7,192,000

 
—

 
(588,254
)
 
6,603,746

Avistar on the Boulevard A Bond (2)
 
13,760,000

 
—

 
(1,306,512
)
 
12,453,488

Avistar on the Hills (2)
 
5,389,000