atax-10q_20200930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2020

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

For the transition period from to

Commission File Number: 000-24843

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

(Exact name of registrant as specified in its charter)

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

14301 FNB Parkway, Suite 211, Omaha, Nebraska		68154
(Address of principal executive offices)		(Zip Code)

(402) 952-1235
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Beneficial Unit Certificates representing assignments of limited partnership interests in America First Multifamily Investors, L.P.	ATAX	The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ NO ☐

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

Large accelerated filer	☐	Accelerated filer	☒
Non- accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of September 30, 2020, the registrant had 60,545,204 Beneficial Unit Certificates representing assignments of limited partnership interests in America First Multifamily Investors, L.P. outstanding.

INDEX

PART I – FINANCIAL INFORMATION

Item 1	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income	6
	Condensed Consolidated Statements of Partners’ Capital	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
Item 3	Quantitative and Qualitative Disclosures About Market Risk	67
Item 4	Controls and Procedures	69

PART II – OTHER INFORMATION
Item 1A	Risk Factors	70
Item 6	Exhibits	72
SIGNATURES		73

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 several assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this report, and, accordingly, we cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the heading “Risk Factors” in Item 1A of America First Multifamily Investors, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2019 and in this report.

These forward-looking statements are subject, but not limited, 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 (“MRBs”) and governmental issuer loans (“GILs”);

•

the competitive environment in which we operate;

•

risks associated with investing in multifamily, student, senior citizen residential properties and commercial properties;

•

changes in business conditions and the general economy, including the current and future impact of the novel coronavirus (“COVID-19”) on business operations, employment and government-mandated relief and mitigation measures;

•

changes in interest rates;

•

our ability to use borrowings or obtain capital to finance our assets;

•

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

•

recapture of previously issued Low Income Housing Tax Credits (“LIHTCs”) in accordance with Section 42 of the Internal Revenue Code (“IRC”);

•

geographic concentration within the MRB portfolio held by the Partnership; and

•

changes in the U.S. corporate tax code and other government regulations affecting our business.

Other risks, uncertainties and factors could cause our actual results to differ materially from those projected in any forward-looking statements we make. We are not obligated to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.

All references to “we,” “us,” “our” and the “Partnership” in this document mean America First Multifamily Investors, L.P. (“ATAX”), its wholly owned subsidiaries and its consolidated variable interest entities. See Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this report for additional details.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30, 2020			December 31, 2019
Assets:
Cash and cash equivalents	$	51,160,770		$	42,308,153
Restricted cash		79,302,009			877,828
Interest receivable, net		8,355,119			7,432,433
Mortgage revenue bonds held in trust, at fair value (Note 6)		759,487,301			743,587,715
Mortgage revenue bonds, at fair value (Note 6)		37,049,300			30,009,750
Governmental issuer loans held in trust (Note 7)		62,085,000			-
Public housing capital fund trust certificates, at fair value (Note 8)		-			43,349,357
Real estate assets: (Note 9)
Land and improvements		4,875,265			4,906,130
Buildings and improvements		72,290,734			72,011,533
Real estate assets before accumulated depreciation		77,165,999			76,917,663
Accumulated depreciation		(17,486,887	)		(15,357,700	)
Net real estate assets		59,679,112			61,559,963
Investments in unconsolidated entities (Note 10)		99,176,922			86,981,864
Property loans, net of loan loss allowance (Note 11)		12,920,719			7,999,094
Other assets (Note 13)		5,408,616			5,062,351
Total Assets	$	1,174,624,868		$	1,029,168,508

Liabilities:
Accounts payable, accrued expenses and other liabilities (Note 14)	$	9,997,214		$	9,036,167
Distribution payable		3,686,982			7,607,984
Unsecured lines of credit (Note 15)		11,843,000			13,200,000
Debt financing, net (Note 16)		667,248,701			536,197,421
Mortgages payable and other secured financing, net (Note 17)		26,275,890			26,802,246
Total Liabilities		719,051,787			592,843,818

Commitments and Contingencies (Note 19)

Redeemable Series A Preferred Units, approximately $94.5 million redemption value, 9.5 million issued and outstanding, net (Note 20)		94,413,465			94,386,427

Partnersʼ Capital:
General Partner (Note 1)		948,408			735,128
Beneficial Unit Certificates ("BUCs," Note 1)		360,211,208			341,203,135
Total Partnersʼ Capital		361,159,616			341,938,263
Total Liabilities and Partnersʼ Capital	$	1,174,624,868		$	1,029,168,508

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

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020			2019			2020			2019
Revenues:
Investment income	$	12,043,313		$	12,589,743		$	35,988,555		$	37,072,288
Property revenues		1,548,931			1,974,546			5,358,132			6,002,971
Contingent interest income		-			3,360			12,043			3,045,462
Other interest income		238,185			206,625			686,253			635,732
Other income		9,518			91,428			9,518			120,181
Total revenues		13,839,947			14,865,702			42,054,501			46,876,634
Expenses:
Real estate operating (exclusive of items shown below)		1,454,985			1,381,909			3,484,783			3,477,983
Provision for credit loss (Note 6)		3,463,253			-			5,285,609			-
Provision for loan loss (Note 11)		811,706			-			811,706			-
Impairment charge on real estate assets		-			75,000			25,200			75,000
Depreciation and amortization		719,783			743,503			2,141,302			2,384,115
Interest expense		5,105,432			6,509,021			16,012,716			19,110,876
General and administrative		3,513,024			6,992,528			9,257,921			12,267,917
Total expenses		15,068,183			15,701,961			37,019,237			37,315,891
Other Income:
Gain on sale of securities		-			-			1,416,023			-
Gain on sale of investments in unconsolidated entities		-			10,475,927			-			10,475,927
Income (loss) before income taxes		(1,228,236	)		9,639,668			6,451,287			20,036,670
Income tax expense (benefit)		(68,219	)		(68,235	)		41,199			(9,236	)
Net income (loss)		(1,160,017	)		9,707,903			6,410,088			20,045,906
Redeemable Series A Preferred Unit distributions and accretion		(717,763	)		(717,762	)		(2,153,288	)		(2,153,288	)
Net income (loss) available to Partners	$	(1,877,780	)	$	8,990,141		$	4,256,800		$	17,892,618

Net income (loss) available to Partners allocated to:
General Partner	$	(18,778	)	$	1,266,157		$	(33,476	)	$	2,078,086
Limited Partners - BUCs		(1,879,096	)		7,695,468			4,239,515			15,719,693
Limited Partners - Restricted units		20,094			28,516			50,761			94,839
	$	(1,877,780	)	$	8,990,141		$	4,256,800		$	17,892,618
BUC holders' interest in net income (loss) per BUC, basic and diluted	$	(0.03	)	$	0.13		$	0.07		$	0.26
Weighted average number of BUCs outstanding, basic		60,545,204			60,519,542			60,614,862			60,457,299
Weighted average number of BUCs outstanding, diluted		60,545,204			60,519,542			60,614,862			60,457,299

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

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2020			2019		2020			2019
Net income (loss)	$	(1,160,017	)	$	9,707,903	$	6,410,088		$	20,045,906
Reversal of net unrealized gains on sale of securities		-			-		(1,408,804	)		-
Reversal of net unrealized loss on securities to provision for credit loss		280,711			-		652,880			-
Unrealized gain on securities		18,000,520			19,048,316		31,914,433			42,112,324
Unrealized gain on bond purchase commitments		256,222			-		256,222			-
Comprehensive income	$	17,377,436		$	28,756,219	$	37,824,819		$	62,158,230

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

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL

(UNAUDITED)

	General Partner			# of BUCs - Restricted and Unrestricted			BUCs - Restricted and Unrestricted			Total			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2019	$	735,128			60,835,204		$	341,203,135		$	341,938,263		$	99,308,677
Distributions paid or accrued ($0.125 per BUC):
Regular distribution		(80,501	)		-			(7,969,618	)		(8,050,119	)		-
Distribution of Tier 2 loss (Note 3)		80,501			-			365,218			445,719			-
Net income (loss) allocable to Partners		(53,404	)		-			2,317,398			2,263,994			-
Repurchase of BUCs		-			(290,000	)		(2,106,673	)		(2,106,673	)		-
Restricted units awarded		-			290,000			-			-			-
Restricted unit compensation expense		391			-			38,677			39,068			-
Unrealized loss on securities		(70,577	)		-			(6,987,159	)		(7,057,736	)		(7,057,736	)
Reversal of net unrealized gains on sale of securities		(14,088	)		-			(1,394,716	)		(1,408,804	)		(1,408,804	)
Reversal of net unrealized loss on securities to provision for credit loss		3,722			-			368,447			372,169			372,169
Balance as of March 31, 2020		601,172			60,835,204			325,834,709			326,435,881			91,214,306
Distributions paid or accrued ($0.06 per BUC):
Regular distribution		(36,870	)		-			(3,650,112	)		(3,686,982	)		-
Net income allocable to Partners		38,706			-			3,831,880			3,870,586			-
Restricted unit compensation expense		2,962			-			293,306			296,268			-
Unrealized gain on securities		209,716			-			20,761,933			20,971,649			20,971,649
Balance as of June 30, 2020		815,686			60,835,204			347,071,716			347,887,402			112,185,955
Distributions paid or accrued ($0.06 per BUC):
Regular distribution		(36,870	)		-			(3,650,113	)		(3,686,983	)		-
Net loss allocable to Partners		(18,778	)		-			(1,859,002	)		(1,877,780	)		-
Restricted unit compensation expense		2,996			-			296,528			299,524			-
Unrealized gain on securities		180,005			-			17,820,515			18,000,520			18,000,520
Unrealized gain on bond purchase commitments		2,562			-			253,660			256,222			256,222
Reversal of net unrealized loss on securities to provision for credit loss		2,807			-			277,904			280,711			280,711
Balance as of September 30, 2020	$	948,408			60,835,204		$	360,211,208		$	361,159,616		$	130,723,408

	General Partner			# of BUCs - Restricted and Unrestricted			BUCs - Restricted and Unrestricted			Total			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2018	$	344,590			60,691,467		$	304,121,151		$	304,465,741		$	58,978,042
Cumulative effect of accounting change (Note 14)		(2	)		-			(210	)		(212	)		-
Distributions paid or accrued ($0.125 per BUC):
Regular distribution		(53,812	)		-			(5,327,357	)		(5,381,169	)		-
Distribution of Tier 2 income (Note 3)		(753,025	)		-			(2,259,077	)		(3,012,102	)		-
Net income allocable to Partners		780,245			-			4,953,805			5,734,050			-
Restricted unit compensation expense		1,842			-			182,342			184,184			-
Unrealized gain on securities		81,439			-			8,062,488			8,143,927			8,143,927
Balance as of March 31, 2019		401,277			60,691,467			309,733,142			310,134,419			67,121,969
Distributions paid or accrued ($0.125 per BUC):
Regular distribution		(76,631	)		-			(7,586,433	)		(7,663,064	)		-
Net income allocable to Partners		31,684			-			3,136,743			3,168,427			-
Restricted unit compensation expense		1,862			-			184,368			186,230			-
Unrealized gain on securities		149,201			-			14,770,880			14,920,081			14,920,081
Balance as of June 30, 2019		507,393			60,691,467			320,238,700			320,746,093			82,042,050
Distributions paid or accrued ($0.125 per BUC):
Distribution of Tier 2 income (Note 3)		(1,264,949	)		-			(3,794,847	)		(5,059,796	)		-
Distribution of Tier 3 income (Note 3)		-			-			(3,809,553	)		(3,809,553	)		-
Net income allocable to Partners		1,266,157			-			7,723,984			8,990,141			-
Restricted units awarded		-			353,197			-			-			-
Restricted unit compensation expense		32,657			-			3,233,020			3,265,677			-
BUCs surrendered to pay tax withholding on vested restricted units		-			(209,460	)		(1,581,423	)		(1,581,423	)		-
Unrealized gain on securities		190,483			-			18,857,833			19,048,316			19,048,316
Balance as of September 30, 2019	$	731,741			60,835,204		$	340,867,714		$	341,599,455		$	101,090,366

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

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended September 30,
	2020			2019
Cash flows from operating activities:
Net income	$	6,410,088		$	20,045,906
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		2,141,302			2,384,115
Provision for loan loss		811,706			-
Gain on sale of investment in securities		(1,416,023	)		-
Provision for credit loss		5,285,609			-
Gain on sale of investment in an unconsolidated entity		-			(10,475,927	)
Contingent interest realized on investing activities		(12,043	)		(3,045,462	)
Impairment charge on real estate assets		25,200			75,000
(Gain) loss on derivatives, net of cash paid		(144,546	)		574,028
Restricted unit compensation expense		634,860			3,636,091
Bond premium/discount amortization		(82,975	)		(106,114	)
Debt premium amortization		(30,353	)		(8,410	)
Amortization of deferred financing costs		1,288,044			1,476,463
Deferred income tax expense & income tax payable/receivable		2,036			100,804
Change in preferred return receivable from unconsolidated entities, net		(2,414,759	)		(1,935,286	)
Changes in operating assets and liabilities					-
Increase in interest receivable		(922,686	)		(915,670	)
Decrease in other assets		327,508			694,925
Increase in accounts payable and accrued expenses		738,652			327,188
Net cash provided by operating activities		12,641,620			12,827,651
Cash flows from investing activities:
Capital expenditures		(319,757	)		(88,110	)
Acquisition of mortgage revenue bonds		(9,513,450	)		(19,250,000	)
Advances on governmental issuer loans		(62,085,000	)		-
Contributions to unconsolidated entities		(17,542,465	)		(18,304,139	)
Advances on property loans		(5,733,331	)		(405,717	)
Principal payments received on mortgage revenue bonds		13,836,006			15,508,192
Proceeds from sale of PHC Certificates		43,349,357			-
Principal payments received on PHC Certificates		-			4,775,103
Proceeds from sale of investment in an unconsolidated entity		7,762,166			20,189,663
Principal payments received on taxable mortgage revenue bonds		6,560			25,997
Principal payments received on property loans and contingent interest		12,043			11,413,098
Net cash provided by (used in) investing activities		(30,227,871	)		13,864,087
Cash flows from financing activities:
Distributions paid		(21,025,617	)		(25,758,751	)
Repurchase of BUCs		(2,106,673	)		-
Payment of tax withholding related to restricted unit awards		-			(1,581,423	)
Proceeds from debt financing		277,231,000			122,921,712
Principal payments on debt financing		(146,126,658	)		(90,025,780	)
Principal payments on mortgages payable		(535,233	)		(474,391	)
Principal borrowing on unsecured lines of credit		10,492,728			23,200,000
Principal payments on unsecured lines of credit		(11,849,728	)		(45,659,200	)
Decrease in security deposit liability related to restricted cash		(123,286	)		(51,324	)
Debt financing and other deferred costs		(1,093,484	)		(1,177,696	)
Net cash provided by (used in) financing activities		104,863,049			(18,606,853	)
Net increase in cash, cash equivalents and restricted cash		87,276,798			8,084,885
Cash, cash equivalents and restricted cash at beginning of period		43,185,981			33,268,611
Cash, cash equivalents and restricted cash at end of period	$	130,462,779		$	41,353,496

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	14,481,578		$	16,874,341
Cash paid during the period for income taxes		36,927			155,000
Supplemental disclosure of noncash investing and financing activities:
Distributions declared but not paid for BUCs and General Partner	$	3,686,982		$	8,869,350
Distributions declared but not paid for Series A Preferred Units		708,750			708,750
Capital expenditures financed through accounts payable		60,572			24,504
Deferred financing costs financed through accounts payable		285,108			15,000

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the total of such amounts shown in the condensed consolidated statements of cash flows:

	September 30, 2020		September 30, 2019
Cash and cash equivalents	$	51,160,770	$	40,782,506
Restricted cash		79,302,009		570,990
Total cash, cash equivalents and restricted cash	$	130,462,779	$	41,353,496

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

AMERICA FIRST MULTIFAMILY INVESTORS, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Basis of Presentation

America First Multifamily Investors, L.P. (the “Partnership”) was formed on April 2, 1998, under the Delaware Revised Uniform Limited Partnership Act for the purpose of acquiring, holding, selling and otherwise dealing with a portfolio of mortgage revenue bonds (“MRBs”) that have been issued to provide construction and/or permanent financing for affordable multifamily and student housing residential properties (collectively “Residential Properties”) and commercial properties. The Partnership has also invested in governmental issuer loans (“GILs”), which are similar to MRBs, to provide construction financing for affordable multifamily properties. The Partnership expects and believes the interest earned on these MRBs and GILs is excludable from gross income for federal income tax purposes. The Partnership may also invest in other types of securities that may or may not be secured by real estate and may make property loans to multifamily residential properties which may or may not be financed by MRBs or GILs held by the Partnership. The Partnership may acquire real estate securing its MRBs, GILs, or property loans through foreclosure in the event of a default or through the receipt of a fee simple deed in lieu of foreclosure. In addition, the Partnership may acquire interests in multifamily, student and senior citizen residential properties (“MF Properties”) in order to position itself for future investments in MRBs that finance these properties or to operate the MF Properties until their “highest and best use” can be determined by management.

The Partnership’s sole general partner is America First Capital Associates Limited Partnership Two (“AFCA 2” or “General Partner”). The general partner of AFCA 2 is Greystone AF Manager LLC (“Greystone Manager”), an affiliate of Greystone & Co., Inc. (collectively with its affiliates, “Greystone”).

The Partnership has issued Beneficial Unit Certificates (“BUCs”) representing assigned limited partner interests to investors (“BUC holders”). The Partnership has also issued non-cumulative, non-voting, non-convertible Series A Preferred Units (“Series A Preferred Units”) that represent limited interests in the Partnership under the Partnership’s First Amended and Restated Agreement of Limited Partnership dated September 15, 2015, as further amended (the “Partnership Agreement”). The Series A Preferred Units are redeemable in the future and represent limited partnership interests in the Partnership pursuant to subscription agreements with five financial institutions (see Note 20). The holders of the BUCs and Series A Preferred Units are referred to herein collectively as “Unitholders.”

2. Summary of Significant Accounting Policies

Consolidation

The “Partnership,” as used herein, includes America First Multifamily Investors, L.P., its consolidated subsidiaries and consolidated variable interest entities (see Note 5). All intercompany transactions are eliminated. The consolidated subsidiaries of the Partnership for the periods presented consist of:

•

ATAX TEBS I, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the M24 Tax Exempt Bond Securitization (“TEBS”) Financing with the Federal Home Loan Mortgage Corporation (“Freddie Mac”);

•

ATAX TEBS II, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the M31 TEBS Financing with Freddie Mac;

•

ATAX TEBS III, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the M33 TEBS Financing with Freddie Mac;

•

ATAX TEBS IV, LLC, a special purpose entity owned and controlled by the Partnership, created to hold MRBs to facilitate the M45 TEBS Financing with Freddie Mac;

•

ATAX TEBS Holdings, LLC, a wholly owned subsidiary of the Partnership, which has issued secured notes (“the Secured Notes”) to Mizuho Capital Markets LLC (“Mizuho”);

•

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

•

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

•

The Suites on Paseo MF Property, a real estate asset, is owned directly by the Partnership.

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

Restricted Cash

Restricted cash is legally restricted as to its use. The Partnership is required to maintain restricted cash collateral related to its two total return swap transactions (see Note 18). In addition, the Partnership is required to maintain restricted cash balances related to the TEBS Financing facilities, resident security deposits, required maintenance reserves, escrowed funds, and property rehabilitation. Restricted cash is presented with cash and cash equivalents on the Partnership’s condensed consolidated statements of cash flows.

Impairment of Mortgage Revenue Bonds

The Partnership periodically reviews its MRBs for impairment. The Partnership evaluates whether unrealized losses are considered other-than-temporary impairments based on various factors including, but not necessarily limited to, the following:

•

The duration and severity of the decline in fair value;

•

The Partnership’s intent to hold and the likelihood of it being required to sell the security before its value recovers;

•

Adverse conditions specifically related to the security, its collateral, or both;

•

Volatility of the fair value of the security;

•

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

•

Failure of the issuer to make scheduled interest or principal payments; and

•

Recoveries or additional declines in fair value after the balance sheet date.

While the Partnership evaluates all available information, it focuses specifically on whether the security’s estimated fair value is below amortized cost. If a MRB’s estimated fair value is below amortized cost, and the Partnership has the intent to sell or may be required to sell the MRB prior to the time that its value recovers or until maturity, the Partnership will record an other-than-temporary impairment through earnings equal to the difference between the MRB’s carrying value and its fair value. If the Partnership does not expect to sell an other-than-temporarily impaired MRB, only the portion of the other-than-temporary impairment related to credit losses is recognized through earnings as a provision for credit loss, with the remainder recognized as a component of other comprehensive income (loss). In determining the provision for credit loss, the Partnership compares the present value of cash flows expected to be collected to the MRB’s amortized cost basis.

The recognition of other-than-temporary impairment, provision for credit loss, and the potential impairment analysis are subject to a considerable degree of judgment, the results of which, when applied under different conditions or assumptions, could have a material impact on the Partnership’s condensed consolidated financial statements. If the Partnership experiences deterioration in the values of its MRB portfolio, the Partnership may incur other-than-temporary impairments or provision for credit losses that could negatively impact the Partnership’s financial condition, cash flows, and reported earnings.

Investment in Governmental Issuer Loans

The Partnership accounts for its investment in governmental issuer loans (“GILs”) under the accounting guidance for certain investments in debt and equity securities. The Partnership’s investment in these instruments are classified as held-to-maturity debt securities and are reported at amortized cost.

The Partnership periodically reviews its GILs for impairment. The Partnership evaluates whether unrealized losses are considered other-than-temporary impairments based on various factors including, but not necessarily limited to, the following:

•

The duration and severity of the decline in fair value;

•

Adverse conditions specifically related to the security, its collateral, or both;

•

Volatility of the fair value of the security;

•

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

•

The failure of the borrower to make scheduled interest or principal payments; and

•

Recoveries or additional declines in fair value after the balance sheet date.

While the Partnership evaluates all available information, it focuses specifically on whether the security’s estimated fair value is below amortized cost. If a GIL’s estimated fair value is below amortized cost, and the Partnership does not expect to recover its entire amortized cost, only the portion of the other-than-temporary impairment related to credit losses is recognized through earnings as a provision for credit loss, with the remainder recognized as a component of other comprehensive income (loss).

The recognition of other-than-temporary impairment, provision for credit loss, and the potential impairment analysis are subject to a considerable degree of judgment, the results of which, when applied under different conditions or assumptions, could have a material impact on the Partnership’s condensed consolidated financial statements. If the Partnership experiences deterioration in the value of its GILs, the Partnership may incur other-than-temporary impairments or provision for credit losses that could negatively impact the Partnership’s financial condition, cash flows, and reported earnings.

Property Loans, Net of Loan Loss Allowance

The Partnership invests in taxable property loans made to the owners of certain multifamily properties. Most of the property loans have been made to multifamily properties that secure MRBs and GILs owned by the Partnership. The Partnership recognizes interest income on the property loans as earned and the interest income is reported within “Other interest income” on the Partnership’s condensed consolidated statements of operations. Interest income is not recognized for property loans that are deemed to be in nonaccrual status. The repayment of these property loans and accrued interest is dependent largely on the cash flows or proceeds upon sale or refinancing of the related property. The Partnership periodically evaluates these loans for potential impairment by estimating the fair value of the related property and comparing the fair value to the outstanding MRBs, GILs or other senior financing, plus the Partnership’s property loans. The Partnership utilizes a discounted cash flow model that considers varying assumptions. The discounted cash flow analysis may assume multiple revenue and expense scenarios, various capitalization rates, and multiple discount rates. The Partnership may also consider other information such as independent appraisals in estimating a property’s fair value.

If the estimated fair value of the related property, after deducting the amortized cost basis of the MRB, GIL or other senior financing, exceeds the principal balance of the taxable property loan then no potential loss is indicated and no allowance for loan loss is recorded. If a potential loss is indicated, an allowance for loan loss is recorded against the outstanding loan amount and a loss is realized. The determination of the need for an allowance for loan loss is subject to considerable judgment.

Estimates and assumptions

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“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 in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such SEC rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading.

The Partnership’s condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2019. These condensed consolidated financial statements and notes have been prepared consistently with the 2019 Form 10-K. In the opinion of management, all adjustments (consisting of normal and recurring accruals) necessary to present fairly the Partnership’s financial position as of September 30, 2020, and the results of operations for the interim periods presented, have been made. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated balance sheet as of December 31, 2019 was derived from the audited annual consolidated financial statements but does not contain all the footnote disclosures from the annual consolidated financial statements.

Risks and Uncertainties

The business and economic uncertainty resulting from the COVID-19 pandemic has made estimates and assumptions more difficult to calculate. The extent of the impact of COVID-19 on the Partnership’s future operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, the impact on the underlying borrowers of MRBs and GILs, tenants at the MF Properties and operations of the Partnership’s investments in unconsolidated entities. In addition, market volatility may cause fluctuations in the valuation of the Partnership’s MRBs, taxable MRBs, GILs, MF Properties and investments in unconsolidated entities. The extent to which COVID-19 will impact the Partnership’s financial condition or results of operations in the future is uncertain and actual results and outcomes could differ from current estimates.

As of September 30, 2020, the Partnership has yet to observe a significant decline in occupancy or operating results at properties securing its MRBs due to the COVID-19 pandemic, with the exception of the Pro Nova 2014-1 and Live 929 Apartments MRBs which are further discussed in Note 6. Furthermore, the Partnership has observed no material negative trends that potentially indicate impairment of The 50/50 MF Property or properties related to its GILs and investments in unconsolidated entities. The Partnership performed an impairment analysis for the Suites at Paseo MF Property due to a significant decline in occupancy as of September 30, 2020 as a result of COVID-19. The Partnership’s estimates of future undiscounted net cash flows expected to be generated from the use of the asset significantly exceeded the carrying value such that the property was not impaired.

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326).” ASU 2016-13 enhances the methodology of measuring expected credit losses for financial assets to include the use of reasonable and supportable forward-looking information to better estimate credit losses. ASU 2016-13 also includes changes to the impairment model for available-for-sale debt securities such as the Partnership’s MRBs and taxable MRBs. In November 2019, the FASB issued ASU 2019-10 which amended the mandatory effective dates of certain ASUs, including ASU 2016-13, based on an entity’s filing status. As a smaller reporting company, the Partnership’s mandatory effective date for ASU 2016-13 is now January 1, 2023, and the Partnership has elected to defer adoption until that date. The delay in implementing ASU 2016-13 will allow the Partnership to take advantage of any additional guidance that may come out from the FASB on implementing ASU 2016-13. The effective date may be sooner if the Partnership becomes an accelerated filer in the future. Prior to the issuance of ASU 2019-10, the Partnership completed an initial assessment and determined that its property loans, the interest receivable on property loans, receivables reported within other assets, financial guarantees and commitments are within the scope of ASU 2016-13. The Partnership has also determined that the GILs and the interest receivable on GILs are within the scope of ASU 2016-13. Furthermore, the Partnership has begun developing data collection processes, assessment procedures and internal controls required to implement ASU 2016-13. The Partnership will continue to develop data collection processes, assessment procedures and internal controls that will be required when it does implement ASU 2016-13, and to evaluate the impact on the Partnership’s condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform—Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional guidance for a limited period meant to ease the potential burden in accounting for, or recognizing the effects of, reform to LIBOR and certain other reference rates. The standard is effective for all entities from March 12, 2020 through December 31, 2022. However, ASU 2020-04 is only applicable to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform, and that were entered into or evaluated prior to January 1, 2023. The Partnership is currently evaluating the impact that the adoption of ASU 2020-04 will have on its condensed consolidated financial statements.

3. Partnership Income, Expenses and Cash Distributions

The Partnership Agreement contains provisions for the distribution of Net Interest Income, Net Residual Proceeds and Liquidation Proceeds, for the allocation of income or loss from operations, and for the allocation of income and loss arising from a repayment, sale, or liquidation of investments. Income and losses will be allocated to each Unitholder on a periodic basis, as determined by the General Partner, based on the number of Series A Preferred Units and BUCs held by each Unitholder as of the last day of the period for which such allocation is to be made. Distributions of Net Interest Income and Net Residual Proceeds will be made to each Unitholder of record on the last day of each distribution period based on the number of Series A Preferred Units and BUCs held by each Unitholder on that date. Cash distributions are currently made on a quarterly basis.

For purposes of the Partnership Agreement, income and cash received by the Partnership from its investments in MF Properties, investments in unconsolidated entities, and property loans will be included in the Partnership’s Net Interest Income, and cash distributions received by the Partnership from the sale or redemption of such investments will be included in the Partnership’s Net Residual Proceeds.

The holders of the Series A Preferred Units are entitled to distributions at a fixed rate of 3.0% per annum prior to payment of distributions to other Unitholders.

Net Interest Income (Tier 1) is allocated 99% to the limited partners and BUC holders as a class and 1% to the General Partner. Net Interest Income (Tier 2) and Net Residual Proceeds (Tier 2) are allocated 75% to the limited partners and BUC holders as a class and 25% to the General Partner. Net Interest Income (Tier 2) and Net Residual Proceeds (Tier 2) in excess of the maximum allowable amount as set forth in the Partnership Agreement are considered Net Interest Income (Tier 3) and Net Residual Proceeds (Tier 3) and are allocated 100% to the limited partners and BUC holders as a class.

4. Net income per BUC

The Partnership has disclosed basic and diluted net income per BUC on the Partnership’s condensed consolidated statements of operations. The unvested Restricted Unit Awards (“RUAs”) issued under the Partnership’s 2015 Equity Incentive Plan (the “2015 Plan”) are considered participating securities. There were no dilutive BUCs for the three and nine months ended September 30, 2020 and 2019.

5. Variable Interest Entities

Consolidated Variable Interest Entities (“VIEs”)

The Partnership has determined the Tender Option Bond (“TOB”), Term TOB, Term A/B and TEBS Financings are VIEs and the Partnership is the primary beneficiary (see Note 16). In determining the primary beneficiary of each VIE, the Partnership considered which party has the power to control the activities of the VIE which most significantly impact its financial performance, the risks that the entity was designed to create, and how each risk affects the VIE. The executed agreements related to the TOB, Term TOB, Term A/B and TEBS Financings stipulate the Partnership has the sole right to cause the trusts to sell the underlying assets. If the underlying assets were sold, the extent to which the VIEs will be exposed to gains or losses would result from decisions made by the Partnership.

As the primary beneficiary, the Partnership reports the TOB, Term TOB, Term A/B and TEBS Financings on a consolidated basis. The Partnership reports the Floater Certificates related to the TOB Financings, and the Class A Certificates related to the Term TOB, Term A/B and TEBS Financings as secured debt financings on the Partnership’s condensed consolidated balance sheets. The MRBs, GILs, and property loans secured by the TOB, Term TOB, Term A/B and TEBS Financings, and the PHCs secured by the TOB Financings, are reported as assets on the Partnership’s condensed consolidated balance sheets (see Notes 6, 7, 8 and 11).

Non-Consolidated VIEs

The Partnership has variable interests in various entities in the form of MRBs, GILs, property loans and investments in unconsolidated entities. These variable interests do not allow the Partnership to direct the activities that most significantly impact the economic performance of such VIEs. As a result, the Partnership is not considered the primary beneficiary and does not consolidate the financial statements of these VIEs in the Partnership’s condensed consolidated financial statements.

The Partnership held variable interests in 20 and 17 non-consolidated VIEs as of September 30, 2020 and December 31, 2019, respectively. The following table summarizes the Partnership’s variable interests in these entities and maximum exposure to loss as of September 30, 2020 and December 31, 2019:

	Maximum Exposure to Loss
	September 30, 2020		December 31, 2019
Mortgage revenue bonds	$	20,879,500	$	30,455,000
Governmental issuer loans		62,085,000		-
Property loans		5,327,342		-
Investment in unconsolidated entities		99,176,922		86,981,864
	$	187,468,764	$	117,436,864

The maximum exposure to loss for the MRBs is equal to the cost adjusted for paydowns. The difference between an MRB’s carrying value on the Partnership’s condensed consolidated balance sheets and the maximum exposure to loss is a function of the unrealized gains or losses on the MRB.

The maximum exposure to loss for GILs, property loans and investments in unconsolidated entities is equal to the Partnership’s carrying value.

6. Investments in Mortgage Revenue Bonds

MRBs owned by the Partnership provide construction and/or permanent financing for Residential Properties and a commercial property. MRBs are either held directly by the Partnership or are held in trusts created in connection with debt financing transactions (see Note 16). All MRBs are current on contractual debt service as of September 30, 2020. The Partnership had the following investments in MRBs as of September 30, 2020 and December 31, 2019:

	September 30, 2020
Description of Mortgage Revenue Bonds Held in Trust	State	Cost Adjusted for Paydowns and Allowances		Cumulative Unrealized Gain		Cumulative Unrealized Loss		Estimated Fair Value
Courtyard - Series A ⁽⁴⁾	CA	$	10,083,199	$	2,360,586	$	-	$	12,443,785
Glenview Apartments - Series A ⁽³⁾	CA		4,496,129		973,537		-		5,469,666
Harmony Court Bakersfield - Series A ⁽⁴⁾	CA		3,676,474		825,077		-		4,501,551
Harmony Terrace - Series A ⁽⁴⁾	CA		6,805,898		1,638,021		-		8,443,919
Harden Ranch - Series A ⁽²⁾	CA		6,642,011		1,515,729		-		8,157,740
Las Palmas II - Series A ⁽⁴⁾	CA		1,668,247		387,698		-		2,055,945
Montclair Apartments - Series A ⁽³⁾	CA		2,435,805		588,172		-		3,023,977
Montecito at Williams Ranch Apartments - Series A ⁽⁶⁾	CA		7,640,285		2,228,796		-		9,869,081
Ocotillo Springs - Series A ⁽⁶⁾	CA		2,023,500		136,002		-		2,159,502
San Vicente - Series A ⁽⁴⁾	CA		3,439,838		749,936		-		4,189,774
Santa Fe Apartments - Series A ⁽³⁾	CA		2,950,886		723,204		-		3,674,090
Seasons at Simi Valley - Series A ⁽⁴⁾	CA		4,248,522		1,148,131		-		5,396,653
Seasons Lakewood - Series A ⁽⁴⁾	CA		7,249,761		1,744,848		-		8,994,609
Seasons San Juan Capistrano - Series A ⁽⁴⁾	CA		12,206,230		2,817,981		-		15,024,211
Summerhill - Series A ⁽⁴⁾	CA		6,330,829		1,390,308		-		7,721,137
Sycamore Walk - Series A ⁽⁴⁾	CA		3,528,394		824,890		-		4,353,284
The Village at Madera - Series A ⁽⁴⁾	CA		3,040,730		682,403		-		3,723,133
Tyler Park Townhomes - Series A ⁽²⁾	CA		5,785,729		986,191		-		6,771,920
Vineyard Gardens - Series A ⁽⁶⁾	CA		3,976,346		1,160,591		-		5,136,937
Westside Village Market - Series A ⁽²⁾	CA		3,780,963		856,081		-		4,637,044
Brookstone ⁽¹⁾	IL		7,383,072		2,247,992		-		9,631,064
Copper Gate Apartments ⁽²⁾	IN		5,005,000		683,989		-		5,688,989
Renaissance - Series A ⁽³⁾	LA		10,904,002		3,564,144		-		14,468,146
Live 929 Apartments ⁽⁶⁾	MD		36,291,223		-		-		36,291,223
Woodlynn Village ⁽¹⁾	MN		4,146,000		14,592		-		4,160,592
Gateway Village⁽⁶⁾	NC		2,600,000		140,475		-		2,740,475
Greens Property - Series A⁽²⁾	NC		7,856,000		756,805		-		8,612,805
Lynnhaven Apartments ⁽⁶⁾	NC		3,450,000		186,399		-		3,636,399
Silver Moon - Series A ⁽³⁾	NM		7,714,309		1,874,494		-		9,588,803
Village at Avalon - Series A ⁽⁵⁾	NM		16,217,931		4,567,604		-		20,785,535
Ohio Properties - Series A ⁽¹⁾	OH		13,758,000		63,719		-		13,821,719
Bridle Ridge ⁽¹⁾	SC		7,235,000		77,658		-		7,312,658
Columbia Gardens ⁽⁴⁾	SC		12,941,555		2,668,577		-		15,610,132
Companion at Thornhill Apartments ⁽⁴⁾	SC		11,086,752		2,194,358		-		13,281,110
Cross Creek ⁽¹⁾	SC		6,138,945		2,383,041		-		8,521,986
Rosewood Townhomes - Series A ⁽⁶⁾	SC		9,266,171		1,987,546		-		11,253,717
South Pointe Apartments - Series A ⁽⁶⁾	SC		21,567,811		4,626,185		-		26,193,996
The Palms at Premier Park Apartments ⁽²⁾	SC		18,675,219		3,044,617		-		21,719,836
Village at River's Edge ⁽⁴⁾	SC		9,820,327		1,738,232		-		11,558,559
Willow Run ⁽⁴⁾	SC		12,762,198		2,451,637		-		15,213,835
Arbors at Hickory Ridge ⁽²⁾	TN		10,948,055		2,529,443		-		13,477,498
Avistar at Copperfield - Series A ⁽⁶⁾	TX		13,848,985		2,878,107		-		16,727,092
Avistar at the Crest - Series A ⁽²⁾	TX		9,169,185		2,197,370		-		11,366,555
Avistar at the Oaks - Series A ⁽²⁾	TX		7,410,639		1,774,121		-		9,184,760
Avistar at the Parkway - Series A ⁽³⁾	TX		12,755,020		2,772,972		-		15,527,992
Avistar at Wilcrest - Series A ⁽⁶⁾	TX		5,248,485		965,784		-		6,214,269
Avistar at Wood Hollow - Series A ⁽⁶⁾	TX		39,851,626		7,804,810		-		47,656,436
Avistar in 09 - Series A ⁽²⁾	TX		6,398,800		1,560,811		-		7,959,611
Avistar on the Boulevard - Series A ⁽²⁾	TX		15,620,696		3,472,860		-		19,093,556
Avistar on the Hills - Series A ⁽²⁾	TX		5,073,490		1,237,538		-		6,311,028
Bruton Apartments ⁽⁴⁾	TX		17,708,333		3,228,263		-		20,936,596
Concord at Gulfgate - Series A ⁽⁴⁾	TX		18,842,536		4,685,473		-		23,528,009
Concord at Little York - Series A ⁽⁴⁾	TX		13,200,088		3,403,013		-		16,603,101
Concord at Williamcrest - Series A ⁽⁴⁾	TX		20,448,350		5,178,003		-		25,626,353
Crossing at 1415 - Series A ⁽⁴⁾	TX		7,350,633		1,745,850		-		9,096,483
Decatur Angle ⁽⁴⁾	TX		22,318,001		5,321,998		-		27,639,999
Esperanza at Palo Alto ⁽⁴⁾	TX		19,253,807		5,564,002		-		24,817,809
Heights at 515 - Series A ⁽⁴⁾	TX		6,729,631		1,540,848		-		8,270,479
Heritage Square - Series A ⁽³⁾	TX		10,608,706		2,082,726		-		12,691,432
Oaks at Georgetown - Series A⁽⁴⁾	TX		12,161,844		2,269,126		-		14,430,970
Runnymede ⁽¹⁾	TX		9,865,000		212,185		-		10,077,185
Southpark ⁽¹⁾	TX		11,603,714		2,079,073		-		13,682,787
15 West Apartments ⁽⁴⁾	WA		9,622,192		3,105,572		-		12,727,764
Mortgage revenue bonds held in trust		$	632,867,107	$	126,620,194	$	-	$	759,487,301

⁽¹⁾	MRBs owned by ATAX TEBS I, LLC (M24 TEBS), Note 16

⁽²⁾	MRBs owned by ATAX TEBS II, LLC (M31 TEBS), Note 16

⁽³⁾	MRBs owned by ATAX TEBS III, LLC (M33 TEBS), Note 16

⁽⁴⁾	MRBs owned by ATAX TEBS IV, LLC (M45 TEBS), Note 16

⁽⁵⁾	MRB held by Morgan Stanley in a debt financing transaction, Note 16

⁽⁶⁾	MRBs held by Mizuho Capital Markets, LLC in a debt financing transaction, Note 16

	September 30, 2020
Description of Mortgage Revenue Bonds held by the Partnership	State	Cost Adjusted for Paydowns		Cumulative Unrealized Gain		Cumulative Unrealized Loss		Estimated Fair Value
Montevista - Series A	CA	$	6,720,000	$	2,263,726	$	-	$	8,983,726
Solano Vista - Series A	CA		2,665,000		870,630		-		3,535,630
Greens Property - Series B	NC		926,759		121,965		-		1,048,724
Arby Road Apartments - Series A	NV		7,475,000		15,996		-		7,490,996
Ohio Properties - Series B	OH		3,490,490		14,476		-		3,504,966
Rosewood Townhomes - Series B	SC		469,855		2,694		-		472,549
South Pointe Apartments - Series B	SC		1,099,660		6,305		-		1,105,965
Pro Nova 2014-1	TN		8,196,200		-		-		8,196,200
Avistar at the Crest - Series B	TX		737,241		133,980		-		871,221
Avistar at the Oaks - Series B	TX		539,614		94,852		-		634,466
Avistar at the Parkway - Series B	TX		124,059		42,955		-		167,014
Avistar in 09 - Series B	TX		445,133		79,970		-		525,103
Avistar on the Boulevard - Series B	TX		438,071		74,669		-		512,740
Mortgage revenue bonds held by the Partnership		$	33,327,082	$	3,722,218	$	-	$	37,049,300

	December 31, 2019
Description of Mortgage Revenue Bonds Held in Trust	State	Cost Adjusted for Paydowns		Cumulative Unrealized Gain		Cumulative Unrealized Loss			Estimated Fair Value
Courtyard - Series A⁽⁵⁾	CA	$	10,147,686	$	1,602,534	$	-		$	11,750,220
Glenview Apartments - Series A⁽⁴⁾	CA		4,533,958		757,900		-			5,291,858
Harmony Court Bakersfield - Series A ⁽⁵⁾	CA		3,699,987		549,211		-			4,249,198
Harmony Terrace - Series A⁽⁵⁾	CA		6,849,214		1,121,262		-			7,970,476
Harden Ranch - Series A⁽³⁾	CA		6,700,868		1,281,980		-			7,982,848
Las Palmas II - Series A⁽⁵⁾	CA		1,679,022		263,441		-			1,942,463
Montclair Apartments - Series A⁽⁴⁾	CA		2,456,298		446,558		-			2,902,856
Montecito at Williams Ranch Apartments - Series A⁽⁷⁾	CA		7,681,146		1,580,303		-			9,261,449
San Vicente - Series A⁽⁵⁾	CA		3,462,053		510,593		-			3,972,646
Santa Fe Apartments - Series A⁽⁴⁾	CA		2,975,713		540,988		-			3,516,701
Seasons at Simi Valley - Series A⁽⁵⁾	CA		4,282,477		860,856		-			5,143,333
Seasons Lakewood - Series A⁽⁵⁾	CA		7,295,901		1,124,372		-			8,420,273
Seasons San Juan Capistrano - Series A⁽⁵⁾	CA		12,283,916		1,893,075		-			14,176,991
Summerhill - Series A⁽⁵⁾	CA		6,371,318		797,228		-			7,168,546
Sycamore Walk - Series A⁽⁵⁾	CA		3,559,011		567,713		-			4,126,724
The Village at Madera - Series A⁽⁵⁾	CA		3,060,177		454,240		-			3,514,417
Tyler Park Townhomes - Series A⁽³⁾	CA		5,837,595		864,894		-			6,702,489
Vineyard Gardens - Series A⁽⁷⁾	CA		3,995,000		815,213		-			4,810,213
Westside Village Market - Series A⁽³⁾	CA		3,814,857		594,361		-			4,409,218
Brookstone⁽¹⁾	IL		7,406,755		2,194,994		-			9,601,749
Copper Gate Apartments⁽³⁾	IN		5,005,000		682,497		-			5,687,497
Renaissance - Series A⁽⁴⁾	LA		11,001,027		1,775,086		-			12,776,113
Live 929 Apartments ^{(7), (8)}	MD		39,984,026		-		(280,711	)		39,703,315
Woodlynn Village ⁽¹⁾	MN		4,172,000		44,510		-			4,216,510
Gateway Village ⁽²⁾	NC		2,600,000		509,901		-			3,109,901
Greens Property - Series A ⁽³⁾	NC		7,936,000		845,678		-			8,781,678
Lynnhaven Apartments ⁽²⁾	NC		3,450,000		393,686		-			3,843,686
Silver Moon - Series A ⁽⁴⁾	NM		7,762,116		1,166,748		-			8,928,864
Village at Avalon - Series A ⁽⁶⁾	NM		16,302,038		3,131,843		-			19,433,881
Ohio Properties - Series A ⁽¹⁾	OH		13,857,000		48,813		-			13,905,813
Bridle Ridge ⁽¹⁾	SC		7,315,000		113,469		-			7,428,469
Columbia Gardens ⁽⁵⁾	SC		13,064,589		2,179,744		-			15,244,333
Companion at Thornhill Apartments ⁽⁵⁾	SC		11,178,557		1,709,040		-			12,887,597
Cross Creek ⁽¹⁾	SC		6,143,976		2,507,072		-			8,651,048
Rosewood Townhomes - Series A ⁽⁷⁾	SC		9,280,000		316,916		-			9,596,916
South Pointe Apartments - Series A ⁽⁷⁾	SC		21,600,000		835,005		-			22,435,005
The Palms at Premier Park Apartments ⁽³⁾	SC		18,838,478		2,799,411		-			21,637,889
Village at River's Edge⁽⁵⁾	SC		9,872,297		2,236,259		-			12,108,556
Willow Run ⁽⁵⁾	SC		12,884,191		2,100,598		-			14,984,789
Arbors at Hickory Ridge ⁽³⁾	TN		11,056,825		1,934,146		-			12,990,971
Pro Nova 2014-1 ^{(2), (8)}	TN		10,022,352		-		(372,169	)		9,650,183
Avistar at Copperfield - Series A ⁽²⁾	TX		13,945,681		2,356,231		-			16,301,912
Avistar at the Crest - Series A ⁽³⁾	TX		9,252,257		1,715,456		-			10,967,713
Avistar at the Oaks - Series A ⁽³⁾	TX		7,475,794		1,336,580		-			8,812,374
Avistar at the Parkway - Series A⁽⁴⁾	TX		12,854,039		2,065,468		-			14,919,507
Avistar at Wilcrest - Series A ⁽²⁾	TX		5,285,131		806,523		-			6,091,654
Avistar at Wood Hollow - Series A ⁽²⁾	TX		40,129,878		6,450,704		-			46,580,582
Avistar in 09 - Series A ⁽³⁾	TX		6,455,058		1,125,239		-			7,580,297
Avistar on the Boulevard - Series A⁽³⁾	TX		15,762,217		2,648,781		-			18,410,998
Avistar on the Hills - Series A ⁽³⁾	TX		5,118,097		938,032		-			6,056,129
Bruton Apartments ⁽⁵⁾	TX		17,807,768		3,534,702		-			21,342,470
Concord at Gulfgate - Series A ⁽⁵⁾	TX		18,975,786		3,572,995		-			22,548,781
Concord at Little York - Series A⁽⁵⁾	TX		13,293,436		2,624,054		-			15,917,490
Concord at Williamcrest - Series A⁽⁵⁾	TX		20,592,957		3,971,001		-			24,563,958
Crossing at 1415 - Series A⁽⁵⁾	TX		7,405,406		1,229,438		-			8,634,844
Decatur Angle ⁽⁵⁾	TX		22,455,747		4,198,200		-			26,653,947
Esperanza at Palo Alto ⁽⁵⁾	TX		19,356,959		4,111,518		-			23,468,477
Heights at 515 - Series A ⁽⁵⁾	TX		6,779,777		1,154,387		-			7,934,164
Heritage Square - Series A ⁽⁴⁾	TX		10,695,037		1,455,672		-			12,150,709
Oaks at Georgetown - Series A ⁽⁵⁾	TX		12,239,247		1,645,817		-			13,885,064
Runnymede ⁽¹⁾	TX		9,925,000		80,343		-			10,005,343
Southpark ⁽¹⁾	TX		11,548,337		2,334,262		-			13,882,599
15 West Apartments ⁽⁵⁾	WA		9,673,117		2,287,904		-			11,961,021
Mortgage revenue bonds held in trust		$	648,445,150	$	95,795,445	$	(652,880	)	$	743,587,715

⁽¹⁾	MRBs owned by ATAX TEBS I, LLC (M24 TEBS), Note 16

⁽²⁾	MRBs held by Deutsche Bank in a debt financing transaction, Note 16

⁽³⁾	MRBs owned by ATAX TEBS II, LLC (M31 TEBS), Note 16

⁽⁴⁾	MRBs owned by ATAX TEBS III, LLC (M33 TEBS), Note 16

⁽⁵⁾	MRBs owned by ATAX TEBS IV, LLC (M45 TEBS), Note 16

⁽⁶⁾	MRB held by Morgan Stanley in a debt financing transaction, see Note 16

⁽⁷⁾	MRB held by Mizuho Capital Markets, LLC in a debt financing transaction, see Note 16

⁽⁸⁾	As of the date presented, the MRB had been in a cumulative unrealized loss position for less than 12 consecutive months.

	December 31, 2019
Description of Mortgage Revenue Bonds held by the Partnership	State	Cost Adjusted for Paydowns		Cumulative Unrealized Gain		Cumulative Unrealized Loss		Estimated Fair Value
Montevista - Series A & B	CA	$	13,200,000	$	1,654,870	$	-	$	14,854,870
Solano Vista - Series A & B	CA		5,768,000		625,235		-		6,393,235
Greens Property - Series B	NC		930,016		142,265		-		1,072,281
Ohio Properties - Series B	OH		3,504,171		10,363		-		3,514,534
Rosewood Townhomes - Series B	SC		470,000		1,685		-		471,685
South Pointe Apartments - Series B	SC		1,100,000		2,952		-		1,102,952
Avistar at the Crest - Series B	TX		740,876		94,819		-		835,695
Avistar at the Oaks - Series B	TX		542,170		65,455		-		607,625
Avistar at the Parkway - Series B	TX		124,305		38,045		-		162,350
Avistar in 09 - Series B	TX		447,241		53,995		-		501,236
Avistar on the Boulevard - Series B	TX		440,231		53,056		-		493,287
Mortgage revenue bonds held by the Partnership		$	27,267,010	$	2,742,740	$	-	$	30,009,750

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

During the three months ended September 30, 2020, the Partnership recognized a provision for credit loss of approximately $3.5 million related to the Live 929 Apartments MRB in its condensed consolidated statements of operations. During the nine months ended September 30, 2020, the Partnership recognized a provision for credit loss of approximately $5.3 million related to the Live 929 Apartments MRB and the Pro Nova 2014-1 MRB in its condensed consolidated statements of operations. See Note 2 for information considered in the Partnership’s evaluation of other-than-temporary impairment and provision for credit loss of the MRBs.

The provision for credit loss related to the Live 929 Apartments MRB was due to recent operational results, the borrower’s continued covenant forbearance, and a decline in debt service coverage. The change in operating results at the Live 929 Apartments was primarily driven by the impact of the COVID-19 pandemic, which has had a significant impact on the student housing industry. The provision for credit loss related to the Pro Nova 2014-1 MRB was due to debt service shortfalls by the underlying commercial property, the borrower’s request for forbearance, and the general creditworthiness of proton therapy centers in the United States, including the impacts of the COVID-19 pandemic.

MRB Activity in the First Nine Months of 2020

Acquisitions:

The following MRBs were acquired at prices that approximated the principal outstanding plus accrued interest during the nine months ended September 30, 2020:

Property Name

Month

Acquired

Property Location

Units

Maturity Date

Interest Rate

Principal Acquired

Arby Road Apartments - Series A⁽¹⁾

June

Las Vegas, NV

180

10/1/2027

5.35

1,690,000

Arby Road Apartments - Series A⁽¹⁾

June

Las Vegas, NV

180

4/1/2041

5.50

5,785,000

Ocotillo Springs - Series A⁽²⁾

July

Brawley, CA

8/1/2037

4.55%⁽³⁾

2,023,500

9,498,500

⁽¹⁾	Both MRBs are part of the same series but have different interest rates and maturity dates.

⁽²⁾

The Partnership has committed to provide total funding of the MRB up to $15.0 million during construction and lease-up of the property on a drawdown basis. Upon stabilization of the property, the MRB will be partially repaid and the maximum balance of the MRB after stabilization is approximately $3.5 million.

⁽³⁾	The MRB has a variable interest rate equal to 1-month LIBOR plus 3.25%, subject to a floor of 4.55%, during construction of the project until stabilization. After stabilization, the MRB will convert to a fixed interest rate of 4.35%.

Redemptions:

The following MRBs were redeemed at a price that approximated the Partnership’s carrying value plus accrued interest during the nine months ended September 30, 2020:

Property Name	Month Redeemed	Property Location	Units		Original Maturity Date	Interest Rate			Principal Outstanding at Date of Redemption
Solano Vista - Series B	January	Vallejo, CA		96	1/1/2021		5.85	%	$	3,103,000
Montevista - Series B	August	San Pablo, CA		82	7/1/2021		8.00	%		6,480,000
									$	9,583,000

MRB Activity in the First Nine Months of 2019

Acquisitions:

The following MRBs were acquired at prices that approximated the principal outstanding during the nine months ended September 30, 2019:

Property Name	Month Acquired	Property Location	Units		Maturity Date	Interest Rate			Principal Outstanding at Date of Acquisition
Gateway Village	February	Durham, NC		64	4/1/2032		6.10	%	$	2,600,000
Lynnhaven Apartments	February	Durham, NC		75	4/1/2032		6.10	%		3,450,000
Montevista - Series A	June	San Pablo, CA		82	7/1/2036		5.75	%		6,720,000
Montevista - Series B	June	San Pablo, CA		82	7/1/2021		5.75	%		6,480,000
									$	19,250,000

Redemptions:

The following MRBs were redeemed at prices that approximated the Partnership’s carrying value plus accrued interest during the nine months ended September 30, 2019:

Property Name	Month Redeemed	Property Location	Units		Original Maturity Date	Interest Rate			Principal Outstanding at Date of Redemption
Seasons San Juan Capistrano - Series B	January	San Juan Capistrano, CA		112	1/1/2019		8.00	%	$	5,574,000
Courtyard - Series B	April	Fullerton, CA		108	6/1/2019		8.00	%		6,228,000
									$	11,802,000

Restructurings:

The following MRBs were restructured during the nine months ended September 30, 2019. The principal outstanding on the Series B MRBs were collapsed into the principal outstanding on the associated Series A MRBs and the Series B MRBs were eliminated. No cash was paid or received on restructuring. The terms of the Series B MRBs that were eliminated are as follows:

Property Name	Month Restructured	Property Location	Units		Maturity Date	Interest Rate			Principal Outstanding at Date of Restructuring
Avistar at Copperfield - Series B	May	Houston, TX		192	6/1/2054		12.00	%	$	4,000,000
Avistar at Wilcrest - Series B	May	Houston, TX		88	6/1/2054		12.00	%		1,550,000
Avistar at Wood Hollow - Series B	May	Austin, TX		409	6/1/2054		12.00	%		8,410,000
									$	13,960,000

7. Governmental Issuer Loans

Governmental issuer loans (“GILs”) owned by the Partnership are issued by state governmental authorities to provide construction financing for affordable multifamily properties. The Partnership expects and believes the interest earned on the GILs is excludable from gross income for federal income tax purposes. The GILs do not constitute an obligation of any state government, agency or

authority and no state government, agency or authority is liable for them, nor is the taxing power of any state government pledged to the payment of principal or interest on the GILs. The GILs are secured by the borrower’s non-recourse obligation evidenced by a mortgage on all real and personal property associated with the underlying property. The sole source of the funds to pay principal and interest on the GILs is the net cash flow or the sale or refinancing proceeds from the underlying property. The GILs share a first mortgage lien position with the associated property loans also owned by the Partnership (see Note 11). The GILs are held in trust in connection with TOB Trust financing (see Note 16). The Partnership has committed to provide total funding for certain GILs on a draw-down basis during construction. The Partnership had the following investments and remaining funding commitments related to its GILs as of September 30, 2020:

						As of September 30, 2020
Property Name	Date Acquired	Property Location	Units	Maturity Date	Variable Interest Rate	Current Interest Rate	Amortized Cost		Maximum Remaining Commitment
Scharbauer Flats Apartments	June 2020	Midland, TX	300	1/1/2023 ⁽¹⁾	SIFMA + 3.10%	3.22%	$	40,000,000	$	-
Oasis at Twin Lakes	July 2020	Roseville, MN	228	8/1/2023 ⁽²⁾	SIFMA + 3.25%^{(3), (4)}	3.75%		12,410,000		21,590,000
Centennial Crossings	August 2020	Centennial, CO	209	9/1/2023 ⁽²⁾	SIFMA + 2.75%⁽⁴⁾	3.25%		9,675,000		23,405,000
							$	62,085,000	$	44,995,000

⁽¹⁾	The borrower may automatically extend the maturity to July 2023 and may further extend the maturity to January 2024 upon payment of a non-refundable extension fee.

⁽²⁾	The borrower may extend the maturity date to for a period not to exceed six months upon payment of a non-refundable extension fee.

⁽³⁾	The variable rate decreases to SIFMA plus 2.25% upon completion of construction.

⁽⁴⁾	The SIFMA index interest rate component is subject to a floor of 0.50%.

An affiliate of the Partnership has forward committed to purchase the GILs at maturity if the property has reached stabilization and other conditions are met (see Note 22). Affiliates of the borrower have guaranteed payment of principal and accrued interest on the GILs of 100% at origination, decreasing to 50% upon receipt of the certificate of occupancy, and decreasing to 25% upon achievement of 90% occupancy for 30 consecutive days.

8. Public Housing Capital Fund Trust (“PHC”) Certificates

The Partnership’s PHC Certificates represented beneficial interests in three PHC Trusts that consisted of custodial receipts evidencing loans made to numerous local public housing authorities. Principal and interest on these loans were payable by the respective public housing authorities out of annual appropriations to be made to the public housing authorities under the Department of Housing and Urban Development’s (“HUD”) Capital Fund Program established under the Quality Housing and Work Responsibility Act of 1998 (the “Capital Fund Program”).

On January 30, 2020, the Partnership sold its PHC Certificates to an unrelated party for approximately $43.3 million, plus accrued interest, recognizing a gain on sale of securities of approximately $1.4 million. The PHC Certificates were held in trust at Mizuho in secured TOB Trust financing transactions, which upon sale, were collapsed and all principal and interest were paid off in full (see Note 16).

The Partnership had the following investments in the PHC Certificates as of December 31, 2019:

	December 31, 2019
Description of PHC Certificates	Weighted Average Lives (Years)	Investment Rating	Weighted Average Interest Rate Over Life	Cost Adjusted for Paydowns and Impairment		Cumulative Unrealized Gain		Cumulative Unrealized Loss		Estimated Fair Value
PHC Certificate Trust I	5.47	AA-	5.33%	$	24,477,478	$	435,659	$	-	$	24,913,137
PHC Certificate Trust II	4.58	AA-	4.41%		4,375,296		386,433		-		4,761,729
PHC Certificate Trust III	5.43	BBB	5.12%		13,087,779		586,712		-		13,674,491
				$	41,940,553	$	1,408,804	$	-	$	43,349,357

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

9. Real Estate Assets

The following tables summarize information regarding the Partnership’s real estate assets as of September 30, 2020 and December 31, 2019:

Real Estate Assets as of September 30, 2020
Property Name	Location	Number of Units		Land and Land Improvements		Buildings and Improvements		Carrying Value
Suites on Paseo	San Diego, CA		384	$	3,199,268	$	39,349,880	$	42,549,148
The 50/50 MF Property	Lincoln, NE		475		-		32,940,854		32,940,854
Land held for development		⁽¹⁾			1,675,997		-		1,675,997
								$	77,165,999
Less accumulated depreciation									(17,486,887	)
Total real estate assets								$	59,679,112

⁽¹⁾	Land held for development consists of land and development costs for parcels in Gardner, KS; Richland County, SC and Omaha, NE.

Real Estate Assets as of December 31, 2019
Property Name	Location	Number of Units		Land and Land Improvements		Buildings and Improvements		Carrying Value
Suites on Paseo	San Diego, CA		384	$	3,199,268	$	39,073,728	$	42,272,996
The 50/50 MF Property	Lincoln, NE		475		-		32,937,805		32,937,805
Land held for development		⁽²⁾			1,706,862		-		1,706,862
								$	76,917,663
Less accumulated depreciation									(15,357,700	)
Total real estate assets								$	61,559,963

⁽²⁾	Land held for development consists of land and development costs for parcels in Gardner, KS; Richland County, SC and Omaha, NE.

Activity in the First Nine Months of 2020

As of September 30, 2020, the land held for development in Gardner, KS was under contract for sale.

In June 2020, the Partnership determined that the land held for development in Gardner, Kansas was impaired and recorded an impairment charge of $25,200, which represents the difference between the Partnership’s carrying value and the estimated fair value of the land.

Activity in the First Nine Months of 2019

In September 2019, the Partnership determined that the land held for development in Gardner, KS was impaired and recorded an impairment charge of $75,000, which represents the difference between the Partnership’s carrying value and the estimated fair value of the land.

10. Investments in Unconsolidated Entities

ATAX Vantage Holdings, LLC, a wholly owned subsidiary of the Partnership, has equity investment commitments and has made equity investments in unconsolidated entities. The carrying value of the equity investments represents the Partnership’s maximum exposure to loss. ATAX Vantage Holdings, LLC is the only limited equity investor in the unconsolidated entities. An affiliate of the unconsolidated entities guarantees ATAX Vantage Holdings, LLC’s return on its investments for a period of time approximating two to three years after construction completion. The return on these investments earned by the Partnership is reported as “Investment income” on the Partnership’s condensed consolidated statements of operations.

The following table provides the details of the investments in unconsolidated entities as of September 30, 2020 and December 31, 2019 and remaining equity commitment amounts as of September 30, 2020:

Property Name	Location	Units		Month Commitment Executed	Construction Completion Date	Carrying Value as of September 30, 2020		Carrying Value as of December 31, 2019		Maximum Remaining Equity Commitment as of September 30, 2020
Vantage at Waco	Waco, TX		288	August 2016	May 2018	$	-	$	9,337,166	$	-
Vantage at Powdersville	Powdersville, SC		288	November 2017	February 2020		12,295,801		12,295,801		-
Vantage at Stone Creek	Omaha, NE		294	March 2018	April 2020		7,840,500		7,840,500		-
Vantage at Bulverde	Bulverde, TX		288	March 2018	August 2019		10,570,000		10,144,052		-
Vantage at Germantown	Germantown, TN		288	June 2018	March 2020		12,425,000		11,745,155		-
Vantage at Murfreesboro	Murfreesboro, TN		288	September 2018	N/A		14,564,613		13,516,425		-
Vantage at Coventry	Omaha, NE		294	September 2018	N/A		9,007,435		9,007,435		-
Vantage at Conroe	Conroe, TX		288	April 2019	N/A		10,151,000		8,078,519		-
Vantage at O'Connor	San Antonio, TX		288	October 2019	N/A		8,043,132		5,016,811		-
Vantage at Westover Hills	San Antonio, TX		288	January 2020	N/A		7,824,302		-		-
Vantage at Tomball	Tomball, TX		288	August 2020	N/A		6,455,139		-		4,056,333
			3,180			$	99,176,922	$	86,981,864	$	4,056,333

Activity in the First Nine Months of 2020

In January 2020, the Partnership executed a $7.3 million equity commitment to fund construction of the Vantage at Westover Hills multifamily property.

In June 2020, Vantage at Waco sold substantially all assets to an unrelated third party and ceased operations. The Partnership has received cash of approximately $10.6 million as a result of the sale. The Partnership recognized approximately $1.3 million of “Investment Income” associated with the sale. The Partnership may also be entitled to up to $213,000 of additional proceeds in 2020 if certain gain contingencies are satisfied.

In August 2020, the Partnership executed a $10.4 million equity commitment to fund construction of the Vantage at Tomball multifamily property.

Activity in the First Nine Months of 2019:

In April 2019, the Partnership executed a $9.0 million equity commitment to fund construction of the Vantage at Conroe multifamily property.

In September 2019, the membership interests of Vantage at Panama City Beach were sold to an unrelated third party. The Partnership received cash of approximately $22.7 million upon sale. The Partnership recognized approximately $547,000 of investment income and approximately $10.5 million of gain on sale of investment in an unconsolidated entity associated with the sale. The Partnership may also be entitled to receive up to $325,000 of additional proceeds if certain gain contingencies are satisfied.

The following table provides combined summary financial information for the Partnership’s investments in unconsolidated entities for the three and nine months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2020			2019		2020		2019
Property Revenues	$	3,501,288		$	3,713,106	$	8,971,999	$	9,534,250
Gain on sale of property	$	372,974		$	22,556,694	$	6,635,966	$	22,556,694
Net income (loss)	$	(1,495,383	)	$	21,606,621	$	341,905	$	20,918,176

11. Property Loans, Net of Loan Loss Allowances

The following tables summarize the Partnership’s property loans, net of loan loss allowances, as of September 30, 2020 and December 31, 2019:

	September 30, 2020
	Outstanding Balance		Loan Loss Allowance			Property Loan Principal, net of allowance
Arbors at Hickory Ridge	$	191,264	$	-		$	191,264
Avistar (February 2013 portfolio)		201,972		-			201,972
Avistar (June 2013 portfolio)		251,622		-			251,622
Centennial Crossings ⁽¹⁾		3,017,729		-			3,017,729
Cross Creek		11,101,887		(7,393,814	)		3,708,073
Greens Property		850,000		-			850,000
Live 929 Apartments		811,706		(811,706	)		-
Ohio Properties		2,390,446		-			2,390,446
Scharbauer Flats Apartments ⁽¹⁾		2,309,613		-			2,309,613
Total	$	21,126,239	$	(8,205,520	)	$	12,920,719

⁽¹⁾	Property loans are held in trust in connection with a TOB Financing (see Note 16).

	December 31, 2019
	Outstanding Balance		Loan Loss Allowance			Property Loan Principal, net of allowance
Arbors at Hickory Ridge	$	191,264	$	-		$	191,264
Avistar (February 2013 portfolio)		201,972		-			201,972
Avistar (June 2013 portfolio)		251,622		-			251,622
Cross Creek		11,101,887		(7,393,814	)		3,708,073
Greens Property		850,000		-			850,000
Live 929 Apartments		405,717		-			405,717
Ohio Properties		2,390,446		-			2,390,446
Total	$	15,392,908	$	(7,393,814	)	$	7,999,094

The Partnership recognized a provision for loan loss and associated loan loss allowance of approximately $812,000 for the three and nine months ended September 30, 2020 related to Live 929 Apartments property loan as the Partnership determined it was probable the outstanding balance will not be collectible. The interest to be earned on the Live 929 Apartments and Cross Creek property loans was on nonaccrual status for the three and nine months ended September 30, 2020 and 2019. The discounted cash flow method used by management to establish the net realizable value of these property loans determined the collection of the interest earned since inception was not probable. In addition, for the three and nine months ended September 30, 2020 and 2019, interest to be earned on approximately $983,000 of property loan principal for the Ohio Properties was in nonaccrual status as, in management’s opinion, the interest was not considered collectible.

Activity in the First Nine Months of 2020

Concurrent with the acquisition of its GILs (see Note 7), the Partnership has committed to provide property loans for the construction of the underlying properties on a draw-down basis. The property loans and associated GILs are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property. Affiliates of the borrower have guaranteed payment of principal and accrued interest on the GILs of 100% at origination, decreasing to 50% upon receipt of the certificate of occupancy, and decreasing to 25% upon achievement of 90% occupancy for 30 consecutive days. The following is a summary of property loans, and the remaining funding commitments, that were entered into during the first nine months of 2020:

			As of September 30, 2020
Property Name	Date Committed	Maturity Date	Outstanding Balance		Maximum Remaining Commitment
Scharbauer Flats Apartments	June 2020	1/1/2023 ⁽¹⁾	$	2,309,613	$	21,850,387
Oasis at Twin Lakes	July 2020	8/1/2023 ⁽²⁾		-		27,704,180
Centennial Crossings	August 2020	9/1/2023 ⁽²⁾		3,017,729		21,232,271
			$	5,327,342	$	70,786,838

⁽¹⁾	The borrower has the option to extend the maturity date with two six-month extensions.

⁽²⁾	The borrower has the option to extend the maturity date up to six months.

During the third quarter of 2020, the Partnership advanced Live 929 Apartments approximately $406,000 under the secured property loan entered into in August 2019.

Activity in the First Nine Months of 2019

In January 2019, the Vantage at Brooks property was sold by its owner. Upon sale, the Partnership received all outstanding principal and accrued interest on the Vantage at Brooks, LLC property loan. The Partnership received additional proceeds of approximately $3.0 million, which are reported as “Contingent interest income” on the Partnership’s condensed consolidated statements of operations. The contingent interest recognized is considered Tier 2 income for purposes of distributions to the General Partner and BUC holders (see Note 3).

In August 2019, the Partnership entered into a secured property loan with Live 929 Apartments. The property may request additional advances for the sole purpose of funding monthly operating shortfalls up to a total loan amount of $1.0 million. The property loan is subordinate to the MRBs associated with the property and has a stated maturity date of July 31, 2049.

12. Income Tax Provision

The Partnership recognizes current income tax expense for federal, state, and local income taxes incurred by the Greens Hold Co, which owns The 50/50 MF Property and certain property loans. The following table summarizes income tax expense (benefit) for the three and nine months ended September 30, 2020 and 2019:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020			2019			2020			2019
Current income tax expense (benefit)	$	(33,618	)	$	13,932		$	107,681		$	129,095
Deferred income tax benefit		(34,601	)		(82,167	)		(66,482	)		(138,331	)
Total income tax expense (benefit)	$	(68,219	)	$	(68,235	)	$	41,199		$	(9,236	)

The Partnership evaluated whether it is more likely than not that its deferred income tax assets will be realizable. There was no valuation allowance recorded as of September 30, 2020 and December 31, 2019.

13. Other Assets

The following table summarizes the other assets as of September 30, 2020 and December 31, 2019:

	September 30, 2020		December 31, 2019
Deferred financing costs, net	$	430,578	$	353,862
Fair value of derivative instruments (Note 18)		155,457		10,911
Taxable mortgage revenue bonds, at fair value		1,486,883		1,383,237
Bond purchase commitments, at fair value (Note 19)		256,222		-
Operating lease right-of-use assets, net		1,650,360		1,673,242
Other assets		1,429,116		1,641,099
Total other assets	$	5,408,616	$	5,062,351

As of September 30, 2020 and December 31, 2019, the operating lease right-of-use assets consisted primarily of a ground lease at the 50/50 MF Property (see Note 14).

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

The following table includes details of the taxable MRB acquired during the nine months ended September 30, 2020:

Property Name

Month

Acquired

Property Location

Units

Maturity Date

Interest Rate

Principal Acquired

Ocotillo Springs - Series A-T

July

Brawley, CA

8/1/2022

4.91%⁽¹⁾

$ -⁽²⁾

⁽¹⁾	The taxable MRB has a variable interest rate equal to the 1-month LIBOR plus 3.55%, subject to a floor of 4.91%.

⁽²⁾	The Partnership has committed to provide total funding of the taxable MRB up to $7.0 million during construction and lease-up of the property on a drawdown basis. No funds have been advanced as of September 30, 2020.

14. Accounts Payable, Accrued Expenses and Other Liabilities

The following table summarizes the accounts payable, accrued expenses and other liabilities as of September 30, 2020 and December 31, 2019:

	September 30, 2020		December 31, 2019
Accounts payable	$	425,445	$	93,834
Accrued expenses		2,950,430		2,529,982
Accrued interest expense		3,037,449		2,690,076
Operating lease liabilities		2,142,308		2,138,783
Other liabilities		1,441,582		1,583,492
Total accounts payable, accrued expenses and other liabilities	$	9,997,214	$	9,036,167

On January 1, 2019, the Partnership adopted the lease guidance in Accounting Standards Codification (“ASC”) 842. The Partnership adopted ASC 842 at the required adoption date of January 1, 2019, using the transition method that allowed the Partnership to initially apply ASC 842 as of January 1, 2019 and recognize a cumulative-effect adjustment to the opening balance of partners’ capital in the period of adoption. No changes have been made to the Partnership’s condensed consolidated financial statements dated prior to the effective date related to the adoption of ASC 842.

The 50/50 MF Property has a ground lease with the University of Nebraska-Lincoln with an initial lease term expiring in March 2048. The Partnership has an option to extend the lease for an additional five-year period, which has not been factored into the calculation of the ROU asset and lease liability. Annual lease payments are $100 per year. The Partnership is also required to make monthly payments, when cash is available at The 50/50 MF Property, to the University of Nebraska-Lincoln. Payment amounts are based on The 50/50 MF Property’s revenues, subject to an annual guaranteed minimum amount. As of September 30, 2020, the minimum aggregate annual payment due under the agreement is approximately $135,000. The minimum aggregate annual payment increases 2% annually until July 31, 2034 and increases 3% annually thereafter. The 50/50 MF Property will be required to make additional payments under the agreement if its gross revenues exceed certain thresholds. The Partnership recognized expenses related to the ground lease of approximately $42,000 and $126,000 for the three and nine months ended September 30, 2020 and 2019, respectively, and are reported within “Real estate operating expenses” on the Partnership’s condensed consolidated statements of operations.

The following table summarizes future contractual payments for the Partnership’s operating leases and a reconciliation to the carrying value of operating lease liabilities as of September 30, 2020:

Remainder of 2020	$	33,785
2021		136,366
2022		139,091
2023		141,871
2024		144,706
Thereafter		4,517,274
Total		5,113,093
Less: Amount representing interest		(2,970,785	)
Total operating lease liabilities	$	2,142,308

15. Unsecured Lines of Credit

The following tables summarize the unsecured lines of credit (“LOC”) as of September 30, 2020 and December 31, 2019:

Unsecured Lines of Credit	Outstanding as of September 30, 2020		Total Commitment		Commitment Maturity	Variable / Fixed	Reset Frequency	Period End Rate
Bankers Trust non-operating	$	11,843,000	$	50,000,000	June 2022	Variable ⁽¹⁾	Monthly		2.66	%
Bankers Trust operating		-		10,000,000	June 2022	Variable ⁽¹⁾	Monthly		3.41	%
Total unsecured lines of credit	$	11,843,000	$	60,000,000

⁽¹⁾	The variable rate is indexed to LIBOR plus an applicable margin.

Unsecured Lines of Credit	Outstanding as of December 31, 2019		Total Commitment		Commitment Maturity	Variable / Fixed	Reset Frequency	Period End Rate
Bankers Trust non-operating	$	13,200,000	$	50,000,000	June 2021	Variable ⁽²⁾	Monthly		4.19	%
Bankers Trust operating		-		10,000,000	June 2021	Variable⁽²⁾	Monthly		4.94	%
Total unsecured lines of credit	$	13,200,000	$	60,000,000

⁽²⁾	The variable rate is indexed to LIBOR plus an applicable margin.

The principal amount of each acquisition advance is due on the 270th day following the advance date and may be extended for up to three additional 90-day periods by making partial repayments in accordance with the Credit Agreement. The outstanding balances of the non-operating LOC as of September 30, 2020 are due in December 2020 and March 2021, though the Partnership may extend final repayment of the amounts due in March 2021 to December 2021 by making partial repayments. The non-operating LOC contains a covenant, among others, that the Partnership’s ratio of the lender’s senior debt will not exceed 75% of the market value of the Partnership’s assets, as defined in the Credit Agreement. The Partnership was in compliance with all covenants in the Credit Agreement as of September 30, 2020.

The Partnership is required to make principal payments to reduce the operating LOC to zero for fifteen consecutive calendar days during each calendar quarter. The Partnership has fulfilled its prepayment obligation for all periods presented. In addition, the Partnership has fulfilled its fourth quarter of 2020 repayment obligation as it maintained a zero balance in the operating LOC for fifteen consecutive days during October 2020.

16. Debt Financing

The following tables summarize the Partnership’s debt financings, net of deferred financing costs, as of September 30, 2020 and December 31, 2019:

	Outstanding Debt Financings as of September 30, 2020, net		Restricted Cash		Year Acquired	Stated Maturities	Reset Frequency	Variable Rate Index	Index Based Rates	Spread/ Facility Fees	Period End Rates
TEBS Financings
Fixed - M24	$	40,134,588	$	4,000	2010	May 2027	N/A	N/A	N/A	N/A	3.05%
Variable - M31 ⁽¹⁾		78,624,164		4,999	2014	July 2024	Weekly	SIFMA	0.15%	1.38%	1.53%
Fixed - M33		30,941,969		2,606	2015	September 2030	N/A	N/A	N/A	N/A	3.24%
Fixed - M45 ⁽²⁾		216,280,562		5,000	2018	July 2034	N/A	N/A	N/A	N/A	3.82%

Secured Notes
Variable - Notes		103,135,193		78,729,063	2020	September 2025	Monthly	3-month LIBOR	0.22%	9.00%	9.22% ⁽³⁾

TOB Trusts Securitization
Mizuho Capital Markets:
Variable - TOB		1,756,362		-	2020	July 2022	Weekly	SIFMA	0.37%	0.89%	1.26%
Variable - TOB		122,881,252		-	2019	July 2023	Weekly	SIFMA	0.32% - 0.54%	1.17% - 1.67%	1.49% - 2.21%
Variable - TOB		60,477,672		-	2020	September 2023⁽⁴⁾	Weekly	OBFR	0.37%	0.89%	1.26%
Morgan Stanley:
Fixed - Term TOB		13,016,939		-	2019	May 2022	N/A	N/A	N/A	N/A	3.53%
Total Debt Financings	$	667,248,701

⁽¹⁾	Facility fees have a variable component.

⁽²⁾	The M45 TEBS has an initial interest rate of 3.82% through July 31, 2023. From August 1, 2023 through the stated maturity date, the interest rate is 4.39%. These rates are inclusive of credit enhancement fees payable to Freddie Mac.

⁽³⁾

The Partnership has entered into two total return swap transactions with the Secured Notes as the reference security and notional amounts totaling the outstanding principal on the Secured Notes. The total return swaps effectively net down the interest rate on the Secured Notes. Considering the effect of the total return swaps, the effective net interest rate is 4.25% for approximately $40.0 million of the Secured Notes and 1.00% for approximately $63.5 million of the Secured Notes as of September 30, 2020. See Note 18 for further information on the total return swaps.

⁽⁴⁾	Date represents the stated maturity date of the related liquidity and credit enhancement facilities which is the effective maturity of the TOB Trust financing.

	Outstanding Debt Financings as of December 31, 2019, net		Restricted Cash		Year Acquired	Stated Maturities	Reset Frequency	SIFMA Based Rates	Facility Fees	Period End Rates
TEBS Financings
Fixed - M24	$	40,495,442	$	204,000	2010	May 2027	N/A	N/A	N/A	3.05%
Variable - M31⁽¹⁾		79,505,180		4,999	2014	July 2024	Weekly	1.64%	1.54%	3.18%
Fixed - M33		31,367,147		2,606	2015	September 2030	N/A	N/A	N/A	3.24%
Fixed - M45 ⁽²⁾		217,603,233		5,000	2018	July 2034	N/A	N/A	N/A	3.82%

TOB & Term A/B Trusts Securitization
Deutsche Bank:
Fixed - Term TOB		8,010,000		-	2014	January 2020	N/A	N/A	N/A	4.01%
Fixed - Term A/B		5,260,756		-	2019	February 2020	N/A	N/A	N/A	4.53%
Fixed - Term A/B		38,300,456		-	2017	February 2027	N/A	N/A	N/A	4.46%
Mizuho Capital Markets:
Variable - TOB		25,680,070		-	2019	July 2020	Weekly	1.79%	1.17%	2.96%
Variable - TOB		42,207,784		-	2019	August 2020	Weekly	1.79%	1.17% - 1.66%	2.96% - 3.45%
Variable - TOB		34,703,935		-	2019	September 2020	Weekly	2.08%	1.12%	3.20%
Morgan Stanley:
Fixed - Term TOB		13,063,418		-	2019	May 2022	N/A	N/A	N/A	3.53%
Total Debt Financings	$	536,197,421

⁽¹⁾	Facility fees have a variable component.

⁽²⁾	The M45 TEBS has an initial interest rate of 3.82% through July 31, 2023. From August 1, 2023 through the stated maturity date, the interest rate is 4.39%. These rates are inclusive of credit enhancement fees payable to Freddie Mac.

The TOB, Term TOB, Term A/B and TEBS Financing arrangements are consolidated VIE’s to the Partnership (see Note 5). The Partnership is the primary beneficiary due to its rights to the underlying assets. Accordingly, the Partnership consolidates the TOB, Term TOB, Term A/B and TEBS Financings in the Partnership’s condensed consolidated financial statements. See Note 6 for information regarding the MRBs securitized within each TOB, Term TOB, Term A/B and TEBS Financing, Note 7 for information regarding the GILs securitized within each TOB Trust Financing, and Note 11 for information regarding the property loans securitized within each TOB Trust Financing. As the residual interest holder, the Partnership may be required to make certain payments or contribute certain assets to the VIEs if certain events occur. Such events include, but are not limited to, a downgrade in the investment rating of the senior securities issued by the VIEs, a ratings downgrade of the liquidity provider for the VIEs, increases in short term interest rates beyond pre-set maximums, an inability to re-market the senior securities or an inability to obtain liquidity for the senior securities. If such an event occurs in an individual VIE, the underlying collateral may be sold and, if the proceeds are not sufficient to pay the principal amount of the senior securities plus accrued interest and other trust expenses, the Partnership will be required to fund any such shortfall. If the Partnership does not fund the shortfall, the default and liquidation provisions will be invoked against the Partnership. The Partnership has never been, and does not expect in the future, to be required to reimburse the VIEs for any shortfall.

As of September 30, 2020 and December 31, 2019, the Partnership posted restricted cash as contractually required under the terms of the four TEBS Financings. The restricted cash associated with the Secured Notes is collateral posted with Mizuho according to the terms of two total return swaps that have the Secured Notes as the reference security (see Note 18). The Partnership may also be required to post collateral, typically in cash, related to the TOB Trusts with Mizuho. The amount of collateral posting required is dependent on the valuation of the underlying MRBs, GILs and property loans in relation to thresholds set by Mizuho. There was no requirement to post collateral for the TOB Trusts with Mizuho as of September 30, 2020 and December 31, 2019.

The Partnership has entered into various TOB Trust financings with Mizuho secured by MRBs, GILs, and property loans. The Mizuho TOB Trusts require that the Partnership’s residual interest in the TOB Trusts maintain a certain value in relation to the total assets in each Trust. In addition, the Master Trust Agreement with Mizuho requires the Partnership’s partners’ capital, as defined, to maintain a certain threshold and that it remains listed on the NASDAQ. If the Partnership is not in compliance with any of these covenants, a termination event of the financing facility would be triggered, which would require the Partnership to purchase a portion or all of the senior interests issued by each TOB Trust. The Partnership was in compliance with all covenants as of September 30, 2020.

The Term TOB Trust with Morgan Stanley is subject to a Trust Agreement and other related agreements that contain covenants with which the Partnership or the underlying MRB are required to comply. The underlying property must maintain certain occupancy and debt service covenants. A termination event will occur if the Partnership’s net assets, as defined, decrease by 25% in one quarter or 35% over one year. If the underlying property or the Partnership, as applicable, is out of compliance with any of these covenants, a termination event of the financing facility would be triggered which would require the Partnership to purchase a portion or all of the Class A Certificates held by Morgan Stanley. The Partnership was in compliance with all covenants as of September 30, 2020.

The Partnership’s variable rate debt financing arrangements include maximum interest rate provisions that prevent the debt service on the debt financings from exceeding the cash flows from the underlying securitized asset.

Activity in the First Nine Months of 2020

New Debt Financings:

The following is a summary of the Mizuho TOB Trust financings that were entered into during the first nine months of 2020:

TOB Trusts Securitization

TOB

Trust Financing

Stated Maturity

Reset

Frequency

Variable Rate Index

Facility Fees

Avistar at Copperfield - Series A

11,818,000

May 2021

Weekly

SIFMA

1.67%

Avistar at Wilcrest - Series A

4,479,000

May 2021

Weekly

SIFMA

1.67%

Avistar at Wood Hollow - Series A

34,007,000

May 2021

Weekly

SIFMA

1.67%

Gateway Village

2,184,000

May 2021

Weekly

SIFMA

1.67%

Lynnhaven

2,898,000

May 2021

Weekly

SIFMA

1.67%

Ocotillo Springs - Series A

1,818,000

July 2022

Weekly

SIFMA

0.89%

Oasis at Twin Lakes GIL ⁽¹⁾

11,160,000

July 2023

Weekly

SIFMA

0.89%

Scharbauer Flats Apartments GIL ⁽¹⁾

36,000,000

July 2023

Weekly

SIFMA

0.89%

Centennial Crossings GIL ⁽¹⁾

8,707,000

August 2023

Weekly

SIFMA

0.89%

Scharbauer Flats, Twin Lakes, &

Centennial Crossings GILs⁽¹⁾

55,870,000

September 2023

Weekly

OBFR

0.89%

Scharbauer Flats & Centennial

Crossings Property Loans

4,790,000

September 2023

Weekly

OBFR

0.89%

Total TOB Trust Financing

173,731,000

⁽¹⁾

Three TOB Trust financings associated with individual GILs were originated and subsequently collapsed during 2020. The three related GILs were then combined and re-securitized into a single TOB Trust financing in September 2020. The new TOB Trust financing was created to take advantage of lower interest rate spread adjustments compared to the previous TOB Trust financings. The termination of the single-GIL TOB Trust financings were treated as extinguishments for accounting purposes and the Partnership expensed approximately $364,000 of deferred financings costs.

In September 2020, ATAX TEBS Holdings, LLC, a wholly owned subsidiary of the Partnership, issued Secured Notes to Mizuho with an aggregate principal amount of $103.5 million. The Secured Notes are secured by the Partnership’s residual certificates associated with its four TEBS Financings. The Secured Notes bear interest at a variable rate equal to the 3-month LIBOR plus 9.00%, payable monthly. Interest due on the Secured Notes will be paid from receipts related to the TEBS Financing residual certificates. Future receipts of principal related to the TEBS Financing residual certificates will be used to pay down the principal of the Secured Notes. The Partnership has guaranteed the payment and performance of the responsibilities of ATAX TEBS Holdings, LLC under the Secured Notes. If ATAX TEBS Holdings, LLC defaults on its obligations under the Secured Notes and the Partnership does not cure the default, the Partnership’s TEBS Financing residual certificates and their related rights to the underlying TEBS assets will be assigned to Mizuho. If this occurs, the Partnership will cease to be the primary beneficiary of the TEBS Financing VIEs and such VIEs will no longer be consolidated in the Partnership’s condensed consolidated financial statements. Concurrent with the issuance of the Notes, the Partnership entered into two total return swap transactions with Mizuho to reduce the net interest cost related to the Secured Notes (see Note 18). Of the $103.5 million of proceeds from the Secured Notes, approximately $24.8 million was received in cash by the Partnership, approximately $1.2 million was deposited in a reserve account at U.S. Bank which will be released to the Partnership at such time as the Partnership can arrange for principal and interest payments related to the TEBS Financing residual certificates to be remitted directly to U.S. Bank, and approximately $77.5 million was deposited with Mizuho as collateral for the total return swaps.

Refinancing Activity:

In July 2020, the Partnership extended the maturity dates of all Mizuho TOB Trust financings with stated maturity dates of 2021 to July 2023. There were no additional changes to terms or fees associated with the amendments.

Redemptions:

In January 2020, the variable rate TOB Trust financings associated with the PHC Certificates were collapsed and all principal and interest were paid in full in conjunction with the Partnership’s sale of the PHC Certificates to an unrelated party (see Note 8).

In April 2020, the Partnership terminated its Master Trust Agreement and collapsed its Term TOB Trust and all Term A/B Trust financings with Deutsche Bank. As of the termination, the Partnership is no longer subject to the debt covenants in the Master Trust Agreement. All outstanding principal and interest related to the Term A/B Trust financings were paid off in full, and the Partnership paid a one-time fee of approximately $454,000 to terminate the trusts.

The following is a summary of the Deutsche Bank Term A/B and Term TOB Trust financings that were collapsed and paid off in April 2020:

Debt Financing	Debt Facility	Month	Paydown Applied
Avistar at Copperfield - Series A	Term A/B Trust	April 2020	$	8,417,739
Avistar at Wilcrest - Series A	Term A/B Trust	April 2020		3,162,435
Avistar at Wood Hollow - Series A	Term A/B Trust	April 2020		26,860,536
Gateway Village	Term A/B Trust	April 2020		2,262,000
Lynnhaven	Term A/B Trust	April 2020		3,001,500
Pro Nova 2014-1	Term TOB	April 2020		8,010,000
			$	51,714,210

Activity in the First Nine Months of 2019

New Debt Financings:

In February 2019, the Partnership entered into two Term A/B Trusts financings secured by MRBs. The following table summarizes the gross principal and terms of the Term A/B Trusts:

Term A/B Trusts Securitization	Outstanding Term A/B Trust Financing		Stated Maturity	Fixed Interest Rate
Gateway Village	$	2,262,000	February 2020		4.53	%
Lynnhaven Apartments		3,001,500	February 2020		4.53	%
Total Term A/B Trust Financing	$	5,263,500

In May 2019, the Partnership entered into a Term TOB Trust financing with Morgan Stanley secured by an MRB. The following table summarizes the gross principal and terms of the Term TOB Trust:

Term TOB Trusts Securitization

Outstanding Term TOB

Trust Financing

Stated Maturity

Fixed Interest

Rate

Village at Avalon

13,167,000

May 2022

3.53

Total Term TOB Trust Financing

13,167,000

During the third quarter of 2019, The Partnership entered into various TOB Trust financings with Mizuho secured by MRBs and PHC Certificates. The following table summarizes the gross principal and terms of the TOB Trusts:

TOB Trusts Securitization

Outstanding TOB

Trust Financing

Stated Maturity

Reset

Frequency

Variable Rate Index

Facility Fees

Rosewood Townhomes

7,715,000

July 2020

Weekly

SIFMA

1.17%

South Pointe Apartments

18,035,000

July 2020

Weekly

SIFMA

1.17%

Live 929 Apartments

31,800,000

August 2020

Weekly

SIFMA

1.66%

Montecito at Williams Ranch

6,925,000

August 2020

Weekly

SIFMA

1.17%

Vineyard Gardens

3,595,000

August 2020

Weekly

SIFMA

1.17%

PHC Trust I

20,121,000

September 2020

Weekly

SIFMA

1.12%

PHC Trust II

3,803,000

September 2020

Weekly

SIFMA

1.12%

PHC Trust III

12,062,000

September 2020

Weekly

SIFMA

1.12%

Total TOB Trust Financing

104,056,000

Refinancing Activity:

In July 2019, the Partnership refinanced the M24 TEBS Financing with Freddie Mac. The M24 TEBS Financing was converted to a fixed interest rate of 3.05%, which is inclusive of credit enhancement and servicing fees, and the stated maturity was extended to May 2027. The refinancing was treated as an extinguishment for accounting purposes and the Partnership capitalized approximately $307,000 as deferred financing costs related to the refinancing.

In July 2019, the Partnership refinanced the M33 TEBS Financing with Freddie Mac. The M33 TEBS Financing converted to a fixed interest rate of 3.24%, which is inclusive of credit enhancement and servicing fees, and the stated maturity was extended to September 2030. The refinancing was treated as an extinguishment for accounting purposes and the Partnership expensed approximately $496,000 of previously unamortized deferred financing costs associated with the M33 TEBS Financing. The Partnership capitalized

approximately $265,000 as deferred financing costs related to the refinancing. The Partnership received premium proceeds upon refinancing of approximately $435,000, which will be amortized using the effective interest method through the term of the agreement.

Redemptions:

The following debt financing facilities were collapsed and redeemed in full at prices that approximated the Partnership’s carrying value plus accrued interest:

Debt Financing	Debt Facility	Month	Paydown Applied
Live 929 Apartments	Term TOB Trust	August 2019	$	37,553,300
Montecito at Williams Ranch	Term A/B Trust	August 2019		6,921,000
Vineyard Gardens	Term A/B Trust	August 2019		3,595,000
PHC Trust I	TOB Trust	September 2019		19,755,000
PHC Trust II	TOB Trust	September 2019		3,430,000
PHC Trust III	TOB Trust	September 2019		11,000,000
			$	82,254,300

Future Maturities

The Partnership’s contractual maturities of borrowings as of September 30, 2020 for the twelve-month periods ending December 31^st for the next five years and thereafter are as follows:

Remainder of 2020	$	1,650,787
2021		6,129,456
2022		21,232,689
2023		187,223,816
2024		87,839,152
Thereafter		365,616,422
Total		669,692,322
Unamortized deferred financing costs and debt premium		(2,443,621	)
Total debt financing, net	$	667,248,701

17. Mortgages Payable and Other Secured Financing

The following tables summarize the Partnership’s mortgages payable and other secured financing, net of deferred financing costs, as of September 30, 2020 and December 31, 2019:

MF Property Mortgage Payables

Outstanding Mortgage

Payable as of

September 30, 2020, net