atax-10q_20210331.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 March 31, 2021

☐	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 March 31, 2021, the registrant had 60,690,862 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 (Loss)	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	38
Item 3	Quantitative and Qualitative Disclosures About Market Risk	56
Item 4	Controls and Procedures	58

PART II – OTHER INFORMATION
Item 1A	Risk Factors	59
Item 6	Exhibits	59
SIGNATURES		60

Forward-Looking Statements

This Quarterly Report (including, but not limited to, the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. When used, statements which are not historical in nature, including those containing words such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions, are intended to identify forward-looking statements. We have based forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. This report also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves several assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties contained in this report, and accordingly, we cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the heading “Risk Factors” in Item 1A of America First Multifamily Investors, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2020 and in this report.

These forward-looking statements are subject, but not limited, to various risks and uncertainties, including those relating to:

•

defaults on the mortgage loans securing our mortgage revenue bonds (“MRBs”) and governmental issuer loans (“GILs”);

•

the competitive environment in which we operate;

•

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

•

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 access debt and equity capital to finance our assets;

•

current maturities of our financing arrangements and our ability to renew or refinance such financing arrangements;

•

potential exercising of redemption rights by the holders of the Series A Preferred Units;

•

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

•

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

•

geographic concentration within the MRB and GIL 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 report 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)

	March 31, 2021			December 31, 2020
Assets:
Cash and cash equivalents	$	53,277,371		$	44,495,538
Restricted cash		78,263,352			78,495,048
Interest receivable, net		8,796,636			8,212,076
Mortgage revenue bonds held in trust, at fair value (Note 6)		753,176,405			768,468,644
Mortgage revenue bonds, at fair value (Note 6)		18,348,507			25,963,841
Governmental issuer loans held in trust (Note 7)		103,931,256			64,863,657
Real estate assets: (Note 8)
Land and improvements		4,875,265			4,875,265
Buildings and improvements		72,342,485			72,316,152
Real estate assets before accumulated depreciation		77,217,750			77,191,417
Accumulated depreciation		(18,827,865	)		(18,150,215	)
Net real estate assets		58,389,885			59,041,202
Investments in unconsolidated entities (Note 9)		94,664,865			106,878,570
Property loans, net of loan loss allowance (Note 10)		15,920,719			12,920,719
Other assets (Note 12)		7,091,123			5,908,584
Total Assets	$	1,191,860,119		$	1,175,247,879

Liabilities:
Accounts payable, accrued expenses and other liabilities (Note 13)	$	10,073,779		$	9,949,565
Distribution payable		6,210,420			3,686,283
Unsecured lines of credit (Note 14)		-			7,475,000
Debt financing, net (Note 15)		711,788,901			673,957,640
Mortgages payable and other secured financing, net (Note 16)		25,860,469			25,984,872
Total Liabilities		753,933,569			721,053,360

Commitments and Contingencies (Note 18)

Redeemable Series A Preferred Units, approximately $94.5 million redemption value, 9.5 million issued and outstanding, net (Note 19)		94,431,490			94,422,477

Partnersʼ Capital:
General Partner (Note 1)		772,121			934,892
Beneficial Unit Certificates ("BUCs," Note 1)		342,722,939			358,837,150
Total Partnersʼ Capital		343,495,060			359,772,042
Total Liabilities and Partnersʼ Capital	$	1,191,860,119		$	1,175,247,879

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 March 31,
	2021			2020
Revenues:
Investment income	$	12,388,241		$	11,543,423
Property revenues		1,694,524			1,952,247
Contingent interest income		-			12,043
Other interest income		304,723			228,422
Total revenues		14,387,488			13,736,135
Expenses:
Real estate operating (exclusive of items shown below)		1,007,840			1,175,374
Provision for credit loss (Note 6)		-			1,357,681
Depreciation and amortization		683,460			709,438
Interest expense		5,226,475			6,017,968
General and administrative		3,285,708			2,898,526
Total expenses		10,203,483			12,158,987
Other Income:
Gain on sale of securities		-			1,416,023
Gain on sale of investments in unconsolidated entity		2,809,106			-
Income before income taxes		6,993,111			2,993,171
Income tax expense		257			11,414
Net income		6,992,854			2,981,757
Redeemable Series A Preferred Unit distributions and accretion		(717,763	)		(717,763	)
Net income available to Partners	$	6,275,091		$	2,263,994

Net income (loss) available to Partners allocated to:
General Partner	$	736,936		$	(53,404	)
Limited Partners - BUCs		5,526,202			2,312,216
Limited Partners - Restricted units		11,953			5,182
	$	6,275,091		$	2,263,994
BUC holders' interest in net income per BUC, basic and diluted	$	0.09		$	0.04
Weighted average number of BUCs outstanding, basic		60,690,862			60,754,179
Weighted average number of BUCs outstanding, diluted		60,690,862			60,754,179

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 (LOSS)

(UNAUDITED)

	For the Three Months Ended March 31,
	2021			2020
Net income	$	6,992,854		$	2,981,757
Reversal of net unrealized gains on sale of securities		-			(1,408,804	)
Reversal of net unrealized loss on securities to provision for credit loss		-			372,169
Unrealized loss on securities		(16,298,797	)		(7,057,736	)
Unrealized loss on bond purchase commitments		(120,970	)		-
Comprehensive income (loss)	$	(9,426,913	)	$	(5,112,614	)

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, 2020	$	934,892			60,823,674	$	358,837,150		$	359,772,042		$	132,594,007
Distributions paid or accrued ($0.09 per BUC):
Regular distribution		(34,013	)		-		(3,367,301	)		(3,401,314	)		-
Distribution of Tier 2 income (Note 3)		(702,277	)		-		(2,106,829	)		(2,809,106	)		-
Net income allocable to Partners		736,936			-		5,538,155			6,275,091			-
Restricted unit compensation expense		781			-		77,333			78,114			-
Unrealized loss on securities		(162,988	)		-		(16,135,809	)		(16,298,797	)		(16,298,797	)
Unrealized loss on bond purchase commitments		(1,210	)		-		(119,760	)		(120,970	)		(120,970	)
Balance as of March 31, 2021	$	772,121		$	60,823,674	$	342,722,939		$	343,495,060		$	116,174,240

	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	)		-