Greystone Housing Impact Investors LP 10-Q

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 OR ☐ 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. 4 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. 5 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. 6 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 ) - 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 The accompanying notes are an integral part of the condensed consolidated financial statements. 7 AMERICA FIRST MULTIFAMILY INVESTORS, L.P. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Three Months Ended March 31, 2021 2020 Cash flows from operating activities: Net income $ 6,992,854 $ 2,981,757 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 683,460 709,438 Gain on sale of investment in securities - ( 1,416,023 ) Provision for credit loss - 1,357,681 Gain on sale of investment in an unconsolidated entity ( 2,809,106 ) - Contingent interest realized on investing activities - ( 12,043 ) Gain on derivatives, net of cash paid ( 5,873 ) ( 25,201 ) Restricted unit compensation expense 78,114 39,068 Bond premium/discount amortization ( 34,531 ) ( 27,923 ) Debt premium amortization ( 10,136 ) ( 10,111 ) Amortization of deferred financing costs 206,386 358,908 Deferred income tax expense & income tax payable/receivable 257 6,914 Change in preferred return receivable from unconsolidated entities, net 3,214,267 ( 1,391,572 ) Changes in operating assets and liabilities Increase in interest receivable ( 584,560 ) ( 473,070 ) Increase in other assets ( 288,363 ) ( 105,961 ) Increase in accounts payable and accrued expenses 14,585 352,242 Net cash provided by operating activities 7,457,354 2,344,104 Cash flows from investing activities: Capital expenditures ( 25,023 ) ( 86,209 ) Acquisition of mortgage revenue bonds ( 2,071,500 ) - Advances on governmental issuer loans ( 39,067,599 ) - Advances on taxable governmental issuer loans ( 1,000,000 ) - Contributions to unconsolidated entities ( 1,425,562 ) ( 10,270,291 ) Advances on property loans ( 3,000,000 ) - Principal payments received on mortgage revenue bonds 8,778,919 4,470,529 Proceeds from sale of PHC Certificates - 43,349,357 Proceeds from sale of investment in an unconsolidated entity 13,234,106 - Principal payments received on taxable mortgage revenue bonds 2,337 2,138 Principal payments received on property loans and contingent interest - 12,043 Net cash provided by (used in) investing activities ( 24,574,322 ) 37,477,567 Cash flows from financing activities: Distributions paid ( 4,395,033 ) ( 8,316,733 ) Repurchase of BUCs - ( 2,106,673 ) Proceeds from debt financing 39,594,000 - Principal payments on debt financing ( 1,317,897 ) ( 36,013,217 ) Principal payments on mortgages payable ( 124,489 ) ( 120,958 ) Principal borrowing on unsecured lines of credit 11,022,445 - Principal payments on unsecured lines of credit ( 18,497,445 ) ( 660,000 ) (Increase) Decrease in security deposit liability related to restricted cash 34,147 ( 30,549 ) Debt financing and other deferred costs ( 648,623 ) ( 720 ) Net cash provided by (used in) financing activities 25,667,105 ( 47,248,850 ) Net increase (decrease) in cash, cash equivalents and restricted cash 8,550,137 ( 7,427,179 ) Cash, cash equivalents and restricted cash at beginning of period 122,990,586 43,185,981 Cash, cash equivalents and restricted cash at end of period $ 131,540,723 $ 35,758,802 Supplemental disclosure of cash flow information: Cash paid during the period for interest $ 4,829,842 $ 4,880,193 Cash paid during the period for income taxes - 4,500 Supplemental disclosure of noncash investing and financing activities: Distributions declared but not paid for BUCs and General Partner $ 6,210,420 $ 7,604,401 Distributions declared but not paid for Series A Preferred Units 708,750 708,750 Capital expenditures financed through accounts payable 1,309 3,959 Deferred financing costs financed through accounts payable 57,688 103,300 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: March 31, 2021 March 31, 2020 Cash and cash equivalents $ 53,277,371 $ 35,158,156 Restricted cash 78,263,352 600,646 Total cash, cash equivalents and restricted cash $ 131,540,723 $ 35,758,802 The accompanying notes are an integral part of the condensed consolidated financial statements. 8 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 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. We generally refer to affordable multifamily and residential properties associated with our MRBs and GILs as “Residential 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 (Note 19). 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 (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 (“M24 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. 9 The Partnership also consolidates variable interest entities (“VIEs”) in which the Partnership is deemed to be the primary beneficiary. Investment in Governmental Issuer Loans and Taxable Governmental Issuer Loans The Partnership accounts for its investment in governmental issuer loans (“GILs”) and taxable 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 and taxable 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; • 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 and 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 the estimated fair value of a GIL or taxable GIL 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 or taxable 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. Estimates and assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Partnership to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of 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 the Partnership 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, 2020. These condensed consolidated financial statements and notes have been prepared consistently with the 2020 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 March 31, 2021, 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, 2020 was derived from the audited annual consolidated financial statements but does not contain all the footnote disclosures from the annual consolidated financial statements. 10 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, taxable GILs, property loans, 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. The Partnership has noted slight declines in occupancy and operating results at properties securing its MRBs due to the COVID-19 pandemic. However, the Partnership has yet to observe a significant decline at such properties, with the exception of the Provision Center 2014-1 and Live 929 Apartments MRBs which are further discussed in Note 6. Furthermore, the Partnership has evaluated the impacts of COVID-19 on its investments in MF Properties, properties related to its GILs, and investments in unconsolidated entities and noted no indications of impairment of such investments. 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, ASU 2016-13 is effective date for the Partnership on January 1, 2023. The Partnership will take advantage of any additional guidance that may c be issued by the FASB regarding the implementation ASU 2016-13 through the effective date. 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 has evaluated its population of instruments indexed, either directly or indirectly, to LIBOR and 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. 11 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 “Plan”) are considered participating securities. There were no dilutive BUCs for the three months ended March 31, 2021 and 2020. 5. Variable Interest Entities Consolidated Variable Interest Entities (“VIEs”) The Partnership has determined the Tender Option Bond (“TOB”), Term TOB and TEBS financings are VIEs and the Partnership is the primary beneficiary (Note 15). 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 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 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 and TEBS financings as secured debt financings on the Partnership’s condensed consolidated balance sheets. The MRBs, GILs, property loans and taxable GIL secured by the TOB, Term TOB and TEBS financings, are reported as assets on the Partnership’s condensed consolidated balance sheets (Notes 6, 7 and 10). Non-Consolidated VIEs The Partnership has variable interests in various entities in the form of MRBs, GILs, property loans, a taxable GIL 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 24 and 21 non-consolidated VIEs as of March 31, 2021 and December 31, 2020, respectively. The following table summarizes the Partnership’s variable interests in these entities and maximum exposure to loss as of March 31, 2021 and December 31, 2020: Maximum Exposure to Loss March 31, 2021 December 31, 2020 Mortgage revenue bonds $ 15,405,000 $ 20,763,500 Governmental issuer loans 103,931,256 64,863,657 Property loans 8,327,342 5,327,342 Taxable governmental issuer loan 1,000,000 - Investment in unconsolidated entities 94,664,865 106,878,570 $ 223,328,463 $ 197,833,069 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 the GILs, property loans, taxable GIL and investments in unconsolidated entities is equal to the Partnership’s carrying value. 12 6. Mortgage Revenue Bonds The Partnership’s MRBs 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 (Note 15). The Partnership had the following investments in MRBs as of March 31, 2021 and December 31, 2020: March 31, 2021 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 $ 10,038,847 $ 2,036,900 $ - $ 12,075,747 Glenview Apartments - Series A (3) CA 4,469,991 941,975 - 5,411,966 Harmony Court Bakersfield - Series A (4) CA 3,660,303 726,094 - 4,386,397 Harmony Terrace - Series A (4) CA 6,776,107 1,416,111 - 8,192,218 Harden Ranch - Series A (2) CA 6,601,343 1,397,564 - 7,998,907 Las Palmas II - Series A (4) CA 1,660,837 326,950 - 1,987,787 Montclair Apartments - Series A (3) CA 2,421,644 518,332 - 2,939,976 Montecito at Williams Ranch Apartments - Series A (6) CA 7,612,095 1,916,887 - 9,528,982 Montevista - Series A (6) CA 6,720,000 2,086,742 - 8,806,742 Ocotillo Springs - Series A (6) CA 4,095,000 164,711 - 4,259,711 San Vicente - Series A (4) CA 3,424,558 658,833 - 4,083,391 Santa Fe Apartments - Series A (3) CA 2,933,731 637,675 - 3,571,406 Seasons at Simi Valley - Series A (4) CA 4,225,061 1,076,658 - 5,301,719 Seasons Lakewood - Series A (4) CA 7,218,027 1,508,466 - 8,726,493 Seasons San Juan Capistrano - Series A (4) CA 12,152,801 2,428,465 - 14,581,266 Summerhill - Series A (4) CA 6,302,983 1,165,385 - 7,468,368 Sycamore Walk - Series A (4) CA 3,507,305 716,843 - 4,224,148 The Village at Madera - Series A (4) CA 3,027,355 614,256 - 3,641,611 Tyler Park Townhomes - Series A (2) CA 5,749,890 829,871 - 6,579,761 Vineyard Gardens - Series A (6) CA 3,961,901 977,393 - 4,939,294 Westside Village Market - Series A (2) CA 3,757,543 777,054 - 4,534,597 Brookstone (1) IL 7,364,956 1,903,297 - 9,268,253 Copper Gate Apartments (2) IN 4,955,000 572,032 - 5,527,032 Renaissance - Series A (3) LA 10,836,857 3,683,524 - 14,520,381 Live 929 Apartments (6) MD 36,218,314 - - 36,218,314 Woodlynn Village (1) MN 4,120,000 13,341 - 4,133,341 Gateway Village (6) NC 2,600,000 131,447 - 2,731,447 Greens Property - Series A (2) NC 7,802,000 557,051 - 8,359,051 Lynnhaven Apartments (6) NC 3,450,000 174,419 - 3,624,419 Silver Moon - Series A (3) NM 7,681,225 1,851,589 - 9,532,814 Village at Avalon - Series A (5) NM 16,159,797 4,151,656 - 20,311,453 Ohio Properties - Series A (1) OH 13,688,000 - - 13,688,000 Bridle Ridge (1) SC 7,190,000 71,710 - 7,261,710 Columbia Gardens (4) SC 12,856,267 2,501,126 - 15,357,393 Companion at Thornhill Apartments (4) SC 11,023,297 1,890,764 - 12,914,061 Cross Creek (1) SC 6,133,061 2,162,011 - 8,295,072 Rosewood Townhomes - Series A (6) SC 9,259,206 562,960 - 9,822,166 South Pointe Apartments - Series A (6) SC 21,551,600 1,310,337 - 22,861,937 The Palms at Premier Park Apartments (2) SC 18,562,061 2,602,480 - 21,164,541 Village at River's Edge (4) SC 9,784,362 2,030,003 - 11,814,365 Willow Run (4) SC 12,677,935 2,464,921 - 15,142,856 Arbors at Hickory Ridge (2) TN 10,872,864 2,316,451 - 13,189,315 Avistar at Copperfield - Series A (6) TX 13,782,171 2,695,680 - 16,477,851 Avistar at the Crest - Series A (2) TX 9,111,697 1,934,363 - 11,046,060 Avistar at the Oaks - Series A (2) TX 7,365,549 1,624,288 - 8,989,837 Avistar at the Parkway - Series A (3) TX 12,686,495 2,516,255 - 15,202,750 Avistar at Wilcrest - Series A (6) TX 5,223,164 923,710 - 6,146,874 Avistar at Wood Hollow - Series A (6) TX 39,659,362 7,309,397 - 46,968,759 Avistar in 09 - Series A (2) TX 6,359,867 1,348,568 - 7,708,435 Avistar on the Boulevard - Series A (2) TX 15,522,758 3,169,213 - 18,691,971 Avistar on the Hills - Series A (2) TX 5,042,621 1,133,545 - 6,176,166 Bruton Apartments (4) TX 17,639,477 4,336,133 - 21,975,610 Concord at Gulfgate - Series A (4) TX 18,750,321 4,293,867 - 23,044,188 Concord at Little York - Series A (4) TX 13,135,487 3,121,179 - 16,256,666 Concord at Williamcrest - Series A (4) TX 20,348,276 4,747,239 - 25,095,515 Crossing at 1415 - Series A (4) TX 7,312,727 1,495,203 - 8,807,930 Decatur Angle (4) TX 22,222,763 4,918,525 - 27,141,288 Esperanza at Palo Alto (4) TX 19,182,510 5,213,184 - 24,395,694 Heights at 515 - Series A (4) TX 6,694,927 1,395,575 - 8,090,502 Heritage Square - Series A (3) TX 10,548,961 1,934,414 - 12,483,375 Oaks at Georgetown - Series A (4) TX 12,108,609 2,081,022 - 14,189,631 Runnymede (1) TX 9,805,000 - - 9,805,000 Southpark (1) TX 11,480,404 1,735,296 - 13,215,700 15 West Apartments (4) WA 9,586,894 2,701,301 - 12,288,195 Mortgage revenue bonds held in trust $ 638,674,164 $ 114,502,241 $ - $ 753,176,405 (1) MRBs owned by ATAX TEBS I, LLC (M24 TEBS), Note 15 ( 2 ) MRBs owned by ATAX TEBS II, LLC (M31 TEBS), Note 15 ( 3 ) MRBs owned by ATAX TEBS III, LLC (M33 TEBS), Note 15 ( 4 ) MRBs owned by ATAX TEBS IV, LLC (M45 TEBS), Note 15 ( 5 ) MRB held by Morgan Stanley in a debt financing transaction, Note 15 ( 6 ) MRBs held by Mizuho Capital Markets, LLC in a debt financing transaction, Note 15 13 March 31, 2021 Description of Mortgage Revenue Bonds held by the Partnership State Cost Adjusted for Paydowns Cumulative Unrealized Gain Cumulative Unrealized Loss Estimated Fair Value Solano Vista - Series A CA $ 2,662,206 $ 795,575 $ - $ 3,457,781 Greens Property - Series B NC 924,419 91,098 - 1,015,517 Ohio Properties - Series B OH 3,480,770 - - 3,480,770 Rosewood Townhomes - Series B SC 469,781 - - 469,781 South Pointe Apartments - Series B SC 1,099,487 - - 1,099,487 Provision Center 2014-1 TN 6,160,689 - - 6,160,689 Avistar at the Crest - Series B TX 734,678 120,209 - 854,887 Avistar at the Oaks - Series B TX 537,812 86,978 - 624,790 Avistar at the Parkway - Series B TX 123,883 40,662 - 164,545 Avistar in 09 - Series B TX 443,646 71,749 - 515,395 Avistar on the Boulevard - Series B TX 436,548 68,317 - 504,865 Mortgage revenue bonds held by the Partnership $ 17,073,919 $ 1,274,588 $ - $ 18,348,507 14 December 31, 2020 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 (4) CA $ 10,061,161 $ 2,487,317 $ - $ 12,548,478 Glenview Apartments - Series A (3) CA 4,483,154 1,010,425 - 5,493,579 Harmony Court Bakersfield - Series A (4) CA 3,668,439 889,216 - 4,557,655 Harmony Terrace - Series A (4) CA 6,791,096 1,724,350 - 8,515,446 Harden Ranch - Series A (2) CA 6,621,823 1,606,690 - 8,228,513 Las Palmas II - Series A (4) CA 1,664,566 400,431 - 2,064,997 Montclair Apartments - Series A (3) CA 2,428,775 572,671 - 3,001,446 Montecito at Williams Ranch Apartments - Series A (6) CA 7,626,287 2,350,276 - 9,976,563 Montevista - Series A (6) CA 6,720,000 2,404,771 - 9,124,771 Ocotillo Springs - Series A (6) CA 2,023,500 215,633 - 2,239,133 San Vicente - Series A (4) CA 3,432,246 809,327 - 4,241,573 Santa Fe Apartments - Series A (3) CA 2,942,370 724,678 - 3,667,048 Seasons at Simi Valley - Series A (4) CA 4,236,876 1,180,122 - 5,416,998 Seasons Lakewood - Series A (4) CA 7,233,993 1,836,808 - 9,070,801 Seasons San Juan Capistrano - Series A (4) CA 12,179,682 2,973,846 - 15,153,528 Summerhill - Series A (4) CA 6,316,993 1,470,689 - 7,787,682 Sycamore Walk - Series A (4) CA 3,517,919 888,485 - 4,406,404 The Village at Madera - Series A (4) CA 3,034,084 735,450 - 3,769,534 Tyler Park Townhomes - Series A (2) CA 5,767,938 939,214 - 6,707,152 Vineyard Gardens - Series A (6) CA 3,969,173 1,226,058 - 5,195,231 Westside Village Market - Series A (2) CA 3,769,337 859,860 - 4,629,197 Brookstone (1) IL 7,374,252 2,201,663 - 9,575,915 Copper Gate Apartments (2) IN 4,955,000 641,581 - 5,596,581 Renaissance - Series A (3) LA 10,870,681 4,293,328 - 15,164,009 Live 929 Apartments (6) MD 36,234,756 - - 36,234,756 Woodlynn Village (1) MN 4,120,000 56,458 - 4,176,458 Gateway Village (6) NC 2,600,000 136,612 - 2,736,612 Greens Property - Series A (2) NC 7,829,000 663,781 - 8,492,781 Lynnhaven Apartments (6) NC 3,450,000 178,960 - 3,628,960 Silver Moon - Series A (3) NM 7,697,891 1,995,694 - 9,693,585 Village at Avalon - Series A (5) NM 16,189,074 4,879,623 - 21,068,697 Ohio Properties - Series A (1) OH 13,724,000 61,243 - 13,785,243 Bridle Ridge (1) SC 7,235,000 153,657 - 7,388,657 Columbia Gardens (4) SC 12,898,904 2,689,886 - 15,588,790 Companion at Thornhill Apartments (4) SC 11,055,254 2,208,446 - 13,263,700 Cross Creek (1) SC 6,136,261 2,277,289 - 8,413,550 Rosewood Townhomes - Series A (6) SC 9,259,206 578,247 - 9,837,453 South Pointe Apartments - Series A (6) SC 21,551,600 1,345,919 - 22,897,519 The Palms at Premier Park Apartments (2) SC 18,619,081 2,906,879 - 21,525,960 Village at River's Edge (4) SC 9,802,479 1,353,745 - 11,156,224 Willow Run (4) SC 12,720,560 2,650,995 - 15,371,555 Arbors at Hickory Ridge (2) TN 10,910,733 2,704,295 - 13,615,028 Avistar at Copperfield - Series A (6) TX 13,815,817 3,189,896 - 17,005,713 Avistar at the Crest - Series A (2) TX 9,140,656 2,376,580 - 11,517,236 Avistar at the Oaks - Series A (2) TX 7,388,262 1,854,785 - 9,243,047 Avistar at the Parkway - Series A (3) TX 12,721,014 2,790,208 - 15,511,222 Avistar at Wilcrest - Series A (6) TX 5,235,915 1,084,347 - 6,320,262 Avistar at Wood Hollow - Series A (6) TX 39,756,184 8,703,609 - 48,459,793 Avistar in 09 - Series A (2) TX 6,379,479 1,601,535 - 7,981,014 Avistar on the Boulevard - Series A (2) TX 15,572,093 3,779,139 - 19,351,232 Avistar on the Hills - Series A (2) TX 5,058,171 1,292,513 - 6,350,684 Bruton Apartments (4) TX 17,674,167 3,792,253 - 21,466,420 Concord at Gulfgate - Series A (4) TX 18,796,773 4,888,537 - 23,685,310 Concord at Little York - Series A (4) TX 13,168,029 3,543,909 - 16,711,938 Concord at Williamcrest - Series A (4) TX 20,398,687 5,397,326 - 25,796,013 Crossing at 1415 - Series A (4) TX 7,331,821 1,810,458 - 9,142,279 Decatur Angle (4) TX 22,270,729 5,600,721 - 27,871,450 Esperanza at Palo Alto (4) TX 19,218,417 5,955,488 - 25,173,905 Heights at 515 - Series A (4) TX 6,712,409 1,600,836 - 8,313,245 Heritage Square - Series A (3) TX 10,579,057 2,095,871 - 12,674,928 Oaks at Georgetown - Series A (4) TX 12,135,392 2,597,201 - 14,732,593 Runnymede (1) TX 9,805,000 105,634 - 9,910,634 Southpark (1) TX 11,462,172 1,917,286 - 13,379,458 15 West Apartments (4) WA 9,604,680 3,257,826 - 12,862,506 Mortgage revenue bonds held in trust 637,948,068 130,520,576 - 768,468,644 (1) MRBs owned by ATAX TEBS I, LLC (M24 TEBS), Note 15 ( 2 ) MRBs owned by ATAX TEBS II, LLC (M31 TEBS), Note 15 ( 3 ) MRBs owned by ATAX TEBS III, LLC (M33 TEBS), Note 15 ( 4 ) MRBs owned by ATAX TEBS IV, LLC (M45 TEBS), Note 15 ( 5 ) MRB held by Morgan Stanley in a debt financing transaction Note 15 ( 6 ) MRB held by Mizuho Capital Markets, LLC in a debt financing transaction, Note 15 15 December 31, 2020 Description of Mortgage Revenue Bonds held by the Partnership State Cost Adjusted for Paydowns Cumulative Unrealized Gain Cumulative Unrealized Loss Estimated Fair Value Solano Vista - Series A CA $ 2,665,000 $ 891,612 $ - $ 3,556,612 Greens Property - Series B NC 925,607 107,347 - 1,032,954 Arby Road Apartments - Series A NV 7,385,000 15,059 - 7,400,059 Ohio Properties - Series B OH 3,485,690 13,578 - 3,499,268 Rosewood Townhomes - Series B SC 469,781 2,549 - 472,330 South Pointe Apartments - Series B SC 1,099,487 5,967 - 1,105,454 Provision Center 2014-1 TN 6,161,954 - - 6,161,954 Avistar at the Crest - Series B TX 735,974 144,746 - 880,720 Avistar at the Oaks - Series B TX 538,723 100,668 - 639,391 Avistar at the Parkway - Series B TX 123,973 43,650 - 167,623 Avistar in 09 - Series B TX 444,398 83,042 - 527,440 Avistar on the Boulevard - Series B TX 437,318 82,718 - 520,036 Mortgage revenue bonds held by the Partnership $ 24,472,905 $ 1,490,936 $ - $ 25,963,841 See Note 22 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 (loss) 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 MRBs. During the three months ended March 31, 2020, the Partnership recognized a $ 1.4 million provision for credit loss related to the Provision Center 2014-1 MRB in its condensed consolidated statements of operations. The credit loss related to the Provision Center 2014-1 MRB was primarily driven by debt service shortfalls by the underlying commercial property. The borrower of the Provision Center 2014-1 MRB filed for bankruptcy in December 2020. MRB Activity in the First Three Months of 2021 Acquisitions: There were no MRBs acquired during the three months ended March 31, 2021. Redemptions: The following MRBs were redeemed at a price that approximated the Partnership’s carrying value plus accrued interest during the three months ended March 31, 2021: Property Name Month Redeemed Property Location Units Original Maturity Date Interest Rate Principal Outstanding at Date of Redemption Arby Road Apartments - Series A (1) March Las Vegas, NV 180 10/1/2027 5.35 % $ 1,600,000 Arby Road Apartments - Series A (1) March Las Vegas, NV 180 4/1/2041 5.50 % 5,785,000 $ 7,385,000 (1) Both MRBs are part of the same series but had different interest rates and maturity dates. MRB Activity in the First Three Months of 2020 Acquisitions: There were no MRBs acquired during the three months ended March 31, 2020. 16 Redemptions: The following MRB was redeemed at a price that approximated the Partnership’s carrying value plus accrued interest during the three months ended March 31, 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 The following table summarizes the changes in the Partnership’s allowance for credit losses for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 2020 Balance, beginning of period $ 7,319,000 $ - Provision for credit loss - 1,358,000 Balance, end of period (1) $ 7,319,000 $ 1,358,000 (1) The allowance for credit losses as of March 31, 2021 is related to the Provision Center 2014-1 MRB and the Live 929 Apartments MRB . 7. Governmental Issuer Loans Governmental issuer loans (“GILs”) owned by the Partnership are issued by state or local 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 government, agency or authority and no government, agency or authority is liable for them, nor is the taxing power of any 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 (Note 10) or taxable GIL (Note 12) also owned by the Partnership. Affiliates of the borrower have guaranteed limited-to-full payment of principal and interest on the GILs. The GILs are held in trust in connection with TOB Trust financings (Note 15). 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 March 31, 2021 and December 31, 2020: As of March 31, 2021 Property Name Month Acquired Property Location Units Maturity Date (2) Variable Interest Rate Current Interest Rate Amortized Cost Maximum Remaining Commitment Scharbauer Flats Apartments (1) June 2020 Midland, TX 300 1/1/2023 SIFMA + 3.10% 3.15 % $ 40,000,000 $ - Oasis at Twin Lakes (1) July 2020 Roseville, MN 228 8/1/2023 SIFMA + 3.25% (3),(4) 3.75 % 24,733,130 9,266,870 Centennial Crossings (1) August 2020 Centennial, CO 209 9/1/2023 SIFMA + 2.75% (4) 3.25 % 15,182,744 17,897,256 Legacy Commons at Signal Hills (1) January 2021 St. Paul, MN 247 2/1/2024 SOFR + 3.07% (4) 3.57 % 9,917,887 24,702,113 Hilltop at Signal Hills (1) January 2021 St. Paul, MN 146 8/1/2023 SOFR + 3.07% (4) 3.57 % 4,075,050 20,374,950 Hope on Avalon January 2021 Los Angeles, CA 88 2/1/2023 SIFMA + 3.75% (4) 4.60 % 6,331,200 17,058,800 Hope on Broadway January 2021 Los Angeles, CA 49 2/1/2023 SIFMA + 3.75% (4) 4.60 % 3,691,245 8,414,378 $ 103,931,256 $ 97,714,367 (1) An affiliate of the Partnership has forward committed to purchase the GIL at maturity if the property has reached stabilization and other conditions are met (Note 21). (2) The borrower may elect to extend the maturity date to for a period ranging between six and twelve months upon meeting certain conditions, including payment of a non-refundable extension fee. (3) The variable rate decreases to SIFMA plus 2.25 % upon completion of c onstruction. (4) The variable index interest rate component is subject to a floor. 17 As of December 31, 2020 Property Name Month Acquired Property Location Units Maturity Date (2) Variable Interest Rate Current Interest Rate Amortized Cost Scharbauer Flats Apartments (1) June 2020 Midland, TX 300 1/1/2023 SIFMA + 3.10% 3.19 % $ 40,000,000 Oasis at Twin Lakes (1) July 2020 Roseville, MN 228 8/1/2023 SIFMA + 3.25% (3),(4) 3.75 % 14,403,000 Centennial Crossings (1) August 2020 Centennial, CO 209 9/1/2023 SIFMA + 2.75% (4) 3.25 % 10,460,657 $ 64,863,657 (1) 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 (Note 21). (2) The borrower may elect to extend the maturity date to for a period ranging between six and twelve 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 variable index interest rate component is subject to a floor. GIL Activity in the First Three Months of 2021 Acquisitions: During January 2021, the Partnership entered into multiple GIL commitments to provide construction financing for the underlying property on a draw-down basis as summarized below. See above tables for additional information associated with the GIL commitments. • $ 34.6 million commitment related to Legacy Commons at Signal Hills ; • $ 24.5 million commitment related to Hilltop at Signal Hills ; • $ 23.4 million commitment related to Hope on Avalon; • $ 12.1 million commitment related to Hope on Broadway . 8 . Real Estate Assets The following tables summarize information regarding the Partnership’s real estate assets as of March 31, 2021 and December 31, 2020: Real Estate Assets as of March 31, 2021 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 $ 39,399,529 $ 42,598,797 The 50/50 MF Property Lincoln, NE 475 - 32,942,956 32,942,956 Land held for development (1) 1,675,997 - 1,675,997 $ 77,217,750 Less accumulated depreciation ( 18,827,865 ) Net real estate assets $ 58,389,885 (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, 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 $ 39,375,298 $ 42,574,566 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 $ 77,191,417 Less accumulated depreciation ( 18,150,215 ) Net real estate assets $ 59,041,202 ( 1 ) 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 Three Months of 2021 18 As of March 31, 2021, the land held for development in Gardner, KS was listed for sale. 9 . 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 through a date approximately 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 March 31, 2021 and December 31, 2020 and remaining equity commitment amounts as of March 31, 2021: Property Name Location Units Month Commitment Executed Construction Completion Date Carrying Value as of March 31, 2021 Carrying Value as of December 31, 2020 Maximum Remaining Equity Commitment as of March 31, 2021 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 10,570,000 - Vantage at Germantown Germantown, TN 288 June 2018 March 2020 - 12,425,000 - Vantage at Murfreesboro Murfreesboro, TN 288 September 2018 October 2020 12,390,012 14,640,000 - Vantage at Coventry Omaha, NE 294 September 2018 February 2021 9,007,435 9,007,435 - Vantage at Conroe Conroe, TX 288 April 2019 January 2021 10,669,242 10,406,895 - Vantage at O'Connor San Antonio, TX 288 October 2019 N/A 8,453,760 8,245,890 - Vantage at Westover Hills San Antonio, TX 288 January 2020 N/A 8,223,758 8,021,544 - Vantage at Tomball Tomball, TX 288 August 2020 N/A 10,964,487 9,280,134 - Vantage at Hutto Hutto, TX 288 November 2020 N/A 3,243,428 3,163,676 7,359,952 Vantage at San Marcos San Marcos, TX 288 November 2020 N/A 1,006,442 981,695 8,943,914 3,468 $ 94,664,865 $ 106,878,570 $ 16,303,866 Activity in the First Three Months of 2021 In March 2021, Vantage at Germantown sold substantially all assets to an unrelated third party and ceased operations. The Partnership received cash of approximately $ 16.1 million upon sale. The Partnership recognized approximately $ 862,000 of “Investment income” and approximately $ 2.8 million as “Gain on sale of investment in an unconsolidated entity” associated with the sale. Activity in the First Three 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. The following table provides combined summary financial information for the Partnership’s investments in unconsolidated entities for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 2020 Property Revenues $ 5,482,870 $ 2,483,605 Gain on sale of property $ 8,967,247 $ - Net income (loss) $ 6,931,134 $ ( 2,519,165 ) 19 10. Property Loans, Net of Loan Loss Allowances The following tables summarize the Partnership’s property loans, net of loan loss allowances, as of March 31, 2021 and December 31, 2020: March 31, 2021 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 Hilltop at Signal Hills (1) 1,000,000 - 1,000,000 Legacy Commons at Signal Hills (1) 1,000,000 - 1,000,000 Live 929 Apartments 911,232 ( 911,232 ) - Oasis at Twin Lakes (1) 1,000,000 - 1,000,000 Ohio Properties 2,390,446 - 2,390,446 Scharbauer Flats Apartments (1) 2,309,613 - 2,309,613 Total $ 24,225,765 $ ( 8,305,046 ) $ 15,920,719 (1) The p roperty loan is held in trust in connection with a TOB financing (Note 15). December 31, 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 911,232 ( 911,232 ) - Ohio Properties 2,390,446 - 2,390,446 Scharbauer Flats Apartments (1) 2,309,613 - 2,309,613 Total $ 21,225,765 $ ( 8,305,046 ) $ 12,920,719 (1) The p roperty loan is held in trust in connection with a TOB financing (Note 15). During the three months ended March 31, 2021 and 2020, the interest to be earned on the Live 929 Apartments and Cross Creek property loans were in nonaccrual status. The discounted cash flow method used by management to establish the net realizable value of these property loans determined the collection of the interest accrued was not probable. In addition, for the three months ended March 31, 2021 and 2020, 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 Three Months of 2021 Concurrent with the acquisition of GILs (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 properties . Affiliates of the borrower have guaranteed limited-to-full payment of principal and accrued interest on the property loans. The following is a summary of the property loans commitments entered into during the three months ended March 31, 2021 : Property Name Date Committed Maturity Date (1) Outstanding Balance Legacy Commons at Signal Hills January 2021 2/1/2024 $ 1,000,000 Hilltop at Signal Hills January 2021 8/1/2023 1,000,000 $ 2,000,000 (1) The borrower has the option to extend the maturity date up to six months. 20 In March 2021, the Partnership amended the secured property loan with Live 929 Apartments to increase the total available loan amount to $ 1.5 million from $ 1.0 million. The property loan is subordinate to the MRBs associated with the property. The following table summarizes the Partnership’s outstanding property loan commitments as of March 31, 2021: Maximum Remaining Commitment Centennial Crossings 21,232,271 Hilltop at Signal Hills 20,197,939 Legacy Commons at Signal Hills 31,233,972 Oasis at Twin Lakes 26,704,180 Scharbauer Flats Apartments 21,850,387 Total $ 121,218,749 11. 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 months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 2020 Current income tax expense $ 16,485 $ 42,335 Deferred income tax benefit ( 16,228 ) ( 30,921 ) Total income tax expense $ 257 $ 11,414 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 March 31, 2021 and December 31, 2020. 12. Other Assets The following table summarizes the other assets as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Deferred financing costs, net $ 455,954 $ 390,649 Fair value of derivative instruments (Note 17) 327,376 321,503 Taxable mortgage revenue bonds, at fair value 1,443,988 1,510,437 Taxable governmental issuer loan held in trust 1,000,000 - Bond purchase commitments, at fair value (Note 18) 310,909 431,879 Operating lease right-of-use assets, net 1,641,462 1,648,742 Other assets 1,911,434 1,605,374 Total other assets $ 7,091,123 $ 5,908,584 As of March 31, 2021 and December 31, 2020, the operating lease right-of-use assets consisted primarily of a ground lease at the 50/50 MF Property (Note 13). See Note 22 for a description of the methodology and significant assumptions for determining the fair value of derivative instruments, taxable MRBs and bond purchase commitments. Unrealized gains or losses on derivative instruments are reported as “Interest expense” on the Partnership’s condensed consolidated statements of operations. Unrealized gain or losses on taxable MRBs and bond purchase commitments are recorded in the Partnership’s condensed consolidated statements of comprehensive income (loss) 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. 21 Concurrent with the acquisition of the Hope on Avalon GIL (Note 7), the Partnership entered into a taxable GIL to provide construction financing for the underlying property on a draw-down basis. The GIL and taxable GIL are on parity and share a first mortgage lien position on all real and personal property associated with the underlying property. The taxable GIL is held in trust in connection with a TOB Trust financing (Note 15). The following table includes details of the taxable GIL, and the remaining funding commitment, that was entered into during the three months ended March 31, 2021: Property Name Date Committed Maturity Date Outstanding Balance Maximum Remaining Commitment Hope on Avalon January 2021 2/1/2023 (1) $ 1,000,000 $ 9,573,000 (1) The borrower ha s the option to extend the maturity up to six months upon payment of a non-refundable extension fee. 13. Accounts Payable, Accrued Expenses and Other Liabilities The following table summarizes the accounts payable, accrued expenses and other liabilities as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Accounts payable $ 109,503 $ 94,674 Accrued expenses 2,626,800 2,755,010 Accrued interest expense 3,630,945 3,433,247 Operating lease liabilities 2,150,033 2,149,001 Other liabilities 1,556,498 1,517,633 Total accounts payable, accrued expenses and other liabilities $ 10,073,779 $ 9,949,565 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 March 31, 2021, 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 for the three months ended March 31, 2021 and 2020, 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 March 31, 2021: Remainder of 2021 $ 104,102 2022 141,119 2023 143,561 2024 144,706 2025 147,598 Thereafter 4,369,676 Total 5,050,762 Less: Amount representing interest ( 2,900,729 ) Total operating lease liabilities $ 2,150,033 14. Unsecured Lines of Credit The following tables summarize the unsecured lines of credit (“LOC”) as of March 31, 2021 and December 31, 2020: Unsecured Lines of Credit Outstanding as of March 31, 2021 Total Commitment Commitment Maturity Variable / Fixed Reset Frequency Period End Rate Bankers Trust non-operating $ - $ 50,000,000 June 2022 Variable (1) Monthly 2.61 % Bankers Trust operating - 10,000,000 June 2022 Variable (1) Monthly 3.36 % Total unsecured lines of credit $ - $ 60,000,000 (1) The variable rate is indexed to LIBOR plus an applicable margin. 22 Unsecured Lines of Credit Outstanding as of December 31, 2020 Total Commitment Commitment Maturity Variable / Fixed Reset Frequency Period End Rate Bankers Trust non-operating $ 7,475,000 $ 50,000,000 June 2022 Variable (1) Monthly 2.65 % Bankers Trust operating - 10,000,000 June 2022 Variable (1) Monthly 3.40 % Total unsecured lines of credit $ 7,475,000 $ 60,000,000 ( 1 ) The variable rate is indexed to LIBOR plus an applicable margin. The principal amount of each acquisition advance from the non-operating LOC 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 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 as of March 31, 2021. 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 second quarter of 2021 repayment obligation as it maintained a zero balance in the operating LOC for fifteen consecutive days during April 2021. 15. Debt Financing The following tables summarize the Partnership’s debt financings, net of deferred financing costs, as of March 31, 2021 and December 31, 2020: Outstanding Debt Financings as of March 31, 2021, 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 $ 39,710,422 $ 4,000 2010 May 2027 N/A N/A N/A N/A 3.05 % Variable - M31 (1) 77,965,698 4,999 2014 July 2024 Weekly SIFMA 0.08 % 1.36 % 1.44 % Fixed - M33 30,648,101 2,606 2015 September 2030 N/A N/A N/A N/A 3.24 % Fixed - M45 (2) 215,362,292 5,000 2018 July 2034 N/A N/A N/A N/A 3.82 % Secured Notes Variable - Notes 103,016,551 77,530,126 2020 September 2025 Monthly 3-month LIBOR 0.18 % 9.00 % 9.18 % (3) TOB Trusts Securitization Mizuho Capital Markets: Variable - TOB 3,635,973 - 2020 July 2022 Weekly SIFMA 0.25 % 0.89 % 1.14 % Variable - TOB 7,873,144 - 2021 February 2023 Weekly SIFMA 0.25 % 1.42 % 1.67 % Variable - TOB 122,615,475 - 2019 July 2023 Weekly SIFMA 0.25% - 0.30% 1.17% - 1.67% 1.42% - 1.97% Variable - TOB 76,533,047 - 2020 September 2023 Weekly OBFR 0.32 % 0.89 % 1.21 % Variable - TOB 5,680,127 - 2020 December 2023 Weekly SIFMA 0.25 % 1.27 % 1.52 % Variable - TOB 15,761,909 - 2021 January 2024 Weekly OBFR 0.32 % 0.89 % 1.21 % Morgan Stanley: Fixed - Term TOB 12,986,162 - 2019 May 2022 N/A N/A N/A N/A 3.53 % Total Debt Financings $ 711,788,901 (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 $ 39.9 million of the Secured Notes and 1.00 % for approximately $ 63.5 million of the Secured Notes as of March 31, 2021. See Note 17 for further information on the total return swaps. 23 Outstanding Debt Financings as of December 31, 2020 Restricted Cash Year Acquired Stated Maturities Reset Frequency Variable Rate Index Index Based Rates Spread/ Facility Fees Period End Rates TEBS Financings Fixed - M24 $ 39,825,019 $ 238,760 2010 May 2027 N/A N/A N/A N/A 3.05 % Variable - M31 (1) 78,272,018 4,999 2014 July 2024 Weekly SIFMA 0.12 % 1.34 % 1.46 % Fixed - M33 30,796,097 2,606 2015 September 2030 N/A N/A N/A N/A 3.24 % Fixed - M45 (2) 215,825,022 5,000 2018 July 2034 N/A N/A N/A N/A 3.82 % Secured Notes Variable - Notes 103,086,756 77,500,000 2020 September 2025 Monthly 3-month LIBOR 0.22 % 9.00 % 9.22 % (3) TOB Trusts Securitization Mizuho Capital Markets: Variable - TOB 1,765,167 - 2020 July 2022 Weekly SIFMA 0.29 % 0.89 % 1.18 % Variable - TOB 122,724,862 - 2019 July 2023 Weekly SIFMA 0.29% - 0.39% 1.17% - 1.67% 1.46% - 2.06% Variable - TOB 62,992,845 - 2020 September 2023 Weekly OBFR 0.33 % 0.89 % 1.22 % Variable - TOB 5,668,324 - 2020 December 2023 Weekly SIFMA 0.29 % 1.27 % 1.56 % Morgan Stanley: Fixed - Term TOB 13,001,530 - 2019 May 2022 N/A N/A N/A N/A 3.53 % Total Debt Financings $ 673,957,640 (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 December 31, 2020. See Note 17 for further information on the total return swaps. The TOB, Term TOB and TEBS financing arrangements are consolidated VIE’s to the Partnership (Note 5). The Partnership is the primary beneficiary due to its rights to the underlying assets. Accordingly, the Partnership consolidates the TOB, Term TOB 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 and TEBS financing, Note 7 for information regarding the GILs securitized within each TOB Trust financing, Note 10 for information regarding the property loans securitized within each TOB Trust financing and Note 12 for information regarding the taxable GIL securitized within a 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 March 31, 2021 and December 31, 2020, 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 (Note 17). 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 March 31, 2021 and December 31, 2020. The Partnership has entered into various TOB Trust financings with Mizuho secured by MRBs, GILs, property loans and a taxable GIL. 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 the Partnership 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 these covenants as of March 31, 2021. 24 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 March 31, 2021. 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 assets. Activity in the First Three Months of 2021 New Debt Financings: The following is a summary of the Mizuho TOB Trust financings that were entered into during the three months ended March 31, 2021: TOB Trusts Securitization Initial TOB Trust Financing Stated Maturity Reset Frequency Variable Rate Index Facility Fees TOB Trust 2021-XF2926 (1) $ 16,190,000 January 2024 Weekly OBFR 0.89 % Hope on Avalon GIL 5,064,000 February 2023 Weekly SIFMA 1.42 % Hope on Broadway GIL 2,953,000 February 2023 Weekly SIFMA 1.42 % Total TOB Trust Financings $ 24,207,000 (1) The TOB Trust is securitized by the Legacy Commons at Signal Hills GIL and property loan, Hilltop at Signal Hills GIL and property loan, Oasis at Twin Lakes property loan and Hope on Avalon taxable GIL. Activity in the First Three Months of 2020 In January 2020, the Partnership extended the maturity date of the Term TOB Trust financing related to Provision Center 2014-1 from January 2020 to May 2020 . The Term TOB Trust financing was subsequently collapsed in April 2020 . In January 2020, the variable rate TOB Trust financings associated with the PHC Certificates were collapsed and all principal and interest was paid in full in conjunction with the Partnership’s sale of the PHC Certificates to an unrelated party. In February 2020, the Partnership extended the maturity dates of the Term A/B Trust financings related to Gateway Village and Lynnhaven Apartments from February 2020 to February 2021 . The Term A/B Trust financings were subsequently collapsed in April 2020 . Future Maturities The Partnership’s contractual maturities of borrowings as of March 31, 2021 for the twelve-month periods ending December 31 st for the next five years and thereafter are as follows: Remainder of 2021 $ 4,456,041 2022 23,310,689 2023 217,166,816 2024 104,029,152 2025 11,363,784 Thereafter 354,282,763 Total 714,609,245 Unamortized deferred financing costs and debt premium ( 2,820,344 ) Total debt financing, net $ 711,788,901 25 16. 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 March 31, 2021 and December 31, 2020: MF Property Mortgage Payables Outstanding Mortgage Payable as of March 31, 2021, net Outstanding Mortgage Payable as of December 31, 2020, net Year Acquired or Refinanced Stated Maturity Variable / Fixed Period End Rate The 50/50 MF Property--TIF Loan $ 2,521,369 $ 2,521,308 2020 March 2025 Fixed 4.40 % The 50/50 MF Property--Mortgage 23,339,100 23,463,564 2020 April 2027 Fixed 4.35 % Total Mortgage Payable\Weighted Average Period End Rate $ 25,860,469 $ 25,984,872 4.36 % Activity in the First Three Months of 2020 I n February 2020, the Partnership refinanced The 50/50 MF Property Mortgage loan with its existing lender. The Mortgage loan maturity date was extended seven years to April 2027 , and the interest rate decreased to a fixed interest rate of 4.35 %. In February 2020, the Partnership refinanced The 50/50 MF Property TIF loan with its existing lender. The TIF loan maturity date was extended by five years to March 2025 , and the interest rate decreased to 4.40 %. Future Maturities The Partnership’s contractual maturities of borrowings as of March 31, 2021 for the twelve-month periods ending December 31 st for the next five years and thereafter are as follows: Remainder of 2021 $ 710,641 2022 869,599 2023 908,564 2024 946,558 2025 1,782,213 Thereafter 20,644,450 Total 25,862,025 Unamortized deferred financing costs ( 1,556 ) Total mortgages payable and other secured financings, net $ 25,860,469 17. Derivative Financial Instruments The following table summarizes the terms of the Partnership’s total return swaps as of March 31, 2021 and December 31, 2020: Purchase Date Notional Amount Effective Date Termination Date Period End Variable Rate Paid Period End Variable Rate Received Variable Rate Index Counterparty Fair Value as of March 31, 2021 Sept 2020 39,881,661 Sept 2020 Sept 2025 4.25% (1) 9.18% (3) 3-month LIBOR Mizuho Capital Markets $ 77,280 Sept 2020 63,500,000 Sept 2020 Mar 2022 1.00% (2) 9.18% (3) 3-month LIBOR Mizuho Capital Markets 214,768 $ 292,048 (1) Variable rate equal to 3-month LIBOR + 3.75 %, subject to a floor of 4.25 %. (2) Variable rate equal to 3-month LIBOR + 0.50 %, subject to a floor of 1.00 %. (3) Variable rate equal to 3-month LIBOR + 9.00 %. 26 Purchase Date Notional Amount Effective Date Termination Date Period End Variable Rate Paid Period End Variable Rate Received Variable Rate Index Counterparty Fair Value as of December 31, 2020 Sept 2020 39,970,485 Sept 2020 Sept 2025 4.25% (1) 9.22% (3) 3-month LIBOR Mizuho Capital Markets $ 77,995 Sept 2020 63,500,000 Sept 2020 Mar 2022 1.00% (2) 9.22% (3) 3-month LIBOR Mizuho Capital Markets 215,631 $ 293,626 (1) Variable rate equal to 3-month LIBOR + 3.75 %, subject to a floor of 4.25 %. (2) Variable rate equal to 3-month LIBOR + 0.50 %, subject to a floor of 1.00 %. (3) Variable rate equal to 3-month LIBOR + 9.00 %. Each of the total return swaps have the Partnership’s Secured Notes with Mizuho as the specified reference security (Note 15). The combined notional amount of the total return swaps is $ 103.4 million, which is the same as the principal balance of the Secured Notes. The rate received on each total return swap is equal to the interest rate on the Secured Notes such that they offset one another, resulting in a net interest cost equal to the rate paid on each total return swap. Under the total return swaps, the Partnership is liable for any decline in the value of the Secured Notes. If the fair value of the underlying Secured Notes is less than the outstanding principal balance, the Partnership is required to post additional cash collateral equal to the amount of the deficit. Such a deficit will also be reflected in the fair value of the total return swaps. The Partnership was required to initially fund cash collateral with Mizuho for each total return swap. The total return swap with a notional amount of $ 39.9 million, requires the Partnership to maintain cash collateral equal to 35 % of the notional amount, which was approximately $ 14.0 million as of March 31, 2021. The second total return swap with a notional amount of $ 63.5 million, requires the Partnership to maintain cash collateral equal to 100 % of the notional amount, which was approximately $ 63.5 million as of March 31, 2021. Through March 2022, the Partnership has the option to allocate notional amounts from the second total return swap to the first total return swap, in minimum increments of $ 10.0 million, and receive net cash proceeds of approximately 65 % of the reallocated notional amount. The second total return swap terminates in March 2022 and any remaining cash collateral will be used to pay down the principal balance of the Secured Notes. The following tables summarize the Partnership’s interest rate cap agreements as of March 31, 2021 and December 31, 2020: Purchase Date Notional Amount Maturity Date Effective Capped Rate (1) Index Variable Debt Financing Facility Hedged (1) Counterparty Fair Value as of March 31, 2021 Aug 2019 77,642,414 Aug 2024 4.5 % SIFMA M31 TEBS Barclays Bank PLC $ 35,328 $ 35,328 (1) See Notes 15 and 22 for additional details. Purchase Date Notional Amount Maturity Date Effective Capped Rate (1) Index Variable Debt Financing Facility Hedged (1) Counterparty Fair Value as of December 31, 2020 Aug 2019 77,979,924 Aug 2024 4.5 % SIFMA M31 TEBS Barclays Bank PLC $ 27,877 $ 27,877 ( 1 ) See Notes 15 and 22 for additional details. The Partnership’s derivative financial instruments are not designated as hedging instruments and are recorded at fair value. Changes in fair value are included in current period earnings as “Interest expense” on the Partnership’s condensed consolidated statements of operations. See Note 22 for a description of the methodology and significant assumptions for determining the fair value of the derivatives. The derivative financial instruments are presented within “Other assets” on the Partnership’s condensed consolidated balance sheets. 27 18. Commitments and Contingencies Legal Proceedings The Partnership, from time to time, may be subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are frequently covered by insurance. If it has been determined that a loss is probable to occur, the estimated amount of the loss is accrued in the Partnership’s condensed consolidated financial statements. While the resolution of these matters cannot be predicted with certainty, the Partnership believes the outcome of such matters will not have a material effect on the Partnership’s condensed consolidated financial statements. Bond Purchase Commitments The Partnership may enter into bond purchase commitments related to MRBs to be issued and secured by properties under construction. Upon execution of the bond purchase commitment, the proceeds from the MRBs will be used to pay off the construction related debt. The Partnership bears no construction or stabilization risk during the commitment period. The Partnership accounts for its bond purchase commitments as available-for-sale securities and reports the asset or liability at fair value. Changes in the fair value of bond purchase commitments are recorded in other comprehensive income (loss). The following table summarizes the Partnership’s bond purchase commitment as of March 31, 2021: Bond Purchase Commitments Commitment Date Maximum Committed Amounts Remaining Rate Estimated Closing Date Fair Value as of March 31, 2021 CCBA Senior Garden Apartments July 2020 $ 3,807,000 4.50 % Q3 2022 $ 310,909 Mortgage Revenue Bond and Taxable Mortgage Revenue Bond Commitments The Partnership has committed to fund additional proceeds related to the Ocotillo Springs Series A MRB (Note 6) and a taxable MRB (Note 12) while the property is under construction. The Partnership’s remaining maximum commitments related to the Series A MRB and a taxable MRB totaled $ 10.9 million and $ 7.0 million, respectively, as of March 31, 2021. Governmental Issuer Loan and Taxable Governmental Issuer Loan Commitments The Partnership has outstanding commitments to fund the proceeds related to the GILs and taxable GILs while the property is under construction. Disclosures of remaining maximum commitment for GILs and a taxable GIL are in Note 7 and Note 12, respectively. Equity Investment Commitments ATAX Vantage Holdings, LLC, a wholly owned subsidiary of the Partnership, has outstanding commitments to contribute equity to unconsolidated entities. See Note 9 for disclosure of remaining maximum commitments. Property Loan Commitments The Partnership has outstanding commitments to fund the proceeds related to property loans while certain properties are under construction. See Note 10 for disclosure of remaining maximum commitments. Construction Loan Guarantees The Partnership has entered into guaranty agreements for loans related to certain investments in unconsolidated entities. The Partnership will only have to perform on the guarantees if a default by the borrower were to occur. The Partnership has not accrued any amount for these contingent liabilities because the likelihood of guarantee claims is remote. The following table summarizes the Partnership’s maximum exposure under these guarantee agreements as of March 31, 2021: Borrower Year the Guarantee was Executed Maximum Balance Available on Loan Loan Balance as of March 31, 2021 Partnership's Maximum Exposure as of March 31, 2021 Guarantee Terms Vantage at Stone Creek 2018 $ 30,824,000 $ 30,501,955 $ 15,250,978 (1) Vantage at Coventry 2018 31,500,000 29,369,707 14,684,853 (1) Vantage at Murfreesboro 2021 30,500,000 30,500,000 15,250,000 (2) (1) The Partnership’s guaranty was initially for the entire amount of the loan and will decrease based on the achievement of certain events or financial ratios. The Partnership’s maximum exposure will decrease to 25 % of the loan balance when certain debt service coverage levels are achieved by the borrower. 28 (2) The Partnership’s guaranty is for 50 % of the loan balance. The Partnership has guaranteed up to 100 % of the outstanding loan balance upon the occurrence of fraud or other willful misconduct by the borrower or if the borrower voluntarily files for bankruptcy. The guaranty agreement requires the Partnership to maintain a minimum net worth and maintain liquid assets of not less than $ 5.0 million. The Partnership was in compliance with these requirements as of March 31, 2001. The Partnership has also provided indemnification to the lender for costs related to environmental non-compliance and remediation during the term. Other Guarantees and Commitments The Partnership has entered into guarantee agreements with unaffiliated entities under which the Partnership has guaranteed certain obligations of the general partners of certain limited partnerships upon the occurrence of a “repurchase event.” Potential repurchase events include LIHTC tax credit recapture and foreclosure. The Partnership’s maximum exposure is limited to 75 % of the equity contributed by the limited partner to each limited partnership. No amount has been accrued for these guarantees because the likelihood of repurchase events is remote. The following table summarizes the Partnership’s maximum exposure under these guarantee agreements as of March 31, 2021: Limited Partnership(s) Year the Guarantee was Executed End of Guarantee Period Partnership's Maximum Exposure as of March 31, 2021 Ohio Properties 2011 2026 $ 3,011,522 Greens of Pine Glen, LP 2012 2027 2,046,028 19. Redeemable Series A Preferred Units The Partnership has issued non-cumulative, non-voting, non-convertible Series A Preferred Units via a private placement to five financial institutions. The Series A Preferred Units represent limited partnership interests of the Partnership. The Series A Preferred Units have no stated maturity, are not subject to any sinking fund requirements, and will remain outstanding indefinitely unless redeemed by the Partnership or by the holder. Upon the sixth anniversary of the closing of the sale of Series A Preferred Units to a subscriber, and upon each annual anniversary thereafter, the Partnership and each holder of Series A Preferred Units have the right to redeem, in whole or in part, the Series A Preferred Units held by such holder at a per unit redemption price equal to $ 10.00 per unit plus an amount equal to all declared and unpaid distributions through the date of the redemption. In the event of any liquidation, dissolution, or winding up of the Partnership, the holders of the Series A Preferred Units are entitled to a liquidation preference in connection with their investments. With respect to anticipated quarterly distributions and rights upon liquidation, dissolution, or the winding-up of the Partnership’s affairs, the Series A Preferred Units will rank: (a) senior to the Partnership’s BUCs and to any other class or series of Partnership interests or securities expressly designated as ranking junior to the Series A Preferred Units ; (b) junior to all of the Partnership’s existing indebtedness (including indebtedness outstanding under the Partnership’s senior bank credit facility) and other liabilities with respect to assets available to satisfy claims against the Partnership; and (c) junior to any other class or series of Partnership interests or securities expressly designated as ranking senior to the Series A Preferred Units . The following table summarizes the outstanding Series A Preferred Units as of March 31, 2021 and December 31, 2020 : Month Issued Units Purchase Price Distribution Rate Redemption Price per Unit Earliest Redemption Date March 2016 1,000,000 $ 10,000,000 3.00 % $ 10.00 March 2022 May 2016 1,386,900 13,869,000 3.00 % 10.00 May 2022 September 2016 1,000,000 10,000,000 3.00 % 10.00 September 2022 December 2016 700,000 7,000,000 3.00 % 10.00 December 2022 March 2017 1,613,100 16,131,000 3.00 % 10.00 March 2023 August 2017 2,000,000 20,000,000 3.00 % 10.00 August 2023 October 2017 1,750,000 17,500,000 3.00 % 10.00 October 2023 Series A Preferred Units outstanding as of March 31, 2021 and December 31, 2020 9,450,000 $ 94,500,000 29 20. Restricted Unit Awards The Partnership’s Plan permits the grant of restricted units and other awards to the employees of Greystone Manager, the Partnership, or any affiliate of either, and members of the Board of Managers of Greystone Manager for up to 3.0 million BUCs. RUAs have historically been granted with vesting conditions ranging from three months to up to three years . Unvested RUAs are typically entitled to receive distributions during the restriction period. The Plan provides for accelerated vesting of the RUAs if there is a change in control related to the Partnership, the General Partner, or the general partner of the General Partner, or upon death or disability of the Plan participant. In December 2020, the Board of Managers of Greystone Manager vested 50,000 of the Partnership’s previous CEO’s unvested restricted unit awards and all related compensation expense was recognized immediately. The fair value of each RUA is estimated on the grant date based on the Partnership’s exchange-listed closing price of the BUCs. The Partnership recognizes compensation expense for the RUAs on a straight-line basis over the requisite vesting period. The compensation expense for RUAs totaled approximately $ 78,000 and $ 39,000 for the three months ended March 31, 2021 and 2020, respectively. Compensation expense is reported within “General and administrative expenses” on the Partnership’s condensed consolidated statements of operations. The following table summarizes the RUA activity for the three months ended March 31, 2021 and the year ended December 31, 2020: Restricted Units Awarded Weighted average Grant-date Fair Value Nonvested as of January 1, 2020 - $ - Granted 290,000 4.98 Vested ( 154,386 ) 4.98 Forfeited ( 2,802 ) 4.98 Nonvested as of December 31, 2020 132,812 $ 4.98 No activity - 4.98 Nonvested as of March 31, 2021 132,812 $ 4.98 The unrecognized compensation expense related to nonvested RUAs granted under the Plan was $ 334,000 as of March 31, 2021. The remaining compensation expense is expected to be recognized over a weighted average period of 1.2 years. The total intrinsic value of unvested RUAs was approximately $ 734,000 as of March 31, 2021. 21. Transactions with Related Parties The Partnership incurs costs for services and makes contractual payments to AFCA 2, AFCA 2’s general partner, and their affiliates. The costs are reported either as expenses or capitalized costs depending on the nature of each item. The following table summarizes transactions with related parties that are reflected in the Partnership’s condensed consolidated financial statements for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 2020 Partnership administrative fees paid to AFCA 2 (1) $ 966,000 $ 865,000 Reimbursable franchise margin taxes incurred on behalf of unconsolidated entities (2) 11,000 8,000 (1) AFCA 2 is entitled to receive an administrative fee from the Partnership equal to 0.45 % per annum of the outstanding principal balance of any of its MRBs, GILs, property loans collateralized by real property, and other investments for which the owner of the financed property or other third party is not obligated to pay such administrative fee directly to AFCA 2. The disclosed amounts represent administrative fees paid or accrued during the periods specified and are reported within “General and administrative expenses” on the Partnership’s condensed consolidated statements of operations. ( 2 ) The Partnership pays franchise margin taxes on revenues in Texas related to its investments in unconsolidated entities. Such taxes are paid by the Partnership as the unconsolidated entities are required by tax regulations to be included in the Partnership’s group tax return. Since the Partnership is reimbursed for the franchise margin taxes paid on behalf of the unconsolidated entities, these taxes are not reported on the Partnership’s condensed consolidated statements of operations. AFCA 2 receives fees from the borrowers of the Partnership’s MRBs, GILs and certain property loans for services provided to the borrower and based on the occurrence of certain investment transactions. These fees were paid by the borrowers and are not reported on the Partnership’s condensed consolidated financial statements . The following table summarizes transactions between borrowers of the Partnership’s MRBs, GILs and certain property loans and affiliates for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 2020 Non-Partnership property administrative fees received by AFCA 2 (1) $ 9,000 $ 9,000 Investment/mortgage placement fees received by AFCA 2 (2) 1,254,000 542,000 30 (1) AFCA 2 received administrative fees directly from the owners of certain properties financed by certain MRBs held by the Partnership. These administrative fees equal 0.45 % per annum of the outstanding principal balance of the MRBs. The disclosed amounts represent administrative fees received by AFCA 2 during the periods specified. (2) AFCA 2 received placement fees in connection with the acquisition of certain MRBs, GILs, property loans and investments in unconsolidated entities. Greystone Servicing Company LLC, an affiliate of the Partnership, has forward committed to purchase five of the Partnership’s GILs (Note 7), once certain conditions are met, at a price equal to the outstanding principal plus accrued interest. Greystone Servicing Company LLC is committed to then immediately sell the GILs to Freddie Mac pursuant to a financing commitment between Greystone Servicing Company LLC and Freddie Mac. In October 2020, the Partnership executed an agreement with an affiliate of Greystone, in which the Greystone affiliate is entitled to receive a referral fee equal to 0.25 % of the original principal amount of executed tax-exempt loan or tax-exempt bond transactions introduced to the Partnership by the Greystone affiliate. There were no fees paid under this agreement for the three months ended March 31, 2021. The Partnership reported receivables due from unconsolidated entities of approximately $ 63,000 and $ 53,000 as of March 31, 2021 and December 31, 2020, respectively. These amounts are reported within “Other assets” on the Partnership’s condensed consolidated balance sheets. The Partnership had outstanding liabilities due to related parties totaling approximately $ 368,000 and $ 344,000 as of March 31, 2021 and December 31, 2020, respectively. These amounts are reported within “Accounts payable, accrued expenses and other liabilities” on the Partnership’s condensed consolidated balance sheets. 22. Fair Value of Financial Instruments Current accounting guidance on fair value measurements establishes a framework for measuring fair value and provides for expanded disclosures about fair value measurements. The guidance: • Defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date; and • Establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. To increase consistency and comparability in fair value measurements and related disclosures, the fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The three levels of the hierarchy are defined as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3 inputs are unobservable inputs for asset or liabilities. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodologies used for the assets and liabilities measured at fair value on a recurring basis. Investments in MRBs, Taxable MRBs and Bond Purchase Commitments The fair value of the Partnership’s investments in MRBs, taxable MRBs and bond purchase commitments as of March 31, 2021 and December 31, 2020, is based upon prices obtained from a third-party pricing service, which are estimates of market prices. There is no active trading market for these securities, and price quotes for the securities are not available. The valuation methodology of the Partnership’s third-party pricing service incorporates commonly used market pricing methods. The valuation methodology considers the underlying characteristics of each security as well as other quantitative and qualitative characteristics including, but not limited to, market interest rates, illiquidity, legal structure of the borrower, collateral, seniority to other obligations, operating results of the underlying property, geographic location, and property quality. These characteristics are used to estimate an effective yield for each security. The security fair value is estimated using a discounted cash flow and yield to maturity or call analysis by applying the 31 effective yield to contractual cash flows. Significant increases (decreases) in the effective yield would have resulted in a significantly lower (higher) fair value estimate. Changes in fair value due to an increase or decrease in the effective yield do not impact the Partnership’s cash flows. The Partnership evaluates pricing data received from the third-party pricing service by evaluating consistency with information from either the third-party pricing service or public sources. The fair value estimates of the MRBs, taxable MRBs and bond purchase commitments are based largely on unobservable inputs believed to be used by market participants and requires the use of judgment on the part of the third-party pricing service and the Partnership. Due to the judgments involved, the fair value measurements of the Partnership’s investments in MRBs, taxable MRBs and bond purchase commitments are categorized as Level 3 assets. The range of effective yields and weighted average effective yields of the Partnership’s investments in MRBs, taxable MRBs and bond purchase commitments as of March 31, 2021 and December 31, 2020 are as follows: Range of Effective Yields Weighted Average Effective Yields (1) Security Type March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Mortgage revenue bonds 1.6% - 13.5% 1.4% - 13.3% 3.3 % 3.0 % Taxable mortgage revenue bonds 7.9% - 8.0% 7.1% - 7.4% 8.0 % 7.3 % Bond purchase commitments 3.7 % 3.5 % 3.7 % 3.5 % (1) Weighted by the total principal outstanding of all the respective securities as of the reporting date . Derivative Financial Instruments The effect of the Partnership’s interest rate caps is to set a cap, or upper limit, subject to performance of the counterparty, on the base rate of interest paid on the Partnership’s variable rate debt financings equal to the notional amount of the derivative agreement. The inputs in the interest rate cap agreement valuation model include three-month LIBOR rates, unobservable adjustments to account for the SIFMA index, as well as any recent interest rate cap trades with similar terms. The effect of the Partnership’s total return swaps is to lower the net interest rate related to the Partnership’s Secured Notes equal to the notional amount of the derivative instruments. The inputs in the total return swap valuation model include changes in the value of the Secured Notes and the associated changes in value of the underlying assets securing the Secured Notes, accrued and unpaid interest, and any potential gain share amounts. The fair value of the interest rate cap agreements and total return swaps are based on models whose inputs are not observable and therefore the inputs are categorized as Level 3 assets or liabilities. Assets measured at fair value on a recurring basis as of March 31, 2021 are summarized as follows: Fair Value Measurements as of March 31, 2021 Description Assets at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Mortgage revenue bonds, held in trust $ 753,176,405 $ - $ - $ 753,176,405 Mortgage revenue bonds 18,348,507 - - 18,348,507 Bond purchase commitments (reported within other assets) 310,909 - - 310,909 Taxable mortgage revenue bonds (reported within other assets) 1,443,988 - - 1,443,988 Derivative financial instruments (reported within other assets) 327,376 - - 327,376 Total Assets at Fair Value, net $ 773,607,185 $ - $ - $ 773,607,185 32 The following table summarizes the activity related to Level 3 assets for the three months ended March 31, 2021: For the Three Months Ended March 31, 2021 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Mortgage Revenue Bonds (1) Bond Purchase Commitments Taxable Mortgage Revenue Bonds Derivative Financial Instruments Total Beginning Balance January 1, 2021 $ 794,432,485 $ 431,879 $ 1,510,437 $ 321,503 $ 796,696,304 Total gains (losses) (realized/unrealized) Included in earnings (interest income and interest expense) 34,531 - - 1,806,167 1,840,698 Included in other comprehensive loss ( 16,234,685 ) ( 120,970 ) ( 64,112 ) - ( 16,419,767 ) Purchases 2,071,500 - - - 2,071,500 Settlements ( 8,778,919 ) - ( 2,337 ) ( 1,800,294 ) ( 10,581,550 ) Ending Balance March 31, 2021 $ 771,524,912 $ 310,909 $ 1,443,988 $ 327,376 $ 773,607,185 Total amount of gains for the period included in earnings attributable to the change in unrealized losses relating to assets or liabilities held on March 31, 2021 $ - $ - $ - $ 7,451 $ 7,451 (1) Mortgage revenue bonds includes both bonds held in trust as well as those held by the Partnership. Assets measured at fair value on a recurring basis as of December 31, 2020 are summarized as follows: Fair Value Measurements as of December 31, 2020 Description Assets at Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Mortgage revenue bonds, held in trust $ 768,468,644 $ - $ - $ 768,468,644 Mortgage revenue bonds 25,963,841 - - 25,963,841 Bond purchase commitments (reported within other assets) 431,879 431,879 Taxable mortgage revenue bonds (reported within other assets) 1,510,437 - - 1,510,437 Derivative instruments (reported within other assets) 321,503 - - 321,503 Total Assets at Fair Value, net $ 796,696,304 $ - $ - $ 796,696,304 33 The following table summarizes the activity related to Level 3 assets and liabilities for the three months ended March 31, 2020: For the Three Months Ended March 31, 2020 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Mortgage Revenue Bonds (1) PHC Certificates Taxable Mortgage Revenue Bonds Interest Rate Derivatives Total Beginning Balance January 1, 2020 $ 773,597,465 $ 43,349,357 $ 1,383,237 $ 10,911 $ 818,340,970 Total gains (losses) (realized/unrealized) Included in earnings (interest income and interest expense) 35,142 ( 7,219 ) - 25,201 53,124 Included in earnings (impairment of securities and provision for credit loss) ( 1,357,681 ) - - - ( 1,357,681 ) Included in earnings (gain on sale of securities) - 1,416,023 - - 1,416,023 Included in other comprehensive (loss) income ( 6,722,122 ) ( 1,408,804 ) 36,555 - ( 8,094,371 ) Sale of securities - ( 43,349,357 ) - - ( 43,349,357 ) Settlements ( 4,470,529 ) - ( 2,138 ) - ( 4,472,667 ) Ending Balance March 31, 2020 $ 761,082,275 $ - $ 1,417,654 $ 36,112 $ 762,536,041 Total amount of gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets or liabilities held on March 31, 2020 $ ( 1,357,681 ) $ - $ - $ 25,201 $ ( 1,332,480 ) (1) Mortgage revenue bonds includes both bonds held in trust as well as those held by the Partnership. Total gains and losses included in earnings for the derivative financial instruments are reported within “Interest expense” on the Partnership’s condensed consolidated statements of operations. As of March 31, 2021 and December 31, 2020, the Partnership utilized a third-party pricing service to determine the fair value of the Partnership’s GILs and taxable GIL, which is an estimate of their market price. The valuation methodology of the Partnership’s third-party pricing service incorporates commonly used market pricing methods. The valuation methodology considers the underlying characteristics of the GILs as well as other quantitative and qualitative characteristics including, but not limited to, the progress of construction and operations of the underlying properties, and the financial capacity of guarantors. The valuation methodology also considers the probability that conditions for the execution of forward commitments to purchase the GILs will be met. Due to the judgments involved, the fair value measurements of the Partnership’s GILs and taxable GILs are categorized as Level 3 assets. The fair value of the GILs and taxable GILs approximated amortized cost as of March 31, 2021 and December 31, 2020. As of March 31, 2021 and December 31, 2020, the Partnership utilized a third-party pricing service to determine the fair value of the Partnership’s financial liabilities, which are estimates of market prices. The valuation methodology of the Partnership’s third-party pricing service incorporates commonly used market pricing methods. The valuation methodology considers the underlying characteristics of each financial liability as well as other quantitative and qualitative characteristics including, but not limited to, market interest rates, legal structure, seniority to other obligations, operating results of the underlying assets, and asset quality. The financial liability values are then estimated using a discounted cash flow and yield to maturity or call analysis. 34 The Partnership evaluates pricing data received from the third-party pricing service, including consideration of current market interest rates, quantitative and qualitative characteristics of the underlying collateral, and other information from either the third-party pricing service or public sources. The fair value estimates of these financial liabilities are based largely on unobservable inputs believed to be used by market participants and require the use of judgment on the part of the third-party pricing service and the Partnership. Due to the judgments involved, the fair value measurements of the Partnership’s financial liabilities are categorized as Level 3 liabilities . The TEBS f inancings are credit enhanced by Freddie Mac. The TOB Trust financings are credit enhanced by Mizuho. The table below summarizes the fair value of the Partnership’s financial liabilities as of March 31, 2021 and December 31, 20 20 : March 31, 2021 December 31, 2020 Carrying Amount Fair Value Carrying Amount Fair Value Financial Liabilities: Debt financing $ 711,788,901 745,686,708 $ 673,957,640 $ 709,760,933 Unsecured lines of credit - - 7,475,000 7,475,000 Mortgages payable and other secured financing 25,860,469 25,862,025 25,984,872 25,986,514 23. Segments As of March 31, 2021, the Partnership has three reportable segments - Mortgage Revenue Bond Investments, Other Investments, and MF Properties. Previously, the Partnership had a fourth reportable segment related to its investments in Public Housing Capital Fund Trusts; however, all activity in that segment ceased with the sale of the Public Housing Capital Trust Fund investments in January 2020 as described further below. The Partnership separately reports its consolidation and elimination information because it does not allocate certain items to the segments. The Partnership Agreement authorizes the Partnership to make investments in tax-exempt securities other than MRBs provided that the tax-exempt investments are rated in one of the four highest rating categories by a national securities rating agency. The Partnership Agreement also allows the Partnership to invest in other securities whose interest may be taxable for federal income tax purposes. Total tax-exempt and other investments cannot exceed 25 % of the Partnership’s total assets at the time of acquisition as required under the Partnership Agreement. Tax-exempt and other investments consist of taxable MRBs, a taxable GIL, real estate assets and investments in unconsolidated entities. In addition, the amount of other investments is limited based on the conditions to the exemption from registration under the Investment Company Act of 1940. Mortgage Revenue Bond Investments Segment The Mortgage Revenue Bond Investments segment consists of the Partnership’s portfolio of MRBs, GILs and related property loans that have been issued to provide construction and/or permanent financing for Residential Properties and commercial properties in their market areas. Such MRBs and GILs are held as investments, and the related property loans, net of loan loss allowances, are reported as such on the Partnership’s condensed consolidated balance sheets. As of March 31, 2021, the Partnership reported 75 MRBs and seven GILs. The Residential Properties financed by MRBs and GILs contain a total of 10,935 and 1,267 rental units, respectively. In addition, one MRB (Provision Center 2014-1) is collateralized by commercial real estate. All “General and administrative expenses” on the Partnership’s condensed consolidated statements of operations are reported within this segment. Other Investments Segment The Other Investments segment consists of the operations of ATAX Vantage Holdings, LLC, which invests in unconsolidated entities (Note 9) and property loans to certain market-rate multifamily properties (Note 10). MF Properties Segment The MF Properties segment consists of multifamily and student housing residential properties held by the Partnership (Note 8). During the time the Partnership holds an interest in an MF Property, any net rental income generated by the MF Properties in excess of debt service will be available for distribution to the Partnership. As of March 31, 2021, the Partnership owned two MF Properties containing a total of 859 rental units. Income tax expense for the Greens Hold Co is reported within this segment. 35 Public Housing Capital Fund Trusts Segment The Public Housing Capital Fund Trusts segment consisted of the assets, liabilities, and related income and expenses of the Partnership’s PHC Certificates and the related TOB Trust financings. In January 2020, the Partnership sold the PHC Certificates to an unrelated party, and the related TOB Trust financings were collapsed, and all principal and interest was paid in full. As a result, the Public Housing Capital Fund Trusts segment has no activity after January 2020. The following table details certain financial information for the Partnership’s reportable segments for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 2020 Total revenues Mortgage Revenue Bond Investments $ 10,794,788 $ 10,205,803 Other Investments 1,898,176 1,403,615 MF Properties 1,694,524 1,952,247 Public Housing Capital Fund Trusts - 174,470 Total revenues $ 14,387,488 $ 13,736,135 Interest expense Mortgage Revenue Bond Investments $ 4,944,277 $ 5,498,199 Other Investments - - MF Properties 282,198 321,776 Public Housing Capital Fund Trusts - 197,993 Total interest expense $ 5,226,475 $ 6,017,968 Depreciation expense Mortgage Revenue Bond Investments $ 5,811 $ 2,424 Other Investments - - MF Properties 677,649 707,014 Public Housing Capital Fund Trusts - - Total depreciation expense $ 683,460 $ 709,438 Net income (loss) Mortgage Revenue Bond Investments $ 2,549,452 $ 440,336 Other Investments 4,706,221 1,403,152 MF Properties ( 262,819 ) ( 252,730 ) Public Housing Capital Fund Trusts - 1,390,999 Net income (loss) $ 6,992,854 $ 2,981,757 The following table details total assets for the Partnership’s reportable segments as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Total assets Mortgage Revenue Bond Investments $ 1,131,733,809 $ 1,114,146,614 Other Investments 94,728,344 106,931,182 MF Properties 67,649,074 67,988,190 Public Housing Capital Fund Trusts - - Consolidation/eliminations ( 102,251,108 ) ( 113,818,107 ) Total assets $ 1,191,860,119 $ 1,175,247,879 36 24. Subsequent Events In April 2021, the Partnership acquired an MRB for the acquisition and rehabilitation of a senior citizen Residential Property. At closing, the Partnership advanced $ 4.2 million of the MRB commitment with the remaining commitments to be advanced during the renovation period. The following table summarizes the terms of the MRB: Commitment Month Acquired Property Location Units Maturity Date Fixed Interest Rate Initial Funding Maximum Remaining Commitment (1) Jackson Manor Apartments April Jackson, MS 60 May 1, 2038 5.00 % $ 4,150,000 $ 2,750,000 (1) Upon stabilization of the property, the MRB will be partially repaid and the maximum balance of the MRB after stabilization will not exceed approximately $ 4.8 million. In April 2021, the Partnership entered into a TOB Trust financing arrangement with Mizuho to securitize the Jackson Manor MRB. The TOB Trust financing allows for additional borrowings as the Partnership makes additional advances for the related funding commitment. The following table summarizes the initial terms of the TOB Trust financing: TOB Trusts Securitization Initial TOB Trust Financing Stated Maturity Reset Frequency SIFMA Based Rates Facility Fees Initial Interest Rate TOB Trust 2021-XF2936 $ 3,528,000 April 2023 Weekly 0.26 % 1.27 % 1.53 % In April 2021, the Partnership executed a $ 16.3 million equity commitment to fund construction of the Vantage at Loveland multifamily property in Loveland, CO. The Partnership may increase its equity commitment to $ 18.2 million based upon the occurrence of certain events. In April 2021, the General Partner approved the Fifth Amendment to the Partnership Agreement authorizing the Partnership to issue a new series of limited partnership interests designated as Series A-1 Preferred Units (“Series A-1 Preferred Units”). The Series A-1 Preferred Units are on parity with the Series A Preferred Units, have no stated maturity, are not subject to any sinking fund requirements, and will remain outstanding indefinitely unless redeemed by the Partnership or by the holder. Upon the sixth anniversary of the closing of the sale of Series A-1 Preferred Units to a subscriber, and upon each annual anniversary thereafter, the Partnership and each holder of Series A-1 Preferred Units have the right to redeem, in whole or in part, the Series A-1 Preferred Units held by such holder at a per unit redemption price equal to $ 10.00 per unit plus an amount equal to all declared and unpaid distributions through the date of the redemption. The holders of Series A-1 Preferred Units are entitled to receive non-cumulative cash distributions, when, as, and if declared by the Partnership’s general partner, out of funds legally available therefor, at an annual rate of 3.0 %. In April 2021, the Partnership filed a registration statement on Form S-4 to register the offering and issuance of up to 9,450,000 of a newly-created series of limited partnership interests designated as Series A-1 Preferred Units under a shelf registration process. Under this process, the Partnership may from time to time offer and issue up to 9,450,000 Series A-1 Preferred Units in connection with future acquisitions, exchanges, and redemptions of other securities by the Partnership. The registration statement has not yet been declared effective by the SEC, and no Series A-1 Preferred Units are currently outstanding. 37 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. In this Management’s Discussion and Analysis, all references to “we,” “us,” and the “Partnership” refer to America First Multifamily Investors, L.P., its consolidated subsidiaries, and consolidated VIEs for all periods presented. See Note 2 and Note 5 to the Partnership’s condensed consolidated financial statements for further disclosure. Critical Accounting Policies 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 the disclosure of contingent assets and liabilities as of the date of the Partnership’s condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Critical Accounting Estimates The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires the Partnership to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates and assumptions include those used in determining: (i) the fair value of MRBs; (ii) investment impairments; (iii) impairment of real estate assets; and (iv) allowances for loan losses. Executive Summary The Partnership was formed in 1998 for the primary purpose of acquiring a portfolio of mortgage revenue bonds (“MRBs”) that are issued by state and local housing authorities to provide construction and/or permanent financing for affordable multifamily and commercial properties. We also invest in governmental issuer loans (“GILs”), which are similar to MRBs, to provide construction financing for affordable multifamily properties. We generally refer to affordable multifamily and residential properties associated with our MRBs and GILs as “Residential Properties.” We expect and believe the interest received on these MRBs and GILs is excludable from gross income for federal income tax purposes. We may also invest in other types of securities and investments that may or may not be secured by real estate to the extent allowed by the Partnership Agreement. The Partnership includes the assets, liabilities, and results of operations of the Partnership, our wholly owned subsidiaries and consolidated VIEs. All significant transactions and accounts between us and the consolidated VIEs have been eliminated in consolidation. See Note 2 to the Partnership’s condensed consolidated financial statements for additional details. As of March 31, 2021, we have three reportable segments: (1) Mortgage Revenue Bond Investments, (2) Other Investments, and (3) MF Properties. Previously, we had a fourth reportable segment related to our investments in Public Housing Capital Fund Trusts; however, all activity in that segment ceased with the sale of the Public Housing Capital Trust Fund investments in January 2020 . The Partnership separately reports its consolidation and elimination information because it does not allocate certain items to the segments. See Notes 2 and 23 to the Partnership’s condensed consolidated financial statements for additional details. 38 Recent Investment Activity The following table presents information regarding the investment activity of the Partnership for the three months ended March 31, 2021 and 2020: Investment Activity # Amount (in 000's) Retired Debt or Note (in 000's) Tier 2 income distributable to the General Partner (in 000's) (1) Notes to the Partnership's condensed consolidated financial statements For the Three Months Ended March 31, 2021 Mortgage revenue bond advance 1 $ 2,072 N/A N/A 6 Mortgage revenue bond redemptions 2 7,385 N/A N/A 6 Governmental issuer loan advances 6 39,068 N/A N/A 7 Investments in unconsolidated entities 1 1,426 N/A N/A 9 Return of investment in unconsolidated entity upon sale 1 10,425 N/A $ 702 9 Property loan advances 3 3,000 N/A N/A 10 Taxable governmental issuer loan advance 1 1,000 N/A N/A 12 For the Three Months Ended March 31, 2020 Mortgage revenue bond redemption 1 $ 3,103 N/A N/A 6 PHC Certificates sold 3 43,349 $ 34,809 N/A N/A Investments in unconsolidated entities 3 10,270 N/A N/A 9 (1) See “Cash Available for Distribution” in this Item 2 below. Recent Financing Activity The following table presents information regarding the debt financing, derivatives, Series A Preferred Units and partners’ capital activities of the Partnership for the three months ended March 31, 2021 and 2020, exclusive of retired debt amounts listed in the investment activity table above: Financing, Derivative and Capital Activity # Amount (in 000's) Secured Maximum SIFMA Cap Rate (1) Notes to the Partnership's condensed consolidated financial statements For the Three Months Ended March 31, 2021 Net repayment on unsecured LOCs 5 $ 7,475 No N/A 14 Proceeds from TOB financings with Mizuho 5 $ 39,594 Yes N/A 15 For the Three Months Ended March 31, 2020 Net repayment on unsecured LOCs 1 $ 660 No N/A 14 Refinancing of The 50/50 Mortgage and TIF loans 2 - Yes N/A 16 (1) See "Quantitative and Qualitative Disclosures About Market Risk" in Item 3 below. Effects of COVID-19 We continue to monitor the impact of the novel coronavirus (“COVID-19”) pandemic on all aspects of our business, including how it may impact our borrowers, business partners and tenants. While we have developed and implemented measures to monitor and mitigate the impact of COVID-19 to our business, the extent of the impact of the pandemic on our business and financial results will continue to depend on numerous factors that we are unable to reliably predict, including the duration and scope of the pandemic, general economic conditions during and after the pandemic, and governmental actions that have been taken, or may be taken in the future, in response to the pandemic. See the “Liquidity and Capital Resources” section in this Item 2 for information regarding our uses and potential sources of liquidity for the next twelve months. Mortgage Revenue Bonds and Governmental Issuer Loans 39 Our MRBs and GILs are secured by affordable multifamily properties (referred to as “ Residential Properties ” ) except for the Live 929 Apartments MRB, which is secured by a student housing property, and the Provision Center 2014-1 MRB, which is secured by a commercial property. The decline in U.S. economic activity as a result of the COVID-19 pandemic continues to negatively impact employment and earnings for tenants of affordable housing properties nationwide, such as the Residential Properties securing our MRB investments. The property owners and property management service providers of our MRB Residential Properties provide regular updates on operations and rental collections. These parties have reported average rental collections within 30 days of billing of 90% in February 2021, 91% in March 2021, and 92% in April 2021. Such collection rates, plus the availability of reserves, have allowed all of the multifamily Residential Properties to be current on contractual debt service payments on our MRBs and we have received no requests for forbearance of contractual debt service payments. Federal and state governments have instituted various relief measures intended to provide economic assistance to businesses and individuals impacted by COVID-19, including the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, and direct stimulus payments from the United States government to individuals. We believe such relief measures have helped certain tenants to stay current on their contractual rental payments. The long-term ability of the multifamily Residential Properties to stay current on contractual debt service payments may be dependent on various future developments that are uncertain, such as vaccination efforts and efficacy, shutdowns in local markets, changes in unemployment rates, and continuing governmental relief programs. If the Residential Properties experience a significant increase in delinquent rents in future months, our Residential Properties may be unable to make contractual principal and interest payments on our MRBs, negatively impacting our cash flows and leading to potential forbearance requests or MRB defaults. MRB defaults may cause defaults on our debt financing arrangements, triggering either a termination and repayment of the related debt or a sale of the underlying MRB. We may choose to provide support to Residential Properties through supplemental property loans to prevent such MRB defaults. We are continually monitoring rent collections and financial results of the Residential Properties for signs of stress and will proactively work with Residential Property owners that request forbearance on a case-by-case basis. COVID-19 has had a more significant impact on Live 929 Apartments, our sole student housing MRB Residential Property. Live 929 Apartments is 71% occupied as of March 31, 2021. The nearby educational institution, Johns Hopkins University, has announced that it anticipates a broad resumption of in-person, on-campus classes for the Fall 2021 semester. The Live 929 Apartments MRB is currently operating under a forbearance agreement related to certain debt covenants and deferral of contractual MRB principal payments through December 2021. We are actively working with the borrower on opportunities to improve operations and improve cash flows available to pay debt service. Additionally, COVID-19 has negatively impacted the performance of the commercial property associated with the Provision Center 2014-1 MRB in the form of lower patient volume and revenues. These results, in conjunction with declines in the general creditworthiness of proton therapy centers in the United States, have resulted in the reduction of the financial performance and support of the property. The borrower of Provision Center 2014-1 MRB filed for bankruptcy protection under Chapter 11 of title 11 of the United States Code in December 2020 and is working through the bankruptcy process. The outstanding principal balance of the Partnership’s MRB was $10.0 million as of March 31, 2021 and represents approximately 9% of the senior MRBs issued by the borrower. We continue to assess forbearance and restructuring options with the other senior bondholders. Residential Properties associated with our GILs are currently under construction and have not yet commenced leasing operations. To date, these Residential Properties have not experienced any material supply chain disruptions for either construction materials or labor or incurred material construction cost overruns due to COVID-19. If such disruptions or cost overruns were to occur, such GILs could default, causing a default on our debt financing arrangements, triggering either a termination and repayment of the related debt or a sale of the underlying GIL. Investments in unconsolidated entities Our investments in unconsolidated entities are related to the development of market-rate multifamily properties. To date, projects under construction have not experienced any material supply chain disruptions for either construction materials or labor as a result of COVID-19, though such disruptions could occur in the future. In addition, we have noted no material construction cost overruns to date. Future increases in the spread of COVID-19 could require construction sites to close, causing potential construction delays. Leasing activity at properties with available units has faced challenges due to social distancing measures imposed as a result of COVID-19. However, properties with available units have generally experienced increasing occupancy though at a lower rate than before the COVID-19 pandemic. If such challenges persist, leasing could further decelerate, which will negatively impact our returns and cash flows from these investments and may cause impairment losses in future periods. 40 MF Properties The MF Properties are adjacent to universities and serve primarily university students. The University of Nebraska-Lincoln, which is adjacent to The 50/50 MF Property, is currently holding on-campus, in-person classes. The 50/50 MF Property has generated sufficient operating cash flows to meet all mortgage payment and operational obligations through March 31, 2021. San Diego State University, which is adjacent to the Suites on Paseo MF Property, suspended on-campus, in-person classes for the Spring 2021 semesters due to COVID-19 concerns. San Diego State University has announced its intent to resume on-campus, in-person classes for the Fall 2021 semester. Occupancy at the Suites on Paseo was 77% as of March 31, 2021, which is significantly lower than the comparable period in 2020 but is an increase from 68% as of December 31, 2020. We have noted a slight increase in delinquencies at the Suites on Paseo compared to historical average delinquencies. There is currently no mortgage associated with the Suites on Paseo and the property’s operating cash flows have been sufficient to meet all operational obligations through March 31, 2021. Continued spread of COVID-19 could put further stress on occupancy and delinquencies at our MF Properties. We continue to enforce the terms of our lease contracts with tenants, including co-signor guarantees, and will work with tenants experiencing financial difficulties on a case-by-case basis. General Operations Employees of Greystone Manager, the general partner of our General Partner, are responsible for our operations, including those individuals acting as executive officers of the Partnership. To protect the health and safety of our employees, we continue to maintain social distancing measures and certain employees continue to utilize work-at-home options. Also, we continue to maintain policies and procedures to address the COVID-19 pandemic, which have closely followed the recommendations and requirements of the CDC and the pronouncements of the state and local authorities of the states in which we operate . Mortgage Revenue Bond Investments Segment The Partnership’s primary purpose is to acquire and hold as investments a portfolio of MRBs which have been issued to provide construction and/or permanent financing for Residential Properties and commercial properties in their market areas. The Partnership has also invested in GILs, a taxable GIL and property loans which are included within this segment. The following table compares operating results for the Mortgage Revenue Bond Investments segment for the periods indicated (dollar amounts in thousands): For the Three Months Ended March 31, 2021 2020 $ Change % Change Mortgage Revenue Bond Investments Total revenues $ 10,795 $ 10,206 $ 589 5.8 % Interest expense 4,944 5,498 (554 ) -10.1 % Segment net income 2,549 440 2,109 479.3 % Comparison of the three months ended March 31, 2021 and 2020 Interest income increased for the three months ended March 31, 2021 as compared to the same period in 2020 due primarily to interest income from our GIL investments. Interest expense decreased for the three months ended March 31, 2021 as compared to the same period in 2020 primarily due to: • Generally lower SIFMA index rates during the three months ended March 31, 2021 resulted in lower interest expense on our variable rate debt financings. The SIFMA index averaged 0.04% and 1.67% during the three months ended March 2021 and 2020, respectively. See tables below for additional information regarding the impact of rate changes on the Partnership’s variable rate debt financings; 41 • The termination of five fixed rate Term A/B financings with interest rates of approximately 4.50% that were replaced by five new TOB financings with an initial variable interest rate of approximately 2.09% in April 2020; • Approximately $425,000 of additional interest expense incurred during the three months ended March 31, 2020 associated with the termination of the Term A/B financings; and • Offset by the increase in average outstanding principal on the TOB financings and the execution of the Secured Notes in September 2020. Segment net income for the three months ended March 31, 2021 increased as compared to the same period in 2020 due to: • The changes in total revenue and total interest expense detailed in the tables below; • A provision for credit loss of approximately $1.4 million related to the Provision Center 2014-1 MRB for the three months ended March 31, 2020; and • An increase of approximately $387,000 in general and administrative expenses primarily related to salaries and benefits. The following table summarizes the segment’s net interest income, average balances, and related yields earned on interest-earning assets and incurred on interest-bearing liabilities, as well as other income included in total revenues for the three months ended March 31, 2021 and 2020. The average balances are based primarily on monthly averages during the respective periods. All dollar amounts are in thousands. For the Three Months Ended March 31, 2021 2020 Average Balance Interest Income/ Expense Average Rates Earned/ Paid Average Balance Interest Income/ Expense Average Rates Earned/ Paid Interest-earning assets: Mortgage revenue bonds $ 667,989 $ 9,751 5.8 % $ 672,710 $ 9,990 5.9 % Governmental issuer loans 90,094 739 3.3 % - - N/A Property loans 15,671 227 5.8 % 7,999 156 7.8 % Other investments 1,959 54 11.0 % 1,724 46 10.7 % Total interest-earning assets $ 775,713 $ 10,771 5.6 % $ 682,433 $ 10,192 6.0 % Non-investment income 24 14 Total revenues $ 10,795 $ 10,206 Interest-bearing liabilities: Unsecured lines of credit $ 11,117 $ 77 2.8 % $ 13,035 $ 149 4.6 % Fixed TEBS financing 288,011 2,790 3.9 % 291,308 2,822 3.9 % Variable TEBS financing 78,119 279 1.4 % 79,361 625 3.2 % Variable Secured Notes (1) 103,397 583 2.3 % - - N/A Fixed Term A/B & TOB financing 13,024 115 3.5 % 64,918 1,110 6.8 % (2) Variable TOB financing 214,374 901 1.7 % 67,993 574 3.4 % Amortization of deferred finance costs N/A 206 N/A N/A 243 N/A Derivative fair value adjustments N/A (7 ) N/A N/A (25 ) N/A Total interest-bearing liabilities $ 708,042 $ 4,944 2.8 % $ 516,615 $ 5,498 4.3 % Net interest income/spread (3) $ 5,827 3.0 % $ 4,694 2.8 % ( 1 ) Interest expense is reported net of income/loss on the Partnership’s two total return swaps. ( 2 ) The increase in the average interest rate was due primarily to approximately $425,000 of additional interest expense related to termination of the Term A/B financings and Master Trust Agreement with Deutsche Bank in April 2020. Excluding such items, the average interest rate was approximately 4.0%. ( 3 ) Net interest income equals the difference between total interest income from interest-earning assets minus total interest expense from interest-bearing assets. Net interest spread equals annualized net interest income divided by the average interest-bearing assets during the period. 42 The following table summarize s the changes in interest income and interest expense for the three months ended March 31, 2021 and 2020 , and the extent to which these variances are attributable to 1) changes in the volume of interest-earning assets and interest-bearing liabilities, or 2) changes in the interest rates of the interest-earning assets and interest-bearing liabilities. All dollar amounts are in thousands. For the Three Months Ended March 31, 2021 vs. 2020 Total Change Volume $ Change Rate $ Change Interest-earning assets: Mortgage revenue bonds $ (239 ) $ (70 ) $ (169 ) Governmental issuer loans 739 739 - Property loans 71 150 (79 ) Other investments 8 6 2 Total interest-earning assets $ 579 $ 825 $ (246 ) Interest-bearing liabilities: Unsecured & secured lines of credit $ (72 ) $ (22 ) $ (50 ) Fixed TEBS financing (32 ) (32 ) - Variable TEBS financing (346 ) (10 ) (336 ) Variable Secured Notes (1) 583 583 - Fixed Term A/B & TOB financing (995 ) (887 ) (2) (108 ) Variable TOB financing 327 1,236 (2) (909 ) Amortization of deferred finance costs (37 ) N/A (37 ) Derivative fair value adjustments 18 N/A 18 Total interest-bearing liabilities $ (554 ) $ 868 $ (1,422 ) Net interest income $ 1,133 $ (43 ) $ 1,176 (1) Interest expense is reported net of income/loss on our two total return swaps. (2) We terminated all Fixed Term A/B & TOB financings with Deutsche Bank in April 2020 and subsequent closed new variable TOB financings with Mizuho. Other Investments Segment The Other Investments segment consists of the operations of ATAX Vantage Holdings, LLC, which holds noncontrolling equity investments in certain market-rate multifamily properties and issues property loans due from other multifamily properties. The following table compares operating results for the Other Investments segment for the periods indicated (dollar amounts in thousands): For the Three Months Ended March 31, 2021 2020 $ Change % Change Other Investments Total revenues $ 1,898 $ 1,404 $ 494 35.2 % Gain on sale of investments in unconsolidated entity 2,809 - 2,809 N/A Segment net income 4,707 1,404 3,303 235.3 % Comparison of the three months ended March 31, 2021 and 2020 The increase in total revenues for the three months ended March 31, 2021 as compared to the same period in 2020 was primarily due to the following: • An increase of approximately $862,000 for additional investment income recognized upon the sale of Vantage at Germantown, LLC in March 2021; and • A net decrease of approximately $368,000 in recurring investment interest income due to having reached the maximum guaranteed preferred returns on certain investments. The gain on sale of investments in unconsolidated entities is related to the sale of the Vantage at Germantown property in March 2021. The change in segment net income for the three months ended March 31, 2021 as compared to the same period in 2020 was due to the change in total revenues and gain on sale of an unconsolidated entity discussed above. 43 MF Properties Segment The Partnership’s strategy has been to acquire ownership positions in 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. As of March 31, 2021 and 2020, the Partnership and its consolidated subsidiaries owned two MF Properties which contained a total of 859 rental units. The following table compares operating results for the MF Properties segment for the periods indicated (dollar amounts in thousands): For the Three Months Ended March 31, 2021 2020 $ Change % Change MF Properties Total revenues $ 1,695 $ 1,952 $ (257 ) -13.2 % Interest expense 282 322 (40 ) -12.4 % Segment net loss (263 ) (253 ) (10 ) -4.0 % Comparison of the three months ended March 31, 2021 and 2020 The decrease in total revenues for the three months ended March 31, 2021 as compared to the same period in 2020 is due primarily to lower occupancy at the Suites on Paseo. Lower occupancy is a result of the suspension of on-campus, in-person classes at San Diego State University due to the COVID-19 pandemic for the Fall 2020 and Spring 2021 semesters. San Diego State University has announced its intent to resume on-campus, in-person classes for the Fall 2021 semester. The decrease in interest expense for the three months ended March 31, 2021 as compared to the same period in 2020 was due to the refinancing of The 50/50 Mortgage and TIF loans to lower interest rates in February 2020. The increase in segment net loss for the three months ended March 31, 2021 as compared to the same period in 2020 was due to the changes in total revenues and interest expense described above and a decrease of approximately $203,000 in real estate operating expenses due to the closure of the bistro at the Suites on Paseo. Public Housing Capital Fund Trusts Segment The PHC Certificates within this segment consisted of custodial receipts evidencing loans made to public housing authorities. In January 2020, we sold all of our PHC Certificates to an unrelated third party and collapsed the related debt financing. The following table compares operating results for the Public Housing Capital Fund Trusts segment for the periods indicated (dollar amounts in thousands): For the Three Months Ended March 31, 2021 2020 $ Change % Change Public Housing Capital Fund Trusts Total revenues $ - $ 174 $ (174 ) -100.0 % Interest expense - 198 (198 ) -100.0 % Segment net income - 1,391 (1,391 ) -100.0 % Comparison of the three months ended March 31, 2021 and 2020 There were no reported operations for the three months ended March 31, 2021 due to the sale of the PHC Certificates in January 2020 and the collapse and payment in full of all principal and interest due on the TOB Trust financings secured by the PHC Certificates. Discussion of Occupancy at Investment-Related Properties The following tables outline information regarding the Residential Properties for which we hold MRBs as investments. The tables also contain information about the MF Properties and properties associated with our investments in unconsolidated entities. The narrative discussion that follows provides a brief operating analysis of each category as of and for the three months ended March 31, 2021 and 2020. 44 Non-Consolidated Residential Properties - Stabilized The owners of the following Residential Properties either do not meet the definition of a VIE and/or we have evaluated and determined we are not the primary beneficiary of each VIE. As a result, we do not report the assets, liabilities and results of operations of these properties on a consolidated basis. These Residential Properties have met the stabilization criteria (see footnote 3 below the table) as of March 31, 2021. Debt service on our MRBs for the non-consolidated stabilized properties was current as of March 31, 2021. The amounts presented below were obtained from records provided by the property owners and their related property management service providers. Number of Units as of March 31, Physical Occupancy (1) as of March 31, Economic Occupancy (2) for the three months ended March 31, Property Name State 2021 2021 2020 2021 2020 Non-Consolidated Properties-Stabilized (3) Courtyard CA 108 100 % 98 % 92 % 95 % Glenview Apartments CA 88 99 % 98 % 96 % 96 % Harden Ranch CA 100 99 % 97 % 97 % 96 % Harmony Court Bakersfield CA 96 96 % 98 % 87 % 98 % Harmony Terrace CA 136 99 % 98 % 115 % 128 % Las Palmas II CA 81 100 % 99 % 98 % 99 % Montclair Apartments CA 80 98 % 100 % 93 % 103 % Montecito at Williams Ranch Apartments CA 132 92 % 96 % 102 % 107 % Montevista CA 82 96 % 98 % 111 % 118 % San Vicente CA 50 98 % 100 % 92 % 104 % Santa Fe Apartments CA 89 99 % 96 % 91 % 92 % Seasons at Simi Valley CA 69 100 % 99 % 110 % 120 % Seasons Lakewood CA 85 99 % 100 % 101 % 107 % Seasons San Juan Capistrano CA 112 96 % 96 % 95 % 103 % Solano Vista CA 96 100 % 98 % 91 % 106 % Summerhill CA 128 97 % 98 % 89 % 102 % Sycamore Walk CA 112 99 % 98 % 91 % 86 % The Village at Madera CA 75 100 % 100 % 96 % 98 % Tyler Park Townhomes CA 88 99 % 99 % 98 % 97 % Vineyard Gardens CA 62 98 % 100 % 95 % 102 % Westside Village Market CA 81 96 % 99 % 97 % 95 % Brookstone (5) IL 168 96 % 93 % 102 % 104 % Copper Gate Apartments IN 129 98 % 98 % 93 % 95 % Renaissance LA 208 96 % 95 % 92 % 89 % Live 929 Apartments MD 560 71 % 93 % 72 % 94 % Woodlynn Village MN 59 98 % 98 % 98 % 98 % Gateway Village (5) NC 64 97 % 97 % 95 % 85 % Greens Property NC 168 96 % 98 % 92 % 92 % Lynnhaven Apartments (5) NC 75 91 % 93 % 89 % 86 % Silver Moon NM 151 96 % 92 % 97 % 92 % Village at Avalon NM 240 98 % 98 % 97 % 96 % Ohio Properties (4) OH 362 95 % 96 % 91 % 95 % Bridle Ridge SC 152 97 % 100 % 88 % 96 % Columbia Gardens SC 188 95 % 91 % 94 % 91 % Companion at Thornhill Apartments SC 179 100 % 99 % 88 % 90 % Cross Creek SC 144 97 % 97 % 91 % 92 % Rosewood Townhomes SC 100 97 % 99 % 90 % 90 % South Pointe Apartments SC 256 96 % 98 % 88 % 95 % The Palms at Premier Park Apartments SC 240 99 % 99 % 89 % 91 % Village at River's Edge SC 124 94 % 96 % 107 % 80 % Willow Run SC 200 96 % 85 % 96 % 85 % Arbors at Hickory Ridge TN 348 93 % 90 % 86 % 76 % Avistar at Copperfield TX 192 91 % 94 % 83 % 87 % Avistar at the Crest TX 200 95 % 92 % 73 % 81 % Avistar at the Oaks TX 156 96 % 97 % 87 % 89 % Avistar at the Parkway TX 236 90 % 91 % 81 % 82 % Avistar at Wilcrest TX 88 83 % 93 % 70 % 81 % Avistar at Wood Hollow TX 409 88 % 97 % 85 % 93 % Avistar in 09 TX 133 95 % 100 % 88 % 93 % Avistar on the Boulevard TX 344 91 % 94 % 78 % 80 % Avistar on the Hills TX 129 95 % 95 % 87 % 87 % Bruton Apartments TX 264 92 % 92 % 75 % 81 % Concord at Gulfgate TX 288 89 % 93 % 78 % 85 % Concord at Little York TX 276 87 % 94 % 83 % 85 % Concord at Williamcrest TX 288 95 % 97 % 86 % 89 % Crossing at 1415 TX 112 98 % 97 % 89 % 90 % Decatur Angle TX 302 88 % 91 % 74 % 78 % Esperanza at Palo Alto TX 322 93 % 89 % 88 % 83 % Heights at 515 TX 96 99 % 96 % 91 % 92 % Heritage Square TX 204 89 % 92 % 73 % 78 % Oaks at Georgetown TX 192 95 % 94 % 92 % 88 % Runnymede TX 252 99 % 99 % 94 % 91 % Southpark TX 192 97 % 100 % 94 % 96 % 15 West Apartments WA 120 100 % 97 % 99 % 97 % 10,860 93 % 95 % 89 % 90 % (1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement. 45 (2) Economic occupancy is defined as the net rental income received divided by the maximum amount of rental income to be derived from each property. This statistic is reflective of rental concessions, delinquent rents and non-revenue units such as model units and employee units. Physical occupancy is a point in time measurement while economic occupancy is a measurement over the period presented. Therefore, economic occupancy for a period may exceed the actual occupancy at any point in time. (3) A property is considered stabilized once it reaches 90% physical occupancy for 90 days and an achievement of 1.15 times debt service coverage ratio on amortizing debt service for a period after construction completion or completion of the rehabilitation. (4) The Ohio Properties consist of Crescent Village, located in Cincinnati, Ohio, Willow Bend, located in Columbus (Hilliard), Ohio and Postwoods, located in Reynoldsburg, Ohio. (5) The physical occupancy and economic occupancy amounts are based on the latest available occupancy and financial information, which is as of December 31, 2020. Physical and economic occupancy as of and for the three months ended March 31, 2021 were slightly lower compared with the same period in 2020 due primarily to Live 929 Apartments and our Residential Properties located in Texas. Despite the economic impacts of the COVID-19 pandemic, at this time we have not seen significant impacts to physical and economic occupancy for the MRB portfolio on average. We believe this is largely due to government relief programs that aid individuals, including affordable housing tenants, that have experienced economic hardship as a result of COVID-19. If COVID-19 continues to negatively impact the U.S. economy and such government relief programs are discontinued or curtailed, we anticipate there will be a negative impact on economic occupancy and physical occupancy in the future. Live 929 Apartments has seen significant decline in occupancy which is due to the property being primarily student housing, which has been more significantly impacted by COVID-19 than affordable multifamily properties. Non-Consolidated Residential Properties - Not Stabilized The owners of the following Residential Properties do not meet the definition of a VIE and/or we have evaluated and determined we are not the primary beneficiary of each VIE. As a result, we do not report the assets, liabilities and results of operations of these properties on a consolidated basis. For the three months ended March 31, 2021, these Residential Properties have not met the stabilization criteria (see footnote 3 below the table). As of March 31, 2021, debt service on the Partnership’s MRB and GILs for the non-consolidated non-stabilized properties was current. The amounts presented below were obtained from records provided by the property owners and their related property management service providers. Number of Units as of March 31, Physical Occupancy (1) as of March 31, Economic Occupancy (2) for the three months ended March 31, Property Name State 2021 2021 2020 2021 2020 Non-Consolidated Properties-Non Stabilized (3) Ocotillo Springs (4) CA 75 n/a n/a n/a n/a Scharbauer Flats Apartments (4) TX 300 n/a n/a n/a n/a Oasis at Twin Lakes (4) MN 228 n/a n/a n/a n/a Centennial Crossings (4) CO 209 n/a n/a n/a n/a Legacy Commons at Signal Hills (4) MN 247 n/a n/a n/a n/a Hilltop at Signal Hills (4) MN 146 n/a n/a n/a n/a Hope on Avalon (4) CA 88 n/a n/a n/a n/a Hope on Broadway (4) CA 49 n/a n/a n/a n/a 1,342 n/a n/a n/a n/a (1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement. (2) Economic occupancy is defined as the net rental income received divided by the maximum amount of rental income to be derived from each property. This statistic is reflective of rental concessions, delinquent rents and non-revenue units such as model units and employee units. Physical occupancy is a point in time measurement while economic occupancy is a measurement over the period presented. Therefore, economic occupancy for a period may exceed the actual occupancy at any point in time. (3) These properties are currently under construction. As such, these properties are not considered stabilized as they have not met the criteria for stabilization. A property is considered stabilized once it reaches 90% physical occupancy for 90 days and an achievement of 1.15 times debt service coverage ratio on amortizing debt service for a period after completion of the rehabilitation. (4) Physical and economic occupancy information is not available for the three months ended March 31, 2021 and 2020 as the property is under construction. As of March 31, 2021, the Partnership had eight properties that had not stabilized as the properties were still under construction. 46 MF Properties As of March 31, 2021, we owned two MF Properties. We report the assets, liabilities, and results of operations of these properties on a consolidated basis. Both MF Properties are considered stabilized. The 50/50 MF property is encumbered by mortgage loans with an aggregate principal balance of approximately $25.9 million as of March 31, 2021. Debt service on our mortgage payables was current as of March 31, 2021. Number of Units as of March 31, Physical Occupancy (1) as of March 31, Economic Occupancy (2) for the three months ended March 31, Property Name State 2021 2021 2020 2021 2020 MF Properties Suites on Paseo CA 384 77 % 83 % 69 % 78 % The 50/50 Property NE 475 90 % 98 % 86 % 91 % 859 84 % 92 % 77 % 84 % (1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement. (2) Economic occupancy is defined as the net rental income received divided by the maximum amount of rental income to be derived from each property. This statistic is reflective of rental concessions, delinquent rents and non-revenue units such as model units and employee units. Physical occupancy is a point in time measurement while economic occupancy is a measurement over the period presented. Therefore, economic occupancy for a period may exceed the actual occupancy at any point in time. The physical occupancy and economic occupancy as of and for the three months ended March 31, 2021 decreased as compared to the same period in 2020 due to a decrease in overall occupancy at the Suites on Paseo primarily due to the effects of COVID-19. The COVID-19 pandemic and the related impact to universities adjacent to our MF Properties may have a negative impact on economic occupancy and physical occupancy in the future. The University of Nebraska-Lincoln is holding on-campus, in-person learning for the Spring 2021 term and residence halls are open. San Diego State University has suspended on-campus, in-person classes for Spring 2021 semester due to COVID-19 concerns but has announced its intent to resume on-campus, in-person classes for the Fall 2021 semester. If the spread of COVID-19 continues, we may experience further declines in occupancy and collections related to our MF Properties. Investments in Unconsolidated Entities We are the only limited equity investor in various unconsolidated entities formed for the purpose of constructing market-rate, multifamily real estate properties. The Partnership determined the unconsolidated entities are VIEs but that the Partnership is not the primary beneficiary. As a result, the Partnership does not report the assets, liabilities and results of operations of these properties on a consolidated basis. The limited membership interests entitle the Partnership to shares of certain cash flows generated by the Vantage Properties from operations and upon the occurrence of certain capital transactions, such as a refinancing or sale. The amounts presented below were obtained from records provided by the property management service providers. Number of Units as of March 31, Physical Occupancy (1) as of March 31, Property Name State 2021 2021 2020 Vantage at Waco (2) TX n/a n/a 93 % Vantage at Germantown (2) TN n/a n/a 44 % Vantage at Powdersville SC 288 97 % 40 % Vantage at Stone Creek NE 294 65 % 46 % Vantage at Bulverde TX 288 93 % 58 % Vantage at Murfreesboro TN 288 85 % 10 % Vantage at Coventry (3) NE 294 45 % n/a Vantage at Conroe (3) TX 288 31 % n/a Vantage at O'Connor (3) TX 288 27 % n/a Vantage at Westover Hills (3) TX 288 16 % n/a Vantage at Tomball (4) TX 288 n/a n/a Vantage at Hutto (4) TX 288 n/a n/a Vantage at San Marcos (4) TX 288 n/a n/a 3,180 (1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement. ( 2 ) March 2021 information is not available as the properties have been sold. ( 3 ) March 2020 information is not available as the properties were under construction. ( 4 ) March 2021 and 2020 information is not available as the properties are currently under construction. 47 The Vantage Properties a t Tomball, Hutto and San Marcos are currently under construction. All other properties are currently in the lease-up phase. Leasing activit i es at properties with available units have faced challenges due to social distancing measures imposed as a result of the COVID-19 pandemic . Results of Operations The tables and following discussions of our changes change in results of operations for the three months ended March 31, 2021 and 2020 should be read in conjunction with the Partnership’s condensed consolidated financial statements and notes thereto included in Item 1 of this report, as well as the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2020. The following table compares our revenue and other income for the periods presented (dollar amounts in thousands): For the Three Months Ended March 31, 2021 2020 $ Change % Change Revenues and Other Income: Investment income $ 12,388 $ 11,544 $ 844 7.3 % Property revenues 1,695 1,952 (257 ) -13.2 % Contingent interest income - 12 (12 ) -100.0 % Other interest income 305 228 77 33.8 % Gain on sale of securities - 1,416 (1,416 ) -100.0 % Gain on sale of investments in unconsolidated entity 2,809 - 2,809 N/A Total Revenues and Other Income $ 17,197 $ 15,152 $ 2,045 13.5 % Discussion of the Total Revenues and Other Income for the Three Months Ended March 31, 2021 and 2020 Investment income. The increase in investment income for the three months ended March 31, 2021 as compared to the same period in 2020 was due to the following factors: • An increase of approximately $739,000 of investment income related to our GIL investments; • An increase of approximately $507,000 of investment income related to investments in unconsolidated entities. We recognized approximately $862,000 of additional investment income upon the sale of Vantage at Germantown LLC in March 2021 offset by a net decrease of $368,000 in recurring investment income; • A decrease of approximately $239,000 associated with our MRBs and the associated changes in volume and interest rates. See discussion of volume and interest rate changes in the Mortgage Revenue Bond Investments segment previously included in Item 2; and • A decrease of approximately $174,000 in investment interest income related to the PHC Certificates that were sold in January 2020. Property revenues. The decrease in property revenues for the three months ended March 31, 2021 as compared to the same period in 2020 was due primarily to lower occupancy at the Suites on Paseo MF Property. Lower occupancy is a result of the suspension of on-campus, in-person classes at San Diego State University due to the COVID-19 pandemic for the Fall 2020 and Spring 2021 semesters. San Diego State University has announced its intent to resume on-campus, in-person classes for the Fall 2021 semester. Contingent interest income. There was minimal contingent interest income recognized for the three months ended March 31, 2021 and 2020. Other interest income. Other interest income is comprised primarily of interest income on property loans held by us. The increase in in other interest income is primarily due to interest on approximately $8.3 million of property loan advances made during Q1 2021 and throughout 2020. Gain on sale of securities. There was no gain on sale of securities for the three months ended March 31, 2021. The gain on sale of securities for the three months ended 2020 related to the sale of the PHC Certificates in January 2020. 48 Gain on sale of investment in an unconsolidated entity . The gain on sale of investment s in unconsolidated entities for the three months ended 2021 relates to the sale of Vantage at Germantown in March 2021. There was no gain on sale of investments in unconsolidated entities reported for the three months ended March 31, 2020. The following table compares our expenses for the periods presented (dollar amounts in thousands): For the Three Months Ended March 31, 2021 2020 $ Change % Change Expenses: Real estate operating (exclusive of items shown below) $ 1,008 $ 1,175 $ (167 ) -14.2 % Provision for credit loss - 1,358 (1,358 ) -100.0 % Depreciation and amortization 683 709 (26 ) -3.7 % Interest expense 5,226 6,018 (792 ) -13.2 % General and administrative 3,286 2,899 387 13.3 % Total Expenses $ 10,203 $ 12,159 $ (1,956 ) -16.1 % Discussion of the Total Expenses for the Three Months Ended March 31, 2021 and 2020 Real estate operating expenses. Real estate operating expenses are related to MF Properties and are comprised principally of real estate taxes, property insurance, utilities, property management fees, repairs and maintenance, and salaries and related employee expenses of on-site employees. Real estate operating expenses decreased slightly for the three months ended March 31, 2021 as compared to the same period in 2020 due to the closure of the bistro at the Suites on Paseo beginning in Fall 2020. Provision for credit loss. There was no provision for credit loss for the three months ended March 31, 2021. The provision for credit loss for the three months ended March 31, 2020 is related to the other-than-temporary impairment of the Provision Center 2014-1 MRB. Depreciation and amortization expense. Depreciation and amortization relate primarily to the MF Properties. The decrease in depreciation and amortization for the three months ended March 31, 2021 as compared to the same period in 2020 was due primarily to a decrease in depreciation expense at the Suites of Paseo MF Property due to real estate assets that became fully depreciated in 2020 . Interest expense. The decrease in interest expense for the three months ended March 31, 2021 as compared to the same period in 2020 was due to the following factors: • A decrease of approximately $2.4 million due to a decrease in effective interest rates of the debt financing portfolio as a result of recent refinancing activities and generally lower market interest rates; • An increase of approximately $1.8 million due to higher average principal outstanding; and • A decrease of approximately $153,000 in amortization of deferred financing costs. General and administrative expenses. The increase in general and administrative expenses for the three months ended March 31, 2021 as compared to the same period in 2020 was primarily due to an increase in salaries and benefits. Discussion of the Income Tax Expense for the Three Months Ended March 31, 2021 and 2020 A wholly owned subsidiary of the Partnership, the Greens Hold Co, is a corporation subject to federal and state income tax. The Greens Hold Co owns The 50/50 MF Property and certain property loans. The Greens Hold Co generated minimal taxable income for the three months ended March 31, 2021 and 2020. 49 Liquidity and Capital Resources We continually evaluate our potential sources and uses of liquidity, including current and potential future developments related to the COVID-19 pandemic. The information below is based on the Partnership’s current expectations and projections about future events and financial trends, which could materially differ from actual results. Our short-term liquidity requirements over the next 12 months will be primarily operational expenses, investment commitments, debt service (principal and interest payments) on our debt financings, and distribution payments. We expect to meet these liquidity requirements primarily using cash on hand, operating cash flows from our investments and MF Properties, and potentially additional debt financing issued in the normal course of business. Our long-term liquidity requirements will be primarily for maturities of debt financings and mortgages payable, the potential exercise of redemption rights by the holders of the Series A Preferred Units, and additional investments in MRBs, GILs, property loans and unconsolidated entities. We expect to meet these liquidity requirements primarily through refinancing of maturing debt financings with the same or similar lenders, principal and interest proceeds from investments in MRBs and GILs, and proceeds from asset sales and redemptions. In addition, we will consider the issuance of additional Beneficial Unit Certificates (“BUCs”), Series A Preferred Units or other series of beneficial interests in the Partnership based on needs and opportunities for executing our strategy. Sources of Liquidity The Partnership’s principal sources of liquidity consist of: • Unrestricted cash on hand; • Operating cash flows from investments in MRBs, GILs and investments in unconsolidated entities; • Net operating cash flows from MF Properties; • Unsecured lines of credit; • Proceeds from our total return swap transactions associated with our Secured Notes; • Proceeds from obtaining additional debt; • Issuances of BUCs and Series A Preferred Units; and • Proceeds from the sale of assets. Unrestricted Cash on Hand As of March 31, 2021, the Partnership had unrestricted cash on hand of approximately $53.3 million. The Partnership is required to keep a minimum of $5.0 million of unrestricted cash on hand under the terms of certain guaranty obligations. There are no other contractual restrictions of the Partnership’s ability to use cash on hand. Operating Cash Flows from Investments Cash flows from operations are primarily comprised of regular interest payments received on our MRBs, GILs and property loans that provide consistent cash receipts throughout the year. All MRBs and GILs are current on contractual debt service payments as of March 31, 2021, except for the Provision Center 2014-1 MRB. Receipts, net of interest expense on related debt financings and lines of credit balances, are available for general use by the Partnership. The Partnership also receives distributions from investments in unconsolidated entities if, and when, cash is available for distribution at the unconsolidated entities. Receipt of cash from our investments in MRBs and investments in unconsolidated entities is dependent upon the generation of net cash flows at multifamily properties that underlie our investments. These underlying properties are subject to risks usually associated with direct investments in multifamily real estate, which include (but are not limited to) reduced occupancy, tenant defaults, falling rental rates, and increasing operating expenses. Receipt of cash from GILs and certain property loans is dependent on the availability of construction funding and the execution of certain equity commitments by the owners of the underlying properties. 50 Net Operating Cash Flows from MF Properties Cash flows generated by MF Properties, net of operating expenses and mortgage debt service payments, are unrestricted for use by the Partnership. The MF properties are subject to risks usually associated with direct investments in multifamily real estate, which include (but are not limited to) reduced occupancy, tenant defaults, falling rental rates, and increasing operating expenses. The Suites on Paseo MF Property is experiencing a lower than historical occupancy because of COVID-19. There are currently no direct mortgage obligations of the Suites on Paseo MF Property and the property’s operating cash flows have been sufficient to meet all operational obligations through March 31, 2021. However, excess net cash flows from operations could be limited in the future due to continued lower occupancy. Unsecured Lines of Credit We maintain two unsecured lines of credit (“LOC”) with a financial institution. Our unsecured operating LOC allows for the advance of up to $10.0 million to be used for general operations. We are required to make repayments of the principal to reduce the outstanding principal balance on the operating LOC to zero for fifteen consecutive days during each calendar quarter. We fulfilled this requirement during the quarter ended March 31, 2021. In addition, we have fulfilled this requirement for the second quarter of 2021. We have $10.0 million available on the operating LOC as of March 31, 2021. The unsecured operating LOC has a maturity date of June 2022. Our unsecured non-operating LOC allows for the advance of up to $50.0 million and may be utilized for the purchase of multifamily real estate, MRBs and taxable MRBs. Advances on the unsecured non-operating LOC are due on the 270 th day following the advance date but may be extended for up to an additional 270 days by making certain payments. The unsecured non-operating LOC contains a covenant, among others, that the Partnership’s ratio of the lender’s senior debt will not exceed a specified percentage of the market value of the Partnership’s assets, as defined in the Credit Agreement. The Partnership was in compliance with all covenants as of March 31, 2021. We anticipate paying off the balances on our unsecured non-operating LOC by entering into debt financing arrangements, to be secured with the previously acquired MRBs or multifamily real estate. We have approximately $50.0 million available on the unsecured non-operating LOC as of March 31, 2021. The unsecured non-operating LOC has a maturity date of June 2022. Proceeds from our Total Return Swap Transactions In September 2020, we issued Secured Notes to Mizuho totaling $103.5 million. Concurrent with the issuance of the Secured Notes, we entered into two total return swap transactions with Mizuho to reduce the net interest cost related to the Secured Notes. The combined notional amount of the total return swaps is $103.5 million, which is the same as the outstanding principal balance of the Secured Notes. The first total return swap has a notional amount of $39.9 million as of March 31, 2021. Our interest rate on the notional amount is equal to 3-month LIBOR plus 3.75%, with an interest rate floor of 4.25%. We are required to maintain cash collateral with Mizuho equal to 35% of the notional amount, which was approximately $14.0 million as of March 31, 2021. The remaining $26.0 million was received as cash proceeds during 2020. The second total return swap has a notional amount of $63.5 million as of March 31, 2021. The Partnership’s interest rate on the notional amount is equal to 3-month LIBOR plus 0.50%, with an interest rate floor of 1.00%. We are required to maintain cash collateral with Mizuho equal to 100% of the notional amount as of March 31, 2021. Through March 2022, we have the option to reallocate notional amounts from the second total return swap to the first total return swap, in minimum increments of $10.0 million. Upon such a reallocation, cash equal to 35% of the notional amount reallocated will be posted as collateral for the first total return swap and 65% of the notional amount reallocated will be advanced as net proceeds for our general use. As of March 31, 2021, we have the option to reallocate up to $63.5 million of notional amount, which if fully reallocated will generate additional net cash proceeds of approximately $41.3 million for our general use. Proceeds from Obtaining Additional Debt We hold certain investments that are not associated with our debt financings, mortgages payable or non-operating LOC. The Partnership may obtain leverage for these investments by posting the investments as security. As of March 31, 2021, the Partnership’s primary unleveraged assets were the Suites at Paseo MF Property, with a net carrying value of approximately $33.5 million as of March 31, 2021, and certain MRBs with outstanding principal totaling approximately $20.9 million as of March 31, 2021. As noted previously in this report, the Suites on Paseo MF Property is experiencing lower than historical occupancy and operating results due to the COVID-19 pandemic, which could limit the amount of debt that could be obtained related to this asset. Of the MRBs, approximately $10.0 million is principal outstanding on the Provision Center 2014-1 MRB, for which the borrower has declared bankruptcy, and could limit our ability to obtain leverage related to this MRB. 51 Issuances of BUCs and Series A Preferred Units We may, from time to time, issue additional BUCs in the public market. In December 2019, the Partnership’s Registration Statement on Form S-3 (“Registration Statement”) was declared effective by the SEC under which the Partnership may offer up to $225.0 million of BUCs for sale from time to time. The Registration Statement will expire in December 2022. The Partnership is authorized to issue Series A Preferred Units under the Partnership Agreement. As of March 31, 2021, we have issued 9,450,000 Series A Preferred Units for gross proceeds of approximately $94.5 million to five financial institutions. The Series A Preferred Units were issued in a private placement that was terminated in October 2017. The Partnership may conduct additional private offerings of Series A Preferred Units in the future to supplement its cash flow needs, if the General Partner deems such offerings to be necessary and otherwise consistent with the Partnership’s strategic initiatives. The Partnership is able to issue Series A Preferred Units so long as the aggregate market capitalization of the BUCs, based on the closing price on the trading day prior to issuance of the Series A Preferred Units, is no less than three times the aggregate book value of all Series A Preferred Units, inclusive of the amount to be issued. We may also designate and issue additional series of preferred units representing beneficial interest in the Partnership if so desired. In April 2021, the Partnership filed a registration statement on Form S-4 to register the offering and issuance of up to 9,450,000 of a newly-created series of limited partnership interests designated as Series A-1 Preferred Units under a shelf registration process. Under this process, the Partnership may from time to time offer and issue up to 9,450,000 Series A-1 Preferred Units in connection with future acquisitions, exchanges, and redemptions of other securities by the Partnership. The registration statement has not yet been declared effective by the SEC, and no Series A-1 Preferred Units are currently outstanding. Proceeds from the Sale of Assets We may, from time to time, sell our investments in MRBs, GILs, investments in unconsolidated entities and MF Properties consistent with our strategic plans. Our MRB portfolio is marked at a significant premium to cost, adjusted for paydowns, primarily due to higher stated interest rates when compared to current market interest rates for similar investments. We may consider selling certain MRBs in exchange for cash at prices that approximate our currently reported fair value. However, we are contractually prevented from selling the MRBs included in our TEBS financings. Our ability to dispose of investments on favorable terms is dependent upon several factors including, but not limited to, the availability of credit to potential buyers to purchase investments at prices we consider acceptable. In addition, potential adverse changes to general market and economic conditions may negatively impact our ability to sell our investments in the future. In March 2021, our investment in Vantage at Germantown was redeemed upon the sale of the underlying property and we received cash of approximately $16.1 million related to the sale. Uses of Liquidity Our principal uses of liquidity consist of: • General and administrative expenses; • Investments in additional MRBs, GILs, property loans and unconsolidated entities; • Debt service on debt financings, Secured Notes and mortgages payable; • Distributions paid to holders of Series A Preferred Units and BUCs; • Potential redemptions of Series A Preferred Units; and • Other contractual obligations. General and Administrative Expenses We use cash to pay general and administrative expenses of the Partnership’s operations. For additional details, see Item 1A, “Risk Factors” in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2020 and the section captioned “Cash flows from operating activities” in the Partnership’s condensed consolidated statements of cash flows set forth in Item 1 of this report. General and administrative expenses are typically paid from unrestricted cash on hand and operating cash flows. 52 Investments in Additional MRBs, GIL s, Property Loans and Unconsolidated Entities Our overall strategy is to continue to increase our investment in quality multifamily properties through either the acquisition of MRBs, GILs, property loans or equity investments in both existing and new markets. We evaluate investment opportunities based on, but not limited to, our market outlook, including general economic conditions, development opportunities and long-term growth potential. Our ability to make future investments is dependent upon identifying suitable acquisition and development opportunities, access to long-term financing sources, and the availability of investment capital. We may commit to fund additional investments on a draw-down or forward basis. The following table summarizes our outstanding investment commitments as of March 31, 2021: Investment Remaining Funding Commitments Mortgage revenue bond (1) $ 10,905,000 Taxable mortgage revenue bond (1) 7,000,000 Governmental issuer loans (1) 97,714,367 Investments in unconsolidated entities 16,303,866 Property loans (1) 121,218,749 Bond purchase commitments (2) 3,807,000 Total $ 256,948,982 (1) The assets associated with these commitments are securitized in TOB financing facilities with Mizuho that allow for additional principal proceeds as the remaining investment commitments are funded by the Partnership. (2) This investment commitment is contingent upon the completion and stabilization of the underlying property. Debt Service on Debt Financings and Mortgages Payable Our debt financing arrangements consist of various secured financing transactions to leverage our portfolio of MRBs, GILs, taxable GIL and certain property loans. The financing arrangements generally involve the securitization of MRBs, GILs, taxable GIL and property loans into trusts whereby we retain beneficial interests in the trusts that provide us certain rights to the underlying investment assets. The senior beneficial interests are sold to unaffiliated parties in exchange for debt proceeds. The senior beneficial interests require periodic interest payments that may be fixed or variable, depending on the terms of the arrangement, and scheduled principal payments. The Partnership is required to fund any shortfall in principal and interest payable to the senior beneficial interests of the TEBS financings in the case of non-payment, forbearance or default of the borrowers’ contractual debt service payments of the related MRBs. In the case of forbearance or default on an MRB, GIL, taxable GIL or property loan in a Term TOB or TOB financing, we may be required to fund shortfalls in principal and interest payable to the senior beneficial interests, repurchase a portion of the outstanding senior beneficial interests, or repurchase the MRB, GIL, taxable GIL or property loan and seek alternative financing. In addition, the Partnership may be required to post collateral if the value of MRBs, GILs, taxable GIL and property loans securitized in TOB financings drop below a threshold in the aggregate. We anticipate that cash flows from the securitized assets will fund normal, recurring principal and interest payments to the senior beneficial interests and all trust-related fees. Our Secured Notes are secured by the Partnership’s cash flows from the residual certificates associated with our TEBS financings. Interest due on the Secured Notes, net of amounts due to the Partnership on the related total return swap transactions, 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 under the Secured Notes and related documents. We actively manage both our fixed and variable rate debt financings and our exposure to changes in market interest rates. The following table summarizes our fixed and variable rate debt financings as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Securitized Assets - Fixed or Variable Interest Rates Related Debt Financing - Fixed or Variable Interest Rates Outstanding Principal % of Total Debt Financing Outstanding Principal % of Total Debt Fixed Fixed $ 300,274,589 42.0 % $ 301,073,976 44.5 % Fixed Variable 309,767,657 43.4 % 310,286,167 45.9 % Variable (1) Variable (1) 104,566,999 14.6 % 64,972,998 9.6 % Total $ 714,609,245 $ 676,333,141 (1) The securitized asset and related debt financing both have variable interest rates, though the variable rate indices may differ. As such, the Partnership is at least partially hedged against rising interest rates. 53 Our mortgages payable financing arrangements are used to leverage The 50/50 MF Property . The mortgages are entered into with financial institutions and are secured by the MF Property. T he mortgages bear interest at fixed rates and include scheduled principal payments. The mortgages mature in March 2025 and April 2027. We anticipate that cash flows from The 50/50 MF Property will be sufficient to pay all normal, recurring principal and interest payments. Distributions Paid to Holders of Series A Preferred Units and BUCs Distributions to the holders of Series A Preferred Units, if declared by the General Partner, are paid quarterly at an annual fixed rate of 3.0%. The Series A Preferred Units are non-cumulative, non-voting and non-convertible. On March 17, 2021, we announced that the Board of Managers of Greystone Manager, which is the general partner of the General Partner, declared a quarterly distribution of $0.09 per BUC to unitholders of record on March 31, 2021 and payable on April 30, 2021. The Partnership and its General Partner continually assess the level of distributions for the Series A Preferred Units and BUCs based on cash available for distribution, financial performance and other factors considered relevant, including the effects of the COVID-19 pandemic. Potential Redemptions of Series A Preferred Units Upon the sixth anniversary of the closing of the sale of Series A Preferred Units to a subscriber, and upon each annual anniversary thereafter, each holder of Series A Preferred Units has the right to redeem, in whole or in part, the Series A Preferred Units held by such holder at a per unit redemption price equal to $10.00 per unit plus an amount equal to all declared and unpaid distributions through the date of the redemption. The first optional redemption dates for the currently outstanding Series A Preferred Units range from March 2022 through October 2023 and the holders must provide notice of the election to redeem no less than 180 days prior to such redemption dates. If the holders of the Series A Preferred Units elect to redeem, we will be required, subject to certain restrictions, to secure funds to redeem from unrestricted cash on hand, additional borrowings or through additional capital raising options. Other Contractual Obligations We are subject to various guarantee obligations in the normal course of business, and, in most cases, do not anticipate these obligations to result in significant cash payments by the Partnership. Cash Flows For the three months ended March 31, 2021, we generated cash of $8.6 million, which was the net result of $7.5 million provided by operating activities, $24.6 million used in investing activities, and $25.7 million provided by financing activities. Cash provided by operating activities totaled $7.5 million for the three months ended March 31, 2021, as compared to $2.3 million generated for the three months ended March 31, 2020. The change between periods was primarily due to the following factors: • An increase of $4.0 million in net income, offset by the $2.8 million related to the gain on sale of an unconsolidated entity that is cash from investing activities; • An increase of $4.6 million related to changes in the preferred return receivable from unconsolidated entities; and • A net decrease of $632,000 due to changes in operating assets and liabilities. Cash used in investing activities totaled $24.6 million for the three months ended March 31, 2021, as compared to cash provided of $37.5 million for the three months ended March 31, 2020. The change between periods was predominantly due to the following factors: • A decrease of $43.3 million due to proceeds from the sale of the PHC Certificates; • A decrease of $39.1 million due to continued advances on GILs; • An increase of $13.2 million of proceeds from the sale of investments in unconsolidated entities; and • An increase of $8.8 million due to the reduction of contributions to unconsolidated entities. Cash provided by financing activities totaled $25.7 million for the three months ended March 31, 2021, as compared to cash used of $47.2 million for the three months ended March 31, 2020. The change between periods was predominately due to the following factors: • A net increase in proceeds from debt financing of $74.3 million; 54 • An increase of $3.9 million due to a reduction in distributions paid; • An increase of $2.1 million related to the repurchase of BUCs; and • A net decrease of $6.8 million due to payments on the unsecured lines of credit. We believe our cash balance and cash provided by the sources discussed herein will be sufficient to pay, or refinance, our debt obligations and to meet our liquidity needs over the next 12 months. Leverage Ratio We utilize leverage to enhance rates of return to our Unitholders. Those constraints are dependent upon several factors, including the assets being leveraged, the tenor of the leverage program, whether the financing is subject to market collateral calls, and the liquidity and marketability of the financing collateral. We use target constraints for each type of financing utilized by us to manage an overall 75% leverage constraint, as established by the Board of Managers of Greystone Manager, which is the general partner of the Partnership’s General Partner. The Board of Managers of Greystone Manager retains the right to change the leverage constraint in the future based on consideration of factors the Board of Managers considers relevant. We define our leverage ratio as total outstanding debt divided by total assets using cost adjusted for paydowns for MRBs, GILs, property loans, taxable MRBs and taxable GILs, and initial cost for deferred financing costs and MF Properties. As of March 31, 2021, our overall leverage ratio was approximately 67%. Cash Available for Distribution The Partnership believes that Cash Available for Distribution (“CAD”) provides relevant information about the Partnership’s operations and is necessary, along with net income, for understanding its operating results. To calculate CAD, the Partnership begins with net income as computed in accordance with GAAP and adjusts for non-cash expenses consisting of depreciation expense, amortization expense related to deferred financing costs, amortization of premiums and discounts, non-cash interest rate derivative expense or income, provisions for credit and loan losses, impairments on MRBs, GILs, PHC Certificates, real estate assets and property loans, deferred income tax expense (benefit) and restricted unit compensation expense. The Partnership also deducts Tier 2 income (Note 3 to the Partnership’s condensed consolidated financial statements) distributable to the General Partner as defined in the Partnership Agreement and Series A Preferred Unit distributions and accretion. Net income is the GAAP measure most comparable to CAD. There is no generally accepted methodology for computing CAD, and the Partnership’s computation of CAD may not be comparable to CAD reported by other companies. Although the Partnership considers CAD to be a useful measure of the Partnership’s operating performance, CAD is a non-GAAP measure that should not be considered as an alternative to net income calculated in accordance with GAAP, or any other measures of financial performance presented in accordance with GAAP. The following table shows the calculation of CAD (and a reconciliation of the Partnership’s net income, as determined in accordance with GAAP, to CAD) for the three months ended March 31, 2021 and 2020: For the Three Months Ended March 31, 2021 2020 Net income $ 6,992,854 $ 2,981,757 Change in fair value of derivatives and interest rate derivative amortization (7,451 ) (25,201 ) Depreciation and amortization expense 683,460 709,438 Provision for credit loss (1) - 1,357,681 Reversal of impairment on securities (2) - (1,902,979 ) Amortization of deferred financing costs 206,386 358,908 RUA compensation expense 78,114 39,068 Deferred income taxes (16,228 ) (30,921 ) Redeemable Series A Preferred Unit distribution and accretion (717,763 ) (717,763 ) Tier 2 (Income distributable) Loss allocable to the General Partner (3) (702,277 ) 80,501 Bond purchase premium (discount) amortization (accretion), net of cash received (18,521 ) (13,806 ) Total CAD $ 6,498,574 $ 2,836,683 Weighted average number of BUCs outstanding, basic 60,690,862 60,754,179 Net income per BUC, basic $ 0.09 $ 0.04 Total CAD per BUC, basic $ 0.11 $ 0.05 Distributions declared, per BUC $ 0.09 $ 0.125 55 (1) The provision for credit loss for the three months ended March 31, 2020 relates to impairment of the Provision Center 2014-1 MRB. (2) This amount represents previous impairments recognized as adjustments to CAD in prior periods related to the PHC Certificates. Such adjustments were reversed in the first quarter of 2020 upon the sale of the PHC Certificates in January 2020. (3) As described in Note 3 to the Partnership’s condensed consolidated financial statements, Net Interest Income representing contingent interest and Net Residual Proceeds representing contingent interest (Tier 2 income) will be distributed 75% to the limited partners and BUC holders, as a class, and 25% to the General Partner. This adjustment represents the 25% of Tier 2 income due to the General Partner. For the three months ended March 31, 2021, Tier 2 income allocable to the general partner related to the gain on sale of the Partnership’s investment in Vantage at Germantown in March 2021. For the three months ended March 31, 2020, Tier 2 income was due to the gain on sale of the PHC Certificates, net of prior impairments recorded. Off Balance Sheet Arrangements As of March 31, 2021 and December 31, 2020, we held MRBs and GILs that are collateralized by Residential Properties and one commercial property. The affordable multifamily properties and commercial property are owned by entities that are not controlled by us. We have no equity interest in these entities and do not guarantee any obligations of these entities. The Partnership has entered into various commitments and guarantees. For additional discussions related to commitments and guarantees, see Note 18 to the Partnership’s condensed consolidated financial statements. We do not engage in trading activities involving non-exchange traded contracts. As such, we are not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships. We do not have any relationships or transactions with persons or entities that derive benefits from their non-independent relationships with us or our related parties, other than those disclosed in Note 21 to the Partnership’s condensed consolidated financial statements. Contractual Obligations As discussed herein and in our Annual Report on Form 10-K for the year ended December 31, 2020, we have various debt service obligations related to our LOCs, debt financings and our MF Property mortgages payable. Our strategic objective is to leverage our new MRB and GIL investments utilizing long-term securitization financings either with Freddie Mac through its TEBS program or with other lenders with trust securitizations similar to the TOB Trust program with Mizuho and the Term TOB Trust program with Morgan Stanley. This strategy allows us to better match the duration of our assets and liabilities and to better manage the spread between our assets and liabilities. The Partnership’s contractual obligations presented in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2020, which is incorporated by reference herein, have only changed pursuant to the executed contracts during the three months ended March 31, 2021 as disclosed herein. Recently Issued Accounting Pronouncements For a discussion of recently issued accounting pronouncements that will be adopted in future periods, see Note 2 to the Partnership’s condensed consolidated financial statements. Item 3. Quantitative and Qualitative Disclosures About Market Risk. The COVID-19 pandemic has caused significant disruptions in the general economy both globally and in the United States during 2020 and the three months ended March 31, 2021. The information below is based on the Partnership’s current expectations and projections about future events and financial trends, which could materially differ from actual results. With the exception of developments associated with the COVID-19 pandemic, there have been no material changes in market risk, except as discussed below, from the information provided under “Quantitative and Qualitative Disclosures about Market Risk” in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2020. Mortgage Revenue Bonds Sensitivity Analysis A third-party pricing service is used to value our MRBs. The pricing service uses a discounted cash flow and yield to maturity or call analysis which encompasses judgment in its application. The key assumption in the yield to maturity or call analysis is the range of effective yields of the individual MRBs. The effective yield analysis for each MRB considers the current market yield of similar securities, specific terms of each MRB, and various characteristics of the property collateralizing the MRB such as debt service 56 coverage ratio, loan to value, and other characteristics. We completed a sensitivity analysis which is hypothetical and is as of a specific point in time. The results of the sensitivity analysis may not be indicative of actual changes in fair value and should be used with caution. The table below summarizes the sensitivity analysis metrics related to the investments in the MRBs as of March 31, 2021 : Description Estimated Fair Value (in 000's) Range of Effective Yields used in Valuation Range of Effective Yields if 10% Adverse Applied Additional Unrealized Losses with 10% Adverse Change (in 000's) Mortgage Revenue Bonds $ 771,525 1.6% -13.5% 1.8 % -14.9% $ 16,930 Geographic Risk The properties securing our MRBs are geographically dispersed throughout the United States, with significant concentrations (geographic risk) in Texas, California, and South Carolina. The table below summarizes the geographic concentrations in these states as a percentage of the total MRB principal outstanding for the dates indicated: March 31, 2021 December 31, 2020 Texas 44 % 43 % California 17 % 17 % South Carolina 17 % 17 % During 2020, Texas, California and South Carolina experienced significant fluctuations in COVID-19 cases, though there have been no significant declines in occupancy or materially lower rental collections at Residential Properties in these states to date. Increases in COVID-19 cases in these states may pose risk to the our Residential Properties in the future. Summary of Interest Rates on Borrowings and Derivative Financial Instruments As of March 31, 2021, the total costs of borrowing by investment type were as follows: • The unsecured LOCs have variable interest rates ranging between 2.6% and 3.4%; • The M31 TEBS facility has a variable interest rate of 1.4%; • The M24 and M33 TEBS facilities have fixed interest rates that range between 3.1% and 3.2%; • The M45 TEBS facility has a fixed interest rate of 3.8% through July 31, 2023 and 4.4% thereafter; • The Term TOB Trust securitized by an MRB has a fixed interest rate of 3.5%; • The TOB Trust financings securitized by MRBs, GILs and property loans have variable interest rates that range between 1.1% and 2.0%; • The Secured Notes have a variable interest rate of 9.2%; and • The mortgages payable have fixed interest rates of 4.4%. We have entered into total return swap agreements to lower the net interest cost of our Secured Notes. The following table sets forth certain information regarding the Partnership’s total return swap agreements as of March 31, 2021: Purchase Date Notional Amount Effective Date Termination Date Period End Variable Rate Paid Period End Variable Rate Received Variable Rate Index Counterparty Fair Value as of March 31, 2021 Sept 2020 39,881,661 Sept 2020 Sept 2025 4.25% (1) 9.18% (3) 3-month LIBOR Mizuho Capital Markets $ 77,280 Sept 2020 63,500,000 Sept 2020 Mar 2022 1.00% (2) 9.18% (3) 3-month LIBOR Mizuho Capital Markets 214,768 $ 292,048 (1) Variable rate equal to 3-month LIBOR + 3.75%, subject to a floor of 4.25%. (2) Variable rate equal to 3-month LIBOR + 0.50%, subject to a floor of 1.00%. (3) Variable rate equal to 3-month LIBOR + 9.00%. 57 We have entered into interest rate cap agreements to mitigate our exposure to interest rate fluctuations on variable-rate debt financing facilities. The following table sets forth certain information regarding the Partnership’s interest rate cap agreements as of March 31, 2021: Purchase Date Notional Amount Maturity Date Effective Capped Rate (1) Index Variable Debt Financing Facility Hedged (1) Counterparty Fair Value as of March 31, 2021 Aug 2019 77,642,414 Aug 2024 4.5 % SIFMA M31 TEBS Barclays Bank PLC $ 35,328 $ 35,328 (1) For additional details, see Note 22 to the Partnership's condensed consolidated financial statements. Interest Rate Risk – Change in Net Interest Income The following table sets forth information regarding the impact on the Partnership’s net interest income assuming various changes in interest rates as of March 31, 2021: Description - 25 basis points + 50 basis points + 100 basis points + 150 basis points + 200 basis points TOB Debt Financings $ 681,839 $ (1,277,187 ) $ (2,554,373 ) $ (3,831,560 ) $ (5,108,747 ) TEBS Debt Financings 129,681 (259,362 ) (518,724 ) (778,086 ) (1,037,449 ) Other Investment Financings - (216,897 ) (734,397 ) (1,251,897 ) (1,769,397 ) Variable Rate Investments (92,934 ) 232,149 875,596 1,649,952 2,458,939 Total $ 718,586 $ (1,521,297 ) $ (2,931,898 ) $ (4,211,591 ) $ (5,456,654 ) The interest rate sensitivity table above (the “Table”) represents the change in interest income from investments, net of interest on debt and settlement payments for interest rate derivatives over the next twelve months, assuming an immediate parallel shift in the LIBOR yield curve and the resulting implied forward rates are realized as a component of this shift in the curve. Assumptions include anticipated interest rates, relationships between interest rate indices and outstanding investments, liabilities and interest rate derivative positions. No assurance can be made that the assumptions included in the Table presented herein will occur or that other events will not occur that will affect the outcomes of the analysis. Furthermore, the results included in the Table assume the Partnership does not act to change its sensitivity to the movement in interest rates. As the above information incorporates only those material positions or exposures that existed as of March 31, 2021, it does not consider those exposures or positions that could arise after that date. The ultimate economic impact of these market risks will depend on the exposures that arise during the period, our risk mitigation strategies at that time and the overall business and economic environment. Item 4. Controls and Procedures. Evaluation of disclosure controls and procedures. The Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of the end of such period, the Partnership’s current disclosure controls and procedures were effective in ensuring that (i) information required to be disclosed by the Partnership in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) information required to be disclosed by the Partnership in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Partnership’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Changes in internal control over financial reporting. The Chief Executive Officer and Chief Financial Officer have determined that there were no changes in the Partnership’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Partnership’s most recent fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting. 58 PART II - OTHER INFORMATION Item 1A. Risk Factors. The risk factors affecting the Partnership are described in Item 1A “Risk Factors” in the Partnership’s Annual Report on Form 10‑K for the year ended December 31, 2020, which is incorporated by reference herein. There have been no material changes from these previously disclosed risk factors for the three months ended March 31, 2021. Item 6. Exhibits. The following exhibits are filed as required by Item 601 of Regulation S-K. Exhibit numbers refer to the paragraph numbers under Item 601 of Regulation S-K: 31.1 Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101 The following materials from the Partnership’s Quarterly Report on Form 10-Q for the periods ended March 31, 2021 are filed herewith, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets on March 31, 2021 and December 31, 2020, (ii) the Condensed Consolidated Statements of Operations for the periods ended March 31, 2021 and 2020, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the periods ended March 31, 2021 and 2020, (iv) the Condensed Consolidated Statements of Partners’ Capital for the periods ended March 31, 2021 and 2020, (v) the Condensed Consolidated Statements of Cash Flows for the periods ended March 31, 2021 and 2020, and (vi) Notes to Condensed Consolidated Financial Statements. Such materials are presented with detailed tagging of notes and financial statement schedules. 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) 59 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERICA FIRST MULTIFAMILY INVESTORS, L.P. Date: May 5, 2021 By: /s/ Kenneth C. Rogozinski Kenneth C. Rogozinski Chief Executive Officer Date: May 5, 2021 By: /s/ Jesse A. Coury Jesse A. Coury Chief Financial Officer 60