SECURED DEBT

Our secured debt instruments generally feature either monthly interest and principal or monthly interest-only payments with balloon payments due at maturity. For purposes of classification of the following table, variable rate debt with a derivative financial instrument designated as a cash flow hedge is deemed as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instrument. Secured debt, including debt related to real estate held for sale, which encumbers $2.3 billion or 29.8% of UDR’s total real estate owned based upon gross book value ($5.4 billion or 70.2% of UDR’s real estate owned based on gross book value is unencumbered) consists of the following as of June 30, 2012 (dollars in thousands):



	Principal Outstanding				For the Six Months Ended June 30,
	June 30, 2012		December 31, 2011		Weighted Average Interest Rate		Weighted Average Years to Maturity	Number of Communities Encumbered
Fixed Rate Debt
Mortgage notes payable	$	466,266	$	590,208	5.31	%	3.8	9
Fannie Mae credit facilities	632,571		744,509		5.12	%	6.3	23
Total fixed rate secured debt	1,098,837		1,334,717		5.20	%	5.2	32
Variable Rate Debt
Mortgage notes payable	37,415		151,685		1.06	%	1.0	2
Tax-exempt secured notes payable	94,700		94,700		0.85	%	10.1	2
Fannie Mae credit facilities	211,409		310,451		2.08	%	6.1	7
Total variable rate secured debt	343,524		556,836		1.63	%	6.6	11
Total secured debt	$	1,442,361	$	1,891,553	4.35	%	5.6	43

UDR has three secured credit facilities with Fannie Mae with an aggregate commitment of $932.8 million at June 30, 2012. The Fannie Mae credit facilities are for an initial term of 10 years and bear interest at floating and fixed rates. We have $632.6 million of the outstanding balance fixed at a weighted average interest rate of 5.12% and the remaining balance on these facilities is currently at a weighted average variable interest rate of 2.08%. Further information related to these credit facilities is as follows: (dollars amounts in thousands):



	June 30, 2012			December 31, 2011
Borrowings outstanding	$	843,980		$	1,054,960
Weighted average borrowings during the period ended	964,520			1,139,588
Maximum daily borrowings during the period ended	1,054,735			1,157,557
Weighted average interest rate during the period ended	4.3		%	4.4		%
Weighted average interest rate at the end of the period	4.4		%	4.1		%

The Company will from time to time acquire properties subject to fixed rate debt instruments. In those situations, management will record the secured debt at its estimated fair value and amortize any difference between the fair value and par to interest expense over the life of the underlying debt instrument. The unamortized fair market adjustment was a net premium of $19.5 million and $24.1 million at June 30, 2012 and December 31, 2011, respectively.

Fixed Rate Debt

Mortgage notes payable. Fixed rate mortgage notes payable are generally due in monthly installments of principal and interest and mature at various dates from October 2012 through May 2019 years and carry interest rates ranging from 3.43% to 6.54%.

Secured credit facilities. At June 30, 2012, the Company had $632.6 million outstanding of fixed rate secured credit facilities with Fannie Mae with a weighted average fixed interest rate of 5.12%.

Variable Rate Debt

Mortgage notes payable. Variable rate mortgage notes payable are generally due in monthly installments of principal and interest and mature at July 2013. The mortgage notes payable are based on LIBOR plus some basis points, which translate into an interest rate of 1.06% at June 30, 2012.

Tax-exempt secured notes payable. The variable rate mortgage notes payable that secure tax-exempt housing bond issues mature at various dates between August 2019 and March 2030. Interest on these notes is payable in monthly installments. The variable mortgage notes have interest rates ranging from 0.71% to 0.90% as of June 30, 2012.

Secured credit facilities. At June 30, 2012, the Company had $211.4 million outstanding of variable rate secured credit facilities with Fannie Mae with a weighted average floating interest rate of 2.08%.

The aggregate maturities, including amortizing principal payments, of our secured debt due during each of the next five calendar years subsequent to June 30, 2012 are as follows (dollars in thousands):



	Fixed				Variable
Year	Mortgage Notes		Credit Facilities		Mortgage Notes		Tax-Exempt Notes Payable		Credit Facilities		Total Secured
2012	$	10,790	$	1,493	$	—	$	—	$	—	$	12,283
2013	9,777		3,144		37,415		—		—		50,336
2014	44,352		3,328		—		—		—		47,680
2015	193,893		3,523		—		—		—		197,416
2016	132,652		3,702		—		—		—		136,354
Thereafter	74,802		617,381		—		94,700		211,409		998,292
Total	$	466,266	$	632,571	$	37,415	$	94,700	$	211,409	$	1,442,361