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NOTES AND INTEREST RECEIVABLE
 6 Months Ended
Jun. 30, 2015
NOTES AND INTEREST RECEIVABLE  
NOTES AND INTEREST RECEIVABLE

NOTE 3. NOTES AND INTEREST RECEIVABLE

A portion of our assets are invested in mortgage notes receivable, principally secured by real estate. We may originate mortgage loans in conjunction with providing purchase money financing of property sales. Notes receivable are generally collateralized by real estate or interests in real estate and personal guarantees of the borrower and, unless noted otherwise, are so secured. Management intends to service and hold for investment the mortgage notes in our portfolio. A majority of the notes receivable provide for principal to be paid at maturity. Our mortgage notes receivable consist of first, wraparound and junior mortgage loans (dollars in thousands):

    Maturity   Interest         
Borrower   Date   Rate   Amount   Security
Performing loans:                
  Foundation for Better Housing, Inc. (Overlook at Allensville) (1)   11/19   12.00%                       2,472   Secured
  Foundation for Better Housing, Inc. (Overlook at Allensville) (1)   12/17   12.00%                       1,408   Secured
  Foundation for Better Housing, Inc. (Vista Ridge) (1)   04/19   12.00%                       3,923   Secured
  Foundation for Better Housing, Inc. (Vista Ridge) (1)   06/17   12.00%                       1,492   Secured
  H198, LLC (Las Vegas Land)   01/20   12.00%                       5,907   Secured
  One Realco Corporation (1) (2)   01/17   3.00%                       7,000   Unsecured
  Realty Advisors Management, Inc. (1)   12/16   2.20%                     20,387   Unsecured
  Unified Housing Foundation, Inc. (Cliffs of El Dorado) (1)   12/32   12.00%                       2,097   100% Membership Interest in Unified Housing of McKinney, LLC
  Unified Housing Foundation, Inc. (Echo Station) (1)   12/32   12.00%                       1,481   100% Membership Interest in Unified Housing of Temple, LLC
  Unified Housing Foundation, Inc. (Inwood on the Park) (1)   12/32   12.00%                       5,059   100% Membership Interest in Unified Housing Inwood, LLC
  Unified Housing Foundation, Inc. (Kensington Park) (1)   12/32   12.00%                       3,936   100% Membership Interest in Unified Housing Kensington, LLC
  Unified Housing Foundation, Inc. (Lakeshore Villas) (1)   12/32   12.00%                       2,000   Secured
  Unified Housing Foundation, Inc. (Lakeshore Villas) (1)   12/32   12.00%                       9,096   Membership interest in Housing for Seniors of Humble, LLC
  Unified Housing Foundation, Inc. (Limestone Canyon) (1)   12/32   12.00%                       3,057   100% Membership Interest in Unified Housing of Austin, LLC
  Unified Housing Foundation, Inc. (Limestone Canyon) (1)   12/32   12.00%                       4,663   100% Membership Interest in Unified Housing of Austin, LLC
  Unified Housing Foundation, Inc. (Limestone Ranch) (1)   12/32   12.00%                       2,250   100% Membership Interest in Unified Housing of Vista Ridge, LLC
  Unified Housing Foundation, Inc. (Limestone Ranch) (1)   12/32   12.00%                       6,000   100% Membership Interest in Unified Housing of Vista Ridge, LLC
  Unified Housing Foundation, Inc. (Parkside Crossing) (1)   12/32   12.00%                       2,272   100% Membership Interest in Unified Housing of Parkside Crossing, LLC
  Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1)   12/32   12.00%                       2,485   100% Membership Interest in Unified Housing of Harvest Hill I, LLC
  Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1)   12/32   12.00%                       2,555   100% Membership Interest in Unified Housing of Harvest Hill, LLC
  Unified Housing Foundation, Inc. (Sendero Ridge) (1)   12/32   12.00%                       5,174   100% Membership Interest in Unified Housing of Sendero Ridge, LLC
  Unified Housing Foundation, Inc. (Sendero Ridge) (1)   12/32   12.00%                       4,812   100% Membership Interest in Unified Housing of Sendero Ridge, LLC
  Unified Housing Foundation, Inc. (Timbers at the Park) (1)   12/32   12.00%                       1,323   100% Membership Interest in Unified Housing of Terrell, LLC
  Unified Housing Foundation, Inc. (Tivoli) (1)   12/32   12.00%                       7,966   100% Membership Interest in Unified Housing of Tivoli, LLC
  Unified Housing Foundation, Inc. (Trails at White Rock) (1)   12/32   12.00%                       3,815   100% Membership Interest in Unified Housing of Harvest Hill III, LLC
  Unified Housing Foundation, Inc. (1)   06/17   12.00%                       1,261   Unsecured
  Unified Housing Foundation, Inc. (1)   12/17   12.00%                       1,207   Unsecured
  Unified Housing Foundation, Inc. (1)   12/15   12.00%                       2,665   Unsecured
  Unified Housing Foundation, Inc. (1)   12/16   12.00%                       3,657   Unsecured
  Other related party notes (1)   Various   Various                       2,117   Various secured interests
  Other related party notes (1)   Various   Various                       4,929   Various unsecured interests
  Other non-related party notes   Various   Various                       3,164   Various secured interests
  Other non-related party notes   Various   Various                          503   Various unsecured interests
  Accrued interest                               8,350    
Total Performing            $            140,483    
                 
Non-Performing loans:                
  Leman Development, Ltd (2)   07/11 7.00%    $                 1,500   Unsecured
  Tracy Suttles (2)   12/11 0.00%                       1,077   Unsecured
  Other non-related party notes   Various Various                          507   Various secured interests
  Accrued interest                                    97    
Total Non-Performing            $                3,181    
                 
  Allowance for doubtful accounts                           (18,279)    
Total            $             125,385    

(1)  Related party notes
 
(2)  An allowance was taken for estimated losses at full value of note

 

Junior Mortgage Loans. We may invest in junior mortgage loans, secured by mortgages that are subordinate to one or more prior liens either on the fee or a leasehold interest in real estate. Recourse on such loans ordinarily includes the real estate on which the loan is made, other collateral and guarantees.

 

At June 30, 2015, we had junior mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $115.1 million. We recognized interest income of $6.9 million related to these notes receivables.

The Company has various notes receivable from Unified Housing Foundation, Inc. (“UHF”) and Foundation for Better Housing, Inc. (“FBH”). UHF and FBH are determined to be related parties due to our significant investment in the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow of operations of the properties. A sale or refinance of any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes for the specific borrower. These notes are cross-collateralized for the specific borrower, but to the extent cash is received from a specific UHF or FBH property, it is applied first against any outstanding interest for the related-property note. The allowance on the UHF notes was a purchase allowance that was netted against the notes when acquired.