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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | 16. Commitments and Contingencies Legal Proceedings The Partnership, from time to time, is 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 and the amount of the loss can be reasonably estimated, the estimated amount of the loss is accrued in the Partnership's condensed consolidated financial statements. If the Partnership determines that a loss is reasonably possible, the Partnership will, if material, disclose the nature of the loss contingency and the estimated range of possible loss, or include a statement that no estimate of loss can be made. While the resolution of these matters cannot be predicted with certainty, the Partnership currently believes there are no pending legal proceedings in which the Partnership is currently involved the outcome of which will have a material effect on the Partnership’s financial condition, results of operations, or cash flows. 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 as gains or losses on the Partnership's condensed consolidated statements of comprehensive income (loss). The following table summarizes the Partnership’s bond purchase commitments as of June 30, 2024 and December 31, 2023:
Bond Purchase Commitments |  | Commitment Date |  | Maximum Committed Amounts Remaining |  |  | Interest Rate |  |  | Estimated Closing Date |  | Fair Value as of June 30, 2024 |  |  | Fair Value as of December 31, 2023 |
Anaheim & Walnut |  | September 2021 |  |  | 3,900,000 |  |  |  | 4.85 | % |  | Q3 2024 |  |  | 46,238 |  |  |  | 197,788 |
Investment Commitments The Partnership has remaining contractual commitments to provide additional funding of certain MRBs, taxable MRBs, GILs, taxable GILs, and property loans while the secured properties are under construction or rehabilitation. See Note 10 for additional information on the allowance for credit losses on such commitments. The Partnership also has outstanding contractual commitments to contribute additional equity to unconsolidated entities. The following table summarizes the Partnership’s total and remaining commitments as of June 30, 2024:
Property Name |  | Commitment Date |  | Maturity Date |  | Interest Rate (1) |  | Total Initial Commitment |  |  | Remaining Commitment as of June 30, 2024 |
Mortgage Revenue Bonds |  |  |  |  |  |  |  |  |  |
Meadow Valley |  | December 2021 |  | December 2029 |  | 6.25% |  | $ | 44,000,000 |  |  | $ | 14,470,000 |
Residency at the Entrepreneur- Series J-4 |  | April 2022 |  | March 2040 |  | SOFR + 3.60% (2) |  |  | 16,420,000 |  |  |  | 12,600,000 |
Residency at the Entrepreneur- Series J-5 |  | February 2023 |  | April 2025 (3) |  | SOFR + 3.60% |  |  | 5,000,000 |  |  |  | 4,000,000 |
Residency at Empire - Series BB-4 |  | December 2022 |  | December 2040 |  | 6.45% (4) |  |  | 47,000,000 |  |  |  | 41,500,000 |
The Safford |  | October 2023 |  | October 2026 (3) |  | 7.59% |  |  | 43,000,000 |  |  |  | 23,737,106 |
Subtotal |  |  |  |  |  |  |  |  | 155,420,000 |  |  |  | 96,307,106 |
Taxable Mortgage Revenue Bonds |  |  |  |  |  |  |  |  |  |
Residency at the Entrepreneur Series J-T |  | April 2022 |  | April 2025 (3) |  | SOFR + 3.65% |  | $ | 8,000,000 |  |  | $ | 7,000,000 |
Residency at Empire - Series BB-T |  | December 2022 |  | December 2025 (3) |  | 7.45% |  |  | 9,404,500 |  |  |  | 8,404,500 |
Village at Hanford Square - Series H-T |  | May 2023 |  | May 2030 |  | 7.25% |  |  | 10,400,000 |  |  |  | 6,900,000 |
40rty on Colony - Series P-T |  | June 2023 |  | June 2030 |  | 7.45% |  |  | 5,950,000 |  |  |  | 4,950,000 |
Subtotal |  |  |  |  |  |  |  |  | 33,754,500 |  |  |  | 27,254,500 |
Governmental Issuer Loans |  |  |  |  |  |  |  |  |  |
Poppy Grove I |  | September 2022 |  | April 2025 (3) |  | 6.78% |  |  | 35,688,328 |  |  |  | 7,842,328 |
Poppy Grove II |  | September 2022 |  | April 2025 (3) |  | 6.78% |  |  | 22,250,000 |  |  |  | 9,708,700 |
Poppy Grove III |  | September 2022 |  | April 2025 (3) |  | 6.78% |  |  | 39,119,507 |  |  |  | 18,569,507 |
Subtotal |  |  |  |  |  |  |  |  | 97,057,835 |  |  |  | 36,120,535 |
Taxable Governmental Issuer Loans |  |  |  |  |  |  |  |  |  |
Poppy Grove I |  | September 2022 |  | April 2025 (3) |  | 6.78% |  | $ | 21,157,672 |  |  | $ | 20,157,672 |
Poppy Grove II |  | September 2022 |  | April 2025 (3) |  | 6.78% |  |  | 10,941,300 |  |  |  | 9,941,300 |
Poppy Grove III |  | September 2022 |  | April 2025 (3) |  | 6.78% |  |  | 24,480,493 |  |  |  | 23,480,493 |
Subtotal |  |  |  |  |  |  |  |  | 56,579,465 |  |  |  | 53,579,465 |
Property Loans |  |  |  |  |  |  |  |  |  |  |  |
Sandy Creek Apartments |  | August 2023 |  | September 2026 (3) |  | 8.63% (5) |  | $ | 7,830,000 |  |  | $ | 1,042,008 |
Subtotal |  |  |  |  |  |  |  |  | 7,830,000 |  |  |  | 1,042,008 |
Equity Investments |  |  |  |  |  |  |  |  |  |  |  |
Vantage at San Marcos (6), (7) |  | November 2020 |  | N/A |  | N/A |  | $ | 9,914,529 |  |  | $ | 8,943,914 |
Freestone Greeley (7) |  | October 2022 |  | N/A |  | N/A |  |  | 16,035,710 |  |  |  | 10,562,345 |
Freestone Greenville |  | December 2023 |  | N/A |  | N/A |  |  | 20,049,570 |  |  |  | 12,639,538 |
Freestone Ladera (7) |  | December 2023 |  | N/A |  | N/A |  |  | 17,097,624 |  |  |  | 13,449,494 |
Subtotal |  |  |  |  |  |  |  |  | 63,097,433 |  |  |  | 45,595,291 |
Bond Purchase Commitments |  |  |  |  |  |  |  |  |  |  |  |
Anaheim & Walnut |  | September 2021 |  | Q3 2024 (8) |  | 4.85% |  | $ | 3,900,000 |  |  | $ | 3,900,000 |
Subtotal |  |  |  |  |  |  |  |  | 3,900,000 |  |  |  | 3,900,000 |
Total Commitments |  |  |  |  |  |  |  | $ | 417,639,233 |  |  | $ | 263,798,905 |
(1) The variable index interest rate components are subject to a floor of 0.27%. (2) Upon stabilization, the MRB will convert to a fixed rate of 8.0% and become subordinate to the other senior MRBs. (3) The borrowers may elect to extend the maturity date for a period ranging between six and twelve months upon meeting certain conditions, which may include payment of a non-refundable extension fee. (4) Upon stabilization, the MRB will convert to a fixed rate of 10.0% and become subordinate to the other senior MRBs of the borrower. (5) The interest rate will convert to a variable rate of Term SOFR + 3.35% on February 1, 2025. (6) The property became a consolidated VIE effective during the fourth quarter of 2021 (Note 3). (7) A development site has been identified for this property but construction had not commenced as of June 30, 2024. (8) This is the estimated closing date of the associated bond purchase commitment. Other Guaranties and Commitments The Partnership has entered into guaranty 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 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 guaranties because the Partnership believes the likelihood of repurchase events is remote. The following table summarizes the Partnership’s maximum exposure under these guaranty agreements as of June 30, 2024:
Limited Partnership(s) |  | End of Guaranty Period |  | Partnership's Maximum Exposure as of June 30, 2024 |  |
Ohio Properties |  | 2026 |  | $ | 1,960,152 |  |
Greens of Pine Glen, LP |  | 2027 |  |  | 1,470,582 |  |
In December 2022, the Partnership sold 100% of its ownership interest in The 50/50 MF Property to an unrelated non-profit organization. The buyer assumed two mortgages payable associated with the property and the Partnership agreed to provide certain recourse support for the assumed mortgages. The TIF Loan was paid off in June 2024, and the Partnership does not have exposure as of June 30, 2024. The mortgage support is in the form of a forward loan purchase agreement upon maturity of the mortgage. The reported value of the credit guaranties was approximately $324,000 and $343,000 as of June 30, 2024 and December 31, 2023, respectively, and are included within other liabilities in the Partnership's condensed consolidated balance sheets. No additional contingent liability has been accrued because the likelihood of claims is remote. The Partnership's remaining forward loan purchase agreement expires in 2027 and its maximum exposure as of June 30, 2024 was approximately $21.6 million. The Partnership has entered into various forward loan purchase agreements associated with construction loans for its investments in unconsolidated entities. Under these agreements, the Partnership will purchase a loan from the construction lender at maturity of the construction loan, which is typically five to seven years from closing, if not otherwise repaid by the borrower entity. The Partnership has the right to cure any defaults under the construction loan agreement that otherwise could accelerate the maturity of the construction loan. In addition, if the Partnership is required to perform under a forward loan purchase agreement, then it has the right to remove the managing member of the borrower entity, take ownership of the underlying property, and either sell the property or obtain replacement financing. Certain forward loan purchase agreements are only effective upon the receipt by the property of a certificate of occupancy by the borrower entity while others are effective as of the construction loan closing. The Partnership has recourse to the managing member of the borrower entity and/or the project’s general contractor for those agreements that are effective prior to the receipt of a certificate of occupancy. Total construction loan balances associated with effective forward loan purchase agreements are $127.2 million as of June 30, 2024. The Partnership has not recorded any non-contingent or contingent liabilities related to the forward loan purchase agreements as such amounts are deemed minimal.

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