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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2025
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 Partnership had no bond purchase commitments as of December 31, 2024. The following table summarizes the Partnership’s bond purchase commitments as of June 30, 2025:
Bond Purchase Commitments |  | Commitment Date |  | Maximum Committed Amounts Remaining |  |  | Interest Rate |  |  | Estimated Closing Date |  | Fair Value as of June 30, 2025 |
Kindred Apartments |  | March 2025 |  | $ | 21,921,000 |  |  |  | 6.875 | % |  | December 2027 |  | $ | 1,833,078 |
Investment Commitments The Partnership has remaining contractual commitments to provide additional funding of certain MRBs, taxable MRBs, taxable GILs, and property loans while the secured properties are under construction or rehabilitation. The Partnership’s remaining non-cancelable commitments for taxable GILs and property loans are subject to an allowance for credit losses, which was approximately $30,000 as of June 30, 2025. 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, 2025:
Property Name |  | Commitment Date |  | Asset Maturity Date |  | Interest Rate |  | Total Commitment |  |  | Remaining Commitment as of June 30, 2025 |
Mortgage Revenue Bonds |  |  |  |  |  |  |  |  |  |
Meadow Valley |  | December 2021 |  | December 2029 |  | 6.25% |  | $ | 44,000,000 |  |  | $ | 1,500,000 |
Residency at Empire - Series BB-4 |  | December 2022 |  | December 2040 |  | 6.45% (1) |  |  | 47,000,000 |  |  |  | 8,950,000 |
Subtotal |  |  |  |  |  |  |  |  | 91,000,000 |  |  |  | 10,450,000 |
Taxable Mortgage Revenue Bonds |  |  |  |  |  |  |  |  |  |
Residency at Empire - Series BB-T |  | December 2022 |  | December 2025 (2) |  | 7.45% |  | $ | 9,404,500 |  |  | $ | 8,404,500 |
Gateway and Yarbrough Predevelopment Project |  | June 2025 |  | July 2026 |  | 9.00% |  |  | 2,000,000 |  |  |  | 1,200,000 |
Subtotal |  |  |  |  |  |  |  |  | 11,404,500 |  |  |  | 9,604,500 |
Taxable Governmental Issuer Loans |  |  |  |  |  |  |  |  |  |
Poppy Grove III |  | September 2022 |  | October 2025 |  | 6.78% |  | $ | 18,780,493 |  |  | $ | 6,280,493 |
Property Loans |  |  |  |  |  |  |  |  |  |  |  |
Sandoval Flats |  | November 2024 |  | December 2027 (2) |  | 7.48% |  | $ | 29,846,000 |  |  | $ | 28,846,000 |
Equity Investments |  |  |  |  |  |  |  |  |  |  |  |
Vantage at San Marcos (3), (4) |  | November 2020 |  | N/A |  | N/A |  | $ | 9,914,529 |  |  | $ | 8,943,914 |
Freestone Greeley (4) |  | October 2022 |  | N/A |  | N/A |  |  | 16,035,710 |  |  |  | 10,562,345 |
Subtotal |  |  |  |  |  |  |  |  | 25,950,239 |  |  |  | 19,506,259 |
Bond Purchase Commitments |  |  |  |  |  |  |  |  |  |  |  |
Kindred Apartments |  | March 2025 |  | December 2027 (2) |  | 6.875% |  | $ | 21,921,000 |  |  | $ | 21,921,000 |
Total Commitments |  |  |  |  |  |  |  | $ | 198,902,232 |  |  | $ | 96,608,252 |
(1) Upon stabilization, the MRB will convert to a fixed rate of 10.00% and become subordinate to the other senior MRBs of the borrower. (2) 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. (3) The property became a consolidated VIE effective during the fourth quarter of 2021 (Note 3). (4) A development site has been identified for this property but construction had not commenced as of June 30, 2025. In addition, the Partnership is committed to funding 10% of the capital for the Construction Lending JV with the remainder to be funded by a third-party investor with each party contributing its proportionate capital contributions upon funding of future investments. The Partnership’s capital is contributed on a draw-down basis over the term of the underlying investments of the Construction Lending JV. As of June 30, 2025, the Partnership had contributed approximately $271,000 of its maximum capital commitment of approximately $8.3 million. The Partnership’s maximum commitment may increase if additional third-party capital commitments are obtained by the Construction Lending JV. Construction Loan Guaranties The Partnership entered into limited guaranty agreements for bridge loans related to certain investments in unconsolidated entities. The Partnership will only have to perform on the guaranties if a default by the borrower were to occur. The Partnership has not accrued any amount for these contingent liabilities because the Partnership believes the likelihood of guaranty claims is remote. The following table summarizes the Partnership’s maximum exposure under these guaranty agreements as of June 30, 2025:
Borrower |  | Guaranty Maturity |  | Maximum Balance Available on Loan |  |  | Loan Balance as of June 30, 2025 |  |  | Partnership's Maximum Exposure as of June 30, 2025 |  |  | Guaranty Terms
Vantage at McKinney Falls |  | 2026 |  | $ | 35,850,000 |  |  | $ | 35,850,000 |  |  | $ | 17,925,000 |  |  | (1)
Vantage at Hutto |  | 2026 |  |  | 35,000,000 |  |  |  | 35,000,000 |  |  | $ | 17,500,000 |  |  | (1)
Vantage at Loveland |  | 2026 |  |  | 47,000,000 |  |  |  | 47,000,000 |  |  | $ | 23,500,000 |  |  | (1)
(1) 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 of not less than $100.0 million and maintain liquid assets of not less than $6.3 million at the end of each quarter. The Partnership was in compliance with these requirements as of June 30, 2025. The Partnership has also provided indemnification to the lender for various costs including interest expenses, environmental non-compliance and remediation during the term. The Partnership has also provided indemnification to the lender for Vantage at McKinney Falls and Vantage at Loveland for certain operating costs. 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, 2025:
Limited Partnership(s) |  | End of Guaranty Period |  | Partnership's Maximum Exposure as of June 30, 2025 |  |
Ohio Properties |  | 2026 |  | $ | 1,609,695 |  |
Greens of Pine Glen, LP |  | 2027 |  |  | 1,278,767 |  |
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, 2025. The mortgage support is in the form of a forward loan purchase agreement upon maturity of the mortgage. The reported value of the credit guaranty was approximately $315,000 and $319,000 as of June 30, 2025 and December 31, 2024, 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, 2025 was approximately $21.0 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 $78.0 million as of June 30, 2025. 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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