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Notes Payable
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Notes Payable Notes Payable
Notes payable consists of the following (in thousands):
Maturity DatesMarch 31,
2022		December 31,
2021
Fixed mortgage notes payable2022 to 2045$543,593 $592,997 
Variable mortgage notes payable2026 to 2029130,127 88,711 
Notes payable - insurance20221,532 3,483 
Notes payable - other20232,121 2,121 
Total notes payable$677,373 $687,312 
Less: deferred financing costs, net6,352 4,201 
Total notes payable, net$671,021 $683,111 
Less: current portion43,851 69,769 
Total long-term notes payable, less current portion$627,170 $613,342 
The following schedule summarizing our notes payable as of March 31, 2022 (in thousands):
Principal payments due in:
2022$42,391 
202314,452 
2024152,155 
2025194,285 
202675,919 
Thereafter198,171 
Total notes payable, excluding deferred financing costs$677,373 

As of March 31, 2022, our fixed mortgage notes interest rates range from 3.6% to 6.3%. Our variable mortgage notes are based on one-month LIBOR or the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin. As of March 31, 2022, one-month LIBOR and one-month SOFR was 0.44% and 0.29%, respectively, and the applicable margins were 2.14% and 3.50%, respectively.

As of March 31, 2022, we had property and equipment with a net carrying value of $603.8 million that is secured by outstanding notes payable.
2022 Mortgage Refinance
In March 2022, the Company completed the refinancing of certain existing mortgage debt (“Refinance Facility”) for ten of its communities. The Refinance Facility includes an initial term loan of $80.0 million. In addition, $10.0 million is available as delayed loans that can be borrowed upon achieving and maintaining certain financial covenant requirements and up to an additional uncommitted $40 million may be available to fund future growth initiatives. In addition, the Company provided a limited payment guaranty (“Limited Payment Guaranty”) of 33%, that reduces to 25% and then to 10%, of the then outstanding balance of the Refinance Facility based upon achieving certain financial covenants maintained over a certain time period As defined and required in the Limited Payment Guaranty, the Company is required to maintain certain covenants including maintaining a Tangible Net Worth of $150 million and Liquid Assets of at least $13 million (inclusive of a $1.5 million debt service reserve fund provided by the Company at the closing of the Refinance Facility).
The Refinance Facility also requires the financial performance of the ten communities to achieve certain financial covenants, including a minimum debt service coverage ratio and a minimum debt yield (as defined in the Loan Agreement) with a first measurement date as of June 30, 2022 and quarterly measurement dates thereafter. We can provide no assurance that any future financial covenants will be met. The Loan Agreement requires the establishment of a debt service reserve fund with a defined balance of $1.5 million (included in Liquid Assets) that may be released based upon terms described in the Loan Agreement. The reserve fund is included in our “other assets.”
The Refinancing Facility requires that the Company purchase and maintain an interest rate cap facility during the term of the Refinancing Facility. The Company is in process of obtaining the interest rate cap facility in compliance with the lender’s requirements.
The Company incurred costs related to the Refinance Facility of $2.1 million that are included in deferred financing costs at March 31, 2022.
The financing transaction generated a loss on refinancing of notes payable of $0.6 million which is included in loss on extinguishment of debt for the three months ended March 31, 2022.
Transactions Involving Certain Fannie Mae Loans

The Coronavirus Aid, Relief and Economic Security (“CARES”) Act, among other things, permitted borrowers with mortgages from Government Sponsored Enterprises who experienced a financial hardship related to the COVID-19 pandemic to obtain forbearance of their loans for up to 90 days. During 2020, the Company entered into several loan forbearance agreements with the Federal National Mortgage Association (“Fannie Mae”). In July 2020, the Company elected not to pay $3.8 million on the loans for the remaining 18 properties as of that date as it initiated a process intended to transfer the operations and ownership of such properties to Fannie Mae.  Therefore, the Company was in default on such loans. 

As a result of the events of default and receivership order, the Company discontinued recognizing revenues and expenses related to the 18 properties effective August 1, 2020, which was the date of default.  In addition, the Company concluded it was no longer entitled to receive any existing accounts receivable or revenue related to the properties, all amounts held in escrow by Fannie Mae were forfeited, and that the Company no longer has control of the properties in accordance with GAAP. Accordingly, the Company derecognized the net carrying value of the properties and related assets from the financial statements and recorded a loss from the forbearance. The Company continued to recognize the related debt and liabilities until the debts are formally released. When these debts are formally released, the net carrying value of the debts is derecognized and a gain on extinguishment of debt is recognized. During the three months ended March 31, 2021, Fannie Mae completed the transition of legal ownership of three of the Company's properties and the Company recorded a $47.0 million gain on extinguishment of this debt.

As of March 31, 2022, two properties remain for which the legal ownership has not been transferred back to Fannie Mae. At both March 31, 2022 and December 31, 2021, the Company included $32.0 million in outstanding debt in current portion of notes payable, net of deferred financing costs. As March 31, 2022 and December 31, 2021, accrued interest related to the remaining two properties was $3.4 million and $2.7 million, respectively. As of March 31, 2022 and December 31, 2021, the Company did not manage these properties (or any properties) on behalf of Fannie Mae. Except for the non-compliance with Fannie Mae mortgages for the two remaining properties expected to transition back to Fannie Mae, as noted above, the Company was in compliance with all other aspects of its outstanding indebtedness at March 31, 2022.