Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

19. 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 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 consolidated statements of comprehensive income (loss). The following table summarizes the Partnership’s bond purchase commitments as of December 31, 2023 and December 31, 2022:

        Bond Purchase Commitments

        Commitment Date

        Maximum
Committed
Amounts
Remaining

        Interest
Rate

        Estimated Closing
Date

        Fair Value as of 
December 31, 2023

        Fair Value as of 
December 31, 2022

Anaheim & Walnut

September 2021

3,900,000

4.85

Q3 2024

197,788

98,929

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. The Partnership’s remaining non-cancelable commitments for GILs, taxable GILs and property loans are subject to an allowance for credit losses, which was approximately $678,000 as of December 31, 2023. See Note 13 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 December 31, 2023:


Property Name	Commitment Date	Maturity Date	Interest Rate (1)	Total Initial Commitment		Remaining Commitment as of December 31, 2023
Mortgage Revenue Bonds
Meadow Valley	December 2021	December 2029	6.25%	$	44,000,000	$	23,245,000
Residency at the Entrepreneur- Series J-3	April 2022	March 2040	6.00%		26,080,000		13,780,000
Residency at the Entrepreneur- Series J-4	April 2022	March 2040	SOFR + 3.60% (2)		16,420,000		16,420,000
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-3	December 2022	December 2040	6.45% (4)		14,000,000		8,945,000
Residency at Empire - Series BB-4	December 2022	December 2040	6.45% (5)		47,000,000		47,000,000
The Safford	October 2023	October 2026 (3)	7.59%		43,000,000		35,439,966
Subtotal					195,500,000		148,829,966

Taxable Mortgage Revenue Bonds
Residency at the Mayer Series A-T	October 2021	October 2024	SOFR + 3.70%	$	12,500,000	$	1,000,000
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		9,400,000
40rty on Colony - Series P-T	June 2023	June 2030	7.45%		5,950,000		4,950,000
Subtotal					46,254,500		30,754,500

Governmental Issuer Loans
Poppy Grove I	September 2022	April 2025 (3)	6.78%		35,688,328		15,842,328
Poppy Grove II	September 2022	April 2025 (3)	6.78%		22,250,000		12,708,700
Poppy Grove III	September 2022	April 2025 (3)	6.78%		39,119,507		22,569,507
Subtotal					97,057,835		51,120,535

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
Osprey Village	July 2021	August 2024 (3)	SOFR + 3.07%	$	25,500,000	$	10,501,704
Willow Place Apartments	September 2021	October 2024 (3)	SOFR + 3.30%		21,351,328		2,475,722
Sandy Creek Apartments	August 2023	September 2026 (3)	8.63% (6)		7,830,000		5,410,124
Willow Place Apartments Supplemental	November 2023	October 2024 (3)	SOFR + 3.45%		1,838,254		1,499,254
Subtotal					56,519,582		19,886,804

Equity Investments
Vantage at San Marcos (7), (8)	November 2020	N/A	N/A	$	9,914,529	$	8,943,914
Vantage at Loveland (9)	April 2021	N/A	N/A		18,215,000		1,065,061
Freestone Greeley (8)	October 2022	N/A	N/A		16,035,710		11,137,993
The Jessam at Hays Farm	July 2023	N/A	N/A		16,532,636		9,153,867
Freestone Greenville (8)	December 2023	N/A	N/A		19,934,456		14,597,244
Freestone Ladera (8)	December 2023	N/A	N/A		17,097,624		13,449,494
Subtotal					97,729,955		58,347,573

Bond Purchase Commitments
Anaheim & Walnut	September 2021	Q3 2024 (10)	4.85%	$	3,900,000	$	3,900,000
Subtotal					3,900,000		3,900,000

Total Commitments				$	553,541,337	$	366,418,843

(1)

The variable index interest rate components are typically subject to floors that range from 0% to 0.85%.

(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)

Beginning December 2029, the interest rate will change to the greater of (i) 3.25% over the then 10-Year SOFR Swap rate, or (ii) 6.00%.

(5)

Upon stabilization, the MRB will convert to a fixed rate of 10.0% and become subordinate to the other senior MRBs of the borrower.

(6)

The interest rate will convert to a variable rate of Term SOFR + 3.35% on February 1, 2025.

(7)

The property became a consolidated VIE effective during the fourth quarter of 2021 (Note 5).

(8)

A development site has been identified for this property but construction had not commenced as of December 31, 2023.

(9)

In July 2023, the Partnership's initial commitment of $16.3 million was increased by $1.9 million upon meeting certain conditions as outlined in the original agreement.

(10)

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 tax credit 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 December 31, 2023:


Limited Partnership(s)	End of Guaranty Period	Partnership's Maximum Exposure as of December 31, 2023
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 support is in the form of a payment guaranty. 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 $343,000 and $363,000 as of December 31, 2023 and 2022, respectively, and are included within other liabilities in the Partnership's consolidated financial statements. No additional contingent liability has been accrued because the likelihood of claims is remote. The following table summarizes the Partnership’s maximum exposure under these credit guaranties as of December 31, 2023:


Borrower	End of Guaranty Period	Partnership's Maximum Exposure as of December 31, 2023
The 50/50 MF Property--TIF Loan	2025	$	1,337,268
The 50/50 MF Property--Mortgage	2027		21,846,868