Fair Value Measurements

6 Months Ended

Jun. 30, 2012

Fair Value Measurements [Abstract]

Fair Value Disclosures [Text Block]

Fair Value Measurements

Current accounting guidance on fair value measurements establishes a framework for measuring fair value and provides for expanded disclosures about fair value measurements.  The guidance:

• Defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date; and

• Establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date.

Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.  To increase consistency and comparability in fair value measurements and related disclosures, the fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.  The three levels of the hierarchy are defined as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3 inputs are unobservable inputs for asset or liabilities.

The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Following is a description of the valuation methodologies used for assets and liabilities measured at fair value.

Investments in Tax-exempt Mortgage Revenue Bonds.  The fair values of the Company’s investments in tax-exempt mortgage revenue bonds have each been based on a discounted cash flow and yield to maturity analysis. There is no active trading market for the bonds and price quotes for the bonds are not available.  If available, the General Partner may also consider price quotes on similar bonds or other information from external sources, such as pricing services.  The estimates of the fair values of these bonds, whether estimated by the Company or based on external sources, are based largely on unobservable inputs the General Partner believes would be used by market participants.  Additionally, the calculation methodology used by the external sources and the Company encompasses the use of judgment in its application. To validate changes in the fair value of the Company's investments in tax-exempt mortgage revenue bonds between reporting periods, management looks at the key inputs such as changes in the current market yields on similar bonds as well as changes in the operating performance of the underlying property serving as collateral for each bond. We validate that the changes in the estimated fair value of the tax-exempt mortgage revenue bonds move with the changes in these monitored factors. Given these facts the fair value measurement of the Company’s investment in tax-exempt mortgage revenue bonds is categorized as a Level 3 input.

Interest rate derivatives.  The effect of the Company’s interest rate caps is to set a cap, or upper limit, on the base rate of interest paid on the Company’s variable rate debt equal to the notional amount of the derivative agreement.  The effect of the Company’s interest rate swap is to change a variable rate debt obligation to a fixed rate for that portion of the debt equal to the notional amount of the derivative agreement.  The interest rate derivatives are recorded at fair value with changes in fair value included in current period earnings within interest expense.  The fair value of the interest rate derivatives is based on a model whose inputs are not observable and therefore are categorized as a Level 3 input.

Assets and liabilities measured at fair value on a recurring basis are summarized below:

			Fair Value Measurements at June 30, 2012
Description	Assets/Liabilities at Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets
Tax-exempt Mortgage Revenue Bonds	$	136,846,619	$	—		$	—		$	136,846,619
Interest Rate Derivatives	542,773		—			—			542,773
Total Assets at Fair Value	$	137,389,392	$	—		$	—		$	137,389,392
			For Three Months Ended June 30, 2012
			Fair Value Measurements Using Significant
			Unobservable Inputs (Level 3)
			Tax-exempt Mortgage Revenue Bonds			Interest Rate Derivatives			Total
Beginning Balance April 1, 2012			$	138,576,178		$	993,930		$	139,570,108
Total gains (losses) (realized/unrealized)
Included in earnings			—			(451,157		)	(451,157		)
Included in other comprehensive income			4,047,983			—			4,047,983
Purchases			10,164,815			—			10,164,815
Sale of tax-exempt revenue bonds			(15,625,000		)	—			(15,625,000		)
Settlements			(317,357		)	—			(317,357		)
Ending Balance June 30, 2012			$	136,846,619		$	542,773		$	137,389,392
Total amount of losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of June 30, 2012			$	—		$	(451,157	)	$	(451,157	)

	For Six Months Ended June 30, 2012
	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Tax-exempt Mortgage Revenue Bonds			Interest Rate Derivatives			Total
Beginning Balance January 1, 2012	$	135,695,352		$	1,323,270		$	137,018,622
Total gains (losses) (realized/unrealized)
Included in earnings	—			(780,497		)	(780,497		)
Included in other comprehensive income	6,889,571			—			6,889,571
Purchases	10,164,815			—			10,164,815
Sale of tax-exempt revenue bonds	(15,625,000		)	—			(15,625,000		)
Settlements	(278,119		)	—			(278,119		)
Ending Balance June 30, 2012	$	136,846,619		$	542,773		$	137,389,392
Total amount of losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of June 30, 2012	$	—		$	(780,497	)	$	(780,497	)

			Fair Value Measurements at December 31, 2011
Description	Assets/Liabilities at Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets
Tax-exempt Mortgage Revenue Bonds	$	135,695,352	$	—	$	—		$	135,695,352
Interest Rate Derivatives	1,323,270		—		—			1,323,270
Total Assets at Fair Value	$	137,018,622	$	—	$	—		$	137,018,622
			For Three Months Ended June 30, 2011
			Fair Value Measurements Using Significant
			Unobservable Inputs (Level 3)
			Tax-exempt Mortgage Revenue Bonds		Interest Rate Derivatives			Total
Beginning Balance April 1, 2011			$	107,927,564	$	3,174,237		$	111,101,801
VIE deconsolidation			15,810,000		—			15,810,000
Total gains (losses) (realized/unrealized)
Included in earnings			—		(656,000)			(656,000)
Included in other comprehensive income			3,790,432		—			3,790,432
Purchases			15,625,000		—			15,625,000
Bond retirement			(5,795,000)		—			(5,795,000)
Settlements			(52,188)		—			(52,188)
Ending Balance June 30, 2011			$	137,305,808	$	2,518,237		$	139,824,045
Total amount of losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of June 30, 2011			$	—	$	(656,000	)	$	(656,000	)

	For Six Months Ended June 30, 2011
	Fair Value Measurements Using Significant
	Unobservable Inputs (Level 3)
	Tax-exempt Mortgage Revenue Bonds			Interest Rate Derivatives			Total
Beginning Balance January 1, 2011	$	100,566,643		$	3,406,791		$	103,973,434
VIE deconsolidation	15,083,757			—			15,083,757
Total gains (losses) (realized/unrealized)
Included in earnings	—			(888,554		)	(888,554		)
Included in other comprehensive income	6,639,472			—			6,639,472
Purchases	20,117,500			—			20,117,500
Bond retirement	(5,047,208		)	—			(5,047,208		)
Settlements	(54,356		)	—			(54,356		)
Ending Balance June 30, 2011	$	137,305,808		$	2,518,237		$	139,824,045
Total amount of losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of June 30, 2011	$	—		$	(888,554	)	$	(888,554	)

Losses included in earnings for the period shown above are included in interest expense.

The Company calculates a fair market value of each financial instrument using a discounted cash flow model based on the debt amortization schedules at the effective rate of interest for each period represented. This estimate of fair value is based on Level 3 inputs. Below represents the fair market value of the debt held on the balance sheet for June 30, 2012 and December 31, 2011, respectively.

	June 30, 2012		December 31, 2011
	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Financial Liabilities:
Debt financing	104,328,000	105,590,417	112,673,000	115,106,332
Mortgages payable	43,231,990	44,142,663	46,243,883	46,932,670