4. Variable Interest Entities

In the first quarter of 2016, the Partnership made an equity investment in Vantage. The Partnership determined its limited membership interest in Vantage is a variable interest, but it is not the primary beneficiary of the entity. Vantage is a VIE at June 30, 2016.

The Partnership determined the TOB Trusts and TEBs Financings are VIEs and the Partnership is the primary beneficiary of each of the Trusts. As a result, the Partnership reports the TOB Trusts and TEBs Financings on a consolidated basis and the senior floating-rate participation interests (“SPEARS”) related to the TOB Trusts and the mortgage revenue bonds and related Class A Certificates related to the TEBs Financings as secured debt financings. In determining the primary beneficiary of these specific VIEs, the Partnership considered who has the power to control the activities of the VIEs which most significantly impact their financial performance, the risks that the entity was designed to create, and how each risk affects the VIE. The executed agreements related to the TOB Trusts and TEBs Financings stipulates the Partnership has the sole right to cause the Trusts to sell the underlying assets. If they were sold, the extent to which the VIEs will be exposed to gains or losses would result from decisions made by the Partnership.

Prior to 2016, the Partnership concluded it was the primary beneficiary of two properties, Bent Tree and Fairmont Oaks, and reported these properties as Consolidated VIEs. The Partnership did not hold an ownership interest but owned the mortgage revenue bonds which financed these two properties. In the fourth quarter of 2015, the two properties were sold and as a result, these entities met the criteria for discontinued operations presentation in the Partnership’s condensed consolidated financial statements for the three and six months ended June 30, 2015. Upon the sale of the two properties, the Partnership eliminated the Consolidated VIE segment in the fourth quarter of 2015 (Note 24).

The following table presents information regarding the Partnership’s variable interests in VIEs held by the Partnership on June 30, 2016 and December 31, 2015 that the Partnership did not consolidate:

	Maximum Exposure to Loss
	June 30, 2016		December 31, 2015
Mortgage revenue bonds	$	104,532,460	$	103,483,793
Property loans	$	15,820,259	$	19,464,977
Investment in an unconsolidated entity	$	3,463,215	$	-

The mortgage revenue bonds are classified on the Condensed Consolidated Balance Sheet as available-for-sale investments and are carried at fair value while property loans are presented on the balance sheet at the unpaid principal less any loan loss allowances. See Note 5 for additional information regarding the mortgage revenue bonds and Note 10 for additional information regarding the property loans. The maximum exposure to loss for the mortgage revenue bonds is equal to the unpaid principal balance on June 30, 2016 and December 31, 2016. The maximum exposure to loss on the property loans at June 30, 2016 and December 31, 2015 is equal to the unpaid principal balance plus accrued interest. The difference between the mortgage revenue bond’s carrying value and the maximum exposure to loss is a function of the unrealized gains or losses on the mortgage revenue bonds. The difference between the property loans’ carrying value and the maximum exposure is the value of loan loss allowances that have been previously recorded against the outstanding property loan balances.