The Partnership’s PHC Certificates represent beneficial interests in three PHC Trusts. The assets held by the PHC Trusts consist of custodial receipts evidencing loans made to numerous local public housing authorities. Principal and interest on these loans are payable by the respective public housing authorities out of annual appropriations to be made to the public housing authorities under the Department of Housing and Urban Development’s (“HUD”) Capital Fund Program established under the Quality Housing and Work Responsibility Act of 1998 (the “Capital Fund Program”). The PHC Trusts have a first lien on these annual Capital Fund Program payments to secure the public housing authorities’ respective obligations to pay principal and interest on their loans. The loans payable by the public housing authorities are not debts of, or guaranteed by, the United States of America or HUD. Interest payable on the public housing authority debt held by the PHC Trusts is exempt from federal income taxes. The PHC Certificates issued by each of the PHC Trusts have been rated investment grade by Standard & Poor’s. As of December 31, 2019, the PHC Certificates are held in trust at Mizuho Capital Markets, LLC (“Mizuho”) in secured financing transactions (see Note 15).

The Partnership had the following investments in the PHC Certificates as of December 31, 2019 and 2018:

	December 31, 2019
Description of PHC Certificates	Weighted Average Lives (Years)		Investment Rating	Weighted Average Interest Rate Over Life	Cost Adjusted for Paydowns and Impairment		Cumulative Unrealized Gain		Cumulative Unrealized Loss		Estimated Fair Value
PHC Certificate Trust I		5.47	AA-	5.33%	$	24,477,478	$	435,659	$	-	$	24,913,137
PHC Certificate Trust II		4.58	AA-	4.41%		4,375,296		386,433		-		4,761,729
PHC Certificate Trust III		5.43	BBB	5.12%		13,087,779		586,712		-		13,674,491
					$	41,940,553	$	1,408,804	$	-	$	43,349,357

	December 31, 2018
Description of PHC Certificates	Weighted Average Lives (Years)	Investment Rating	Weighted Average Interest Rate Over Life	Cost Adjusted for Paydowns and Impairment		Cumulative Unrealized Gain		Cumulative Unrealized Loss		Estimated Fair Value
PHC Certificate Trust I	6.49	AA-	5.33%	$	24,608,543	$	285,984	$	-	$	24,894,527
PHC Certificate Trust II	5.56	A+	4.35%		9,071,785		44,768		-		9,116,553
PHC Certificate Trust III	6.76	BBB	5.30%		14,566,975		94,031		-		14,661,006
				$	48,247,303	$	424,783	$	-	$	48,672,086

See Note 23 for a description of the methodology and significant assumptions for determining the fair value of the PHC Certificates. Unrealized gains or losses on the PHC Certificates are reported on the Partnership’s consolidated statements of comprehensive income to reflect changes in their estimated fair values resulting from market conditions and fluctuations in the present value of the expected cash flows from the PHC Certificates.

There were no impairment charges on the PHC Certificates recorded during the year ended December 31, 2019. The Partnership recognized impairment charges on PHC Certificates of approximately $1.1 million during the year ended December 31, 2018. See Note 2 for information considered in the Partnership’s evaluation of impairment of the PHC Certificates.

The PHC Certificate Trusts I, II and III Trust Certificates were sold in January 2020. See Note 26 for additional information.