VARIABLE INTEREST ENTITIES

9 Months Ended

Sep. 30, 2023

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

NOTE 12—VARIABLE INTEREST ENTITIES

The Company, through its subsidiary Walker & Dunlop Affordable Equity (“WDAE”), formerly known as “Alliant,” provides alternative investment management services through the syndication of tax credit funds and the joint development of affordable housing projects. To facilitate the syndication and development of affordable housing projects, the Company is involved with the acquisition and/or formation of limited partnerships and joint ventures with investors, property developers, and property managers that are VIEs.

A detailed discussion of the Company’s accounting policies regarding the consolidation of VIEs and significant transactions involving VIEs is included in NOTE 2 and NOTE 17 of the 2022 Form 10-K.

As of September 30, 2023 and December 31, 2022, the assets and liabilities of the consolidated tax credit funds were immaterial.

The table below presents the assets and liabilities of the Company’s consolidated joint development VIEs included in the Condensed Consolidated Balance Sheets:

Consolidated VIEs (in thousands)		September 30, 2023		December 31, 2022
Assets:
Cash and cash equivalents	$	379	$	201
Restricted cash		2,828		1,532
Receivables, net		31,948		33,593
Other Assets		50,501		49,768
Total assets of consolidated VIEs	$	85,656	$	85,094
Liabilities:
Other liabilities	$	44,745	$	39,148
Total liabilities of consolidated VIEs	$	44,745	$	39,148

The table below presents the carrying value and classification of the Company’s interests in nonconsolidated VIEs included in the Condensed Consolidated Balance Sheets:

Nonconsolidated VIEs (in thousands)		September 30, 2023		December 31, 2022
Assets
Committed investments in tax credit equity	$	212,296	$	254,154
Other assets: Equity-method investments		60,188		57,981
Total interests in nonconsolidated VIEs	$	272,484	$	312,135
Liabilities
Commitments to fund investments in tax credit equity	$	196,250	$	239,281
Total commitments to fund nonconsolidated VIEs	$	196,250	$	239,281
Maximum exposure to losses(1)(2)	$	272,484	$	312,135

(1) Maximum exposure determined as Total interests in nonconsolidated VIEs. The maximum exposure for the Company’s investments in tax credit equity is limited to the carrying value of its investment, as there are no funding obligations or other commitments related to the nonconsolidated VIEs other than the amounts presented in the table above.

(2) Based on historical experience and the underlying expected cash flows from the underlying investment, the maximum exposure of loss is not representative of the actual loss, if any, that the Company may incur.