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USE OF SPECIAL PURPOSE ENTITIES AND VARIABLE INTEREST ENTITIES (Tables)

9 Months Ended

Sep. 30, 2019

Variable Interest Entity [Line Items]

The condensed consolidated balance sheets of the FREMF trusts at December 31, 2018 are set out below:


Balance Sheets	December 31, 2018
Assets
Receivables	$	24,357,335
Total assets	$	24,357,335
Liabilities and Equity
Multi-family securitized debt obligations	$	19,231,331
Payables	363,855
Total liabilities	$	19,595,186
Equity	4,762,149
Total liabilities and equity	$	24,357,335

Summary of Loan and Borrowing Characteristics

The following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of September 30, 2019 and December 31, 2018:


						Weighted Average
Loan Type	Unpaid Principal Balance		Carrying Value		Loan Count	Floating Rate Loan %		Coupon⁽¹⁾		Life (Years)⁽²⁾
September 30, 2019
Loans held-for-investment
Senior secured loans⁽³⁾	$	559,521,552	$	559,521,552	45	100.0	%	5.8	%	3.8
	559,521,552		559,521,552		45	100.0	%	5.8	%	3.8


						Weighted Average
Loan Type	Unpaid Principal Balance		Carrying Value		Loan Count	Floating Rate Loan %		Coupon⁽¹⁾		Life (Years)⁽²⁾
December 31, 2018
Loans held-for-investment
Senior secured loans⁽³⁾	$	555,172,891	$	555,172,891	44	100.0	%	6.4	%	4.1
	555,172,891		555,172,891		44	100.0	%	6.4	%	4.1

(1) Average weighted by unpaid principal balance of loan. Weighted average coupon assumes applicable one-month LIBOR rate as of September 30, 2019 and December 31, 2018.

(2) The weighted average life of each loan is based on the expected repayment of principal assuming all extension options are exercised by the borrower.

(3) As of September 30, 2019, $553,190,459 of the outstanding senior secured loans were held in VIEs and $6,331,093 of the outstanding senior secured are held outside VIEs. As of December 31, 2018, $550,555,503 of the outstanding senior secured loans were held in VIEs and $4,617,388 of the outstanding senior secured loans were held outside VIEs.

Activity: For the nine months ended September 30, 2019, the loan portfolio activity was as follows:


	Commercial Mortgage Loans Held-for-Investment



Balance at December 31, 2018	$	555,172,891
Purchases	179,075,497
Proceeds from principal repayments	(174,726,836)
Balance at September 30, 2019	$	559,521,552

Loan Risk Ratings: As further described in Note 2, the Company evaluates the commercial mortgage loan portfolio on a quarterly basis and assigns a risk rating based on a variety of factors. The following tables present the principal balance and net book value of the loan portfolio based on the Company's internal risk ratings as of September 30, 2019 and December 31, 2018:


	September 30, 2019						December 31, 2018
Risk Rating	Number of Loans	Unpaid Principal Balance		Net Carrying Value	Number of Loans	Unpaid Principal Balance	Net Carrying Value
1	—	$	—	—	—	—	—
2	7	76,223,011		76,223,011	5	51,589,000	51,589,000
3	34	433,012,131		433,012,131	34	455,323,082	455,323,082
4	4	50,286,410		50,286,410	5	48,260,809	48,260,809
5	—	—		—	—	—	—
	45	$	559,521,552	559,521,552	44	555,172,891	555,172,891

As of September 30, 2019, the average risk rating of the commercial mortgage loan portfolio was 2.9 (Moderate Risk), weighted by investment carrying value, with 91.0% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager.

As of December 31, 2018 , the average risk rating of the commercial mortgage loan portfolio was 2.9 (Moderate Risk), weighted by investment carrying value, with 91.3% of commercial loans held-for-invested rated 3 (Moderate Risk) or better by the Company's Manager.

Concentration of Credit Risk: The following tables present the geographic and property types of collateral underlying the Company's commercial mortgage loans as a percentage of the loans' carrying value as of September 30, 2019 and December 31, 2018:

Loans Held-for-Investment


	September 30, 2019		December 31, 2018
Geography
Southwest	39.3	%	30.2	%
South	22.8		22.6
Midwest	18.4		20.2
Mid-Atlantic	9.4		10.3
Various	6.0		5.9
West	4.1		10.8
Total	100.0	%	100.0	%


	September 30, 2019		December 31, 2018
Collateral Property Type
Multi-Family	92.0	%	87.2	%
Office	4.1		7.6
Retail	3.1		1.2
Mixed-Use	0.8		3.0
Self-Storage	—		1.0
Total	100.0	%	100.0	%

We did not have any impaired loans, nonaccrual loans, or loans in maturity default as of September 30, 2019 or December 31, 2018.

Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd.

Variable Interest Entity [Line Items]

Condensed Consolidated Balance Sheets

The carrying values of the Company's total assets and liabilities related to Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. at September 30, 2019 and December 31, 2018 included the following VIE assets and liabilities:


ASSETS	September 30, 2019		December 31, 2018
Cash, cash equivalents and restricted cash	$	81,037,212	$	51,330,950
Accrued interest receivable	2,214,540		2,398,905
Investment related receivable	—		32,666,128
Loans held for investment	553,190,459		550,555,503
Total Assets	$	636,442,211	$	636,951,486

LIABILITIES
Accrued interest payable	$	750,546	$	867,794
Collateralized loan obligations⁽¹⁾	505,438,271		503,978,918
Total Liabilities	$	506,188,817	$	504,846,712
Equity	130,253,394		132,104,774
Total liabilities and equity	$	636,442,211	$	636,951,486

(1) The stated maturity of the collateral loan obligations per the terms of the underlying collateralized loan obligation agreement is August 15, 2034 for Hunt CRE 2017-FL1, Ltd. and August 15, 2028 for Hunt CRE 2018-FL2, Ltd.

Summary of Loan and Borrowing Characteristics

The following tables present certain loan and borrowing characteristics of Hunt CRE 2017-FL1, Ltd. and Hunt CRE 2018-FL2, Ltd. as of September 30, 2019 and December 31, 2018:


As of September 30, 2019
Collateralized Loan Obligations	Count	Principal Value		Carrying Value⁽¹⁾		Wtd. Avg. Yield
Collateral (loan investments)	45	$	553,190,459	$	553,190,459	L + 3.79%
Debt (notes issued)	2	510,181,000		505,438,271		L + 1.40%


As of December 31, 2018
Collateralized Loan Obligations	Count	Principal Value		Carrying Value⁽¹⁾		Wtd. Avg. Yield
Collateral (loan investments)	44	$	550,555,503	$	550,555,503	L + 4.05%
Debt (notes issued)	2	510,181,000		503,978,918		L + 1.40%

(1) The carrying value for Hunt CRE 2017-FL1, Ltd. is net of discount of $1,621,111 and $2,440,674 for September 30, 2019 and December 31, 2018, respectively and the carrying value for Hunt CRE 2018-FL2, Ltd. is net of debt issuance costs of $3,121,618 and $3,761,410 for September 30, 2019 and December 31, 2018, respectively.