The following tables summarize certain characteristics of the Company's investments in commercial mortgage loans as of September 30, 2020 and December 31, 2019:


						Weighted Average
Loan Type	Unpaid Principal Balance		Carrying Value		Loan Count	Floating Rate Loan %		Coupon(1)		Remaining Term (Years)(2)
September 30, 2020
Loans held-for-investment
Senior secured loans(3)	$	598,933,122	$	598,933,122	44	100.0	%	5.1	%	3.2
	598,933,122		598,933,122		44	100.0	%	5.1	%	3.2


						Weighted Average
Loan Type	Unpaid Principal Balance		Carrying Value		Loan Count	Floating Rate Loan %		Coupon(1)		Remaining Term (Years)(2)
December 31, 2019
Loans held-for-investment
Senior secured loans(3)	$	635,260,420	$	635,260,420	51	100.0	%	5.4	%	3.8
	635,260,420		635,260,420		51	100.0	%	5.4	%	3.8

(1) Weighted average coupon assumes applicable one-month LIBOR of 0.16% and 1.70% as of September 30, 2020 and December 31, 2019, respectively, inclusive of weighted average floors of 1.61% and 1.56%, respectively.

(2) Weighted average remaining term assumes all extension options are exercised by the borrower, provided, however, that our loans may be repaid prior to such date.

(3) As of September 30, 2020, $582,771,880 of the outstanding senior secured loans were held in VIEs and $16,161,242 of the outstanding senior secured loans were held outside VIEs. As of December 31, 2019, $629,157,956 of the outstanding senior secured loans were held in VIEs and $6,102,464 of the outstanding senior secured loans were held outside VIEs.

Activity: For the nine months ended September 30, 2020, the loan portfolio activity was as follows:


	Commercial Mortgage Loans Held-for-Investment



Balance at December 31, 2019	$	635,260,420
Purchases and fundings	52,580,443
Proceeds from principal payments	(88,907,741)
Balance at September 30, 2020	$	598,933,122

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 utilized as of September 30, 2020 and December 31, 2019:


	September 30, 2020				December 31, 2019
Risk Rating	Number of Loans	Unpaid Principal Balance		Net Carrying Value	Number of Loans	Unpaid Principal Balance	Net Carrying Value
1	—	$	—	—	1	9,000,000	9,000,000
2	8	91,155,086		91,155,086	9	87,176,088	87,176,088
3	27	393,803,374		393,803,374	37	487,513,256	487,513,256
4	9	113,974,662		113,974,662	4	51,571,076	51,571,076
5	—	—		—	—	—	—
	44	$	598,933,122	598,933,122	51	635,260,420	635,260,420

As of September 30, 2020, the average risk rating of the commercial mortgage loan portfolio was 3.1 (Moderate Risk), weighted by investment carrying value, with 81.0% of commercial loans held-for-investment rated 3 (Moderate Risk) or better by the Company's Manager.

As of December 31, 2019, the average risk rating of the commercial mortgage loan portfolio was 2.8 (Moderate Risk), weighted by investment carrying value, with 91.9% of commercial loans held-for-invested rated 3 (Moderate Risk) or better by the Company's Manager.

The increase in the average risk rating during 2020 is primarily the result of downgrade of several non multi-family loans to a risk rating of "4" to reflect higher risk in loans collateralized by retail and office properties that are particularly negatively impacted by the COVID-19 pandemic.

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, 2020 and December 31, 2019:


	September 30, 2020		December 31, 2019
Geography
Southwest	37.0	%	38.7	%
South	35.5		27.5
Midwest	18.8		16.9
Mid-Atlantic	7.0		8.4
West	1.7		3.0
Various	—		5.5
Total	100.0	%	100.0	%


	September 30, 2020(1)		December 31, 2019
Collateral Property Type
Multi-Family	90.4	%	93.9	%
Retail	5.9		2.7
Office	3.0		2.0
Self-Storage	0.7		0.7
Mixed-Use	—		0.7
Total	100.0	%	100.0	%

(1) During the period ended March 31, 2020, two multi-family loans were adjusted to retail and office, respectively, due to the primary nature of the underlying properties. The adjustment represents a reduction in multi-family of 3.6% and an increase to retail and office of 2.8% and 0.8%, respectively, to the percentages presented for December 31, 2019.

We did not have any impaired loans, nonaccrual loans, or loans in maturity default as of September 30, 2020 or December 31, 2019.