NOTE 5. MORTGAGE NOTES PAYABLE

At March 31, 2014 and December 31, 2013, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At March 31, 2014, the interest rates on these loans ranged from 3.76% to 5.97%, payable in monthly installments aggregating approximately $819,000, including principal, to various dates through 2029. The majority of the mortgages are subject to prepayment penalties. At March 31, 2014, the weighted average interest rate on the above mortgages was 4.85%. The effective rate of 4.96% includes the amortization expense of deferred financing costs. See Note 12 for fair value information. The Partnership’s mortgage debt and the mortgage debt of its unconsolidated joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations.

The Partnership has pledged tenant leases as additional collateral for certain of these loans.

Approximate annual maturities at March 31, 2014 are as follows:

2015—current maturities	$	7,224,000
2016	285,000
2017	1,439,000
2018	1,801,000
2019	7,880,000
Thereafter	176,444,000
	$	195,073,000

On February 25, 2013, the Partnership paid off the mortgage of approximately $3,967,000 on Hamilton Cypress LLC. There was no penalty on the early payoff. The funds used to pay off the mortgage were from the Partnerships cash reserves.

On March 11, 2013, the Partnership refinanced the property owned by School Street 9 LLC. The new loan is $15,000,000 with an interest rate of 3.7% due in 2023. The loan calls for interest only for three years followed by principal and interest payments over the remainder of the loan term. Principal payments will be on a 30 year amortization schedule. The Partnership paid off the prior mortgage in the amount of approximately $15,284,000 with the proceeds of the new mortgage and the Partnership’s cash reserves. The costs associated with this refinancing were approximately $159,000.

On July 7, 2013, the Partnership refinanced the property owned by Boylston Downtown LP. The new 15 year $40,000,000 mortgage has an interest rate of 3.97%. The terms of the loan are interest only for the first three years, with a 30 year amortization thereafter until maturity in August 2028. Approximately $19,500,000 of loan proceeds was used to pay off the existing mortgage. The balance of the funds, approximately $20,000,000, after closing costs, was used in connection with the purchase of Hamilton Green Apartments. The costs associated with this refinancing are approximately $279,000.

On October 1, 2013, the Partnership refinanced the property owned by Westgate Apartments LLC. The new mortgage is $15,700,000; the interest rate is 4.65%, interest only payable in 10 years. Approximately $7,616,000 of the loan proceeds was used to pay off the existing mortgage. The mortgage matures in September 2023. The costs associated with the refinancing were approximately $190,000.

On December 20, 2013, the Partnership refinanced the property owned by Hamilton Green Apartments LLP. The new mortgage is $38,500,000; the interest rate is 4.67%; interest only for 2 years. After the first two years, the monthly payments of $198,982 for principal and interest on a 30-year amortization schedule through January 2029. The proceeds of the new mortgage as well as the Partnership’s cash reserves of approximately $1,846,000 were used to pay off the prior mortgage of $40,000,000 and cover the cost of this refinancing. The costs associated with the refinancing were approximately $346,000.

In February 2014, the Partnership paid off the mortgages on Linewt in the amount of $1,465,813 and Linhart in the amount of $1,926,272. There were no prepayment penalties. The Partnership’s cash reserves were used to pay off these mortgages.

On March 13, 2014, the Partnership entered into an agreement to refinance the property owned by NERA Dean Street Associates, LLC. This refinancing is expected to close in June 2014. The new mortgage is for $5,500,000; the interest rate is 4.22%, interest only payable in 10 years. Approximately $5,100,000 will be used to pay off the existing mortgage. The costs associated with this refinancing will be approximately $100,000.

The Partnership is in the process of refinancing the property owned by Courtyard at Westgate LLC. Included in other assets is $77,500 in deposits made by the Partnership for this refinancing. The Partnership expects to close on this refinancing in the third quarter of 2014.