# Greystone Housing Impact Investors LP: Form 10-Q for the period ended Sep 30, 2023

- Company: [Greystone Housing Impact Investors LP](/companies/ghi.md) (CIK 1059142)
- Form: 10-Q
- Filed: 2023-11-08
- Accepted by EDGAR: Nov 8, 2023, 13:46 ET
- Period: 2023-09-30
- Accession: 0000950170-23-060709
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1059142/000095017023060709/ghi-20230930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1059142/000095017023060709/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-07-01 to 2023-09-30 | $26.5m | us-gaap:Revenues |
| Revenue | 9 months, 2023-01-01 to 2023-09-30 | $79.7m | us-gaap:Revenues |
| Income tax | 3 months, 2023-07-01 to 2023-09-30 | $6.2k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-01-01 to 2023-09-30 | $12.4k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | $9.7m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | $47.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-07-01 to 2023-09-30 | $0.39 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2023-01-01 to 2023-09-30 | $1.84 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-07-01 to 2023-09-30 | $0.39 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2023-01-01 to 2023-09-30 | $1.84 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | $20.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2023-09-30 | $58.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2023-09-30 | $1.55bn | us-gaap:Assets |
| Total liabilities | at 2023-09-30 | $1.16bn | us-gaap:Liabilities |
| Long-term debt | at 2023-09-30 | $26.5m | us-gaap:LongTermDebt |

## Management's discussion and analysis

As filed, 178,565 characters.

In this Management’s Discussion and Analysis, all references to “we,” “us,” and the “Partnership” refer to Greystone Housing Impact Investors LP, its consolidated subsidiaries, and consolidated VIEs for all periods presented. See Note 2 and Note 5 to the Partnership’s condensed consolidated financial statements for further disclosures.

### Executive Summary

The Partnership was formed in 1998 primarily for the purpose of acquiring a portfolio of mortgage revenue bonds (“MRBs”) that are issued by state and local housing authorities to provide construction and/or permanent financing for affordable multifamily, seniors housing and commercial properties. We also invest in governmental issuer loans (“GILs”), which are similar to MRBs, to provide construction financing for affordable multifamily housing properties. We expect and believe the interest received on these MRBs and GILs is excludable from gross income for federal income tax purposes. We also invest in other types of securities and investments that may or may not be secured by real estate and may make property loans to multifamily properties which may or may not be financed by MRBs or GILs held by us and may or may not be secured by real estate.

We also make noncontrolling equity investments in unconsolidated entities (“JV Equity Investments”) for the construction, stabilization, and ultimate sale of market-rate multifamily and seniors housing properties. We are entitled to distributions if, and when, cash is available for distribution either through operations, a refinance or sale of the property. In addition, the Partnership may acquire and hold interests in multifamily, student and senior citizen residential properties (“MF Properties”) until their “highest and best use” can be determined by management.

The Partnership includes the assets, liabilities, and results of operations of the Partnership, our wholly owned subsidiaries and consolidated VIEs. All significant transactions and accounts between us and the consolidated VIEs have been eliminated in consolidation. See Note 2 to the Partnership’s condensed consolidated financial statements for additional details.

As of September 30, 2023, we had four reportable segments: (1) Affordable Multifamily MRB Investments, (2) Seniors and Skilled Nursing MRB Investments, (3) Market-Rate Joint Venture Investments and (4) MF Properties. We separately report our consolidation and elimination information because we do not allocate certain items to the segments. All “General and administrative expenses” on the Partnership's condensed consolidated statements of operations are reported within the Affordable Multifamily MRB Investments segment. See Notes 2 and 24 to the Partnership’s condensed consolidated financial statements for additional details. The following table presents summary information regarding activity of our segments for the three and nine months ended September 30, 2023 and 2022 (dollar amounts in thousands):

| Total revenues | For the Three Months Ended September 30, 2023 | Percentage of Total | 2022 | Percentage of Total | For the Nine Months Ended September 30, 2023 | Percentage of Total | 2022 | Percentage of Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Affordable Multifamily MRB Investments | $22,636 | 85.5% | $18,423 | 81.5% | $67,026 | 84.1% | $45,444 | 77.0% |
| Seniors and Skilled Nursing MRB Investments | 604 | 2.3% | 194 | 0.9% | 1,037 | 1.3% | 665 | 1.1% |
| Market-Rate Joint Venture Investments | 2,035 | 7.7% | 2,073 | 9.2% | 8,120 | 10.2% | 7,150 | 12.1% |
| MF Properties | 1,199 | 4.5% | 1,914 | 8.5% | 3,533 | 4.4% | 5,786 | 9.8% |
| Total revenues | $26,474 |  | $22,604 |  | $79,716 |  | $59,045 |  |
| Net income (loss) |  |  |  |  |  |  |  |  |
| Affordable Multifamily MRB Investments | $7,044 | 72.4% | $6,375 | 34.4% | $16,023 | 33.5% | $16,099 | 25.8% |
| Seniors and Skilled Nursing MRB Investments | 1,151 | 11.8% | 188 | 1.0% | 1,727 | 3.6% | 657 | 1.1% |
| Market-Rate Joint Venture Investments | 1,720 | 17.7% | 12,423 | 67.1% | 29,931 | 62.6% | 46,185 | 74.0% |
| MF Properties | (185) | -1.9% | (470) | -2.5% | 127 | 0.3% | (554) | -0.9% |
| Net income | $9,730 |  | $18,516 |  | $47,808 |  | $62,387 |  |

60

Our reported net income includes gains (losses) from derivative fair value adjustments, which are a result of changes in current and forward market interest rates, which can be significant in periods of high interest rate volatility. The primary driver of this is our portfolio of interest rate swap agreements. Such gains (losses) are reported within interest expense on our condensed consolidated statements of operations. The fair value adjustments result in non-cash gains (losses) and can cause variability in reported net income period-to-period. The following table summarizes gains (losses) from derivative fair value adjustments by segment for the three and nine months ended September 30, 2023 and 2022:

| Gains (losses) from derivative fair value adjustments | For the Three Months Ended September 30, 2023 | 2022 | For the Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Affordable Multifamily MRB Investments | $3,373,687 | $2,871,716 | $5,733,044 | $6,579,280 |
| Seniors and Skilled Nursing MRB Investments | 862,910 | - | 1,087,850 | - |
| Market-Rate Joint Venture Investments | - | - | - | - |
| MF Properties | - | - | - | - |
| Tota gains (losses) from derivative fair value adjustments | $4,236,597 | $2,871,716 | $6,820,894 | $6,579,280 |

61

### Recent Developments

#### Recent Investment Activities

The following table presents information regarding the investment activity of the Partnership for the three and nine months ended September 30, 2023 and 2022:

| Investment Activity For the Three Months Ended September 30, 2023 | # | Amount (in 000\`s) | Retired Debt (in 000\`s) | Tier 2 income (loss) allocable to the General Partner (in 000\`s) (1) | Notes to the Partnership\`s consolidated financial statements |
| --- | ---: | ---: | --- | --- | ---: |
| Mortgage revenue bond advances | 3 | $7,665 | N/A | N/A | 6 |
| Mortgage revenue bond paydown | 1 | 7,590 | $9,980 | N/A | 6 |
| Governmental issuer loan acquisition and advances | 5 | 22,573 | N/A | N/A | 7 |
| Governmental issuer loan redemptions | 3 | 70,636 | 61,459 | N/A | 7 |
| Property loan advances | 2 | 11,950 | N/A | N/A | 8 |
| Property loan redemption and paydowns | 3 | 39,921 | 35,655 | N/A | 8 |
| Investments in unconsolidated entities | 4 | 10,194 | N/A | N/A | 9 |
| Taxable mortgage revenue bond advance | 1 | 4,000 | N/A | N/A | 12 |
| Taxable mortgage revenue bond redemption | 1 | 7,000 | 5,770 | N/A | 12 |
| **For the Three Months Ended June 30, 2023** |  |  |  |  |  |
| Mortgage revenue bond acquisitions and advance | 6 | $51,150 | N/A | N/A | 6 |
| Governmental issuer loan advances | 4 | 20,402 | N/A | N/A | 7 |
| Governmental issuer loan redemption | 1 | 34,000 | $30,600 | N/A | 7 |
| Property loan advances | 3 | 9,608 | N/A | N/A | 8 |
| Property loan redemption and paydowns | 3 | 29,990 | 26,005 | N/A | 8 |
| Investments in unconsolidated entities | 2 | 3,744 | N/A | N/A | 9 |
| Return of investment in unconsolidated entities upon sale | 1 | 9,025 | N/A | $813 | 9 |
| Taxable mortgage revenue bond acquisitions and advance | 3 | 4,500 | N/A | N/A | 12 |
| Taxable governmental issuer loan advance | 1 | 2,573 | N/A | N/A | 12 |
| **For the Three Months Ended March 31, 2023** |  |  |  |  |  |
| Mortgage revenue bond advances | 6 | $60,547 | N/A | N/A | 6 |
| Mortgage revenue bond redemptions | 3 | 11,856 | $7,579 | $(1,428) | 6 |
| Governmental issuer loan advances | 4 | 17,377 | N/A | N/A | 7 |
| Property loan advances | 4 | 7,581 | N/A | N/A | 8 |
| Property loan redemption and paydowns | 3 | 18,316 | 15,700 | N/A | 8 |
| Investments in unconsolidated entities | 2 | 5,698 | N/A | N/A | 9 |
| Return of investment in unconsolidated entities upon sale | 2 | 12,283 | N/A | 3,843 | 9 |
| Taxable mortgage revenue bond advances | 2 | 1,805 | N/A | N/A | 12 |
| Taxable governmental issuer loan advance | 1 | 3,000 | N/A | N/A | 12 |
| **For the Three Months Ended September 30, 2022** |  |  |  |  |  |
| Mortgage revenue bond advance | 1 | $1,623 | N/A | N/A | 6 |
| Mortgage revenue bond redemption and paydown | 2 | 11,577 | $10,420 | N/A | 6 |
| Governmental issuer loan advances | 7 | 39,820 | N/A | N/A | 7 |
| Property loan advances | 6 | 22,742 | N/A | N/A | 8 |
| Property loan redemptions | 3 | 27,081 | N/A | N/A | 8 |
| Investments in unconsolidated entities | 2 | 2,524 | N/A | N/A | 9 |
| Return of investment in unconsolidated entity upon sale | 1 | 7,400 | N/A | N/A | 9 |
| Taxable mortgage revenue bond advance | 1 | 2,300 | N/A | N/A | 12 |
| Taxable governmental issuer loan advances | 3 | 3,000 | N/A | N/A | 12 |
| **For the Three Months Ended June 30, 2022** |  |  |  |  |  |
| Mortgage revenue bond advances | 3 | $20,307 | N/A | N/A | 6 |
| Mortgage revenue bond redemption | 1 | 7,100 | $7,100 | N/A | 6 |
| Governmental issuer loan advances | 5 | 39,806 | N/A | N/A | 7 |
| Property loan advances | 7 | 23,527 | N/A | N/A | 8 |
| Investments in unconsolidated entities | 4 | 7,824 | N/A | N/A | 9 |
| Return of investment in unconsolidated entity upon sale | 1 | 7,341 | N/A | N/A | 9 |
| Taxable mortgage revenue bond advances | 2 | 2,000 | N/A | N/A | 12 |
| **For the Three Months Ended March 31, 2022** |  |  |  |  |  |
| Mortgage revenue bond advances | 3 | $69,365 | N/A | N/A | 6 |
| Mortgage revenue bond redemptions | 4 | 70,479 | $45,109 | N/A | 6 |
| Governmental issuer loan advances | 6 | 16,882 | N/A | N/A | 7 |
| Property loan advances | 5 | 38,412 | N/A | N/A | 8 |
| Property loan redemptions and principal paydowns | 7 | 3,251 | N/A | N/A | 8 |
| Investments in unconsolidated entities | 5 | 12,777 | N/A | N/A | 9 |
| Return of investment in unconsolidated entity upon sale | 1 | 12,240 | N/A | $3,242 | 9 |
| Taxable mortgage revenue bond advances | 2 | 6,325 | N/A | N/A | 12 |

(1) See “Cash Available for Distribution” in Item 2 below.

#### Recent Financing Activity

The following table presents information regarding the debt financing, derivatives, Preferred Units and partners’ capital activities of the Partnership for the three and nine months ended September 30, 2023 and 2022, exclusive of retired debt amounts listed in the investment activity table above:

| Financing, Derivative and Capital Activity For the Three Months Ended September 30, 2023 | # | Amount (in 000\`s) | Secured | Notes to the Partnership\`s condensed consolidated financial statements |
| --- | ---: | ---: | --- | ---: |
| Net repayment on Acquisition LOC | 3 | $6,000 | Yes | 15 |
| Net borrowing on General LOC | 1 | 10,000 | Yes | 15 |
| Proceeds from TOB trust financings with Mizuho | 8 | 30,985 | Yes | 16 |
| Proceeds from TOB trust financing with Barclays | 4 | 10,535 | Yes | 16 |
| Proceeds from mortgage payable | 1 | 25,000 | Yes | 17 |
| Interest rate swaps executed | 3 | - | N/A | 18 |
| Redemption of Series A Preferred Units | 1 | 20,000 | N/A | 20 |
| **For the Three Months Ended June 30, 2023** |  |  |  |  |
| Net borrowing on Acquisition LOC | 5 | 6,000 | Yes | 15 |
| Net activity on General LOC | 2 | - | Yes | 15 |
| Proceeds from TOB trust financings with Mizuho | 6 | 36,516 | Yes | 16 |
| Proceeds from TOB trust financing with Barclays | 5 | 31,875 | Yes | 16 |
| Interest rate swaps executed | 3 | - | N/A | 18 |
| Issuance of Series A-1 Preferred Units | 1 | 10,000 | N/A | 20 |
| **For the Three Months Ended March 31, 2023** |  |  |  |  |
| Net repayment on Acquisition LOC | 6 | $49,000 | Yes | 15 |
| Proceeds from TOB trust financings with Mizuho | 9 | 98,526 | Yes | 16 |
| Proceeds from TOB trust financing with Barclays | 2 | 11,535 | Yes | 16 |
| Interest rate swaps executed | 3 | - | N/A | 18 |
| Issuance of Series A-1 Preferred Units | 1 | 8,000 | N/A | 20 |
| Exchange of Series A Preferred Units for Series A-1 Preferred Units | 1 | 7,000 | N/A | 20 |
| **For the Three Months Ended September 30, 2022** |  |  |  |  |
| Net repayment on Acquisition LOC | 4 | $8,512 | Yes | 15 |
| Proceeds from TOB trust financings with Mizuho | 4 | 24,930 | Yes | 16 |
| Proceeds from TOB trust financing with Barclays | 1 | 20,215 | Yes | 16 |
| **For the Three Months Ended June 30, 2022** |  |  |  |  |
| Net borrowing on Acquisition LOC | 5 | $9,255 | Yes | 15 |
| Proceeds from TOB trust financings with Mizuho | 7 | 51,045 | Yes | 16 |
| Proceeds from TOB trust financing with Barclays | 1 | 11,875 | Yes | 16 |
| Repayment of TOB Financings with Mizuho | 2 | 5,079 | Yes | 16 |
| Exchange of Series A Preferred Units for Series A-1 Preferred Units | 1 | 20,000 | N/A | 20 |
| **For the Three Months Ended March 31, 2022** |  |  |  |  |
| Net repayment on Acquisition LOC | 1 | $15,515 | Yes | 15 |
| Proceeds from TOB trust financings with Mizuho | 8 | 108,530 | Yes | 16 |
| Proceeds from TOB trust financing with Barclays | 1 | 800 | Yes | 16 |
| Unrestricted cash from total return swap | 1 | 41,275 | Yes | 18 |
| Interest rate swaps executed | 2 | - | N/A | 18 |

#### Conditions within the Banking System

During the first nine months of 2023, Silicon Valley Bank, Signature Bank and First Republic Bank were closed and taken over by the Federal Deposit Insurance Corporation (FDIC), which created significant market disruption and uncertainty for those companies and individual customers who bank with those institutions, and which raised significant concerns regarding the stability of the banking system in the United States, particularly with respect to regional and community banks. We did not hold our cash with, were not borrowing customers of, and did not otherwise bank with Silicon Valley Bank, Signature Bank, or First Republic Bank. Based on publicly available information, the banks we use in connection with our business activities are well capitalized. If the banks and financial institutions at which we hold our cash enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our cash and cash equivalents may be reduced and such events could have a material adverse effect on our business and financial condition.

### Corporate Responsibility

We are committed to corporate responsibility and the importance of developing environmental, social and governance (“ESG”) policies and practices consistent with that commitment. We believe the implementation and maintenance of such policies and practices benefit the employees that serve the Partnership, support long-term performance for our Unitholders, and have a positive impact on society and the environment.

#### Environmental Responsibility

Achieving positive environmental and sustainability impacts in connection with our affordable housing investment activity is important to us. Opportunities for positive environmental investments are open to us because private activity bond volume cap and LIHTC allocations are key components of the capital structure for most new construction or acquisition/rehabilitation affordable housing properties financed by our MRB and GIL investments. These resources are allocated by individual states to our property sponsors through a competitive application process under a state-specific qualified allocation plan (“QAP”) as required under Section 42 of the IRC. Each state implements its public policy objectives through an application scoring or ranking system that rewards certain property features. Some of the common features rewarded under individual state QAPs are transit amenities (proximity to various forms of public transportation), proximity to public services (parks, libraries, full scale supermarkets, or a senior center), and energy efficiency/sustainability. Some state-specific QAPs have minimum energy efficiency standards that must be met, such as the use of low water need landscaping, Energy Star appliances and hot water heaters, and GREENGUARD Gold certified insulation. Since we can only finance properties with successful applications, we work with our sponsor clients to maximize these environmental features such that their applications can earn the most points possible under the individual state’s QAP. The following table summarizes total funding commitments related to properties that were awarded both private activity bond cap and LIHTC allocations through state-specific QAPs:

| Asset Type | For the Nine Months Ended September 30, 2023 | For the year ended December 31, 2022 |
| --- | ---: | ---: |
| MRBs and taxable MRBs | $8,050,000 | $160,404,500 |
| GILs, taxable GILs and property loans | 19,930,000 | 184,337,300 |
| Total | $27,980,000 | $344,741,800 |

In 2021, we acquired an MRB investment secured by Meadow Valley, a to-be-constructed 174-bed seniors housing facility in Traverse City, MI. Part of the construction financing is provided through a Commercial Property Assessed Clean Energy (C-PACE) program, which is a state policy-enabled financing mechanism that allows developers to access the capital needed to make renewable energy accessible and cost-effective. In the case of Meadow Valley, C-PACE financing of $24.8 million will be provided to finance energy conservation features including high efficiency windows, roof, walls, heating, cooling, indoor and outdoor lighting, water heating and low-flow fixtures. The C-PACE financing is repaid through a property tax assessment over the life of the property. Many lenders are averse to financing properties with C-PACE financing as the tax assessment is a senior obligation of the property. We have developed underwriting procedures that allow for the borrower to obtain C-PACE financing and still meet our security and underwriting requirements. We will continue to evaluate investment opportunities related to properties that utilize C-PACE financing for future investment as we want to encourage our borrowers to utilize clean energy design and construction practices.

The Suites on Paseo MF Property, which is wholly owned by the Partnership, is a LEED Silver Certified property. LEED provides a framework for healthy, efficient, carbon and cost-saving green buildings. To achieve LEED certification, a property earns points by adhering to prerequisites and credits that address carbon, energy, water, waste, transportation, materials, health and indoor environmental quality. In addition, the property has three rooftop solar panel arrays to generate renewable energy for the local power system. Two of the arrays are owned by the local utility provider on roof space leased by the property and the third array is owned by the property.

We are committed to minimizing the overall environmental impact of our corporate operations. The Partnership’s operations are primarily managed by 16 employees of Greystone Manager, so we have a relatively modest environmental impact and have adequate facilities to grow our employee base without acquiring additional physical space.

#### Social Responsibility

Our MRB and GIL investments directly support the construction, rehabilitation, and stabilized operation of decent, safe, and sanitary affordable multifamily housing across the United States. The development of affordable multifamily housing has relatively broad legislative support at the federal and state levels. Each of the properties securing our MRB and GIL investments is required to maintain a minimum percentage of units set-aside for a combination of very low-income (50% of area median income or "AMI") and low-income (80% of AMI) tenants in accordance with IRC guidelines, and the owners of the properties often agree to exceed the minimum IRC requirements. The rent charged to income qualified tenants at MRB or GIL properties is often restricted to a certain percentage of the tenants’ income, making them more affordable. For any newly originated MRBs or GILs associated with a low-income housing tax credit property, restrictions regarding tenant incomes and rents charged to those low-income households are required. In addition, certain borrowers related to our MRB investments are non-profit entities that provide affordable multifamily housing consistent with their charitable purposes. These properties provide valuable housing and support services to both low-income and market-rate tenants and create housing diversity in the geographic and social communities in which they are located.

The following table summarizes, by investment asset class, the number of residential rental units associated with the affordable multifamily properties financed by the Partnership that have some form of tenant income or rent restrictions as evidenced by a regulatory agreement recorded on the local government land records as of September 30, 2023:

|  | Number of Units at \<=50% AMI | Number of Units at \<=60% AMI | Number of Units at \<=80% AMI | Total Number of Units | Affordable Units as % of Total Units | Number of Properties | Number of States | Reported Asset Value | Percentage of Total Partnership Assets |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| MRBs and taxable MRBs | 1,830 | 6,429 | 9,421 | 10,750 | 88% | 69 | 11 | $779,229,927 | 50% |
| GILs, taxable GILs and related property loans | 66 | 1,927 | 1,927 | 1,927 | 100% | 10 | 5 | 346,240,860 | 22% |
| Total | 1,896 | 8,356 | 11,348 | 12,677 | 90% | 79 |  | $1,125,470,787 | 72% |

Certain investments may be eligible for regulatory credit under the Community Reinvestment Act of 1977 ("CRA") to help meet the credit needs of the communities in which they exist, including low- and moderate-income (LMI) neighborhoods. See "Community Investments" in this Item 2 below for further information regarding assets of the Partnership the General Partner believes are eligible for regulatory credit under the CRA.

We and Greystone are committed to supporting our workforce. Greystone has implemented evaluation and compensation policies designed to attract, retain, and motivate employees that provide services to the Partnership to achieve superior results. Greystone also provides formal and informal training programs to enhance the skills of employees providing services to the Partnership and to instill Greystone’s corporate policies and practices. We are also committed to ensuring the safety of personnel that work for third-party contractors that perform services at properties that underlie our investment assets. Specifically for properties under construction, we consider the safety record of contractors and monitor safety incidents through reviews of independent construction monitoring reports.

Greystone and the Partnership are committed to diversity, equity and inclusion (“DEI”). Specific Greystone DEI initiatives include formal diversity training and employee resources groups to support a diverse workforce as well as a formal DEI committee and DEI Leadership Council to lead and advise all DEI related work, events, and learning. Of the 16 employees of Greystone Manager responsible for the Partnership’s operations, three are women and one employee identifies as ethnically diverse.

#### Corporate Governance

Greystone Manager, as the general partner of the Partnership’s general partner, is committed to corporate governance that aligns with the interests of our Unitholders and stakeholders. We set high ethical standards for our related employees and partners. We regularly review and update, as appropriate, our policies governing ethical conduct and responsible behavior in order to support our sustainable and continued success. Our Code of Business Conduct and Ethics is applicable to all Greystone personnel that provide services to the Partnership and is available on the Partnership’s website. All such employees are required to annually affirm that they have read and understood the Code of Business Conduct and Ethics. Employees are encouraged to share any ethics or compliance concerns with their supervisors or confidentially through our third-party managed hotline. We maintain a formal compliance policy to investigate ethics or compliance concerns and to protect whistleblowers. Our policy is designed to meet the requirements and standards of the Sarbanes Oxley Act of 2002 and the Securities and Exchange Act of 1934.

The Board of Managers of Greystone Manager brings a diverse set of skills and experiences across industries in the public, private and not-for-profit sectors. The composition of the Greystone Manager Board of Managers is in compliance with the NYSE listing rules and SEC rules applicable to the Partnership. Beginning on August 1, 2023, a majority of the members of the Greystone Manager Board of managers meet the independence standards established by the New York Stock Exchange listing rules and the rules of the SEC. All the members of the Audit Committee of Greystone Manager are independent under the applicable SEC and NYSE independence requirements, two of whom qualify as “audit committee financial experts.” Of the seven Managers of Greystone Manager, one Manager is female.

The Greystone Manager Board of Managers is highly engaged in the governance and operations of the Partnership. Our non-independent Managers are employees of Greystone that regularly monitor developments in our operating environment and capital markets and discuss such developments with management on a regular basis. One of our Managers is a member of our investment committee that pre-approves all new investments. We regularly monitor and assess risks to achieving our business objectives and such risk assessments are discussed with both the Audit Committee and the full Board of Managers at regularly held meetings and in regular informal discussions. The Audit Committee and Board of Managers have had 100% attendance during 2022 and 2023.

### Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant estimates and assumptions include those used in determining (i) the fair value of MRBs and taxable MRBs; (ii) investment impairments; (iii) impairment of real estate assets; and (iv) allowance for credit losses.

The Partnership’s critical accounting policies and estimates are the same as those described in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2022, except for certain policies regarding the allowance for credit losses. The Partnership’s critical accounting policy for allowance for credit losses is as follows:

#### Allowance for Credit Losses

On January 1, 2023, the Partnership adopted Accounting Standard Update (“ASU”) 2016-13, Financial Instruments-Credit Losses, and subsequent related amendments (“ASC 326”), which replaced the incurred loss methodology with an expected loss model known as the Current Expected Credit Loss (“CECL”) model. The CECL model establishes a single allowance framework for financial assets carried at amortized cost which reflects an estimate of credit losses over the remaining expected life of financial assets. The adoption of the ASU 2016-13 requires a cumulative-effect adjustment to Partners’ Capital upon adoption. Additionally, ASU 2016-13 requires enhanced disclosures, including additional disclosures regarding credit quality. The allowance for credit losses is presented as a valuation reserve to the corresponding assets on the Partnership’s condensed consolidated balance sheets. Expected credit losses related to non-cancelable unfunded commitments and financial guaranties are accounted for as separate liabilities and are included in “Accounts payable, accrued expenses and other liabilities” on the Partnership’s condensed consolidated balance sheets. Upon adoption on January 1, 2023, the Partnership recorded a cumulative effect of accounting change of approximately $5.9 million as a direct reduction to Partners’ Capital. Subsequent changes to the allowance for credit losses are recognized through “Provision for credit losses” on the Partnership’s condensed consolidated statements of operations.

### Held-to-Maturity Debt Securities, Held-for-Investment Loans and Related Unfunded Commitments

The Partnership estimates allowances for credit losses for its GILs, taxable GILs, property loans and related non-cancelable funding commitments using a Weighted Average Remaining Maturity (“WARM”) method loss-rate model, combined with qualitative factors that are sensitive to changes in forecasted economic conditions. The Partnership applies qualitative factors related to risk factors and changes in current economic conditions that may not be adequately reflected in quantitatively derived results, or other relevant factors to ensure the allowance for credit losses reflects the Partnership’s best estimate of current expected credit losses. The WARM method pools assets sharing similar characteristics and utilizes a historical annual charge-off rate which is applied to the outstanding asset balances over the remaining weighted average life of the pool, adjusted for certain qualitative factors to estimate expected credit losses. The Partnership has limited loss history with its GILs, taxable GILs, and property loans portfolio and has had minimal credit losses to date. As such, the Partnership uses historical annual charge-off data for similar assets from publicly available loan data through the Federal Financial Institution Examination Council (“FFIEC”). The Partnership adjusts for current conditions and the impact of qualitative forecasts that are reasonable and supportable. The Partnership assesses qualitative adjustments related to, but not limited to, credit quality changes in the asset portfolio, general economic conditions, changes in the affordable multifamily real estate markets, changes in lending policies and underwriting, and underlying collateral values.

The Partnership will elect to separately evaluate an asset if it no longer shares the same risk characteristics as the respective pool or the specific investment attributes do not lend to analysis with a model-based approach. For collateral-dependent assets when foreclosure is probable, the Partnership will apply a practical expedient to estimate current expected credit losses as the difference between the fair value of collateral and the amortized cost of the asset.

Charge-offs to the allowance for credit losses occur when losses are confirmed through the receipt of cash or other consideration from the completion of a sale, when a modification or restructuring takes place in which the Partnership grants a concession to a borrower or agrees to a discount in full or partial satisfaction of the asset, when the Partnership takes ownership and control of the underlying collateral in full satisfaction of the asset, or when significant collection efforts have ceased and it is highly likely that a loss has been realized.

The Partnership has elected to not measure an allowance for credit losses on accrued interest receivables related to its GILs, taxable GILs and property loans because uncollectable accrued interest receivable is written off in a timely manner pursuant to policies for placing assets on non-accrual status.

### Available-for-Sale Debt Securities

The Partnership periodically determines if allowances of credit losses are needed for its MRBs and taxable MRBs under the applicable guidance for available-for-sale debt securities. The Partnership evaluates whether unrealized losses are considered impairments based on various factors including, but not necessarily limited to, the following:

- The severity of the decline in fair value;
- The Partnership’s intent to hold and the likelihood of it being required to sell the security before its value recovers;
- Adverse conditions specifically related to the security, its collateral, or both;
- The likelihood of the borrower being able to make scheduled interest and principal payments; and
- Failure of the borrower to make scheduled interest or principal payments.

While the Partnership evaluates all available information, it focuses specifically on whether the estimated fair value of the security is below amortized cost. If the estimated fair value of an MRB is below amortized cost, and the Partnership has the intent to sell or may be required to sell the MRB prior to the time that its value recovers or until maturity, the Partnership will record an impairment through earnings equal to the difference between the MRB’s carrying value and its fair value. If the Partnership does not expect to sell an other-than-temporarily impaired MRB, only the portion of the impairment related to credit losses is recognized through earnings as a provision for credit loss, with the remainder recognized as a component of other comprehensive income. In determining the provision for credit loss, the Partnership compares the present value of cash flows expected to be collected to the amortized cost basis of the MRB and records any provision for credit losses as an adjustment to the allowance for credit losses. The Partnership has elected to not measure an allowance for credit losses on accrued interest receivables related to its MRBs and taxable MRBs because uncollectable accrued interest receivable is written off in a timely manner pursuant to policies for placing assets on non-accrual status.

The recognition of an impairment, provision for credit loss, and the potential impairment analysis are subject to a considerable degree of judgment, the results of which, when applied under different conditions or assumptions, could have a material impact on the Partnership's condensed consolidated financial statements. If the Partnership experiences deterioration in the values of its MRB portfolio, the Partnership may incur impairments or provisions for credit losses that could negatively impact the Partnership’s financial condition, cash flows, and reported earnings. The Partnership periodically reviews any previously impaired MRBs for indications of a recovery of value. If a recovery of value is identified, the Partnership will report the recovery of prior credit losses through its allowance for credit losses as a provision for credit losses (recoveries). For MRB impairment recoveries identified prior to the adoption of the CECL model, the Partnership will accrete the recovery of prior credit losses into investment income over the remaining term of the MRB.

### Affordable Multifamily MRB Investments Segment

The Partnership’s primary purpose is to acquire and hold as investments a portfolio of MRBs which have been issued to provide construction and/or permanent financing for residential properties and commercial properties in their market areas. We have also invested in taxable MRBs, GILs, taxable GILs and property loans which are included within this segment. All “General and administrative expenses” on the Partnership's condensed consolidated statements of operations are reported within this segment.

The following table compares operating results for the Affordable Multifamily MRB Investments segment for the periods indicated (dollar amounts in thousands):

| Affordable Multifamily MRB Investments | For the Three Months Ended September 30, 2023 | 2022 | $ Change | % Change | For the Nine Months Ended September 30, 2023 | 2022 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Total revenues | $22,636 | $18,423 | $4,213 | 22.9% | $67,026 | $45,444 | $21,582 | 47.5% |
| Interest expense | 10,822 | 7,531 | 3,291 | 43.7% | 37,376 | 17,310 | 20,066 | 115.9% |
| Segment net income | 7,044 | 6,375 | 669 | 10.5% | 16,023 | 16,099 | (76) | -0.5% |

67

#### Comparison of the three months ended September 30, 2023 and 2022

Total revenues increased for the three months ended September 30, 2023 as compared to the same period in 2022 primarily due to:

- An increase of approximately $2.9 million in interest income from higher GIL investment balances and higher average interest rates, offset by a decrease of approximately $415,000 in interest income due to GIL redemptions;
- An increase of approximately $3.0 million in interest income from recent MRB advances, offset by a decrease of approximately $2.1 million in interest income due to MRB redemptions and principal repayments;
- An increase of approximately $2.1 million of other interest income from higher average property loan, taxable MRB and taxable GIL investment balances;
- A decrease of approximately $2.1 million for property loan redemptions during 2022 and 2023, of which approximately $1.7 million relates to payments received on redemption of the Cross Creek property loans in the third quarter of 2022 that were previously in nonaccrual status;
- An increase of approximately $678,000 of other interest income due to increasing interest earned on cash balances; and
- An increase of approximately $117,000 in other income for receipt of non-refundable fees for the extension of the Hope on Avalon GIL and taxable GIL, Hope on Broadway GIL, and Jackson Manor MRB maturity dates.

Total interest expense increased for the three months ended September 30, 2023 as compared to the same period in 2022 primarily due to:

- An increase of approximately $3.4 million due to higher average interest rates on debt financing;
- An increase of approximately $1.0 million due to an increase in the average outstanding principal of our debt financing instruments of approximately $118.7 million;
- A decrease of approximately $588,000 in amortization of deferred financing costs, which includes approximately $510,000 of unamortized deferred financing costs that were recognized as interest expense upon the collapse of a TOB in September 2022; and
- A decrease of approximately $546,000 due to interest rate derivative fair value adjustments.

Segment net income increased for the three months ended September 30, 2023 as compared to the same period in 2022 as a result of the following factors:

- The changes in total revenues and total interest expense detailed in the tables below;
- A decrease in the allowance for credit losses of $562,000 (Note that there was no provision for credit losses in 2022 as it was prior to our adoption of the CECL standard effective January 1, 2023. See Note 2 of the condensed consolidated financial statements for additional information); and
- An increase in general and administrative expenses primarily due to increases of approximately $250,000 in administration fees paid to AFCA2 due to greater assets under management, approximately $349,000 in employee compensation and benefits, and approximately $188,000 related to professional and consulting fees from increased transactional activity.

The following table summarizes the segment’s net interest income, average balances, and related yields earned on interest-earning assets and incurred on interest-bearing liabilities, as well as other income included in total revenues for the three months ended September 30, 2023 and 2022. The average balances are based primarily on monthly averages during the respective periods. All dollar amounts are in thousands.

| Interest-earning assets: | For the Three Months Ended September 30, 2023 Average Balance | Interest Income/ Expense | Average Rates Earned/ Paid | 2022 Average Balance | Interest Income/ Expense | Average Rates Earned/ Paid |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Mortgage revenue bonds | $823,111 | $12,295 | 6.0% | $688,308 | $11,350 | 6.6% | (1) |
| Governmental issuer loans | 284,222 | 5,604 | 7.9% | 256,984 | 3,134 | 4.9% |  |
| Property loans | 135,502 | 2,758 | 8.1% | 122,755 | 3,218 | 10.5% | (2) |
| Other investments | 33,699 | 681 | 8.1% | 14,710 | 218 | 5.9% |  |
| Total interest-earning assets | $1,276,534 | $21,338 | 6.7% | $1,082,757 | $17,920 | 6.6% |  |
| Non-investment income |  | 1,298 |  |  | 503 |  |  |
| Total revenues |  | $22,636 |  |  | $18,423 |  |  |
| Interest-bearing liabilities: |  |  |  |  |  |  |  |
| Lines of credit | $4,525 | $118 | 10.4% | $22,759 | $249 | 4.4% |  |
| Fixed TEBS financing | 248,419 | 2,472 | 4.0% | 256,981 | 2,539 | 4.0% |  |
| Variable TEBS financing | 67,174 | 820 | 4.9% | 76,139 | 561 | 2.9% |  |
| Variable Secured Notes (3) | 102,438 | 2,420 | 9.4% | 102,838 | 1,685 | 6.6% |  |
| Fixed Term TOB financing | 12,785 | 63 | 2.0% | 12,883 | 64 | 2.0% |  |
| Variable TOB financing | 663,607 | 9,607 | 5.8% | 508,637 | 4,489 | 3.5% |  |
| Interest rate swap cash payments (receipts) | N/A | (1,660) | N/A | N/A | (172) | N/A |  |
| Total interest-bearing liabilities | $1,098,948 | $13,840 | 5.0% | $980,237 | $9,415 | 3.8% |  |
| Net interest spread (4) |  | $7,498 | 2.3% |  | $8,505 | 3.1% |  |
| Interest expense on interest-bearing liabilities |  | 13,840 |  |  | 9,415 |  |  |
| Amortization of deferred finance costs |  | 280 |  |  | 868 |  |  |
| Derivative fair value adjustments |  | (3,298) |  |  | (2,752) |  |  |
| Total interest expense |  | $10,822 |  |  | $7,531 |  |  |

(1) Interest income includes $1.5 million of discount accretion on the Cross Creek MRB upon redemption at par in the third quarter of 2022. Excluding this item, the average interest rate was 5.7%.

(2) Interest income includes $1.7 million for payments received in the third quarter of 2022 on Cross Creek property loans that were previously in nonaccrual status. Excluding this item, the average interest rate was 4.9%.

(3) Interest expense is reported net of income/loss on the Partnership’s total return swap agreements.

(4) Net interest spread equals interest income less interest expense before amortization of deferred finance costs and derivative instrument fair value adjustments. The net interest spread rate is the annualized net interest spread during the period.

The following table summarizes the changes in interest income and interest expense for the three months ended September 30, 2023 and 2022, and the extent to which these variances are attributable to 1) changes in the volume of interest-earning assets and interest-bearing liabilities, or 2) changes in the interest rates of the interest-earning assets and interest-bearing liabilities. All dollar amounts are in thousands.

| Interest-earning assets: | For the Three Months Ended September 30, 2023 vs. 2022 Total Change |  | Volume $ Change | Rate $ Change |  |
| --- | ---: | ---: | ---: | ---: | ---: |
| Mortgage revenue bonds | $945 |  | $2,223 | $(1,278) | (1) |
| Governmental issuer loans | 2,470 |  | 332 | 2,138 |  |
| Property loans | (460) |  | 334 | (794) | (2) |
| Other investments | 463 |  | 281 | 182 |  |
| Total interest-earning assets | $3,418 |  | $3,170 | $248 |  |
| Interest-bearing liabilities: |  |  |  |  |  |
| Lines of credit | $(131) |  | (199) | 68 |  |
| Fixed TEBS financing | (67) |  | (85) | 18 |  |
| Variable TEBS financing | 259 |  | (66) | 325 |  |
| Variable Secured Notes (3) | 735 |  | (7) | 742 |  |
| Fixed Term TOB financing | (1) |  | - | (1) |  |
| Variable TOB financing | 5,118 |  | 1,368 | 3,750 |  |
| Interest rate swap cash payments & receipts | (1,488) |  | N/A | (1,488) |  |
| Total interest-bearing liabilities | $4,425 |  | $1,011 | $3,414 |  |
| Amortization of deferred finance costs (4) | (588) | (4) | N/A | (588) |  |
| Derivative fair value adjustments | (546) |  | N/A | (546) |  |
| Total interest expense change | $3,291 |  | $1,011 | $2,280 |  |
| Total net change | $127 |  | $2,159 | $(2,032) |  |

(1) The average change attributable to rate includes $1.5 million of discount accretion on the Cross Creek MRB upon redemption at par in the third quarter of 2022.

(2) The average change attributable to rate includes $1.7 million for payments received on the Cross Creek property loans in 2022, that were previously in nonaccrual status.

(3) Interest expense is reported net of income/loss on the Partnership’s total return swap agreements.

(4) The decrease in amortization of deferred finance costs is due to approximately $510,000 of previously unamortized costs that were recognized as interest expense upon the collapse of a TOB in September 2022.

#### Comparison of the nine months ended September 30, 2023 and 2022

Total revenues increased for the nine months ended September 30, 2023 as compared to the same period in 2022 primarily due to:

- An increase of approximately $10.0 million in interest income from higher GIL investment balances and higher average interest rates;
- An increase of approximately $9.1 million in interest income from recent MRB advances, offset by a decrease of approximately $3.6 million in interest income due to MRB redemptions and principal repayments;
- An increase of approximately $7.3 million in other interest income due to additional property loan, taxable MRB and taxable GIL investments and higher average interest rates;
- An increase of approximately $2.1 million of other interest income due to increasing interest earned on cash balances;
- An increase of approximately $250,000 in other income for receipt of non-refundable fees for the extension of the Scharbauer Flats GIL and property loan, Hope on Avalon GIL and taxable GIL, Hope on Broadway GIL, and Jackson Manor MRB maturity dates;
- A decrease of approximately $1.9 million in other interest income for payments received on the Ohio Properties and Live 929 Apartments property loans in the first quarter of 2022 that did not recur; and
- A decrease of approximately $1.7 million in other interest income for payments received on the Cross Creek property loan in the third quarter of 2022 that did not recur.

Interest expense increased for the nine months ended September 30, 2023 as compared to the same period in 2022 primarily due to:

- An increase of approximately $15.8 million due to higher average interest rates on debt financing;
- An increase of approximately $3.3 million due to an increase in the average outstanding principal of our debt financing instruments of approximately $195.4 million;
- An increase of approximately $1.1 million due to interest rate derivative fair value adjustments; and
- A decrease of approximately $110,000 in amortization of deferred financing costs.

Segment net income decreased for the nine months ended September 30, 2023 as compared to the same period in 2022 due to:

- The changes in total revenues and total interest expense detailed in the tables below;
- A decrease in the allowance for credit losses of $1.9 million (Note that there was no provision for credit losses in 2022 as it was prior to our adoption of the CECL standard effective January 1, 2023. See Note 2 of the condensed consolidated financial statements for additional information); and
- An increase in general and administrative expenses primarily due to increases of approximately $1.2 million in employee compensation related to higher transactional bonuses and salaries, approximately $976,000 in administration fees paid to AFCA2 due to greater assets under management, approximately $621,000 in restricted unit compensation expense, and approximately $652,000 related to professional and consulting fees from increased transactional activity.

The following table summarizes the segment's net interest income, average balances, and related yields earned on interest-earning assets and incurred on interest-bearing liabilities, as well as other income included in total revenues for the nine months ended September 30, 2023 and 2022. All dollar amounts are in thousands.

| Interest-earning assets: | For the Nine Months Ended September 30, 2023 Average Balance | Interest Income/ Expense | Average Rates Earned/ Paid | 2022 Average Balance | Interest Income/ Expense | Average Rates Earned/ Paid |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Mortgage revenue bonds | $811,599 | $36,298 | 6.0% | $689,745 | $30,813 | 6.0% | (1) |
| Governmental issuer loans | 302,796 | 16,801 | 7.4% | 223,362 | 6,820 | 4.1% |  |
| Property loans | 156,525 | 9,142 | 7.8% | 99,306 | 6,679 | 9.0% | (2) |
| Other investments | 30,716 | 1,812 | 7.9% | 11,682 | 488 | 5.6% |  |
| Total interest-earning assets | $1,301,636 | $64,053 | 6.6% | $1,024,095 | $44,800 | 5.8% |  |
| Non-investment income |  | 2,973 |  |  | 644 |  |  |
| Total revenues |  | $67,026 |  |  | $45,444 |  |  |
| Interest-bearing liabilities: |  |  |  |  |  |  |  |
| Lines of credit | $11,280 | $488 | 5.8% | $22,804 | $687 | 4.0% |  |
| Fixed TEBS financing | 249,224 | 7,443 | 4.0% | 266,428 | 7,855 | 3.9% |  |
| Variable TEBS financing | 69,771 | 2,382 | 4.6% | 76,470 | 1,269 | 2.2% |  |
| Variable Secured Notes (3) | 102,540 | 6,971 | 9.1% | 102,934 | 3,675 | 4.8% |  |
| Fixed Term TOB financing | 12,810 | 188 | 2.0% | 12,907 | 192 | 2.0% |  |
| Variable TOB financing | 684,909 | 27,836 | 5.4% | 453,630 | 8,352 | 2.5% |  |
| Interest rate swap cash payments (receipts) | N/A | (4,014) | N/A | N/A | 194 | N/A |  |
| Total interest-bearing liabilities | $1,130,534 | $41,294 | 4.9% | $935,173 | $22,224 | 3.2% |  |
| Net interest spread (4) |  | $22,759 | 2.3% |  | $22,576 | 2.9% |  |
| Interest expense on interest-bearing liabilities |  | 41,294 |  |  | 22,224 |  |  |
| Amortization of deferred finance costs |  | 1,471 |  |  | 1,581 |  |  |
| Derivative fair value adjustments |  | (5,389) |  |  | (6,495) |  |  |
| Total interest expense |  | $37,376 |  |  | $17,310 |  |  |

(1) Interest income includes $1.5 million due to discount accretion on the Cross Creek MRB upon redemption at par in the third quarter of 2022. Excluding this item, the average interest rate was 5.7%.

(2) Interest income includes $1.8 million and $1.7 million for payments received on property loans that were previously in nonaccrual status in the first and third quarters of 2022, respectively. Excluding these items, the average interest rate was 4.3%.

(3) Interest expense is reported net of income/loss on the Partnership’s total return swap agreements.

(4) Net interest spread equals interest income less interest expense before amortization of deferred finance costs and derivative instrument fair value adjustments. The net interest spread rate is the annualized net interest spread during the period.

The following table summarizes the changes in interest income and interest expense for the nine months ended September 30, 2023 and 2022, and the extent to which these variances are attributable to 1) changes in the volume of interest-earning assets and interest-bearing liabilities, or 2) changes in the interest rates of the interest-earning assets and interest-bearing liabilities. All dollar amounts are in thousands.

| Interest-earning assets: | For the Nine Months Ended September 30, 2023 vs. 2022 Total Change | Average Volume $ Change | Average Rate $ Change |  |
| --- | ---: | ---: | ---: | ---: |
| Mortgage revenue bonds | $5,485 | $5,444 | $41 | (1) |
| Governmental issuer loans | 9,981 | 2,425 | 7,556 |  |
| Property loans | 2,463 | 3,848 | (1,385) | (2) |
| Other investments | 1,324 | 795 | 529 |  |
| Total interest-earning assets | $19,253 | $12,512 | $6,741 |  |
| Interest-bearing liabilities: |  |  |  |  |
| Lines of credit | $(199) | $(347) | $148 |  |
| Fixed TEBS financing | (412) | (507) | 95 |  |
| Variable TEBS financing | 1,113 | (111) | 1,224 |  |
| Variable Secured Notes (3) | 3,296 | (14) | 3,310 |  |
| Fixed Term TOB trust financing | (4) | (1) | (3) |  |
| Variable TOB financing | 19,484 | 4,258 | 15,226 |  |
| Interest rate swap cash payments & receipts | (4,208) | N/A | (4,208) |  |
| Total interest-bearing liabilities | $19,070 | $3,278 | $15,792 |  |
| Amortization of deferred finance costs (4) | (110) | N/A | (110) |  |
| Derivative fair value adjustments | 1,106 | N/A | 1,106 |  |
| Total interest expense change | $20,066 | $3,278 | $16,788 |  |
| Total net change | $(813) | $9,234 | $(10,047) |  |

(1) The average change attributable to rate includes $1.5 million of discount accretion on the Cross Creek MRB upon redemption at par in the third quarter of 2022.

(2) The average change attributable to rate includes $1.8 million and $1.7 million for payments received on property loans that were previously in nonaccrual status in the first and third quarters of 2022, respectively.

(3) Interest expense is reported net of income/loss on the Partnership’s total return swap agreements.

(4) The increase in amortization of deferred finance costs is primarily due to approximately $584,000 of previously unamortized deferred financing costs that were recognized as interest expense upon the redemption and reissuance of a TOB financing in February 2023. This amount has been offset by approximately $510,000 of unamortized deferred financing costs that were recognized as interest expense upon the collapse of a TOB in September 2022.

#### Operational Matters

The multifamily properties securing our MRBs were all current on contractual debt service payments on our MRBs and we have received no requests for forbearance of contractual debt service payments as of September 30, 2023.

Our sole student housing property securing an MRB, Live 929 Apartments, was 69% occupied as of September 30, 2023, and is current on MRB debt service. Current occupancy is lower than in recent years due to on-site management issues during the Fall 2023 lease-up process. Certain personnel changes have been made and the property management team is focused on leasing to tenants at the nearby Johns Hopkins University medical campus whose programs begin during the 2023-2024 academic year.

The proton therapy center securing the Provision Center 2014-1 MRB was successfully sold out of bankruptcy in July 2022 and we received partial liquidation proceeds of $3.7 million in January 2023. We expect to recover additional liquidation of proceeds of approximately $928,000 at final liquidation.

Construction and rehabilitation activities continue at properties securing our GILs, taxable GILs and related property loans. Four of the 10 underlying affordable multifamily properties had commenced leasing operations as of September 30, 2023. To date, these properties have not experienced any material supply chain disruptions for either construction materials or labor or incurred material construction cost overruns.

As many of our GIL investments and certain MRB investments have variable interest rates, we regularly monitor interest costs in comparison to capitalized interest reserves in each property’s development budget, available construction budget contingency balances, and the funding of certain equity commitments by the owners of the underlying properties. Though original development budgets are sized to incorporate potential interest rate increases, the pace of recent interest rate increases has caused actual interest costs during construction to exceed original projections. We have noted that some properties that are complete or nearing completion have incurred interest costs that have exceeded capitalized interest reserves. In such instances, the developer has either reallocated other available reserves and contingencies, deferred their developer fees, or made direct cash payment during construction to ensure all interest is paid and avoid enforcement of our recourse guaranties against the developers and their affiliates. In addition, such projects have developer completion guaranties as well as capital contributed by LIHTC equity investors that will only receive their tax credits upon completion and stabilization of the projects. In certain instances, we may advance supplemental loans to the borrowers secured by the underlying properties if returns meet our requirements and/or if such loans are necessary to meet the 50% tax-exempt financing requirements under the LIHTC regulations.

Freddie Mac, through a servicer, has forward committed to purchase each GIL at maturity at par if the property has reached stabilization and other conditions are met. The Freddie Mac forward commitment includes a forward committed interest rate that was set at the original closing of the GIL, with many committed rates being well below current market interest rates. Such forward committed rates significantly reduce refinance risk and incentivize borrowers to convert to the Freddie Mac loan to realize interest savings. So far during 2023, four of our GIL investments were purchased by Freddie Mac, through a servicer, and repaid in full. In addition, the Scharbauer Flats and Hope on Avalon properties are nearing stabilization and have started the forward commitment conversion process with Freddie Mac.

### Seniors and Skilled Nursing MRB Investments Segment

The Seniors and Skilled Nursing MRB Investments segment provides acquisition, construction and permanent financing for seniors housing and skilled nursing properties. Seniors housing consists of a combination of independent living, assisted living and memory care units.

As of September 30, 2023, we owned two MRBs with aggregate outstanding principal of $39.4 million, with an outstanding commitment to provide additional funding of $27.6 million on a draw-down basis during construction. The MRBs are secured by a new construction, combined independent living, assisted living and memory care property in Traverse City, MI, with 174 total beds and a skilled nursing facility in Monroe Township, NJ with 120 beds. Furthermore, in 2021 we funded a property loan secured by a skilled nursing facility in Houston, TX, which was redeemed in September 2022.

The following table compares the operating results for the Senior and Skilled Nursing MRB Investments segment for the periods indicated (dollar amounts in thousands):

| Seniors and Skilled Nursing Investments | For the Three Months Ended September 30, 2023 | 2022 | $ Change | % Change | For the Nine Months Ended September 30, 2023 | 2022 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Total revenues | $604 | $194 | $410 | 211.3% | $1,037 | $665 | $372 | 55.9% |
| Interest expense | (547) | 6 | (553) | N/A | (701) | 6 | (707) | N/A |
| Segment net income | 1,151 | 188 | 963 | 512.2% | 1,727 | 657 | 1,070 | 162.9% |

#### Comparison of the three months ended September 30, 2023 and 2022

Total revenues increased for the three months ended September 30, 2023 as compared to the same period in 2022 primarily due to:

- An increase of approximately $597,000 due to higher average principal balances; and
- A decrease of approximately $187,000 due to the redemption of the Magnolia Crossing property loan in September 2022.

Negative interest expense is primarily due to approximately $863,000 of gains from interest rate derivative fair value adjustments, partially offset by approximately $315,000 in TOB interest expense for the three months ended September 30, 2023.

The change in segment net income for the three months ended September 30, 2023 as compared to the same period in 2022 was primarily due to the change in total revenues and interest income discussed above.

#### Comparison of the nine months ended September 30, 2023 and 2022

Total revenues increased for the nine months ended September 30, 2023 as compared to the same period in 2022 primarily due to:

- An increase of approximately $1.0 million due to higher average principal balances; and
- A decrease of approximately $654,000 due to the redemption of the Magnolia Crossing property loan in September 2022.

Negative interest expense is primarily due to approximately $1.1 million of gains from interest rate derivative fair value adjustments, partially offset by approximately $365,000 in TOB interest expense for the nine months ended September 30, 2023.

The change in segment net income for the nine months ended September 30, 2023 as compared to the same period in 2022 was primarily due to the change in total revenues and interest income discussed above.

### Market-Rate Joint Venture Investments Segment

The Market-Rate Joint Venture Investments segment consists of our noncontrolling joint venture equity investments in market-rate multifamily properties, also referred to as our investments in unconsolidated entities or JV Equity Investments. Our joint venture equity investments are passive in nature. Operational oversight of each property is controlled by our respective joint venture partners according to each respective entity’s operating agreement. All properties are managed by property management companies affiliated with our joint venture partners. Decisions on when to sell an individual property are made by our respective joint venture partners based on their views of the local market conditions and current leasing trends.

We account for all our JV Equity Investments using the equity method and recognize our preferred returns during the hold period. Specifically for our Vantage JV Equity Investments, an affiliate of our Vantage joint venture partner provides a guaranty of our preferred returns through a date approximately five years after commencement of construction. Upon the sale of a property, net proceeds will be distributed according to the entity operating agreement. Sales proceeds distributed to us that represent previously unrecognized preferred return and gain on sale are recognized in net income upon receipt. Historically, the majority of our income from our JV Equity Investments is recognized at the time of sale. As a result, we may experience significant income recognition in those quarters when a property is sold and our equity investment is redeemed.

The following table compares operating results for the Market-Rate Joint Venture Investments segment for the periods indicated (dollar amounts in thousands):

| Market-Rate Joint Venture Investments | For the Three Months Ended September 30, 2023 | 2022 | $ Change | % Change | For the Nine Months Ended September 30, 2023 | 2022 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Total revenues | $2,035 | $2,073 | $(38) | -1.8% | $8,120 | $7,150 | $970 | 13.6% |
| Interest expense | 345 | 226 | 119 | 52.7% | 906 | 620 | 286 | 46.1% |
| Gain on sale of investments in unconsolidated entities | 32 | 10,581 | (10,549) | -99.7% | 22,725 | 39,664 | (16,939) | -42.7% |
| Segment net income | 1,720 | 12,423 | (10,703) | -86.2% | 29,931 | 46,185 | (16,254) | -35.2% |

#### Comparison of the three months ended September 30, 2023 and 2022

The decrease in total revenues for the three months ended September 30, 2023 as compared to the same period in 2022 was primarily due to the following:

- An increase of approximately $654,000 in investment income related to our various JV Equity Investments primarily from equity contributions during 2022 and 2023;
- A decrease of approximately $379,000 of investment income related to the sales of Vantage at O’Connor in July 2022, Vantage at Stone Creek in January 2023, and Vantage at Coventry in January 2023; and
- A decrease of approximately $313,000 of investment income due to Vantage at Tomball meeting its maximum guaranteed preferred return in the first quarter of 2023.

Interest expense for the three months ended September 30, 2023 and 2022 is related to our General LOC that is primarily secured by our JV Equity Investments. The increase in interest expense is primarily due to a higher variable interest rate on outstanding balances.

The gain on sale of JV Equity Investments for the three months ended September 30, 2023 primarily related to final settlement of the Vantage at Powdersville sale in May 2021. The gain on sale of JV Equity Investments for the three months ended September 30, 2022 primarily related to the sale of Vantage at O'Connor in July 2022 for a gain of approximately $10.6 million.

The change in segment net income for the three months ended September 30, 2023 as compared to the same period in 2022 was primarily due to the change in total revenues, total interest expense, and gains on sales of unconsolidated entities discussed above.

#### Comparison of the nine months ended September 30, 2023 and 2022

The increase in total revenues for the nine months ended September 30, 2023 as compared to the same period in 2022 was primarily due to the following:

- An increase of approximately $2.1 million of investment income related to preferred return received upon the sale of Vantage at Conroe in June 2023;
- An increase of approximately $1.3 million in investment income related to our various JV Equity Investments primarily from equity contributions during 2022 and 2023; and
- A decrease of approximately $2.4 million of investment income related to the sales of Vantage at Murfreesboro in March 2022, Vantage at Westover Hills in May 2022, Vantage at O’Connor in July 2022, Vantage at Stone Creek in January 2023, and Vantage at Coventry in January 2023.

Interest expense for the nine months ended September 30, 2023 and 2022 is related to our General LOC that is primarily secured by our JV Equity Investments. The increase in interest expense is primarily due to a higher variable interest rate on outstanding balances.

The gain on sale of JV Equity Investments for the nine months ended September 30, 2023 primarily consisted of the following:

- The sale of Vantage at Stone Creek in January 2023 for a gain of approximately $9.1 million;
- The sale of Vantage at Coventry in January 2023 for a gain of approximately $6.3 million; and
- The sale of Vantage at Conroe in June 2023 for a gain of approximately $7.3 million.

The gain on sale of JV Equity Investments for the nine months ended September 30, 2022 primarily consisted of the following:

- The sale of Vantage at Murfreesboro in March 2022 for a gain of approximately $16.4 million; and
- The sale of Vantage at Westover Hills in May 2022 for a gain of approximately $12.7 million; and
- The sale of Vantage at O'Connor in July 2022 for a gain of approximately $10.6 million.

The change in segment net income for the nine months ended September 30, 2023 as compared to the same period in 2022 was primarily due to the change in total revenues and gains on sales of unconsolidated entities discussed above.

#### Operational Matters

We have noted no material construction cost overruns to date, despite generally volatile market prices for construction materials, particularly lumber and commodities. In addition, we have noted no material issues in securing materials and labor needed to construct the properties underlying our JV Equity Investments, despite general supply chain constraints noted in the current business environment. The construction loans associated with our JV Equity Investments typically have variable interest rates, so we regularly monitor interest costs in comparison to capitalized interest reserves in each property’s development budget and available construction budget contingency balances. Though original development budgets were sized to incorporate potential interest rate increases, the pace of recent interest rate increases has caused actual interest costs during construction to exceed original projections. We have noted that some properties that are complete or nearing completion have incurred interest costs that have exceeded capitalized interest reserves, and such properties may utilize construction contingencies or the developers have and may continue to defer a portion of its developer fee payment. Such interest cost overruns, and other potential development cost overruns, may require us to contribute additional equity which may result in lower returns on our JV Equity Investments.

As of September 30, 2023, Vantage at Tomball, Vantage at Helotes, and Vantage at Fair Oaks have completed construction, are in the initial leasing phase, and are 90%, 93%, and 54% occupied as of September 30, 2023, respectively. Vantage at Hutto is nearing completion and has begun leasing activities with 24% occupancy as of September 20, 2023.

In February 2023, we executed an $8.2 million commitment for Valage Senior Living Carson Valley, a to-be-constructed seniors housing property in Minden, NV. The structure and terms of this JV Equity Investment are very similar to our Vantage and Freestone JV Equity Investments. The managing member of the property is an experienced seniors housing developer and operator. We believe our initiation of JV Equity Investments for seniors housing properties diversifies the exposure of our portfolio of JV Equity Investment while offering risk-adjusted returns similar to our current portfolio.

In July 2023, we executed a $16.5 million commitment for The Jessam at Hays Farms, a to-be-constructed 318 unit market rate multifamily housing property in Huntsville, AL, which is with a new, experienced developer partner. The terms of this JV Equity

Investment are very similar to our Vantage and Freestone JV Equity Investments. This JV Equity Investment is held through ATAX Great Hill Holdings LLC, a wholly owned subsidiary of the Partnership, and diversifies our developer relationships for sourcing JV Equity Investments as well as our geographic areas of investment.

### MF Properties Segment

As of September 30, 2023 and 2022, the Partnership owned the Suites on Paseo MF Property containing a total of 384 rental units that serve primarily university students. As of September 30, 2022, the Partnership also owned The 50/50 MF Property which was sold to an unrelated non-profit organization in December 2022.

The following table compares operating results for the MF Properties segment for the periods indicated (dollar amounts in thousands):

| MF Properties | For the Three Months Ended September 30, 2023 | 2022 | $ Change | % Change | For the Nine Months Ended September 30, 2023 | 2022 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Total revenues | $1,199 | $1,914 | $(715) | -37.4% | $3,533 | $5,786 | $(2,253) | -38.9% |
| Real estate operating expense | 874 | 1,521 | (647) | -42.5% | 2,091 | 3,564 | (1,473) | -41.3% |
| Interest expense | 97 | 273 | (176) | -64.5% | 97 | 815 | (718) | -88.1% |
| Segment net income (loss) | (185) | (470) | 285 | 60.6% | 127 | (554) | 681 | N/A |

#### Comparison of the three months ended September 30, 2023 and 2022

The decrease in total revenues for the three months ended September 30, 2023 as compared to the same period in 2022 is primarily due to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Revenues for The 50/50 MF Property were approximately $798,000 for the three months ended September 30, 2022. This was partially offset by an increase of approximately $82,000 due to higher rental revenue at the Suites on Paseo MF Property.

The decrease in real estate operating expense for the three months ended September 30, 2023 as compared to the same period in 2022 is due primarily to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Operating expenses for The 50/50 MF Property were approximately $594,000 for the three months ended September 30, 2022. Operating expenses for the Suites on Paseo MF Property decreased approximately $53,000.

The decrease in interest expense for the three months ended September 30, 2023 as compared to the same period in 2022 is due to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022 and the buyer's assumption of debt outstanding at the property. In September 2023, the Suites on Paseo MF Property executed a variable rate mortgage payable in the amount of $25.0 million, which resulted in minimal interest expense during the third quarter.

The increase in segment net income for the three months ended September 30, 2023 as compared to the same period in 2022 was due to the changes in total revenue and interest expense described above. Included in segment net income (loss) is depreciation expense of $407,000 and $693,000 for the three months ended September 30, 2023 and 2022, respectively. The decrease in depreciation expense is primarily due to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Depreciation expense for The 50/50 MF Property was approximately $293,000 for the three months ended September 30, 2022.

#### Comparison of the nine months ended September 30, 2023 and 2022

The decrease in total revenues for the nine months ended September 30, 2023 as compared to the same period in 2022 is primarily due to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Revenues for The 50/50 MF Property were approximately $2.4 million for the nine months ended September 30, 2022. This was partially offset by an increase of approximately $180,000 due to higher rental revenue at the Suites on Paseo MF Property.

The decrease in real estate operating expense for the nine months ended September 30, 2023 as compared to the same period in 2022 is due primarily to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Operating expenses for The 50/50 MF Property were approximately $1.3 million for the nine months ended September 30, 2022. Operating expenses for the Suites on Paseo MF Property decreased approximately $189,000 due primarily to insurance proceeds from flood damage that offset expenses recognized in prior periods.

The decrease in interest expense for the nine months ended September 30, 2023 as compared to the same period in 2022 is due to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022 and the buyer's assumption of debt outstanding at the property. As of September 30, 2023, the Suites on Paseo MF Property had a variable rate mortgage.

The improvement in segment net income (loss) for the nine months ended September 30, 2023 as compared to the same period in 2022 was due to the changes in total revenue and interest expense described above. Included in segment net income (loss) is depreciation expense of $1.2 million and $2.1 million for the nine months ended September 30, 2023 and 2022, respectively. The decrease in depreciation expense is primarily due to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Depreciation expense for The 50/50 MF Property was approximately $879,000 for the nine months ended September 30, 2022.

#### Operational Matters

In December 2022, we sold 100% of our ownership interest in The 50/50 MF Property to an unrelated non-profit organization. We received an unsecured property loan in return upon sale payable from future net cash flows of the property. The buyer assumed two mortgages payable associated with the property and we agreed to provide certain recourse support for the assumed mortgages. As a result of the sale, we deconsolidated The 50/50 MF Property in our condensed consolidated financial statements as of the date of sale. We have deferred a gain on sale of approximately $6.6 million and will recognize the gain upon collection of principal of the unsecured property loan.

The Suites on Paseo MF Property has generated sufficient operating cash flows to meet all operational and debt service obligations as of September 30, 2023. The Suites on Paseo MF Property, which is adjacent to San Diego State University, was 100% occupied as of September 30, 2023. The high occupancy is due in part to San Diego State University having leased 140 beds for the period from August 2023 through July 2024 under a master lease, which will be subleased to its students. The master lease will support overall occupancy and provide certainty of revenue for the related beds.

### Discussion of Occupancy at Investment-Related Properties

The following tables summarize occupancy and other information regarding the properties underlying our various investment classes. The narrative discussion that follows provides a brief operating analysis of each investment class as of and for the nine months ended September 30, 2023 and 2022.

### Non-Consolidated Properties – Stabilized

The owners of the following properties either do not meet the definition of a VIE and/or we have evaluated and determined we are not the primary beneficiary of the VIE. As a result, we do not report the assets, liabilities and results of operations of these properties on a consolidated basis. These properties have met the stabilization criteria (see footnote 3 below the table) as of September 30, 2023. Debt service on our MRBs for the non-consolidated stabilized properties was current as of September 30, 2023. The amounts presented below were obtained from records provided by the property owners and their related property management service providers.

*MRB Multifamily Properties-Stabilized (3)*

| Property Name | State | Number of Units as of September 30, 2023 | Physical Occupancy (1) as of September 30, 2023 | 2022 | Economic Occupancy (2) for the nine months ended September 30, 2023 | 2022 |
| --- | --- | ---: | ---: | ---: | ---: | ---: |
| CCBA Senior Garden Apartments | CA | 45 | 93% | 98% | 96% | 96% |
| Courtyard | CA | 108 | 100% | 99% | 98% | 96% |
| Glenview Apartments | CA | 88 | 89% | 94% | 84% | 89% |
| Harden Ranch | CA | 100 | 100% | 96% | 98% | 96% |
| Harmony Court Bakersfield | CA | 96 | 97% | 98% | 92% | 91% |
| Harmony Terrace | CA | 136 | 99% | 96% | 136% | 132% |
| Las Palmas II | CA | 81 | 100% | 100% | 98% | 98% |
| Lutheran Gardens | CA | 76 | 96% | 92% | 94% | 90% |
| Montclair Apartments | CA | 80 | 95% | 98% | 90% | 94% |
| Montecito at Williams Ranch Apartments | CA | 132 | 98% | 92% | 104% | 105% |
| Montevista | CA | 82 | 90% | 94% | 96% | 95% |
| San Vicente | CA | 50 | 100% | 100% | 88% | 89% |
| Santa Fe Apartments | CA | 89 | 100% | 94% | 95% | 91% |
| Seasons at Simi Valley | CA | 69 | 97% | 99% | 121% | 118% |
| Seasons Lakewood | CA | 85 | 100% | 99% | 107% | 99% |
| Seasons San Juan Capistrano | CA | 112 | 96% | 97% | 101% | 100% |
| Solano Vista | CA | 96 | 95% | 98% | 88% | 87% |
| Summerhill | CA | 128 | 95% | 98% | 93% | 91% |
| Sycamore Walk | CA | 112 | 96% | 98% | 94% | 88% |
| The Village at Madera | CA | 75 | 99% | 96% | 104% | 99% |
| Tyler Park Townhomes | CA | 88 | 99% | 99% | 98% | 97% |
| Vineyard Gardens | CA | 62 | 100% | 100% | 103% | 100% |
| Westside Village Market | CA | 81 | 96% | 99% | 95% | 89% |
| Ocotillo Springs | CA | 75 | 93% | 99% | 99% | 88% |
| Brookstone | IL | 168 | 98% | 99% | 100% | 100% |
| Copper Gate Apartments | IN | 129 | 99% | 98% | 98% | 101% |
| Renaissance | LA | 208 | 89% | 94% | 91% | 91% |
| Live 929 Apartments | MD | 575 | 69% | 89% | 81% | 75% |
| Silver Moon | NM | 151 | 97% | 97% | 95% | 96% |
| Village at Avalon | NM | 240 | 100% | 97% | 98% | 96% |
| Columbia Gardens | SC | 188 | 90% | 88% | 100% | 98% |
| Companion at Thornhill Apartments | SC | 180 | 98% | 99% | 81% | 83% |
| The Palms at Premier Park Apartments | SC | 240 | 97% | 98% | 86% | 88% |
| Village at River's Edge (4) | SC | 124 | 93% | 93% | 93% | 94% |
| Willow Run | SC | 200 | 89% | 90% | 102% | 100% |
| Arbors at Hickory Ridge (5) | TN | 348 | n/a | n/a | n/a | n/a |
| Avistar at Copperfield | TX | 192 | 95% | 98% | 89% | 85% |
| Avistar at the Crest | TX | 200 | 97% | 98% | 91% | 84% |
| Avistar at the Oaks | TX | 156 | 97% | 98% | 89% | 89% |
| Avistar at the Parkway | TX | 236 | 87% | 94% | 82% | 83% |
| Avistar at Wilcrest | TX | 88 | 93% | 92% | 82% | 78% |
| Avistar at Wood Hollow | TX | 409 | 95% | 97% | 92% | 87% |
| Avistar in 09 | TX | 133 | 98% | 100% | 94% | 93% |
| Avistar on the Boulevard | TX | 344 | 91% | 97% | 82% | 84% |
| Avistar on the Hills | TX | 129 | 95% | 96% | 87% | 85% |
| Bruton Apartments | TX | 264 | 69% | 91% | 47% | 62% |
| Concord at Gulfgate | TX | 288 | 91% | 94% | 79% | 86% |
| Concord at Little York | TX | 276 | 87% | 88% | 76% | 76% |
| Concord at Williamcrest | TX | 288 | 94% | 94% | 86% | 83% |
| Crossing at 1415 | TX | 112 | 95% | 97% | 86% | 87% |
| Decatur Angle | TX | 302 | 85% | 92% | 71% | 67% |
| Esperanza at Palo Alto | TX | 322 | 91% | 85% | 74% | 76% |
| Heights at 515 | TX | 96 | 91% | 97% | 86% | 89% |
| Heritage Square | TX | 204 | 97% | 98% | 87% | 83% |
| Oaks at Georgetown | TX | 192 | 96% | 92% | 92% | 92% |
| Runnymede | TX | 252 | 100% | 100% | 91% | 96% |
| Southpark | TX | 192 | 92% | 98% | 84% | 90% |
| 15 West Apartments | WA | 120 | 98% | 99% | 98% | 98% |
|  |  | 9,692 | 92.0% | 95.0% | 88.1% | 87.7% |

(1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement.

(2) Economic occupancy is defined as the net rental income received divided by the maximum amount of rental income to be derived from each property. This statistic is reflective of rental concessions, delinquent rents and non-revenue units such as model units and employee units. Physical occupancy is a point in time measurement while economic occupancy is a measurement over the period presented. Therefore, economic occupancy for a period may exceed the actual occupancy at any point in time.

(3) A property is considered stabilized once it reaches 90% physical occupancy for 90 days and an achievement of 1.15 times debt service coverage ratio on amortizing debt service for a period after construction completion or completion of the rehabilitation.

(4) The physical occupancy and economic occupancy amounts are based on the latest available occupancy and financial information, which is as of June 30, 2023.

(5) The MRB is defeased and as such, the Partnership does not report property occupancy information.

Physical occupancy as of September 30, 2023 decreased from the same period in 2022 due primarily to occupancy declines at Live 929 Apartments and Bruton Apartments. Live 929 Apartments occupancy is lower than in recent years due to on-site management issues during the Fall 2023 lease-up process. Certain personnel changes have been made and the property management team is focused on leasing to tenants at the nearby Johns Hopkins University medical campus whose programs begin during the 2023-2024 academic year. Bruton Apartments physical occupancy has significantly declined during 2023 as the property continues to remove non-paying tenants upon the expiration of local COVID-related ordinances in July 2023 and is repairing such units to be leased to new paying tenants. We will continue to monitor and discuss property operations with the individual borrowers for Live 929 Apartments and Bruton Apartments to ensure noted performance issues are addressed.

Economic occupancy for the nine months ended September 30, 2023 increased slightly compared with the same period in 2022 due to higher rental rates offsetting noted declines in occupancy. Bruton Apartments economic occupancy has significantly declined during 2023 due to higher than historical bad debt write-offs and decreased physical occupancy, as noted above.

### Non-Consolidated Properties - Not Stabilized

The owners of the following residential properties do not meet the definition of a VIE and/or we have evaluated and determined we are not the primary beneficiary of each VIE. As a result, we do not report the assets, liabilities and results of operations of these properties on a consolidated basis. As of September 30, 2023, these Residential Properties have not met the stabilization criteria (see footnote 3 below the table). As of September 30, 2023, debt service on the Partnership’s MRBs and GILs for the non-consolidated, non-stabilized properties was current. The amounts presented below were obtained from records provided by the property owners and their related property management service providers.

*MRB Multifamily Properties-Non Stabilized (3)*

| Property Name | State | Number of Units as of September 30, 2023 |  | Physical Occupancy (1) as of September 30, 2023 |  | 2022 | Economic Occupancy (2) for the nine months ended September 30, 2023 | 2022 |
| --- | --- | ---: | ---: | --- | ---: | --- | --- | --- |
| 40rty on Colony - Series P (4) | CA | 40 |  | n/a |  | n/a | n/a | n/a |
| Residency at Empire (4) | CA | 148 |  | n/a |  | n/a | n/a | n/a |
| Residency at the Entrepreneur (4) | CA | 200 |  | n/a |  | n/a | n/a | n/a |
| Residency at the Mayer (4) | CA | 79 |  | n/a |  | n/a | n/a | n/a |
| Village at Hanford Square (4) | CA | 100 |  | n/a |  | n/a | n/a | n/a |
| Handsel Morgan Village Apartments (4) | GA | 45 |  | n/a |  | n/a | n/a | n/a |
| MaryAlice Circle Apartments (5) | GA | 98 |  | 58% |  | n/a | 51% | n/a |
| Jackson Manor Apartments | MS | 60 |  | 95% |  | 100% | 97% | 96% |
| The Ivy Apartments (5) | SC | 212 |  | 79% |  | n/a | 65% | n/a |
| The Park at Sondrio Apartments (5) | SC | 271 |  | 71% |  | n/a | 59% | n/a |
| The Park at Vietti Apartments (5) | SC | 204 |  | 73% |  | n/a | 61% | n/a |
| Windsor Shores Apartments (5) | SC | 176 |  | 81% |  | n/a | 72% | n/a |
|  |  | 1,633 |  |  |  |  |  |  |
| GIL Multifamily Properties-Non Stabilized (3) |  |  |  |  |  |  |  |  |
| Hope on Avalon (5) | CA | 88 |  | 98% |  | n/a | 79% | n/a |
| Poppy Grove I (4) | CA | 147 |  | n/a |  | n/a | n/a | n/a |
| Poppy Grove II (4) | CA | 82 |  | n/a |  | n/a | n/a | n/a |
| Poppy Grove III (4) | CA | 158 |  | n/a |  | n/a | n/a | n/a |
| Osprey Village (4) | FL | 383 |  | n/a |  | n/a | n/a | n/a |
| Magnolia Heights | GA | 200 |  | 69% |  | 56% | 40% | 56% |
| Willow Place Apartments (4) | GA | 182 |  | n/a |  | n/a | n/a | n/a |
| Legacy Commons at Signal Hills | MN | 247 |  | 61% |  | 4% | 21% | 0% |
| Scharbauer Flats Apartments | TX | 300 |  | 94% |  | 8% | 50% | 2% |
| Sandy Creek Apartments (4) | TX | 140 |  | n/a |  | n/a | n/a | n/a |
|  |  | 1,927 |  |  |  |  |  |  |
| MRB Seniors Housing and Skilled Nursing Properties-Non Stabilized (3) |  |  |  |  |  |  |  |  |
| Meadow Valley (4) | MI | 174 | (7) | n/a |  | n/a | n/a | n/a |
| Village Point Apartments (5), (6) | NJ | 120 | (8) | 83% | (8) | n/a | n/a | n/a |
|  |  | 294 |  |  |  |  |  |  |
| Grand total |  | 3,854 |  |  |  |  |  |  |

(1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement.

(2) Economic occupancy is defined as the net rental income received divided by the maximum amount of rental income to be derived from each property. This statistic is reflective of rental concessions, delinquent rents and non-revenue units such as model units and employee units. Physical occupancy is a point in time measurement while economic occupancy is a measurement over the period presented. Therefore, economic occupancy for a period may exceed the actual occupancy at any point in time.

(3) The property is not considered stabilized as it has not met the criteria for stabilization. A property is considered stabilized once construction and/or rehabilitation is complete, it reaches 90% physical occupancy for 90 days, and it achieves 1.15 times debt service coverage ratio on amortizing debt service for a certain period.

(4) Physical and economic occupancy information is not available for the nine months ended September 30, 2023 and 2022 as the property is under construction or rehabilitation.

(5) Physical and economic occupancy information is not available for the nine months ended September 30, 2022 as the related investment was either under construction, rehabilitation, or recently acquired.

(6) The physical occupancy is based on the latest available financial information, which is as of September 30, 2023. Economic occupancy is not available as of September 30, 2023 as the property was recently acquired or recently began operations.

(7) Meadow Valley is a seniors housing property with 174 beds in 154 units.

(8) Village Point is a skilled nursing property with 120 beds in 92 units. Occupancy is based on the daily average of beds occupied during the month of September 2023.

As of September 30, 2023, six MRB multifamily properties and one MRB seniors housing property were under construction and have no operating metrics to report. The Jackson Manor, The Ivy Apartments, The Park at Sondrio Apartments, The Park at Vietti Apartments, and Windsor Shores Apartments MRB properties are currently undergoing tenant-in-place rehabilitations. The MaryAlice Circle Apartments MRB property is undergoing both rehabilitation and new construction phases.

As of September 30, 2023, six GIL properties were under construction and have no operating metrics to report. The remaining four GIL properties have substantially completed construction and are leasing units. The Sandy Creek Apartments GIL property is currently undergoing a tenant-in-place rehabilitation.

### JV Equity Investments

We are the noncontrolling equity investor in various unconsolidated entities formed for the purpose of constructing market-rate, multifamily real estate properties. The Partnership determined the JV Equity Investments are VIEs but that the Partnership is not the primary beneficiary. As a result, the Partnership does not report the assets, liabilities and results of operations of these properties on a consolidated basis. The one exception is Vantage at San Marcos, for which the Partnership is deemed the primary beneficiary and reports the entity's assets and liabilities on a consolidated basis. Our JV Equity Investments entitle us to shares of certain cash flows generated by the entities from operations and upon the occurrence of certain capital transactions, such as a refinance or sale. The amounts presented below were obtained from records provided by the property management service providers.

| Property Name Sold Properties | State | Construction Completion Date | Planned Number of Units |  | Physical Occupancy (1) as of September 30, 2023 | 2022 | Revenue For the Three Months Ended September 30, 2023 (2) | Sale Date | Per-unit Sale Price |
| --- | --- | --- | ---: | ---: | --- | --- | --- | --- | --- |
| Vantage at Germantown | TN | March 2020 | n/a |  | n/a | n/a | n/a | March 2021 | $149,000 |
| Vantage at Powdersville | SC | February 2020 | n/a |  | n/a | n/a | n/a | May 2021 | 170,000 |
| Vantage at Bulverde | TX | August 2019 | n/a |  | n/a | n/a | n/a | August 2021 | 170,000 |
| Vantage at Murfreesboro | TN | October 2020 | n/a |  | n/a | n/a | n/a | March 2022 | 273,000 |
| Vantage at Westover Hills | TX | July 2021 | n/a |  | n/a | n/a | n/a | May 2022 | (3) |
| Vantage at O'Connor | TX | June 2021 | n/a |  | n/a | n/a | n/a | July 2022 | 201,000 |
| Vantage at Stone Creek | NE | April 2020 | n/a |  | n/a | 97% | n/a | January 2023 | 196,000 |
| Vantage at Coventry | NE | February 2021 | n/a |  | n/a | 96% | n/a | January 2023 | 180,000 |
| Vantage at Conroe | TX | January 2021 | n/a |  | n/a | 91% | n/a | June 2023 | 174,000 |
| Operating Properties |  |  |  |  |  |  |  |  |  |
| Vantage at Tomball | TX | April 2022 | 288 |  | 90% | 67% | $1,139,609 | n/a | n/a |
| Vantage at Helotes | TX | November 2022 | 288 |  | 93% | 40% | 1,155,594 | n/a | n/a |
| Vantage at Fair Oaks | TX | May 2023 | 288 |  | 54% | n/a | 451,276 | n/a | n/a |
| Properties Under Construction |  |  |  |  |  |  |  |  |  |
| Vantage at Hutto (4) | TX | n/a | 288 |  | 24% | n/a | $158,472 | n/a | n/a |
| Vantage at Loveland | CO | n/a | 288 |  | n/a | n/a | n/a | n/a | n/a |
| Vantage at McKinney Falls | TX | n/a | 288 |  | n/a | n/a | n/a | n/a | n/a |
| Freestone Cresta Bella | TX | n/a | 296 |  | n/a | n/a | n/a | n/a | n/a |
| Valage Senior Living Carson Valley | NV | n/a | 102 | (5) | n/a | n/a | n/a | n/a | n/a |
| The Jessam at Hays Farm | AL | n/a | 318 |  | n/a | n/a | n/a | n/a | n/a |
| Properties in Planning |  |  |  |  |  |  |  |  |  |
| Vantage at San Marcos (6) | TX | n/a | 288 |  | n/a | n/a | n/a | n/a | n/a |
| Freestone Greeley | CO | n/a | 296 |  | n/a | n/a | n/a | n/a | n/a |
|  |  |  | 3,028 |  |  |  |  |  |  |

(1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement.

(2) Revenue is attributable to the property underlying the Partnership’s equity investment and is not included in the Partnership's income.

(3) Disclosure of the per-unit sale price is not permitted according to provisions in the purchase agreement executed by the entity’s managing member and the buyer.

(4) Information as of September 30, 2023 is provided as the property has commenced leasing operations prior to construction completion.

(5) Valage Senior Living Carson Valley is a seniors housing property with 102 beds in 88 units.

(6) The property is reported as a consolidated VIE as of September 30, 2023 (see Note 5 to the Partnership’s condensed consolidated financial statements).

The Vantage at Loveland, Vantage at McKinney Falls, Freestone Cresta Bella, Valage Senior Living Carson Valley, and The Jessam at Hays Farm properties are under construction and have yet to commence leasing activities as of September 30, 2023. Vantage at Hutto is nearing construction completion and has commenced leasing activities. Freestone Greeley and Vantage at San Macros are in the planning phase.

Construction was completed on Vantage at Tomball and Vantage at Helotes during 2022 and both properties are leasing up in line with expectations. Vantage at Tomball was publicly listed for sale by its managing member in October 2023. Vantage at Fair Oaks construction was completed in 2023 and has commenced leasing activities.

### MF Properties

As of September 30, 2023, we owned one MF Property. The Partnership reports the assets, liabilities, and results of operations of this property on a consolidated basis.

*MF Properties*

| Property Name | State | Number of Units as of September 30, 2023 | Physical Occupancy (1) as of September 30, 2023 | 2022 | Economic Occupancy (2) for the nine months ended September 30, 2023 | 2022 |
| --- | --- | ---: | ---: | ---: | ---: | ---: |
| Suites on Paseo | CA | 384 | 100% | 98% | 91% | 85% |

(1) Physical occupancy is defined as the total number of units occupied divided by total units at the date of measurement.

(2) Economic occupancy is defined as the net rental income received divided by the maximum amount of rental income to be derived from each property. This statistic is reflective of rental concessions, delinquent rents and non-revenue units such as model units and employee units. Physical occupancy is a point in time measurement while economic occupancy is a measurement over the period presented. Therefore, economic occupancy for a period may exceed the actual occupancy at any point in time.

The economic occupancy for the nine months ended September 30, 2023 increased as compared to the same period in 2022 due to higher average monthly occupancy. The physical occupancy as of September 30, 2023 remained relatively stable as compared to the same period in 2022. The property and San Diego State University have entered into a master lease whereby the university has leased 140 beds for the period from August 2023 through July 2024, which the university will then sublease to its students. The master lease supports overall occupancy and provides certainty of revenue for the related beds.

### Results of Operations

The tables and following discussions of our changes in results of operations for the three and nine months ended September 30, 2023 and 2022 should be read in conjunction with the Partnership’s consolidated financial statements and notes thereto included in Item 1 of this report, as well as the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2022.

The following table compares our revenue and other income for the periods indicated (dollar amounts in thousands):

| Revenues and Other Income: | For the Three Months Ended September 30, 2023 | 2022 | $ Change | % Change | For the Nine Months Ended September 30, 2023 | 2022 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Investment income | $20,537 | $16,564 | $3,973 | 24.0% | $62,256 | $44,792 | $17,464 | 39.0% |
| Property revenues | 1,199 | 1,914 | (715) | -37.4% | 3,533 | 5,786 | (2,253) | -38.9% |
| Other interest income | 4,621 | 4,127 | 494 | 12.0% | 13,677 | 8,466 | 5,211 | 61.6% |
| Other income | 117 | - | 117 | N/A | 250 | - | 250 | N/A |
| Gain on sale of investments in unconsolidated entities | 32 | 10,581 | (10,549) | -99.7% | 22,725 | 39,664 | (16,939) | -42.7% |
| Total Revenues and Other Income | $26,506 | $33,186 | $(6,680) | -20.1% | $102,441 | $98,708 | $3,733 | 3.8% |

#### Discussion of Total Revenues and Other Income for the Three Months Ended September 30, 2023 and 2022

*Investment income.* The increase in investment income for the three months ended September 30, 2023 as compared to the same period in 2022 was due to the following factors:

- An increase of approximately $2.9 million in interest income from higher GIL investment balances and higher average interest rates, offset by a decrease of approximately $415,000 in interest income due to GIL redemptions;
- An increase of approximately $3.6 million in interest income from recent MRB advances, offset by a decrease of approximately $2.1 million in interest income due to MRB redemptions and principal repayments;
- A decrease of approximately $37,000 of investment income related to JV Equity Investments. This decrease consisted of:
- An increase of approximately $654,000 in investment income related to our various JV Equity Investments primarily from equity contributions during 2022 and 2023;
- A decrease of approximately $379,000 of investment income related to the sales of Vantage at O’Connor in July 2022, Vantage at Stone Creek in January 2023, and Vantage at Coventry in January 2023; and
- A decrease of approximately $313,000 of investment income due to Vantage at Tomball meeting its maximum guaranteed preferred return in the first quarter of 2023.

*Property revenues.* The decrease in property revenues for the three months ended September 30, 2023 as compared to the same period in 2022 is primarily due to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Revenues for The 50/50 MF Property were approximately $798,000 for the three months ended September 30, 2022. This was partially offset by an increase of approximately $82,000 due to higher rents at the Suites on Paseo MF Property.

*Other interest income.* Other interest income is comprised primarily of interest income on our property loan, taxable MRB, and taxable GIL investments. The increase in other interest income for the three months ended September 30, 2023 as compared to the same period in 2022 was due to the following factors:

- An increase of approximately $2.1 million from higher average property loan, taxable MRB and taxable GIL investment balances of $20.5 million and higher average interest rates;
- An increase of approximately $678,000 of other interest income due to increasing interest earned on cash balances; and
- A decrease of approximately $2.3 million for property loan redemptions during 2022 and 2023, of which approximately $1.7 million relates to payments received on redemption of the Cross Creek property loans in the third quarter of 2022 that were previously in nonaccrual status.

*Other income*. Other income for the three months ended September 30, 2023 related to receipt of non-refundable fees for the extension of the Hope on Avalon GIL and taxable GIL, Hope on Broadway GIL, and Jackson Manor MRB maturity dates. There was no other income for the three months ended September 30, 2022.

*Gain on sale of investments in unconsolidated entities.* The gain on sale of JV Equity Investments for the three months ended September 30, 2023 primarily related to final settlement of the Vantage at Powdersville sale in May 2021. The gain on sale of JV Equity Investments for the three months ended September 30, 2022 primarily related to the sale of Vantage at O'Connor in July 2022 for a gain of approximately $10.6 million.

#### Discussion of Total Revenues and Other Income for the Nine Months Ended September 30, 2023 and 2022

*Investment income.* The increase in investment income for the nine months ended September 30, 2023 as compared to the same period in 2022 was due to the following factors:

- An increase of approximately $10.0 million in interest income from higher GIL investment balances and higher average interest rates;
- An increase of approximately $10.1 million in interest income from recent MRB advances, offset by a decrease of approximately $3.6 million in interest income due to MRB redemptions;
- An increase of approximately $1.0 million of investment income related to JV Equity Investments consisting of:
- An increase of approximately $2.1 million of investment income related to preferred return received upon the sale of Vantage at Conroe in June 2023;
- An increase of approximately $1.3 million in investment income related to our various JV Equity Investments primarily from equity contributions during 2022 and 2023; and
- A decrease of approximately $2.4 million of investment income related to the sales of Vantage at Murfreesboro in March 2022, Vantage at Westover Hills in May 2022, Vantage at O’Connor in July 2022, Vantage at Stone Creek in January 2023, and Vantage at Coventry in January 2023.

*Property revenues.* The decrease in property revenues for the nine months ended September 30, 2023 as compared to the same period in 2022 is primarily due to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Revenues for The 50/50 MF Property were approximately $2.4 million for the nine months ended September 30, 2022. This was partially offset by an increase of approximately $180,000 due to higher rental revenue at the Suites on Paseo MF Property.

*Other interest income.* Other interest income is comprised primarily of interest income on our property loan, taxable MRB, and taxable GIL investments. The increase in other interest income for the nine months ended September 30, 2023 as compared to the same period in 2022 was due to the following factors:

- An increase of approximately $7.5 million from higher average property loan, taxable MRB and taxable GIL investment balances of $63.3 million and higher average interest rates;
- An increase of approximately $2.1 million of other interest income due to increasing interest earned on cash balances;
- A decrease of approximately $1.9 million in other interest income for payments received on the Ohio Properties and Live 929 Apartments property loans in the first quarter of 2022 that did not recur;
- A decrease of approximately $1.7 million for payments received on redemption of the Cross Creek property loans in the third quarter of 2022 that were previously in nonaccrual status; and
- A decrease of approximately $788,000 in other interest income due to property loan redemptions in 2022.

*Other income.* Other income for the nine months ended September 30, 2023 related to receipt of non-refundable fees for the extension of the Scharbauer Flats GIL and property loan, Hope on Avalon GIL and taxable GIL, Hope on Broadway GIL, and Jackson Manor MRB maturity dates. There was no other income for the nine months ended September 30, 2022.

*Gain on sale of investments in unconsolidated entities.* The gain on sale of JV Equity Investments for the nine months ended September 30, 2023 primarily consisted of the following:

- The sale of Vantage at Stone Creek in January 2023 for a gain of approximately $9.1 million;
- The sale of Vantage at Coventry in January 2023 for a gain of approximately $6.3 million; and
- The sale of Vantage at Conroe in June 2023 for a gain of approximately $7.3 million.

The gain on sale of JV Equity Investments for the nine months ended September 30, 2022 primarily consisted of the following:

- The sale of Vantage at Murfreesboro in March 2022 for a gain of approximately $16.4 million; and
- The sale of Vantage at Westover Hills in May 2022 for a gain of approximately $12.7 million; and
- The sale of Vantage at O'Connor in July 2022 for a gain of approximately $10.6 million.

The following table compares our expenses for the periods indicated (dollar amounts in thousands):

| Expenses: | For the Three Months Ended September 30, 2023 | 2022 | $ Change | % Change | For the Nine Months Ended September 30, 2023 | 2022 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Real estate operating (exclusive of items shown below) | $874 | $1,521 | $(647) | -42.5% | $2,091 | $3,564 | $(1,473) | -41.3% |
| Provision for credit losses | (562) | - | (562) | N/A | (1,881) | - | (1,881) | N/A |
| Depreciation and amortization | 413 | 688 | (275) | -40.0% | 1,224 | 2,057 | (833) | -40.5% |
| Interest expense | 10,717 | 8,036 | 2,681 | 33.4% | 37,677 | 18,750 | 18,927 | 100.9% |
| General and administrative | 5,328 | 4,505 | 823 | 18.3% | 15,510 | 11,996 | 3,514 | 29.3% |
| Total Expenses | $16,770 | $14,750 | $2,020 | 13.7% | $54,621 | $36,367 | $18,254 | 50.2% |

#### Discussion of Total Expenses for the Three Months Ended September 30, 2023 and 2022

*Real estate operating expenses.* Real estate operating expenses are related to MF Properties and are comprised principally of real estate taxes, property insurance, utilities, property management fees, repairs and maintenance, and salaries and related employee expenses of on-site employees. Real estate operating expenses decreased for the three months ended September 30, 2023 as compared to the same period in 2022 primarily due to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022.

Operating expenses for The 50/50 MF Property were approximately $594,000 for the three months ended September 30, 2022. Operating expenses for the Suites on Paseo MF Property decreased approximately $53,000.

*Provision for credit losses.* The Partnership adopted the CECL standard effective January 1, 2023 and we recorded a cumulative effect of accounting change of approximately $5.9 million directly to Partners’ Capital as of the effective date. The provision for credit losses for the three months ended September 30, 2023 relates to declining expected credit losses for our portfolio of GIL, taxable GIL and property loan investments and is primarily due to GIL and property loan redemptions during 2023, a decrease in the weighted average life of the remaining investment portfolio, and updates of market data used as quantitative assumptions in the Partnership’s model to estimate the allowance for credit losses. There was no provision for credit losses for the three months ended September 30, 2022, which was prior to the effective date of the CECL standard.

*Depreciation and amortization expense.* Depreciation and amortization relate primarily to the MF Properties. Depreciation and amortization expense decreased for the three months ended September 30, 2023 as compared to the same period in 2022 due primarily to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Depreciation expense for The 50/50 MF Property was approximately $293,000 for the three months ended September 30, 2022.

*Interest expense.* The increase in interest expense for the three months ended September 30, 2023 as compared to the same period in 2022 was due to the following factors:

- An increase of approximately $3.5 million due to higher average interest rates on variable-rate debt financing;
- An increase of approximately $1.3 million due to higher average principal outstanding of $135.0 million;
- A decrease of approximately $630,000 in amortization of deferred financing costs, which includes approximately $510,000 of unamortized deferred financing costs that were recognized as interest expense upon the collapse of a TOB in September 2022; and
- A decrease of approximately $1.4 million due to interest rate derivative fair value adjustments.

*General and administrative expenses.* The increase in general and administrative expenses for the three months ended September 30, 2023 as compared to the same period in 2022 was primarily due to increases of approximately $250,000 in administration fees paid to AFCA2 due to greater assets under management, approximately $349,000 in employee compensation and benefits, and approximately $188,000 related to professional and consulting fees from increased transactional activity.

#### Discussion of Total Expenses for the Nine Months Ended September 30, 2023 and 2022

*Real estate operating expenses.* Real estate operating expenses are related to MF Properties and are comprised principally of real estate taxes, property insurance, utilities, property management fees, repairs and maintenance, and salaries and related employee expenses of on-site employees. Real estate operating expenses decreased for the nine months ended September 30, 2023 as compared to the same period in 2022 primarily due to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Operating expenses for The 50/50 MF Property were approximately $1.3 million for the nine months ended September 30, 2022. Operating expenses for the Suites on Paseo MF Property decreased approximately $189,000 due primarily to insurance proceeds from flood damage.

*Provision for credit losses.* The Partnership adopted the CECL standard effective January 1, 2023 and we recorded a cumulative effect of accounting change of approximately $5.9 million directly to Partners’ Capital as of the effective date. The provision for credit losses for the nine months ended September 30, 2023 relates to declining expected credit losses for our portfolio of GIL, taxable GIL and property loan investments and is primarily due to GIL and property loan redemptions during 2023, a decrease in the weighted average life of the remaining investment portfolio, and updates of market data used as quantitative assumptions in the Partnership’s model to estimate the allowance for credit losses. There was no provision for credit losses for the nine months ended September 30, 2022, which was prior to the effective date of the CECL standard.

*Depreciation and amortization expense.* Depreciation and amortization relate primarily to the MF Properties. Depreciation and amortization expense decreased for the nine months ended September 30, 2023 as compared to the same period in 2022 due primarily to the sale of the Partnership's ownership interest in The 50/50 MF Property in December 2022. Depreciation expense for The 50/50 MF Property was approximately $879,000 for the nine months ended September 30, 2022.

*Interest expense.* The increase in interest expense for the nine months ended September 30, 2023 as compared to the same period in 2022 was due to the following factors:

- An increase of approximately $15.7 million due to higher average interest rates on variable-rate debt financing;
- An increase of approximately $3.4 million due to higher average principal outstanding of $188.0 million;
- An increase of approximately $30,000 due to interest rate derivative fair value adjustments; and
- A decrease of approximately $173,000 in amortization of deferred financing costs.

*General and administrative expenses.* The increase in general and administrative expenses for the nine months ended September 30, 2023 as compared to the same period in 2022 was primarily due to increases of approximately $1.2 million in employee compensation related to higher transactional bonuses and salaries, approximately $976,000 in administration fees paid to AFCA2 due to greater assets under management, approximately $621,000 in restricted unit compensation expense, and approximately $652,000 related to professional and consulting fees from increased transactional activity.

#### Discussion of Income Tax Expense for the Three and Nine Months Ended September 30, 2023 and 2022

A wholly owned subsidiary of the Partnership, the Greens Hold Co, is a corporation subject to federal and state income tax. The Greens Hold Co owns certain property loans. The Greens Hold Co sold its ownership interest in The 50/50 MF Property to an unrelated non-profit organization in December 2022 and deferred a gain on sale of approximately $6.6 million. There was minimal taxable income for the Greens Hold Co for the three and nine months ended September 30, 2023 and 2022.

### Cash Available for Distribution - Non-GAAP Financial Measures

The Partnership believes that Cash Available for Distribution (“CAD”) provides relevant information about the Partnership’s operations and is necessary, along with net income, for understanding its operating results. To calculate CAD, the Partnership begins with net income as computed in accordance with GAAP and adjusts for non-cash expenses or income consisting of depreciation expense, amortization expense related to deferred financing costs, amortization of premiums and discounts, fair value adjustments to derivative instruments, provisions for credit and loan losses, impairments on MRBs, GILs, real estate assets and property loans, deferred income tax expense (benefit) and restricted unit compensation expense. The Partnership also deducts Tier 2 income (see Note 3 to the Partnership’s condensed consolidated financial statements) distributable to the General Partner as defined in the Partnership Agreement and distributions and accretion for the Preferred Units. Net income is the GAAP measure most comparable to CAD. There is no generally accepted methodology for computing CAD, and the Partnership’s computation of CAD may not be comparable to CAD reported by other companies. Although the Partnership considers CAD to be a useful measure of the Partnership’s operating performance, CAD is a non-GAAP measure that should not be considered as an alternative to net income calculated in accordance with GAAP, or any other measures of financial performance presented in accordance with GAAP.

The following table shows the calculation of CAD (and a reconciliation of the Partnership’s net income, as determined in accordance with GAAP, to CAD) for the three and nine months ended September 30, 2023 and 2022 (all per BUC amounts are presented giving effect to the BUCs Distributions on a retroactive basis for all periods presented):

|  | For the Three Months Ended September 30, 2023 | 2022 | For the Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Net income | $9,729,378 | $18,516,593 | $47,807,772 | $62,387,292 |
| Change in fair value of derivative instruments | (4,236,597) | (2,871,716) | (6,820,894) | (6,579,280) |
| Depreciation and amortization expense | 413,433 | 688,488 | 1,223,822 | 2,056,512 |
| Provision for credit losses (1) | (562,000) | - | (1,881,000) | - |
| Reversal of impairment on securities (2) | - | (5,712,230) | - | (5,712,230) |
| Reversal of provision for loan loss (3) | - | (593,000) | - | (593,000) |
| Amortization of deferred financing costs | 352,692 | 982,388 | 1,751,442 | 1,926,580 |
| Restricted unit compensation expense | 603,473 | 580,156 | 1,540,609 | 919,563 |
| Deferred income taxes | (1,103) | (42,543) | (3,158) | (49,250) |
| Redeemable Preferred Unit distributions and accretion | (700,156) | (716,490) | (2,245,988) | (2,150,734) |
| Tier 2 Income allocable to the General Partner (4) | 64,919 | (70,200) | (3,228,709) | (2,905,748) |
| Recovery of prior credit loss (5) | (17,344) | (17,345) | (51,656) | (39,968) |
| Bond premium, discount and origination fee amortization, net of cash received | (45,157) | 957,343 | (139,384) | 819,627 |
| Total CAD | $5,601,538 | $11,701,444 | $37,952,856 | $50,079,364 |
| Weighted average number of BUCs outstanding, basic | 22,734,412 | 22,676,491 | 22,734,479 | 22,676,038 |
| Net income per BUC, basic | $0.39 | $0.77 | $1.84 | $2.51 |
| Total CAD per BUC, basic | $0.25 | $0.52 | $1.67 | $2.21 |
| Cash Distributions declared, per BUC | $0.368 | $0.359 | $1.102 | $1.233 |
| BUCs Distributions declared, per BUC (6) | $0.07 | $0.20 | $0.14 | $0.20 |

(1) The adjustment for the three and nine months ended September 30, 2023 reflects the change in allowances for credit losses under the CECL standard that was effective for the Partnership as of January 1, 2023 which requires the Partnership to update estimates of expected credit losses for our investments portfolio at each reporting date. The accounting for credit losses for the three and nine months ended September 30, 2022 was subject to previous accounting guidance that was generally applied incurred loss model rather than expected credit losses. There were no credit losses incurred using prior accounting guidance for the three and nine months ended September 30, 2022.

(2) This amount represents previous impairments recognized as adjustments to CAD in prior periods related to the Provision Center 2014-1 MRB. The property securing the MRB was sold in July 2022 with cash proceeds contributed to the bankruptcy estate. The borrower and the bankruptcy court are finalizing liquidation of the estate and the settlement of all remaining, receivables, payable and expenses such that the Partnership’s share of the proceeds can be distributed. Substantially all the assets of the borrower were liquidated in the third quarter of 2022 such that the Partnership’s loss was effectively realized.

(3) This amount represents previous impairments recognized as adjustments to CAD in prior periods related to the Cross Creek property loans. Such adjustments were reversed in the third quarter of 2022 upon the settlement of the outstanding balances.

(4) As described in Note 3 to the Partnership’s condensed consolidated financial statements, Net Interest Income representing contingent interest and Net Residual Proceeds representing contingent interest (Tier 2 income) will be distributed 75% to the limited partners and BUC holders, as a class, and 25% to the General Partner. This adjustment represents 25% of Tier 2 income due to the General Partner.

For the three and nine months ended September 30, 2023, Tier 2 income allocable to the General Partner consisted of approximately $3.8 million related to the gains on sale of Vantage at Stone Creek and Vantage at Coventry in January 2023 and approximately $813,000 related to the gain on sale of Vantage at Conroe in June 2023, offset by a $1.4 million Tier 2 loss allocable to the General Partner related to the Provision Center 2014-1 MRB realized in January 2023 upon receipt of the majority of expected bankruptcy liquidation proceeds.

For the three and nine months ended September 30, 2022, Tier 2 income allocable to the General Partner consisted of approximately $2.6 million related to the gain on sale of Vantage at Murfreesboro in March 2022, and approximately $260,000 related to the gain on sale of Vantage at Westover Hills in June 2022.

(5) The Partnership determined there was a recovery of previously recognized impairment recorded for the Live 929 Apartments Series 2022A MRB prior to the adoption of the CECL standard effective January 1, 2023. The Partnership is accreting the recovery of prior credit loss for this MRB into investment income over the term of the MRB consistent with applicable guidance. The accretion of recovery of value is presented as a reduction to current CAD as the original provision for credit loss was an addback for CAD calculation purposes in the period recognized.

(6) The Partnership declared the Second Quarter 2023 BUCs Distribution and the Third Quarter 2023 BUCs Distribution, each payable in the form of additional BUCs equal to $0.07 per BUC for outstanding BUCs as of the record dates of June 30 and September 29, 2023, respectively. The Partnership declared the Third Quarter 2022 BUCs Distribution, payable in the form of additional BUCs equal to $0.20 per BUC for outstanding BUCs as of the record date of September 30, 2022.

### Liquidity and Capital Resources

We continually evaluate our potential sources and uses of liquidity, including current and potential future developments related to market interest rates and the general economic and geopolitical environment. The information below is based on our current expectations and projections about future events and financial trends, which could materially differ from actual results.

Our short-term liquidity requirements over the next 12 months will be primarily operational expenses, investment commitments net of leverage secured by the investment assets; debt service (principal and interest payments) related to our debt financings and mortgages payable; repayments of our secured lines of credit balances; the exercise of redemption rights by the holders of the Series A Preferred Units; and distribution payments to Unitholders. We expect to meet these liquidity requirements primarily using cash on hand, operating cash flows from our investments and an MF Property, redemptions of various investment asset at the stated maturity dates, and potentially additional debt financing issued in the normal course of business. In addition, we will consider the issuance of additional BUCs, Series A-1 Preferred Units, Series B Preferred Units, or other series of limited partnership interests in the Partnership based on needs and opportunities for executing our strategy.

Our long-term liquidity requirements will be primarily for maturities of debt financings and mortgages payable; the exercise of redemption rights by the holders of the Series A Preferred Units; and funding and purchase of additional investment assets, net of leverage secured by the investment assets. We expect to meet these liquidity requirements primarily through refinancing of maturing debt financings with the same or similar lenders; contractual principal and interest payments from investments in MRBs, GILs and property loans; and proceeds from asset sales and redemptions. In addition, we will consider the issuance of additional BUCs, Series A-1 Preferred Units, Series B Preferred Units, or other series of limited partnership interests in the Partnership based on needs and opportunities for executing our strategy.

### Sources of Liquidity

The Partnership’s principal sources of liquidity consist of:

- Unrestricted cash on hand;
- Operating cash flows from investment assets;
- Net operating cash flows from our MF Property;
- Secured lines of credit;
- Proceeds from the sale or redemption of assets;
- Proceeds from obtaining additional debt; and
- Issuances of debt securities, BUCs, Series A-1 Preferred Units, Series B Preferred Units, or other series of limited partnership interests.

#### Unrestricted Cash on Hand

As of September 30, 2023, we reported unrestricted cash on hand of approximately $58.9 million. There are no contractual restrictions of the Partnership’s ability to use unrestricted cash on hand. In July 2023, $5.0 million of restricted cash related to our General LOC was released upon amendment of the facility. The Partnership has a financial covenant to maintain a minimum consolidated liquidity of $5.0 million under the terms of our various financing arrangements.

#### Operating Cash Flows from Investments

Cash flows from operations are primarily comprised of regular principal and interest payments received on our investment assets that provide consistent cash receipts throughout the year. All MRBs, taxable MRBs, GILs, taxable GILs and property loans are current on contractual debt service payments as of September 30, 2023, except for the Provision Center 2014-1 MRB. Investment receipts, net of interest expense on related debt financing and lines of credit, are available for our general use. We also receive distributions from JV Equity Investments if, and when, cash is available for distribution.

Receipt of cash from our investments in MRBs, taxable MRBs, and JV Equity Investments is dependent upon the generation of net cash flows at multifamily properties that underlie these investments. These underlying properties are subject to risks usually associated with direct investments in multifamily real estate, which include (but are not limited to) reduced occupancy, tenant defaults, falling rental rates, and increasing operating expenses.

Receipt of cash from our investments in GILs, taxable GILs, and construction financing and mezzanine property loans is dependent on the availability of funds in the original development budgets. The current rising interest rate environment is resulting in higher interest costs for properties with variable rate construction financing. We regularly monitor capitalized interest costs in comparison to capitalized interest reserves in the property’s development budget, available construction cost contingencies balances, and the funding of certain equity commitments by the owners of the underlying properties. The developers may also make cash payments to pay interest due to avoid claims under their payment and completion guaranties.

#### Net Operating Cash Flows from our MF Property

Cash flows generated by the Suites on Paseo MF Property, net of operating expenses and debt service, are unrestricted for our use. Such cash flows are subject to risk usually associated with direct investments in student multifamily real estate, which include (but are not limited to) reduced occupancy, tenant defaults, falling rental rates, and increasing operating expenses.

#### Secured Lines of Credit

We maintain a secured line of credit (“General LOC”) with two financial institutions of up to $40.0 million to purchase additional investments and to meet general working capital and liquidity requirements. We may borrow, prepay and reborrow amounts at any time through the maturity date, subject to the limitations of a borrowing base. The aggregate available commitment cannot exceed a borrowing base calculation, which is equal to 35% multiplied by the aggregate value of a pool of eligible encumbered assets. Eligible encumbered assets consist of 100% of our equity capital contributions to JV Equity Investments, subject to certain limits and restrictions. The General LOC is secured by first priority security interests in our JV Equity Investments. We have the ability to increase the total maximum commitment by $20.0 million to $60.0 million, subject to the identification of lenders to provide the additional commitment, the payment of certain fees, and other conditions. We will evaluate whether to increase the commitment based on the size of the borrowing base, liquidity needs and costs of such additional commitments. We are subject to various affirmative and negative covenants that, among others, require us to maintain consolidated liquidity of not less than $5.0 million (which will increase up to a maximum of $7.5 million if the maximum available commitment is fully increased to $60.0 million) and maintain a consolidated tangible net worth of not less than $200.0 million. We were in compliance with all covenants as of September 30, 2023. The balance of the General LOC was $16.5 million with the ability to draw an additional $20.1 million as of September 30, 2023. The General LOC has a maturity date of June 2025, with options to extend for up to two additional years, subject to certain terms and conditions.

We maintain a secured non-operating line of credit (“Acquisition LOC”) with a financial institution of up to $50 million. The Acquisition LOC may be used to fund purchases of MRBs, taxable MRBs, or loans issued to finance the acquisition, rehabilitation, or construction of affordable housing or which are otherwise secured by real estate or mortgage-backed securities (i.e., GILs, taxable GILs, and property loans). Advances on the Acquisition LOC are due on the 270th day following the advance date but may be extended for up to an additional 270 days by making certain payments. The Acquisition LOC contains a covenant, among others, that our senior debt will not exceed a specified percentage of the market value of our assets to be consistent with the Leverage Ratio (as defined by the Partnership). We were in compliance with all covenants as of September 30, 2023. There was no balance outstanding on the Acquisition LOC and approximately $50.0 million was available as of September 30, 2023. The Acquisition LOC has a maturity date of June 2024, with two one-year extension options, subject to certain terms and conditions.

#### Proceeds from the Sale or Redemption of Assets

We may, from time to time, sell or redeem our investments in MRBs, GILs, property loans, JV Equity Investments and MF Properties consistent with our strategic plans. Our MRB portfolio is marked at a premium to cost, adjusted for paydowns, primarily due to higher stated interest rates when compared to current market interest rates for similar investments. We may consider selling certain MRB investments in exchange for cash at prices that approximate our currently reported fair value. However, we are contractually prevented from selling the MRB investments included in our TEBS financings.

Our ability to dispose of investment assets on favorable terms is dependent upon several factors including, but not limited to, the number of potential buyers and the availability of credit to such potential buyers to purchase investment assets at prices we consider acceptable. Recent volatility in market interest rates, recent inflation and the potential for an economic recession may negatively impact the potential prices we could realize upon the disposition of our various assets.

The following table summarizes the proceeds from sales of our JV Equity Investments during 2023, inclusive of the return of our initial equity investments:

| Property Name | Location | Units | Month Sold | Gross Proceeds to the Partnership |
| --- | --- | ---: | --- | ---: |
| Vantage at Stone Creek | Omaha, NE | 294 | January 2023 | $14,689,244 |
| Vantage at Coventry | Omaha, NE | 294 | January 2023 | 13,220,218 |
| Vantage at Conroe | Conroe, TX | 288 | June 2023 | 19,828,060 |
|  |  |  |  | $47,737,522 |

In February 2023, the Greens of Pine Glen MRBs and property loans were redeemed. We received approximately $10.9 million of cash proceeds upon redemption of the MRBs and property loan. Related TEBS financing principal of $7.6 million was paid down upon redemption.

Many of our GIL and property loan investments have maturity dates within the next 12 months, which will be purchased by Freddie Mac, through a servicer, or repaid by the borrower on or before the maturity at prices equal to the principal outstanding plus accrued interest. Such proceeds will be primarily used to repay our related debt financing. We regularly monitor the progress of the underlying properties and the likelihood of redemption upon maturity and currently have no concerns regarding repayment. Borrowers of certain GIL and property loan investments may request an extension of the maturity dates up to six months, subject to meeting various conditions, obtaining an approval of Freddie Mac to extend the maturity date of the forward purchase commitment, and payment of an extension fee to us.

#### Proceeds from Obtaining Additional Debt

We hold certain investments that are not associated with our debt financings, mortgages payable, or secured LOCs. We may obtain leverage for these investments by posting the investments as security. As of September 30, 2023, our primary unleveraged assets were certain MRBs and taxable MRBs with outstanding principal totaling approximately $24.0 million.

#### Issuances of Debt Securities, BUCs, Series A-1 Preferred Units or Series B Preferred Units

We may, from time to time, issue additional BUCs, Preferred Units, or debt securities, in one or more offerings, at prices or quantities that are consistent with our strategic goals. In December 2022, the Partnership’s Registration Statement on Form S-3 (“Registration Statement”) was declared effective by the SEC under which the Partnership may, from time to time, offer and sell BUCs, Preferred Units, or debt securities, in one or more offerings, with a maximum aggregate offering price of $300.0 million. Debt securities issued under the Registration Statement may be senior or subordinate obligations of the Partnership. The Registration Statement will expire in December 2025.

We are currently party to a Capital on DemandTM Sales Agreement to offer and sell, from time to time at market prices on the date of sale, BUCs up to an aggregate offering price of $30 million via an “at the market offering.” As of September 30, 2023, we have not sold any BUCs under this program. We will continue to assess if and when to issue BUCs under this program going forward.

We have two registration statements on Form S-3 covering the offering of Preferred Units that have been declared effective by the SEC. The following table summarizes the Partnership's current Preferred Unit offerings:

| Preferred Unit Series | Initial Registration Effectiveness Date | Expiration Date | Unit Offering Price | Distribution Rate | Optional Redemption Date | Units Available to Issue as of September 30, 2023 |  | Units Issued as of September 30, 2023 |
| --- | --- | --- | ---: | ---: | --- | ---: | ---: | ---: |
| Series A-1 | September 2021 | September 2024 | $10.00 | 3.00% | Sixth anniversary | 1,700,000 | (1) | 1,800,000 |
| Series B | September 2021 | September 2024 | 10.00 | 5.75% | Sixth anniversary | 10,000,000 | (2) | - |
| Total |  |  |  |  |  | 11,700,000 |  | 1,800,000 |

(1) The Partnership is able to issue Series A-1 Preferred Units so long as the aggregate market capitalization of the BUCs, based on the closing price on the trading day prior to issuance of the Series A-1 Preferred Units, is no less than three times the aggregate book value of all Series A Preferred Units and Series A-1 Preferred Units, inclusive of the amount to be issued.

(2) The Partnership is able to issue Series B Preferred Units so long as the aggregate market capitalization of the BUCs, based on the closing price on the trading day prior to issuance of the Series B Preferred Units, is no less than two times the aggregate book value of all Series A Preferred Units, Series A-1 Preferred Units and Series B Preferred Units, inclusive of the amount to be issued.

During the nine months ended September 30, 2023, we sold a total of 1,800,000 Series A-1 Preferred Units to two financial institutions under the registration statement for the Series A-1 Preferred Units offering referenced in the table above for gross proceeds of $18.0 million.

We may also designate and issue additional series of preferred units representing limited partnership interests in the Partnership in accordance with the terms of the Partnership Agreement.

### Uses of Liquidity

Our principal uses of liquidity consist of:

- General and administrative expenses;
- Investment funding commitments;
- Debt service on debt financings, Secured Notes, mortgages payable, and secured lines of credit;
- Distributions paid to holders of Preferred Units and BUCs;
- Redemptions of Series A Preferred Units; and
- Other contractual obligations.

#### General and Administrative Expenses

We use cash to pay general and administrative expenses of our operations and real estate operating expenses of our MF Properties. For additional details, see Item 1A, “Risk Factors” in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2022 and the section captioned “Cash flows from operating activities” in the condensed consolidated statements of cash flows set forth in Item 1 of this report. General and administrative expenses are typically paid from unrestricted cash on hand and operating cash flows.

#### Investment Funding Commitments

Our overall strategy is to invest in quality multifamily properties through the acquisition of MRBs, GILs, property loans and JV Equity Investments in both existing and new markets. We evaluate investment opportunities based on, but not limited to, our market outlook, including general economic conditions, development opportunities and long-term growth potential. Our ability to make future investments is dependent upon identifying suitable acquisition and development opportunities, access to long-term financing sources, and the availability of investment capital. We may commit to fund additional investments on a draw-down or forward basis. The following table summarizes our outstanding investment commitments as of September 30, 2023:

| Property Name Commitment Date Mortgage Revenue Bonds | Asset Maturity Date | Total Initial Commitment | Remaining Commitment as of September 30, 2023 | Projected Funding by Year (1) Remainder of 2023 | 2024 | 2025 | Interest Rate (2) | Related Debt Financing (3) |
| --- | --- | ---: | ---: | ---: | ---: | ---: | --- | --- |
| Meadow Valley December 2021 | December 2029 | $44,000,000 | $27,560,000 | $5,000,000 | $19,400,000 | $3,160,000 | 6.25% | Variable TOB |
| Residency at the Entrepreneur- Series J-3 April 2022 | March 2040 | 26,080,000 | 19,680,000 | 11,200,000 | 8,480,000 | - | 6.00% | Variable TOB |
| Residency at the Entrepreneur- Series J-4 April 2022 | March 2040 | 16,420,000 | 16,420,000 | - | 16,420,000 | - | SOFR + 3.60% (4) | Variable TOB |
| Residency at the Entrepreneur- Series J-5 February 2023 | April 2025 (5) | 5,000,000 | 4,000,000 | - | 4,000,000 | - | SOFR + 3.60% | (6) |
| Residency at Empire - Series BB-3 December 2022 | December 2040 | 14,000,000 | 12,745,000 | 6,000,000 | 6,745,000 | - | 6.45% (7) | Variable TOB |
| Residency at Empire - Series BB-4 December 2022 | December 2040 | 47,000,000 | 47,000,000 | - | 39,700,000 | 7,300,000 | 6.45% (8) | (6) |
| Subtotal |  | 152,500,000 | 127,405,000 | 22,200,000 | 94,745,000 | 10,460,000 |  |  |
| Taxable Mortgage Revenue Bonds |  |  |  |  |  |  |  |  |
| Residency at the Mayer Series A-T October 2021 | October 2024 | $12,500,000 | $4,000,000 | $4,000,000 | $- | $- | SOFR + 3.70% | Variable TOB |
| Residency at the Entrepreneur Series J-T April 2022 | April 2025 (5) | 8,000,000 | 7,000,000 | - | 7,000,000 | - | SOFR + 3.65% | N/A |
| Residency at Empire - Series BB-T December 2022 | December 2025 (5) | 9,404,500 | 8,404,500 | - | - | 8,404,500 | 7.45% | N/A |
| Village at Hanford Square - Series H-T May 2023 | May 2030 | 10,400,000 | 9,400,000 | - | 9,400,000 | - | 7.25% | N/A |
| 40rty on Colony - Series P-T June 2023 | June 2030 | 5,950,000 | 4,950,000 | - | 4,395,000 | 555,000 | 7.45% | N/A |
| Subtotal |  | 46,254,500 | 33,754,500 | 4,000,000 | 20,795,000 | 8,959,500 |  |  |
| Governmental Issuer Loans |  |  |  |  |  |  |  |  |
| Poppy Grove I September 2022 | April 2025 (5) | $35,688,328 | $18,342,328 | $10,000,000 | $8,342,328 | $- | 6.78% | Variable TOB |
| Poppy Grove II September 2022 | April 2025 (5) | 22,250,000 | 13,708,700 | 6,000,000 | 7,708,700 | - | 6.78% | Variable TOB |
| Poppy Grove III September 2022 | April 2025 (5) | 39,119,507 | 24,569,507 | 6,000,000 | 18,569,507 | - | 6.78% | Variable TOB |
| Subtotal |  | 97,057,835 | 56,620,535 | 22,000,000 | 34,620,535 | - |  |  |
| Taxable Governmental Issuer Loans |  |  |  |  |  |  |  |  |
| Poppy Grove I September 2022 | April 2025 (5) | $21,157,672 | $20,157,672 | $- | $20,157,672 | $- | 6.78% | Variable TOB |
| Poppy Grove II September 2022 | April 2025 (5) | 10,941,300 | 9,941,300 | - | 9,941,300 | - | 6.78% | Variable TOB |
| Poppy Grove III September 2022 | April 2025 (5) | 24,480,493 | 23,480,493 | - | 19,980,493 | 3,500,000 | 6.78% | Variable TOB |
| Subtotal |  | 56,579,465 | 53,579,465 | - | 50,079,465 | 3,500,000 |  |  |
| Property Loans |  |  |  |  |  |  |  |  |
| Osprey Village July 2021 | August 2024 (5) | $25,500,000 | $16,725,196 | $6,000,000 | $10,725,196 | $- | SOFR + 3.07% | Variable TOB |
| Willow Place Apartments September 2021 | October 2024 (5) | 21,351,328 | 7,144,854 | 7,144,854 | - | - | SOFR + 3.30% | Variable TOB |
| Sandy Creek Apartments August 2023 | September 2026 (5) | 7,830,000 | 7,830,000 | 1,450,000 | 6,380,000 | - | 8.63% (9) | N/A |
| Subtotal |  | 54,681,328 | 31,700,050 | 14,594,854 | 17,105,196 | - |  |  |
| Equity Investments |  |  |  |  |  |  |  |  |
| Vantage at San Marcos (10), (11) November 2020 | N/A | $9,914,529 | $8,943,914 | $8,943,914 | $- | $- | N/A | N/A |
| Vantage at Loveland (12) April 2021 | N/A | 18,215,000 | 1,065,061 | 1,065,061 | - | - | N/A | N/A |
| Freestone Greeley (11) October 2022 | N/A | 16,035,710 | 11,325,008 | 11,325,008 | - | - | N/A | N/A |
| Freestone Cresta Bella November 2022 | N/A | 16,405,514 | 2,607,927 | 2,607,927 | - | - | N/A | N/A |
| Valage Senior Living Carson Valley February 2023 | N/A | 8,163,301 | 643,104 | 643,104 | - | - | N/A | N/A |
| The Jessam at Hays Farm July 2023 | N/A | 16,532,636 | 12,834,437 | 4,740,819 | 8,093,618 |  | N/A | N/A |
| Subtotal |  | 85,266,690 | 37,419,451 | 29,325,833 | 8,093,618 | - |  |  |
| Bond Purchase Commitments |  |  |  |  |  |  |  |  |
| Anaheim & Walnut September 2021 | Q3 2024 (13) | $3,900,000 | $3,900,000 | $- | $3,900,000 | $- | 4.85% | N/A |
| Subtotal |  | 3,900,000 | 3,900,000 | - | 3,900,000 | - |  |  |
| Total Commitments |  | $496,239,818 | $344,379,001 | $92,120,687 | $229,338,814 | $22,919,500 |  |  |

(1) Projected fundings by year are based on current estimates and the actual funding schedule may differ materially due to, but not limited to, the pace of construction, adverse weather conditions, delays in governmental approvals or permits, the availability of materials and contractors, and labor disputes.

(2) The variable index interest rate components are typically subject to floors that range from 0% to 0.85%.

(3) We have securitized the indicated assets in TOB financing facilities that allow for additional principal proceeds as the remaining investment commitments are funded by us. See Note 16 for further details on debt financing.

(4) Upon stabilization, the MRB will convert to a fixed rate of 8.0% and become subordinate to the other senior MRBs of the borrower.

(5) The borrower may elect to extend the maturity date for up to six months upon meeting certain conditions, which may include payment of a non-refundable extension fee.

(6) All draws to date on this investment, if applicable, were funded with available cash or proceeds from the Acquisition LOC. The Partnership intends to securitize the assets in TOB financing facilities for additional principal proceeds. See Note 16 for further details on debt financing.

(7) In December 2029, the interest rate will reset to the greater of (i) 3.25% over the then 10-Year SOFR Swap rate, or (ii) 6.00%.

(8) Upon stabilization, the MRB will resize to an amount not to exceed $3.3 million and become subordinate to the other senior MRBs of the borrower. In December 2029, the interest rate will convert to a fixed rate of 10.0%.

(9) The interest rate will convert to a variable rate of Term SOFR + 3.35% on February 1, 2025.

(10) The property became a consolidated VIE effective during the fourth quarter of 2021.

(11) A development site has been identified for this property but construction had not commenced as of September 30, 2023.

(12) In July 2023, the Partnership's initial commitment of $16.3 million was increased by $1.9 million upon meeting certain conditions as outlined in the original agreement.

(13) This is the estimated closing date of the associated bond purchase commitment.

#### Debt Service on Debt Financings, Secured Notes, Mortgages Payable, and Secured Lines of Credit

Our debt financing arrangements consist of various secured financing transactions to leverage our portfolio of MRB, taxable MRB, GIL, taxable GIL and certain property loan investment assets. The financing arrangements generally involve the securitization of these investment assets into trusts whereby we retain beneficial interests in the trusts that provide us certain rights to the underlying investment assets. The senior securities are sold to unaffiliated parties in exchange for debt proceeds. The senior securities require periodic interest payments that may be fixed or variable, depending on the terms of the arrangement, and scheduled principal payments. We are required to fund any shortfall in principal and interest payable to the senior securities of the TEBS financings in the case of non-payment, forbearance or default of the borrowers’ contractual debt service payments of the related MRBs, up to the value of our residual interests. In the case of forbearance or default on an underlying investment asset in a Term TOB or TOB trust financing, we may be required to fund shortfalls in principal and interest payable to the senior securities, repurchase a portion of the outstanding securities, or repurchase the underlying investment asset and seek alternative financing. We anticipate that cash flows from the securitized investment assets will fund normal, recurring principal and interest payments to the senior securities and all trust-related fees.

When possible, we structure the debt financing maturity dates associated with our GIL, taxable GIL, and property loan investments to match the investment maturity dates such that investment redemption proceeds will paydown the outstanding debt financing.

Our debt financing arrangements include various fixed and variable rate debt arrangements. Recent increases in short-term interest rates have resulted in increases in the interest costs associated with our variable rate debt financing arrangements. We actively manage our portfolio of fixed and variable rate debt financings and our exposure to changes in market interest rates. The following table summarizes our fixed and variable rate debt financings as of September 30, 2023 and December 31, 2022:

| Securitized Assets - Fixed or Variable Interest Rates | Related Debt Financing - Fixed or Variable Interest Rates | September 30, 2023 Outstanding Principal | % of Total Debt Financing | December 31, 2022 Outstanding Principal | % of Total Debt Financing |
| --- | --- | ---: | ---: | ---: | ---: |
| Fixed | Fixed | $260,531,077 | 24.0% | $262,973,604 | 24.8% |
| Variable (1) | Variable (1) | 278,561,999 | 25.8% | 402,811,000 | 37.9% |
| Fixed | Variable | 128,011,355 | 11.8% | 165,628,934 | 15.6% |
| Fixed | Variable - Hedged (2) | 416,578,075 | 38.4% | 230,092,856 | 21.7% |
| Total |  | $1,083,682,506 |  | $1,061,506,394 |  |

(1) The securitized assets and related debt financings each have variable interest rates, though the variable rate indices may differ on individual transactions. As such, the Partnership is largely hedged against rising interest rates.

(2) The variable-rate debt financing is hedged through our interest rate swap agreements. Though the variable rate indices may differ, these interest rate swaps have effectively synthetically fixed the interest rate of the related debt financing. See further discussion of our interest rate hedging activities below.

The interest rate paid on our variable rate debt financings are generally determined by the senior securities remarketing agent as the rate necessary to remarket any senior securities tendered by holders thereof for remarketing that week at a price of par. Interest on the senior securities is either taxable or tax-exempt to the holders based on the structure of the TOB financing. The senior securities rate on TOB financings structured as tax-exempt to the senior securities holders are typically correlated to tax-exempt municipal short-term securities indices, such as SIFMA. The senior securities rate on TOB financings structured as taxable to the senior securities holders are typically correlated to taxable short-term securities indices, such as SOFR.

We have hedged a portion of our overall exposure to changes in market interest rates on our variable rate debt financings through various interest rate swaps. Our interest rate swaps are subject to monthly settlements whereby we pay a stated fixed rate and our counterparty pays a variable rate equal to the compounded SOFR rate for the settlement period. We are currently a net receiver on our interest rate swaps and received net settlement proceeds totaling $3.8 million during the nine months ended September 30, 2023.

The majority of our variable rate debt financings that are hedged through interest rate swaps have interest that is tax-exempt to the senior securities holders. In order to account for the differential between our interest rate swaps which are indexed to SOFR (a taxable rate) and our debt financing rate (which is correlated to short-term tax-exempt municipal securities rates), we assume that, over the term of our debt financing, the tax-exempt senior securities interest rate will approximate 70% of the SOFR rate. This assumption aligns with common market assumptions and the historical correlation between taxable and tax-exempt municipal short-term securities rates. However, such ratio may not be accurate in the short term or long term in the future. We apply a 70% conversion ratio when determining the notional amount of our interest rate swaps such that, as an example, a $7.0 million notional amount indexed to SOFR is the equivalent to $10.0 million notional amount for tax-exempt debt financing. As such, the reported amount of variable debt financing in the table above exceeds the stated notional amount of the SOFR-indexed interest rate swaps as of September 30, 2023. The following table summarizes the average stated SOFR-denominated notional amount by year for our existing interest rate swaps (does not consider our assumed 70% ratio of tax-exempt municipal securities rates to SOFR):

| Year | Average Notional |
| --- | ---: |
| Remainder of 2023 | $299,253,125 |
| 2024 | 294,979,167 |
| 2025 | 234,896,631 |
| 2026 | 184,758,799 |
| 2027 | 152,858,799 |
| 2028 | 125,802,132 |
| 2029 | 103,872,299 |

The table above does not include an additional interest rate swap executed in October 2023 with an initial notional amount of approximately $3.5 million that increases to a maximum notional amount of $24.1 million through March 2027 to hedge future variable rate TOB financings.

When we execute a TOB trust financing, we retain a residual interest that is pledged as our initial collateral under the ISDA master agreement based on the market value of the investment asset(s) at the time of initial closing. If the net aggregate value of our investment assets in TOB trust financings and our interest rate swap agreements decline below a certain threshold, then we are required to post additional collateral with our counterparties. We posted approximately $16.9 million of cash collateral with Mizuho during the nine months ended September 30, 2023 due to declines in the value of our fixed interest rate investment assets funded with TOB trusts resulting from generally rising market interest rates. In addition, we posted additional cash collateral of approximately $3.4 million in October 2023 due to further valuation declines on our fixed rate investment assets funded with TOB trusts. We satisfied all collateral calls using unrestricted cash on hand. Continuing volatility in market interest rates and potential deterioration of general economic conditions may cause the value of our investment assets to decline and result in the posting of additional collateral in the future. The valuation of our interest rate swaps move inversely with the change in valuation of our investment assets, so the change in valuation of our interest rate swaps partially offset the change in value of our investment assets when determining the amount of collateral posting requirements.

Our Secured Notes are secured by the cash flows from the residual certificates of our TEBS financings. Interest due on the Secured Notes, net of amounts due to the Partnership on the related total return swap transactions, will be paid from receipts related to the TEBS financing residual certificates. Future receipts of principal related to the TEBS financing residual certificates will be used to pay down the principal of the Secured Notes. The Partnership has guaranteed the payment and performance of the responsibilities under the Secured Notes and related documents.

Our General LOC and Acquisition LOC require monthly interest payments on outstanding balances and certain quarterly commitment fees. Such obligations are paid primarily from operating cash flows. The Acquisition LOC requires principal payments as previously described in this Item 2. The General LOC does not require principal payments until maturity in June 2025 as long as the outstanding principal does not exceed the borrowing base calculation.

We executed a mortgage payable secured by the Suites on Paseo MF Property with a financial institution in September 2023 for principal totaling $25.0 million. The mortgage payable has a variable interest rate and matures in March 2024, with a 6-month extension option. The mortgage payable requires monthly debt service payments which we expect to be paid from net operating cash flows of the Suites on Paseo MF Property. We also entered into a 6-month interest rate swap to hedge our exposure to rising short-term interest rates given the floating rate nature of the mortgage payable.

The following table summarizes contractual maturities by year for our secured lines of credit, debt financings, and mortgages payable as of September 30, 2023:

|  | Secured Lines of Credit | Debt Financing | Mortgages Payable | Total |
| --- | ---: | ---: | ---: | ---: |
| Remainder of 2023 | $- | $1,743,224 | $1,690,000 | $3,433,224 |
| 2024 | - | 379,913,151 | 25,000,000 | 404,913,151 |
| 2025 | 16,500,000 | 288,056,249 | - | 304,556,249 |
| 2026 | - | 100,019,863 | - | 100,019,863 |
| 2027 | - | 88,258,325 | - | 88,258,325 |
| Thereafter | - | 225,691,694 | - | 225,691,694 |
| Total | $16,500,000 | $1,083,682,506 | $26,690,000 | $1,126,872,506 |

94

In November 2023, we completed a trust securitization financing transaction of our residual interests in the M31, M33 and M45 TEBS financings (the “TEBS Residual Financing”). The securitization involved the sale of the TEBS Financings residual interests to an issuer, which then issued and sold $61.5 million of senior Affordable Housing Multifamily Certificates. We retained $20.5 million of residual Affordable Housing Multifamily Certificates also issued by the issuer. The senior Affordable Housing Multifamily Certificates are considered secured financing of the Partnership and were sold to third party investors in exchange for financing proceeds. The residual Affordable Housing Multifamily Certificates were retained by the Partnership. The $61.5 million of senior Affordable Housing Multifamily Certificates represent secured financing of the Partnership for financial reporting purposes and are entitled to interest at a fixed rate of 7.125% per annum and certain principal payments from the assets within the TEBS Residual Financing. We are entitled to all residual cash flows of the TEBS Residual Financing after payments to the senior Affordable Housing Multifamily Certificates and trustee expenses of 0.03% per annum. The term of the TEBS Residual Financing will end upon the earlier of repayment of the $61.5 million stated amount of the senior Affordable Housing Multifamily Certificates or July 25, 2034. We received net proceeds of approximately $60.4 million, after payment of placement, legal and other related costs. Approximately $57.9 million of the net proceeds, in addition to approximately $24.6 million of restricted cash released under our total return swap, were used to pay down approximately $82.5 million of outstanding principal and accrued interest of our Secured Notes. The TEBS Residual Financing is not reflected in the tables above as it was completed after September 30, 2023.

There are many benefits to the Partnership from the TEBS Residual Financing including non-recourse financing to the Partnership; no mark-to-market posting requirement; a term that matches the term of the underlying residual interests in the M31, M33 and M45 TEBS financings (subject to an early termination option for the Partnership on or after October 2029); the conversion from a floating interest rate to a fixed interest rate; and approximately 3.90% in annual interest savings compared to the current rate on our Secured Notes.

#### Distributions Paid to Holders of Preferred Units and BUCs

Distributions to the holders of Series A Preferred Units and Series A-1 Preferred Units, if declared by the General Partner, are paid quarterly at an annual fixed rate of 3.0%. If the Partnership were to issue Series B Preferred Units, holders of such units will be paid quarterly distributions, if declared by the General Partner, at an annual fixed rate of 5.75%. The Series A Preferred Units, Series A-1 Preferred Units and Series B Preferred Units are non-cumulative, non-voting and non-convertible.

On September 13, 2023, we announced that the Board of Managers of Greystone Manager, which is the general partner of the General Partner, declared a quarterly cash distribution of $0.37 per BUC to unitholders of record on September 29, 2023 and payable on October 31, 2023. The Board of Managers of Greystone AF Manager also declared a supplemental distribution payable in the form of additional BUCs equal to $0.07 per BUC, which was paid on October 31, 2023 at a ratio of 0.00418 BUCs for each BUC outstanding as of September 29, 2023. All fractional BUCs resulting from the BUCs Distribution received cash for such fraction based on the market value of the BUCs on the record date.

The Partnership and its General Partner continually assess the level of distributions for the Preferred Units and BUCs based on cash available for distribution, financial performance and other factors considered relevant. On September 13, 2023, the Partnership announced that the Board intends to declare additional supplemental distributions of $0.07 per BUC payable in the form of additional BUCs during the fourth quarter of 2023 and the first quarter of 2024.

#### Redemptions of Series A Preferred Units

Upon the sixth anniversary of the closing of the sale of Series A Preferred Units to a subscriber, and upon each anniversary thereafter, each holder of Series A Preferred Units has the right to redeem, in whole or in part, the Series A Preferred Units held by such holder at a per unit redemption price equal to $10.00 per unit plus an amount equal to all declared and unpaid distributions through the date of the redemption. The next optional redemption dates for the currently outstanding Series A Preferred Units range from August 2023 through March 2024 and the holders must provide notice of the election to redeem no less than 180 days prior to such redemption dates. If the holders of the Series A Preferred Units elect to redeem, we will be required, subject to certain restrictions, to secure funds to redeem from unrestricted cash on hand, proceeds from our General LOC, additional borrowings or through additional capital raising options.

The Partnership redeemed $20.0 million and $10.0 million of Series A Preferred Units in August 2023 and October 2023, respectively. In addition, in October 2023, we received notice from a holder of Series A Preferred Units of its intent to redeem $10.0 million of Series A Preferred Units in March 2024.

In February 2023, we issued 700,000 Series A-1 Preferred Units in exchange for 700,000 outstanding Series A Preferred Units, held by a financial institution pursuant to a Form S-4 registration statement which we previously filed to register the offering of up to 9,450,000 of Series A-1 Preferred Units in exchange for the Partnership’s outstanding Series A Preferred Units. This offering has expired and the Partnership has de-registered the remaining unsold Series A-1 Preferred Units covered by the Form S-4 referenced above. A total of 3,700,000 Series A Preferred Units were exchanged for Series A-1 Preferred Units prior to expiration of the offering.

In October 2023, the Partnership filed a registration statement on Form S-4 to register the offering and issuance of up to 1,750,000 of Series B Preferred Units under a shelf registration process. If declared effective by the SEC, under this offering, the Partnership may issue up to 1,750,000 Series B Preferred Units in exchange for the Partnership’s outstanding Series A Preferred Units. If unitholders elect to exchange Series A Preferred Units for Series B Preferred Units, the new Series B Preferred Units will not be eligible for redemption until the sixth anniversary of the date of the exchange, except in certain limited circumstances.

#### Other Contractual Obligations

We are subject to various guaranty obligations in the normal course of business, and, in most cases, do not anticipate these obligations to result in significant cash payments.

### Cash Flows

For the nine months ended September 30, 2023, we generated cash of $14.2 million, which was the net result of $20.2 million provided by operating activities, $22.7 million provided by investing activities, and $28.7 million used in financing activities.

Cash provided by operating activities totaled $20.2 million for the nine months ended September 30, 2023, as compared to $19.7 million generated for the nine months ended September 30, 2022. The change between periods was primarily due to the following factors:

- A decrease of $14.6 million in net income, offset by the $16.9 million adjustment for the gain on sale of unconsolidated entities that is considered cash from investing activities;
- An increase of $2.2 million of cash related to changes in the Partnership's net operating assets and liabilities;
- An increase of $1.7 million related to the amortization of bond premium, discount and origination fees;
- A decrease of $3.9 million related to changes in the preferred return receivable from unconsolidated entities; and
- A decrease of $1.9 million in non-cash provisions for credit loss.

Cash provided by investing activities totaled $22.7 million for the nine months ended September 30, 2023, as compared to cash used of $110.4 million for the nine months ended September 30, 2022. The change between periods was primarily due to the following factors:

- A net increase of $60.6 million of cash due to lower advances on MRBs, taxable MRBs, GILs, taxable GILs and property loans;
- A net increase of $91.7 million of cash due to overall higher paydowns and redemptions of MRBs, taxable MRBs, GILs and property loans;
- An increase of $4.5 million of cash due to less contributions to unconsolidated entities; and
- A decrease of $22.6 million of cash due to less proceeds from the sale of investments in unconsolidated entities.

Cash used in financing activities totaled $28.7 million for the nine months ended September 30, 2023, as compared to cash provided of $87.8 million for the nine months ended September 30, 2022. The change between periods was primarily due to the following factors:

- A net decrease of $120.4 million of cash due to principal payments on debt financing;
- A net decrease of $24.2 million of cash due to an increase in payments on the secured lines of credit;
- An increase of $18.0 million of cash related to proceeds from the issuance of Series A-1 Preferred Units, offset by $20.0 million of cash paid for the redemption of Series A Preferred Units;
- A net increase of $25.6 million due to proceeds from mortgages payable; and
- An increase of $4.3 million of cash due to lower distributions paid.

We believe our cash balance and cash provided by the sources discussed herein will be sufficient to pay, or refinance, our debt obligations and to meet our liquidity needs over the next 12 months.

### Leverage Ratio

We set target constraints for each type of financing utilized by us. Those constraints are dependent upon several factors, including the assets being leveraged, the tenor of the leverage program, whether the financing is subject to mark-to-market collateral calls, and the liquidity and marketability of the financed collateral. We use target constraints for each type of financing to manage to an overall 80% maximum leverage level (the “Leverage Ratio”), as established by the Board of Managers of Greystone Manager. The Board of Managers of Greystone Manager retains the right to change the maximum Leverage Ratio in the future based on the consideration of factors the Board of Managers considers relevant. We calculate our Leverage Ratio as total outstanding debt divided by total assets using cost adjusted for paydowns for MRBs, GILs, property loans, taxable MRBs and taxable GILs, and initial cost for deferred financing costs and real estate assets. As of September 30, 2023, our overall Leverage Ratio was approximately 72%.

### Off Balance Sheet Arrangements

As of September 30, 2023 and December 31, 2022, we held MRB, GIL, taxable MRB, taxable GIL and certain property loan investments that are secured by affordable multifamily and seniors housing properties and one commercial property, which are owned by entities that are not controlled by us. We have no equity interest in these entities and do not guarantee any obligations of these entities.

As of September 30, 2023, we own noncontrolling equity interests in various unconsolidated entities for the development of market rate multifamily and seniors housing properties. We account for these equity interests using the equity method of accounting and the assets, liabilities, and operating results of the underlying entities are not included in our consolidated financial statements.

We have entered into various financial commitments and guaranties. For additional discussions related to commitments and guaranties, see Note 19 to the condensed consolidated financial statements.

We do not engage in trading activities involving non-exchange traded contracts. As such, we are not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships.

We do not have any relationships or transactions with persons or entities that derive benefits from their non-independent relationships with us or our related parties, other than those disclosed in Note 22 to the condensed consolidated financial statements.

### Recently Issued Accounting Pronouncements

For a discussion of recently issued accounting pronouncements that will be adopted in future periods, see Note 2 to the Partnership’s condensed consolidated financial statements.

### Community Investments

The Partnership has invested and intends to invest in assets which are and will be purchased in order to support underlying community development activities targeted to low- and moderate-income individuals, such as affordable housing, small business lending, and job creating activities in areas of the United States. These investments may be eligible for regulatory credit under the Community Reinvestment Act of 1977 ("CRA") and available for allocation to holders of our Preferred Units (see Note 20 to Partnership's condensed consolidated financial statements).

The following table sets forth the assets of the Partnership the General Partner believes are eligible for regulatory credit under the CRA and are available for allocation to Preferred Unit investors as of November 7, 2023:

| Property Name | Investment Available for Allocation | Senior Bond Maturity Date (1) | Street | City | County | State | Zip |
| --- | ---: | --- | --- | --- | --- | --- | ---: |
| The Safford Apartments | $7,560,034 | 10/10/2026 | 8740 North Silverbell Road | Marana | Pima | AZ | 85743 |
| CCBA Senior Garden Apartments | 3,807,000 | 7/1/2037 | 438 3rd Ave | San Diego | San Diego | CA | 92101 |
| Courtyard Apartments | 7,305,000 | 12/1/2033 | 4127 W. Valencia Dr | Fullerton | Orange | CA | 92833 |
| Glenview Apartments | 4,670,000 | 12/1/2031 | 2361 Bass Lake Rd | Cameron Park | El Dorado | CA | 95682 |
| Harden Ranch Apartments | 460,000 | 3/1/2030 | 1907 Dartmouth Way | Salinas | Monterey | CA | 93906 |
| Harmony Court Apartments | 3,730,000 | 12/1/2033 | 5948 Victor Street | Bakersfield | Kern | CA | 93308 |
| Harmony Terrace Apartments | 3,400,000 | 1/1/2034 | 941 Sunset Garden Lane | Simi Valley | Ventura | CA | 93065 |
| Hope on Avalon | 13,963,000 | 2/1/2024 | 12225-12227 South Avalon Blvd | Los Angeles | Los Angeles | CA | 90061 |
| Las Palmas II Apartments | 1,695,000 | 11/1/2033 | 51075 Frederick Street | Coachella | Riverside | CA | 92236 |
| Lutheran Gardens Apartments | 10,352,000 | 2/1/2025 | 2347 E. El Segundo Boulevard | Compton | Los Angeles | CA | 90222 |
| Montclair Apartments | 1,630,000 | 12/1/2031 | 150 S 19th Ave | Lemoore | Kings | CA | 93245 |
| Montecito at Williams Ranch | 7,690,000 | 10/1/2034 | 1598 Mesquite Dr | Salinas | Monterey | CA | 93905 |
| Montevista | 6,720,000 | 7/1/2036 | 13728 San Pablo Avenue | San Pablo | Contra Costa | CA | 94806 |
| Ocotillo Springs | 3,997,070 | 8/1/2038 | 1615 I St | Brawley | Imperial | CA | 92227 |
| Poppy Grove I | 19,846,000 | 4/1/2025 | 10149 Bruceville Road | Elk Grove | Sacramento | CA | 95624 |
| Poppy Grove II | 10,541,300 | 4/1/2025 | 10149 Bruceville Road | Elk Grove | Sacramento | CA | 95624 |
| Poppy Grove III | 17,550,000 | 4/1/2025 | 10149 Bruceville Road | Elk Grove | Sacramento | CA | 95624 |
| Residency at Empire (2) | 21,455,000 | 12/31/2040 | 2814 W Empire Avenue | Burbank | Los Angeles | CA | 91504 |
| Residency at the Entrepreneur (3) | 27,100,000 | 3/31/2040 | 1657-1661 North Western Avenue | Hollywood | Los Angeles | CA | 90027 |
| Residency at the Mayer (4) | 39,000,000 | 4/1/2039 | 5500 Hollywood Boulevard | Hollywood | Los Angeles | CA | 90028 |
| San Vicente Townhomes | 3,495,000 | 11/1/2033 | 250 San Vicente Road | Soledad | Monterey | CA | 93960 |
| Santa Fe Apartments | 265,000 | 12/1/2031 | 16576 Sultana St | Hesperia | San Bernardino | CA | 92345 |
| Seasons Lakewood Apartments | 7,350,000 | 1/1/2034 | 21309 Bloomfield Ave | Lakewood | Los Angeles | CA | 90715 |
| Seasons San Juan Capistrano Apartments | 5,300,000 | 1/1/2034 | 31641 Rancho Viejo Rd | San Juan Capistrano | Orange | CA | 92675 |
| Seasons At Simi Valley | 4,376,000 | 9/1/2032 | 1606 Rory Ln | Simi Valley | Ventura | CA | 93063 |
| Solano Vista Apartments | 2,655,000 | 1/1/2036 | 40 Valle Vista Avenue | Vallejo | Solano | CA | 94590 |
| Summerhill Family Apartments | 4,623,000 | 12/1/2033 | 6200 Victor Street | Bakersfield | Kern | CA | 93308 |
| Sycamore Walk | 3,632,000 | 1/1/2033 | 380 Pacheco Road | Bakersfield | Kern | CA | 93307 |
| Tyler Park Townhomes | 6,075,000 | 1/1/2030 | 1120 Heidi Drive | Greenfield | Monterey | CA | 93927 |
| Village at Madera Apartments | 3,085,000 | 12/1/2033 | 501 Monterey St | Madera | Madera | CA | 93637 |
| Vineyard Gardens | 3,995,000 | 1/1/2035 | 2800 E Vineyard Ave | Oxnard | Ventura | CA | 93036 |
| Westside Village Apartments | 1,970,000 | 1/1/2030 | 595 Vera Cruz Way | Shafter | Kern | CA | 93263 |
| Osprey Village | 71,964,286 | 8/1/2024 | 151 N. Osprey Village Road | Kissimmee | Osceola | FL | 34758 |
| Handsel Morgan Village | 2,150,000 | 3/1/2041 | Elliot and South Street | Buford | Gwinnett | GA | 30518 |
| Magnolia Heights | 28,518,546 | 7/1/2024 | 10156 Magnolia Heights Circle | Covington | Newton | GA | 30014 |
| MaryAlice Circle | 5,900,000 | 3/1/2041 | Arnold Street and Gwinnett Street | Buford | Gwinnett | GA | 30518 |
| Willow Place Apartments | 42,109,712 | 10/1/2024 | 150 South Zack Hinton Parkway | McDonough | Henry | GA | 30253 |
| Brookstone Apartments | 7,351,468 | 5/1/2040 | 4200 Hickory Hills Drive | Waukegan | Lake | IL | 60087 |
| Copper Gate Apartments | 5,220,000 | 12/1/2029 | 3140 Copper Gate Circle | Lafayette | Tippecanoe | IN | 47909 |
| Renaissance Gateway Apartments | 11,500,000 | 6/1/2050 | 650 N. Ardenwood Drive | Baton Rouge | East Baton Rouge Parish | LA | 70806 |
| Legacy Commons at Signal Hills | 66,853,972 | 2/1/2024 | 50 Signal Hills Center | West Saint Paul | Dakota | MN | 55118 |
| Jackson Manor Apartments | 4,828,000 | 5/1/2038 | 332 Josanna Street | Jackson | Hinds | MS | 39202 |
| Silver Moon Apartments | 8,500,000 | 8/1/2055 | 901 Park Avenue SW | Albuquerque | Bernalillo | NM | 87102 |
| Village at Avalon | 16,400,000 | 1/1/2059 | 915 Park SW | Albuquerque | Bernalillo | NM | 87102 |
| Columbia Gardens Apartments | 15,000,000 | 12/1/2050 | 4000 Plowden Road | Columbia | Richland | SC | 29205 |
| Companion at Thornhill Apartments | 11,500,000 | 1/1/2052 | 930 East Main Street | Lexington | Lexington | SC | 29072 |
| The Ivy Apartments | 30,500,000 | 2/1/2030 | 151 Century Drive | Greenville | Greenville | SC | 29607 |
| The Palms at Premier Park | 20,152,000 | 1/1/2050 | 1155 Clemson Frontage Road | Columbia | Richland | SC | 29229 |
| Park at Sondrio Apartments | 39,200,000 | 1/1/2030 | 3500 Pelham Road | Greenville | Greenville | SC | 29615 |
| Park at Vietti Apartments | 27,865,000 | 1/1/2030 | 1000 Hunt Club Lane | Spartanburg | Spartanburg | SC | 29301 |
| Village at River's Edge | 10,000,000 | 6/1/2033 | Gibson & Macrae Streets | Columbia | Richland | SC | 29203 |
| Willow Run | 15,000,000 | 12/18/2050 | 511 Alcott Drive | Columbia | Richland | SC | 29203 |
| Windsor Shores Apartments | 22,350,000 | 2/1/2030 | 1000 Windsor Shores Drive | Columbia | Richland | SC | 29223 |
| Arbors of Hickory Ridge Apartments | 11,581,925 | 1/1/2049 | 6296 Lake View Trail | Memphis | Shelby | TN | 38115 |
| Angle Apartments | 23,000,000 | 1/1/2054 | 4250 Old Decatur Rd | Fort Worth | Tarrant | TX | 76106 |
| Avistar at Copperfield (Meadow Creek) | 14,000,000 | 5/1/2054 | 6416 York Meadow Drive | Houston | Harris | TX | 77084 |
| Avistar at the Crest Apartments | 11,211,961 | 3/1/2050 | 12660 Uhr Lane | San Antonio | Bexar | TX | 78217 |
| Avistar at the Oaks | 8,985,774 | 8/1/2050 | 3935 Thousand Oaks Drive | San Antonio | Bexar | TX | 78217 |
| Avistar at Wilcrest (Briar Creek) | 3,470,000 | 5/1/2054 | 1300 South Wilcrest Drive | Houston | Harris | TX | 77042 |
| Avistar at Wood Hollow (Oak Hollow) | 40,260,000 | 5/1/2054 | 7201 Wood Hollow Circle | Austin | Travis | TX | 78731 |
| Avistar in 09 Apartments | 7,808,622 | 8/1/2050 | 6700 North Vandiver Road | San Antonio | Bexar | TX | 78209 |
| Avistar on Parkway | 13,425,000 | 5/1/2052 | 9511 Perrin Beitel Rd | San Antonio | Bexar | TX | 78217 |
| Avistar on the Blvd | 17,559,976 | 3/1/2050 | 5100 USAA Boulevard | San Antonio | Bexar | TX | 78240 |
| Avistar on the Hills | 5,769,327 | 8/1/2050 | 4411 Callaghan Road | San Antonio | Bexar | TX | 78228 |
| Crossing at 1415 | 7,590,000 | 12/1/2052 | 1415 Babcock Road | San Antonio | Bexar | TX | 78201 |
| Concord at Gulf Gate Apartments | 9,185,000 | 2/1/2032 | 7120 Village Way | Houston | Harris | TX | 77087 |
| Concord at Little York Apartments | 13,440,000 | 2/1/2032 | 301 W Little York Rd | Houston | Harris | TX | 77076 |
| Concord at Williamcrest Apartments | 20,820,000 | 2/1/2032 | 10965 S Gessner Rd | Houston | Harris | TX | 77071 |
| Esperanza at Palo Alto Apartments | 19,540,000 | 7/1/2058 | SWC of Loop 410 and Highway 16 South | San Antonio | Bexar | TX | 78224 |
| Heights at 515 | 6,435,000 | 12/1/2052 | 515 Exeter Road | San Antonio | Bexar | TX | 78209 |
| Heritage Square Apartments | 11,185,000 | 9/1/2051 | 515 S. Sugar Rd | Edinburg | Hidalgo | TX | 78539 |
| Oaks at Georgetown Apartments | 12,330,000 | 1/1/2034 | 550 W 22nd St | Georgetown | Williamson | TX | 78626 |
| Runnymede Apartments | 10,825,000 | 10/1/2024 | 1101 Rutland Drive | Austin | Travis | TX | 78758 |
| Sandy Creek Apartments | 12,860,000 | 9/1/2026 | 1828 Sandy Point Road | Bryan | Brazos | TX | 77807 |
| Scharbauer Flats Apartments | 53,386,764 | 1/1/2024 | 2300 N. Fairgrounds Road | Midland | Midland | TX | 79705 |
| South Park Ranch Apartment Homes | 11,919,860 | 12/1/2049 | 9401 S 1st Street | Austin | Travis | TX | 78748 |
| 15 West Apartments | 4,850,000 | 7/1/2054 | 401 15th Street | Vancouver | Clark | WA | 98660 |
|  | $1,073,594,597 |  |  |  |  |  |  |

(1) The date reflects the stated contractual maturity of the Partnership’s senior debt investment in the property. For various reasons, including, but not limited to, call provisions that can be exercised by both the borrower and the Partnership, such debt investments may be redeemed prior to the stated maturity date. The Partnership may also elect to sell certain debt investments prior to the contractual maturity, consistent with its strategic purposes.

(2) The Partnership committed to provide total funding of MRBs up to $79.0 million and a taxable MRB up to $9.4 million during the construction and lease-up of the property on a draw-down basis. The taxable MRB has a maturity date of 12/1/2025 with an option to extend the maturity six months if stabilization has not occurred. Upon stabilization of the property, the MRBs will be partially repaid and the maximum balance of the MRBs after stabilization will not exceed $35.3 million and will have a maturity date of 12/1/2040.

(3) The Partnership committed to provide total funding of MRBs up to $64.0 million and a taxable MRB up to $8.0 million during the acquisition and rehabilitation phase of the property on a draw-down basis. The taxable MRB has a maturity date of 4/1/2025 with an option to extend the maturity six months if stabilization has not occurred. Upon stabilization of the property, the MRB will be partially repaid and the maximum balance of the MRB after stabilization will not exceed $44.1 million and will have a maturity date of 3/31/2040.

(4) The Partnership committed to provide total funding of an MRB up to $29.5 million and a taxable MRB up to $12.5 million during the acquisition and rehabilitation phase of the property on a draw-down basis. The taxable MRB has a maturity date of 10/1/2024. Upon stabilization of the property, the MRB will be partially repaid and the maximum balance of the MRB after stabilization will not exceed $18.1 million and will have a maturity date of 4/1/2039.

## Market risk

As filed, 18,268 characters.

The primary components of our market risk as of September 30, 2023 are related to interest rate risk and credit risk. Our exposure to market risks relates primarily to our investments in MRBs, GILs, property loans and our debt financing and mortgages payable. We seek to actively manage these and other risks and to acquire and hold assets that we believe justify bearing those risks, and to maintain capital levels consistent with those risks.

The current rising interest rate environment, the recent inflationary environment, and the risk of a potential recession have contributed to increasing market risk. See the information under “Quantitative and Qualitative Disclosures about Market Risk” in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information.

#### Interest Rate Risk

Volatility in the fixed income markets continued into the third quarter of 2023. The Federal Reserve announced Federal Funds Rate increases totaling 525 basis points during 2022 and 2023. The Federal Reserve has stated that additional short term interest rate increases may be needed to combat inflation in the broader economy. The Federal Reserve continues to reduce its balance sheet of US treasury bonds and mortgage-backed securities which may cause further upward pressure on interest rates. Increases in short-term interest rates will generally result in similar increases in the interest cost associated with our variable debt financing arrangements.

Interest rates are highly sensitive to many factors, including governmental, monetary and tax policies, domestic and international economic and political considerations, and other factors beyond our control. The nature of our MRB, GIL, and property loan investments and the debt used to finance these investments, exposes us to financial risk due to fluctuations in market interest rates. The majority of our MRB investment bear interest at fixed rates. Our GIL and property loan investments predominantly bear interest at variable rates and all are subject to interest rate floors.

The following table sets forth information regarding the impact on our net interest income assuming various changes in short-term interest rates as of September 30, 2023:

| Description | - 25 basis points | + 50 basis points | + 100 basis points | + 150 basis points | + 200 basis points |
| --- | ---: | ---: | ---: | ---: | ---: |
| TOB Debt Financings | $1,223,811 | $(2,447,621) | $(4,895,243) | $(7,342,864) | $(9,790,485) |
| TEBS Debt Financings | 96,944 | (193,887) | (387,774) | (581,661) | (775,548) |
| Other Financings & Derivatives | (536,889) | 1,073,779 | 2,147,557 | 3,221,336 | 4,295,115 |
| Variable Rate Investments | (566,796) | 1,133,592 | 2,267,183 | 3,400,775 | 4,534,366 |
| Net Interest Income Impact | $217,070 | $(434,137) | $(868,277) | $(1,302,414) | $(1,736,552) |
| Per BUC Impact (1) | $0.010 | $(0.019) | $(0.038) | $(0.057) | $(0.076) |

(1) The net interest income change per BUC calculated based on 22,734,375 BUCs outstanding as of September 30, 2023.

The interest rate sensitivity table above (the “Table”) represents the change in interest income from investments, net of interest on debt and settlement payments for interest rate derivatives over the next twelve months, assuming an immediate parallel shift in the SOFR yield curve and the resulting implied forward rates are realized as a component of this shift in the curve. Assumptions include anticipated interest rates; relationships between different interest rate indices such as SOFR and SIFMA; and outstanding investment, debt financing and interest rate derivative positions. The amounts in the table above do not consider any potential non-cash derivative fair value adjustments in determining the net interest income impact or per BUC impact. No assurance can be made that the assumptions included in the Table presented herein will occur or that other events will not occur that will affect the outcomes of the analysis. Furthermore, the results included in the Table assume we do not act to change our sensitivity to the movement in interest rates. As the above information incorporates only those material positions or exposures that existed as of September 30, 2023, it does not consider those exposures or positions that have arisen or could arise after that date, including the TEBS Residual Financing transaction that closed in November 2023. The ultimate economic impact of these market risks will depend on the exposures that arise during the period, our risk mitigation strategies at that time and the overall business and economic environment.

We employ leverage to fund the acquisition of many of our fixed income assets. Approximately 76% of our leverage bears interest at short term variable interest rates. Our remaining 24% of leverage has fixed interest rates. Of those assets funded with short term variable rate debt facilities, approximately 34% bear interest at a variable rate as well. While there is some basis risk between the interest cost associated with our debt financing arrangements and the short-term interest rate indices on our variable rate assets, this portion of our portfolio is substantially match funded with rising short term interest rates having a minimal impact on our net interest income.

For those fixed rate assets where we have variable rate funding, hedging instruments such as interest rate caps and interest rate swaps have been utilized to hedge some, but not all, of the potential increases in our funding cost that would result from higher short term interest rates. In some cases, these positions have been hedged to their expected maturity date. In others, a shorter-term hedge has been executed due to uncertainty regarding the time period over which the individual fixed rate asset might be outstanding.

The ICE Benchmark Association, or IBA, ceased publication of our relevant U.S. dollar LIBOR settings effective July 1, 2023. As of June 30, 2023, all Partnership contracts that were previously indexed to LIBOR were amended to replace such terms with SOFR or Term SOFR indexed rates such that our exposure to the cessation of LIBOR is minimal. Despite the LIBOR transition in various markets, multi-rate environments may persist in the near term. However, we have not observed any material negative impacts to our investment or debt financing portfolios as a result of the cessation of LIBOR.

For information on our debt financing and interest rate derivatives see Notes 16 and 18, respectively.

#### Credit Risk

Our primary credit risk is the risk of default on our investment in MRBs, GILs and property loans collateralized by multifamily residential, seniors housing and skilled nursing properties. The MRB and GIL investments are not direct obligations of the governmental authorities that issue the MRB or GIL and are not guaranteed by such authorities or any issuer. In addition, the MRB, GIL and the associated property loan investments are non-recourse obligations of the property owner. As a result, the primary sources of principal and interest payments on our MRB, GIL and property loan investments are the net operating cash flows generated by these properties or the net proceeds from a sale or refinance of these properties. Affiliates of the borrowers of our GIL and construction financing property loan investments have full to limited guaranties of construction completion and payment of principal and accrued interest on the GIL and property loan investments, so we may have additional recourse options for these investments.

If a property is unable to sustain net rental revenues at a level necessary to pay current debt service obligations on our MRB, GIL or property loan investments, a default may occur. A property’s ability to generate net operating cash flows is subject to a variety of factors, including rental and occupancy rates of the property and the level of its operating expenses. Occupancy rates and rents are directly affected by the supply of, and demand for, multifamily residential, single-family rentals, seniors housing and skilled nursing properties in the market area where the property is located. This is affected by several factors such as local or national economic conditions, the amount of new apartment construction and the affordability of single-family homes. In addition, factors such as government regulation (e.g. zoning laws and permitting requirements), inflation, real estate and other taxes, labor issues, and natural disasters can affect the economic operations of a multifamily residential property. Rental rates for set-aside units at affordable multifamily properties are typically tied to certain percentages of the area median income. Increases in area median income are not necessarily correlated to inflationary increases in operating expenses. A significant mismatch between area median income growth and increased property operating expenses could negatively impact net operating cash flows available to pay debt service. If AMI declines on a year-over-year basis, rents could need to be reduced.

Certain MRB, GIL, and construction financing property loan investments fund the construction of new affordable multifamily and seniors properties and have variable interest rates. Since there are little to no operating cash flows during the construction and lease-up periods for new properties, borrowers utilize capitalized interest reserves to fund debt service prior to stabilization. Increases in market interest rates will cause an increase in debt service costs. If interest rate increases are large enough, such capitalized interest reserves and other budgeted contingencies may be insufficient to pay all debt service through stabilization. Such cost overruns may cause defaults on our construction financing investments if other funding sources are not available to the borrowers or if related guarantors fail to meet their obligations.

Defaults on our MRB, GIL, or property loan investments may reduce the amount of future cash available for distribution to Unitholders. In addition, if a property’s net operating cash flow declines, it may affect the market value of the property, which may result in net proceeds from the ultimate sale or refinancing of the property to be insufficient to repay the entire principal balance of our MRB, GIL or property loan investment. In the event of a default, we will have the right to foreclose on the mortgage or deed of trust on the property securing the investment. If we take ownership of the property securing a defaulted MRB or GIL investment, we will be entitled to all net operating cash flows generated by the property and will be subject to risks associated with ownership of multifamily real estate. If such an event occurs, these investments will not provide tax-exempt income. In the event of default, we will likely be required to repay debt secured by our investment using available liquidity or arrange alternative financing, if available, which is likely to be at less favorable terms. Such occurrences will negatively impact our overall available liquidity.

We actively manage the credit risks associated with our MRB, GIL, and property loan investments by performing a complete due diligence and underwriting process of the owners and the properties securing these investments prior to investing. In addition, we carefully monitor the on-going performance of the properties underlying these investments.

Credit risk is also present in the geographical concentration of the properties securing our MRB investments. We have significant geographic concentrations in Texas, California, and South Carolina. The table below summarizes the geographic concentrations in these states as a percentage of the total MRB principal outstanding:

|  | September 30, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Texas | 33% | 37% |
| California | 25% | 26% |
| South Carolina | 21% | 17% |

#### Mortgage Revenue Bonds Sensitivity Analysis

Third-party pricing services are used to value our MRB investments. The pricing service uses a discounted cash flow and yield to maturity or call analysis which encompasses judgment in its application. The key assumption in the yield to maturity or call analysis is the range of effective yields of the individual MRB investments. The effective yield analysis for each MRB considers the current market yield of similar securities, specific terms of each MRB, and various characteristics of the property collateralizing the MRB such as debt service coverage ratio, loan to value, and other characteristics. The effective yield has historically trended with, although is not directly influenced by, medium and long-term interest rate movements. Our valuation service provider uses tax-exempt and taxable multifamily interest rate curves published by Municipal Market Data to estimate the value of our MRB investments. The main curve used by our valuation service provider increased by an average of 82 and 80 basis points across the curve as of September 30, 2023 compared to June 30, 2023 and December 31, 2022, respectively. The 10 year and 30 year United States Treasury yield increased 71 and 76 basis points, respectively, during the first nine months of 2023. The 5 year and 10 year SOFR swap rate increased 63 and 71 basis points, respectively, during the first nine months of 2023. These interest rate increases have an adverse effect on the market value of our MRB portfolio, but do not directly impact a borrower's ability to meet its obligations.

We completed a sensitivity analysis which is hypothetical and is as of a specific point in time. The results of the sensitivity analysis may not be indicative of actual changes in fair value and should be used with caution. The table below summarizes the sensitivity analysis metrics related to our MRB investments as of September 30, 2023:

| Description | Estimated Fair Value (in 000's) | Range of Effective Yields used in Valuation |  | Range of Effective Yields if 10% Adverse Applied |  | Additional Unrealized Losses with 10% Adverse Change (in 000's) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Mortgage Revenue Bonds (1) | $859,046 | 3.4% | - 8.8% | 3.7% | -9.7% | $26,473 |

(1) Mortgage revenue bonds excludes the Provision Center 2014-1 MRB for figures as of September 30, 2023 as the proton therapy center securing the MRB was successfully sold out of bankruptcy in July 2022 and we received liquidation proceeds of $3.7 million in January 2023. The valuation as of September 30, 2023 is based on expected additional liquidation proceeds of approximately $928,000 at final liquidation.

#### Real Estate Valuation Risk

We own multifamily real estate and our JV Equity Investments fund the construction, stabilization and sale of market-rate multifamily real estate. The realizable property values for such investments are primarily dependent upon the value of a property to prospective buyers at the time of its sale, which may be impacted by, market cap rates, the operating results of the property, local market conditions and competition, and interest rates on mortgage financing. We have noticed market cap rates are trending upward due to, though not limited to, the current economic environment and increasing interest rates. Operating results of real estate properties may be affected by many factors, such as the number of tenants, the rental and fee rates, operating expenses, the cost of repairs and maintenance, taxes, debt service requirements, competition from other similar multifamily rental properties and general and local economic conditions.

In addition, all outstanding financing directly secured by such real estate properties must be repaid upon sale. Lower sales proceeds may prevent us from collecting our accrued preferred return or the return of our original investment equity, which would result in realized losses on our investments.

#### Reinvestment Risk

MRB investments may have optional call features that may be exercised by either the borrower or the Partnership that are earlier than the contractual maturity. These optional call features may be at either par or premiums to par. In addition, our GIL and most property loan investments are prepayable at any time without penalty. Borrowers may choose to redeem our investments if prevailing market interest rates are lower than the interest rate on our investment asset or for other reasons. In order to maintain or grow our investment portfolio size and earnings, we must reinvest repayment proceeds in new assets. New MRB, GIL and property loan investment opportunities may not generate the same returns as our current investments such that our reported operating results may decline over time. In addition, rising interest rates and construction costs could limit the ability of developers to initiate new projects for us to finance with MRB, GIL, and property loan investments.

Similarly, we are subject to reinvestment risk on the return of capital from sales of JV Equity Investments. Our strategy involves making JV Equity Investments for the development, stabilization and sale of market-rate multifamily rental properties. Our initial equity contributions are returned upon sale of the underlying properties, at which time we will look to reinvest the capital into new JV Equity Investments or other investments. Fewer new investment opportunities may result from negative changes in various economic factors and those new investments that we do make may not generate the same returns as our prior investments due to factors including, but not limited to, increasing competition in the development of market-rate multifamily rental properties, rising interest rates on construction loans and increasing construction costs. We have observed declining availability of credit and tighter credit underwriting standards for banks that provide construction financing for our JV Equity Investments, which may result in lower loan proceeds and higher rates on construction loans in the near-term such that new investment profitability is negatively impacted or more difficult to originate. Lower returns on new investment opportunities will result in declining operating results over time.

## Controls and procedures

As filed, 1,571 characters.

*Evaluation of disclosure controls and procedures.* The Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures were effective in ensuring that (i) information required to be disclosed by the Partnership in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) information required to be disclosed by the Partnership in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Partnership’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

*Changes in internal control over financial reporting.* There were no changes in the Partnership’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

## Risk factors

As filed, 478 characters.

The risk factors affecting the Partnership are described in Item 1A “Risk Factors” in the Partnership’s Annual Report on Form 10‑K for the year ended December 31, 2022, Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, which are incorporated by reference herein. There have been no material changes from these previously disclosed risk factors for the nine months ended September 30, 2023.

Filed Nov 8, 2023.
Source: SEC EDGAR, the filing index for accession 0000950170-23-060709. Last ingested by Listed: Oct 24, 2026, 15:03 ET. No prices; not investment advice.