v3.26.1
Allowance for Credit Losses (Tables)
 6 Months Ended
Jun. 30, 2026
Financing Receivable, Allowance for Credit Loss [Line Items]  
Summary of Changes in Partnership's Allowance for Credit Losses

The following table summarizes the changes in the Partnership’s allowance for credit losses for the three and six months ended June 30, 2026:

 

 

For the Three Months Ended June 30, 2026

 

 

 

Governmental Issuer Loans

 

 

Taxable Governmental Issuer Loans

 

 

Property Loans

 

 

Unfunded Commitments

 

 

Total

 

Balance, beginning of period

 

$

564,000

 

 

$

225,000

 

 

$

3,550,115

 

 

$

-

 

 

$

4,339,115

 

Current provision for credit losses

 

 

(564,000

)

 

 

(225,000

)

 

 

377,000

 

 

 

-

 

 

 

(412,000

)

Balance, end of period

 

$

-

 

 

$

-

 

 

$

3,927,115

 

 

$

-

 

 

$

3,927,115

 

 

 

 

 

For the Six Months ended June 30, 2026

 

 

 

Governmental Issuer Loans

 

 

Taxable Governmental Issuer Loans

 

 

Property Loans

 

 

Unfunded Commitments

 

 

Total

 

Balance, beginning of period

 

$

609,000

 

 

$

244,000

 

 

$

3,477,134

 

 

$

-

 

 

$

4,330,134

 

Current provision for credit losses (1)

 

 

(609,000

)

 

 

(244,000

)

 

 

449,981

 

 

 

-

 

 

 

(403,019

)

Balance, end of period

 

$

-

 

 

$

-

 

 

$

3,927,115

 

 

$

-

 

 

$

3,927,115

 
(1)
The current provision for credit losses includes an asset-specific allowance of approximately $93,000 related to the Opportunity South Carolina property loan.

The following table summarizes the changes in the Partnership’s allowance for credit losses for the three and six months ended June 30, 2025:

 

 

For the Three Months Ended June 30, 2025

 

 

 

Governmental Issuer Loans

 

 

Taxable Governmental Issuer Loans

 

 

Property Loans

 

 

Unfunded Commitments

 

 

Total

 

Balance, beginning of period

 

$

941,000

 

 

$

141,000

 

 

$

1,858,000

 

 

$

118,000

 

 

$

3,058,000

 

Current provision for credit losses(1)

 

 

(245,000

)

 

 

71,000

 

 

 

607,734

 

 

 

(88,000

)

 

 

345,734

 

Balance, end of period

 

$

696,000

 

 

$

212,000

 

 

$

2,465,734

 

 

$

30,000

 

 

$

3,403,734

 
(1)
The current provision for credit losses includes an asset-specific allowance of approximately $624,000 related to the Opportunity South Carolina property loan.

 

 

 

For the Six Months ended June 30, 2025

 

 

 

Governmental Issuer Loans

 

 

Taxable Governmental Issuer Loans

 

 

Property Loans

 

 

Unfunded Commitments

 

 

Total

 

Balance, beginning of period

 

$

1,038,000

 

 

$

76,000

 

 

$

1,930,000

 

 

$

186,000

 

 

$

3,230,000

 

Current provision for credit losses(1)

 

 

(342,000

)

 

 

136,000

 

 

 

535,734

 

 

 

(156,000

)

 

 

173,734

 

Balance, end of period

 

$

696,000

 

 

$

212,000

 

 

$

2,465,734

 

 

$

30,000

 

 

$

3,403,734

 
(1)
The current provision for credit losses includes an asset-specific allowance of approximately $624,000 related to the Opportunity South Carolina property loan.
Summary of Partnerships Carrying Value by Acquisition Year Grouped by Risk Rating

The following tables summarize the Partnership’s outstanding balance by acquisition year, grouped by risk rating as of June 30, 2026 and December 31, 2025:

 

 

June 30, 2026

 

 

 

2026

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

Prior

 

 

Total

 

Property Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

38,824,000

 

 

$

-

 

 

$

7,250,000

 

 

$

-

 

 

$

4,315,093

 

 

$

-

 

 

$

50,389,093

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Nonperforming

 

 

-

 

 

 

1,808,115

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

495,000

 

 

 

2,303,115

 

Total

 

$

38,824,000

 

 

$

1,808,115

 

 

$

7,250,000

 

 

$

-

 

 

$

4,315,093

 

 

$

495,000

 

 

$

52,692,208

 

 

 

 

December 31, 2025

 

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Total

 

Governmental Issuer Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

-

 

 

$

-

 

 

$

-

 

 

$

109,757,835

 

 

$

-

 

 

$

-

 

 

$

109,757,835

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Nonperforming

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Subtotal

 

 

-

 

 

 

-

 

 

 

-

 

 

 

109,757,835

 

 

 

-

 

 

 

-

 

 

 

109,757,835

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Governmental Issuer Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

-

 

 

$

-

 

 

$

-

 

 

$

43,879,465

 

 

$

-

 

 

$

-

 

 

$

43,879,465

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Nonperforming

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Subtotal

 

 

-

 

 

 

-

 

 

 

-

 

 

 

43,879,465

 

 

 

-

 

 

 

-

 

 

 

43,879,465

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

-

 

 

$

7,250,000

 

 

$

-

 

 

$

43,139,094

 

 

 

-

 

 

$

-

 

 

$

50,389,094

 

Watch

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Nonperforming

 

 

1,715,133

 

 

 

-

 

 

 

-

 

 

 

-

 

 

$

-

 

 

 

495,000

 

 

 

2,210,133

 

Subtotal

 

 

1,715,133

 

 

 

7,250,000

 

 

 

-

 

 

 

43,139,094

 

 

 

-

 

 

 

495,000

 

 

 

52,599,227

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,715,133

 

 

$

7,250,000

 

 

$

-

 

 

$

196,776,394

 

 

$

-

 

 

$

495,000

 

 

$

206,236,527

 
MRB and taxable MRB investments [Member]  
Financing Receivable, Allowance for Credit Loss [Line Items]  
Summary of Changes in Partnership's Allowance for Credit Losses The following table summarizes the changes in the Partnership’s allowance for credit losses for the three and six months ended June 30, 2026 and 2025:

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Balance, beginning of period

 

$

4,157,802

 

 

$

4,111,882

 

 

$

12,875,922

 

 

$

4,128,849

 

Current provision for credit loss (1)

 

 

39,419

 

 

 

8,707,000

 

 

 

(2,047,440

)

 

 

8,707,000

 

Write-offs (1)

 

 

(39,419

)

 

 

-

 

 

 

(6,659,560

)

 

 

-

 

Recovery of prior credit loss (2)

 

 

(11,523

)

 

 

79,191

 

 

 

(22,643

)

 

 

62,224

 

Balance, end of period (3)

 

$

4,146,279

 

 

$

12,898,073

 

 

$

4,146,279

 

 

$

12,898,073

 

 

(1)
During the first quarter of 2026, the Partnership recovered approximately $2.0 million of its previously recognized allowance for credit loss related to The Park at Sondrio MRB and taxable MRB, The Park at Vietti MRB and taxable MRB, and Windsor Shores Apartments MRB and taxable MRB, with the remaining allowance associated with the MRBs being written off upon closing of the deed in lieu of foreclosure transactions (Note 8). During the three months ended June 30, 2026, the Partnership reduced the recovery amount and increased the amount written off by approximately $39,000 which was due to final settlement of the deed in lieu of foreclosure transactions.

 

During the three and six months ended June 30, 2025, the Partnership recognized a provision for credit loss of approximately $8.7 million related to The Park at Sondrio MRB and taxable MRB, The Park at Vietti MRB and taxable MRB, and the Windsor Shores Apartments MRB and taxable MRB. The credit loss was driven primarily by worse than projected operating results, financial conditions of the borrowers, and estimated underlying collateral values.

(2)
The Partnership compared the present value of cash flows expected to be collected to the amortized cost basis of the Live 929 Apartments Series 2022A MRB, which indicated a recovery of value. As the recovery was identified prior to the effective date of the CECL standard, the Partnership will accrete the recovery of prior credit loss into investment income over the term of the MRB.
(3)
The allowance for credit losses as of June 30, 2026 was related to the Live 929 Apartments – 2022A MRB. The allowance for credit losses as of June 30, 2025 was related to the Live 929 Apartments – 2022A MRB, The Park at Sondrio MRB and taxable MRB, The Park at Vietti MRB and taxable MRB, and the Windsor Shores Apartments MRB and taxable MRB.