Greystone Housing Impact Investors LP

Previous wording

As of March 31, 2025, we had four reportable segments: (1) Affordable Multifamily Investments, (2) Seniors and Skilled Nursing 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 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 months ended March 31, 2025 and 2024 (dollar amounts in thousands):

Current wording

As of June 30, 2025, we had four reportable segments: (1) Affordable Multifamily Investments, (2) Seniors and Skilled Nursing 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 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 six months ended June 30, 2025 and 2024 (dollar amounts in thousands):

Previous wording

During the three months ended March 31, 2025 and 2024, our net income was significantly impacted by unrealized losses on our derivative instrument portfolio, which primarily consists of interest rate swaps. Under the applicable accounting guidance, we report our derivatives at fair value as of each reporting date. The fair value is based on a model that considers observable indices and observable market trades for similar arrangements, such as publicly available current SOFR rates and forward SOFR swap rates. The period-over-period change in the fair value of each derivative that is not directly related to net cash settlements are recorded as unrealized (gains) losses within “Net result from derivative transactions” on our condensed consolidated statements of operations and is included as a component of our reported net income. Unrealized (gains) losses can be significant in periods of significant interest rate volatility.

Current wording

During the six months ended June 30, 2025 and 2024, our net income was significantly impacted by unrealized losses on our derivative instrument portfolio, which primarily consists of interest rate swaps. Under the applicable accounting guidance, we report our derivatives at fair value as of each reporting date. The fair value is based on a model that considers observable indices and observable market trades for similar arrangements, such as publicly available current SOFR rates and forward SOFR swap rates. The period-over-period change in the fair value of each derivative that is not directly related to net cash settlements are recorded as unrealized (gains) losses within “Net result from derivative transactions” on our condensed consolidated statements of operations and is included as a component of our reported net income. Unrealized (gains) losses can be significant in periods of significant interest rate volatility. The following table summarizes unrealized (gains) losses for the three and six months ended June 30, 2025 and 2024 by segment:

Previous wording

We recorded unrealized losses from derivatives totaling $3.9 million during the three months ended March 31, 2025 and unrealized gains totaling $4.6 million for the three months ended March 31, 2024 primarily due to market interest rate changes between reporting dates. The 3-year SOFR swap rate is a reasonable proxy for our interest rate swap portfolio as a whole as our derivatives are primarily SOFR-denominated interest rate swaps and the weighted average life of our interest rate swap portfolio is typically between three and four years. The 3-year SOFR swap rate declined 0.40% from 4.05% as of December 31, 2024 to 3.65% as of March 31, 2025, resulting in a significant unrealized loss on our interest rate swap portfolio for the three months ended March 31, 2025. The 3-year SOFR swap rate increased 0.50% from 3.75% as of December 31, 2023 to 4.25% as of March 31, 2024, resulting in a significant unrealized gain on our interest rate swap portfolio for the three months ended March 31, 2024.

Current wording

Differences between the respective periods is primarily due to market interest rate changes between reporting dates. The 3-year SOFR swap rate is a reasonable proxy for our interest rate swap portfolio as a whole as our derivatives are primarily SOFR-denominated interest rate swaps and the weighted average life of our interest rate swap portfolio is typically between three and four years. The 3-year SOFR swap rate declined 0.65% from 4.05% as of December 31, 2024 to 3.40% as of June 30, 2025, resulting in significant unrealized losses on our interest rate swap portfolio for the six months ended June 30, 2025. The 3-year SOFR swap rate increased 0.60% from 3.75% as of December 31, 2023 to 4.35% as of June 30, 2024, resulting in significant unrealized gains on our interest rate swap portfolio for the three and six months ended June 30, 2024.

Previous wording

The following table presents information regarding the investment activity of the Partnership for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents information regarding the investment activity of the Partnership for the three and six months ended June 30, 2025 and 2024:

Previous wording

The following table presents information regarding the debt financing, derivatives, Preferred Units and partners’ capital activities of the Partnership for the three months ended March 31, 2025 and 2024, exclusive of retired debt amounts listed in the investment activity table above:

Current wording

The following table presents information regarding the debt financing, derivatives, Preferred Units and partners’ capital activities of the Partnership for the three and six months ended June 30, 2025 and 2024, exclusive of retired debt amounts listed in the investment activity table above:

Previous wording

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 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:

Current wording

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 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 our total funding commitments related to properties that were awarded both private activity bond cap and LIHTC allocations through state-specific QAPs (inclusive of investments of our Construction Lending JV):

Previous wording

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.

Current wording

We are committed to minimizing the overall environmental impact of our corporate operations. The Partnership’s operations are primarily managed by 15 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.

Previous wording

Greystone and the Partnership are committed to building a workplace that allows all employees to feel supported and valued, regardless of any identity, by focusing on our culture of ‘where people matter’ to build belonging. Specific initiatives include training and employee resources groups to support our workforce as well as a formal Culture and Community Committee and Culture and Community Executive Advisory Council to lead and advise all belonging related work, events, and learning. Of the 16 employees of Greystone Manager responsible for the Partnership’s operations, four are women and two employees identify as ethnically diverse.

Current wording

Greystone and the Partnership are committed to building a workplace that allows all employees to feel supported and valued, regardless of any identity, by focusing on our culture of ‘where people matter’ to build belonging. Specific initiatives include training and employee resources groups to support our workforce as well as a formal Culture and Community Committee and Culture and Community Executive Advisory Council to lead and advise all belonging related work, events, and learning. Of the 15 employees of Greystone Manager responsible for the Partnership’s operations, three are women and two employees identify as ethnically diverse.

Previous wording

The 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 2024 and to date in 2025.

Current wording

The 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 had 100% attendance at meetings during 2024 and to date in 2025. The Board of Managers had 100% and 93% attendance during 2024 and to date in 2025, respectively.

Previous wording

The tables and following discussions of our changes in results of operations for the three months ended March 31, 2025 and 2024 should be read in conjunction with the Partnership’s condensed 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, 2024.

Current wording

The tables and following discussions of our changes in results of operations for the three and six months ended June 30, 2025 and 2024 should be read in conjunction with the Partnership’s condensed 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, 2024.

Previous wording

An increase of approximately $2.6 million in interest income from recent MRB advances, offset by a decrease of approximately $745,000 in interest income due to MRB redemptions and principal repayments;

Current wording

A decrease of approximately $2.6 million in interest income due to recent GIL redemptions, offset by an increase of approximately $909,000 in interest income from recent GIL investments;

Previous wording

An increase of approximately $1.6 million of investment income related to unconsolidated entities consisting of:

Current wording

An increase of approximately $1.7 million of investment income related to unconsolidated entities consisting of:

Previous wording

Other interest income. Other interest income is comprised primarily of interest income on our property loan, taxable MRB, and taxable GIL investments. The decrease in other interest income for the three months ended March 31, 2025 as compared to the same period in 2024 was primarily due to:

Current wording

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 June 30, 2025 as compared to the same period in 2024 was primarily due to:

Previous wording

Earnings (losses) on investments in unconsolidated entities. The Partnership reports its proportionate share of earnings (losses) on investments in unconsolidated entities using the equity method of accounting. Such investments typically incur losses during development and lease-up, particularly from depreciation, consistent with development plans. The increase for the three months ended March 31, 2025 as compared to the same period in 2024 is primarily due to general and administrative expenses at Valage Senior Living Carson Valley and non-capitalized and interest expense at Freestone Cresta Bella as the property commenced operations in September 2024.

Current wording

Earnings (losses) on investments in unconsolidated entities. The Partnership reports its proportionate share of earnings (losses) on investments in unconsolidated entities using the equity method of accounting. Our JV Equity Investments typically incur operating losses during development and lease-up, particularly from depreciation, consistent with development plans. The increase in losses for the three months ended June 30, 2025 as compared to the same period in 2024 is primarily due to general and administrative expenses at Valage Senior Living Carson Valley and the Jessam at Hays Farm and non-capitalized interest expense at Freestone Greenville and Freestone Cresta Bella as the properties have begun operations.

Previous wording

A decrease of approximately $1.0 million of investment income due to certain investments meeting the maximum guaranteed preferred return during 2024 and 2025; and

Current wording

An increase of approximately $1.0 million in investment income related to preferred returns on equity contributions during 2024 and 2025; and

Previous wording

Other income. Other income for the three months ended March 31, 2025 and 2024 related to the receipt of non-refundable fees for the extension of various MRB and GIL maturity dates.

Current wording

Other income. Other income for the six months ended June 30, 2025 and 2024 related to the receipt of non-refundable fees for the extension of various MRB and GIL maturity dates.

Previous wording

The provision for credit losses for the three months ended March 31, 2025 and 2024 related to declining expected credit losses for our portfolio of GIL, taxable GIL and property loan investments. The decreases were primarily due to GIL and property loan redemptions during 2024 and 2025, decreases in the weighted average life of the remaining investment portfolio, and updates of market data used as quantitative assumptions in the model used to estimate the allowance for credit losses.

Current wording

Provision for credit losses. The provision for credit losses for the three months ended June 30, 2025 includes an asset-specific allowances of approximately $624,000 related to the Opportunity South Carolina property loan and 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. These asset-specific provisions were partially offset by GIL and property loan redemptions and 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.

Previous wording

Interest expense. The increase in interest expense for the three months ended March 31, 2025 as compared to the same period in 2024 was due primarily to the following factors:

Current wording

Interest expense. The decrease in interest expense for the three months ended June 30, 2025 as compared to the same period in 2024 was due primarily to the following factors:

Previous wording

Provision for credit losses. The provision for credit losses for the three months ended March 31, 2025 and 2024 related to declining expected credit losses for our portfolio of GIL, taxable GIL and property loan investments and was primarily due to GIL and property loan redemptions during 2024 and 2025, 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.

Current wording

Provision for credit losses. The provision for credit losses for the six months ended June 30, 2025 includes an asset-specific allowance of approximately $624,000 related to the Opportunity South Carolina property loan and 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. These asset-specific provisions were partially offset by a decline in expected credit losses primarily due to GIL and property loan redemptions and 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.

Previous wording

General and administrative expenses. The decrease in general and administrative expenses for the three months ended March 31, 2025 as compared to the same period in 2024 was primarily due to decreases of approximately $230,000 in employee compensation and benefits, and approximately $240,000 in professional and consulting fees. These decreases were partially offset by an increase of approximately $112,000 in administration fees paid to the General Partner due to higher assets under management.

Current wording

General and administrative expenses. The decrease in general and administrative expenses for the six months ended June 30, 2025 as compared to the same period in 2024 was primarily due to decreases of approximately $419,000 in employee compensation and benefits, and approximately $267,000 in professional and consulting fees. These decreases were partially offset by an increase of approximately $177,000 in administration fees paid to the General Partner due to higher assets under management.

Previous wording

Income Tax Expense for the three months ended March 31, 2025 and 2024

Current wording

Income Tax Expense for the three and six months ended June 30, 2025 and 2024

Previous wording

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 and real estate assets. The Greens Hold Co sold its ownership interest in The 50/50 MF

Current wording

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 and real estate assets. 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 six months ended June 30, 2025 and 2024.

Previous wording

The Partnership believes that 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 adjusts net income for the Partnership’s share of (earnings) losses of investments in unconsolidated entities as such amounts are primarily depreciation expenses and development costs that are expected to be recovered upon an exit event. The Partnership also deducts Tier 2 income (see Note 22 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.

Current wording

The Partnership believes that 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 adjusts net income for the Partnership’s share of (earnings) losses of investments in unconsolidated entities related to the Market-Rate Joint Venture Investments segment as such amounts are primarily depreciation expenses and development costs that are expected to be recovered upon an exit event. The Partnership also deducts Tier 2 income (see Note 22 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.

Previous wording

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 months ended March 31, 2025 and 2024 (all per BUC amounts are presented giving effect to the BUCs Distributions on a retroactive basis for all periods presented):

Current wording

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 six months ended June 30, 2025 and 2024 (all per BUC amounts are presented giving effect to the BUCs Distributions on a retroactive basis for all periods presented):

Previous wording

The adjustments reflect the change in allowances for credit losses under the CECL standard which requires the Partnership to update estimates of expected credit losses for its investment portfolio at each reporting date.

Current wording

The adjustments reflect the change in allowances for credit losses under the CECL standard which requires the Partnership to update estimates of expected credit losses for its investment portfolio at each reporting date. Credit losses are not reported within CAD until such losses are realized. The provision for credit loss for the three and six months ended June 30, 2025 includes asset-specific provisions for credit losses for affordable multifamily investments totaling approximately $9.3 million. In connection with the final settlement of the bankruptcy estate of the Provision Center 2014-1 MRB in July 2024, the Partnership recovered approximately $169,000 of its previously recognized allowance credit loss which is not included as an adjustment to net income in the calculation of CAD for the three and six months ended June 30, 2024.

Previous wording

As described in Note 22 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. There was no Tier 2 income for the three months ended March 31, 2025 and 2024.

Current wording

As described in Note 22 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. Tier 2 income for the three and six months ended June 30, 2025 related to the gain on sale of Vantage at Helotes and the premium received upon redemption of the Companion at Thornhill Apartments MRB. There was no Tier 2 income for the three and six months ended June 30, 2024.

Previous wording

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.

Current wording

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, net of adjustments, 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.

Previous wording

The following tables summarize occupancy and other information regarding the properties underlying our various investments. The narrative discussion that follows provides a brief operating analysis of each investment as of and for the three months ended March 31, 2025 and 2024.

Current wording

The following tables summarize occupancy and other information regarding the properties underlying our various investments. The narrative discussion that follows provides a brief operating analysis of each investment as of and for the six months ended June 30, 2025 and 2024.

Previous wording

Physical and economic occupancy information is not available for the periods indicated as the related investment was recently acquired.

Current wording

Physical and economic occupancy information is not available for the periods indicated as the related investment was recently acquired or is otherwise unavailable.

Previous wording

Comparison of the three months ended March 31, 2025 and 2024

Current wording

Comparison of the six months ended June 30, 2025 and 2024

Previous wording

Physical occupancy as of March 31, 2025 decreased from the same period in 2024 due primarily to occupancy declines at various properties located in Texas - primarily in San Antonio and Houston where there have been large increases in the supply of available multifamily units in recent years. Overall higher vacancy levels in these markets is putting pressure on leasing at these properties. We observed new construction starts in these markets declined sharply starting in late 2023 and we expect that occupancy will recover once new unit supply declines in the near term. The properties are still current on debt service. However, if there are continuing declines in operating results of the properties such that the borrowers are unable to make contractual principal and interest payments on our MRBs, we may receive forbearance requests or experience MRB defaults. We may choose to provide support to the borrowers through supplemental property loans to prevent such MRB defaults, which will be considered on a case-by-case basis. We will continue to monitor results and discuss property operations with the individual borrowers.

Current wording

Physical occupancy as of June 30, 2025 decreased from the same period in 2024 due primarily to occupancy declines at various properties located in Texas - primarily in San Antonio and Houston where there have been large increases in the supply of available multifamily units in recent years. Overall higher vacancy levels in these markets is putting pressure on leasing at these properties. We observed new construction starts in these markets declined sharply starting in late 2023 and we expect that occupancy will recover once new unit supply declines in the near term. The overall physical occupancy for Texas properties as of June 30, 2025 approximates physical occupancy as of March 31, 2025. The properties are still current on debt service. However, if there are continuing declines in operating results of the properties such that the borrowers are unable to make contractual principal and interest payments on our MRBs, we may receive forbearance requests or experience MRB defaults. We may choose to provide support to the borrowers through supplemental property loans to prevent such MRB defaults, which will be considered on a case-by-case basis. We will continue to monitor results and discuss property operations with the individual borrowers.

Previous wording

Economic occupancy for the three months ended March 31, 2025 decreased from the same period in 2024 due primarily to decreases in rental revenue at various properties in Texas as a result of the declines in physical occupancy noted above. Willow Run reported a decline in economic occupancy due to significant bad debts recognized in the first quarter of 2025. Such declines were partially offset by improving economic occupancy at Live 929 Apartments as a result of higher physical occupancy.

Current wording

Economic occupancy for the six months ended June 30, 2025 decreased from the same period in 2024 due primarily to decreases in rental revenue at various properties in Texas as a result of the declines in physical occupancy noted above. The overall economic occupancy for Texas properties as of June 30, 2025 is slightly lower than March 31, 2025 due to pressure on rental rates from high local competition. Willow Run reported a large decline in economic occupancy due to significant bad debts recognized in the first quarter of 2025. Such declines were partially offset by improving economic occupancy at Live 929 Apartments as a result of higher physical occupancy.

Previous wording

Decatur Angle and Bruton Apartments continue to report low physical and economic occupancy, though Decatur Angle occupancy has improved in the most recent period. The properties are continuing to remove non-paying tenants now that local regulations permit tenant evictions. The removals have resulted in higher than historical bad debt write-offs, declines in physical occupancy, and high repairs and maintenance costs to ready units to be leased to new tenants. Bruton Apartments has also experienced an increase in local crime, which the borrower is actively working to deter. We continue to monitor and discuss property operations with the individual borrowers to assess progress towards resolving performance issues.

Current wording

Decatur Angle and Bruton Apartments continue to report low physical and economic occupancy, though Decatur Angle occupancy has improved during 2025. The properties are continuing to remove non-paying tenants now that local regulations permit tenant evictions. The removals have resulted in higher than historical bad debt write-offs, declines in physical occupancy, and high repairs and maintenance costs to ready units to be leased to new tenants. Bruton Apartments has also experienced an increase in local crime, which the borrower is actively working to deter. We continue to monitor and discuss property operations with the individual borrowers to assess progress towards resolving performance issues.

Previous wording

Restricted rents at affordable multifamily properties are tied to changes in AMI, which has generally been increasing in the United States as overall wages increased significantly in 2021 through 2024. AMI is updated on a one-year lag, so restricted rental rates will increase on a similar lag and is realized upon annual lease renewals. On an overall basis, we noted same-property maximum rental income amounts increased 4.3% during the three months ended March 31, 2025 as compared to the same period in 2024, which is higher than average historical annual rent increases. However, we observed a decrease in same-property net rental revenue of 2.6% during the three months ended March 31, 2025 as compared to the same period in 2024 due to lower physical occupancy for the three months ended March 31, 2025 as compared to the same period in 2024.

Current wording

Restricted rents at affordable multifamily properties are tied to changes in AMI, which has generally been increasing in the United States as overall wages increased significantly in 2021 through 2024. AMI is updated on a one-year lag, so restricted rental rates will increase on a similar lag and is realized upon annual lease renewals. On an overall basis, we noted same-property maximum rental income amounts increased 5.9% during the six months ended June 30, 2025 as compared to the same period in 2024, which is higher than average historical annual rent increases. However, we observed a decrease in same-property net rental revenue of 0.5% during the six months ended June 30, 2025 as compared to the same period in 2024 due to lower physical occupancy.

Previous wording

As March 31, 2025, seven MRB multifamily properties and one MRB seniors housing property were under construction or recently acquired and have no operating metrics to report. Aventine Apartments, The Ivy Apartments, The Park at Sondrio Apartments, The Park at Vietti Apartments, Windsor Shores Apartments, and Woodington Gardens are currently undergoing tenant-in-place rehabilitations. The MaryAlice Circle Apartments MRB property is undergoing both rehabilitation and new construction phases.

Current wording

As June 30, 2025, six MRB multifamily properties and one MRB seniors housing property were under construction or recently acquired and have no operating metrics to report. Aventine Apartments, The Ivy Apartments, The Park at Sondrio Apartments, The Park at Vietti Apartments, Windsor Shores Apartments, and Woodington Gardens are currently undergoing tenant-in-place rehabilitations. The MaryAlice Circle Apartments MRB property is undergoing both rehabilitation and new construction phases. Agape Helotes is in the process of converting from market-rate units to rent-restricted units after purchase of the property by a non-profit entity in May 2025.

Previous wording

As of March 31, 2025, four GIL properties were under construction or recently acquired and have no operating metrics to report. Sandy Creek Apartments is currently undergoing a tenant-in-place rehabilitation. Legacy Commons at Signal Hills has substantially completed construction and is in the lease-up phase.

Current wording

As of June 30, 2025, Poppy Grove III was under construction and had no operating metrics to report. Poppy Grove I and Poppy Grove II have substantially completed construction and are in the lease-up phase. Sandy Creek Apartments is currently undergoing a tenant-in-place rehabilitation that is substantially complete and nearly stabilized.

Previous wording

Vantage at Helotes, Vantage at Fair Oaks, and Vantage at Hutto have achieved stabilized operations and the managing member of each property will evaluate options for the sale of each property to maximize value. Vantage at Hutto occupancy declined from recent quarters due to the loss of a corporate tenant, which the property management team is working to lease now vacant units. The managing member of Vantage at Tomball completed the sale of the property to a third-party buyer in January 2025.

Current wording

Vantage at Hutto occupancy declined from recent quarters due to the loss of a corporate tenant, which the property management team is working to lease now vacant units.

Previous wording

Vantage at McKinney Falls, Vantage at Loveland, and Freestone Cresta Bella have completed construction and commenced leasing activities in March 2024, May 2024, and September 2024, respectively. Freestone Greenville is nearing construction completion and began leasing activities in March 2025.

Current wording

Vantage at McKinney Falls, Vantage at Loveland, Freestone Cresta Bella, and Valage Senior Living Carson Valley have completed construction and commenced leasing activities in March 2024, May 2024, September 2024, and April 2025, respectively.

Previous wording

We expect to report the Partnership’s proportionate share of earnings from our Construction Lending JV within this segment once it has reportable activities. The first capital call and investment for the Construction Lending JV occurred in April 2025.

Current wording

We report the Partnership’s proportionate share of earnings from our Construction Lending JV within this segment. The first capital call and investment for the Construction Lending JV occurred in April 2025.

Previous wording

A decrease of approximately $2.0 million in interest income due to recent GIL redemptions, offset by an increase of approximately $830,000 in interest income from recent GIL investments;

Current wording

An increase of approximately $2.0 million in interest income from recent MRB advances, offset by a decrease of approximately $762,000 in interest income due to MRB redemptions and principal repayments;