Greystone Housing Impact Investors LP

Previous wording

The borrowers of our MRBs and GILs were all current on contractual debt service payments as of June 30, 2026.

Current wording

The borrowers of our MRBs and GILs were current on contractual debt service obligations as of September 30, 2026, except for five MRBs associated with a single borrower. The properties securing these MRBs include Avistar at the Oaks, Avistar at the Parkway, Avistar on the Boulevard, Concord at Williamcrest, and Crossing at 1415, all of which are located in Texas, and have experienced payment delays related to property operating performance. The properties did not make their October 1, 2026, debt service payments in a timely manner and GHI made support payments to keep debt service current on the associated debt financing facilities. With the exception of Crossing at 1415, the properties have made their October 1, 2026, debt service payments as of the date of this Report. Management is in ongoing discussions with the borrower regarding the delayed payments and continues to monitor the situation closely.

Previous wording

As of June 30, 2026, 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, 2026 and 2025 (dollar amounts in thousands):

Current wording

As of September 30, 2026, 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 nine months ended September 30, 2026 and 2025 (dollar amounts in thousands):

Previous wording

During the three and six months ended June 30, 2026 and 2025, our net income was impacted by unrealized gains and 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 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, 2026 and 2025 by segment:

Current wording

During the three and nine months ended September 30, 2026 and 2025, our net income was impacted by unrealized gains and 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 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 nine months ended September 30, 2026 and 2025 by segment:

Previous 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 increased 0.61% from 3.34% as of December 31, 2025 to 3.95% as of June 30, 2026, resulting in unrealized gains on our interest rate swap portfolio for the three and six months ended June 30, 2026. The 3-year SOFR swap rate decreased 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 three and six months ended June 30, 2025.

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 increased 1.44% from 3.34% as of December 31, 2025 to 4.78% as of September 30, 2026, resulting in significant unrealized gains on our interest rate swap portfolio for the three and nine months ended September 30, 2026. The 3-year SOFR swap rate decreased 0.70% from 4.05% as of December 31, 2024 to 3.35% as of September 30, 2025, resulting in significant unrealized losses on our interest rate swap portfolio for the three and nine months ended September 30, 2025.

Previous wording

Though unrealized gains or losses may impact our reported net income period-to-period, the net cash settlements on our interest rate swaps are less variable. Our interest rate swaps are designed such that changes in the monthly net cash settlements will offset the changes in monthly interest costs on our variable-rate debt financings. Our interest rate swaps are subject to monthly net cash 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. If short-term interest rates decline, the interest cost of our variable-rate debt financings will typically decline. Meanwhile, the variable rate payment by the counterparty on our interest rate swap will decline such that our benefit from the monthly net settlement payment will decline. The change in interest cost on our variable-rate debt financing generally offsets the reduced monthly net cash settlement payments associated with the related interest rate swap, such that our net cash flow for the period is not materially impacted by changes in short term interest rate changes. For this reason, we adjust net income for unrealized losses on our derivative instruments when calculating CAD, a non-GAAP performance measure discussed later in this Item 2, which we consider to be a useful measure of our operating performance.

Current wording

Though unrealized gains or losses may impact our reported net income period-to-period, the net cash settlements on our interest rate swaps are less variable. Our interest rate swaps are designed such that changes in the monthly net cash settlements will offset the changes in monthly interest costs on our variable-rate debt financings. We do not enter into interest rate swaps to hedge the market value of our MRB investments. In situations where we have matched funded positions (fixed rate financing on fixed rate MRBs or variable rate financing on variable rate MRBs), we typically do not enter into interest rate hedges. Our interest rate swaps are subject to monthly net cash 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. If short-term interest rates decline, the interest cost of our variable-rate debt financings will typically decline. Meanwhile, the variable rate payment by the counterparty on our interest rate swap will decline such that our benefit from the monthly net settlement payment will decline. The change in interest cost on our variable-rate debt financing generally offsets the reduced monthly net cash settlement payments associated with the related interest rate swap, such that our net cash flow for the period is not materially impacted by changes in short term interest rate changes. For this reason, we adjust net income for unrealized losses on our derivative instruments when calculating CAD, a non-GAAP performance measure discussed later in this Item 2, which we consider to be a useful measure of our operating performance.

Previous wording

The following table presents information regarding the investment activity of the Partnership for the three and six months ended June 30, 2026 and 2025:

Current wording

The following table presents information regarding the investment activity of the Partnership for the three and nine months ended September 30, 2026 and 2025:

Previous 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, 2026 and 2025, 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 nine months ended September 30, 2026 and 2025, exclusive of retired debt amounts listed in the investment activity table above:

Previous wording

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.

Current wording

In 2021, we acquired an MRB investment secured by Meadow Valley, a to-be-constructed 164 bed seniors housing facility in Traverse City, MI. Part of the construction financing is provided through a 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.

Previous wording

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 Board of Managers is in compliance with the NYSE listing rules and SEC rules applicable to the Partnership. The majority of the members of the 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 are independent under the applicable SEC and NYSE independence requirements, two of whom qualify as “audit committee financial experts.” Of the eight Managers of Greystone Manager, one Manager is female.

Current wording

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 Board of Managers is in compliance with the NYSE listing rules and SEC rules applicable to the Partnership. In this regard, all the members of the Audit Committee are independent under the applicable SEC and NYSE independence requirements, all of whom qualify as “audit committee financial experts.” Of the seven Managers of Greystone Manager, one Manager is female.

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 had 100% attendance at meetings during 2025 and to date in 2026. The Board of Managers had 96% and 100% attendance during 2025 and to date in 2026, respectively.

Current wording

The Board of Managers is highly engaged in the governance and operations of the Partnership. The Board of Managers currently consists of three independent Managers and four non-independent Managers. 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 2025 and to date in 2026. The Board of Managers had 96% and 100% attendance during 2025 and to date in 2026, respectively.

Previous wording

The tables and following discussions of our changes in results of operations for the three and six months ended June 30, 2026 and 2025 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, 2025.

Current wording

The tables and following discussions of our changes in results of operations for the three and nine months ended September 30, 2026 and 2025 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, 2025.

Previous wording

A decrease of approximately $2.0 million in interest income from recent GIL paydowns; offset by an increase of approximately $524,000 in interest income from recent GIL investments;

Current wording

A decrease of approximately $2.1 million in interest income from recent GIL paydowns; offset by an increase of approximately $601,000 in interest income from recent GIL investments;

Previous wording

A decrease of approximately $1.6 million of investment income related to investments in unconsolidated entities consisting of:

Current wording

An increase of approximately $2.7 million of investment income related to investments in unconsolidated entities consisting of:

Previous wording

A decrease of approximately $2.2 million of investment income due to a preferred return distribution from Vantage at Loveland in March 2025;

Current wording

An increase of approximately $2.5 million of investment income related to preferred return recognized upon the sale of Vantage at Loveland in August 2026; and

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 increase in other interest income for the six months ended June 30, 2026 as compared to the same period in 2025 was primarily due to an increase of approximately $1.7 million from recent property loan, taxable MRB and taxable GIL investment advances, offset by a decrease of approximately $139,000 due to recent property loan, taxable MRB and taxable GIL investment redemptions and principal repayments.

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 decrease in other interest income for the three months ended September 30, 2026 as compared to the same period in 2025 was primarily due to a decrease of approximately $815,000 due to taxable MRB and taxable GIL investment redemptions and principal repayments, offset by an increase of approximately $682,000 from recent property loan, taxable MRB and taxable GIL investment advances.

Previous wording

Other income. Other income for the three months ended June 30, 2026 was related to the receipt of non-refundable fees for the extension of various MRB, GIL, and property loan maturity dates. There was no other income for the three months ended June 30, 2025.

Current wording

Other income. Other income for the three months ended September 30, 2026 and 2025 was related to the receipt of non-refundable fees for the extension of various MRB, GIL, and property loan maturity dates.

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. 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, 2026 as compared to the same period in 2025 is primarily due to non-capitalized interest and depreciation expense at Valage Senior Living Carson Valley, The Jessam at Hays Farm, Freestone Greenville, Freestone Cresta Bella, and Freestone Ladera as the properties began primary operations in mid to late 2025. Depreciation and amortization expenses accounted for approximately $2.0 million of our proportionate share of losses for the three months ended June 30, 2026, with the remaining losses related to non-capitalized interest expense and general operating expenses.

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 September 30, 2026 as compared to the same period in 2025 is primarily due to non-capitalized interest and depreciation expense at Valage Senior Living Carson Valley, The Jessam at Hays Farm, Freestone Greenville, Freestone Cresta Bella, and Freestone Ladera as the properties began primary operations in mid to late 2025. Depreciation and amortization expenses accounted for approximately $1.9 million of our proportionate share of losses for the three months ended September 30, 2026, with the remaining losses related to non-capitalized interest expense and general operating expenses.

Previous wording

Total Revenues and Other Income comparison for the six months ended June 30, 2026 and 2025

Current wording

Total Revenues and Other Income comparison for the nine months ended September 30, 2026 and 2025

Previous wording

Investment income. The decrease in investment income for the six months ended June 30, 2026 as compared to the same period in 2025 was due to the following factors:

Current wording

Investment income. The decrease in investment income for the nine months ended September 30, 2026 as compared to the same period in 2025 was due to the following factors:

Previous wording

A decrease of approximately $3.3 million in interest income due to recent GIL redemptions, offset by an increase of approximately $1.0 million in interest income from recent GIL investments;

Current wording

A decrease of approximately $5.4 million in interest income due to recent GIL redemptions, offset by an increase of approximately $1.6 million in interest income from recent GIL investments;

Previous wording

A decrease of approximately $3.7 million of investment income related to unconsolidated entities consisting of:

Current wording

A decrease of approximately $930,000 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 increase in other interest income for the three months ended June 30, 2026 as compared to the same period in 2025 was primarily due to an increase of approximately $1.1 million from recent property loan, taxable MRB and taxable GIL investment advances, offset by a decrease of approximately $383,000 due to recent property loan, taxable MRB and taxable GIL investment redemptions and principal repayments.

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 nine months ended September 30, 2026 as compared to the same period in 2025 was primarily due to an increase of approximately $2.4 million from recent property loan, taxable MRB and taxable GIL investment advances, offset by a decrease of approximately $954,000 due to recent property loan, taxable MRB and taxable GIL investment redemptions and principal repayments.

Previous wording

Property revenues. Total property revenues for the six months ended June 30, 2026 were related to the Partnership's acquisition of the four MF Properties via deed in lieu of foreclosure in the first quarter of 2026. There was no property revenues for the six months ended June 30, 2025.

Current wording

Property revenues. Total property revenues for the nine months ended September 30, 2026 were related to the Partnership's acquisition of the four MF Properties via deed in lieu of foreclosure in the first quarter of 2026. There was no property revenues for the nine months ended September 30, 2025.

Previous wording

Contingent interest income. There was no contingent interest income for the three months ended June 30, 2026. Contingent interest income for the three months ended June 30, 2025 related to a premium received upon redemption of the Companion at Thornhill Apartments MRB in June 2025.

Current wording

Contingent interest income. There was no contingent interest income for the nine months ended September 30, 2026. Contingent interest income for the nine months ended September 30, 2025 related to a premium received upon redemption of the Companion at Thornhill Apartments MRB in June 2025.

Previous wording

Other income. Other income for the six months ended June 30, 2026 and 2025 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 nine months ended September 30, 2026 and 2025 related to the receipt of non-refundable fees for the extension of various MRB and GIL maturity dates.

Previous wording

Gain on sale of investments in unconsolidated entities. The gain on sale of investments in unconsolidated entities for the six months ended June 30, 2026 is related to final settlement of the Vantage at Helotes sale that occurred in May 2025. The gain on sale for the six months ended June 30, 2025 related to the sale of Vantage at Helotes in May 2025 for a gain of approximately $163,000 and final settlement of the Vantage at O'Connor and Vantage at Coventry sales that occurred in July 2022 and January 2023, respectively.

Current wording

Gain on sale of investments in unconsolidated entities. The gain on sale of investments in unconsolidated entities for the nine months ended September 30, 2026 is related to final settlement of the Vantage at Helotes sale that occurred in May 2025. The gain on sale for the nine months ended September 30, 2025 related to the sale of Vantage at Helotes in May 2025 for a gain of approximately $163,000 and final settlement of the Vantage at O'Connor and Vantage at Coventry sales that occurred in July 2022 and January 2023, respectively.

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. 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 six months ended June 30, 2026 as compared to the same period in 2025 is primarily due to non-capitalized interest and depreciation expense at Valage Senior Living Carson Valley, The Jessam at Hays Farm, Freestone Greenville, Freestone Cresta Bella, and Freestone Ladera as the properties began primary operations in mid to late 2025. Depreciation and amortization expenses accounted for approximately $3.9 million of our proportionate share of losses for the six months ended June 30, 2026, with the remaining losses related to non-capitalized interest expense and general operating expenses.

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 nine months ended September 30, 2026 as compared to the same period in 2025 is primarily due to non-capitalized interest and depreciation expense at Valage Senior Living Carson Valley, The Jessam at Hays Farm, Freestone Greenville, Freestone Cresta Bella, and Freestone Ladera as the properties began primary operations in mid to late 2025. Depreciation and amortization expenses accounted for approximately $5.8 million of our proportionate share of losses for the nine months ended September 30, 2026, with the remaining losses related to non-capitalized interest expense and general operating expenses.

Previous wording

Provision for credit losses. The provision for credit losses for the three months ended June 30, 2026 related to declining expected credit losses for our portfolio of GIL, taxable GIL and property loan investments and was primarily due to GIL and taxable GIL redemptions during 2026.

Current wording

Provision for credit losses. The provision for credit losses for the three months ended September 30, 2026 related to declining expected credit losses for our portfolio of property loan investments and was primarily due to property loan redemptions during 2026.

Previous wording

Depreciation and amortization. Depreciation expense for the three months ended June 30, 2026 related primarily to the four SC MF Properties and totaled approximately $772,000. Amortization of in-place lease intangible assets for the SC MF Properties was approximately $2.5 million for the three months ended June 30, 2026. Depreciation expense for the three months ended June 30, 2025 related to furniture and equipment owned by the Partnership.

Current wording

Depreciation and amortization. Depreciation expense for the three months ended September 30, 2026 related primarily to the four SC MF Properties and totaled approximately $1.2 million. Amortization of in-place lease intangible assets for the SC MF Properties was approximately $916,000 for the three months ended September 30, 2026. Depreciation expense for the three months ended September 30, 2025 related to furniture and equipment owned by the Partnership.

Previous wording

A decrease of approximately $719,000 due to lower average principal outstanding of approximately $56.8 million; and

Current wording

A decrease of approximately $885,000 due to lower average principal outstanding of approximately $73.9 million;

Previous wording

General and administrative. The decrease in general and administrative expenses for the three months ended June 30, 2026 as compared to the same period in 2025 was primarily due to a decrease of approximately $566,000 in employee compensation and benefits.

Current wording

General and administrative. The decrease in general and administrative expenses for the three months ended September 30, 2026 as compared to the same period in 2025 was primarily due to a decrease of approximately $1.1 million in employee compensation and benefits.

Previous wording

Total Expenses comparison for the Six Months Ended June 30, 2026 and 2025

Current wording

Total Expenses comparison for the Nine Months Ended September 30, 2026 and 2025

Previous wording

Real estate operating. 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 for the six months ended June 30, 2026 related to the Partnership's acquisition of the four MF Properties via deed in lieu of foreclosure in the first quarter of 2026. There were no real estate operating expenses for the six months ended June 30, 2025.

Current wording

Real estate operating. 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 for the nine months ended September 30, 2026 related to the Partnership's acquisition of the four MF Properties via deed in lieu of foreclosure in the first quarter of 2026. There were no real estate operating expenses for the nine months ended September 30, 2025.

Previous wording

Provision for credit losses. The provision for credit losses for the six months ended June 30, 2026 includes an asset-specific allowance of approximately $93,000 related to the Opportunity South Carolina property loan offset by a recovery of approximately $2.0 million of our 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. We also recorded a decrease in our general allowance for credit losses primarily due to GIL and taxable GIL redemptions during 2026.

Current wording

Provision for credit losses. The provision for credit losses for the nine months ended September 30, 2026 includes an asset-specific allowance of approximately $93,000 related to the Opportunity South Carolina property loan offset by a recovery of approximately $2.0 million of our 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. We also recorded a decrease in our general allowance for credit losses primarily due to GIL and taxable GIL redemptions during 2026.

Previous wording

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.

Current wording

The provision for credit losses for the nine months ended September 30, 2025 includes asset-specific allowances of approximately $1.2 million 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 our model used to estimate the allowance for credit losses.

Previous wording

Depreciation expense. Depreciation expense for the six months ended June 30, 2026 related primarily to the four SC MF Properties and totaled approximately $1.9 million. Amortization of in-place lease intangible assets for the SC MF Properties was approximately $4.1 million for the six months ended June 30, 2026. Depreciation expense for the six months ended June 30, 2025 related to furniture and equipment owned by the Partnership.

Current wording

Depreciation expense. Depreciation expense for the nine months ended September 30, 2026 related primarily to the four SC MF Properties and totaled approximately $3.1 million. Amortization of in-place lease intangible assets for the SC MF Properties was approximately $5.0 million for the nine months ended September 30, 2026. Depreciation expense for the nine months ended September 30, 2025 related to furniture and equipment owned by the Partnership.

Previous wording

Interest expense. The decrease in interest expense for the six months ended June 30, 2026 as compared to the same period in 2025 was due to the following factors:

Current wording

Interest expense. The decrease in interest expense for the nine months ended September 30, 2026 as compared to the same period in 2025 was due to the following factors:

Previous wording

A decrease of approximately $1.5 million due to lower average principal outstanding of approximately $59.8 million; and

Current wording

A decrease of approximately $2.4 million due to lower average principal outstanding of approximately $64.2 million; and

Previous wording

An increase of approximately $755,000 due to lower capitalized interest expense on our investments in unconsolidated entities.

Current wording

An increase of approximately $666,000 due to lower capitalized interest expense on our investments in unconsolidated entities.

Previous wording

Net result from derivative transactions. The net result from derivative transactions consists of realized and unrealized (gains) losses from our derivative financial instruments. Realized (gains) losses represent receipts or payments related to our interest rate swaps during the period. Unrealized (gains) losses are generally a result of changes in current and forward interest rates during the period. Increasing interest rates generally result in unrealized gains while decreasing interest rates generally result in unrealized losses. The following table summarizes the components of this line item for the six months ended June 30, 2025 and 2024 (dollar amounts in thousands):

Current wording

Net result from derivative transactions. The net result from derivative transactions consists of realized and unrealized (gains) losses from our derivative financial instruments. Realized (gains) losses represent receipts or payments related to our interest rate swaps during the period. Unrealized (gains) losses are generally a result of changes in current and forward interest rates during the period. Increasing interest rates generally result in unrealized gains while decreasing interest rates generally result in unrealized losses. The following table summarizes the components of this line item for the nine months ended September 30, 2026 and 2025 (dollar amounts in thousands):