v2.4.0.6
Document and Entity Information
9 Months Ended
Sep. 30, 2012
Entity Registrant Name AMERICA FIRST TAX EXEMPT INVESTORS LP
Entity Central Index Key 0001059142
Current Fiscal Year End Date --12-31
Entity Filer Category Accelerated Filer
Document Type 10-Q
Document Period End Date Sep. 30, 2012
Document Fiscal Year Focus 2012
Document Fiscal Period Focus Q3
Amendment Flag false
Entity Common Stock, Units Outstanding 0
v2.4.0.6
Condensed Consolidated Balance Sheets (USD $)
Sep. 30, 2012
Dec. 31, 2011
Assets [Abstract]    
Cash and cash equivalents $ 55,514,460 $ 20,176,906
Restricted cash 5,970,155 13,691,088
Interest receivable 9,124,124 6,984,978
Tax-exempt mortgage revenue bonds held in trust, at fair value 100,178,554 109,152,787
Tax-exempt mortgage revenue bonds, at fair value 38,623,510 26,542,565
Public housing capital fund trusts, at fair value 66,163,969 0
Real estate assets:    
Land 12,895,622 10,394,910
Buildings and improvements 112,488,768 103,911,079
Real estate assets before accumulated depreciation 125,384,390 114,305,989
Accumulated depreciation (21,813,339) (18,264,194)
Net real estate assets 103,571,051 96,041,795
Other assets 8,289,472 10,069,314
Assets of discontinued operations 8,224,333 15,317,112
Total assets 395,659,628 297,976,545
Liabilities [Abstract]    
Accounts payable, accrued expenses and other liabilities 3,660,766 3,231,360
Distribution payable 5,705,283 3,911,340
Debt financing 153,184,000 112,673,000
Mortgages payable 39,178,128 35,464,455
Liabilities of discontinued operations 4,870,902 11,107,345
Total Liabilities 206,599,079 166,387,500
Commitments and Contingencies      
Partners' Capital    
General Partner (367,578) (354,006)
Beneficial Unit Certificate holders 213,005,840 154,911,228
Unallocated deficit of Consolidated VIEs (24,525,004) (23,512,962)
Total Partners' Capital 188,113,258 131,044,260
Noncontrolling interest 947,291 544,785
Total Capital 189,060,549 131,589,045
Total Liabilities and Partners' Capital $ 395,659,628 $ 297,976,545
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Condensed Consolidated Statements of Operations (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Revenues [Abstract]        
Property revenues $ 4,003,744 $ 3,598,955 $ 11,441,606 $ 10,289,790
Investment income 3,110,717 2,465,876 7,770,767 7,094,549
Gain on sale of bonds 0 0 667,821 0
Other income 15,224 359,167 97,996 759,478
Total Revenues 7,129,685 6,423,998 19,978,190 18,143,817
Expenses [Abstract]        
Real estate operating (exclusive of items shown below) 2,572,957 2,088,085 6,811,950 6,102,356
Provision for loss on receivables (261,825) 14,525 214,525 725,215
Depreciation and amortization 1,469,476 1,311,600 4,168,441 3,509,964
Interest 1,551,543 2,036,470 4,317,329 4,421,608
General and administrative 834,301 725,115 2,533,246 2,044,132
Total Expenses 6,166,452 6,175,795 18,045,491 16,803,275
Income (loss) from continuing operations 963,233 248,203 1,932,699 1,340,542
Income from discontinued operations 1,385,433 29,218 1,613,817 187,302
Net income (loss) 2,348,666 277,421 3,546,516 1,527,844
Net income (loss) attributable to noncontrolling interest 137,099 145,369 398,469 449,866
Net income (loss) - America First Tax Exempt Investors, L.P. 2,211,567 132,052 3,148,047 1,077,978
Net income (loss) allocated to:        
General Partner 333,962 3,750 508,592 75,212
Limited Partners - Unitholders 2,390,779 371,285 3,651,497 1,942,800
Unallocated loss of Consolidated Property VIEs (513,174) (242,983) (1,012,042) (940,034)
Noncontrolling interest 137,099 145,369 398,469 449,866
Net income (loss) $ 2,348,666 $ 277,421 $ 3,546,516 $ 1,527,844
Unitholders' interest in net income per unit (basic and diluted):        
Income from continuing operations $ 0.03 $ 0.01 $ 0.05 $ 0.05
Income from discontinued operations $ 0.03 $ 0.00 $ 0.05 $ 0.01
Net income (loss), basic and diluted, per unit $ 0.06 $ 0.01 $ 0.10 $ 0.06
Weighted average number of units outstanding, basic and diluted 42,772,928 30,122,928 35,572,562 30,122,928
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Condensed Consolidated Statements of Comprehensive Income (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Net income (loss) $ 2,348,666 $ 277,421 $ 3,546,516 $ 1,527,844
Deconsolidation of VIE     0 9,996,003
Unrealized gain on securities     9,043,887 9,162,810
Accumulated Other Comprehensive Income (Loss) [Member]
       
Net income (loss)     0  
Deconsolidation of VIE 0 0 0 (726,243)
Unrealized gain on securities 2,121,836 1,765,185 9,043,887 9,162,810
Comprehensive income 4,470,502 2,042,606 12,590,403 9,964,411
Comprehensive income attributable to noncontrolling interest 137,099 145,369 398,469 449,866
Comprehensive income - America First Tax Exempt Investors, L.P. $ 4,333,403 $ 1,897,237 $ 12,191,934 $ 9,514,545
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Condensed Consolidated Statements of Partners' Capital (USD $)
Total
General Partner
Number of Units
Beneficial Unit Certificate Holders
Unallocated Deficit of Consolidated VIEs
Noncontrolling Interest
Accumulated Other Comprehensive Income (Loss) [Member]
Balance at Dec. 31, 2010 $ 128,021,565 $ (280,629)   $ 161,389,189 $ (32,945,669) $ (141,326) $ (9,692,233)
Partners' Capital Account, Units at Dec. 31, 2010     30,122,928        
Proceeds from Issuance of Common Stock 0            
Deconsolidation of VIE 9,996,003 (7,262) 0 (718,981) 10,722,246   (726,243)
Noncontrolling interest contribution 0            
Distributions paid or accrued (11,473,741) (177,643)   (11,296,098)      
Net income (loss) 1,527,844 75,212   1,942,800 (940,034) 449,866  
Unrealized gain on securities 9,162,810 91,628   9,071,182     9,162,810
Balance at Sep. 30, 2011 137,234,481 (298,694)   160,388,092 (23,163,457) 308,540 (1,255,666)
Balance at Jun. 30, 2011              
Deconsolidation of VIE             0
Net income (loss) 277,421            
Unrealized gain on securities             1,765,185
Balance at Sep. 30, 2011 137,234,481           (1,255,666)
Balance at Dec. 31, 2011 131,589,045         544,785  
Partners' Capital Account, Units at Dec. 31, 2011     30,122,928        
Common Stock shares, issued 12,650,000            
Noncontrolling interest contribution 4,037         4,037  
Balance at Jun. 30, 2012              
Balance at Dec. 31, 2011 131,589,045 (354,006)   154,911,228 (23,512,962) 544,785 95,894
Partners' Capital Account, Units at Dec. 31, 2011     30,122,928        
Proceeds from Issuance of Common Stock 59,948,265 0   59,948,265      
Common Stock shares, issued     12,650,000        
Deconsolidation of VIE 0           0
Noncontrolling interest contribution 4,037            
Distributions paid or accrued (15,071,201) (612,603)   (14,458,598)      
Net income (loss) 3,546,516 508,592   3,651,497 (1,012,042) 398,469 0
Unrealized gain on securities 9,043,887 90,439   8,953,448     9,043,887
Balance at Sep. 30, 2012 189,060,549 (367,578)   213,005,840 (24,525,004) 947,291 9,139,781
Balance at Jun. 30, 2012              
Common Stock shares, issued     12,650,000        
Deconsolidation of VIE             0
Net income (loss) 2,348,666            
Unrealized gain on securities             2,121,836
Balance at Sep. 30, 2012 $ 189,060,549           $ 9,139,781
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Condensed Consolidated Statements of Cash Flows (USD $)
9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Cash flows from operating activities:    
Net income (loss) $ 3,546,516 $ 1,527,844
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:    
Depreciation and amortization expense 4,618,505 4,171,142
Provision for loss on receivables 214,525 725,215
Non-cash loss on derivatives 1,055,311 1,962,016
Gain on sale of MF Property (1,277,976) 0
Bond discount and premium amortization and accretion (315,580) (366,013)
Gain on sale of bonds 667,821 0
Gain on asset sold 0 (21,103)
Gain on early extinguishment of debt 0 (104,988)
Changes in operating assets and liabilities, net of effect of acquisitions    
Increase (decrease) in interest receivable (2,834,210) (2,590,871)
(Increase) decrease in other assets (842,388) 1,466,137
Increase (decrease) in accounts payable and accrued expenses (115,371) 302,403
Net cash provided (used) by operating activities 3,381,511 7,071,782
Cash flows from investing activities:    
Capital expenditures (4,750,312) (7,220,528)
Acquisition of tax-exempt mortgage revenue bonds (10,165,287) (20,117,500)
Acquisition of public housing capital fund trust certificates (65,985,913) 0
Acquisition of partnerships, net of cash acquired (5,500,000) (24,779,613)
Proceeds from sale of MF Property 8,325,000 0
Proceeds from assets sold 0 36,500
Proceeds from the sale of bonds 16,829,960 0
Decrease (increase) in restricted cash 160,820 (154,371)
Restricted cash - debt collateral released 7,895,236 230,046
Change in restricted cash - Ohio sale 0 2,684,876
Cash released upon foreclosure 0 2,235,335
Proceeds from bond retirement 0 6,119,573
Transfer of cash to unconsolidated VIE upon deconsolidation 0 (5,135)
Principal payments received on taxable bonds 95,000 4,528,137
Principal payments received on tax-exempt mortgage revenue bonds 571,458 370,688
Net cash provided (used) by investing activities (52,524,038) (36,071,992)
Cash flows from financing activities:    
Distributions paid (13,277,258) (11,473,741)
Net proceeds from equity raise of BUCs 59,948,265 0
Proceeds from debt financing 52,764,044 48,233,354
Sale of LP Interests - Ohio Properties 4,037 0
Decrease in liabilities related to restricted cash (160,820) 154,371
Deferred financing costs (116,542) (222,307)
Principal payments on debt financing (8,484,000) (10,557,444)
Principal payments on mortgages payable (6,206,798) 0
Net cash (used) provided by financing activities 84,470,928 26,134,233
Net increase (decrease) in cash and cash equivalents 35,328,401 (2,865,977)
Cash and cash equivalents at beginning of period, including discontinued operations 20,213,413 13,277,048
Cash paid during the period for interest 3,086,659 2,607,888
Distributions declared but not paid 5,705,283 3,803,399
Capital expenditures financed through payables $ 58,304 $ 9,000,099
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Condensed Consolidated Statements of Cash Flows Parenthetical Tagging (USD $)
Sep. 30, 2012
Dec. 31, 2011
Sep. 30, 2011
Dec. 31, 2010
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents, beginning of period $ 27,354 $ 36,507 $ 57,994 $ 28,365
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents, end of period $ 27,354 $ 36,507 $ 57,994 $ 28,365
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Basis of Presentation
9 Months Ended
Sep. 30, 2012
Basis of Presentation [Abstract]  
Basis of Presentation and Significant Accounting Policies [Text Block]
Basis of Presentation

General
 
America First Tax Exempt Investors, L.P. (the “Partnership”) was formed on April 2, 1998, under the Delaware Revised Uniform Limited Partnership Act for the primary purpose of acquiring, holding, selling and otherwise dealing with a portfolio of federally tax-exempt mortgage revenue bonds which have been issued to provide construction and/or permanent financing of multifamily residential properties.  Interest on these bonds is excludable from gross income for federal income tax purposes.  As a result, most of the income earned by the Partnership is exempt from federal income taxes.  The Partnership may also invest in other types of tax-exempt securities that may or may not be secured by real estate and may make taxable mortgage loans secured by multifamily properties which are financed by tax-exempt mortgage revenue bonds held by the Partnership.  The Partnership generally does not seek to acquire direct interests in real property as long term or permanent investments.  The Partnership may, however, acquire real estate securing its tax-exempt mortgage revenue bonds or taxable mortgage loans through foreclosure in the event of a default.  In addition, the Partnership may acquire interests in multifamily apartment properties (“MF Properties”) in order to position itself for future investments in tax-exempt mortgage revenue bonds issued to finance these properties. The Partnership expects to sell its interest in these MF Properties in connection with the future syndication of low income housing tax credits under Section 42 of the Internal Revenue Code ("LIHTCs") or to a tax-exempt organization and to acquire tax-exempt mortgage revenue bonds on these properties to provide debt financing to the new owners.
 
Our general partner is America First Capital Associates Limited Partnership Two (“AFCA 2” or “General Partner”).  The general partner of AFCA2 is The Burlington Capital Group LLC ("Burlington"). The Partnership has issued Beneficial Unit Certificates (“BUCs”) representing assigned limited partner interests to investors (“unitholders”).  The Partnership will terminate on December 31, 2050, unless terminated earlier under provisions of its Agreement of Limited Partnership.
 
The condensed consolidated financial statements of the “Company” reported in this Form 10-Q include the assets, liabilities and results of operations of the Partnership, ATAX Capital Fund I LLC, an entity owned and controlled by the Partnership which owns the residual interest in three Public Housing Capital Fund Tender Option Bond Trusts (Note 5), its other Consolidated Subsidiaries and three other consolidated entities in which the Partnership does not hold an ownership interest but which own multifamily apartment properties financed with tax-exempt mortgage revenue bonds held by the Partnership and which are treated as variable interest entities ("VIEs") of which the Partnership has been determined to be the primary beneficiary (“Consolidated VIEs”).  The Consolidated Subsidiaries of the Partnership consist of:

ATAX TEBS I, LLC, a special purpose entity owned and controlled by the Partnership, created to hold tax-exempt mortgage revenue bonds in order to facilitate the Tax Exempt Bond Securitization (“TEBS”) Financing with Freddie Mac (Note 9).
Nine multifamily apartments ("MF Properties") of which three are reported as discontinued operations for all periods presented (Note 8). The MF Properties are owned by five limited partnerships in which a subsidiary of the Partnership holds a 99% limited partner interestfive and four limited liability companies of which a subsidiary of the Partnership owns a 100% member interest.
Three apartment properties (the "Ohio Properties") which are subject to a sales agreement continue to be reported by the Partnership as MF Properties for the reasons described in Note 2.

Stand alone financial information of the Partnership reported in this Form 10-Q includes only the assets, liabilities, and results of operations of the Partnership and its Consolidated Subsidiaries (hereafter the “Partnership”) without the Consolidated VIEs.  In the Company’s consolidated financial statements, all transactions and accounts between the Partnership, the Consolidated Subsidiaries and the Consolidated VIEs have been eliminated in consolidation.  The Partnership does not believe that the consolidation of VIEs for reporting under accounting principles generally accepted in the United States of America (“GAAP”) affects the Partnership’s status as a partnership for federal income tax purposes or the status of unitholders as partners of the Partnership, the treatment of the tax-exempt mortgage revenue bonds on the properties owned by Consolidated VIEs as debt, the tax-exempt nature of the interest payments received on bonds secured by the properties owned by Consolidated VIEs or the manner in which the Partnership’s income is reported to unitholders on IRS Form K-1.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  The accompanying interim unaudited condensed consolidated financial statements have been prepared according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted according to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. These condensed consolidated financial statements and notes have been prepared consistently with the 2011 Form 10-K. In the opinion of management, all adjustments (consisting of normal and recurring accruals) necessary to present fairly the financial position as of September 30, 2012, and the results of operations for the interim periods presented have been made. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year.

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Partnership Income, Expense and Cash Distributions
9 Months Ended
Sep. 30, 2012
Partnership Income, Expenses and Cash Distributions [Abstract]  
Partnership Income Expenses and Cash Distributions [Text Block]
Partnership Income, Expenses and Cash Distributions
 
The Agreement of Limited Partnership of the Partnership contains provisions for the distribution of Net Interest Income, Net Residual Proceeds and Liquidation Proceeds, for the allocation of income or loss from operations and for the allocation of income and loss arising from a repayment, sale, or liquidation of investments.  Income and losses will be allocated to each unitholder on a periodic basis, as determined by the General Partner, based on the number of BUCs held by each unitholder as of the last day of the period for which such allocation is to be made. Distributions of Net Interest Income and Net Residual Proceeds will be made to each unitholder of record on the last day of each distribution period based on the number of BUCs held by each unitholder as of such date. For purposes of the Agreement of Limited Partnership, cash distributions, if any, received by the Partnership from its indirect interest in MF Properties (Note 6) will be included in the Partnership’s Interest Income and cash distributions received by the Partnership from the sale of such properties will be included in the Partnership Residual Proceeds.

Cash distributions are currently made on a quarterly basis but may be made on a monthly or semiannual basis at the election of AFCA 2.  On each distribution date, Net Interest Income is distributed 99% to the unitholders and 1% to AFCA 2 and Net Residual Proceeds are distributed 100% to unitholders except that Net Interest Income and Net Residual Proceeds representing contingent interest in an amount equal to 0.9% per annum of the principal amount of the tax-exempt mortgage revenue bonds on a cumulative basis (defined as Net Interest Income (Tier 2) and Net Residual Proceeds (Tier 2), respectively) are distributed 75% to the unitholders and 25% to AFCA 2.

In June 2010, the Company completed a sales transaction whereby four of the MF Properties, Crescent Village, Post Woods (I and II), and Willow Bend apartments in Ohio (the “Ohio Properties”), were sold to three new ownership entities controlled by an unaffiliated not-for-profit entity. The Company acquired 100% of the $18.3 million tax-exempt mortgage revenue bonds issued by the Ohio Housing Finance Agency as part of a plan of financing for the acquisition and rehabilitation of the Ohio Properties. The tax-exempt mortgage revenue bonds secured by the Ohio Properties were acquired by the Company at par and consisted of two series. The Series A bond has a par value of $14.7 million and bears interest at an annual rate of 7.0%. The Series B bond has a par value of $3.6 million and bears interest at an annual interest rate of 10.0%. Both series of bonds mature in June 2050. The Company had previously acquired a 99% interest in the Ohio Properties as part of its strategy of acquiring existing multifamily apartment properties that it expects will be partially financed with new tax-exempt mortgage bonds at the time the properties become eligible for the issuance of additional LIHTCs. In addition to the new tax-exempt mortgage revenue bonds acquired by the Company, the plan of financing for the acquisition included other subordinated debt issued by the Company. At the time of acquisition, the new owners had not contributed any capital to the transaction and the Company effectively provided 100% of the capital structure to the new owners as part of the sale transaction. Pursuant to accounting guidance for property, plant, and equipment - real estate sales, the sale and restructure does not meet the criteria for derecognition of the properties or full accrual accounting for the gain. The guidance requires sufficient equity at risk as part of a sales transaction to indicate a commitment from the buyer (typically a minimum of 3 to 5% investment by the new owners). Under the sales agreement, the Ohio Properties were sold for a total purchase price of $16.2 million. Cash received by the selling limited partnerships as part of the sale transaction represents a gain on the sale transaction of approximately $1.8 million which has been deferred by the Company.

In October 2011, the three limited partnerships that own the Ohio Properties admitted two entities that are affiliates of Boston Capital (the “BC Partners”) as new limited partners as part of a syndication of LIHTCs on the Ohio Properties. The BC Partners have agreed to contribute approximately $6.7 million to the equity of these limited partnerships, subject to the Ohio Properties meeting certain debt service coverage ratios specified in the applicable limited partnership agreements. As of September 30, 2012, the Ohio Properties had not yet achieved these debt service coverage ratios and the BC Partners had not contributed a sufficient amount of additional capital to these limited partnerships to allow the Company to deconsolidate the Ohio Properties. Accordingly, the Company will continue to report each Ohio Property as an MF Property, and no gain from the 2010 sale of such Ohio Property will be recognized by the Company, until the Ohio Property achieves specified debt service coverage ratios and the BC Partners have contributed their additional capital to the limited partnership owning the Ohio Property. The Company expects that each of the Ohio Properties will achieve the debt service coverage ratios so that the BC Partners will fully fund their capital commitments during 2012. As that occurs, each Ohio Property will cease to be reported as an MF Property and the Company will recognize the gain for the 2010 sale of the Ohio Property. After that time, the Company will report the tax-exempt mortgage revenue bonds on such Ohio Property as an asset and will report the related interest income on the bond.

In connection with the BC Partners transaction, the Company entered into guarantee agreements with the BC Partners under which the Company has guaranteed certain obligations of the general partner of these limited partnerships, including an obligation to repurchase the interests of the BC Partners if certain “repurchase events” occur. A repurchase event is defined as any one of a number of events mainly focused on the completion of the property rehabilitation, property rent stabilization, the delivery of LIHTCs, tax credit recapture and foreclosure. Even if a repurchase event should occur after the $7.8 million of equity has been contributed, 25% of the BC contributed capital would remain as equity in the Ohio Properties and thus BC, a third party, would have sufficient equity in the Ohio Properties for the Company to recognize the sale discussed above.

No amount has been accrued for this contingent liability because the likelihood of a repurchase event is remote (Note 15).

The unallocated deficit of the Consolidated VIEs is primarily comprised of the accumulated historical net losses of the Consolidated VIEs since the applicable consolidation date. The unallocated deficit of the VIEs and the VIEs' net losses subsequent to that date are not allocated to the General Partner and unitholders as such activity is not contemplated by, or addressed in, the Agreement of Limited Partnership.
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Variable Interest Entities
9 Months Ended
Sep. 30, 2012
Variable Interest Entities [Abstract]  
Variable interest entities [Text Block]
Variable Interest Entities

The Partnership invests in federally tax-exempt mortgage revenue bonds which have been issued to provide construction and/or permanent financing of multifamily residential apartments.  The Partnership owns 100% of these bonds and each bond is secured by a first mortgage on the property.  The Partnership has also made taxable loans to the property owners in certain cases which are secured by second mortgages on these properties.  Although each multifamily property financed with tax-exempt mortgage revenue bonds held by the Partnership is owned by a separate entity in which the Partnership has no equity ownership interest, the debt financing provided by the Partnership creates a variable interest in these ownership entities that may require the Partnership to report the assets, liabilities, and results of operations of these entities on a consolidated basis under GAAP.   

The Partnership determined that five of the entities financed by tax-exempt mortgage revenue bonds owned by the Partnership are held by VIEs as of September 30, 2012.  These VIEs are Ashley Square, Bent Tree, Cross Creek, Fairmont Oaks, and Lake Forest. The Partnership has determined that the Exchange Accommodation Titleholder ("EAT (Maples on 97th)") is also a VIE based on its Qualified Exchange Accommodation Agreement and Master Lease Agreement with EAT (Maples on 97th). See below for further discussion on which VIEs are consolidated as of the reporting date.

At September 30, 2012 and 2011, the Partnership reported three properties as Consolidated VIEs; Bent Tree, Fairmont Oaks, and Lake Forest and has continued to consolidate these entities. In June 2011, the ownership of Iona Lakes became an unaffiliated not-for-profit entity and Iona Lakes ceased to be reported as a Consolidated VIE. At September 30, 2012, the Partnership reported one additional property as a Consolidated VIE; EAT (Maples on 97th), which reports the property's fixed assets and related depreciation.

The Partnership does not hold an equity interest in these VIEs and, therefore, the assets of the VIEs cannot be used to settle the general commitments of the Partnership and the Partnership is not responsible for the commitments and liabilities of the VIEs.  The primary risks to the Partnership associated with these VIEs relate to the entities ability to meet debt service obligations to the Partnership and the valuation of the underlying multifamily apartment property which serves as bond collateral.

The following is a discussion of the significant judgments and assumptions made by the Partnership in determining the primary beneficiary of the VIE and, therefore, whether the Partnership must consolidate the VIE.

Consolidated VIEs

The Partnership determined it is the primary beneficiary of the following properties at September 30, 2012: Bent Tree, EAT (Maples on 97th), Fairmont Oaks, and Lake Forest. The capital structure of Bent Tree, Fairmont Oaks, and Lake Forest consists of senior debt, subordinated debt, and equity capital.  The senior debt is in the form of a tax-exempt mortgage revenue bonds and accounts for the majority of each VIE's total capital. As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents.  The equity ownership of the consolidated VIEs is ultimately held by corporations which are owned by four individuals, two of which are related parties.  Additionally, each of these properties is managed by an affiliate of the Partnership, America First Properties Management Company, LLC (“Properties Management”) which is an affiliate of Burlington.
In August 2012, the Partnership sold the Commons at Churchland property for approximately $8.1 million resulting in a gain of approximately $1.3 million. In a separate August 2012 transaction, the Partnership closed on the purchase of the Maples on 97th property (“replacement property”), located in Omaha, Nebraska, for a purchase price of approximately $5.5 million through the execution of a Qualified Exchange Accommodation Agreement that assigned the right to acquire and own the replacement property to a wholly-owned subsidiary of a Title Company (EAT (Maples on 97th)) for a period not to exceed six months. During this six month holding period, the Partnership will rehabilitate the replacement property. The Partnership lent the EAT (Maples on 97th) the necessary funds to purchase the replacement property; there is no other capital within that entity.
The EAT (Maples on 97th) then executed a Master Lease Agreement and Construction Management Agreement with the Partnership. These two agreements give the Partnership the rights and obligations to manage the replacement property as well as the rehabilitation during the six month hold period. In addition, the Qualified Exchange Accommodation Agreement stipulates that title to the Property is to revert back to a subsidiary of the Partnership no later than the end of the six month holding period. The Partnership has determined that it is the primary beneficiary of the EAT (Maples on 97th). Based on the terms of the Master Lease Agreement, the Partnership has determined that it will report the rental income and related real estate operating expenses for the Maples on 97th property during the six month holding period as an MF Property since it has all the rights and obligations of landlord for the property.

In determining the primary beneficiary of these VIEs, the Partnership considered the activities of the VIE which most significantly impact the VIEs' economic performance, who has the power to control such activities, the risks which the entities were designed to create, the variability associated with those risks and the interests which absorb such variability.  The Partnership also considered the related party relationship of the entities involved in the VIEs.  It was determined that the Partnership, as part of the related party group, met both of the primary beneficiary criteria and was the most closely associated with the VIEs and; therefore, was determined to be the primary beneficiary.

Non-Consolidated VIEs

The Company does not consolidate two VIE entities, Ashley Square and Cross Creek.  In determining the primary beneficiary of these VIEs, the Partnership considered the activities of each VIE which most significantly impact the VIEs' economic performance, who has the power to control such activities, the risks which the entities were designed to create, the variability associated with those risks and the interests which absorb such variability.  The significant activities of the VIE that impact the economic performance of the entity include leasing and maintaining apartments, determining if the property is to be sold, decisions relating to debt refinancing, the selection of or replacement of the property manager and the approval of the operating and capital budgets.  As discussed below, while the capital structures of these VIEs resulted in the Partnership holding a majority of the variable interests in these VIEs, the Partnership determined it does not have the power to direct the activities of these VIEs that most significantly impact the VIEs’ economic performance and, as a result, is not the primary beneficiary of these VIEs.
 
Ashley Square –  Ashley Square Housing Cooperative acquired the ownership of the Ashley Square Apartments in December 2008 from Ashley Square LLC through a warranty deed of transfer and an assumption of debt.  This transfer of ownership constituted a reconsideration event as outlined in the consolidation guidance which triggered a re-evaluation of the holders of variable interests to determine the primary beneficiary of the VIE.  The capital structure of the VIE consists of senior debt, subordinated loans and equity capital.  The senior debt is in the form of tax-exempt mortgage revenue bonds that are 100% owned by the Partnership and account for the majority of the VIE’s total capital.  As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents.  The VIE is organized as a housing cooperative and the 99% equity owner of this VIE is The Foundation for Affordable Housing (“FAH”), an unaffiliated Nebraska not-for-profit organization.  Additionally, this property is managed by Properties Management.

Cross Creek –  Cross Creek Apartments Holdings LLC is the owner of the Cross Creek Apartments.  On January 1, 2010, Cross Creek Apartment Holdings LLC entered into a new operating agreement and admitted three new members.  These new members committed approximately $2.2 million of capital payable in three installments including $563,000 on January 1, 2010.  The new operating agreement and admission of new owner members constituted a reconsideration event as outlined in the consolidation guidance which triggered a re-evaluation of the holders of variable interests to determine the primary beneficiary of the VIE.  The capital structure of the VIE consists of senior debt, subordinated loans, and equity capital at risk.  The senior debt is in the form of tax-exempt mortgage revenue bonds that are 100% owned by the Partnership and account for the majority of the VIE’s total capital.  As the bondholder, the Partnership is entitled to principal and interest payments and has certain protective rights as established by the bond documents.  The three newly admitted members of this VIE are each unaffiliated with the Partnership and have contributed significant equity capital to the VIE.  These members collectively control a 99% interest in the VIE.  The other 1% member of this VIE is FAH, which is also unaffiliated with the Partnership.  Additionally, this property is managed by Properties Management.

The following table presents information regarding the carrying value and classification of the assets held by the Partnership as of September 30, 2012, which constitute a variable interest in Ashley Square and Cross Creek.
 
Balance Sheet Classification
 
 Carrying Value
 
 Maximum Exposure to Loss
Ashley Square Apartments
 
 
 
 
 
Tax Exempt Mortgage Revenue Bond
Bond Investment
 
$
5,532,076

 
$
5,272,000

Property Loan
Other Asset
 
4,852,342

 
1,256,000

 
 
 
$
10,384,418

 
$
6,528,000

Cross Creek Apartments
 
 
 
 
 
Tax Exempt Mortgage Revenue Bond
Bond Investment
 
$
8,031,125

 
$
5,994,150

Property Loans
Other Asset
 
3,383,615

 
3,383,615

 
 
 
$
11,414,740

 
$
9,377,765



The tax-exempt mortgage revenue bonds are classified on the balance sheet as available for sale investments and are carried at fair value while property loans are presented on the balance sheet as Other assets and are carried at the unpaid principal and interest less any loan loss reserves.  See Note 4 for additional information regarding the bonds and Note 7 for additional information regarding the property loans.  The maximum exposure to loss for the bonds is equal to the unpaid principal balance as of September 30, 2012.  The difference between the carrying value and the maximum exposure to loss is a function of the fair value of the bond.  The difference between the carrying value and the maximum exposure is the value of loan loss reserves that have been previously recorded against the outstanding loan balances.

The following tables present the effects of the consolidation of the Consolidated VIEs on the Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations.

Condensed Consolidating Balance Sheets as of September 30, 2012 and December 31, 2011:
 
 
 
 Partnership as of September 30, 2012
 
 Consolidated VIEs as of September 30, 2012
 
 Consolidation -Elimination as of September 30, 2012
 
 Total as of September 30, 2012
Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
55,484,126

 
$
30,334

 
$

 
$
55,514,460

Restricted cash
 
4,693,511

 
1,276,644

 

 
5,970,155

Interest receivable
 
14,460,415

 

 
(5,336,291
)
 
9,124,124

Tax-exempt mortgage revenue bonds held in trust, at fair value
 
125,004,792

 

 
(24,826,238
)
 
100,178,554

Tax-exempt mortgage revenue bonds, at fair value
 
38,623,510

 

 

 
38,623,510

Public housing capital fund trusts, at fair value
 
66,163,969

 

 

 
66,163,969

Real estate assets:
 
 
 
 
 
 
 
 
Land
 
8,523,403

 
4,372,219

 

 
12,895,622

Buildings and improvements
 
76,696,662

 
35,792,106

 

 
112,488,768

Real estate assets before accumulated depreciation
 
85,220,065

 
40,164,325

 

 
125,384,390

Accumulated depreciation
 
(8,404,483
)
 
(13,408,856
)
 

 
(21,813,339
)
Net real estate assets
 
76,815,582

 
26,755,469

 

 
103,571,051

Other assets
 
23,349,351

 
672,562

 
(15,732,441
)
 
8,289,472

Assets of discontinued operations
 
8,224,333

 

 

 
8,224,333

Total Assets
 
$
412,819,589

 
$
28,735,009

 
$
(45,894,970
)
 
$
395,659,628

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Accounts payable, accrued expenses and other liabilities
 
$
2,875,306

 
$
26,088,519

 
$
(25,303,059
)
 
$
3,660,766

Distribution payable
 
5,705,283

 

 

 
5,705,283

Debt financing
 
153,184,000

 

 

 
153,184,000

Mortgages payable
 
39,178,128

 
24,221,000

 
(24,221,000
)
 
39,178,128

Liabilities of discontinued operations
 
4,870,902

 

 

 
4,870,902

Total Liabilities
 
205,813,619

 
50,309,519

 
(49,524,059
)
 
206,599,079

Partners' Capital
 
 
 
 
 
 
 
 
General Partner
 
(367,578
)
 

 

 
(367,578
)
Beneficial Unit Certificate holders
 
206,426,257

 

 
6,579,583

 
213,005,840

Unallocated deficit of Consolidated VIEs
 

 
(21,574,510
)
 
(2,950,494
)
 
(24,525,004
)
Total Partners' Capital
 
206,058,679

 
(21,574,510
)
 
3,629,089

 
188,113,258

Noncontrolling interest
 
947,291

 

 

 
947,291

Total Capital
 
207,005,970

 
(21,574,510
)
 
3,629,089

 
189,060,549

Total Liabilities and Partners' Capital
 
$
412,819,589

 
$
28,735,009

 
$
(45,894,970
)
 
$
395,659,628

 

 
 
 Partnership as of December 31, 2011
 
 Consolidated VIEs as of December 31, 2011
 
 Consolidation -Elimination as of December 31, 2011
 
 Total as of December 31, 2011
Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
20,164,188

 
$
12,718

 
$

 
$
20,176,906

Restricted cash
 
12,754,035

 
937,053

 

 
13,691,088

Interest receivable
 
11,395,266

 

 
(4,410,288
)
 
6,984,978

Tax-exempt mortgage revenue bonds held in trust, at fair value
 
132,920,723

 

 
(23,767,936
)
 
109,152,787

Tax-exempt mortgage revenue bonds, at fair value
 
26,542,565

 

 

 
26,542,565

Real estate assets:
 
 
 
 
 
 
 
 
Land
 
7,144,866

 
3,250,044

 

 
10,394,910

Buildings and improvements
 
72,303,086

 
31,607,993

 

 
103,911,079

Real estate assets before accumulated depreciation
 
79,447,952

 
34,858,037

 

 
114,305,989

Accumulated depreciation
 
(5,931,860
)
 
(12,332,334
)
 

 
(18,264,194
)
Net real estate assets
 
73,516,092

 
22,525,703

 

 
96,041,795

Other assets
 
20,080,854

 
839,879

 
(10,851,419
)
 
10,069,314

Assets of discontinued operations
 
15,317,112

 

 

 
15,317,112

Total Assets
 
$
312,690,835

 
$
24,315,353

 
$
(39,029,643
)
 
$
297,976,545

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Accounts payable, accrued expenses and other liabilities
 
$
2,256,569

 
$
24,780,781

 
$
(23,805,990
)
 
$
3,231,360

Distribution payable
 
3,911,340

 

 

 
3,911,340

Debt financing
 
112,673,000

 

 

 
112,673,000

Mortgages payable
 
35,464,455

 
24,407,000

 
(24,407,000
)
 
35,464,455

Liabilities of discontinued operations
 
11,107,345

 

 

 
11,107,345

Total Liabilities
 
165,412,709

 
49,187,781

 
(48,212,990
)
 
166,387,500

Partners' Capital
 
 
 
 
 
 
 
 
General Partner
 
(354,006
)
 

 

 
(354,006
)
Beneficial Unit Certificate holders
 
147,087,347

 

 
7,823,881

 
154,911,228

Unallocated deficit of Consolidated VIEs
 

 
(24,872,428
)
 
1,359,466

 
(23,512,962
)
Total Partners' Capital
 
146,733,341

 
(24,872,428
)
 
9,183,347

 
131,044,260

Noncontrolling interest
 
544,785

 

 

 
544,785

Total Capital
 
147,278,126

 
(24,872,428
)
 
9,183,347

 
131,589,045

Total Liabilities and Partners' Capital
 
$
312,690,835

 
$
24,315,353

 
$
(39,029,643
)
 
$
297,976,545





Condensed Consolidating Statements of Operations for the three months ended September 30, 2012 and 2011:

 
 Partnership For the Three Months Ended September 30, 2012
 
 Consolidated VIEs For the Three Months Ended September 30, 2012
 
 Consolidation -Elimination For the Three Months Ended September 30, 2012
 
 Total For the Three Months Ended September 30, 2012
Revenues:
 
 
 
 
 
 
 
Property revenues
$
2,799,857

 
$
1,203,887

 
$

 
$
4,003,744

Investment income
3,490,431

 

 
(379,714
)
 
3,110,717

Other income
15,224

 

 

 
15,224

Total revenues
6,305,512

 
1,203,887

 
(379,714
)
 
7,129,685

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
1,613,087

 
959,870

 

 
2,572,957

Recovery of loss on receivables
(261,825
)
 

 

 
(261,825
)
Depreciation and amortization
1,091,999

 
388,353

 
(10,876
)
 
1,469,476

Interest
1,551,543

 
808,841

 
(808,841
)
 
1,551,543

General and administrative
834,301

 

 

 
834,301

Total expenses
4,829,105

 
2,157,064

 
(819,717
)
 
6,166,452

Income (loss) from operations
1,476,407

 
(953,177
)
 
440,003

 
963,233

Income from discontinued operations (including gain on sale of MF Property of $1,277,976)
1,385,433

 

 

 
1,385,433

Net income (loss)
2,861,840

 
(953,177
)
 
440,003

 
2,348,666

Net income attributable to noncontrolling interest
137,099

 

 

 
137,099

Net income (loss) - America First Tax Exempt Investors, L. P.
$
2,724,741

 
$
(953,177
)
 
$
440,003

 
$
2,211,567


 
 Partnership For the Three Months Ended September 30, 2011
 
 Consolidated VIEs For the Three Months Ended September 30, 2011
 
 Consolidation -Elimination For the Three Months Ended September 30, 2011
 
 Total For the Three Months Ended September 30 , 2011
Revenues:
 
 
 
 
 
 
 
Property revenues
$
2,390,421

 
$
1,208,534

 
$

 
$
3,598,955

Investment income
2,849,396

 

 
(383,520
)
 
2,465,876

Other income
359,167

 

 

 
359,167

Total revenues
5,598,984

 
1,208,534

 
(383,520
)
 
6,423,998

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
1,358,372

 
729,713

 

 
2,088,085

Provision for loss on receivables
14,525

 

 

 
14,525

Depreciation and amortization
973,316

 
347,518

 
(9,234
)
 
1,311,600

Interest
2,036,470

 
789,331

 
(789,331
)
 
2,036,470

General and administrative
725,115

 

 

 
725,115

Total expenses
5,107,798

 
1,866,562

 
(798,565
)
 
6,175,795

Income (loss) from operations
491,186

 
(658,028
)
 
415,045

 
248,203

Income from discontinued operations
29,218

 

 

 
29,218

Net income (loss)
520,404

 
(658,028
)
 
415,045

 
277,421

Net income attributable to noncontrolling interest
145,369

 

 

 
145,369

Net income (loss) - America First Tax Exempt Investors, L. P.
$
375,035

 
$
(658,028
)
 
$
415,045

 
$
132,052



Condensed Consolidating Statements of Operations for the nine months ended September 30, 2012 and 2011:
 
 Partnership For the Nine Months Ended September 30, 2012
 
 Consolidated VIEs For the Nine Months Ended September 30, 2012
 
 Consolidation -Elimination For the Nine Months Ended September 30, 2012
 
 Total For the Nine Months Ended September 30, 2012
Revenues:
 
 
 
 
 
 
 
Property revenues
$
7,843,065

 
$
3,598,541

 
$

 
$
11,441,606

Investment income
8,912,856

 

 
(1,142,089
)
 
7,770,767

Gain on sale of bonds
667,821

 

 

 
667,821

Other income
97,996

 

 

 
97,996

Total revenues
17,521,738

 
3,598,541

 
(1,142,089
)
 
19,978,190

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
4,412,744

 
2,399,206

 

 
6,811,950

Provision for loss on receivables
214,525

 

 

 
214,525

Depreciation and amortization
3,099,153

 
1,102,000

 
(32,712
)
 
4,168,441

Interest
4,317,329

 
2,411,676

 
(2,411,676
)
 
4,317,329

General and administrative
2,533,246

 

 

 
2,533,246

Total expenses
14,576,997

 
5,912,882

 
(2,444,388
)
 
18,045,491

Income (loss) from continuing operations
2,944,741

 
(2,314,341
)
 
1,302,299

 
1,932,699

Income from discontinued operations (including gain on sale of MF Property of $1,277,976)
1,613,817

 

 

 
1,613,817

Net income (loss)
4,558,558

 
(2,314,341
)
 
1,302,299

 
3,546,516

Net income attributable to noncontrolling interest
398,469

 

 

 
398,469

Net income (loss) - America First Tax Exempt Investors, L. P.
$
4,160,089

 
$
(2,314,341
)
 
$
1,302,299

 
$
3,148,047


 
 Partnership For the Nine Months Ended September 30, 2011
 
 Consolidated VIEs For the Nine Months Ended September 30, 2011
 
 Consolidation -Elimination For the Nine Months Ended September 30, 2011
 
 Total For the Nine Months Ended September 30, 2011
Revenues:
 
 
 
 
 
 
 
Property revenues
$
5,534,453

 
$
4,755,337

 
$

 
$
10,289,790

Investment income
8,729,857

 

 
(1,635,308
)
 
7,094,549

Other income
654,490

 
4,133,477

 
(4,028,489
)
 
759,478

Total revenues
14,918,800

 
8,888,814

 
(5,663,797
)
 
18,143,817

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
3,276,179

 
2,826,177

 

 
6,102,356

Provision for loss on receivables
725,215

 

 

 
725,215

Depreciation and amortization
2,171,090

 
1,366,577

 
(27,703
)
 
3,509,964

Interest
4,421,608

 
3,243,737

 
(3,243,737
)
 
4,421,608

General and administrative
2,044,132

 

 

 
2,044,132

Total expenses
12,638,224

 
7,436,491

 
(3,271,440
)
 
16,803,275

Income (loss) from continuing operations
2,280,576

 
1,452,323

 
(2,392,357
)
 
1,340,542

Income from discontinued operations
187,302

 

 

 
187,302

Net income (loss)
2,467,878

 
1,452,323

 
(2,392,357
)
 
1,527,844

 Net income attributable to noncontrolling interest
449,866

 

 

 
449,866

Net income (loss) - America First Tax Exempt Investors, L. P.
$
2,018,012

 
$
1,452,323

 
$
(2,392,357
)
 
$
1,077,978

v2.4.0.6
Investments in Tax-Exempt Bonds
9 Months Ended
Sep. 30, 2012
Investments in Tax Exempt Bonds [Abstract]  
Investments in Debt and Equity Instruments, Cash and Cash Equivalents, Unrealized and Realized Gains (Losses) [Text Block]
Investments in Tax-Exempt Bonds

The tax-exempt mortgage revenue bonds owned by the Company have been issued to provide construction and/or permanent financing of multifamily residential properties and do not include the tax-exempt mortgage revenue bonds issued with respect to properties owned by Consolidated VIEs or the Ohio Properties presented as MF Properties (Note 2 and Note 6). Tax-exempt mortgage revenue bonds are either held directly by the Company or are held in trusts created in connection with debt financing transactions (Note 9). The Company had the following investments in tax-exempt mortgage revenue bonds as of dates shown:

 
 
September 30, 2012
Description of Tax-Exempt Mortgage Revenue Bonds
 
Cost adjusted for pay-downs
 
Unrealized Gain
 
Unrealized Loss
 
Estimated Fair Value
Ashley Square (1)
 
$
5,272,000

 
$
260,076

 
$

 
$
5,532,076

Autumn Pines (2)
 
12,311,758

 
1,013,109

 

 
13,324,867

Bella Vista (1)
 
6,600,000

 
118,140

 

 
6,718,140

Bridle Ridge (1)
 
7,765,000

 
135,732

 

 
7,900,732

Brookstone (1)
 
7,449,870

 
1,499,825

 

 
8,949,695

Cross Creek (1)
 
5,994,150

 
2,036,975