v2.4.0.8
Document and Entity Information
6 Months Ended
Jun. 30, 2013
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 Jun. 30, 2013
Document Fiscal Year Focus 2013
Document Fiscal Period Focus Q2
Amendment Flag false
Entity Common Stock, Units Outstanding 0
v2.4.0.8
Condensed Consolidated Balance Sheets (USD $)
Jun. 30, 2013
Dec. 31, 2012
Assets [Abstract]    
Cash and cash equivalents $ 23,985,725 $ 30,172,773
Restricted cash 8,205,726 5,471,522
Interest receivable 6,481,932 8,473,360
Tax-exempt mortgage revenue bonds held in trust, at fair value 158,419,660 99,534,082
Tax-exempt mortgage revenue bonds, at fair value 40,695,933 45,703,294
Public housing capital fund trusts, at fair value 62,759,268 65,389,298
Available-for-sale Securities, Fair Value Disclosure, Mortgage-backed Securities 41,092,433 32,121,412
Real estate assets:    
Land 12,488,232 11,202,876
Buildings and improvements 112,059,618 93,615,479
Real estate assets before accumulated depreciation 124,547,850 104,818,355
Accumulated depreciation (21,772,145) (19,330,063)
Net real estate assets 102,775,705 85,488,292
Other assets 11,739,071 8,216,295
Assets of discontinued operations 9,972,795 32,580,427
Total assets 466,128,248 413,150,755
Liabilities [Abstract]    
Accounts payable, accrued expenses and other liabilities 4,537,156 5,013,947
Distribution payable 5,870,784 5,566,908
Debt financing 225,447,000 177,948,000
Mortgages payable 46,486,463 39,119,507
Liabilities of discontinued operations 141,160 1,531,462
Total Liabilities 282,482,563 229,179,824
Commitments and Contingencies      
Partners' Capital    
General Partner 5,114 (430,087)
Beneficial Unit Certificate holders 207,855,207 207,383,087
Unallocated deficit of Consolidated VIEs (25,578,906) (25,035,808)
Total Partners' Capital 182,281,415 181,917,192
Noncontrolling interest 1,364,270 2,053,739
Total Capital 183,645,685 183,970,931
Total Liabilities and Partners' Capital $ 466,128,248 $ 413,150,755
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Condensed Consolidated Statements of Operations (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Revenues [Abstract]        
Property revenues $ 3,952,046 $ 2,855,949 $ 7,684,853 $ 5,816,349
Investment income 4,595,197 2,288,646 12,311,814 4,660,050
Contingent Interest Income 6,497,160 0 6,497,160 0
Interest Income, Operating 96,180 43,427 1,341,165 82,772
Gain on sale of bonds 0 667,821 0 667,821
Other income 0 0 250,000 0
Total Revenues 15,140,583 5,855,843 28,084,992 11,226,992
Expenses [Abstract]        
Real estate operating (exclusive of items shown below) 2,315,325 1,745,052 4,372,361 3,360,428
Realized loss on taxable loans 4,557,741 0 4,557,741 0
Provision for loan loss 96,000 0 96,000 0
Provision for loss on receivables 3,523 238,175 241,698 476,350
Depreciation and amortization 1,661,082 1,150,615 3,242,458 2,214,382
Interest 1,426,349 1,496,970 2,962,622 2,765,786
General and administrative 1,141,444 1,048,366 2,111,935 1,698,945
Total Expenses 11,201,464 5,679,178 17,584,815 10,515,891
Income (loss) from continuing operations 3,939,119 176,665 10,500,177 711,101
Income from discontinued operations 166,887 251,601 2,099,906 486,749
Net income (loss) 4,106,006 428,266 12,600,083 1,197,850
Net income (loss) attributable to noncontrolling interest (150,846) (122,218) (323,497) (261,370)
Net income (loss) - America First Tax Exempt Investors, L.P. 3,955,160 306,048 12,276,586 936,480
Net income (loss) allocated to:        
General Partner 508,033 165,927 1,019,784 174,630
Limited Partners - Unitholders 3,749,266 399,129 11,799,900 1,260,717
Unallocated loss of Consolidated VIEs (302,139) (259,008) (543,098) (498,867)
Noncontrolling interest $ 150,846 $ 122,218 $ 323,497 $ 261,370
Unitholders' interest in net income per unit (basic and diluted):        
Income from continuing operations $ 0.09 $ 0 $ 0.23 $ 0.02
Income from discontinued operations $ 0.00 $ 0.01 $ 0.05 $ 0.02
Net income (loss), basic and diluted, per unit $ 0.09 $ 0.01 $ 0.28 $ 0.04
Weighted average number of units outstanding, basic and diluted 42,772,928 33,682,818 42,772,928 31,912,707
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Condensed Consolidated Statements of Operations Parenthetical (USD $)
6 Months Ended
Jun. 30, 2013
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax $ 1,775,527
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Condensed Consolidated Statements of Comprehensive Income (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Net income (loss) $ 4,106,006 $ 428,266 $ 12,600,083 $ 1,197,850
Net Income (Loss) Allocated to General Partners 508,033 165,927 1,019,784 174,630
Net income (loss) allocated to unitholders 3,749,266 399,129 11,799,900 1,260,717
Unallocated loss of Consolidated VIEs (302,139) (259,008) (543,098) (498,867)
Net income (loss) attributable to noncontrolling interest (150,846) (122,218) (323,497) (261,370)
Accumulated Other Comprehensive Income (Loss) [Member]
       
Net income (loss)     0 0
Unrealized Gain (Loss) on Securities (8,276,828) (4,074,444) (5,476,209) 6,922,051
Net Income (Loss) Allocated to General Partners 425,265 206,672 965,022 243,851
Net income (loss) allocated to unitholders (4,444,794) 4,432,828 6,378,453 8,113,547
Unallocated loss of Consolidated VIEs (302,139) (259,008) (543,098) (498,867)
Net income (loss) attributable to noncontrolling interest 150,846 122,218 323,497 261,370
Comprehensive income - America First Tax Exempt Investors, L.P. $ (4,170,822) $ 4,502,710 $ 7,123,874 $ 8,119,901
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Condensed Consolidated Statements of Partners' Capital (USD $)
Total
USD ($)
General Partner
USD ($)
Number of Units
Beneficial Unit Certificate Holders
USD ($)
Unallocated Deficit of Consolidated VIEs
USD ($)
Noncontrolling Interest
USD ($)
Accumulated Other Comprehensive Income (Loss) [Member]
USD ($)
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        
Stock Issued During Period, Shares, New Issues     12,650,000        
Proceeds from Issuance of Common Stock 59,948,265     59,948,265     0
Sale of Limited Partner Interest in Multi-Family Properties 4,037 0   0 0 4,037 0
Distributions paid or accrued (9,365,918) (253,936)   (9,111,982) 0 0 0
Net income (loss) 1,197,850 174,630   1,260,717 (498,867) 261,370 0
Unrealized gain on securities 6,922,051 69,221   6,852,830 0 0 6,922,051
Balance at Jun. 30, 2012 190,295,330 (364,091)   213,861,058 (24,011,829) 810,192 7,017,945
Balance at Dec. 31, 2012 183,970,931 (430,087)   207,383,087 (25,035,808) 2,053,739 7,161,381
Partners' Capital Account, Units at Dec. 31, 2012     42,772,928        
Proceeds from Issuance of Common Stock 0            
Deconsolidation of Discontinued Operations 393,401 14,064   1,392,303 0 (1,012,966) 1,406,367
Proceeds from Sale of Available-for-sale Securities (651,849) (6,518)   (645,331) 0 0 (651,849)
Foreclosure of Available-for-Sale Securities 4,080,734 40,807   4,039,927 0 0 4,080,734
Distributions paid or accrued (11,271,406) (578,174)   (10,693,232) 0 0 0
Net income (loss) 12,600,083 1,019,784   11,799,900 (543,098) 323,497 0
Unrealized gain on securities (5,476,209) (54,762)   (5,421,447) 0 0 (5,476,209)
Balance at Jun. 30, 2013 $ 183,645,685 $ 5,114   $ 207,855,207 $ (25,578,906) $ 1,364,270 $ 6,520,424
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Condensed Consolidated Statements of Cash Flows (USD $)
6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Cash flows from operating activities:    
Net income (loss) $ 12,600,083 $ 1,197,850
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:    
Depreciation and amortization expense 3,250,911 3,056,181
Provision for loss on receivables 241,698 476,350
Non-cash gain (loss) on derivatives (136,246) 780,497
Bond discount and premium amortization and accretion (166,811) (215,777)
Gain on sale of bonds 0 (667,821)
Gain on the sale of the Ohio Properties (1,775,527) 0
Contingent Interest Income (6,497,160) 0
Realized loss on taxable loans 4,557,741 0
Changes in operating assets and liabilities, net of effect of acquisitions    
Increase (decrease) in interest receivable (1,901,440) (1,073,526)
(Increase) decrease in other assets (1,679,436) 262,683
Increase (decrease) in accounts payable and accrued expenses (2,585,429) 90,823
Net cash provided (used) by operating activities 5,908,384 3,907,260
Cash flows from investing activities:    
Capital expenditures (4,723,977) (3,744,461)
Acquisition of tax-exempt mortgage revenue bonds (62,210,000) (10,164,815)
Proceeds from sale of MF Property 16,195,000 0
Investment in the Ohio Properties' bonds (18,313,000) 0
Cash received from taxable loans receivable - Ohio Properties 4,064,089 0
Proceeds from the sale/redemption of bonds 21,935,343 16,829,960
Acquisition of mortgage-backed securities (12,629,888) 0
Acquisition of partnerships, net of cash acquired (1,635,000) 0
Decrease in restricted cash 26,811 208,195
Restricted cash - debt collateral released (2,321,608) 7,248,436
Change in restricted cash - Greens Property sale 2,546,362 0
Principal payments received on taxable bonds 1,402,947 594,134
Net cash provided (used) by investing activities (55,662,921) 10,971,449
Cash flows from financing activities:    
Distributions paid (10,967,531) (7,714,741)
Proceeds from debt financing 42,530,000 3,167,342
Proceeds from sale of beneficial unit certificates 0 59,948,265
Principal borrowings on mortgages payable 7,500,000 0
Net change in line of credit 6,000,000 0
Principal payments on debt and mortgage financing (1,284,044) (8,445,491)
Decrease in liabilities related to restricted cash (26,811) (208,195)
Debt financing costs (334,308) (34,188)
Proceeds from Noncontrolling Interests 0 4,037
Net cash (used) provided by financing activities 43,417,306 46,717,029
Net increase (decrease) in cash and cash equivalents (6,337,231) 61,595,738
Cash and cash equivalents at beginning of period, including discontinued operations 30,331,500 20,213,413
Cash and cash equivalents at end of period, including discontinued operations 23,994,269 81,809,151
Cash paid during the period for interest 2,913,874 2,077,832
Distributions declared but not paid 5,870,784 5,562,518
Capital expenditures financed through payables 1,460,185 73,765
Deconsolidation of the Ohio Properties - noncontrolling interest 1,012,966 0
Taxable loans receivable - Ohio Properties 1,236,236 0
Foreclosure of the Woodland Park bond $ 15,662,000 $ 0
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Condensed Consolidated Statements of Cash Flows Parenthetical Tagging (USD $)
Jun. 30, 2013
Dec. 31, 2012
Jun. 30, 2012
Dec. 31, 2011
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents $ 8,544 $ 158,727 $ 62,910 $ 126,572
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Basis of Presentation
6 Months Ended
Jun. 30, 2013
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 property 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 "Company" refers to the consolidated financial statements reported in this Form 10-Q which include the assets, liabilities, and results of operations of the Partnership, its Consolidated Subsidiaries (defined below) and three 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 (the “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 10).
Nine multifamily apartments ("MF Properties") which are either wholly or majority owned by subsidiaries of the Partnership.
One apartment property, the Greens of Pine Glen ("Greens Property")which is reported as discontinued operations (Note 9).

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 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.

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, 2012. These condensed consolidated financial statements and notes have been prepared consistently with the 2012 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 June 30, 2013, 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
6 Months Ended
Jun. 30, 2013
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 7) 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 and in October 2011, the three limited partnerships that own the Ohio Properties admitted two entities that are affiliates of Boston Capital ("BC Partners") as new limited partners as part of a syndication of LIHTCs. 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 had a par value of $14.7 million and bears interest at an annual rate of 7.0%. The Series B bond had 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 BC Partners agreed to contribute equity to these limited partnerships, subject to the Ohio Properties meeting certain debt service coverage ratios specified in the applicable limited partnership agreements. As such, there was not sufficient equity invested at closing by the not-for-profit or BC Partners into the Ohio Properties to allow the Company to recognize a real estate sale.

During the first quarter of 2013, BC Partners contributed $6.5 million of capital into the Ohio Properties which was sufficient to allow the Company to recognize the sale pursuant to the accounting guidance. The Company determined that the approximate $1.8 million gain from the sale of the Ohio Properties was Tier 2 income in 2010, the year in which the Ohio Properties were sold to the unaffiliated not-for-profit. As such, 25% of that gain was distributed to AFCA 2 in 2010 and there was no Tier 2 income reported in 2013 related to the Ohio Properties.

The deposit method of accounting for real estate sales required both the deferral of the gain from the real estate sale and also did not allow recognition of the tax-exempt interest payments by the Ohio Properties to the Company between June 2010 and the date of the equity contribution by BC Partners. In conjunction with the recognition of the real estate sale, approximately $3.5 million of tax-exempt interest was recognized within investment income in the first quarter of 2013 which represents the tax-exempt interest payments received from the Ohio Properties between June 2010 and December 2012. In addition, the Partnership reported approximately $1.1 million in taxable note interest income and $250,000 guarantee fee from the general partner of the Ohio Properties during the first quarter of 2013 (Note 9). The deposit method of accounting also deferred the recognition of the sale of the the Ohio Properties and the purchase of the tax-exempt mortgage revenue bonds they secure in the consolidated statement of cash flows. As such, these transactions were recognized in the consolidated statement of cash flows in 2013.

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Variable Interest Entities
6 Months Ended
Jun. 30, 2013
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.  In certain cases, the Partnership has also made taxable property loans to the property owners 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 June 30, 2013 and December 31, 2012.  These VIEs are Ashley Square, Bent Tree, Cross Creek, Fairmont Oaks, and Lake Forest. At December 31, 2012, the Partnership also determined that the Exchange Accommodation Titleholder ("EAT (Maples on 97th)") was also a VIE based on the Qualified Exchange Accommodation Agreement and Master Lease Agreement between the Partnership and EAT (Maples on 97th).

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

In determining the primary beneficiary of these VIEs, the Partnership considers 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 considers 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 of the following VIEs at June 30, 2013: Bent Tree, 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 Capital Group, LLC ("Burlington").

In August 2012, the EAT (Maples on 97th), a wholly-owned subsidiary of a Title Company which owned a multi-family property located in Omaha, Nebraska, executed a Master Lease Agreement and Construction Management Agreement with the Partnership. These two agreements gave the Partnership the rights and obligations to manage this property as well as the rehabilitation during the six month hold period which contractually ended in February 2013. The Partnership determined that it was the primary beneficiary of the EAT (Maples on 97th) and consolidated the EAT as a VIE as of December 31, 2012. Based on the terms of the Master Lease Agreement, the Partnership reported 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 had all the rights and obligations of landlord for the property. In February 2013, title to the Maples on 97th property transferred to the Partnership from the EAT (Maples on 97th) and the property is reported as an MF Property in the consolidated balance sheet as of June 30, 2013.

Non-Consolidated VIEs

The Company did not consolidate two VIE entities, Ashley Square and Cross Creek June 30, 2013.  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 June 30, 2013, 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
 
$
5,497,964

 
$
5,236,000

Taxable Property Loan
Other Asset
 
1,416,000

 
6,887,254

 
 
 
$
6,913,964

 
$
12,123,254

Cross Creek Apartments
 
 
 
 
 
Tax Exempt Mortgage Revenue Bond
Bond Investment
 
$
8,015,734

 
$
6,024,018

Taxable Property Loans
Other Asset
 
3,383,615

 
3,383,615

 
 
 
$
11,399,349

 
$
9,407,633



The tax-exempt mortgage revenue bonds are classified on the balance sheet as available for sale investments and are carried at fair value while taxable 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 8 for additional information regarding the taxable property loans.  The maximum exposure to loss for the bonds is equal to the unpaid principal balance as of June 30, 2013.  The difference between the tax-exempt mortgage revenue bond's carrying value and the maximum exposure to loss is a function of the fair value of the bond.  The difference between the taxable property loan's carrying value and the maximum exposure is the value of loan loss reserves that have been previously recorded against the outstanding taxable property 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 June 30, 2013 and December 31, 2012:
 
 
 
 Partnership as of June 30, 2013
 
 Consolidated VIEs as of June 30, 2013
 
 Consolidation -Elimination as of June 30, 2013
 
 Total as of June 30, 2013
Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
23,953,918

 
$
31,807

 
$

 
$
23,985,725

Restricted cash
 
7,135,454

 
1,070,272

 

 
8,205,726

Interest receivable
 
12,802,909

 

 
(6,320,977
)
 
6,481,932

Tax-exempt mortgage revenue bonds held in trust, at fair value
 
183,013,167

 

 
(24,593,507
)
 
158,419,660

Tax-exempt mortgage revenue bonds, at fair value
 
40,695,933

 

 

 
40,695,933

Public housing capital fund trusts, at fair value
 
62,759,268

 

 

 
62,759,268

Mortgage-backed securities, at fair value
 
41,092,433

 

 

 
41,092,433

Real estate assets:
 
 
 
 
 
 
 
 
Land
 
9,238,188

 
3,250,044

 

 
12,488,232

Buildings and improvements
 
79,857,792

 
32,201,826

 

 
112,059,618

Real estate assets before accumulated depreciation
 
89,095,980

 
35,451,870

 

 
124,547,850

Accumulated depreciation
 
(7,362,917
)
 
(14,409,228
)
 

 
(21,772,145
)
Net real estate assets
 
81,733,063

 
21,042,642

 

 
102,775,705

Other assets
 
20,924,637

 
664,567

 
(9,850,133
)
 
11,739,071

Assets of discontinued operations
 
9,972,795

 

 

 
9,972,795

Total Assets
 
$
484,083,577

 
$
22,809,288

 
$
(40,764,617
)
 
$
466,128,248

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Accounts payable, accrued expenses and other liabilities
 
$
3,911,863

 
$
28,015,588

 
$
(27,390,295
)
 
$
4,537,156

Distribution payable
 
5,870,784

 

 

 
5,870,784

Debt financing
 
225,447,000

 

 

 
225,447,000

Mortgages payable
 
46,486,463

 
24,026,000

 
(24,026,000
)
 
46,486,463

Liabilities of discontinued operations
 
141,160

 

 

 
141,160

Total Liabilities
 
281,857,270

 
52,041,588

 
(51,416,295
)
 
282,482,563

Partners' Capital
 
 
 
 
 
 
 
 
General Partner
 
5,114

 

 

 
5,114

Beneficial Unit Certificate holders
 
200,856,923

 

 
6,998,284

 
207,855,207

Unallocated deficit of Consolidated VIEs
 

 
(29,232,300
)
 
3,653,394

 
(25,578,906
)
Total Partners' Capital
 
200,862,037

 
(29,232,300
)
 
10,651,678

 
182,281,415

Noncontrolling interest
 
1,364,270

 

 

 
1,364,270

Total Capital
 
202,226,307

 
(29,232,300
)
 
10,651,678

 
183,645,685

Total Liabilities and Partners' Capital
 
$
484,083,577

 
$
22,809,288

 
$
(40,764,617
)
 
$
466,128,248

 

 
 
 Partnership as of December 31, 2012
 
 Consolidated VIEs as of December 31, 2012
 
 Consolidation -Elimination as of December 31, 2012
 
 Total as of December 31, 2012
Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
30,123,447

 
$
49,326

 
$

 
$
30,172,773

Restricted cash
 
4,538,071

 
933,451

 

 
5,471,522

Interest receivable
 
14,131,063

 

 
(5,657,703
)
 
8,473,360

Tax-exempt mortgage revenue bonds held in trust, at fair value
 
124,149,600

 

 
(24,615,518
)
 
99,534,082

Tax-exempt mortgage revenue bonds, at fair value
 
45,703,294

 

 

 
45,703,294

Public housing capital fund trusts, at fair value
 
65,389,298

 

 

 
65,389,298

Mortgage-backed securities, at fair value
 
32,121,412

 

 

 
32,121,412

Real estate assets:
 
 
 
 
 
 
 
 
Land
 
6,798,407

 
4,404,469

 

 
11,202,876

Buildings and improvements
 
55,776,753

 
37,838,726

 

 
93,615,479

Real estate assets before accumulated depreciation
 
62,575,160

 
42,243,195

 

 
104,818,355

Accumulated depreciation
 
(5,458,961
)
 
(13,871,102
)
 

 
(19,330,063
)
Net real estate assets
 
57,116,199

 
28,372,093

 

 
85,488,292

Other assets
 
22,923,356

 
852,321

 
(15,559,382
)
 
8,216,295

Assets of discontinued operations
 
32,580,427

 

 

 
32,580,427

Total Assets
 
$
428,776,167

 
$
30,207,191

 
$
(45,832,603
)
 
$
413,150,755

 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
Accounts payable, accrued expenses and other liabilities
 
$
2,330,852

 
$
28,529,405

 
$
(25,846,310
)
 
$
5,013,947

Distribution payable
 
5,566,908

 

 

 
5,566,908

Debt financing
 
177,948,000

 

 

 
177,948,000

Mortgages payable
 
39,119,507

 
24,158,000

 
(24,158,000
)
 
39,119,507

Liabilities of discontinued operations
 
1,531,462

 

 

 
1,531,462

Total Liabilities
 
226,496,729

 
52,687,405

 
(50,004,310
)
 
229,179,824

Partners' Capital
 
 
 
 
 
 
 
 
General Partner
 
(430,087
)
 

 

 
(430,087
)
Beneficial Unit Certificate holders
 
200,655,786

 

 
6,727,301

 
207,383,087

Unallocated deficit of Consolidated VIEs
 

 
(22,480,214
)
 
(2,555,594
)
 
(25,035,808
)
Total Partners' Capital
 
200,225,699

 
(22,480,214
)
 
4,171,707

 
181,917,192

Noncontrolling interest
 
2,053,739

 

 

 
2,053,739

Total Capital
 
202,279,438

 
(22,480,214
)
 
4,171,707

 
183,970,931

Total Liabilities and Partners' Capital
 
$
428,776,167

 
$
30,207,191

 
$
(45,832,603
)
 
$
413,150,755





Condensed Consolidating Statements of Operations for the three months ended June 30, 2013 and 2012:

 
 Partnership For the Three Months Ended June 30, 2013
 
 Consolidated VIEs For the Three Months Ended June 30, 2013
 
 Consolidation -Elimination For the Three Months Ended June 30, 2013
 
 Total For the Three Months Ended June 30, 2013
Revenues:
 
 
 
 
 
 
 
Property revenues
$
2,731,740

 
$
1,220,306

 
$

 
$
3,952,046

Investment income
4,971,873

 

 
(376,676
)
 
4,595,197

Contingent tax-exempt interest income
6,497,160

 

 

 
6,497,160

Other interest income
96,180

 

 

 
96,180

Total revenues
14,296,953

 
1,220,306

 
(376,676
)
 
15,140,583

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
1,515,316

 
800,009

 

 
2,315,325

Realized loss on taxable property loan
4,557,741

 

 

 
4,557,741

Provision for loan loss
96,000

 

 

 
96,000

Provision for loss on receivables
3,523

 

 

 
3,523

Depreciation and amortization
1,315,322

 
356,550

 
(10,790
)
 
1,661,082

Interest
1,426,349

 
825,466

 
(825,466
)
 
1,426,349

General and administrative
1,141,444

 

 

 
1,141,444

Total expenses
10,055,695

 
1,982,025

 
(836,256
)
 
11,201,464

Income (loss) from continuing operations
4,241,258

 
(761,719
)
 
459,580

 
3,939,119

Income from discontinued operations
166,887

 

 

 
166,887

Net income (loss)
4,408,145

 
(761,719
)
 
459,580

 
4,106,006

Net income attributable to noncontrolling interest
150,846

 

 

 
150,846

Net income (loss) - America First Tax Exempt Investors, L. P.
$
4,257,299

 
$
(761,719
)
 
$
459,580

 
$
3,955,160


 
 Partnership For the Three Months Ended June 30, 2012
 
 Consolidated VIEs For the Three Months Ended June 30, 2012
 
 Consolidation -Elimination For the Three Months Ended June 30, 2012
 
 Total For the Three Months Ended June 30, 2012
Revenues:
 
 
 
 
 
 
 
Property revenues
$
1,656,204

 
$
1,199,745

 
$

 
$
2,855,949

Mortgage revenue bond investment income
2,669,348

 

 
(380,702
)
 
2,288,646

Other interest income
43,427

 

 

 
43,427

Gain on sale of bonds
667,821

 

 

 
667,821

Total revenues
5,036,800

 
1,199,745

 
(380,702
)
 
5,855,843

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
1,013,757

 
731,295

 

 
1,745,052

Provision for loss on receivables
238,175

 

 

 
238,175

Depreciation and amortization
803,858

 
357,661

 
(10,904
)
 
1,150,615

Interest
1,496,970

 
803,693

 
(803,693
)
 
1,496,970

General and administrative
1,048,366

 

 

 
1,048,366

Total expenses
4,601,126

 
1,892,649

 
(814,597
)
 
5,679,178

Income (loss) from continuing operations
435,674

 
(692,904
)
 
433,895

 
176,665

Income from discontinued operations
251,601

 

 

 
251,601

Net income (loss)
687,275

 
(692,904
)
 
433,895

 
428,266

Net income attributable to noncontrolling interest
122,218

 

 

 
122,218

Net income (loss) - America First Tax Exempt Investors, L. P.
$
565,057

 
$
(692,904
)
 
$
433,895

 
$
306,048

 
 
 
 
 
 
 
 
 
 Partnership For the Six Months Ended June 30, 2013
 
 Consolidated VIEs For the Six Months Ended June 30, 2013
 
 Consolidation -Elimination For the Six Months Ended June 30, 2013
 
 Total For the Six Months Ended June 30, 2013
Revenues:
 
 
 
 
 
 
 
Property revenues
$
5,251,478

 
$
2,433,375

 
$

 
$
7,684,853

Mortgage revenue bond investment income
13,066,199

 

 
(754,385
)
 
12,311,814

Contingent tax-exempt interest income
6,497,160

 

 

 
6,497,160

Other interest income
1,341,165

 

 

 
1,341,165

Other income
250,000

 

 

 
250,000

Total revenues
26,406,002

 
2,433,375

 
(754,385
)
 
28,084,992

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
2,838,950

 
1,533,411

 

 
4,372,361

Realized loss on taxable property loan
4,557,741

 

 

 
4,557,741

Provision for loan loss
96,000

 

 

 
96,000

Provision for loss on receivables
241,698

 

 

 
241,698

Depreciation and amortization
2,553,781

 
710,286

 
(21,609
)
 
3,242,458

Interest
2,962,622

 
1,644,629

 
(1,644,629
)
 
2,962,622

   General and administrative
2,111,935

 

 

 
2,111,935

Total expenses
15,362,727

 
3,888,326

 
(1,666,238
)
 
17,584,815

Income (loss) from continuing operations
11,043,275

 
(1,454,951
)
 
911,853

 
10,500,177

Income from discontinued operations (including gain on sale of MF Properties of $1,775,527 in the first quarter of 2013)
2,099,906

 

 

 
2,099,906

Net income (loss)
13,143,181

 
(1,454,951
)
 
911,853

 
12,600,083

  Net income attributable to noncontrolling interest
323,497

 

 

 
323,497

Net income (loss) - America First Tax Exempt Investors, L. P.
$
12,819,684

 
$
(1,454,951
)
 
$
911,853

 
$
12,276,586

 
 
 
 
 
 
 
 
 
 Partnership For the Six Months Ended June 30, 2012
 
 Consolidated VIEs For the Six Months Ended June 30, 2012
 
 Consolidation -Elimination For the Six Months Ended June 30, 2012
 
 Total For the Six Months Ended June 30, 2012
Revenues:
 
 
 
 
 
 
 
Property revenues
$
3,421,695

 
$
2,394,654

 
$

 
$
5,816,349

Investment income
5,422,425

 

 
(762,375
)
 
4,660,050

Other interest income
82,772

 

 

 
82,772

Gain on sale of bonds
667,821

 

 

 
667,821

Total revenues
9,594,713

 
2,394,654

 
(762,375
)
 
11,226,992

Expenses:
 
 
 
 
 
 
 
Real estate operating (exclusive of items shown below)
1,921,092

 
1,439,336

 

 
3,360,428

Provision for loss on receivables
476,350

 

 

 
476,350

Depreciation and amortization
1,522,571

 
713,647

 
(21,836
)
 
2,214,382

Interest
2,765,786

 
1,602,835

 
(1,602,835
)
 
2,765,786

General and administrative
1,698,945