Greystone Housing Impact Investors LP Q1 FY2025 earnings call

• Portfolio Overview: No forbearance requests for multifamily mortgage revenue bonds, with all borrowers current on payments. Physical occupancy of the stabilized mortgage revenue bond portfolio was 89.5% as of March 31, 2025. Funds advanced to borrowers as per commitments. Vantage joint venture equity investments: Properties sold, refinancings completed to lower interest rates. Freestone Development Group joint ventures: Progress on various projects, with some completed construction, others in progress. Valage Senior Living Carson Valley received a certificate of occupancy and is set to open soon, while Jessam at Hays Farm is nearing construction completion and leasing activities. • Financial Results: GAAP net income was $3.3 million, or $0.11 per unit basic and diluted. Cash available for distribution (CAD) was $7.1 million, or $0.31 per unit. Impacted by non-cash unrealized losses on interest rate derivatives and investment income from preferred return. Book value per unit was $12.59, with an 8% discount to the market close price on May 6. • Market Conditions: The U.S. municipal bond market underperformed in Q1 2025, with investment-grade tax-exempt bonds being the worst-performing fixed income asset class. MMD rates for 10-year and 30-year bonds increased, and market supply and fund flows were discussed. • Investment Pipeline: Joint venture with BlackRock for construction lending, capitalizing on the pullback in affordable housing construction lending by commercial banks.

The debt investment portfolio consists of mortgage revenue bonds, governmental issuer loans, and property loans totaling $1.29 billion as of March 31, 2025, which accounts for 84% of total assets. The joint venture equity investments portfolio had a reported carrying value of approximately $168 million as of March 31, 2025, exclusive of one investment. During the first quarter, $60.6 million was funded for mortgage revenue bond, governmental issuer loan, and related investments, and approximately $113 million in redemptions and paydowns occurred. Unrestricted cash and cash equivalents stood at $51.4 million as of March 31, 2025, a significant increase from $14.7 million at the end of the previous year.

• Well-positioned to fund current financing commitments with $51.4 million in unrestricted cash and $41.5 million available on secured lines of credit. • Funding commitments for debt investments, totaling approximately $52 million, are expected to be funded over approximately 12 months, with redemption proceeds from nearing-maturity construction financing redeployed. • Pursuing additional issuances of Series B preferred units.

• Market Volatility: The municipal bond market has experienced underperformance, affecting valuations. • Interest Rate Changes: Exposure to fixed rate assets with variable rate debt not hedged, particularly for balances maturing in the second half of 2025. • Legislative/Regulatory Shifts: Potential impacts on muni credit ratings and valuations from proposed shifts in federal to state/local government funding, as seen with proposals like elimination of community development block grant. • Insurance Costs: Impact on sale gains, as seen with the Tomball asset where insurance costs increased significantly.

Q: Are any proposed shifts from federal to state to local governments likely to affect muni credit ratings and valuations?

A: Ken states it is early in the process, with proposals such as elimination of the community development block grant and potential Section 8 funding shift; these remain to be seen through the congressional process.

Q: How have tariffs changed thinking on the BlackRock JV near term given impact on construction costs?

A: Ken indicates no significant impact seen in current pipeline deals as sponsors have not adjusted pro formas yet; some deals are less affected by tariffs.

Q: General size of the BlackRock JV pipeline?

A: Jesse mentions approximately $83 million in committed capital to the joint venture, with an aim to deploy $450 million in lending capacity within 12-18 months.

Q: Gains on JV sales lower than prior years, any other factors besides insurance?

A: Ken mentions multifamily market pressures and delayed sale timelines due to cap rate expectations not changing significantly.

Q: How is partner Vantage holding up with lower profitability?

A: Ken states Vantage's model includes developer fees, with interests aligned with maximizing returns, and there is no concern on the continued partnership.

Q: ROE on the Helotes sale bonds?

A: Ken provides details on bond purchases but notes leverage terms are not finalized yet, with plans to follow up once TOB funding occurs.