Greystone Housing Impact Investors LP Q2 FY2025 earnings call

• Portfolio overview: No forbearance requests for multifamily mortgage revenue bonds, borrowers current on payments; stabilized mortgage revenue bond portfolio occupancy 88.4% as of June 30, 2025. Advanced funds to borrowers under debt investments. Vantage joint venture equity investments: 5 properties, 4 with completed construction, 1 site evaluated; Freestone Development Group JV: 4 projects, progress on construction and leasing. Valage Senior Living Carson Valley received occupancy certificate, 49% occupied; Jessam at Hays Farm approaching construction completion.
• Financial results: GAAP net loss of $7.1 million or $0.35 per unit; cash available for distribution (CAD) was positive $5.7 million or $0.25 per unit. Provision for credit losses of $9.1 million related to 3 nonprofit owner mortgage revenue bonds in SC. Unrealized losses on interest rate swaps of $2.1 million due to market interest rate movements. Book value per unit as of June 30 was $11.83, down from $12.59 on March 31.
• Market and investment pipeline: Continued underperformance of muni bond market in 2025; elevated new supply with Barclays forecasting $175 - $200 billion net new issuance in 2025. New construction lending joint venture with BlackRock received an additional $60 million capital commitment in July.

The debt investments portfolio, consisting of mortgage revenue bonds, governmental issuer loans and property loans, totaled $1.26 billion as of June 30, which is 85% of total assets. During the second quarter, approximately $41 million of mortgage revenue bond, governmental issuer loan and related commitments were funded, and redemptions and paydowns of approximately $64 million occurred. One governmental issuer loan and one taxable governmental issuer loan were sold to the construction lending joint venture with BlackRock. Outstanding future funding commitments for these investments were $26.3 million as of June 30. The market rate joint venture equity investments portfolio had 10 properties as of June 30 with a carrying value of approximately $154 million. Remaining funding commitments for JV equity investments were $19.5 million. The Vantage at Helotes property was sold in May 2025, with proceeds of $17.1 million received.

• For the joint venture with BlackRock, historically, the pace of deployment picks up in the second half of the year as states have a better handle on private activity volume cap for low-income housing tax credit projects.

• Credit risk: Provision for credit losses of $9.1 million due to properties in SC not meeting underwritten levels. - Interest rate risk: Unrealized losses on interest rate swaps of $2.1 million due to market rate movements, but expected minimal impact on net cash flows. - Market supply risk: Elevated new supply of munis may impact performance.

Q: Matthew Erdner asks about why muni bonds underperformed and fundamental drivers.

A: Ken says elevated new supply, investment demand gap, and overhangs in high-yield market like Brightline train and American Dream mall issues.

Q: Chris Muller asks about BlackRock JV and Vantage projects.

A: Ken says JV strategy similar to historical mortgage revenue bond work, Vantage additional capital contributions due to property taxes before sale, no change in ownership interest.

Q: Unidentified Analyst asks about interest rate hedges and multifamily demand.

A: Ken says hedging strategy likely remains net neutral in rate changes; for multifamily, muted but continued activity in investment space, good leasing at projects in lease-up.