Greystone Housing Impact Investors LP Q1 FY2026 earnings call

Strategic Portfolio Repositioning

• Core strategy: Exit all remaining market rate multifamily JV equity investments to maximize unit holder value, then reinvest proceeds into high-quality tax-exempt mortgage revenue bond (MRB) investments.
• Expected benefits of repositioning:
  • More stable recurring earnings, compared to uneven JV equity returns that are only realized primarily upon property sales
  • Long-term increase in the share of tax-exempt income allocated to unit holders for federal income tax purposes
  • Investment in a proven core asset class that leverages Greystone's existing lending relationships and industry expertise
• Management acknowledges full portfolio repositioning will take time, and expects reinvestment of JV sale proceeds will increase long-term recurring earnings.

JV Equity Investment Update

• 8 completed construction market rate multifamily JV investments are currently either in lease-up or stabilized; overall occupancy is rising for lease-up assets, with variable occupancy among stabilized assets driven by local market conditions.
• 2 potential development sites are under evaluation by JV partners, who may opt to sell the land and terminate GHI's remaining funding commitments.
• In April 2026, GHI received $18 million in net capital return from the sale of two completed projects to Freddie Mac.

Debt Investment Portfolio Update

• Two California governmental issuer loan investments (totaling $90 million) redeemed at par in April 2026, with a third expected to redeem at par in late May 2026.
• GHI completed the deed-in-lieu of foreclosure process for four South Carolina MRB properties in Q1 2026, and now owns the properties directly with new first mortgage financing from a group of two banks. A third-party property manager operates the assets under GHI oversight, with support from Greystone's corporate asset management team.
• Total outstanding debt financing was $927 million as of March 31 2026, a $92 million decrease from December 31 2025. 76% of total debt is structured to insulate net returns from short-term interest rate changes, with only 24% unhedged, most of which is tied to assets maturing in 2026.

Liquidity and Interest Rate Positioning

• As of March 31 2026, GHI held $20.6 million in unrestricted cash and cash equivalents, with $40 million in available secured line of credit capacity. Additional liquidity will come from assets maturing in the remainder of 2026 and potential future JV equity sales. Management confirms GHI is well-positioned to meet all current funding commitments.
• GHI is largely hedged against interest rate volatility: an immediate 100bps increase or decrease in rates would change net interest income and CAD by only $736,000 (3.2 cents per unit), assuming no major credit issues.

Market Conditions

• The U.S. municipal bond market performed well through the first four months of 2026, with steady fund inflows and improving secondary market liquidity. Muni yield ratios have improved since the last earnings call, though rates remain slightly elevated from year-end due to inflation uncertainty tied to the Middle East conflict.

1. Debt Investment Portfolio (Mortgage Revenue Bonds, Governmental Issuer Loans, Property Loans): Total portfolio value of $1.17 billion as of March 31, 2026, accounting for 79% of GHI's total assets. This segment includes 80 mortgage revenue bonds across 12 states and 4 governmental issuer loans. All investments were current on principal and interest payments as of March 31. Physical occupancy for the stabilized portfolio was 85.9%, a slight decline from 86.7% at December 31, 2025. GHI recorded a $2.1 million recovery of prior credit loss provisions and a $2.2 million gain on the deed-in-lieu of foreclosure for four South Carolina mortgage revenue bond properties.
2. Market Rate Multifamily JV Equity Investments: GHI reported a proportionate share of losses of approximately $4.9 million (21 cents per diluted unit) from these investments in Q1 2026. 39% ($1.9 million) of these losses came from depreciation and amortization, with the remainder from interest and operating expenses exceeding lease-up revenue. Total remaining funding commitments for this segment were $19.5 million as of March 31, 2026, all tied to potential development sites.
3. Market Rate Seniors Housing JV Equity Investments: GHI holds two investments in this segment in Nevada, with an outstanding funding commitment of approximately $7 million for the Bellagio Mount Rose project. Total firm-wide Q1 2026 results: GAAP net income of $1.3 million (1 cent per basic/diluted unit); non-GAAP cash available for distribution (CAD) of $3.1 million (13 cents per unit); diluted book value per unit of $11.30 as of March 31, 2026.

Management did not release formal numerical full-year or next-quarter guidance. Key forward-looking statements include:

• Stabilized occupancy for the MRB portfolio is expected to recover as new multifamily supply is absorbed and deliveries slow in the near term.
• The proportionate share of JV equity investment losses is expected to decline over time as lease-up progresses through the 2026 spring peak leasing season, boosting property revenues.
• Capital from JV equity sales is expected to be redeployed into new tax-exempt MRB investments quickly after receipt, growing long-term recurring earnings.
• GHI has roughly one year to improve the performance of the foreclosed South Carolina properties before the first debt service coverage covenant test in early 2027.

• Local market supply and demand fluctuations can lead to variable occupancy and rent levels for both stabilized market rate JV properties and MRB-financed affordable properties, most recently seen in Texas.
• GHI has limited control over the timing of JV equity investment exits, as sale decisions are made by JV managing partners.
• 24% of GHI's outstanding debt is unhedged variable-rate debt tied to fixed-rate assets, creating near-term interest rate risk, though 83% of this unhedged exposure is tied to assets maturing in 2026, limiting the duration of exposure.
• The foreclosed South Carolina properties require debt service coverage covenants in 2027; failure to meet covenants would require a principal paydown, though covenant levels are currently very low (1x debt service coverage for the first test), giving GHI time to improve performance.
• Inflation uncertainty tied to the ongoing Middle East conflict has kept muni rates slightly elevated relative to year-end levels.
• GHI's unit price trades at a 55% discount to its March 31 2026 net book value per diluted unit.

Q: What is the current status of the 8 completed construction market rate JV properties, and what is the expected timeline for monetization? / A: Four of the 8 properties are currently at or near stabilized occupancy, while the other four remain in active lease-up. Peak leasing season is spring and early summer, and GHI is seeing strong leasing velocity at many lease-up properties. Exit timing is controlled by GHI's JV partners, but management expects to evaluate potential monetization of all stabilized assets alongside JV partners as peak leasing season progresses in 2026.

Q: What are the financing terms and covenant risks for the four foreclosed South Carolina properties? / A: The properties are secured by a single $84 million full-recourse mortgage from two banks, with a 10% partial guarantee from a Greystone affiliate to secure better financing terms. Debt service coverage covenants are scheduled for early and mid-2027, with the first test set at a very low 1x T3 debt service coverage, giving GHI roughly a year to improve property performance before any potential covenant exposure. Recourse exposure is unchanged from the prior financing structure.

Q: What are the expected near-term capital expenditures and earnings impact of the South Carolina properties, and is $1.9 million quarterly depreciation a good run rate for future JV losses? / A: Management is still evaluating CapEx needs with the new property manager, but the original MRB investment already included $2-$3 million of rehab per property completed in 2022-2023, so no major unplanned rehab is expected. The $1.9 million quarterly depreciation run rate is stable for the current portfolio of operating JV investments, but total proportional JV losses will decline as lease-up progresses and property revenues increase.

Q: What was GHI's diluted book value per unit as of Q1 2026? / A: Diluted book value per unit was $11.30 as of March 31, 2026.