Greystone Housing Impact Investors (GHI) risk factors, 2025 10-K

Risks Related to our Business and Investments

1. 01We are managed by our General Partner and engage in transactions with related parties
2. 02Global economic, political and market conditions, including uncertainty about the financial stability of the United States, could have a significant adverse effect on our business, financial condition and results of operations
3. 03We are subject to various risks associated with our debt investments secured by seniors housing and skilled nursing properties
4. 04There are risks related to the construction of properties underlying our investment assets
5. 05Properties related to our investment assets may not be completely insured against damage from natural disasters
6. 06We are subject to reinvestment risk from maturities and prepayments of our investment assets
7. 10We are managed by our General Partner and engage in transactions with related parties
8. 11We are subject to risks associated with the current interest rate environment, and changes in interest rates may affect our cost of capital and, consequently, our net income and Cash Available for Distribution
9. 12We are subject to risks related to inflation
10. 13Our investment assets are generally illiquid and our valuation estimates are subject to inherent uncertainty
11. 14The market value of our investment assets may be adversely impacted by elevated interest rate levels
12. 15The receipt of contractual interest and principal payments on our debt investments will be affected by the economic results of the secured properties
13. 16The rent restrictions and occupant income limitations imposed on properties securing our MRBs and GILs may limit the revenues of such properties
14. 17There are risks related to the lease-up of newly constructed or renovated properties that may affect our debt investments secured by these properties
15. 18The repayment of principal of our debt investments is principally dependent upon proceeds from the sale or refinancing of the secured properties
16. 19ability to pay contractual debt service on our MRB or property loan investment. Such differences will also impact the availability and cost of debt financing associated with such investments
17. 20There are various risks associated with our JV Equity Investments including, but not limited to, risks normally associated with the ownership of such multifamily real estate, sales or refinancing, third-party property management, and variable interest costs
18. 21There are various risks associated with our commitments to fund investments on a draw-down or forward basis
19. 22If we acquire ownership of properties securing our investment assets through foreclosure or otherwise, we will be subject to all the risks normally associated with the ownership of such properties
20. 23Properties related to our MRB investments and JV Equity Investments are geographically concentrated in certain states
21. 24Our investments in certain asset classes may be concentrated with certain developers and related affiliates
22. 25Recourse guaranties related to our GIL investments and property loans are concentrated in certain entities
23. 26There is risk that a third-party developer that has provided guaranties of preferred returns on our Vantage JV Equity Investments may not perform
24. 27Our reserves for credit losses are based on estimates and may prove inadequate, which could have a material adverse effect on our financial results
25. 28Several of California’s largest property insurance providers have recently paused or severely limited their issuance of new policies, or their renewal of existing policies, in the state, which could increase the Partnership’s risk of loss in its MRB portfolio
26. 29The properties related to our investment assets may be subject to liability for environmental contamination which could increase the risk of default or loss on our investment
27. 30Adverse developments affecting the banking industry, such as actual events or concerns regarding bank failures, liquidity, defaults, or non-performance by financial institutions, could adversely affect our current and projected business operations and our financial condition and results of operations

Risks Related to Debt Financings and Derivative Instruments

1. 07Our investment strategy involves significant leverage, which could adversely affect our financial condition and results of operations
2. 31Our investment strategy involves significant leverage, which could adversely affect our financial condition and results of operations
3. 32Our access to financing sources, which may not be available on favorable terms, or at all, may be limited, and our lenders and derivative counterparties may require us to post additional collateral which may materially impact our financial condition and results of operations
4. 33our retained interest requirements, based on, among other factors, the regulatory environment and the lenders' management of actual and perceived risk
5. 34There are risks associated with debt financing programs that involve securitization of our investment assets
6. 35Changes in interest rates can adversely affect the cost of the asset securitization financing
7. 36Payments on our residual interests are subordinate to payments on the senior securities and to payment of all trust-related fees
8. 37Termination of an asset securitization financing may occur under certain circumstances and could result in the liquidation of the securitized assets resulting in losses
9. 38An insolvency or receivership of the program sponsor could impair our ability to recover the assets and other collateral pledged in connection with bond securitization financings
10. 39We may be required to post additional collateral if the securitized investment assets and related derivative instruments experience declines in value
11. 40There is risk that we will not meet financial covenants, non-financial covenants and risk retention requirements
12. 41We are subject to various risks associated with our derivative agreements
13. 42If a liquid secondary market does not exist for these derivative instruments, we may be required to maintain a derivative position until exercise or expiration, which could result in losses
14. 43If we elect to terminate our derivative instruments prior to the contractual maturity and the fair value is below zero, then we will be required to advance to our counterparty equal to the negative fair value
15. 44We are subject to various risks associated with our secured line of credit arrangements

Risks Related to Ownership of Beneficial Unit Certificates and Preferred Units

1. 08The Partnership’s portfolio investment decisions may create CRA strategy risks
2. 45Cash distributions related to BUCs may change at the discretion of the Partnership’s general partner
3. 46A resurgence of higher than expected inflation may cause the real value of distributions on our BUCs and Preferred Units to decline
4. 47Future issuances of additional BUCs could cause the market value of all outstanding BUCs to decline
5. 48Certain rights of our BUC holders are limited by and subordinate to the rights of the holders of our Preferred Units, and these rights may have a negative effect on the value of the BUCs
6. 49The General Partner has the authority to declare cash distributions related to the Preferred Units
7. 50Holders of Preferred Units may have liability to repay distributions
8. 51We may be required to redeem Preferred Units in the future
9. 52The assets held by the Partnership may not be considered qualified investments under the CRA by the bank regulatory authorities
10. 53Under certain circumstances, investors may not receive CRA credit for their investment in the Preferred Units
11. 54The Preferred Units are subordinated to existing and future debt obligations, and the interests could be diluted by the issuance of additional units, including additional Preferred Units, and by other transactions
12. 55Holders of the Preferred Units may be required to bear the risks of an investment for an indefinite period of time
13. 56Treatment of distributions on our Preferred Units is uncertain
14. 57There is no public market for the Preferred Units, which may prevent an investor from liquidating its investment
15. 58Market interest rates may adversely affect the value of the Preferred Units

Risks Related to Governmental and Regulatory Matters

1. 09Any downgrade, or anticipated downgrade, of U.S. sovereign credit ratings or the credit ratings of the GSEs by the various credit rating agencies may materially adversely affect our business
2. 64We are not registered under the Investment Company Act
3. 65A change in the federal conservatorship of Fannie Mae and Freddie Mac and related efforts, along with any changes in laws and regulations affecting the relationship between Fannie Mae, Freddie Mac, and the U.S. government, may materially adversely affect our business, financial condition and results of operations
4. 66Many aspects of the Partnership’s investment objectives are directly affected by the national and local legal and regulatory environments. Changes in laws, regulations, or the interpretation of regulations could all pose risks to the successful realization of the Partnership’s investment objectives
5. 67We face possible risks associated with the effects of climate change and severe weather
6. 68We are increasingly dependent on information technology, and potential disruption, cyber-attacks, security issues, and expanding social media vehicles present new risks
7. 69Developments related to artificial intelligence could result in reputational or competitive harm, legal liability, and other adverse effects on our business

Risks Related to Income Taxes

1. 59Income from various investments is subject to taxation
2. 60There are limits on the ability of our Unitholders to deduct Partnership losses and expenses allocated to them
3. 61Unitholders may incur tax liability if any of the interest on our MRB or GIL investments is determined to be taxable
4. 62If we are determined to be an association taxable as a corporation, it will have adverse economic consequences for us and our Unitholders
5. 63Certain income may be considered UBTI for certain tax-exempt or tax-deferred owners of BUCs and Preferred Units