Business Context and Reporting Period
This Form 8-K Current Report, dated December 31, 2025, details a material definitive agreement entered into by Greystone Housing Impact Investors LP (the "Partnership") and its subsidiaries. The filing reports on a new loan facility executed on December 31, 2025, with funding released on January 2, 2026, to finance the acquisition of multifamily residential properties.
Key Financial Metrics and Transaction Details
- Total Loan Facility: Up to $84,000,000.
- Initial Funding: $42,000,000 advanced on December 31, 2025, and released on January 2, 2026.
- Remaining Capacity: $42,000,000 available for future advances on or before March 15, 2026, subject to syndication and conditions.
- Interest Rate: One-month Term SOFR plus 2.75%, resetting monthly.
- Default Interest Rate: 5% higher than the applicable rate or the maximum permitted by law.
- Initial Maturity: December 31, 2027 (extendable to December 31, 2028).
- Transaction Fees: $252,000 origination fee and $78,000 arrangement/agency fees paid upon execution.
- Collateral: Pledges of ownership interests, mortgages, and assignments of leases/rents for the acquired properties.
Material Changes and Transaction Background
The Partnership acquired two properties, The Park at Sondrio Apartments (271 units) and The Park at Vietti Apartments (204 units), via a deed in lieu of foreclosure on January 2, 2026. These properties were previously owned by Opportunity South Carolina and held as collateral for mortgage revenue bond investments. The acquisition was necessitated by events of default in January 2026 due to the properties' inability to achieve operating results required under the bond documents. The new loan proceeds were used to finance this acquisition.
Guidance, Covenants, and Risks
Financial Covenants (Borrower):
- Debt Service Coverage Ratio (DSCR) of 1.00:1.00 required as of December 31, 2026.
- DSCR of 1.10:1.00 required as of June 30, 2027.
- Failure to meet ratios triggers mandatory partial prepayment, cash posting, or letter of credit requirements.
Financial Covenants (Partnership Guaranty):
- Liquid assets of not less than $6,250,000 (or $7,500,000 if requested).
- Net worth of not less than $200,000,000.
Financial Covenants (GSI Affiliate Guaranty):
- Total liquidity of not less than $30,000,000.
- Total net worth of not less than $370,000,000.
- Leverage ratio of no greater than 4.50:1.00.
Risks and Contingencies:
- Interest Rate Risk: The loan bears a floating rate based on Term SOFR, though the Borrower is required to execute swap agreements to hedge this exposure.
- Default Remedies: Upon an event of default, the Administrative Agent may declare all sums immediately due and payable and exercise remedies including taking possession of collateral.
- Forward-Looking Statements: The filing notes risks related to interest rate fluctuations, collateral valuations, and the ability to refinance.
Investor Verification Checklist
- Verify the status of the $42,000,000 remaining loan capacity and the timeline for syndication by March 15, 2026.
- Confirm the execution and terms of the required interest rate swap agreements to hedge the floating rate exposure.
- Monitor the Borrower's ability to meet the 1.00:1.00 DSCR covenant by December 31, 2026, given the properties' prior operating difficulties.
- Review the Partnership's and GSI's quarterly financial statements to ensure compliance with the $6.25M/$30M liquidity and $200M/$370M net worth covenants.
- Assess the impact of the $330,000 in upfront transaction fees on the Partnership's immediate cash flow.