NOTES AND INTEREST PAYABLE

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

NOTES AND INTEREST PAYABLE

NOTE 6. NOTES AND INTEREST PAYABLE

Below is a summary of our notes and interest payable as of December 31, 2015 (dollars in thousands):

	Notes Payable			Accrued Interest		Total Debt
Apartments	$	507,498		$	1,499	$	508,997
Apartments under construction	$	11,139		$	—		11,139
Commercial		109,269			509		109,778
Land		32,818			116		32,934
Real estate subject to sales contract		5,953			469		6,422
Mezzanine financing		122,900			—		122,900
Other		7,269			—		7,269
Total	$	796,846		$	2,593	$	799,439
Unamortized deferred borrowing costs		(20,005	)		—		(20,005	)
	$	776,841		$	2,593	$	779,434

The following table schedules the principal payments on the notes payable for the next five years and thereafter (dollars in thousands):

Year	Amount
2016	$	79,526
2017		23,581
2018		43,890
2019		34,623
2020		127,370
Thereafter		487,856
Total	$	796,846

Interest payable at December 31, 2015 was $2.6 million. Interest accrues at rates ranging from 2.5% to 12.0% per annum and mature between 2016 and 2055. The mortgages were collateralized by deeds of trust on real estate having a net carrying value of $667 million.

During the year the Company refinanced or modified ten loans with a total principal balance of $136 million. The refinancing resulted in lower interest rates and the extension of the term of the loan. The modifications resulted in lower interest rates. The transactions provide for lower monthly payments over the term of loans.

On May 28, 2015, the Company secured additional financing of $120.0 million from an independent third party. At closing $84.4 million was advanced to the Company. The financing can be used for general corporate purposes, acquisition of multi-family apartment complexes and to reduce debt. The note has a term of five years at an interest rate of 30 day Libor plus 10.75%. The note is interest only, payable monthly, with the principal due at the end of the five years. The loan is secured by various equity interests in certain residential apartments. In November 2015 the note was amended to cap the loan amount at $84.4 million in order to allow for a construction loan of $50 million on an apartment complex being developed in Rowlett, Texas. All other terms and conditions of the loan remained the same.

The note contains customary restrictions, representations, covenants, corporate and officer guarantees, events of default and require the Company to meet certain financial covenants. The Company believes it is in compliance with these financial covenants at December 31, 2015.

Simultaneous with the closing of the above financing, the Company amended its existing financing of $40.0 million from an independent third party. The note has a term of five years at an interest rate of 12.0% and has a maturity of May 2020. The note is interest only for the first year with quarterly principal payments due of $0.5 million starting April 1, 2015. As of December 31, 2015, the outstanding balance on the loan was $38.5 million. The loan is secured by various equity interests in residential apartments and can be prepaid at a penalty rate of 4% for year 1 with the penalty declining by 1% each year thereafter. The note contains customary restrictions, representations, covenants, corporate and officer guarantees, events of default and require the Company to meet certain financial covenants. The Company believes it is in compliance with these financial covenants at December 31, 2015.

There are various land mortgages, secured by the property, that are in the process of a modification or extension to the original note due to expiration of the loan. We are in constant contact with these lenders, working together in order to modify the terms of these loans and we anticipate a timely resolution that is similar to the existing agreement or subsequent modification.

In conjunction with the development of various apartment projects and other developments, we drew down $9.9 million in construction loans during the twelve months ended December 31, 2015.