NOTES AND INTEREST RECEIVABLE

3 Months Ended

Mar. 31, 2018

Receivables [Abstract]

NOTES AND INTEREST RECEIVABLE

NOTE 4. NOTES AND INTEREST RECEIVABLE

A portion of our assets are invested in mortgage notes receivable, principally secured by real estate. We may originate mortgage loans in conjunction with providing purchase money financing of property sales. Notes receivable are generally collateralized by real estate or interests in real estate and guarantees, unless noted otherwise, are so secured. Management intends to service and hold for investment the mortgage notes in our portfolio. A majority of the notes receivable provide for principal to be paid at maturity. Below is a summary of our notes receivable as of March 31, 2018 (dollars in thousands):

Borrower	Maturity Date	Interest  Rate			Amount		Collateral
Performing loans:
H198, LLC (Las Vegas Land)	01/20		12.00	%	$	5,907	Secured
H198, LLC (McKinney Ranch Land)	09/18		6.00	%		4,558	Secured
Oulan-Chikh Family Trust	03/21		8.00	%		174	Secured
Spyglass Apartments of Ennis LP	11/19		5.00	%		4,638	Secured
D4DS, LLC	05/20		5.00	%		3,027	Secured
Parc at Windmill Farms	05/20		5.00	%		4,777	Secured
Unified Housing Foundation, Inc. (Echo Station) (1)	12/32		12.00	%		1,481	Secured
Unified Housing Foundation, Inc. (Lakeshore Villas) (1)	12/32		12.00	%		2,000	Secured
Unified Housing Foundation, Inc. (Lakeshore Villas) (1)	12/32		12.00	%		6,369	Secured
Unified Housing Foundation, Inc. (Limestone Ranch) (1)	12/32		12.00	%		6,000	Secured
Unified Housing Foundation, Inc. (Limestone Ranch) (1)	12/32		12.00	%		1,953	Secured
Unified Housing Foundation, Inc. (Timbers of Terrell) (1)	12/32		12.00	%		1,323	Secured
Unified Housing Foundation, Inc. (Tivoli) (1)	12/32		12.00	%		6,140	Secured
Unified Housing Foundation, Inc. (1)	12/18		12.00	%		3,994	Unsecured
Unified Housing Foundation, Inc. (1)	12/18		12.00	%		6,407	Unsecured
Unified Housing Foundation, Inc. (1)	06/20		12.00	%		5,760	Unsecured
Unified Housing Foundation, Inc. (1)	03/21		12.00	%		5,314	Unsecured
Other related party notes (1)	Various		Various			6,894	Various unsecured interests
Other non-related party notes	Various		Various			796	Various secured interests
Other non-related party notes	Various		Various			981	Various unsecured interests
Accrued interest						4,849
Total Performing					$	83,342

⁽¹⁾ Related party notes

We invest in mortgage loans, secured by mortgages that are subordinate to one or more prior liens either on the fee or a leasehold interest in real estate. Recourse on such loans ordinarily includes the real estate on which the loan is made, other collateral and guarantees.

At March 31, 2018, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $83.3 million. We recognized interest income of $2.1 million related to these notes receivables for the three months ending March 31, 2018.

The Company has various notes receivable from Unified Housing Foundation, Inc. (“UHF”) and Foundation for Better Housing, Inc. (“FBH”). UHF and FBH are determined to be related parties due to our reliance upon the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow of operations of the properties. A sale or refinance of any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes for the specific borrower. These notes are cross-collateralized for the specific borrower, but to the extent cash is received from a specific UHF or FBH property, it is applied first against any outstanding interest for the related-property note. The allowance on the UHF notes was a purchase allowance that was netted against the notes when acquired.