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NOTES AND INTEREST RECEIVABLE
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
NOTES AND INTEREST RECEIVABLE
NOTE 5. 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 June 30, 2020 (dollars in thousands):

 

    Maturity     Interest              
Borrower   Date     Rate     Amount     Security  
Performing loans:                            
Prospectus Endeavors 4, LLC   01/23       12.00 %     5,907     Secured  
Prospectus Endeavors 6, LLC   10/22       12.00 %     496     Secured  
Oulan-Chikh Family Trust   03/21       8.00 %     174     Secured  
H198, LLC (McKinney Ranch Land)   09/20       6.00 %     4,554     Secured  
Forest Pines Phase I   11/20       5.00 %     2,869     Secured  
Spyglass Apartments of Ennis, LP   11/20       5.00 %     5,336     Secured  
Bellwether Ridge   11/20       5.00 %     3,855     Secured  
Parc at Windmill Farms   11/20       5.00 %     7,929     Secured  
Autumn Breeze   10/21       5.00 %     1,638     Secured  
Plum Tree   10/21       5.00 %     658     Secured  
Parc at Ingleside   12/21       5.00 %     2,181     Secured  
RNC Revolving Line of Credit   09/24       5.00 %     8,853     Secured  
Steeple Crest   10/20       5.00 %     6,665     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 %     1,953     Secured  
Unified Housing Foundation, Inc. (Limestone Ranch) (1)   12/32       12.00 %     2,000     Secured  
Unified Housing Foundation, Inc. (Limestone Ranch) (1)   12/32       12.00 %     4,000     Secured  
Unified Housing Foundation, Inc. (Timbers of Terrell) (1)   12/32       12.00 %     1,323     Secured  
Unified Housing Foundation, Inc. (1)   12/21       12.00 %     10,401     Unsecured  
Unified Housing Foundation, Inc. (1)   03/21       12.00 %     5,314     Unsecured  
Unified Housing Foundation, Inc. (1)   03/22       12.00 %     4,782     Unsecured  
Unified Housing Foundation, Inc. (Lakeshore Villas) (1)   07/21       12.00 %     838     Secured  
Unified Housing Foundation, Inc. (Limestone Ranch) (1)   07/21       12.00 %     773     Secured  
Unified Housing Foundation, Inc. (Marquis at Vista Ridge) (1)   07/21       12.00 %     839     Secured  
Unified Housing Foundation, Inc. (Timbers at the Park) (1)   07/21       12.00 %     432     Secured  
Unified Housing Foundation, Inc. (Bella Vista) (1)   08/21       12.00 %     212     Secured  
Unified Housing Foundation, Inc. (1)   03/23       12.00 %     61     Unsecured  
Unified Housing Foundation, Inc. (1)   03/23       12.00 %     1,482     Unsecured  
Unified Housing Foundation, Inc. (1)   03/23       12.00 %     4,792     Unsecured  
Unified Housing Foundation, Inc. (1)   03/23       12.00 %     716     Unsecured  
Unified Housing Foundation, Inc. (1)   03/23       12.00 %     317     Unsecured  
Unified Housing Foundation, Inc. (1)   05/23       12.00 %     3,615     Unsecured  
Unified Housing Foundation, Inc. (1)   10/21       12.00 %     6,831     Unsecured  
Other related party notes   Various       Various       4,078     Various secured interests  
Other non-related party notes   Various       Various       11,724     Various secured interests  
Accrued interest                   10,041        
Total Performing                 $ 137,489        
Allowance for estimated losses                   (1,825 )      
Total                 $ 135,664        

 

(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 June 30, 2020, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $66.3 million and recognized interest income of $3.5 million related to these notes receivables. During the quarter just ended, the Company collected $3.2 million and purchased from a related party $10.9 million of notes receivables with an interest rate of 12% and maturity date of March 2023.

 

The Company has various notes receivable from Unified Housing foundation, Inc. (“UHF”). UHF is determined to be a related party due to our significant investment in the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow from operations, sale or refinancing of the underlying properties. These notes are cross collateralized to the extent that any surplus cash available from any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes. Furthermore, any surplus cash available from any of the properties UHF owns, besides the properties underlying these notes, can be used to repay outstanding interest and principal for these notes. The allowance on the notes was a purchase allowance that was netted against principal balance at the time of the acquisition.