Supplemental Financial Report for

Quarter Ended June 30, 2017

Pages

Supplemental Letter from the CEO

4

Quarterly Fact Sheet

5

Financial Performance Trend Graphs

6-11

Other Partnership Information

12

Partnership Financial Statements

13-15

Partnership Financial Measures and Schedules

16-20

•

Sold one parcel of Land held for development for $3.0 million,

•

Invested approximately $1.6 million in Investment in unconsolidated entities,

•

Increased the maximum amount of ATAX’s Line of Credit to $10 million and extended its maturity to May 2019,

•

Extended the maturity of ATAX’s $50 million Unsecured Line of Credit to May 2019, and

•

Extended the maturity of two MF Property mortgage loans of approximately $7.2 million to June 2019.

•

Total revenue increased approximately 8.7% to $16.2 million, compared to $14.9 million in the second quarter of 2016, and

•

Total assets increased to $1.02 billion at June 30, 2017, compared to $944.1 million at December 31, 2016.

4

PARTNERSHIP DETAILS

We were formed for the primary purpose of acquiring a portfolio of mortgage revenue bonds (“MRBs”) that are issued to provide construction and/or permanent financing of multifamily residential properties.  We continue to expect most of the interest paid on these MRBs is excludable from gross income for federal income tax purposes. We continue to pursue a business strategy of acquiring additional MRBs and other investments on a leveraged basis.  We also invest in other securities which, if not secured by a direct or indirect interest in a property, must be rated in one of the four highest rating categories by at least one nationally recognized securities rating agency.  We have also acquired interests in multifamily apartments (“MF Properties”) in order to position ourselves for future investments in mortgage revenue bonds issued to finance these properties.  In addition, we have invested in equity interests of multifamily, market rate, projects throughout the U.S.

(As of June 30, 2017)

Symbol (NASDAQ)

ATAX

Annual Distribution

$

0.50

Price

$

5.95

Yield

8.4%

Units Outstanding (including Restricted Units)

60,252,928

Market Capitalization

$

358,504,922

52-week Unit price range

$5.30 to $6.09

Partnership Financial Information for the Q2 2017

(amounts in thousands, except per Unit)

Total Revenue

$

16,234

Net Income – ATAX Partnership

$

4,109

Total Assets

$

1,024,827

Ratio of Debt to Total Assets at Par and Cost

66%

Cash Available for Distribution (“CAD”)¹

$

5,886

Distribution Declared per unit²

$

0.125

¹

Management utilizes a calculation of Cash Available for Distribution (“CAD”) to assess the Partnership’s operating performance. This is a non-GAAP financial measure and a reconciliation of our GAAP net income to its CAD is provided on page 16 of the Supplement herein.

²

The most recent distribution was paid on July 31, 2017 for Unitholders of record as of June 30, 2017. The distribution is payable to Unitholders of record as of the last business day of the quarter end and ATAX trades ex-dividend two days prior to the record date, with a payable date of the last business day of the subsequent month.

5

•

Total mortgage revenue bonds, core assets of ATAX, have increased to 75% of Total Assets at June 30, 2017, from 35% of Total Assets at December 31, 2012.

6

7

¹

Total outstanding debt divided by total assets using the carrying value of the MRBs, PHC Certificates, initial finance costs and the MF Properties at cost.

8

•

During the second quarter of 2017, we recognized contingent interest of approximately $87,000,

•

During the first quarter of 2017, we recognized a gain on the sale of Northern View (an MF Property) of approximately $3.2 million, net of income taxes and Tier 2 income paid to the general partner, and before direct and indirect expense, and contingent interest of approximately $133,000,

•

During the fourth quarter of 2016, we recognized contingent interest of approximately $1.7 million,

•

During the third quarter of 2016, we recognized a gain of approximately $1.1 million, net of tax, on the sale of Woodland Park, an MF Property, and contingent interest of $90,000,

•

During the second quarter of 2016, we recognized a gain of approximately $8.3 million, net of tax, on the sale of the Arboretum, an MF Property, and contingent interest income of approximately $45,000,

•

During the first quarter of 2016, we recognized contingent interest income of approximately $174,000,

•

During the fourth quarter of 2015, we recognized contingent interest and note interest income of approximately $6.2 million from the sale of the Consolidated VIEs, and

•

During the third quarter of 2015, we recognized a gain of approximately $1.2 million on the sale of Glynn Place, an MF Property.

9

•

Since September 30, 2015, the ratio of “Salaries and benefits” and “General and administrative” expenses has averaged approximately 0.47% of Total Assets.

10

•

In 2017, we realized approximately $219,000 of contingent interest, of which $55,000 was due to the General Partner.  In addition, we reported the sale of Northern View, which resulted in a gain of approximately $4.3 million, net of tax, of which approximately $1.1 million was due to the General Partner.  There was approximately $3.3 million that was allocated to the Unitholders.

•

In 2016, we realized approximately $2.0 million of contingent interest, of which $505,000 was due the General Partner. In addition, we reported the sale of the Arboretum and Woodland Park which resulted in gains of approximately $8.3 million and $1.1 million, respectively, net of tax, of which approximately $2.4 million was due the General Partner.  There was approximately $8.6 million that was allocated to the Unitholders.

•

In 2015, we realized approximately $4.8 million of contingent interest, of which approximately $1.2 million was due the General Partner. In addition, we reported the sale of Glynn Place and The Colonial which resulted in gains of approximately $1.2 million and $3.4 million, respectively, of which approximately $297,000 and $854,000, respectively, was due the General Partner. There was approximately $7.0 million that was allocated to the Unitholders.

11

OTHER PARTNERSHIP INFORMATION

Corporate Office:

Transfer Agent:

1004 Farnam Street

American Stock Transfer & Trust Company

Suite 400

59 Maiden Lane

Omaha, NE  68102

Plaza Level

Phone:

402-444-1630

New York, NY 10038

Investor Services:

402-930-3098

Phone: 718-921-8124

K-1 Services:

855-4AT-AXK1

888-991-9902

Fax:

402-930-3047

Fax:718-236-2641

Web Site:

www.ataxfund.com

K-1 Services Email:

k1s@ataxfund.com

Ticker Symbol:

ATAX

Corporate Counsel:

Independent Accountants:

Barnes & Thornburg LLP

PwC

11 S. Meridian Street

1 North Wacker Drive

Indianapolis, IN 46204

Chicago, Illinois 60606

Burlington Capital LLC, General Partner of the General Partner for ATAX

Board of Managers

Michael B. Yanney

Chairman Emeritus of the Board

Lisa Y. Roskens

Chairman of the Board

Mariann  Byerwalter

Manager

Dr. William S. Carter

Manager

Patrick J. Jung

Manager

George  Krauss

Manager

Dr. Gail Yanney

Manager

Walter K. Griffith

Manager

Senator Michael Johanns

Manager

Corporate Officers

Chief Executive Officer – Chad L. Daffer

Chief Financial Officer – Craig S. Allen

12

Partnership Financial

Statements and Information

Schedules

June 30, 2017

December 31, 2016

Assets

Cash and cash equivalents

$

15,371,898

$

20,748,521

Restricted cash

6,641,289

6,757,699

Interest receivable

6,397,508

6,983,203

Mortgage revenue bonds, held in trust

741,181,807

590,194,179

Mortgage revenue bonds

26,947,851

90,016,872

Public housing capital fund trusts

55,791,371

57,158,068

Real estate assets:

Land and improvements

10,729,217

17,354,587

Buildings and improvements

105,178,529

113,089,041

Real estate assets before accumulated depreciation

115,907,746

130,443,628

Accumulated depreciation

(16,367,265

)

(16,217,028

)

Net real estate assets

99,540,481

114,226,600

Investment in equity interests

31,950,493

19,470,006

Property loans, net

31,603,970

29,763,334

Other assets

9,400,100

8,795,192

Total Assets

$

1,024,826,768

$

944,113,674

Liabilities

Accounts payable, accrued expenses and other liabilities

$

7,197,103

$

7,255,327

Distribution payable

7,623,425

8,017,950

Unsecured lines of credit

-

40,000,000

Secured line of credit, net

-

19,816,667

Debt financing, net

597,465,241

495,383,033

Mortgages payable and other secured financing, net

50,778,452

51,379,512

Derivative swaps

1,283,437

1,339,283

Total Liabilities

664,347,658

623,191,772

Redeemable preferred units

56,894,600

40,788,034

Partners' Capital

General Partner

351,751

102,536

Beneficial Unit Certificate holders

303,232,759

280,026,669

Total Partners' Capital

303,584,510

280,129,205

Noncontrolling interest

-

4,663

Total Capital

303,584,510

280,133,868

Total Liabilities and Partners' Capital

$

1,024,826,768

$

944,113,674

14

For The Three Months Ended June 30, 2017

For The Three Months Ended June 30, 2016

For The Six Months Ended June 30, 2017

For The Six Months Ended June 30, 2016

Revenues:

Investment income

$

12,174,215

$

9,009,907

$

23,644,401

$

18,167,141

Property revenues

3,306,722

4,994,868

7,036,500

10,068,972

Contingent interest income

86,567

45,000

219,217

219,396

Other interest income

666,796

883,346

1,311,933

1,397,471

Other Income

-

-

62,637

-

   Total Revenues

16,234,300

14,933,121

32,274,688

29,852,980

Expenses:

Real estate operating (exclusive of items shown below)

1,621,084

2,369,455

4,105,300

5,006,132

Impairment charge

-

61,506

-

61,506

Depreciation and amortization

1,270,379

1,806,732

2,863,205

3,931,630

Amortization of deferred financing costs

562,585

392,493

1,302,823

924,680

Interest expense

5,841,327

4,322,054

11,283,580

9,092,189

General and administrative

2,876,450

2,764,981

6,007,330

5,097,352

   Total Expenses

12,171,825

11,717,221

25,562,238

24,113,489

Other Income:

Gain on sale of MF Properties

(16,075

)

12,442,929

7,152,512

12,442,929

Gain on sale of securities

-

-

-

8,097

Income before income taxes

4,046,400

15,658,829

13,864,962

18,190,517

Income tax expense

(63,000

)

4,653,000

2,395,047

4,653,000

Net income before noncontrolling interest

4,109,400

11,005,829

11,469,915

13,537,517

Income (loss) attributable to noncontrolling interest

-

(101

)

71,653

(113

)

Net income - ATAX Partnership

$

4,109,400

$

11,005,930

$

11,398,262

$

13,537,630

Net income - ATAX Partnership

4,109,400

11,005,930

11,398,262

13,537,630

   Redeemable preferred unit distributions and accretion

(432,550

)

(124,982

)

(757,192

)

(126,666

)

Net income available to Partners

$

3,676,850

$

10,880,948

$

10,641,070

$

13,410,964

Selected Segment Data (Partnership):

Revenue and Other Income

   Mortgage Revenue Bond Investments

$

11,059,940

$

8,790,823

$

21,648,438

$

17,577,974

   MF Properties

3,290,647

17,437,797

14,251,649

22,511,901

   Public Housing Capital Fund Trusts

719,182

722,990

1,427,968

1,453,892

   MBS Securities Investments

-

-

-

48,755

Other Investments

1,148,456

424,440

2,099,145

711,484

Total  Revenue and Other Income

$

16,218,225

$

27,376,050

$

39,427,200

$

42,304,006

Total Expenses:

   Mortgage Revenue Bond Investments

$

8,467,172

$

6,570,100

$

16,826,617

$

13,326,958

   MF Properties

3,272,600

9,465,475

10,488,057

14,807,382

   Public Housing Capital Fund Trusts

369,053

334,545

714,264

635,265

   MBS Securities Investments

-

-

-

(3,229

)

   Other Investments

-

-

-

-

Total

$

12,108,825

$

16,370,120

$

28,028,938

$

28,766,376

Net Income (loss) – ATAX Partnership:

   Mortgage Revenue Bond Investments

$

2,592,768

$

2,220,723

$

4,821,821

$

4,251,016

   MF Properties

18,047

7,972,322

3,763,592

7,704,519

   Public Housing Capital Fund Trusts

350,129

388,445

713,704

818,627

   MBS Securities Investments

-

-

-

51,984

Other Investments

1,148,456

424,440

2,099,145

711,484

Income from continuing operations

$

4,109,400

$

11,005,930

$

11,398,262

$

13,537,630

15

June 30, 2017

March 31, 2017

December 31, 2016

September 30, 2016

June 30, 2016

March 31, 2016

December 31, 2015

September 30, 2015

Partnership only net income

$

4,109,400

$

7,288,862

$

5,623,335

$

4,623,542

$

11,005,930

$

2,531,700

$

9,549,326

$

2,514,338

Change in fair value of derivatives and interest rate derivative amortization

181,420

121,349

(1,395,730

)

(263,684

)

531,389

1,110,407

(153,039

)

1,254,564

Depreciation and amortization expense (Partnership only)

1,270,379

1,592,826

1,569,641

1,361,259

1,806,732

2,124,898

2,208,551

1,405,696

Impairment charge

-

-

-

-

61,506

-

-

-

Amortization of deferred financing costs

562,585

740,238

512,309

425,520

392,493

532,187

554,128

423,330

Restricted units compensation expense

438,893

170,840

802,092

31,050

-

-

-

-

Deferred income taxes

(201,000

)

(164,000

)

(51,000

)

(136,000

)

553,000

-

-

-

Redeemable preferred unit distribution and accretion

(432,550

)

(324,642

)

(274,772

)

(181,969

)

(124,982

)

(1,684

)

-

-

Bond purchase discount accretion (net of cash received)

(26,741

)

(23,507

)

(27,770

)

(147,033

)

33,668

34,696

171,717

380,644

Tier 2 Income distributable to the General Partner

(16,224

)

(1,104,401

)

(426,774

)

(291,295

)

(2,096,982

)

(43,599

)

(1,187,639

)

(296,952

)

Provision for (recovery of) loss on receivable

-

-

-

-

-

-

-

(98,431

)

Amortization related to discontinued operations

-

-

-

-

-

-

1,344

2,023

CAD

$

5,886,162

$

8,297,565

$

6,331,331

$

5,421,390

$

12,162,754

$

6,288,605

$

11,144,388

$

5,585,212

Weighted average number of units outstanding, basic

59,862,969

60,037,687

59,995,789

60,176,937

60,252,928

60,252,928

60,252,928

60,252,928

Partnership Only:

Net income, basic and diluted, per unit

$

0.06

$

0.10

$

0.09

$

0.07

$

0.15

$

0.04

$

0.14

$

0.04

CAD per unit, basic

$

0.10

$

0.14

$

0.11

$

0.09

$

0.20

$

0.10

$

0.19

$

0.09

Distributions declared, per unit

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

$

0.125

16

Base

Maturity

Interest

Principal

Estimated

Property Name

Location

Date

Rate

Outstanding

Fair Value

15 West Apartments

Vancouver, WA

7/1/2054

6.25

%

$

9,826,657

$

11,408,877

Arbors at Hickory Ridge

Memphis, TN

1/1/2049

6.25

%

11,295,071

12,772,442

Ashley Square

Des Moines, IA

12/1/2025

6.25

%

5,009,000

5,036,602

Avistar on the Boulevard - Series A

San Antonio, TX

3/1/2050

6.00

%

16,190,599

17,822,192

Avistar at Chase Hill - Series A

San Antonio, TX

3/1/2050

6.00

%

9,797,642

10,211,947

Avistar at Copperfield - Series A

Houston, TX

5/1/2054

5.75

%

10,000,000

10,491,288

Avistar at Copperfield - Series B

Houston, TX

6/1/2054

12.00

%

4,000,000

4,024,939

Avistar at the Crest - Series A

San Antonio, TX

3/1/2050

6.00

%

9,503,712

10,505,833

Avistar (February 2013 Acquisition) - Series B (3 Bonds)

San Antonio, TX

4/1/2050

9.00

%

2,153,135

2,167,329

Avistar at the Oak - Series A

San Antonio, TX

8/1/2050

6.00

%

7,673,015

8,537,680

Avistar in 09 - Series A

San Antonio, TX

8/1/2050

6.00

%

6,625,352

7,214,254

Avistar on the Hill - Series A

San Antonio, TX

8/1/2050

6.00

%

5,301,268

5,898,662

Avistar (June 2013 Acquisition) - Series B (2 Bonds)

San Antonio, TX

9/1/2050

9.00

%

1,002,877

1,049,934

Avistar at the Parkway - Series A

San Antonio, TX

5/1/2052

6.00

%

13,290,665

14,205,816

Avistar at the Parkway - Series B

San Antonio, TX

6/1/2052

12.00

%

124,981

156,117

Avistar at Wilcrest - Series A

Houston, TX

5/1/2054

5.75

%

3,775,000

3,976,007

Avistar at Wilcrest - Series B

Houston, TX

6/1/2054

12.00

%

1,550,000

1,559,782

Avistar at Wood Hollow - Series A

Austin, TX

5/1/2054

5.75

%

31,850,000

33,414,751

Avistar at Wood Hollow - Series B

Austin, TX

6/1/2054

12.00

%

8,410,000

8,465,645

Bella Vista

Gainesville, TX

4/1/2046

6.15

%

6,295,000

6,326,115

Bridle Ridge

Greer, SC

1/1/2043

6.00

%

7,500,000

7,617,210

Brookstone

Waukegan, IL

5/1/2040

5.45

%

9,028,534

9,334,127

Bruton

Dallas, TX

8/1/2054

6.00

%

18,108,276

20,870,767

Columbia Gardens

Columbia, SC

12/1/2050

5.50

%

15,000,000

15,039,401

Companion at Thornhill Apartments

Lexington, SC

1/1/2052

5.80

%

11,457,334

12,593,684

Concord at Gulfgate - Series A

Houston, TX

2/1/2032

6.00

%

19,185,000

21,760,473

Concord at Little York - Series A

Houston, TX

2/1/2032

6.00

%

13,440,000

15,311,771

Concord at Williamcrest - Series A

Houston, TX

2/1/2032

6.00

%

20,820,000

23,614,962

Copper Gate Apartments

Lafayette, IN

12/1/2029

6.25

%

5,145,000

5,997,946

Courtyard Apartments - Series A

Fullerton, CA

12/1/2033

5.00

%

10,230,000

11,220,190

Courtyard Apartments - Series B

Fullerton, CA

12/1/2018

5.50

%

6,228,000

6,216,722

Cross Creek

Beaufort, SC

3/1/2049

6.15

%

8,214,257

9,212,225

Crossing at 1415 - Series A

San Antonio, TX

12/1/2052

6.00

%

7,590,000

7,548,255

Crossing at 1415 - Series B

San Antonio, TX

1/1/2053

12.00

%

335,000

337,191

Decatur Angle

Fort Worth, TX

1/1/2054

5.75

%

22,873,696

25,688,323

Glenview - Series A

Cameron Park, CA

12/1/2031

5.75

%

4,648,920

5,294,599

Greens of Pine Glen - Series A

Durham, NC

10/1/2047

6.50

%

8,168,000

9,452,012

Greens of Pine Glen - Series B

Durham, NC

10/1/2047

9.00

%

938,985

1,158,863

Harden Ranch - Series A

Salinas, CA

3/1/2030

5.75

%

6,879,738

7,985,721

Harmony Court Bakersfield - Series A

Bakersfield, CA

12/1/2033

5.00

%

3,730,000

4,052,268

Harmony Court Bakersfield - Series B

Bakersfield, CA

12/1/2018

5.50

%

1,997,000

1,993,232

Harmony Terrace - Series A

Simi Valley, CA

1/1/2034

5.00

%

6,900,000

7,607,627

Harmony Terrace - Series B

Simi Valley, CA

1/1/2019

5.50

%

7,400,000

7,399,539

Heights at 515 - Series A

San Antonio, TX

12/1/2052

6.00

%

6,435,000

6,657,833

Heights at 515 - Series B

San Antonio, TX

1/1/2053

12.00

%

510,000

513,686

Heritage Square - Series A

Edinburg, TX

9/1/2051

6.00

%

11,112,914

12,338,148

Lake Forest Apartments

Daytona Beach, FL

12/1/2031

6.25

%

8,573,000

10,099,928

Las Palmas II - Series A

Coachella, CA

11/1/2033

5.00

%

1,695,000

1,849,318

Las Palmas II - Series B

Coachella, CA

11/1/2018

5.50

%

1,770,000

1,768,274

17

Live 929

Baltimore, MD

7/1/2049

5.78

%

40,030,000

45,019,717

Montclair - Series A

Lemoore, CA

12/1/2031

5.75

%

2,518,580

2,923,723

Oaks at Georgetown - Series A

Georgetown, TX

1/1/2034

5.00

%

12,330,000

12,958,904

Oaks at Georgetown - Series B

Georgetown, TX

1/1/2019

5.50

%

5,512,000

5,500,346

Ohio Bond - Series A

Ohio

6/1/2050

7.00

%

14,166,998

15,255,477

Ohio Bond - Series B

Ohio

6/1/2050

10.00

%

3,543,079

3,757,098

Pro Nova - 2014-1

Knoxville, TN

5/1/2034

6.00

%

10,000,000

10,278,840

Renaissance - Series A

Baton Rouge, LA

6/1/2050

6.00

%

11,294,718

12,951,771

Runnymede

Austin, TX

10/1/2042

6.00

%

10,200,000

10,446,902

Santa Fe - Series A

Hesperia, CA

12/1/2031

5.75

%

3,051,165

3,582,962

San Vicente - Series A

Soledad, CA

11/1/2033

5.00

%

3,495,000

3,724,245

San Vicente - Series B

Soledad, CA

11/1/2018

5.50

%

1,825,000

1,820,311

Seasons at Simi Valley - Series A

Simi Valley, CA

9/1/2032

5.75

%

4,376,000

5,159,712

Seasons at Simi Valley - Series B

Simi Valley, CA

9/1/2017

8.00

%

1,944,000

1,944,175

Seasons Lakewood - Series A

Lakewood, CA

1/1/2034

5.00

%

7,350,000

8,065,034

Seasons Lakewood - Series B

Lakewood, CA

1/1/2019

5.50

%

5,260,000

5,250,076

Seasons San Juan Capistrano - Series A

San Juan Capistrano, CA

1/1/2034

5.00

%

12,375,000

13,321,779

Seasons San Juan Capistrano - Series B

San Juan Capistrano, CA

1/1/2019

5.50

%

6,574,000

6,558,105

Silver Moon - Series A

Albuquerque, NM

8/1/2055

6.00

%

7,906,826

8,775,380

Southpark

Austin, TX

12/1/2049

6.13

%

13,435,000

15,188,493

Summerhill - Series A

Bakersfield, CA

12/1/2033

5.00

%

6,423,000

7,011,222

Summerhill - Series B

Bakersfield, CA

12/1/2018

5.50

%

3,372,000

3,370,507

Sycamore Walk - Series A

Bakersfield, CA

1/1/2033

5.25

%

3,632,000

4,049,047

Sycamore Walk - Series B

Bakersfield, CA

1/1/2018

8.00

%

1,815,000

1,813,092

The Palms at Premier Park

Columbia, SC

1/1/2050

6.25

%

19,330,703

21,976,749

Tyler Park Townhomes

Greenfield, CA

1/1/2030

5.75

%

5,995,219

6,761,473

Vantage at Judson

San Antonio, TX

1/1/2053

9.00

%

26,241,102

29,239,454

Vantage at Harlingen

San Antonio, TX

9/1/2053

9.00

%

24,426,694

26,399,400

The Village at Madera - Series A

Madera, CA

12/1/2033

5.00

%

3,085,000

3,335,649

The Village at Madera - Series B

Madera, CA

12/1/2018

5.50

%

1,719,000

1,715,626

Westside Village Market

Shafter, CA

1/1/2030

5.75

%

3,917,864

4,528,479

Willow Run

Columbia, SC

12/1/2050

5.50

%

15,000,000

15,330,447

Woodlynn Village

Maplewood, MN

11/1/2042

6.00

%

4,289,000

4,334,956

$

706,021,576

$

768,129,658

Weighted

Weighted Avg.

Principal

Estimated

Name

Average Lives