Supplemental Financial Report for

Quarter Ended September 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

•

Acquired approximately $12.5 million of mortgage revenue bonds

•

Invested an additional $1.6 million in the Investment in unconsolidated entities,

•

Executed on a subscription agreement from an institutional investor to purchase $20 million of ATAX’s Series A Preferred Units,

•

Extended the maturity of the M24 TEBS I debt financing to September 15, 2020, and

•

Acquired an interest rate cap with a notional value of approximately $60.2 million for approximately $52,000.

•

Total revenue increased approximately 22.7% to $16.2 million, compared to $13.2 million in the third quarter of 2016, and

•

Total assets increased to $1.05 billion at September 30, 2017, compared to $944.1 million at December 31, 2016.

4

PARTNERSHIP DETAILS

ATAX was 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 September 30, 2017)

Symbol (NASDAQ)

ATAX

Annual Distribution

$

0.50

Price

$

6.05

Yield

8.3%

Units Outstanding (including Restricted Units)

60,252,928

Market Capitalization

$

364,530,214

52-week Unit price range

$5.30 to $6.25

Partnership Financial Information for the Q3 2017

(amounts in thousands, except per Unit)

Total Revenue

$

16,235

Net Income – ATAX Partnership

$

3,545

Total Assets

$

1,053,196

Ratio of Debt to Total Assets at Par and Cost

66%

Cash Available for Distribution (“CAD”)¹

$

5,440

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 CAD is provided on page 16 of the Supplement herein.

²

The most recent distribution was paid on October 31, 2017 for Unitholders of record as of September 29, 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 74% of Total Assets at September 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, and

•

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.

9

•

Since December 31, 2015, the ratio of “Salaries and benefits” and “General and administrative” expenses has averaged approximately 0.45% 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

September 30, 2017

December 31, 2016

Assets

Cash and cash equivalents

$

35,556,115

$

20,748,521

Restricted cash

2,449,346

6,757,699

Interest receivable

7,319,913

6,983,203

Mortgage revenue bonds, held in trust

739,967,192

590,194,179

Mortgage revenue bonds

39,346,686

90,016,872

Public housing capital fund trusts

54,913,748

57,158,068

Real estate assets:

Land and improvements

10,798,832

17,354,587

Buildings and improvements

105,323,268

113,089,041

Real estate assets before accumulated depreciation

116,122,100

130,443,628

Accumulated depreciation

(17,623,467

)

(16,217,028

)

Net real estate assets

98,498,633

114,226,600

Investment in equity interests

34,335,649

19,470,006

Property loans, net

31,194,704

29,763,334

Other assets

9,613,734

8,795,192

Total Assets

$

1,053,195,720

$

944,113,674

Liabilities

Accounts payable, accrued expenses and other liabilities

$

8,297,418

$

7,255,327

Distribution payable

7,607,693

8,017,950

Unsecured lines of credit

12,471,000

40,000,000

Secured line of credit, net

-

19,816,667

Debt financing, net

594,635,819

495,383,033

Mortgages payable and other secured financing, net

50,579,400

51,379,512

Derivative swaps

1,196,701

1,339,283

Total Liabilities

674,788,031

623,191,772

Redeemable preferred units

76,855,492

40,788,034

Partners' Capital

General Partner

331,429

102,536

Beneficial Unit Certificate holders

301,220,768

280,026,669

Total Partners' Capital

301,552,197

280,129,205

Noncontrolling interest

-

4,663

Total Capital

301,552,197

280,133,868

Total Liabilities and Partners' Capital

$

1,053,195,720

$

944,113,674

14

For The Three Months Ended September 30, 2017

For The Three Months Ended September 30, 2016

For The Nine Months Ended September 30, 2017

For The Nine Months Ended September 30, 2016

Revenues:

Investment income

$

12,242,533

$

9,071,460

$

35,886,934

$

27,238,601

Property revenues

3,244,440

3,414,788

10,280,940

13,483,760

Contingent interest income

-

90,000

219,217

309,396

Other interest income

735,123

645,691

2,047,056

2,043,162

Other Income

12,734

-

75,371

-

   Total Revenues

16,234,830

13,221,939

48,509,518

43,074,919

Expenses:

Real estate operating (exclusive of items shown below)

2,225,845

2,252,939

6,331,145

7,259,071

Impairment charge

-

-

-

61,506

Depreciation and amortization

1,259,055

1,361,259

4,122,260

5,292,889

Amortization of deferred financing costs

577,413

425,520

1,880,236

1,350,200

Interest expense

5,714,181

3,485,172

16,997,761

12,577,361

General and administrative

3,197,853

2,377,148

9,205,183

7,474,500

   Total Expenses

12,974,347

9,902,038

38,536,585

34,015,527

Other Income:

Gain on sale of real estate assets

-

1,633,973

7,152,512

14,076,902

Gain on sale of securities

-

-

-

8,097

Income before income taxes

3,260,483

4,953,874

17,125,445

23,144,391

Income tax expense

(285,000

)

331,000

2,110,047

4,984,000

Net income before noncontrolling interest

3,545,483

4,622,874

15,015,398

18,160,391

Income (loss) attributable to noncontrolling interest

-

(668

)

71,653

(781

)

Net income - ATAX Partnership

$

3,545,483

$

4,623,542

$

14,943,745

$

18,161,172

Net income - ATAX Partnership

3,545,483

4,623,542

14,943,745

18,161,172

   Redeemable preferred unit distributions and accretion

(523,682

)

(181,969

)

(1,280,874

)

(308,635

)

Net income available to Partners

$

3,021,801

$

4,441,573

$

13,662,871

$

17,852,537

Selected Segment Data (Partnership):

Revenue and Other Income

   Mortgage Revenue Bond Investments

$

11,035,530

$

8,504,675

$

32,683,968

$

26,082,649

   MF Properties

3,257,174

5,048,761

17,508,823

27,560,662

   Public Housing Capital Fund Trusts

711,823

724,735

2,139,791

2,178,627

   MBS Securities Investments

-

-

-

48,755

Other Investments

1,230,303

577,741

3,329,448

1,289,225

Total  Revenue and Other Income

$

16,234,830

$

14,855,912

$

55,662,030

$

57,159,918

Total Expenses:

   Mortgage Revenue Bond Investments

$

8,430,541

$

5,586,175

$

25,257,158

$

18,913,133

   MF Properties

3,884,001

4,294,320

14,372,058

19,101,702

   Public Housing Capital Fund Trusts

371,830

351,875

1,086,094

987,140

   MBS Securities Investments

-

-

-

(3,229

)

Other Investments

2,975

-

2,975

-

Total

$

12,689,347

$

10,232,370

$

40,718,285

$

38,998,746

Net Income (loss) - ATAX Partnership

   Mortgage Revenue Bond Investments

$

2,604,989

$

2,918,500

$

7,426,810

$

7,169,516

   MF Properties

(626,827

)

754,441

3,136,765

8,458,960

   Public Housing Capital Fund Trusts

339,993

372,860

1,053,697

1,191,487

   MBS Securities Investments

-

-

-

51,984

Other Investments

1,227,328

577,741

3,326,473

1,289,225

Income from continuing operations

$

3,545,483

$

4,623,542

$

14,943,745

$

18,161,172

15

September 30, 2017

June 30, 2017

March 31, 2017

December 31, 2016

September 30, 2016

June 30, 2016

March 31, 2016

December 31, 2015

Partnership only net income

$

3,545,483

$

4,109,400

$

7,288,862

$

5,623,335

$

4,623,542

$

11,005,930

$

2,531,700

$

9,549,326

Change in fair value of derivatives and interest rate derivative amortization

66,917

181,420

121,349

(1,395,730

)

(263,684

)

531,389

1,110,407

(153,039

)

Depreciation and amortization expense (Partnership only)

1,259,055

1,270,379

1,592,826

1,569,641

1,361,259

1,806,732

2,124,898

2,208,551

Impairment charge

-

-

-

-

-

61,506

-

-

Amortization of deferred financing costs

577,413

562,585

740,238

512,309

425,520

392,493

532,187

554,128

Restricted units compensation expense

550,390

438,893

170,840

802,092

31,050

-

-

-

Deferred income taxes

(9,000

)

(201,000

)

(164,000

)

(51,000

)

(136,000

)

553,000

-

-

Redeemable preferred unit distributions and accretion

(523,682

)

(432,550

)

(324,642

)

(274,772

)

(181,969

)

(124,982

)

(1,684

)

-

Bond purchase premium/discount accretion (net of cash received)

(26,270

)

(26,741

)

(23,507

)

(27,770

)

(147,033

)

33,668

34,696

171,717

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

)

Amortization related to discontinued operations

-

-

-

-

-

-

-

1,344

CAD

$

5,440,306

$

5,886,162

$

8,297,565

$

6,331,331

$

5,421,390

$

12,162,754

$

6,288,605

$

11,144,388

Weighted average number of units outstanding, basic

59,811,578

59,862,969

60,037,687

59,995,789

60,176,937

60,252,928

60,252,928

60,252,928

Partnership Only:

Net income, basic and diluted, per unit

$

0.05

$

0.06

$

0.10

$

0.09

$

0.07

$

0.15

$

0.04

$

0.14

CAD per unit, basic

$

0.09

$

0.10

$

0.14

$

0.11

$

0.09

$

0.20

$

0.10

$

0.19

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

%

$

9,812,357

$

11,546,126

Arbors at Hickory Ridge

Memphis, TN

1/1/2049

6.25

%

11,266,283

13,028,600

Ashley Square

Des Moines, IA

12/1/2025

6.25

%

4,994,000

5,007,538

Avistar on the Boulevard - Series A

San Antonio, TX

3/1/2050

6.00

%

16,150,587

17,815,399

Avistar at Chase Hill - Series A

San Antonio, TX

3/1/2050

6.00

%

9,773,429

9,492,751

Avistar at Copperfield - Series A

Houston, TX

5/1/2054

5.75

%

10,000,000

10,423,447

Avistar at Copperfield - Series B

Houston, TX

6/1/2054

12.00

%

4,000,000

4,012,278

Avistar at the Crest - Series A

San Antonio, TX

3/1/2050

6.00

%

9,480,225

10,501,275

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

San Antonio, TX

4/1/2050

9.00

%

2,150,422

2,167,468

Avistar at the Oak - Series A

San Antonio, TX

8/1/2050

6.00

%

7,654,594

8,535,033

Avistar in 09 - Series A

San Antonio, TX

8/1/2050

6.00

%

6,609,446

7,275,678

Avistar on the Hill - Series A

San Antonio, TX

8/1/2050

6.00

%

5,288,542

5,896,835

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

San Antonio, TX

9/1/2050

9.00

%

1,001,662

1,060,108

Avistar at the Parkway - Series A

San Antonio, TX

5/1/2052

6.00

%

13,262,378

14,170,981

Avistar at the Parkway - Series B

San Antonio, TX

6/1/2052

12.00

%

124,922

155,701

Avistar at Wilcrest - Series A

Houston, TX

5/1/2054

5.75

%

3,775,000

3,982,425

Avistar at Wilcrest - Series B

Houston, TX

6/1/2054

12.00

%

1,550,000

1,554,816

Avistar at Wood Hollow - Series A

Austin, TX

5/1/2054

5.75

%

31,850,000

33,198,678

Avistar at Wood Hollow - Series B

Austin, TX

6/1/2054

12.00

%

8,410,000

8,437,395

Bella Vista

Gainesville, TX

4/1/2046

6.15

%

6,295,000

6,395,991

Bridle Ridge

Greer, SC

1/1/2043

6.00

%

7,465,000

7,522,667

Brookstone

Waukegan, IL

5/1/2040

5.45

%

9,004,023

9,567,665

Bruton

Dallas, TX

8/1/2054

6.00

%

18,080,240

20,688,022

Columbia Gardens

Columbia, SC

12/1/2050

5.50

%

14,969,000

15,673,452

Companion at Thornhill Apartments

Lexington, SC

1/1/2052

5.80

%

11,431,237

12,746,002

Concord at Gulfgate - Series A

Houston, TX

2/1/2032

6.00

%

19,185,000

21,796,745

Concord at Little York - Series A

Houston, TX

2/1/2032

6.00

%

13,440,000

15,336,349

Concord at Williamcrest - Series A

Houston, TX

2/1/2032

6.00

%

20,820,000

23,654,325

Copper Gate Apartments

Lafayette, IN

12/1/2029

6.25

%

5,145,000

6,012,844

Courtyard Apartments - Series A

Fullerton, CA

12/1/2033

5.00

%

10,230,000

11,375,338

Courtyard Apartments - Series B

Fullerton, CA

12/1/2018

5.50

%

6,228,000

6,220,807

Cross Creek

Beaufort, SC

3/1/2049

6.15

%

8,191,568

9,148,365

Crossing at 1415 - Series A

San Antonio, TX

12/1/2052

6.00

%

7,590,000

7,885,343

Crossing at 1415 - Series B

San Antonio, TX

1/1/2053

12.00

%

335,000

336,079

Decatur Angle

Fort Worth, TX

1/1/2054

5.75

%

22,834,591

25,353,589

Glenview - Series A

Cameron Park, CA

12/1/2031

5.75

%

4,638,152

5,278,395

Greens of Pine Glen - Series A

Durham, NC

10/1/2047

6.50

%

8,147,000

9,377,615

Greens of Pine Glen - Series B

Durham, NC

10/1/2047

9.00

%

938,204

1,149,746

Harden Ranch - Series A

Salinas, CA

3/1/2030

5.75

%

6,862,983

7,949,314

Harmony Court Bakersfield - Series A

Bakersfield, CA

12/1/2033

5.00

%

3,730,000

4,128,115

Harmony Terrace - Series A

Simi Valley, CA

1/1/2034

5.00

%

6,900,000

7,713,042

Harmony Terrace - Series B

Simi Valley, CA

1/1/2019

5.50

%

7,400,000

7,399,765

Heights at 515 - Series A

San Antonio, TX

12/1/2052

6.00

%

6,435,000

6,764,490

Heights at 515 - Series B

San Antonio, TX

1/1/2053

12.00

%

510,000

511,815

Heritage Square - Series A

Edinburg, TX

9/1/2051

6.00

%

11,088,157

12,077,271

Lake Forest Apartments

Daytona Beach, FL

12/1/2031

6.25

%

8,540,000

10,025,248

Las Palmas II - Series A

Coachella, CA

11/1/2033

5.00

%

1,695,000

1,874,814

Las Palmas II - Series B

Coachella, CA

11/1/2018

5.50

%

1,770,000

1,769,214

17

Live 929

Baltimore, MD

7/1/2049

5.78

%

40,010,000

44,555,656

Montclair - Series A

Lemoore, CA

12/1/2031

5.75

%

2,512,746

2,913,798

Montecito at Williams Ranch Apartments - Series A

Salinas, CA

10/1/2034

5.50

%

7,690,000

7,690,000

Montecito at Williams Ranch Apartments - Series B

Salinas, CA

10/1/2019

5.50

%

4,781,000

4,781,000

Oaks at Georgetown - Series A

Georgetown, TX

1/1/2034

5.00

%

12,330,000

13,144,421

Oaks at Georgetown - Series B

Georgetown, TX

1/1/2019

5.50

%

5,512,000

5,505,838

Ohio Bond - Series A

Ohio

6/1/2050

7.00

%

14,140,000

15,136,412

Ohio Bond - Series B

Ohio

6/1/2050

10.00

%

3,539,620

3,732,274

Pro Nova - 2014-1

Knoxville, TN

5/1/2034

6.00

%

10,000,000

10,233,522

Renaissance - Series A

Baton Rouge, LA

6/1/2050

6.00

%

11,267,286

12,896,186

Runnymede

Austin, TX

10/1/2042

6.00

%

10,200,000

10,368,797

Santa Fe - Series A

Hesperia, CA

12/1/2031

5.75

%

3,044,098

3,570,075

San Vicente - Series A

Soledad, CA

11/1/2033

5.00

%

3,495,000

3,776,588

San Vicente - Series B

Soledad, CA

11/1/2018

5.50

%

1,825,000

1,822,687

Seasons at Simi Valley - Series A

Simi Valley, CA

9/1/2032

5.75

%

4,376,000

5,160,070

Seasons at Simi Valley - Series B

Simi Valley, CA

9/1/2018

8.00

%

1,944,000

1,944,084

Seasons Lakewood - Series A

Lakewood, CA

1/1/2034

5.00

%

7,350,000

8,177,218

Seasons Lakewood - Series B

Lakewood, CA

1/1/2019

5.50

%

5,260,000

5,255,104

Seasons San Juan Capistrano - Series A

San Juan Capistrano, CA

1/1/2034

5.00

%

12,375,000

13,509,909

Seasons San Juan Capistrano - Series B

San Juan Capistrano, CA

1/1/2019

5.50

%

6,574,000

6,566,159

Silver Moon - Series A

Albuquerque, NM

8/1/2055

6.00

%

7,893,310

8,973,048

Southpark

Austin, TX

12/1/2049

6.13

%

13,435,000

15,001,374

Summerhill - Series A

Bakersfield, CA

12/1/2033

5.00

%

6,423,000

7,108,547

Summerhill - Series B

Bakersfield, CA

12/1/2018

5.50

%

3,372,000

3,371,261

Sycamore Walk - Series A

Bakersfield, CA

1/1/2033

5.25

%

3,632,000

4,098,553

Sycamore Walk - Series B

Bakersfield, CA

1/1/2018

8.00

%

1,815,000

1,813,922

The Palms at Premier Park

Columbia, SC

1/1/2050

6.25

%

19,284,860

22,223,008

Tyler Park Townhomes

Greenfield, CA

1/1/2030

5.75

%

5,980,454

6,857,802

Vantage at Judson

San Antonio, TX

1/1/2053

9.00

%

26,187,732

29,590,746

Vantage at Harlingen

San Antonio, TX

9/1/2053

9.00

%

24,379,208

26,300,680

The Village at Madera - Series A

Madera, CA

12/1/2033

5.00

%

3,085,000

3,398,244

The Village at Madera - Series B

Madera, CA

12/1/2018

5.50

%

1,719,000

1,717,464

Westside Village Market

Shafter, CA

1/1/2030

5.75

%

3,908,215

4,512,784

Willow Run

Columbia, SC

12/1/2050

5.50

%

14,970,000

15,311,952

Woodlynn Village

Maplewood, MN

11/1/2042

6.00

%

4,289,000

4,299,736

$

715,651,531

$

779,313,878

Weighted

Weighted Avg.

Name

Average Lives

Coupon Rate

Principal Outstanding

Estimated Fair Value

Public Housing Capital Fund Trust Certificate I

7.76

5.39

%

$

24,913,137

$

25,810,657

Public Housing Capital Fund Trust Certificate II

6.80

4.32

%

9,763,546

9,404,297

Public Housing Capital Fund Trust Certificate III

8.19

5.45

%

20,043,767

19,698,794

$

54,720,450

$

54,913,748

18

Base

Maturity

Interest

Principal

Estimated

Property Name

Location

Date

Rate

Outstanding

Fair Value

15 West Apartments

Vancouver, WA

7/1/2054

6.25

%