An Ohio affordable-housing nonprofit that bought more than 1,800 apartments in the Chicago area has drawn the ire of its tenants and the city for the poor condition of its buildings. Now it faces a reckoning with investors that hold nearly $85 million in bonds on its properties.

The Better Housing Foundation expects to miss payments on the debt that come due in June, another setback for the nonprofit and the investors who own the bonds. The bonds have plunged in value since last fall, some by more than 50 percent, following an investigation by the Chicago Tribune that uncovered mismanagement by the nonprofit and widespread building code violations at its buildings.

“Because of the condition of the facilities, the financial performance of the portfolios has been strained,” the organization says in a statement. “Although we continue to seek new capital sources, we anticipate that we will not be able to make the debt service payments due on the bonds, on June 1.”

The organization’s troubles stand out in a Chicago apartment market that has been especially good to landlords the past several years, even ones that provide low-income housing, a tough business. Offering to provide affordable housing for low-income tenants, the Better Housing Foundation moved aggressively into Chicago about three years ago, financing its push here with bonds issued through the Illinois Finance Authority, most of them exempt from federal income taxes. In Chicago, the non-profit took over 75 buildings with nearly 1,000 apartments, all on the South Side.

The organization also used bonds to buy nearly 900 apartments in Chicago suburbs including Glen Ellyn, Mundelein and Blue Island. But those properties have avoided trouble, and the bonds have maintained their value.

It’s a different story in the city, where the non-profit is still trying to recover from the disclosures last year about its poorly maintained buildings. The city has pursued multiple lawsuits alleging code violations at the organization’s properties. Several of the non-profit’s buildings have failed inspections by the Chicago Housing Authority, preventing tenants with housing vouchers from the authority from renting there.

Last October, the Better Housing Foundation sued an outside manager who collected millions of dollars in fees from its deals, accusing him of “grossly mismanaging” its properties.

The manager, L. Mark DeAngelis of Chicago, has denied the allegations and has asked a judge to dismiss the case. Thomas Cronin, a Chicago-based attorney representing DeAngelis, declined to comment.

The Better Housing Foundation agreed last year to transfer its Chicago portfolio to another non-profit, Invest in America’s Veterans Foundation. But the two organizations never reached a final deal, and the Better Housing Foundation instead decided last November to recruit a new board of directors. It named Andrew Belew, managing partner of Consilium Capital Partners, a Palm Beach, Fla.-based firm that specializes in distressed debt, as its chairman.

“Since the new BHF board took over in November, we have made substantial progress in stabilizing the buildings, improving relationships with the city and working to create an effective long-term management plan,” the non-profit said in a statement.

Still, the improvements won’t come fast enough for many bondholders. In December, S&P Global Ratings lowered its ratings on the bonds secured by the organization’s Chicago properties. Predicting that the Better Housing Foundation wouldn’t make its June interest payments on the debt, S&P cut its to ratings to CCC- from CCC. The nonprofit already has defaulted on some of the debt by not meeting conditions of its loan agreement.

Some bondholders have absorbed big losses since last year. But other investors that specialize in distressed debt might see the debt as a promising opportunity. In March, bonds backed by some the nonprofit’s city properties traded for 49.38 cents on the dollar, pushing their yield up to 14.1 percent.