WNC HOUSING TAX CREDIT FUND VI, L.P.,
SERIES 7
Supplement Dated October 6, 2000
To Prospectus Dated September 3, 1999
This supplement is part of, and should be read in conjunction with, the
prospectus of WNC Housing Tax Credit Fund VI, L.P., Series 7 dated September 3,
1999, the supplement to prospectus dated September 3, 1999, and the supplement
to prospectus dated April 15, 2000. The supplement dated September 3, 1999 is
not for use in all states. All other supplements are superseded.
TABLE OF CONTENTS
Page
Status of Series 7 Offering....................................................1
Local Limited Partnership Investments..........................................1
Prior Performance Summary......................................................6
STATUS OF SERIES 7 OFFERING
As of the date hereof, Series 7 has received subscriptions in the amount of
$14,318,955 (14,319 Units), of which $611,000 currently is represented by
investor promissory notes.
LOCAL LIMITED PARTNERSHIP INVESTMENTS
Series 7 has identified for acquisition or acquired an interest in: Hickory
Lane Partners, L.P., an Iowa limited partnership; Ozark Properties III, an
Arkansas limited partnership; Pierce Street Partners, L.P., an Iowa limited
partnership; Stroud Housing Associates Limited Partnership, an Oklahoma limited
partnership; and Tahlequah Properties IV, a Limited Partnership, an Oklahoma
limited partnership. These entities are referred to herein as local limited
partnerships.
Hickory owns the Shire Apartments in Sioux City, Iowa; Ozark owns the
Hillview Apartments in Ozark, Arkansas; Pierce owns the Martin Tower Apartments
in Sioux City, Iowa; Stroud owns the Garland Square of Stroud Apartments in
Stroud, Oklahoma; and Tahlequah owns the Savannah Park Apartments in Tahlequah,
Oklahoma.
WNC & Associates, Inc. believes that Series 7 is reasonably likely to
acquire or retain an interest in the local limited partnerships identified
herein. However, Series 7 may not do so as a result of one or more factors. For
example, a local limited partnership identified herein may fail to satisfy one
or more conditions precedent to the investment of Series 7. Moreover, the terms
of an acquisition may differ from those as described. Accordingly, investors
should not rely on the ability of Series 7 to acquire or retain an investment in
the local limited partnerships identified herein on the indicated terms in
deciding whether to invest in Series 7.
The following tables contain information concerning the local limited
partnerships identified herein and their respective properties:
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<TABLE>
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ESTIMATED
OR ACTUAL ESTIMATED PERMANENT
LOCAL PROJECT CONSTRUC- DEVELOP- MORTGAGE ANTICIPATED
LIMITED NAME AND TION MENT COST NUMBER OF BASIC LOAN AGGREGATE
PARTNER- NUMBER LOCATION COMPLETION (INCLUDING APARTMENT MONTHLY PRINCIPAL TAX CREDITS
SHIP OF BUILDINGS OF PROPERTY DATE LAND COST) UNITS RENTS AMOUNT (1)
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
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HICKORY Shire Sioux City December $2,369,600 40 1BR $576 $1,520,000 $844,400
Apartments (Woodbury 2000 units SNB (5) LIHTC
County),
1 building Iowa HAP on 40
(2)(3) units (4)
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OZARK Hillview Ozark January $1,289,000 8 2BR $295 $421,626 $389,997
Apartments (Franklin 2001 units RD (6) LIHTC
County), 12 3BR
7 buildings Arkansas units
4 4BR
units
RAP on 18
units (4)
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PIERCE Martin Tower Sioux City December $5,131,500 80 1BR $702 $2,600,000 $1,726,570
Apartments (Woodbury 2000 units SNB (5) LIHTC
County),
1 building Iowa HAP on 80 $248,455
(2)(3) units (4) FHTC (7)
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STROUD Garland Stroud December $1,301,000 4 EFF $280 $550,000 $779,9240
Square (Lincoln 2000 units BO (8) LIHTC
of Stroud County), 6 1BR $230-$295
Apartments Oklahoma units
13 2BR $348
8 building units
(3) 10 3BR $400
units
3 4BR $444
units
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TAHLEQUAH Savannah Tahlequah May $1,289,000 20 1BR $259-$321 $600,000 $343,697
Park (Cherokee 2001 units RD (6) LIHTC
Apartments County), 4 2BR $387
Oklahoma units
6 buildings
RAP on 18 $250,000
units (4) CHCA (9)
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<FN>
(1) Low income housing tax credits are available over a 10-year period. In the
first credit year, Series 7 will receive only that percentage of the annual
credit which corresponds to the number of months during which Series 7 was a
limited partner of the local limited partnership, and during which the apartment
complex was completed and in service. See the discussion under "The Low Income
Housing Tax Credit - Utilization of the Low Income Housing Tax Credit" in the
prospectus.
(2) The apartment complex is designed for senior citizens.
(3) The apartment complex is a rehabilitation property.
(4) The U.S. Department of Housing & Urban Development provides rent subsidies
known as Housing Assistance Payments (HAP) and the U.S. Department of
Agriculture, Rural Development provides rent subsidies known as Rental
Assistance Payments (RAP) to certain projects. Funds from such payments are
applied to cover any difference between rents required to be paid by tenants and
the basic rent established for the applicable project. See "Other Government
Assistance Programs" in the prospectus.
(5) Security National Bank will provide the mortgage loan for a term of 15 years
at an annual interest rate of 7.75% initially, with the rate adjusted every 60
months based on the average 5-year Treasury rate plus 2.75%. Principal and
interest will be payable monthly based on a 30-year amortization schedule.
Outstanding principal and interest will be due on maturity of the loan.
(6) The U.S. Department of Agriculture, Rural Development will provide the
mortgage loan for a term of 30 years at a market rate of interest prior to
reduction of the interest rate by a mortgage interest subsidy to an annual rate
of 1%. Principal and interest will be payable monthly based on a 50-year
amortization schedule. Outstanding principal and interest will be due on
maturity of the loan.
(7) The apartment complex will also generate Federal historic tax credits.
See "Federal Income Tax Considerations - Historic Tax Credits" in the
prospectus.
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(8) Bank of Oklahoma will provide the mortgage loan for a term of 15 years at an
annual interest rate of 7.75%. Principal and interest will be payable monthly
based on a 30-year amortization schedule. Outstanding principal and interest
will be due on maturity of the loan.
(9) Cookson Hills Community Action will provide the second mortgage loan for a
term of 30 years at an annual interest rate of 3%. Principal and interest will
be payable monthly based on a 30-year amortization schedule.
</FN>
</TABLE>
Sioux City (Hickory and Pierce): Sioux City is in Woodbury County, Iowa at the
intersection of Interstate Highway 29 and U.S. Highway 20, approximately 95
miles north of Omaha, Nebraska, and 90 miles south of Sioux Falls, South Dakota.
The population is approximately 83,000, and the major employers for Sioux City
residents are Gateway (computers), MCI WorldCom (communications), and Mercy
Medical Center (medical).
Ozark (Ozark): Ozark is in Franklin County, Arkansas on Interstate Highway 40
approximately 25 miles east of Fort Smith. The population is approximately
3,500, and the major employers for Ozark residents are Honey Suckle White (meat
processors), Great Lakes Carbon (manufacturing), and Arkansas Valley Electric
Co-op.
Stroud (Stroud): Stroud is in Lincoln County, Oklahoma at the intersection of
Interstate Highway 44 and State Highway 99, approximately 40 miles east of
Oklahoma City. The population is approximately 2,500, and the major employers
for Stroud residents are Sigma (health care), Paramount Apparel, and Midway
Machine.
Tahlequah (Tahlequah): Tahlequah is the county seat of Cherokee County, Oklahoma
and is located at the intersection of U.S. Highway 62 and State Highway 51,
approximately 50 miles southeast of Tulsa. The population is approximately
10,500, and the major employers for Tahlequah residents are Tahlequah City
Hospital, Northeastern State University, and Cherokee Nation.
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SHARING RATIOS:
LOCAL LOCAL LOCAL GENERAL SHARING RATIOS: ALLOCATIONS (4) SERIES 7's
LIMITED GENERAL PROPERTY PARTNER CASH FLOW (3) AND SALE OR CAPITAL
PARTNERSHIP PARTNERS MANAGER (1) DEVELOPMENT REFINANCING CONTRIBUTION
FEE (2) PROCEEDS (5) (6)
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<S> <C> <C> <C> <C> <C> <C>
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HICKORY Lewis F. Oakleaf Real $250,000 Series 7: 99.98/.01/.01 $633,473
Weinberg Estate 15% but 30/70
(7) Management(9) not greater
than
Weinberg $3,000
Investments, LGP: 70% of
Inc. the
(7) balance
The balance:
Sioux Falls 30/70
Environmental
Access, Inc. (8)
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OZARK ERC ERC Properties, $256,922 Series 7: 99.98/.01/.01 $314,040
Properties, Inc. (10) 15% but 25/75
Inc. not less than
(10) $1,000
LGP: 70% of
the balance
The balance:
30/70
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PIERCE Lewis F. Oakleaf Real $605,000 Series 7: 99.98/.01/.01 $1,525,709
Weinberg Estate 15% but 30/70
(7) Management(9) not greater
than
Weinberg $7,500
Investments, LGP: 70% of
Inc. the
(7) balance
The balance:
Sioux Falls 30/70
Environmental
Access, Inc.(8)
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STROUD ERC ERC Properties, $187,073 Series 7: 99.98/.01/.01 $631,690
Properties, Inc. (10) 15% but 25/75
Inc. not less than
(10) $1,000
LGP: 70% of
the balance
The balance:
30/70
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TAHLEQUAH ERC ERC Properties, $142,336 Series 7: 99.98/.01/.01 $375,226
Properties, Inc. (10) 15% but 25/75
Inc. not less than
(10) $1,000
LGP: 70% of
the
balance
The balance:
30/70
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<FN>
(1) Each local limited partnership will employ either its local general partners
or an affiliate of its local general partners, or a third party, as a property
manager for leasing and management of the apartment complex. The maximum fee
payable is determined pursuant to lender regulations.
(2) Each local limited partnership will pay its local general partners or an
affiliate of its local general partners a development fee in the amount set
forth, for services incident to the development and construction of the
apartment complex. Services include: negotiating the financing commitments for
the apartment complex, securing necessary approvals and permits for the
development and construction of the apartment complex, and obtaining allocations
of low income housing tax credits. This payment will be made in installments
after receipt of each installment of the capital contributions made by Series 7.
(3) Reflects the amount of the net cash flow from operations, if any, to be
distributed to Series 7 and the local general partners of each local limited
partnership for each year of operations. Net cash flow generally is equal to the
excess of revenues over expenses, including the property manager's fee.
(4) Subject to certain special allocations, reflects the respective
percentage interests in profits, losses and low income housing tax credits of
(i) Series 7, (ii) WNC Housing, L.P., an affiliate of WNC & Associates, Inc.
which is the special limited partner, and (iii) the local general partners.
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(5) Reflects the percentage interests in any net cash proceeds from sale or
refinancing of the apartment complex of (i) Series 7, and (ii) the local general
partners. Net cash proceeds from sale or refinancing of the apartment complex is
equal to the sale proceeds less payment of the mortgage loan and other local
limited partnership obligations.
(6) Series 7 normally will make its capital contributions to a local limited
partnership in stages, with each contribution due when certain conditions
regarding construction or operations of the apartment complex have been
fulfilled. In the case of a completed apartment complex, Series 7 may pay its
capital contributions in full at the time of its acquisition of the local
limited partnership. Series 7 expects to negotiate adjuster provisions providing
for a reduction in the capital contributions in the event the tax credits are
less than originally anticipated. See "Investment Policies" and "Terms of the
Local Limited Partnership Agreements" under "Investment Objectives and Policies"
in the prospectus.
(7) Lewis F. Weinberg is president of Weinberg Investments, Inc. Since
1970, Weinberg Investments, Inc. has developed 20 affordable housing properties.
Mr. Weinberg has represented to Series 7 that he had a net worth in excess of
$3,500,000 as of May 31, 2000.
(8) Sioux Falls Environmental Access, Inc. is a South Dakota non-profit
corporation which was formed in 1975. It has developed one affordable housing
property.
(9) Weinberg Investments, Inc. is the majority owner of Oakleaf Real Estate
Management, a South Dakota corporation, which currently manages 15 affordable
housing properties consisting of 568 units.
(10) ERC Properties, Inc., an Arkansas corporation which was formed in 1976,
will act as both the general partner of the property and as the management
company. ERC has developed 119 properties, including 105 affordable properties,
and 96 tax credit properties. ERC currently manages all of the affordable
properties, which include 4,104 units. ERC currently manages all of the tax
credit properties, which include 3,769 units. ERC has represented to Series 7
that it had a net worth in excess of $10,000,000 as of July 1, 2000.
</FN>
</TABLE>
Prior Performance Summary
The following information is intended to update that provided in the
supplement dated April 15, 2000 under the caption "Prior Performance Summary" in
the penultimate paragraph on page 14 thereof.
WNC identified problems with a developer who is the local general
partner of six local limited partnerships invested in by three public WNC
partnerships sponsored in 1994 and 1995. The local general partner has been
removed from each of the local limited partnerships. Two of the properties have
overdue construction debt in place. The lender of the construction debt has
filed a notice of default with regard to each loan. Of the other four
properties, operating deficits at three of them have been cured. One of the
other four properties was poorly managed, has an occupancy rate below 50% and
continues to have operating deficits. Some of the unoccupied units included
therein require renovation. WNC is still analyzing its potential courses of
action, which include a sale or a transfer of all or a portion of its interests
in the partnerships.
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