<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended DECEMBER 31, 1996
Commission File Number
2-84816
REAL ESTATE ASSOCIATES LIMITED VII
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. Employer Identification No. 95-3290316
9090 WILSHIRE BLVD., SUITE 201, BEVERLY HILLS, CALIFORNIA 90211
Registrant's Telephone Number, Including Area Code (310) 278-2191
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed with the Commission by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
<PAGE> 2
PART I.
ITEM 1. BUSINESS
Real Estate Associates Limited VII ("REAL VII" or the "Partnership") is a
limited partnership which was formed under the laws of the State of California
on May 24, 1983. On February 1, 1984, the Partnership offered 2,600 units
consisting of 10,400 limited partnership interests and warrants to purchase a
maximum of 5,200 additional limited partnership interests through a public
offering managed by Lehman Brothers Inc.
The general partners of the Partnership are National Partnership Investments
Corp. ("NAPICO"), a California Corporation (the "Corporate General Partner"),
and National Partnership Investments Associates II ("NAPIA II"). NAPIA II is a
limited partnership formed under the California Limited Partnership Act and
consists of Mr. Charles H. Boxenbaum and an unrelated individual as limited
partners and NAPICO as general partner. The business of the Partnership is
conducted primarily by its general partners as the Partnership has no employees
of its own.
Casden Investment Corporation ("CIC") owns 100 percent of NAPICO's stock. The
current members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce
E. Nelson, Alan I. Casden, Henry C. Casden and Brian D. Goldberg.
The Partnership holds limited partnership interests in thirty-two local limited
partnerships as of December 31, 1996. The Partnership also holds a general
partner interest in Real Estate Associates IV ("REA IV") which, in turn, holds
limited partnership interests in sixteen additional local limited partnerships;
therefore, the Partnership holds interests, either directly or indirectly
through REA IV, in forty-eight local limited partnerships. The other general
partner of REA IV is NAPICO. Each of the local partnerships owns a low income
housing project which is subsidized and/or has a mortgage note payable to or is
insured by agencies of the federal or local government.
In order to stimulate private investment in low income housing, the federal
government and certain state and local agencies have provided significant
ownership incentives, including among others, interest subsidies, rent
supplements, and mortgage insurance, with the intent of reducing certain market
risks and providing investors with certain tax benefits, plus limited cash
distributions and the possibility of long-term capital gains. There remain,
however, significant risks. The long-term nature of investments in government
assisted housing limits the ability of the Partnership to vary its portfolio in
response to changing economic, financial, and investment conditions. Such
investments are also subject to changes in local economic circumstances and
housing patterns, as well as rising operating costs, vacancies, rent collection
difficulties, energy shortages, and other factors which have an impact on real
estate values. These projects also require greater management expertise and
may have higher operating expenses than conventional housing projects.
The partnerships in which the Partnership has invested are principally existing
local limited partnerships. The Partnership became the limited partner in
these local limited partnerships pursuant to arm's-length negotiations with the
local partnership's general partners who are often the original project
developers. In certain other cases, the Partnership invested in newly formed
local partnerships which, in turn, acquired the projects. As a limited
partner, the Partnership's liability for obligations of the local limited
partnership is limited to its investment. The local general partner of the
local limited partnership retains the responsibility of maintaining, operating
and managing the project. Under certain circumstances, the Partnership has the
right to replace the general partner of the local limited partnerships.
<PAGE> 3
Although each of the partnerships in which the Partnership has invested will
generally own a project which must compete in the market place for tenants,
interest subsidies and rent supplements from governmental agencies make it
possible to offer these dwelling units to eligible "low income" tenants at a
cost significantly below the market rate for comparable conventionally financed
dwelling units in the area.
During 1996, all of the projects in which the Partnership had invested were
substantially rented. The following is a schedule of the status, as of
December 31, 1996, of the projects owned by local partnerships in which the
Partnership, either directly or indirectly through REA IV, has invested.
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VII HAS AN INVESTMENT
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ----- ----------------- -------- -------------
<S> <C> <C> <C> <C>
Anthracite Apts. 121 121/ 0 121 100%
Pittston, PA
Aristocrat Manor 113 113/ 0 91 81%
Hot Springs, AR
Arkansas City Apts. 16 4/ 7 13 81%
Arkansas City, AR
Arrowsmith Apts. 70 70/ 0 70 100%
Corpus Christi, TX
Ashland Manor 189 189/ 0 185 98%
Toledo, OH
Bangor House 121 121/ 0 121 100%
Bangor, ME
Bellair Manor Apts. 68 7/ 7 63 93%
Niles, OH
Birch Manor Apts. I 60 12/ 0 59 98%
Medina, OH
Birch Manor Apts II 60 6/ 0 58 97%
Medina, OH
Bluewater Apts. 116 None 111 96%
Port Huron, MI
</TABLE>
<PAGE> 4
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VII HAS AN INVESTMENT
DECEMBER 31, 1996
(CONTINUED)
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ----- ----------------- -------- -------------
<S> <C> <C> <C> <C>
Center City 176 175/ 0 176 100%
Hazelton, PA
Clarkwood Apts. I 72 24/ 0 66 92%
Elyria, OH
Clarkwood Apts. II 120 39/ 0 112 93%
Elyria, OH
Cleveland Apts. I 50 50/ 0 50 100%
Hayti, MO
Cleveland Apts. II 50 50/ 0 50 100%
Hayti, MO
Cleveland Apts. III 21 21/ 0 21 100%
Hayti, MO
Danbury Park Manor 151 85/ 0 142 94%
Superior Township, MI
Desoto Apts. 42 42/ 0 42 100%
Desoto, MO
Dexter Apts. 50 50/ 0 49 98%
Dexter, MO
Edgewood Terrace II 258 103/ 0 237 92%
Washington, DC
Goodlette Arms Apts. 250 None 249 100%
Naples, FL
Hampshire House 150 150/ 0 142 95%
Warren, OH
Henrico Arms 232 232/ 0 232 100%
Richmond, VA
</TABLE>
<PAGE> 5
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VII HAS AN INVESTMENT
DECEMBER 31, 1996
(CONTINUED)
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ----- ----------------- -------- -------------
<S> <C> <C> <C> <C>
Ivywood Apts. 124 75/ 0 123 99%
Columbus, OH
Jasper County Prop. 24 None 23 96%
Heidelberg, MS
King Towers 68 14/ 0 68 100%
Cincinnati, OH
Meherrin Landings 42 None 30 71%
Emporia, VA
Nantucket Apts. 60 59/ 0 59 98%
Alliance, OH
Newton Apts. 36 None 31 86%
Newton, MS
Oak Hill Apts. 120 82/ 0 120 100%
Franklin, PA
Oakview Apts. 32 None 27 84%
Monticello, AR
Oakwood Park I Apts 50 None 49 98%
Lorain, OH
Oakwood Park II Apts 78 None 74 95%
Lorain, OH
Pachuta Apartments 16 None 16 100%
Pachuta, MS
Parkway Towers Apt 104 103/ 0 102 98%
E. Providence, RI
Pebbleshire Apts. 120 24/ 0 118 98%
Vernon Hills, IL
</TABLE>
<PAGE> 6
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VII HAS AN INVESTMENT
DECEMBER 31, 1996
(CONTINUED)
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ----- ----------------- -------- -------------
<S> <C> <C> <C> <C>
Pinebrook Apts. 136 109/ 0 126 93%
Lansing, MI
Rand Grove Village 212 212/ 0 195 92%
Palatine, IL
Richards Park Apts. 60 24/ 0 59 98%
Elyria, OH
Ridgewood Towers 140 140/ 0 139 99%
Moline, IL
Shubuta Properties 16 None 15 94%
Shubuta, MS
South Glen Apts. 159 27/ 0 159 100%
Trenton, MI
South Park Apts. 138 138/ 0 124 90%
Elyria, OH
Sunland Terrace 80 80/ 0 80 100%
Phoenix, AZ
Tradewinds East 150 None 145 97%
Essexville, MI
Warren Heights Apts II 88 87/ 0 82 93%
Warren, OH
White Cliff Apts. 72 72/ 0 71 99%
Cincinnati, OH
Yorkview Estates 50 50/ 0 48 96%
Massillon, OH
----- --------- -----
TOTAL 4,731 2,960/ 14 4,543 96%
===== ========= =====
</TABLE>
<PAGE> 7
ITEM 2. PROPERTIES
Through its participation in local limited and general partnerships, the
Partnership holds interests in real estate properties. See Item 1 and Schedule
XI for information pertaining to these properties.
ITEM 3. LEGAL PROCEEDINGS
As of December 31, 1996, the Partnership's Corporate General Partner was a
plaintiff or defendant in several lawsuits. In addition, the Partnership is
involved in the following lawsuit. In the opinion of management and the
Corporate General Partner, the claims will not result in any material liability
to the Partnership.
John Mitchell v. Oakwood Apartments, NAPICO et al., Case No. 94CV112108, Court
of Common Pleas, Lorain County, Ohio. On March 31, 1994, the Plaintiff filed a
lawsuit alleging that on May 5, 1992, while returning to his apartment (Oakwood
Apartments, Lorain, Ohio) he tripped and sustained mental and physical
injuries. The Plaintiff voluntarily dismissed his action and a Notice of
Voluntary Dismissal without prejudice was filed. The Plaintiff, however,
refiled the action which remains pending.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED
SECURITY HOLDER MATTERS.
The Limited Partnership Interests are not traded on a public exchange but were
sold through a public offering managed by Lehman Brothers, Inc. It is not
anticipated that any public market will develop for the purchase and sale of
any partnership interest. Limited Partnership Interests may be transferred
only if certain requirements are satisfied. At December 31, 1996, there were
3,666 registered holders of units in the Partnership. No distributions have
been made from the inception of the Partnership to December 31, 1996. The
Partnership has invested in certain government assisted projects under programs
which in many instances restrict the cash return available to project owners.
The Partnership was not designed to provide cash distributions to investors in
circumstances other than refinancing or disposition of its investments in
limited partnerships.
<PAGE> 8
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Loss From Operations $ (3,240,566) $ (3,234,086) $ (3,225,472) $ (3,245,333) $ (3,244,612)
Distributions From
Limited Partnerships
Recognized as Income 63,515 19,632 249,371 190,767 124,966
Equity in Loss of Limited
Partnerships and
Amortization of
Acquisition Costs (243,392) (511,033) (1,074,503) (1,325,646) (1,014,151)
------------ ------------ ------------ ------------ ------------
Net Loss $ (3,420,443) $ (3,725,487) $ (4,050,604) $ (4,380,212) $ (4,133,797)
Net Loss per Limited
Partnership Interest $ (164) $ (179) $ (193) $ (211) $ (197)
============ ============ ============ ============ ============
Total assets $ 18,321,519 $ 19,183,742 $ 20,411,116 $ 22,203,347 $ 24,129,351
============ ============ ============ ============ ============
Investments in Limited
Partnerships $ 17,873,759 $ 18,600,961 $ 19,757,594 $ 21,590,427 $ 23,573,755
============ ============ ============ ============ ============
Notes Payable $ 24,869,501 $ 24,869,501 $ 24,869,501 $ 24,869,501 $ 24,869,501
============ ============ ============ ============ ============
Fees and Expenses Due to
General Partner $ 3,213,854 $ 2,630,214 $ 2,041,574 $ 1,597,934 $ 1,054,294
============ ============ ============ ============ ============
</TABLE>
<PAGE> 9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY
The Partnership's primary sources of funds include interest income on money
market funds and certificates of deposit and distributions from local
partnerships in which the Partnership has invested. It is not expected that
any of the local partnerships in which the Partnership has invested will
generate cash flow sufficient to provide for distributions to the Partnership's
limited partners in any material amount.
As of December 31, 1996, the fees and expenses due the general exceeded the
Partnership's cash. The general partner, during the forthcoming year, will not
demand payment of amounts due in excess of such cash or such that the
Partnership would not have sufficient operating cash; however, the Partnership
will remain liable for all such amounts.
CAPITAL RESOURCES
The Partnership received $39,000,000 in subscriptions for units of limited
partnership interests (at $5,000 per unit) during the period March 7, 1984 to
June 11, 1985, pursuant to a registration statement on Form S-11.
RESULTS OF OPERATIONS
The Partnership was formed to provide various benefits to its partners as
discussed in Item 1. It is anticipated that the local partnerships in which
the Partnership has invested could produce tax losses for as long as 20 years.
The Partnership will seek to defer income taxes from sale by not selling any
projects or project interests within 10 years, except to qualified tenant
cooperatives, or when proceeds of the sale would supply sufficient cash to
enable the Partners to pay applicable taxes.
Tax benefits will decline over time as the advantages of accelerated
depreciation are greatest in the earlier years, as deductions for interest
expense decrease as mortgage principal is amortized, and as the Tax Reform Act
of 1986 limits the deductions available.
The Partnership accounts for its investments in the local limited partnerships
on the equity method, thereby adjusting its investment balance by its
proportionate share of the income or loss of the local limited partnerships.
Losses incurred after the limited partnership investment account is reduced to
zero are not recognized.
Distributions received from limited partnerships are recognized as return of
capital until the investment balance has been reduced to zero or to a negative
amount equal to future capital contributions required. Subsequent
distributions received are recognized as income.
Except for certificates of deposit and money market funds, the Partnership's
investments are entirely interests in other limited and general partnerships
owning government assisted projects. Available cash is invested in money
market funds and certificates of deposit which provide interest income as
reflected in the statement of operations. These temporary investments can be
easily converted to cash to meet obligations as they arise. The Partnership
intends to continue investing available funds in this manner.
A recurring Partnership expense is the management fee. The fee is payable
monthly to the corporate general partner of the Partnership and is calculated
as a percentage of the Partnership's invested assets. The fee is payable
beginning with the month following the Partnership's initial investment in a
local partnership.
<PAGE> 10
General and administrative expenses of the Partnership consist substantially of
professional fees or services rendered to the Partnership.
Interest expense did not vary significantly in the years presented.
The Partnership, as a limited partner in the local partnerships in which it has
invested, is subject to the risks incident to the construction, management and
ownership of improved real estate. The Partnership investments are also
subject to adverse general economic conditions and, accordingly, the status of
the national economy, including substantial unemployment and concurrent
inflation, could increase vacancy levels, rental payment defaults and operating
expenses, which in turn, could substantially increase the risk of operating
losses for the projects.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
<PAGE> 11
REAL ESTATE ASSOCIATES LIMITED VII
(A California limited partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
DECEMBER 31, 1996
<PAGE> 12
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Real Estate Associates Limited VII
(A California limited partnership)
We have audited the accompanying balance sheets of Real Estate Associates
Limited VII (a California limited partnership) as of December 31, 1996 and
1995, and the related statements of operations, partners' deficiency and cash
flows for each of the three years in the period ended December 31, 1996. Our
audits also included the financial statement schedules listed in the index at
item 14. These financial statements and financial statement schedules are the
responsibility of the management of the Partnership. Our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits. We did not audit the financial statements of
certain limited partnerships, the investments in which are reflected in the
accompanying financial statements using the equity method of accounting. The
investments in these limited partnerships represent 32 percent and 31 percent
of total assets as of December 31, 1996 and 1995, respectively, and the equity
in loss of these limited partnerships represents 17 percent, 21 percent and 14
percent of the total net loss of the Partnership for the years ended December
31, 1996, 1995 and 1994, respectively, and represent a substantial portion of
the investee information in Note 2 and the financial statement schedules. The
financial statements of these limited partnerships are audited by other
auditors. Their reports have been furnished to us and our opinion, insofar as
it relates to the amounts included for these limited partnerships, is based
solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe our audits and the reports of other
auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Real Estate Associates Limited VII as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles. Also, in our
opinion, based on our audits and the reports of other auditors, such financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 26, 1997
<PAGE> 13
[LOGO]
[PARENTE RANDOLPH ORLANDO CAREY & ASSOCIATES LETTERHEAD]
To the Partners
South Mill Associates:
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheets of South Mill
Associates (a limited partnership), FHA Project No. 034-35145-LD, as of
December 31, 1996 and 1995, and the related statements of income, partners'
equity (deficit) and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audits
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of South Mill
Associates (a limited partnership) as of December 31, 1996 and 1995, and
the results of its operations, changes in partners' equity (deficit) and
its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of
Housing and Urban Development, we have also issued a report dated January
29, 1997, on our consideration of South Mill Associates' (a limited
partnership) internal control structure, and reports dated January 29,
1997, on its compliance with specific requirements applicable to major HUD
programs and specific requirements applicable to Affirmative Fair Housing.
<PAGE> 14
Our audit was conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information on pages 14 to 22 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of
South Mill Associates (a limited partnership). Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/Parente Randolph Orlando, Carey & Associates
Wilkes-Barre, Pennsylvania
January 29, 1997
<PAGE> 15
[LOGO]
[BERRY & CACCAMISI P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Partners
Arkansas City Apartments Limited Partnership
Arkansas City, Arkansas
We have audited the accompanying Balance Sheet of ARKANSAS CITY
APARTMENTS LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the
related Statements of Operations, Partners' Equity (Deficit) and Cash Flows
for the years then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller of
the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of ARKANSAS CITY
APARTMENTS LIMITED PARTNERSHIP at December 31, 1996 and 1995, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information
included is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the audit procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/Berry & Caccamisis P.C.
January 22, 1997
<PAGE> 16
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Arrowsmith, Ltd.
We have audited the accompanying balance sheets of ARROWSMITH, LTD. (a
limited partnership), FHA Project No. 115-35166-PM-L8 (the "Partnership"),
as of December 31, 1996 and 1995, and the related statements of operations,
changes in partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Arrowsmith, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, changes in
its partners' equity, and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated February 17, 1997 on our consideration of the Partnership's
internal control structure and a report dated February 17, 1997 on its
compliance with laws and regulations.
<PAGE> 17
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional 1996
financial data shown on pages 13 through 20 are presented for purposes of
additional analysis and are not a required part of the financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the 1996 financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LTD
Los Angeles, California
February 17, 1997
<PAGE> 18
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Ashland Manor, Ltd.
We have audited the balance sheets of ASHLAND MANOR, LTD., FHA Project
Number 042-44803-LDP, as of December 31, 1996 and 1995, and the statements
of operations, changes in partners' deficit and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Ashland Manor, Ltd. at
December 31, 1996 and 1995, and the results of its operations, changes in
partners' deficit and cash flows for the years then ended in conformity
with generally accepted accounting principles
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations
<PAGE> 19
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 14 through 20 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 20
[LOGO]
[HUGHES AND COMPANY P.C. LETTERHEAD]
Independent Auditors' Report
To the Partners
Bangor House Proprietary
Boston, Massachusetts
We have audited the accompanying balance sheets of Bangor House Proprietary
(A Limited Partnership) Project No. ME36-H017-107 as of December 31, 1996
and 1995, and the related statements of changes in partners' equity,
revenue and expenses, and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Bangor House
Proprietary (A Limited Partnership) as of December 31, 1996 and 1995, and
the results of its operations, changes in partners' equity and cash flows
for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 17, 1997,
on our consideration of Bangor House Proprietary's internal control
structure and reports dated January 17, 1997, on its compliance with laws
and regulations, specific requirements applicable to major HUD programs and
specific requirements applicable to Affirmative Fair Housing.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information shown on pages 12 to 20 is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/Hughes and Company P.C.
Melrose, Massachusetts
January 17, 1997
<PAGE> 21
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Bellair Manor Apartments,
Limited Partnership
We have audited the balance sheets of BELLAIR MANOR APARTMENTS, LIMITED
PARTNERSHIP, FHA Project Number 042-44174-LDP, as of December 31, 1996 and
1995, and the statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Bellair Manor
Apartments, Limited Partnership as of December 31, 1996 and 1995, and the
results of its operations, changes in partners' equity and cash flows for
the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 22
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 14 through 20 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 23
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
AND ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Birch Manor Apartments Phase - I
We have audited the balance sheets of BIRCH MANOR APARTMENTS - PHASE I, FHA
Project Number 042-44031-LDP, as of December 31, 1996 and 1995, and the
statements of operations, changes in partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Birch Manor Apartments
- Phase I as of December 31, 1996 and 1995, and the results of its
operations, changes in partners'equity and cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 24
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 14 through 19 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LPP
Chicago, Illinois
January 21, 1997
<PAGE> 25
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Birch Manor Apartments - Phase II
We have audited the balance sheets of BIRCH MANOR APARTMENTS - PHASE II,
FHA Project Number 042-44144-LDP, (Partnership) as of December 31, 1996 and
1995, and the statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Birch Manor Apartments
- Phase II as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditinq Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 26
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 14 through 21 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin & Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 27
[LOGO]
[COOPERS & LYBRAND LETTERHEAD]
Report of Independent Accountants
To the Partners of
Bluewater Limited Dividend
Housing Association:
We have audited the accompanying balance sheet of Bluewater Limited
Dividend Housing Association (a Michigan limited partnership), MSHDA
Development No. 35, as of December 31, 1996 and the related statements of
profit and loss, partners' equity, and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Bluewater Limited
Dividend Housing Association, as of December 31, 1996 and the results of
its operations and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 31, 1997 on our consideration of Bluewater Limited
Dividend Housing Association's internal control structure and a report
dated January 31, 1997 on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included on
pages 13 and 14 is presented for purposes of additional analysis and is not
a required part of the basic financial statements of Bluewater Limited
Dividend Housing Association. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated, in all material respects, in
relation to the basic financial statements taken as a whole.
<PAGE> 28
We have previously audited and expressed an unqualified opinion on the
financial statements of Bluewater Limited Dividend Housing Association for
the years 1990 through 1995. In our opinion, the supplemental data
included on page 15, relating to the years 1990 through 1996, is fairly
stated, in all material respects, in relation to the basic financial
statements from which it has been derived. The data on page 15 for the
years 1974 through 1989 was not audited by us and, accordingly, we do not
express an opinion on such data. That data was audited by other auditors
who have ceased operation and whose report, dated January 24, 1990, stated
that such information was fairly stated, in all material respects, in
relation to the basic financial statements taken as a whole.
/s/Coopers & Lybrand LLP
Detroit, Michigan
January 31, 1997
<PAGE> 29
[LOGO]
[PARENTE RANDOLPH ORLANDO CAREY & ASSOCIATES LETTERHEAD]
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Center City Associates:
We have audited the accompanying balance sheets of Center City
Associates (a limited partnership), FHA Project No. 034-35147-LD, as of
December 31, 1996 and 1995, and the related statements of income, partners'
equity (deficit) and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and signifcant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Center City
Associates (a limited partnership) as of December 31, 1996 and 1995, and
the results of its operations, changes in partners' equity (deficit) and
its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of
Housing and Urban Development, we have also issued a report dated January
29, 1997, on our consideration of Center City Associates' (a limited
partnership) internal control structure, and reports dated January 29,
1997, on its compliance with specific requirements applicable to major HUD
programs and specific requirements applicable to Affirmative Fair Housing.
<PAGE> 30
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 14 to 22 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of
Center City Associates (a limited partnership). Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/Parente Randolph Orlando Carey & Associates
Wilkes-Barre, Pennsylvania
January 29, 1997
<PAGE> 31
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
AND ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Clarkwood Apartments - Phase I
We have audited the balance sheets of CLARKWOOD APARTMENTS - PHASE I, FHA
Project Number 042-44009-LDP, as of December 31, 1996 and 1995, and the
statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Clarkwood Apartments -
Phase I at December 31, 1996 and 1995, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 32
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 14 through 20 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 33
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Clarkwood Apartments - Phase II
We have audited the balance sheets of CLARKWOOD APARTMENTS - PHASE II, FHA
Project Number 042-44066-LDP, as of December 31, 1996 and 1995, and the
statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Clarkwood Apartments -
Phase II as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 34
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional
financial data on pages 14 through 19 are presented for purposes of
additional analysis and are not a required part of the financial
statements. This information has been subjected to the procedures applied
in the audits of the financial statements and, in our opinion, is stated
fairly in all material respects in relation to the financial statements
taken as a whole.
/s/Altschuler, Melvoin & Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 35
[LOGO]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Hayti Associates I
We have audited the accompanying balance sheet of Hayti Associates I as
of December 31, 1996, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Hayti
Associates I as of December 31, 1996, and the results of its operations,
the changes in partners' equity and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on
pages 19 through 26 is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE> 36
In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 24, 1997 on our consideration of Hayd Associates I's internal
control structure and on its compliance with specific requirements
applicable to major and nonmajor HUD programs, affirmative fair housing and
laws and regulations applicable to the financial statements.
/S/Reznick Fedder and Silverman
Bethesda, Maryland
January 24, 1997
Federal Employer
Identification Number:
52-1088612
Audit Principal: Craig Birmingham
<PAGE> 37
[LOGO]
[REZNICK FEDDER & SILVERMAN LETTERHEAD}
INDEPENDENT AUDITORS' REPORT
To the Partners
Hayti Associates II
We have audited the accompanying balance sheet of Hayti Associates II
as of December 31, 1996, and the related statements of profit and loss (on
HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Hayti
Associates II as of December 31,1996, and the results of its operations,
the changes in partners' equity and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on
pages 19 through 25 is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE> 38
In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 24, 1997 on our consideration of Hayti Associates II's internal
control structure and on its compliance with specific requirements
applicable to major and nonmajor HUD programs, affirmative fair housing,
and laws and regulations applicable to the financial statements.
/s/Reznick, Fedder & Silverman
Bethesda, Maryland
January 24, 1997
Federal Employer
Identification Number:
52-1088612
Audit Principal: Craig Birmingham
<PAGE> 39
[LOGO]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Hayti Asssociates III
We have audited the accompanying balance sheet of Hayti Associates III
as of December 31, 1996, and the related statements of profit and loss (on
HUD Form No. 92410), partners' deficit and cash flows for the year then
ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Hayti
Associates III as of December 31, 1996, and the results of its operations,
the changes in partners' deficit and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on
pages 19 through 25 is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE> 40
In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs", we have also issued reports dated
January 24, 1997 on our consideration of Hayti Associates III's internal
control structure and on its compliance with specific requirements
applicable to major and nonmajor HUD programs, affirmative fair housing,
and laws and regulations applicable to the financial statements.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 24, 1997
Federal Employer
Identification Number:
52-1088612
Audit Principal: Craig Birmingham
<PAGE> 41
[LOGO]
[FREEDMAN & GOLDBERG LETTERHEAD]
Independent Auditor 's Report
To the Partners
Danbury Park Manor
We have audited the accompanying balance sheets of Danbury Park Manor, (a
Michigan general partnership), FHA Project No. 044-44052-LD1, as of
December 31, 1996 and 1995 and the related statements of income and
expenses, partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material missstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial Statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the Financial statements referred to above present fairly,
in all material respects, the financial position of Danbury Park Manor as
of December 31, 1996 and 1995, and the results of its operations, changes
in partners' equity and cash flows for the years then ended, in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of BUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 13, 1997,
on our consideration of Danbury Park Manor s Internal control structure and
reports dated January 13, 1997, on its compliance with specific
requirements applicable to major HUD programs, and specific requirements
applicable to Affirmative Fair Housing.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in
pages 11 to 24 is presented For purposes of additional analysis and is not
a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied In the audit of the basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole
Respectfully,
/s/Freedman & Goldberg
Certified Public Accountants
Farmington Rills, MI
January 13, 1997
<PAGE> 42
[LOGO]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
DeSoto Associates
We have audited the accompanying balance sheet of DeSoto Associates as
of December 31, 1996, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includs
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of DeSoto
Associates as of December 31, 1996, and the results of its operations, the
changes in partners' equity and cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on
pages 19 through 26 is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE> 43
In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 24, 1997 on our consideration of DeSoto Associates' internal
control structure and on its compliance with specific requirements
applicable to major and nonmajor HUD programs, affirmative fair housing,
and laws and regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 24, 1997
Federal Employer
Identification Number:
52-1088612
Audit Principal: Craig Birmingham
<PAGE> 44
[LOGO]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Dexter Associates I
We have audited the accompanying balance sheet of Dexter Associates I
as of December 31, 1996, and the related statements of profit and loss (on
HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the
partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Dexter Associates I as
of December 31, 1996, and the results of its operations, the changes in
partners' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on
pages 19 through 25 is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE> 45
In accordance with Government Auditing Standards, we have also issued
reports dated January 24, 1997 on our consideration of Dexter Associates
I's internal control structure and on its compliance with specific
requirements applicable to major and nonmajor HUD programs, affirmative
fair housing and laws and regulations applicable to the financial
statements.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 24, 1997
Federal Employer
Identification Number:
52-1088612
Audit Principal: Craig Birmingham
<PAGE> 46
[LOGO]
[REZNICK FEDDER & SILVERMAN LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Edgewood II Associates Limited Partnership
We have audited the accompanying balance sheet of Edgewood II
Associates Limited Partnership as of December 31, 1996, and the related
statements of profit and loss (on HUD Form No. 92410), partners' deficit
and cash flows for the year then ended. These financial statements are the
responsibility of the partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Edgewood II
Associates Limited Partnership as of December 31, 1996, and the results of
its operations, the changes in partners' deficit and cash flows for the
year then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on
pages 20 through 26 is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
<PAGE> 47
In accordance with Government Auditing Standards and the "Consolidated
Audit Guide for Audits of HUD Programs," we have also issued reports dated
January 17, 1997 on our consideration of Edgewood II Associates Limited
Partnership's internal control structure and on its compliance with
specific requirements applicable to major HUD programs, affirmative fair
housing, and laws and regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Bethesda, Maryland
January 17, 1997
Federal Employer
Identification Number:
52-1088612
Audit Principal: Bill D. Tzamaras
<PAGE> 48
[LOGO]
[ERNST & YOUNG LETTERHEAD]
Report of Independent Auditors
To the Partners
Goodlette Arms Apartments
We have audited the accompanying balance sheet of Goodlette Arms
Apartments, a limited partnership--Project Number 066-44117-NP, as of
December 31, 1996, and the related statements of profit and loss, partners'
capital and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in
accordance with generally accepted auditing standards and Government
Auditing Standards, issued by the Comptroller General of the United States.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In determining the basis of fixed assets as a result of the transfer of
ownership in 1984, the Partnership used the historical cost of purchase
money notes given by the new partners as part of the transfer. Generally
accepted accounting principles would require these notes be discounted to
approximate their fair market value, thereby reducing the basis of fixed
assets. The Partnership has not made (nor, in accordance with instructions
from the Partnership, have we made) a determination of the basis of fixed
assets using a discounted value of the purchase money notes; therefore, the
effects on the Partnership's financial statements of using the historical
cost of the notes are not known.
In our opinion, except for the effects of such adjustments, if any, as
might have been determined to be necessary had the basis of fixed assets
been determined using a discounted value of purchase money notes been
known, the financial statements referred to above present fairly, in all
material respects, the financial position of Goodlette Arms Apartments at
December 31, 1996, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have issued a report
entitled "Independent Auditors' Report on Internal Control Based on an
Audit of the Financial Statements in Accordance with Government Auditing
Standards" dated January 22, 1997 on our consideration of the Partnership's
internal control and a report entitled "Independent Auditors' Report on
Compliance with Laws and Regulations in Accordance
<PAGE> 49
with Government Auditing Standards" dated January 22, 1997 on its
compliance with applicable laws and regulations.
Our audit was made for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data listed on the contents
page is presented for purposes of additional analysis and is not a required
part of the financial statements of the Partnership. Such data has been
subjected to the auditing procedures applied in our audit of the financial
statements and, in our opinion, except for the effects on the supporting
data of such adjustments, if any, as might have been determined to be
necessary had the basis of fixed assets determined using a discounted value
of purchase money notes been known, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
/s/Ernst & Young
January 22, 1997
<PAGE> 50
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of Hampshire
House Apartments, Ltd.
We have audited the balance sheets of HAMPSHIRE HOUSE APARTMENTS, LTD., FHA
Project Number 042-44274-LDP, as of December 31, 1996 and 1995, and the
statements of operations, changes in partners' deficiency and cash flows
for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Hampshire House
Apartments, Ltd. at December 31, 1996 and 1995, and the results of its
operations, changes in partners' deficiency and cash flows for the years
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 51
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional
financial data on pages 14 through 19 are presented for purposes of
additional analysis and are not a required part of the financial
statements. This information has been subjected to the procedures applied
in the audits of the financial statements and, in our opinion, is stated
fairly in all material respects in relation to the financial statements
taken as a whole.
/s/Alschuler, Melvoin & Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 52
[LOGO]
[SCHEINER, MISTER & GRANDIZIO, P.A. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Henrico Limited Partnership
Rockville, Maryland
We have audited the accompanying balance sheet of HUD Project No. 051-
35164LD/SUP of the Henrico Limited Partnership as of December 31, 1996, and
the related statements of profit and loss, changes in partners' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
The Partnership is required to file annually with the Department of Housing
and Urban Development. The accompanying financial statements are presented
in accordance with the financial presentation recommended by HUD. The
elements of the presentation do not conflict with generally accepted
accounting principles.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Henrico Limited
Partnership as of December 31, 1996, and the results of its operations and
the changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 11, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 11, 1997, on its
compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The supporting information included
in the report shown on pages 9 through 15 is presented for the purposes of
additional analysis and is not a required part of the basic financial
statements of Henrico Limited Partnership. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in
<PAGE> 53
all material respects in relation to the financial statements taken as a
whole.
/s/Scheiner, Mister & Grandizio P.A.
January 11, 1997
<PAGE> 54
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Ivywood Apartments, Limited Partnership
We have audited the balance sheets of IVYWOOD APARTMENTS, LIMITED
PARTNERSHIP, FHA Project Number 043-44072-LDP, as of December 31, 1996 and
1995, and the statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Ivywood Apartments,
Limited Partnership as of December 31, 1996 and 1995, and the results of
its operations, changes in partners' equity and cash flows for the years
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 55
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 14 through 20 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the auditing procedures applied in the audits of the
financial statements and, in our opinion, is stated fairly in all material
respects in relation to the financial statements taken as a whole.
/s/Alschuler, Melvoin and Glasser
Chicago, Illinois
January 21, 1997
<PAGE> 56
[LOGO]
[MINTER, CORKERN & CO. LETTERHEAD]
The Partners
Jasper County Properties, Ltd.
Jackson, Mississippi
We have compiled the accompanying Statement of Budget and Cash Flow (Form
FmHA 19307) for the year ended December 31, 1996 and Year End Report and
Analysis (FmHA 1930-8) of Jasper County Properties, Ltd. as of December 31,
1996 included in the accompanying prescribed form in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants.
Our compilation was limited to presenting in the form prescribed by Farmers
Home Administration information that is the representation of the owners.
We have not audited or reviewed the accompanying financial statements and,
accordingly, do not express an opinion or any other form of assurance on
them.
These financial statements on prescribed forms are presented in accordance
with the requirements of FmHA, which differ from generally accepted
accounting principles. Accordingly, these financial statements are not
designed for those who are not informed about such differences.
/s/Minter, Corken & Co. Certified Public Accountants
Jackson, Mississippi
February 10, 1997
<PAGE> 57
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
King Towers Associates
We have audited the balance sheets of KING TOWERS ASSOCIATES (an Ohio
limited partnership), FHA Project Number 046-44165-LDP, (the Partnership)
as of December 31, 1996 and 1995, and the statements of operations, changes
in partners' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of King Towers Associates
as of December 31, 1996 and 1995, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 58
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional
financial data on pages 14 through 19 are presented for purposes of
additional analysis and are not a required part of the financial
statements. This information has been subjected to the procedures applied
in the audits of the financial statements and, in our opinion, is stated
fairly in all material respects in relation to the financial statements
taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 59
[LOGO]
[GAJDA, MARLOW & COMPANY LETTERHEAD]
Independent Auditors' Report
To the Partners
Meherrin Limited Partnership
We have audited the accompanying balance sheets of Meherrin Limited
Partnership (a Virginia limited partnership), FmHA Project No.: 54-049-
002723101, as of December 31, 1996 and 1995 and the related statements of
operations, partners' deficit and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Meherrin
Limited Partnership as of December 31, 1996 and 1995, and the results of
its operations and its cash flows for the years then ended in conformity
with generally accepted accounting principles.
<PAGE> 60
Independent Auditors' Report (continued)
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on
pages 15 through 24 is presented for purposes of additional analysis and is
not a required part of the basic financial statements. Such information has
been subjected to the audit procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
The accompanying financial statements have been prepared assuming that
Meherrin Limited Partnership will continue as a going concern. As
discussed in Note H to the financial statements , Meherrin Limited
Partnership has suffered from losses from operations and has a net capital
deficiency that raise substantial doubt about its ability to continue as a
going concern. Managements plans in regard to these matters are also
described in Note H. The financial statements do not include any
adjustments that might result from the outcome of this unacertainty .
/s/Gadja, Marlow & Co.
March 3, 1997
Wi11iamstown, Massachusetts
<PAGE> 61
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of Mount
Union Apartments, Ltd.
We have audited the balance sheets of MOUNT UNION APARTMENTS, LTD., aka
Nantucket Circle, FHA Project Number 042-44070-LDP, as of December 31, 1996
and 1995, and the statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Mount Union Apartments,
Ltd. as of December 31, 1996 AND 1995, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 62
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 14 through 20 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Alschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 63
[LOGO]
[MINTER, CORKERN & CO LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
Newton Apartments, Ltd.
Jackson, Mississippi
We have audited the accompanying balance sheets of Newton Apartments, Ltd.,
FmHA Case No. 28-51-64087535, a Mississippi limited partnership, as of
December 31, 1996 and 1995, and the related statements of income, partners'
capital, and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller
General of the United States and the U. S. Department of Agriculture,
Farmers Home Administration Audit Program. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Newton Apartments,
Ltd., FmHA Case No. 28-51-64087535, as of December 31, 1996 and 1995, and
the results of its operations and its cash flows for the years then ended
in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying financial
information included on pages 16 through 22 is presented for purposes of
additional analysis and is not a required part of the basic financial
statements. Such information, except for the budget, the proposed budget,
and the market rent budget, on pages 17 through 20, on which we express no
opinion, has been subjected to the auditing procedures applied in the
audits of the basic financial statements, and in our opinion, is fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
<PAGE> 64
Page 2
In accordance with Government Auditing Standards, we have also issued our
reports dated January 24, 1997, on our consideration of Newton Apartments,
Ltd's internal control and on its compliance with laws and regulations.
/s/ Minter, Corkern & Co
Certified Public Accountants
January 24, 1997
<PAGE> 65
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Oak Hill Apartments, Ltd.
We have audited the balance sheets of OAK HILL APARTMENTS, LTD., FHA
Project Number 03344149-LDP, as of December 31, 1996 and 1995, and the
statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Oak Hill Apartments,
Ltd. at December 31, 1996 and 1995, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 66
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional 1996 financial data
on pages 14 through 19 are presented for purposes of additional analysis
and are not a required part of the financial statements. This information
has been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 67
[LOGO]
[BERRY & CACCAMISI, P.C LETTERHEAD]
Partners
Oakview Apartments Limited Partnership
Monticello. Arkansas
We have audited the accompanying Balance Sheet of OAKVIEW APARTMENTS
LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the related
Statements of Operations, Partners' Equity (Deficit) and Cash Flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of OAKVIEW
APARTMENTS LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information
included is presented for purposes of additional analysis and is not a
required part of the basis financial statements. Such information has been
subjected to the audit procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/Berru & Caccamisi P.C.
January 22. 1997
<PAGE> 68
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Oakwood Park Apartments - Phase I
We have audited the balance sheets of OAKWOOD PARK APARTMENTS - PHASE I,
FHA Project No. 042-55031-LDC, as of December 31, 1996 and 1995, and the
statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Oakwood Park Apartments
- Phase I as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 69
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 13 through 19 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 70
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Oakwood Park Apartments - Phase II
We have audited the balance sheets of OAKWOOD PARK APARTMENTS - PHASE II,
FHA Project No. 042-55049-LDC, as of December 31, 1996 and 1995, and the
statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Oakwood Park Apartments
- Phase II as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 71
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 13 through 19 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 72
[LOGO]
[MINTER, CORKERN & CO. LETTERHEAD]
The Partners
Pachuta Apartments, Ltd.
Jackson, Mississippi
We have compiled the accompanying Statement of Budget and Cash Flow (Form
FmHA 19307) for the year ended December 31, 1996 and Year End Report and
Analysis (FmHA 1930-8) of Pachuta Apartments, Ltd. as of December 31, 1996
included in the accompanying prescribed form in accordance with Statements
on Standards for Accounting and Review Services issued by the American
Institute of Certified Public Accountants.
Our compilation was limited to presenting in the form prescribed by Farmers
Home Administration information that is the representation of the owners.
We have not audited or reviewed the accompanying financial statements and,
accordingly, do not express an opinion or any other form of assurance on
them.
These financial statements on prescribed forms are presented in accordance
with the requirements of FmHA, which differ from generally accepted
accounting principles. Accordingly, these financial statements are not
designed for those who are not informed about such differences.
/s/Minter, Corken & Co.
Certified Public Accountants
Jackson, Mississippi
February 10, 1997
<PAGE> 73
[LOGO]
[KPMG PEAT MARWICK LLP LETTERHEAD]
Report on Audited Financial Statements
and Supplementary Information
Independent Auditors' Report
The Partners
Parkway Towers Associates
(A Limited Partnership):
We have audited the accompanying balance sheet of Parkway Towers Associates
(A Limited Partnership) (the "Partnership"), HUD Project No.
RI-43-HO23-026, as of July 31, 1996, and the related statements of profit
and loss (on HUD Form 92410), changes in partners' equity and cash flows
for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the Partnership as of
July 31, 1996 and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued
reports dated September 13, 1996, on: our consideration of the
Partnership's internal control structure, the Partnership's compliance with
specific requirements applicable to major HUD programs, and the
Partnership's compliance with specific requirements applicable to
affirmative fair housing.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information included in Schedules 1 through 7 is presented for purposes of
additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ KPMG Peat Marwick LLP
September 13, 1996
<PAGE> 74
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY THE
ILLINOIS HOUSING DEVELOPMENT AUTHORITY AND THE
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Pebbleshire Housing Associates Limited
We have audited the accompanying balance sheets of PEBBLESHIRE HOUSING
ASSOCIATES LIMITED (an Illinois limited partnership), IHDA Project No.
ML-57 (the "Partnership"), as of December 31, 1996 and 1995, and the
related statements of operations, changes in partners' deficiency and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Pebbleshire Housing
Associates Limited as of December 31, 1996 and 1995, and the results of its
operations, changes in its partners' deficiency, and its cash flows for the
years then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a
report dated February 17, 1997 on our consideration of the Partnerships
internal control structure and a report dated February 17, 1997 on its
compliance with laws and regulations.
<PAGE> 75
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional 1996
financial data shown on pages 16 through 20 are presented for purposes of
additional analysis and are not a required part of the financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the 1996 financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Los Angeles, California
February 17, 1997
<PAGE> 76
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Pinebrook Manor AKA Coachlight Apartments Co.
We have audited the accompanying balance sheets of PINEBROOK MANOR AKA
COACHLIGHT APARTMENTS CO. (a limited partnership), FHA Project No. 047-
44016-LDP-SUP (the "Partnership") as of December 31, 1996 and 1995, and the
related statements of income, changes in partners' equity and cash flows
for the years then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Pinebrook Manor AKA
Coachlight Apartments Co. as of December 31, 1996 and 1995, and the results
of its operations, changes in its partners' equity and its cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a
report dated February 17, 1997 on our consideration of the Partnership's
internal control structure and a report dated February 17, 1997 on its
compliance with laws and regulations.
<PAGE> 77
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional 1996
financial data shown on pages 13 through 20 are presented for purposes of
additional analysis and are not a required part of the financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the 1996 financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Los Angeles, California
February 17, 1997
<PAGE> 78
[LOGO]
[HARAN & ASSOCIATES LTD LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
RAND GROVE VILLAGE PARTNERSHIP
Chicago, Illinois
HUD Field Office Director
Chicago, Illinois
We have audited the accompanying balance sheet of RAND GROVE VILLAGE
PARTNERSHIP, Project No. 071-44126-LD, as of December 31, 1996, and the
related statements of profit and loss, changes in partners' equity and
statement of cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
As more fully described in the notes to the financial statements, the
Partnership has expensed construction period interest and real estate taxes
associated with the building. In our opinion, construction period interest
and taxes should be capitalized and depreciated over the life of the
building to conform with generally accepted accounting principles. In
addition, the project recognized depreciation for the building over a
shorter useful life than would be allowable under generally accepted
accounting principles. The effects on the financial statements of the
preceding practices are not reasonably determinable.
In our opinion, except for the effects of the matters discussed in the
preceding paragraph, the financial statements referred to in the first
paragraph present fairly, in all material respects, the financial position
of RAND GROVE VILLAGE PARTNERSHIP, as of December 31, 1996, and its profit
or 1066, changes in partners' equity, and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997 on our consideration of RAND GROVE VILLAGE
PARTNERSHIP's internal control structure and reports dated January 21, 1997
on its compliance with specific requirements applicable to Major
<PAGE> 79
HUD Programs and specific requirements applicable to Affirmative Fair
Housing.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
The accompanying supplementary information (shown on pages 14 to 19) is
presented for purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation
to the financial statements taken as a whole.
/s/Haran and Associates Ltd
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Federal Certification No. 36-3097692
Audit Partner: James E. Haran(847)853-2580
January 21, 1997
<PAGE> 80
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL
STATEMENTS AND ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Richards Park Apartments
We have audited the balance sheets of RICHARDS PARK APARTMENTS, FHA Project
Number 04244089-LDP, as of December 31, 1996 and 1995, and the statements
of operations, changes in partners' equity and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Richards Park
Apartments as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 81
Our audits were performed for the purpose of forming an opinion on the
financial statements conducted as a whole. The additional financial data on
pages 14 through 20 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 82
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Ridgewood Towers Associates
We have audited the balance sheets of RIDGEWOOD TOWERS ASSOCIATES, FHA
Project Number 071-35254-PM, as of December 31, 1996 and 1995, and the
statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis' evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Ridgewood Towers
Associates as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 31, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 31, 1997, on its
compliance with laws and regulations.
<PAGE> 83
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 13 through 19 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 31, 1997
<PAGE> 84
[LOGO]
[MINTER, CORKERN & CO LETTERHEAD]
The Partners
Shubuta Properties, Ltd.
Jackson, Mississippi
We have compiled the accompanying Statement of Budget and Cash Flow (Form
FmHA 19307) for the year ended December 31, 1996 and Year End Report and
Analysis (FmHA 1930-8) of Shubuta Properties, Ltd. as of December 31, 1996
included in the accompanying prescribed form in accordance with Statements
on Standards for Accounting and Review Services issued by the American
Institute of Certified Public Accountants.
Our compilation was limited to presenting in the form prescribed by Farmers
Home Administration information that is the representation of the owners.
We have not audited or reviewed the accompanying financial statements and,
accordingly, do not express an opinion or any other form of assurance on
them.
These financial statements on prescribed forms are presented in accordance
with the requirements of FmHA, which differ from generally accepted
accounting principles. Accordingly, these financial statements are not
designed for those who are not informed about such differences.
/s/Minter, Corkern & Co.
Certified Public Accountants
Jackson, Mississippi
February 10, 1997
<PAGE> 85
[LOGO]
[SWEITZER HARON & BACHMAN]
To the General Partners South Glen Limited
Dividend Housing Association
We have audited the accompanying balance sheet of South Glen Limited
Dividend Housing Association. (a Michigan limited partnership), MSHDA
Development No. 291 as of December 31, 1996 and the related statements of
profit and loss (HUD Format), partners' equity (deficit) and cash flows
income tax basis for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
As described in Notes A and J. these financial statements were prepared on
the accounting basis used for income tax purposes and are not intended to
be a presentation in conformity with generally accepted accounting
principles.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of South Glen Limited
Dividend Housing Association. at December 31, 1996 and the results of its
operations and cash flows for the year then ended on the basis of
accounting described in Note A.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data on page 12
through 14 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
/s/Sweitzer, Haron & Bachman, CPAs, PLLC
January 17, 1997
<PAGE> 86
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON
FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Joint Venturers of
South Park Apartments
We have audited the balance sheets of SOUTH PARK APARTMENTS (a Joint
Venture) FHA Project Number 042-35040-LDP, as of December 31, 1996 and
1995, and the statements of operations, changes in venturers' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Venture's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of South Park Apartments
as of December 31, 1996 and 1995, and the results of its operations,
changes in venturers' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Venture's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 87
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The additional 1996 financial data
on pages 14 through 20 are presented for purposes of additional analysis
and are not a required part of the financial statements. This information
has been subjected to the procedures applied in the audit of the 1996
financial statements and, in our opinion, is stated fairly in all material
respects in relation to the financial statements taken as a whole.
/s/ Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 88
[LOGO]
[MCGLADREY & PULLEN LLP LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL
STATEMENTS AND SUPPLEMENTARY INFORMATION
To the Partners
Sunland Terrace. Ltd.
(A Limited Partnership)
San Bernardino, California
U.S. Department of Housing
and Urban Development
Phoenix, Arizona
We have audited the accompanying balance sheet of U.S. Department of
Housing and Urban Development ("HUD") Project No. 123-35131/AZ16-8023- 002
of Sunland Terrace, Ltd. (A Limited Partnership) as of December 31, 1996,
and the related statements of profit and loss, changes in partners'
(deficit) and cash flows for the year then ended. These financial
statements are the responsibility of Sunland Terrace, Ltd. (A Limited
Partnership)'s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and "Government Auditing Standards," issued by the Comptroller
General of the United States, and the "Consolidated Audit Guide for Audits
of HUD Programs," (the "Guide") issued by the U.S. Department of Housing
and Urban Development, Office of the Inspector General in July 1993. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of HUD Project No.
123-35131/AZ16-8023-002 of Sunland Terrace, Ltd. (A Limited Partnership) as
of December 31, 1996, and the results of its operations and the changes in
partners' (deficit) and cash flows for the year then ended in conformity
with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report, dated February 14, 1997, on our consideration of Sunland Terrace,
Ltd. (A Limited Partnership)'s internal control structure and a report,
dated February 14, 1997, on its compliance with laws and regulations.
<PAGE> 89
The accompanying supplementary information included on pages 13 through 17
of this report is presented for purposes of additional analysis and is not a
required part of the basic financial statements of HUD Project No.
123-35131/AZ16-8023-002 of Sunland Terrace, Ltd. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole
/s/McGladrey & Pullen, LLP
San Bernardino, California
February 14, 1997
<PAGE> 90
[LOGO]
[COOPERS & LYBRAND LETTERHEAD]
Report of Independent Accountants
To the Partners of
Tradewinds East Associates Limited
Dividend Housing Association:
We have audited the accompanying balance sheet of Tradewinds East
Associates Limited Dividend Housing Association (a Michigan limited
partnership), MSHDA Development No. 147, as of December 31, 1996 and the
related statements of profit and loss, partners' equity, and cash flows for
the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Tradewinds East
Associates Limited Dividend Housing Association, as of December 31, 1996
and the results of its operations and its cash flows for the year then
ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 31, 1997 on our consideration of Tradewinds East
Associates Limited Dividend Housing Association's internal control
structure and a report dated January 31, 1997 on its compliance with laws
and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included on
pages 13 and 14 is presented for purposes of additional analysis and is not
a required part of the basic financial statements of Tradewinds East
Associates Limited Dividend Housing Association. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
<PAGE> 91
We have previously audited and expressed an unqualified opinion on the
financial statements of Tradewinds East Associates Limited Dividend Housing
Association for the years 1990 through 1995. In our opinion, the
supplemental data included on page 15, relating to the years 1990 through
1996, is fairly stated, in all material respects, in relation to the basic
financial statements from which it has been derived. The data on page 15
for the years 1975 through 1989 was not audited by us and, accordingly, we
do not express an opinion on such data. That data was audited by other
auditors who have ceased operation and whose report, dated January 24,
1990, stated that such information was fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
/s/Coopers & Lybrand LLP
Detroit, Michigan
January 31, 1997
<PAGE> 92
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Warren Heights Apartments, Ltd.
We have audited the balance sheets of WARREN HEIGHTS APARTMENTS, LTD., FHA
Project Number 042-44156-LDP (Partnership), as of December 31, 1996 and
1995, and the statements of operations, changes in partners' equity and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnerships management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Warren Heights
Apartments, Ltd. as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity and cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 93
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data shown
on pages 14 through 20 are presented for purposes of additional analysis
and are not a required part of the financial statements. This information
has been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 94
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
White Cliff Apartments,Ltd.
We have audited the balance sheets of WHITE CLIFF APARTMENTS, LTD., FHA
Project Number 046-35409-LDP, as of December 31, 1996 and 1995, and the
statements of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of White Cliff Apartments,
Ltd. at December 31, 1996 and 1995, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 95
The financial statements have been prepared assuming the partnership will
continue as a going concern. As discussed in Note 6 to the financial
statements, the Partnership will experience a substantial decrease in
rental income with the six-month extension of the HAP contract. This matter
raises substantial doubt about the Partnership's ability to continue as a
going concern. Management's plans with regard to this matter are described
in Note 6. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 14 through 20 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 96
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Yorkview Estates, Ltd.
We have audited the balance sheets of YORKVIEW ESTATES, LTD., FHA Project
Number 04244151-LDP, as of December 31, 1996 and 1995, and the statements
of operations, changes in partners' equity and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller
General of the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Yorkview Estates, Ltd.
as of December 31, 1996 and 1995, and the results of its operations,
changes in partners' equity and cash flows for the years then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 21, 1997, on our consideration of the Partnership's
internal control structure and a report dated January 21, 1997, on its
compliance with laws and regulations.
<PAGE> 97
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on
pages 14 through 20 are presented for purposes of additional analysis and
are not a required part of the financial statements. This information has
been subjected to the procedures applied in the audits of the financial
statements and, in our opinion, is stated fairly in all material respects
in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 98
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
------------- ------------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 17,873,759 $ 18,600,961
CASH 342,631 352,652
SHORT TERM INVESTMENTS (Note 1) - 125,000
OTHER ASSETS 105,129 105,129
------------- ------------
TOTAL ASSETS $ 18,321,519 $ 19,183,742
============= ============
LIABILITIES AND PARTNERS' DEFICIENCY
LIABILITIES:
Notes payable (Note 3) $ 24,869,501 $ 24,869,501
Accrued interest payable (Note 3) 24,393,044 22,427,527
Accrued fees and expenses
due general partner (Note 4) 3,213,854 2,630,214
Accounts payable and other liabilities 22,582 13,519
------------- ------------
52,498,981 49,940,761
------------- ------------
COMMITMENTS AND CONTINGENCIES
(Notes 4 and 5)
PARTNERS' DEFICIENCY:
General partners (664,905) (630,701)
Limited partners (33,512,557) (30,126,318)
------------- ------------
(34,177,462) (30,757,019)
TOTAL LIABILITIES AND PARTNERS'
DEFICIENCY $ 18,321,519 $ 19,183,742
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 99
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
------------ ----------- -------------
<S> <C> <C> <C>
REVENUE:
Interest income $ 15,911 $ 20,741 $ 16,409
------------ ----------- -------------
OPERATING EXPENSES:
Interest (Note 3) 2,320,842 2,323,426 2,326,128
Management fees - general partner (Note 4) 743,640 743,640 743,640
General and administrative (Note 4) 103,194 106,227 98,197
Legal and accounting 88,801 81,534 73,916
------------ ----------- -------------
3,256,477 3,254,827 3,241,881
LOSS FROM OPERATIONS (3,240,566) (3,234,086) (3,225,472)
------------ ----------- -------------
DISTRIBUTIONS FROM LIMITED
PARTNERSHIP RECOGNIZED
AS INCOME (Note 2) 63,515 19,632 249,371
EQUITY IN LOSS OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ADDITIONAL BASIS AND
ACQUISITION COSTS (Note 2) (243,392) (511,033) (1,074,503)
------------ ----------- -------------
NET LOSS $ (3,420,443) $(3,725,487) $ (4,050,604)
============ =========== =============
NET LOSS PER LIMITED PARTNERSHIP
INTEREST $ (164) $ (179) $ (193)
============ =========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 100
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' DEFICIENCY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
---------- ------------- -------------
<S> <C> <C> <C>
DEFICIENCY, January 1, 1994 $ (552,940) $ (22,427,988) $ (22,980,928)
Net loss for 1994 (40,506) (4,010,098) (4,050,604)
---------- ------------- -------------
DEFICIENCY, December 31,. 1994 (593,446) (26,438,086) (27,031,532)
Net loss, 1995 (37,255) (3,688,232) (3,725,487)
---------- ------------- -------------
DEFICIENCY, December 31, 1995 (630,701) (30,126,318) (30,757,019)
Net loss, 1996 (34,204) (3,386,239) (3,420,443)
---------- ------------- -------------
DEFICIENCY, December 31, 1996 $ (664,905) $ (33,512,557) $ (34,177,462)
========== ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 101
REAL ESTATE ASSOCIATES LIMITED VII
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (3,420,443) $ (3,725,487) $ (4,050,604)
Adjustments to reconcile net loss to net cash
used in operating activities:
Equity in loss of limited partnerships
and amortization of additional basis
and acquisition costs 243,392 511,033 1,074,503
Decrease (increase) in other assets - (75,561) (25,911)
Increase in accrued interest payable 1,965,517 1,913,055 1,803,220
Increase in accrued fees and expenses
due general partner 583,640 588,640 443,640
Increase (decrease) in accounts payable
and other liabilities 9,063 (3,582) 11,513
------------ ------------- -------------
Net cash used in operating activities (618,831) (791,902) (743,639)
------------ ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturity of short term investments 125,000 - -
Distributions from limited partnerships recognized
as a return of capital 499,766 649,950 869,113
Capital contributions to limited partnerships (15,956) (4,350) (110,783)
------------ ------------- -------------
Net cash provided by investing activities 608,810 645,600 758,330
NET INCREASE (DECREASE) IN CASH (10,021) (146,302) 14,691
CASH, BEGINNING OF YEAR 352,652 498,954 484,263
------------ ------------- -------------
CASH, END OF YEAR $ 342,631 $ 352,652 $ 498,954
============ ============= =============
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR INTEREST $ 355,325 $ 410,370 $ 522,908
============ ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 102
REAL ESTATE ASSOCIATES LIMITED VII
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Real Estate Associates Limited VII (the "Partnership") was formed under
the California Limited Partnership Act on May 24, 1983. The Partnership
was formed to invest primarily in other limited partnerships or joint
ventures which own and operate primarily federal, state or local
government-assisted housing projects. The general partners are Coast
Housing Investments Associates, a limited partnership and National
Partnership Investments Corp. (NAPICO), the corporate general partner,
and National Partnership Investments Associates II (NAPIA II), a limited
partnership. Casden Investment Corporation owns 100 percent of NAPICO's
stock. The general partner of NAPIA II is NAPICO.
These financial statements include the accounts of Real Estate
Associates Limited VII and Real Estate Associates IV ("REA IV"), a
California general partnership in which the Partnership holds a 99
percent general partner interest. Losses in excess of the minority
interest in equity that would otherwise be attributed to the minority
interest are being allocated to the Partnership.
The Partnership issued 5,200 units of limited partnership interests
through a public offering. Each unit was comprised of two limited
partnership interests and two warrants granting the investor the right
to purchase two additional limited partnership interests. An additional
10,400 interests associated with warrants were exercised. The general
partners have a 1 percent interest in profits and losses of the
Partnership. The limited partners have the remaining 99 percent
interest in proportion to their respective investments.
The Partnership shall be dissolved only upon the expiration of 50
complete calendar years (December 31, 2033) from the date of the
formation of the Partnership or the occurrence of various other events
as specified in the Partnership agreement.
Upon total or partial liquidation of the Partnership or the disposition
or partial disposition of a project or project interest and distribution
of the proceeds, the general partners will be entitled to a liquidation
fee as stipulated in the Partnership agreement. The limited partners
will have a priority return equal to their invested capital attributable
to the project(s) or project interest(s) sold and shall receive from the
sale of the project(s) or project interest(s) an amount sufficient to
pay state and federal income taxes, if any, calculated at the maximum
rate then in effect. The general partners' fee may accrue but shall not
be paid until the limited partners have received distributions equal to
100 percent of their capital contributions.
USES OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
5
<PAGE> 103
REAL ESTATE ASSOCIATES LIMITED VII
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
METHOD OF ACCOUNTING FOR INVESTMENTS IN LIMITED PARTNERSHIPS
The investments in limited partnerships are accounted for on the equity
method. Acquisition, selection and other costs related to the
acquisition of the projects have been capitalized as part of the
investment account and are being amortized on a straight line basis over
the estimated lives of the underlying assets, which is generally 30
years.
NET LOSS PER LIMITED PARTNERSHIP INTEREST
Net loss per limited partnership interest was computed by dividing the
limited partners' share of net loss by the number of limited partnership
interests outstanding during the year. The number of limited
partnership interests was 20,802 for all years presented.
SHORT TERM INVESTMENTS
Short term investments consist of bank certificates of deposit with
original maturities ranging from more than three months to twelve
months. The fair value of these securities, which have been classified
as held for sale, approximates their carrying value.
IMPAIRMENT OF LONG-LIVED ASSETS
The Partnership reviews long-lived assets to determine if there has been
any permanent impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable.
If the sum of the expected future cash flows is less than the carrying
amount of the assets, the Partnership recognizes an impairment loss.
2. INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in 32 limited
partnerships. In addition, the Partnership holds a general partner
interest in REA IV. NAPICO is also the general partner in REA IV. REA
IV, in turn, holds limited partner interests in 16 additional limited
partnerships. In total, therefore, the Partnership holds interests,
either directly or indirectly through REA IV, in 48 partnerships all of
which own residential low income rental projects consisting of 4,731
apartment units. The mortgage loans of these projects are payable to or
insured by various governmental agencies.
The Partnership, as a limited partner, is entitled to between 93 percent
and 99 percent of the profits and losses in the limited partnerships it
has invested in directly. The Partnership is also entitled to 99
percent of the profits and losses of REA IV. REA IV holds a 99 percent
interest in each of the limited partnerships in which it has invested.
Equity in losses of limited partnerships is recognized in the financial
statements until the limited partnership investment account is reduced
to a zero balance. Losses incurred after the limited partnership
investment account is reduced to zero are not recognized. The cumulative
amount of the unrecognized
6
<PAGE> 104
REAL ESTATE ASSOCIATES LIMITED VII
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
equity in losses of certain unconsolidated limited partnerships was
approximately $8,129,000 and $6,359,000 as of December 31, 1996 and
1995, respectively.
Distributions from the limited partnerships are accounted for as a
return of capital until the investment balance is reduced to zero.
Subsequent distributions received are recognized as income.
The following is a summary of the investments in limited partnerships
and reconciliation to the limited partnership accounts:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Investment balance, beginning of year $18,600,961 $19,757,594
Cash distributions recognized as
a return of capital (499,766) (649,950)
Equity in loss of limited partnerships (51,136) (309,810)
Amortization of additional basis and
capitalized acquisition costs and fees (192,256) (201,223)
Capital contributions to limited partnerships 15,956 4,350
----------- -----------
Investment balance, end of year $17,873,759 $18,600,961
=========== ===========
</TABLE>
The difference between the investment per the accompanying balance
sheets at December 31, 1996 and 1995, and the equity per the limited
partnerships' combined financial statements is due primarily to
cumulative unrecognized equity in losses of certain limited
partnerships, additional basis and costs capitalized to the investment
account and cumulative distributions recognized as income.
Selected financial information from the combined financial statements at
December 31, 1996 and 1995 and for each of the three years in the period
ended December 31, 1996, of the limited partnerships in which the
Partnership has invested directly or indirectly, is as follows:
Balance Sheets
<TABLE>
<CAPTION>
1996 1995
-------- --------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 79,208 $ 83,427
======== ========
Total assets $ 96,894 $ 99,949
======== ========
Mortgages loan payable $ 75,690 $ 77,936
======== ========
Total liabilities $ 95,054 $ 95,863
======== ========
Equity of Real Estate Associates Limited VII $ 2,612 $ 4,793
======== ========
Deficiency of other partners $ (772) $ (707)
======== ========
</TABLE>
7
<PAGE> 105
REAL ESTATE ASSOCIATES LIMITED VII
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENT IN LIMITED PARTNERSHIPS (CONTINUED)
Statements of Operations
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total revenue $27,858 $27,145 $26,507
======= ======= =======
Interest expense $ 4,068 $ 3,503 $ 3,871
======= ======= =======
Depreciation $ 5,472 $ 6,596 $ 5,867
======= ======= =======
Total expenses $29,519 $28,768 $29,209
======= ======= =======
Net loss $(1,661) $(1,623) $(2,702)
======= ======= =======
Net loss allocable to the Partnership $(1,642) $(1,606) $(1,835)
======= ======= =======
</TABLE>
Land and buildings above have been adjusted for the amount by which the
investments in the limited partnerships exceed the Partnership's share
of the net book value of the underlying net assets of the investee which
are recorded at historical costs. Depreciation on the adjustment is
provided for over the estimated remaining useful lives of the
properties.
An affiliate of NAPICO is the general partner in 26 of the limited
partnerships included above, and another affiliate receives property
management fees of approximately 5 to 6 percent of the revenue from
three of these partnerships. The affiliate received property management
fees of $116,995, $116,175 and $107,237 in 1996, 1995 and 1994
respectively. The following sets forth the significant data for these
partnerships in which an affiliate of NAPICO was the general partner,
reflected in the accompanying financial statements using the equity
method of accounting:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total assets $40,934 $42,346
======= =======
Total liabilities $50,671 $50,676
======= =======
Deficiency of Real Estate Associates Limited VII $(9,442) $(8,047)
======= =======
Deficiency of other partners $ (295) $ (283)
======= =======
Total revenue $12,785 $12,311 $11,934
======= ======= =======
Net loss $(1,141) $(1,262) $(1,934)
======= ======= =======
</TABLE>
8
<PAGE> 106
REAL ESTATE ASSOCIATES LIMITED VII
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
3. NOTES PAYABLE
Certain of the Partnership's investments involved purchases of
partnership interests from partners who subsequently withdrew from the
operating partnership. The Partnership is obligated on non-recourse
notes payable of $24,869,501, bearing interest at 9 1/2 percent, to the
sellers of the partnership interests. The notes have principal maturity
dates ranging from August 1999 to December 2002 or upon sale or
refinancing of the underlying partnership properties. These obligations
and related interest are collateralized by the Partnership's investments
in the investee limited partnerships and are payable only out of cash
distributions from the investee partnerships, as defined in the notes.
Unpaid interest is due at maturity of the notes.
Maturity dates on the notes and related accrued interest payable are as
follows:
<TABLE>
<CAPTION>
Accrued
Years Ending December 31, Notes Interest
------------------------- ----------- -----------
<S> <C> <C>
1997 $ $
1998
1999 18,059,000 17,358,918
2000
2001 4,595,000 4,837,648
Thereafter 2,215,501 2,196,478
----------- -----------
$24,869,501 $24,393,044
=========== ===========
</TABLE>
4. FEES AND EXPENSES DUE GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to NAPICO for an annual
management fee equal to .5 percent of the original invested assets of the
partnerships. Invested assets is defined as the costs of acquiring
project interests, including the proportionate amount of the mortgage
loans related to the Partnership's interest in the capital accounts of
the respective partnerships.
As of December 31, 1996, the fees and expenses due the general partner
exceeded the Partnership's cash. The general partners, during the
forthcoming year, will not demand payment of amounts due in excess of
such cash or such that the Partnership would not have sufficient
operating cash; however, the Partnership will remain liable for all such
amounts.
The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $43,124, $39,900 and $38,450 in 1996, 1995
and 1994, respectively, and is included in operating expenses.
9
<PAGE> 107
REAL ESTATE ASSOCIATES LIMITED VII
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
5. CONTINGENCIES
The corporate general partner of the Partnership and the Partnership are
involved in various lawsuits arising from transactions in the ordinary
course of business. In the opinion of management and the corporate
general partner, the claims will not result in any material liability to
the Partnership.
6. INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements since such taxes, if any, are the liability of the
individual partners. The major differences in tax and financial
reporting result from the use of different bases and depreciation
methods for the properties held by the limited partnerships.
Differences in tax and financial reporting also arise as losses are not
recognized for financial reporting purposes when the investment balance
has been reduced to zero.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments, when it is practicable to
estimate that value. The notes payable are collateralized by the
Partnership's investments in investee limited partnerships and are
payable only out of cash distributions from the investee partnerships.
The operations generated by the investee limited partnerships, which
account for the Partnership's primary source of revenues, are subject to
various government rules, regulations and restrictions which make it
impracticable to estimate the fair value of the notes payable and
related accrued interest and amounts due general partner. The carrying
amount of other assets and liabilities reported on the balance sheets
that require such disclosure approximates fair value due to their
short-term maturity.
8. FOURTH-QUARTER ADJUSTMENT
The Partnership's policy is to record its equity in the loss of limited
partnerships on a quarterly basis, using estimated financial information
furnished by the various local operating general partners. The equity
in loss of limited partnerships reflected in the accompanying annual
financial statements is based primarily upon audited financial
statements of the investee limited partnerships. The decrease of
approximately $144,000 between the estimated nine-month equity in loss
and the actual 1996 year end equity in loss has been recorded in the
fourth quarter.
10
<PAGE> 108
SCHEDULE
REAL ESTATE ASSOCIATES LIMITED VII
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1996
----------------------------------------------------------------------------
Cash Equity
Balance Distri- in Balance
January 1, Capital butions Income December 31,
Limited Partnerships 1996 Contributions Received (Loss) 1996
- -------------------- ------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Anthracite Apts. $ 1,057,033 $ $ (25,948) $ 22,825 $ 1,053,910
Aristocrat Manor 547,020 (50,499) 496,521
Arkansas City Apts.
Arrowsmith Apts. 382,819 (10,399) 372,420
Ashland Manor
Bangor House 1,613,076 71,308 1,684,384
Bellair Manor Apts. 282,472 (2,654) (20,472) 259,346
Birch Manor I
Birch Manor II
Bluewater Apts. 1,796,000 (13,502) 83,850 1,866,348
Center CIty Apts. 2,190,092 (36,470) 192,016 2,345,638
Clarkwood Apts. I 1,316 (1,316)
Clarkwood Apts. II 2,729 (2,729)
Cleveland I 108,138 (37,821) (17,836) 52,481
Cleveland II 136,258 (19,268) (38,167) 78,823
Cleveland III 24,941 (13,150) (11,791) 0
Danbury Park Manor
Desoto Apts. 140,188 (13,209) (17,820) 109,159
Dexter Apts. 112,122 (22,451) (26,100) 63,571
Edgewood Terrace II 768,565 (104,531) 664,034
Goodlette Arms Apts. 2,520,096 (1,485) (89,520) 2,429,091
Hampshire House Apts.
Henrico Arms
Ivywood Apts. 359,633 (5,790) (47,671) 306,172
Jasper County
King Towers 296,703 (2,045) (55,046) 239,612
Meherrin Landings
Nantucket Apts. 255,625 (1,417) (17,157) 237,051
Newton Apts.
Oak Hill I 189,146 (3,085) (82,513) 103,548
Oakview Apts.
Oakwood Park I 1,207 (1,207)
Oakwood Park II 694 (694)
Pachuta Apts.
Parkway Towers 1,707,990 (15,801) 131,170 1,823,359
Pebbleshire Apts. 9,840 (9,840)
Pinebrook Apts. 728,826 42,017 770,843
Rand Grove Village 518,851 (24,284) (265,173) 229,394
Richards Park Apts. 170 (170)
Ridgewood Towers 616,752 (221,751) 169,680 564,681
Shubuta Properties
South Glen Apts. 9,305 (9,305) 0
South Park Apts.
Sunland Terrace
Tradewinds East Apts. 1,610,376 (19,388) (4,264) 1,586,724
Warren Heights Apts. II 284,076 (4,230) (37,638) 242,208
White Cliffs Apts. 210,389 (39,957) 170,432
Yorkview Estates 134,469 (61) (10,399) 124,009
------------ ------------ ------------ ------------ ------------
$ 18,600,961 $ 15,956 $ (499,766) $ (243,392) $ 17,873,759
============ ============ ============ ============ ============
</TABLE>
<PAGE> 109
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED VII
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1995
----------------------------------------------------------------------------
Cash Equity
Balance Distri- in Balance
January 1, Capital butions Income December 31,
Limited Partnerships 1996 Contributions Received (Loss) 1995
- -------------------- ------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Anthracite Apts. $ 1,037,867 $ $ (25,948) $ 45,114 $ 1,057,033
Aristocrat Manor 660,098 (113,078) 547,020
Arkansas City Apts.
Arrowsmith Apts. 469,332 (14,850) (71,663) 382,819
Ashland Manor
Bangor House 1,609,060 (101,136) 105,152 1,613,076
Bellair Manor Apts. 305,068 (4,882) (17,714) 282,472
Birch Manor I 581 (581)
Birch Manor II 3,244 (3,244)
Bluewater Apts. 1,797,663 (27,003) 25,340 1,796,000
Center CIty Apts. 2,033,873 (36,470) 192,689 2,190,092
Clarkwood Apts. I 1,061 (1,061)
Clarkwood Apts. II
Cleveland I 133,418 (33,240) 7,960 108,138
Cleveland II 166,434 (18,230) (11,946) 136,258
Cleveland III 30,597 (1,734) (3,922) 24,941
Danbury Park Manor
Desoto Apts. 178,452 (18,253) (20,011) 140,188
Dexter Apts. 149,359 (5,623) (31,614) 112,122
Edgewood Terrace II 934,508 (30,738) (135,205) 768,565
Goodlette Arms Apts. 2,543,290 (1,485) (21,709) 2,520,096
Hampshire House Apts.
Henrico Arms (9,865) 9,865
Ivywood Apts. 411,136 (4,015) (47,488) 359,633
Jasper County
King Towers 337,383 (40,680) 296,703
Meherrin Landings
Nantucket Apts. 274,141 (18,516) 255,625
Newton Apts.
Oak Hill I 241,932 (52,786) 189,146
Oakview Apts.
Oakwood Park I 1,640 (1,640)
Oakwood Park II 864 (864)
Pachuta Apts.
Parkway Towers 1,558,737 (15,590) 164,843 1,707,990
Pebbleshire Apts. 9,840 (9,840)
Pinebrook Apts. 679,155 49,671 728,826
Rand Grove Village 822,741 (24,284) (279,606) 518,851
Richards Park Apts. 1,022 (1,022)
Ridgewood Towers 721,120 (224,604) 120,236 616,752
Shubuta Properties
South Glen Apts. 323,984 (15,000) (23,763) (275,916) 9,305
South Park Apts. 1,098 (1,098)
Sunland Terrace
Tradewinds East Apts. 1,634,847 (24,471) 1,610,376
Warren Heights Apts. II 308,241 (3,915) (20,250) 284,076
White Cliffs Apts. 246,471 (1,031) (35,051) 210,389
Yorkview Estates 148,687 (3,941) (10,277) 134,469
------------ ------------ ------------ ------------ ------------
$ 19,757,594 $ 4,350 $ (649,950) $ (511,033) $ 18,600,961
============ ============ ============ ============ ============
</TABLE>
<PAGE> 110
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED VII
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1994
----------------------------------------------------------------------------
Cash Equity
Balance Distri- in Balance
January 1, Capital butions Income December 31,
Limited Partnerships 1995 Contributions Received (Loss) 1994
- -------------------- ------------ ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Anthracite Apts. $ 1,082,364 $ $(25,948) $ (18,549) $ 1,037,867
Aristocrat Manor 711,571 (51,473) 660,098
Arkansas City Apts.
Arrowsmith Apts. 499,723 - (30,391) 469,332
Ashland Manor 15,276 (15,276)
Bangor House 1,552,706 (33,006) 89,360 1,609,060
Bellair Manor Apts. 335,256 (9,693) (20,495) 305,068
Birch Manor I 10,154 (10,154)
Birch Manor II 3,288 (3,288)
Bluewater Apts. 1,764,963 (13,502) 46,202 1,797,663
Center City Apts. 1,965,002 (36,470) 105,341 2,033,873
Clarkwood Apts. I 6,543 (6,543)
Clarkwood Apts. II 7,613 (7,613)
Cleveland I 198,885 (77,743) 12,276 133,418
Cleveland II 188,636 (26,191) 3,989 166,434
Cleveland III 45,999 (8,437) (6,965) 30,597
Danbury Park Manor
Desoto Apts. 209,309 (27,077) (3,780) 178,452
Dexter Apts. 212,500 (17,987) (45,154) 149,359
Edgewood Terrace II 1,138,047 (32,298) (171,241) 934,508
Goodlette Arms Apts. 2,603,418 (1,485) (58,643) 2,543,290
Hampshire House Apts.
Henrico Arms 214,044 (22,021) (192,023) -
Ivywood Apts. 491,855 (17,327) (63,392) 411,136
Jasper County
King Towers 409,865 (4,871) (67,611) 337,383
Meherrin Landings
Nantucket Apts. 299,135 (10,403) (14,591) 274,141
Newton Apts.
Oak Hill I 358,228 (10,426) (105,870) 241,932
Oakview Apts.
Oakwood Park I 8,137 (8,137)
Oakwood Park II 7,239 (7,239)
Pachuta Apts.
Parkway Towers 1,523,261 (16,131) 51,607 1,558,737
Pebbleshire Apts. 25,838 (25,838)
Pinebrook Apts. 983,052 (303,897) 679,155
Rand Grove Village 955,840 (24,284) (108,815) 822,741
Richards Park Apts. 7,576 (7,576)
Ridgewood Towers 880,227 (267,282) 108,175 721,120
Shubuta Properties
South Glen Apts. 454,860 (23,763) (107,113) 323,984
South Park Apts. 19,119 (19,119)
Sunland Terrace
Tradewinds East Apts. 1,681,237 (19,388) (27,002) 1,634,847
Warren Heights Apts. II 350,469 (9,929) (32,299) 308,241
White Cliffs Apts. 298,180 (4,993) (46,716) 246,471
Yorkview Estates 181,795 (17,675) (15,433) 148,687
----------- --------- ---------- ----------- -----------
$21,590,427 $ 110,783 $ (869,113) $(1,074,503) $19,757,594
=========== ========= ========== =========== ===========
</TABLE>
<PAGE> 111
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED VII
INVESTMENTS IN, EQUITY IN EARNINGS OF AND DIVIDENDS RECEIVED FROM
AFFILIATES AND OTHER PERSONS
FOR THE YEARS ENDED
DECEMBER 31, 1996, 1995 AND 1994
NOTES: 1. Equity in income (losses) of the limited partnerships
represents the Partnership's allocable share of the net
results of operations from the limited partnerships for the
year. Equity in losses of the limited partnerships will be
recognized until the investment balance is reduced to zero or
below zero to an amount equal to future capital contributions
to be made by the Partnership.
2. Cash distributions from the limited partnerships will be
treated as a return of the investment and will reduce the
investment balance until such time as the investment is
reduced to an amount equal to additional contributions.
Distributions subsequently received will be recognized as
income.
<PAGE> 112
SCHEDULE III
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VII
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VII HAS INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
BUILDINGS, FURNISHINGS
NUMBER OUTSTANDING & EQUIPMENT
OF MORTGAGE AMOUNT CARRIED ACCUMULATED
PARTNERSHIP/LOCATION UNITS LOAN LAND AT CLOSE OF PERIOD TOTAL DEPRECIATION
- -------------------- ------ ----------- -------- ---------------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
ANTHRACITE APARTMENTS 121 $3,476,966 $132,875 $4,247,165 $4,380,040 $1,639,16?
Piaston, PA
ARISTOCRAT MANOR 113 1,201,620 265,158 3,007,932 3,273,090 1,168,45?
Hot Springs, AR
ARKANSAS CITY APARTMENTS 16 500,268 22,416 504,920 527,336 142,97?
Arkansas City, AR
BANGOR HOUSE 121 3,879,192 125,277 6,507,809 6,633,086 2,320,20?
Bangor ME
BLUEWATER APARTMENTS 116 1,786,321 130,163 3,787,990 3,918,153 1,624,58?
Port Huron, MI
CENTER CITY APARTMENTS 176 4,953,112 216,196 6,148,217 6,364,413 2,397,55?
Hazelton, PA
CLEVELAND APARTMENTS I 50 816,296 60,000 1,406,756 1,466,756 740,62?
Hayti, MO
CLEVELAND APARTMENTS II 50 807,295 50,000 1,427,920 1,477,920 734,13?
Hayti, MO
CLEVELAND APARTMENTS III 21 358,570 25,000 604,465 629,465 324,19?
Hayti, MO
DANBURY PARK MANOR 151 1,934,112 183,752 4,434,935 4,618,687 1,777,97?
Superior Township, MI
DESOTO APARTMENTS 42 677,371 50,000 1,223,646 1,273,646 621,92?
Desoto, MO
DEXTER APARTMENTS 50 816,383 50,000 1,522,911 1,572,911 787,78?
Dexter, MO
GOODLETTE ARMS APARTMENTS 250 3,116,476 500,000 6,948,002 7,448,002 2,979,38?
Naples, FL
HENRICO ARMS 232 2,946,479 206,980 3,783,137 3,990,117 3,402,79?
Richmond, VA
JASPER COUNTY PROP. 24 664,804 33,000 770,478 803,478 653,01?
Heidelberg, MS
MEHERRIN LANDINGS 42 1,253,760 105,000 1,283,499 1,388,499 804,62?
Emporia, VA
NEWTON APARTMENTS 36 958,324 55,017 1,053,680 1,108,697 935,68?
Newton, MS
OAKVIEW APARTMENTS 32 1,113,354 75,000 1,153,487 1,228,487 310,62?
Monticello, AR
PACHUTA APARTMENTS 16 446,306 20,680 489,524 510,204 431,95?
Pachuta, MS
PARKWAY TOWERS APARTMENTS 104 1,453,797 287,919 4,077,524 4,365,443 3,304,7??
East Providence, RI
RAND GROVE VILLAGE 212 2,844,395 491,000 6,335,858 6,826,858 4,033,37?
Palatine, IL
SHUBUTA PROPERTIES 16 447,517 23,179 537,279 560,458 436,00?
Shubuta, MS
SOUTH GLEN APARTMENTS 159 2,857,548 298,089 4,779,323 5,077,412 3,413,7??
Trenton, MI
SUNLAND TERRACE 80 2,416,624 55,500 2,990,298 3,045,798 1,508,2??
Phoenix, AZ
TRADEWINDS EAST APARTMENTS 150 2,352,652 117,692 5,172,205 5,289,897 2,197,6??
Essexville, MI
ARROWSMITH APARTMENTS 70 1,287,638 252,480 2,312,151 2,564,631 1,075,5??
Corpus Christi, TX
ASHLAND MANOR 189 2,291,775 91,530 4,484,942 4,576,472 2,206,1??
Toledo, OH
BELLAIR MANOR APARTMENTS 68 928,644 152,995 1,597,944 1,750,939 695,5??
Niles, OH
BIRCH MANOR APARTMENTS I 60 608,953 60,889 1,373,175 1,434,064 604,4??
Medina, OH
BIRCH MANOR APARTMENTS II 60 780,853 50,284 1,432,405 1,482,689 623,6??
Medina, OH
CLARKWOOD APARTMENTS I 72 670,857 68,841 1,592,455 1,661,296 698,7??
Elyria, OH
</TABLE>
<PAGE> 113
SCHEDULE III
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VII
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VII HAS INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
BUILDINGS, FURNISHINGS
NUMBER OUTSTANDING & EQUIPMENT
OF MORTGAGE AMOUNT CARRIED ACCUMULATED
PARTNERSHIP/LOCATION UNITS LOAN LAND AT CLOSE OF PERIOD TOTAL DEPRECIATION
- -------------------- ------ ----------- -------- ---------------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
CLARKWOOD APARTMENTS 120 $ 1,221,690 $ 92,510 $ 2,730,574 $ 2,823,084 $ 1,197,35?
Elyria, OH
HAMPSHIRE HOUSE APARTMENT 150 2,984,173 101,163 4,062,821 4,163,984 1,761,35?
Warren, OH
IVYWOOD APARTMENTS 124 1,716,635 200,184 3,020,686 3,220,870 1,312,87?
Columbus, OH
KING TOWERS 68 794,907 97,919 1,532,422 1,630,341 664,14?
Cincinnati, OH
NANTUCKET APARTMENTS 60 655,856 34,676 1,344,874 1,379,550 587,11?
Alliance, OH
OAK HILL APARTMENTS 120 1,922,818 75,834 3,173,971 3,249,805 1,374,98?
Franklin, PA
OAKWOOD PARK I APARTMENTS 50 261,487 63,123 889,197 952,320 392,37?
Lorain, OH
OAKWOOD PARK II APARTMENTS 78 469,269 102,202 1,437,489 1,539,691 633,07?
Lorain, OH
RICHARDS PARK APARTMENTS 60 753,567 52,416 1,448,588 1,501,004 629,82?
Elyria, OH
SOUTH PARK APARTMENTS 138 1,045,107 135,579 2,852,592 2,988,171 1,248,95?
Elyria, OH
WARREN HEIGHTS APARTMENTS II 88 1,221,749 21,803 2,268,950 2,290,753 983,90?
Warren, OH
WHITE CLIFF APARTMENTS 72 1,165,792 62,911 1,966,523 2,029,434 850,88?
Cincinnati, OH
YORKVIEW ESTATES 50 679,271 22,049 1,240,379 1,262,428 538,70?
Massillon, OH
EDGEWOOD TERRACE II 258 4,008,850 525,000 9,676,726 10,201,726 5,981,12?
Washington, DC
PEBBLESHIRE APARTMENTS 120 1,969,775 359,943 4,311,798 4,671,741 1,804,03?
Vernon Hills, IL
PINEBROOK APARTMENTS 136 1,546,321 265,172 3,569,357 3,834,529 1,500,52?
Lansing, MI
RIDGEWOOD TOWERS 140 2,624,968 88,658 6,403,429 6,492,087 3,784,29?
Moline, IL
Additional basis of real estate due to
capital contribution to investee
limited partnership 332,570 8,022,823 8,355,393 4,789,64?
----- ----------- ---------- ------------ ------------ -----------
TOTAL 4,731 $75,690,497 $6,890,624 $146,945,231 $153,835,855 $74,627,83?
===== =========== ========== ============ ============ ===========
</TABLE>
<PAGE> 114
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED VII
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VII HAS INVESTMENTS
DECEMBER 31, 1996
NOTES: 1. Each local limited partnership has developed, owns and
operates the housing project. Substantially all project
costs, including construction period interest expense, were
capitalized by the limited partnerships.
2. Depreciation is provided for by various methods over the
estimated useful lives of the projects. The estimated
composite useful lives of the buildings are from 25 to 40
years.
3. Investments in property and equipment:
<TABLE>
<CAPTION>
Buildings,
Furnishings,
And
Land Equipment Total
---- ----------- -----
<S> <C> <C> <C>
Balance, January 1, 1994 $6,735,343 $143,853,561 $150,588,904
Net additions - 1994 36,000 1,077,123 1,113,123
---------- ------------ ------------
Balance, December 31, 1994 6,771,343 144,930,684 151,702,027
Net additions - 1995 31,400 755,312 786,712
---------- ------------ ------------
Balance, December 31, 1995 6,802,743 145,685,996 152,488,739
Net additions - 1996 87,881 1,259,235 1,347,116
---------- ------------ ------------
Balance, December 31, 1996 $6,890,624 $146,945,231 $153,835,855
========== ============ ============
</TABLE>
<PAGE> 115
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED VII
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VII HAS INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Buildings,
Furnishings
And
Equipment
--------------
<S> <C>
ACCUMULATED DEPRECIATION:
- ------------------------
Balance, January 1, 1994 $56,767,167
Net additions, 1994 5,731,210
-----------
Balance, December 31, 1994 62,498,377
Net additions, 1995 6,563,752
-----------
Balance, December 31, 1995 69,062,129
Net additions, 1996 5,565,703
-----------
Balance, December 31, 1996 $74,627,832
===========
</TABLE>
<PAGE> 116
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
REAL ESTATE ASSOCIATES LIMITED VII (the "Partnership") has no directors or
executive officers of its own.
National Partnership Investment Corp. ("NAPICO" or "the Managing General
Partner") is a wholly-owned subsidiary of Casden Investment Company, an
affiliate of The Casden Company. The following biographical information is
presented for the directors and executive officers of NAPICO with principal
responsibility for the Partnership's affairs.
CHARLES H. BOXENBAUM, 67, Chairman of the Board of Directors and Chief
Executive Officer of NAPICO.
Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was
a real estate broker with the Beverly Hills firm of Carl Rhodes Company.
Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate
Association, National Institute of Real Estate Brokers, Appraisal Institute,
various mortgage banking seminars, and the North American Property Forum held
in London, England. In 1963, he was the winner of the Snyder Award, the
highest annual award offered by the National Association of Real Estate Boards
for Best Exchange. He is one of the founders and a past director of the First
Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a member of
the Board of Directors of the National Housing Council. Mr. Boxenbaum received
his Bachelor of Arts degree from the University of Chicago.
BRUCE E. NELSON, 45, President and a director of NAPICO.
Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved
in the identification, analysis, and negotiation of real estate investments.
From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his
Bachelor of Arts degree from the University of Wisconsin and is a graduate of
the University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.
ALAN I. CASDEN, 51, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.
Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Company. Prior to
that, he was the president and chairman of Mayer Group, Inc., which he joined
in 1975. He is also chairman of Mayer Management, Inc., a real estate
management firm. Mr. Casden has been involved in approximately $3 billion of
real estate financings and sales and has been responsible for the development
and construction of more than 12,000 apartment units and 5,000 single-family
homes and condominiums.
<PAGE> 117
Mr. Casden is a member of the American Institute of Certified Public
Accountants and of the California Society of Certified Public Accountants. Mr.
Casden is a member of the advisory board of the National Multi-Family Housing
Conference, the Multi-Family Housing Council, and the President's Council of
the California Building Industry Association. He also serves on the advisory
board to the School of Accounting of the University of Southern California. He
holds a Bachelor of Science and a Masters in Business Administration degree
from the University of Southern California.
HENRY C. CASDEN, 53, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden
Company, as well as a director of NAPICO since February 1988. He became
secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was of
counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould.
From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm
of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the Beverly
Hills law firm of Fink & Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.
BRIAN D. GOLDBERG, 33, Chief Financial Officer of The Casden Company and a
director of NAPICO.
Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991. Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver. Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.
SHAWN HORWITZ, 37, Executive Vice President and Chief Financial Officer.
Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining
NAPICO, Mr. Horwitz was President of Star Sub Shops, Inc., a corporation
engaged in the business of selling fast food franchises, for approximately one
year, was an audit manager in the real estate industry group for Altschuler,
Melvin & Glasser for six years, and was an auditor with Arthur Young & Co. for
3 years.
Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants and
the South African Institute of Chartered Accountants.
BOB SCHAFER, 55, Vice President and Corporate Controller.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years.
Mr. Schafer is a member of the California Society of Certified Public
Accountants. He holds a Bachelor of Science degree in accounting from Woodbury
University, Los Angeles.
<PAGE> 118
PATRICIA W. TOY, 67, Senior Vice President - Communications and Assistant
Secretary.
Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.
MARK L. WALTHER, 36, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr.
Walther worked in the San Francisco law firm of Browne and Kahn which
specialized in construction litigation. Mr. Walther received his Bachelor of
Arts Degree in Political Science from the University of California, Santa
Barbara and is a graduate of the University of California, Davis, School of
Law. He is a member of the State Bar of Hawaii.
<PAGE> 119
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS
Real Estate Associates Limited VII has no officers, directors or employees.
However, under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to pay the Corporate General Partner
an annual management fee. The annual management fee is approximately equal to
.5 percent of the invested assets, including the Partnership's allocable share
of the mortgages related to the real estate properties held by local limited
partnerships. The fee is earned beginning in the month the Partnership makes
its initial contribution to the local partnership. In addition, the
Partnership reimburses the Corporate General Partner for certain expenses.
An affiliate of the General Partner is responsible for the on-site property
management for certain properties owned by the limited partnerships in which
the Partnership has invested.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
The General Partners own all of the outstanding general partnership
interests of REAL VII; no person is known to own beneficially in excess
of 5 percent of the outstanding limited partnership interests.
(b) With the exception of the initial limited partner, Bruce Nelson, who is
an officer of the Corporate General Partner, none of the officers or
directors of the Corporate General Partner own directly or beneficially
any limited partnership interests in REAL VII.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership has no officers, directors or employees of its own. All of its
affairs are managed by the Corporate General Partner, National Partnership
Investments Corp. The transactions with the Corporate General Partner are
primarily in the form of fees paid by the Partnership to the general partner
for services rendered to the Partnership, as discussed in Item 11 and in the
accompanying notes to the financial statements.
<PAGE> 120
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORT ON FORM 8-K
FINANCIAL STATEMENTS
Report of Independent Public Accountants.
Balance Sheets as of December 31, 1996 and 1995.
Statements of Operations for the years ended December 31, 1996, 1995 and 1994.
Statements of Partners' Deficiency for the years ended December 31, 1996, 1995
and 1994.
Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994.
Notes to Financial Statements.
FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED VII, REAL ESTATE ASSOCIATES IV AND
THE LIMITED PARTNERSHIPS IN WHICH REAL ESTATE ASSOCIATES LIMITED VII AND REAL
ESTATE ASSOCIATES IV HAVE INVESTMENTS.
Schedule - Investments in Limited Partnerships, December 31, 1996, 1995 and
1994.
Schedule III - Real Estate and Accumulated Depreciation, December 31, 1996.
The remaining schedules are omitted because the required information is
included in the financial statements and notes thereto or they are not
applicable or not required.
EXHIBITS
(3) Articles of incorporation and bylaws: The registrant is not
incorporated. The Partnership Agreement was filed with Form S-11
#2-84816 which is incorporated herein by reference.
(10) Material contracts: The registrant is not party to any material
contracts, other than the Restated Certificate and Agreement of Limited
Partnership dated May 24, 1983 and the forty-eight contracts representing
the partnership investment in local limited partnership's as previously
filed at the Securities Exchange Commission, File #2-84816 which is
hereby incorporated by reference.
(13) Annual report to security holders: Pages 96 to 105.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the year ended December 31, 1996.
<PAGE> 121
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Los
Angeles, State of California.
REAL ESTATE ASSOCIATES LIMITED VII
By: NATIONAL PARTNERSHIP INVESTMENTS CORP.
The General Partner
_______________________________________________
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer
_______________________________________________
Bruce E. Nelson
Director and President
_______________________________________________
Alan I. Casden
Director
_______________________________________________
Henry C. Casden
Director
_______________________________________________
Brian D. Goldberg
Director
_______________________________________________
Shawn D. Horwitz
Executive Vice President and
Chief Financial Officer
_______________________________________________
Bob E. Schafer
Senior Vice President and Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 342,631
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 342,631
<PP&E> 0
<DEPRECIATION> 0
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<CURRENT-LIABILITIES> 22,582
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (34,177,462)
<TOTAL-LIABILITY-AND-EQUITY> 18,321,519
<SALES> 0
<TOTAL-REVENUES> 79,426
<CGS> 0
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<OTHER-EXPENSES> 1,179,027
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,320,842
<INCOME-PRETAX> (3,420,443)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,420,443)
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<EXTRAORDINARY> 0
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<NET-INCOME> (3,420,443)
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</TABLE>
