FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to _________
Commission file number 0-13465
NATIONAL HOUSING PARTNERSHIP REALTY FUND I (Exact name of
small business issuer as specified in its charter)
Maryland 52-1358879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, SC 29601
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for 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____
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
NATIONAL HOUSING PARTNERSHIP REALTY FUND I
Statement of Financial Position
(Unaudited)
(in thousands)
September 30, 2000
ASSETS
Investments in and advances to Local Limited
Partnerships (Note 2) $2,007
$2,007
LIABILITIES AND PARTNERS' (DEFICIT) EQUITY
Liabilities
Administrative and reporting fee payable to
General Partner (Note 3) $1,068
Due to General Partner (Note 3) 98
Accrued interest on partner loans (Note 3) 5
Other accrued expenses 32
1,203
Partners' (deficit) equity
General Partner -- The National Housing
Partnership (NHP) (87)
Original Limited Partner -- 1133 Fifteenth
Street Associates (92)
Other Limited Partners -- 11,509 investment
units 983
804
$2,007
See Accompanying Notes to Financial Statements
<PAGE>
b)
NATIONAL HOUSING PARTNERSHIP REALTY FUND I
Statements of Operations
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
revenues:
Share of profits from Local
<S> <C> <C> <C> <C>
Limited Partnerships (Note 2) $ 55 $ 34 $ 78 $ 57
Interest received on advances to
Local Limited Partnerships -- 9 -- 9
Distributions in excess of investment
in Local Limited Partnership (Note 2) -- -- 34 --
55 43 112 66
Costs and Expenses:
Administrative and reporting fees to
General Partner (Note 3) 22 22 65 65
Interest expense on General Partner
Loans 3 -- 3 1
Other operating expenses 15 15 51 44
Total expenses 40 37 119 110
Net income (loss) $ 15 $ 6 $ (7) $ (44)
Allocation of net income (loss):
General Partner - NHP $ -- $ -- $ -- $ (1)
Original Limited Partner - 1133
Fifteenth Street Associates -- -- -- (1)
Other Limited Partners $ 15 $ 6 $ (7) $ (42)
$ 15 $ 6 $ (7) $ (44)
Net income (loss) per Other Limited
Partnership Interest $ 1.30 $ .52 $ (.61) $ (3.65)
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
c)
NATIONAL HOUSING PARTNERSHIP REALTY FUND I
Statement of Partners' (Deficit) Equity
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
The National 1133
Housing Fifteenth Other
Partnership Street Limited
(NHP) Associates Partners Total
(Deficit) equity at
<S> <C> <C> <C> <C>
December 31, 1999 $ (87) $ (92) $ 990 $ 811
Net loss - nine months
ended September 30, 2000 -- -- (7) (7)
(Deficit) equity at
September 30, 2000 $ (87) $ (92) $ 983 $ 804
Percentage interest at
September 30, 2000 1% 1% 98% 100%
(A) (B) (C)
(A) General Partner
(B) Original Limited Partner
(C) Consists of 11,509 investment units
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
d)
NATIONAL HOUSING PARTNERSHIP REALTY FUND I
Statements of Cash Flows
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
CASH FLOWS USED IN OPERATING ACTIVITIES:
Distributions in excess of investment in Local Limited
<S> <C> <C>
Partnerships $ 34 $ --
Interest received -- 9
Operating expenses paid (57) (56)
Net cash used in operating activities (23) (47)
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions received from Local Limited Partnerships
with equity balances -- 39
Advances to Local Limited Partnerships (89) --
Repayment of advances to Local Limited Partnerships -- 8
Net cash (used in) provided by investing activities (89) 47
CASH FLOWS FROM FINANCING ACTIVITIES:
Net advances from General Partner 89 1
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (23) 1
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 23 --
CASH AND CASH EQUIVALENTS, END OF PERIOD $ -- $ 1
RECONCILIATION OF NET LOSS TO NET CASH USED
IN OPERATING ACTIVITIES:
Net loss $ (7) $ (44)
Adjustments to reconcile net loss to net
cash used in operating activities:
Share of profits from Local Limited Partnerships (78) (57)
Increase in administrative and reporting fees payable 65 65
Increase in accrued interest on partner loans 3 1
Decrease in other accrued expenses (6) (12)
Net cash used in operating activities $ (23) $ (47)
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
e)
NATIONAL HOUSING PARTNERSHIP REALTY FUND I
Notes to Financial Statements
(Unaudited)
(1) ACCOUNTING POLICIES
Organization
National Housing Partnership Realty Fund I (the "Partnership" or the
"Registrant") is a limited partnership organized under the Maryland Revised
Uniform Limited Partnership Act on October 21, 1983. The Partnership was formed
for the purpose of raising capital by offering and selling limited partnership
interests and then investing in limited partnerships (Local Limited
Partnerships), each of which owns and operates an existing rental housing
project which is financed and/or operated with one or more forms of rental
assistance or financial assistance from the U.S. Department of Housing and Urban
Development ("HUD").
The National Housing Partnership, a District of Columbia limited partnership
("NHP" or the "General Partner"), raised capital for the Partnership by offering
and selling to additional limited partners 11,519 investment units at a price of
$1,000 per unit. During 1984, the Partnership acquired limited partnership
interests ranging from 98% to 99% in ten Local Limited Partnerships, each of
which was organized to acquire and operate an existing rental housing project.
Apartment Investment and Management Company ("AIMCO") and its affiliates
ultimately control the General Partner. The Original Limited Partner of the
Partnership is 1133 Fifteenth Street Associates, whose limited partners were key
employees of the general partner of NHP at the time the Partnership was formed.
The general partner of 1133 Fifteenth Street Associates is NHP.
Basis of Presentation
The accompanying unaudited interim financial statements reflect all adjustments
which are, in the opinion of management, necessary for a fair statement of the
financial condition and results of operations for the interim periods presented.
All such adjustments are of a normal and recurring nature.
While the General Partner believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these financial
statements be read in conjunction with the financial statements and notes
included in the Partnership's Annual Report filed on Form 10-KSB for the year
ended December 31, 1999.
<PAGE>
(2) INVESTMENTS IN AND ADVANCES TO LOCAL LIMITED PARTNERSHIPS
The Partnership owns a 98% limited partnership interest in Gates Mills I Limited
Partnership and 99% limited partnership interests in nine other Local Limited
Partnerships: Fairmeadows Limited Partnership, Forest Green Limited Partnership,
Griffith Limited Partnership, Northgate Village Limited Partnership, Southward
Limited Partnership, San Jose Limited Partnership, Southridge Apartments Limited
Partnership, Hurbell IV Limited Partnership, and Village Green Limited
Partnership. Since the Partnership, as a limited partner, does not exercise
control over the activities of the Local Limited Partnerships in accordance with
the partnership agreements, these investments are accounted for using the equity
method. Thus, the investments (and the advances made to the Local Limited
Partnerships as discussed below) are carried at cost plus the Partnership's
share of the Local Limited Partnerships' profits less the Partnership's share of
the Local Limited Partnerships' losses and distributions. However, since the
Partnership is not legally liable for the obligations of the Local Limited
Partnerships, or is not otherwise committed to provide additional support to
them, it does not recognize losses once its investment in each of the individual
Local Limited Partnerships, increased for its share of profits, reduced for its
share of losses and cash distributions, reaches zero. As of September 30, 2000,
investments in eight of the ten Local Limited Partnerships had been reduced to
zero. The Partnership did not recognize approximately $554,000 of its allocated
share of losses from six Local Limited Partnerships and approximately $62,000 of
its allocated share of profits from two Local Limited Partnerships for the nine
months ended September 30, 2000, as the Partnership's net carrying basis in
these Local Limited Partnerships had been reduced to zero. The Partnership did
not recognize approximately $612,000 of its allocated share of losses from seven
Local Limited Partnerships and approximately $102,000 of its allocated share of
profit from one Local Limited Partnership for the nine months ended September
30, 1999, as the Partnership's net carrying basis in these Local Limited
Partnerships had been reduced to zero. As of September 30, 2000, the Partnership
has not recognized a total of approximately $18,266,000 of its allocated share
of cumulative losses from the Local Limited Partnerships in which its investment
is zero.
Eight of the Local Limited Partnerships in which the Partnership has invested
have deferred acquisition notes due to the original owner of each Property. With
the exception of Fairmeadows and Southridge, these notes were due between 1997
and 1999, and are currently in default. Fairmeadows and Southridge are currently
in default due to non-payment of required annual interest payments for 1999 (see
below). The notes are secured by both the Partnership's and NHP's interests in
the Local Limited Partnerships. The noteholders have not exercised their rights
under the notes, including the foreclosure on NHP's and the Partnership's
interests in the Local Limited Partnerships. There can be no assurance as to
when, or if, such holders may seek to exercise such rights.
<PAGE>
The Fairmeadows and Southridge notes, both of which were issued in connection
with the Partnership's initial acquisition of the property, initially accrued
interest at the rate of 10% per annum. The notes are nonrecourse and are secured
by a security interest in all partnership interests in the Partnership. In 1996,
the Partnership and the holders of the Fairmeadows and Southridge notes entered
into a Modification, Renewal and Extension of Liens Agreement (the Agreement)
which extended the maturity of the notes to December 1, 2011. Interest on the
notes continues to accrue at 10% and is due and payable at maturity; provided,
however, that minimum annual installments of interest are paid on or before
December 31 of each year through December 31, 2010. Such minimum annual
installment increases each year by not less than 2.5% and not more than 5%,
based on the Consumer Price Index
for All Urban Consumers (CPI-U). No minimum payments were paid in 1999 or during
the nine months ended September 30, 2000 on either note. During the third
quarter of 2000, an affiliate of the General Partner purchased the Fairmeadows
and Southridge notes.
Griffith, Southward, Northgate Village, San Jose, Gates Mill I and Hurbell IV
Limited Partnerships all have notes which were executed by the respective Local
Limited Partnerships with the seller as part of the acquisition of the property
by the Local Limited Partnership. The notes were nonrecourse notes secured by a
security interest in all partnership interests in the Local Limited Partnership
and are subordinated to the respective mortgage notes on each property for as
long as the mortgage notes are insured by HUD. Any payments due from project
income are payable from surplus cash, as defined by the HUD Regulatory
Agreement. Neither the Limited Partnership nor any partner thereof, present or
future, assume any personal liability for the payment of the notes. The notes
were due October 31, 1997, October 4, 1998, July 26, 1999, August 29, 1999,
October 1, 1999, and November 9, 1999, respectively. Interest continues to be
paid or accrued under the original terms of the respective agreements. Each note
is in default and the Local Limited Partnership interests are subject to
potential foreclosure. Continuation of the Local Limited Partnerships'
operations in the present form is dependent on its ability to extend the
maturity date of their respective notes, or to repay or refinance their note.
The financial statements do not include any adjustments which might result from
the outcome of this uncertainty.
Advances made by the Partnership to the individual Local Limited Partnerships
are considered part of the Partnership's investment in Local Limited
Partnerships. When advances are made, they are charged to operations as a loss
on investment in the Local Limited Partnership using previously unrecognized
cumulative losses. As discussed above, due to the cumulative losses incurred by
eight of the Local Limited Partnerships, the aggregate balance of investments in
and advances to Local Limited Partnerships, for these eight Local Limited
Partnerships, has been reduced to zero at September 30, 2000. To the extent
these advances are repaid by the Local Limited Partnerships in the future, the
repayments will be credited as distributions and repayments in excess of
investment in Local Limited Partnerships. These advances are payable to the
Partnership. Interest is calculated at the Chase Manhattan prime rate plus 2%
(11.50% at September 30, 2000). Payment of principal and interest is contingent
upon the Local Limited Partnerships having available surplus cash, as defined by
HUD regulations, from operations or from refinancing or sale of the Local
Limited Partnership properties.
During the nine months ended September 30, 2000, the Partnership advanced
$89,000 to Southridge Apartments Limited Partnership for working capital
purposes. During the nine months ended September 30, 1999, the Partnership made
no advances for working capital purposes. At September 30, 2000, the amount owed
to the Partnership for working capital advances to Local Limited Partnerships
amounted to approximately $451,000.
The following are combined statements of operations for the three and nine
months ended September 30, 2000 and 1999, respectively, of the Local Limited
Partnerships in which the Partnership has invested. The statements are compiled
from financial statements of the Local Limited Partnerships, prepared on the
accrual basis of accounting, as supplied by the management agents of the
projects, and are unaudited.
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
(in thousands)
<S> <C> <C> <C> <C>
Rental income $ 1,920 $ 1,847 $ 5,757 $ 5,527
Other income 138 141 304 260
Total income 2,058 1,988 6,061 5,787
Operating expenses 1,264 1,113 3,734 3,554
Interest, taxes, and insurance 590 589 1,778 1,716
Depreciation 335 393 969 977
Total expense 2,189 2,095 6,481 6,247
Net loss $ (131) $ (107) $ (420) $ (460)
National Housing Partnership
Realty Fund I share of losses $ (129) $ (106) $ (414) $ (455)
</TABLE>
(3) TRANSACTIONS WITH THE GENERAL PARTNER
During both the nine month periods ended September 30, 2000 and 1999, the
Partnership accrued administrative and reporting fees payable to the General
Partner in the amount of approximately $65,000 for services provided to the
Partnership. No payments for such fees were made to the General Partner during
the nine months ended September 30, 2000 and 1999. As of September 30, 2000, the
Partnership owed approximately $1,068,000 to the General Partner for accrued
administrative and reporting fees.
<PAGE>
During the nine months ended September 30, 2000 and 1999, approximately $89,000
and $1,000, respectively, of working capital advances were made by the General
Partner to the Partnership. The amount owed to the General Partner at September
30, 2000 was approximately $98,000. Interest is charged on borrowings at the
Chase Manhattan Bank rate of prime plus 2% (11.50% at September 30, 2000).
Accrued interest on this loan amounted to approximately $5,000 at September 30,
2000.
The advances and accrued administrative and reporting fees payable to the
General Partner will be paid as cash flow permits or from proceeds generated
from the sale or refinancing of one or more of the underlying properties of the
Local Limited Partnerships.
(4) SEGMENT INFORMATION
The Partnership has only one reportable segment. Due to the very nature of the
Partnership's operations, the General Partner believes that segment-based
disclosures will not result in a more meaningful presentation than the financial
statements as currently presented.
(5) GOING CONCERN
Certain of the Local Partnership's notes payable are past due (see Note 2).
Continuation of the Local Partnerships' operations in the present form is
dependent on its ability to extend the maturity date of these notes, or to repay
or to refinance the notes. These conditions raise substantial doubt about their
ability to continue as a going concern. The financial statements do not include
any adjustments which might result from the outcome of this uncertainty.
(6) LEGAL PROCEEDINGS
In 1997, NHP received subpoenas from the HUD Inspector General ("IG") requesting
documents relating to arrangements whereby NHP or any of its affiliates provided
compensation to owners of HUD-assisted or HUD-insured multi-family projects in
exchange for or in connection with property management of a HUD project. In July
1999, NHP received a grand jury subpoena requesting documents relating to the
same subject matter as the HUD IG subpoenas and NHP's operation of a group
purchasing program created by NHP, known as Buyers Access. To date, neither the
HUD IG nor the grand jury has initiated any action against NHP or AIMCO, the
ultimate controlling entity of NHP or, to NHP's or AIMCO's knowledge, any owner
of a HUD property managed by NHP. AIMCO believes that NHP's operations and
programs are in compliance, in all material respects, with all laws, rules and
regulations relating to HUD-assisted or HUD-insured properties. NHP and AIMCO
are cooperating with the investigations and does not believe that the
investigations will result in a material adverse impact on its operations.
However, as with any similar investigation, there can be no assurance that these
will not result in material fines, penalties or other costs.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operation. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
This item should be read in conjunction with the financial statements and other
items contained elsewhere in this report.
LIQUIDITY AND CAPITAL RESOURCES
The Properties in which the Partnership has invested, through its investments in
the Local Limited Partnerships, receive one or more forms of assistance from the
Federal Government. As a result, the Local Limited Partnerships' ability to
transfer funds either to the Partnership or among themselves in the form of cash
distributions, loans or advances is generally restricted by these
government-assistance programs. These restrictions, however, are not expected to
impact the Partnership's ability to meet its cash obligations.
The Partnership had no cash and cash equivalents at September 30, 2000, as
compared to approximately $1,000 in cash and cash equivalents at September 30,
1999. The Partnership had cash and cash equivalents of approximately $23,000 at
December 31, 1999. The ability of the Partnership to meet its on-going cash
requirements, in excess of cash on hand at September 30, 2000, is dependent on
distributions from recurring operations received from the Local Limited
Partnerships and proceeds from the sales or refinancings of the underlying
properties. The Partnership's only other form of liquidity is from General
Partner loans. For the nine months ended September 30, 2000 and 1999, the
General Partner advanced the Partnership approximately $89,000 and $1,000,
respectively, to pay operating expenses. The General Partner will evaluate
lending the Partnership additional funds as such funds are needed, but is in no
way legally obligated to make such loans.
At September 30, 2000, the Partnership currently owes the General Partner
approximately $1,068,000 for administrative and reporting services performed.
During the nine months ended September 30, 2000 and 1999, no payments were made
by the Partnership to the General Partner for administrative and reporting
services. There is no guarantee that the Local Limited Partnerships will
generate future surplus cash sufficient to distribute to the Partnership in
amounts adequate to repay administrative and reporting fees owed, rather the
payment of the unpaid administrative and reporting fees will most likely result
from the sale or refinancing of the underlying properties of the Local Limited
Partnerships, rather than through recurring operations.
During the nine months ended September 30, 2000 the Partnership advanced
approximately $89,000 to the Southridge Apartments Limited Partnership for
working capital purposes. During the nine months ended September 30, 1999, no
working capital advances were made by the Partnership to the Local Limited
Partnerships. A repayment of approximately $8,000 was received during the nine
months ended September 30, 1999. No repayments of advances were received from
the Local Limited Partnerships during the nine months ended September 30, 2000.
The combined amount carried as due to the Partnership by the Local Limited
Partnerships was approximately $451,000 as of September 30, 2000.
Distributions received in excess of investment in Local Limited Partnerships
represent the Partnership's proportionate share of the excess cash available for
distribution from the Local Limited Partnerships. As a result of the use of the
equity method of accounting for the Partnership's investments, as of September
30, 2000, investments in eight of the Local Limited Partnerships has been
decreased to zero. Cash distributions received are recorded in revenues as
distributions received in excess of investment in Local Limited Partnerships.
Cash distributions of approximately $34,000 were received from two Local Limited
Partnerships during the nine months ended September 30, 2000. Cash distributions
of approximately $39,000 were received during the nine months ended September
30, 1999 for Local Limited Partnerships for which the Partnership's investment
has not yet been reduced to zero. The receipt of distributions in future years
is dependent on the operations of the underlying properties of the Local Limited
Partnerships.
Eight of the Local Limited Partnerships in which the Partnership has invested
have deferred acquisition notes due to the original owner of each Property. With
the exception of Fairmeadows and Southridge, these notes were due between 1997
and 1999, and are currently in default. Fairmeadows and Southridge are currently
in default due to non-payment of required annual interest payments for 1999 (see
below). The notes are secured by both the Partnership's and NHP's interests in
the Local Limited Partnerships. The noteholders have not exercised their rights
under the notes, including the foreclosure on NHP's and the Partnership's
interests in the Local Limited Partnerships. There can be no assurance as to
when, or if, such holders may seek to exercise such rights.
The Fairmeadows and Southridge notes, both of which were issued in connection
with the Partnership's initial acquisition of the property, initially accrued
interest at the rate of 10% per annum. The notes are nonrecourse and are secured
by a security interest in all partnership interests in the Partnership. In 1996,
the Partnership and the holders of the Fairmeadows and Southridge notes entered
into a Modification, Renewal and Extension of Liens Agreement (the Agreement)
which extended the maturity of the notes to December 1, 2011. Interest on the
notes continues to accrue at 10% and is due and payable at maturity; provided,
however, that minimum annual installments of interest are paid on or before
December 31 of each year through December 31, 2010. Such minimum annual
installment increases each year by not less than 2.5% and not more than 5%,
based on the Consumer Price Index for All Urban Consumers (CPI-U). No minimum
payments were paid in 1999 or during the nine months ended September 30, 2000 on
either note. During the third quarter of 2000, an affiliate of the General
Partner purchased the Fairmeadows and Southridge notes.
Griffith, Southward, Northgate Village, San Jose, Gates Mill I and Hurbell IV
Limited Partnerships all have notes which were executed by the respective Local
Limited Partnerships with the seller as part of the acquisition of the property
by the Local Limited Partnership. The notes were nonrecourse notes secured by a
security interest in all partnership interests in the Local Limited Partnership
and are subordinated to the respective mortgage notes on each property for as
long as the mortgage notes are insured by HUD. Any payments due from project
income are payable from surplus cash, as defined by the HUD Regulatory
Agreement. Neither the Limited Partnership nor any partner thereof, present or
future, assume any personal liability for the payment of the notes. The notes
were due October 31, 1997, October 4, 1998, July 26, 1999, August 29, 1999,
October 1, 1999, and November 9, 1999, respectively. Interest continues to be
paid or accrued under the original terms of the respective agreements. Each note
is in default and the Local Limited Partnership interests are subject to
potential foreclosure. Continuation of the Local Limited Partnerships'
operations in the present form is dependent on its ability to extend the
maturity date of their respective notes, or to repay or refinance their note.
The financial statements do not include any adjustments which might result from
the outcome of this uncertainty.
RESULTS OF OPERATIONS
The Partnership has invested as a limited partner in Local Limited Partnerships
which operate ten rental housing properties. Due to the use of the equity method
of accounting as discussed in Note 2 to the Partnership's financial statements,
to the extent the Partnership still has a carrying basis in a respective Local
Limited Partnership, results of operations would be impacted by the
Partnership's share of the profits or losses of the Local Limited Partnerships.
Eight of the ten investments in Local Limited Partnership have been reduced to
zero. As a result, the Partnership's operations are no longer being affected by
its share of the operations. The Partnership has recorded its share of
operations in the remaining two Local Limited Partnerships which amounted to
profits of approximately $78,000 and $57,000 for the nine months ended September
30, 2000 and 1999, respectively.
The Partnership realized net income of approximately $15,000 and a net loss of
approximately $7,000 for the three and nine months ended September 30, 2000,
respectively, compared to net income of approximately $6,000 and a net loss of
approximately $44,000 for the three and nine months ended September 30, 1999.
Net income (loss) per unit of limited partnership interest was approximately
$1.30 and ($0.61) for the three and nine months ended September 30, 2000 and
approximately $0.52 and ($3.65) for the three and nine months ended September
30, 1999. The increase in net income was due to an increase in the share of
profits from the Local Limited Partnerships in which the Partnership's equity
has not been reduced to zero. The increase in net income for the nine months
ended September 30, 2000 was also due to distributions in excess of investment
in Local Limited Partnerships.
The Partnership did not recognize approximately $554,000 of its allocated share
of losses from six Local Limited Partnerships and approximately $62,000 of its
allocated share of profits from two Local Limited Partnerships for the nine
months ended September 30, 2000, as the Partnership's net carrying basis in
these Local Limited Partnerships had been reduced to zero. The Partnership did
not recognize approximately $612,000 of its allocated share of losses from seven
Local Limited Partnerships and approximately $102,000 of its allocated share of
profit from one Local Limited Partnership for the nine months ended September
30, 1999, as the Partnership's net carrying basis in these Local Limited
Partnerships had been reduced to zero.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In 1997, NHP received subpoenas from the HUD Inspector General ("IG") requesting
documents relating to arrangements whereby NHP or any of its affiliates provided
compensation to owners of HUD-assisted or HUD-insured multi-family projects in
exchange for or in connection with property management of a HUD project. In July
1999, NHP received a grand jury subpoena requesting documents relating to the
same subject matter as the HUD IG subpoenas and NHP's operation of a group
purchasing program created by NHP, known as Buyers Access. To date, neither the
HUD IG nor the grand jury has initiated any action against NHP or Apartment
Investment and Management Company ("AIMCO"), the ultimate controlling entity of
NHP or, to NHP's or AIMCO's knowledge, any owner of a HUD property managed by
NHP. AIMCO believes that NHP's operations and programs are in compliance, in all
material respects, with all laws, rules and regulations relating to HUD-assisted
or HUD-insured properties. NHP and AIMCO are cooperating with the investigations
and does not believe that the investigations will result in a material adverse
impact on its operations. However, as with any similar investigation, there can
be no assurance that these will not result in material fines, penalties or other
costs.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit 27, Financial Data Schedule
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 2000.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NATIONAL HOUSING PARTNERSHIP REALTY FUND I
(Registrant)
By: The National Housing Partnership,
Its sole General Partner
By: National Corporation for Housing
Partnerships, its sole General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date: November 15, 2000
