HOUSING PROGRAMS LTD, 10-K/A, 1997-01-23

HOUSING PROGRAMS LTD
10-K/A, 1997-01-23
REAL ESTATE

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

For the Fiscal Year Ended DECEMBER 31, 1995

Commission File Number
2-92352

HOUSING PROGRAMS LIMITED
A CALIFORNIA LIMITED PARTNERSHIP
(Formerly, Shearson Lehman/Coast Savings Housing Partners, Limited)

I.R.S. Employer Identification No. 95-3906167

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. / /

<PAGE> 2

AMENDMENT NO. 1

The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for the
year ended December 31, 1995 as set forth in the following pages attached
hereto:

Item 1. Reports of other Independent Public Accountants

Pages 11 to 63

Item 3. Note 2 - Investments in Limited Partnerships

Financial Statements of (Evergreen Apartments limited
partnership) Oshtemo Limited Dividend Housing
Association (a Michigan limited partnership).

Pages 24 to 42

Item 4. Item 3 (above) continues - Impairment of Long-Lived
Assets

Page 69

Item 5. Fees and Expenses Due General Partners, Page 22

Page 73

SIGNATURE

Pursuant to the requirements 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.

Housing Programs Limited
-----------------------------------------
Registrant

Bob Schafer
-----------------------------------------
Vice President and Corporate Controller

<PAGE> 3

PART I.

ITEM 1. BUSINESS

Housing Programs Limited (the "Partnership") is a limited partnership which was
formed under the laws of the State of California on May 15, 1984. On September
12, 1984, the Partnership offered 3,000 units consisting of 6,000 Limited
Partnership Interests and warrants to purchase a maximum of 6,000 Additional
Limited Partnership Interests through a public offering.

The general partners of the Partnership are Housing Programs Corporation II,
National Partnership Investments Corp. ("NAPICO"), and Coast Housing Investment
Associates ("CHIA"). CHIA is a limited partnership formed under the California
Limited Partnership Act and consists of Messrs. Nicholas G. Ciriello, an
unrelated individual, as general partner and Charles H. Boxenbaum, as limited
partner. The business of the Partnership is conducted primarily by its general
partners as Housing Programs Limited has no employees of its own.

Casden Investment Corporation 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. LBI Group Inc.
owns all of the stock of Housing Programs Corporation II.

The Partnership holds limited partnership interests in eighteen local limited
partnerships as of December 31, 1995. National Partnership Investments
Associates II ("NPIA II"), a limited partnership formed under the California
Limited Partnership Act and consisting of Messrs. Charles H. Boxenbaum, general
partner, and Nicholas G. Ciriello, limited partner, hold a general partnership
interest in ten of the local limited partnerships. Each of the local
partnerships owns a low income housing project which is subsidized and/or has a
mortgage note payable to or 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 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 remains, 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 Partnership became the limited partner in the local limited partnerships
pursuant to arm's-length negotiations with the local limited partnerships'
general partners who are often the original project developers. In certain other
cases, the Partnership invested in newly formed local limited 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 general partner of the local limited partnership retains
responsibility for maintaining, operating and managing the project. Under
certain circumstances, the Partnership has the right to replace the general
partner of the limited partnerships.

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.

2
<PAGE> 4

During 1995, 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, 1995, of the projects owned by local partnerships in which the Partnership
has invested.

SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH HOUSING PROGRAMS LIMITED HAS AN INVESTMENT
DECEMBER 31, 1995

<TABLE>
<CAPTION>
Units Authorized
For Rental
No. of Assistance Under Units Percentage of
Name & Location Units Section 8 Occupied Total Units
- --------------- ----- --------------- -------- ------------
<S> <C> <C> <C> <C>
Bannock Arms Apts. 66 66 60 91%
Boise, ID

Berkeley Gardens 132 26 125 95%
Martinsburg, WV

Cape LaCroix 125 0 118 94%
Cape Girardeau, MO

Cloverdale 100 0 100 100%
Crawfordsville, IN

Cloverleaf 94 94 91 97%
Indianapolis, IN

Deep Lake Hermitage 144 18 136 94%
Lake Villa, IL

Evergreen Apts. 330 330 322 98%
Oshtemo, MI

Friendship Arms 151 150 151 100%
Hyattsville, MD

Jenny Lind Hall 78 78 78 100%
Springfield, MO

Lancaster Heights 198 0 177 89%
Normal, IL

Locust House 99 98 99 100%
Westminster, MD

Midpark Towers 202 202 200 99%
Dallas, TX

Oxford House 156 152 156 100%
Decatur, IL
</TABLE>

3
<PAGE> 5

SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH HOUSING PROGRAMS LIMITED HAS AN INVESTMENT
DECEMBER 31, 1995

Round Barn Manor 156 156 156 100%
Champaign, IL

Santa Fe Towers 252 251 252 100%
Overland Park, KS

Walnut Towers 78 77 78 100%
Winfield, KS

Westwood Terrace 97 97 96 99%
----- ----- -----
Moline, IL

TOTAL 2,686 1,909 2,609 97%
===== ===== =====
</TABLE>

4
<PAGE> 6

ITEM 2. PROPERTIES

Through its participation in local limited 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, 1995, NAPICO was a plaintiff or defendant in several
lawsuits. None of these suits are related to the Partnership. In addition, the
Partnership is involved in the following lawsuits. In the opinion of management
and NAPICO, the claims will not result in any material liability to the
Partnership.

The Montecito local partnership had been operating at a deficit, and the General
Partner was unsuccessful in its attempt to negotiate a mortgage modification
with the lender to improve the situation. No mortgage payments to the lender
were made subsequent to May 1994. A Notice of Default and Election To Sell Under
the Deed of Trust was filed for record on October 27, 1994 in the LA County
Recorder's office. On October 26, 1994, the loan servicer, on behalf of the
lender, filed a complaint for Specific Performance for Appointment of Receiver
and Judicial Foreclosure against the Partnership. The request for an appointment
of a receiver was approved on November 10, 1994. Representatives of the
Montecito local partnership and the General Partner met with the loan servicer
on November 2, 1994 and on February 22, 1995 to discuss a loan modification
proposal. However, the lender rejected all mortgage modification proposals
submitted and foreclosed upon the property on July 18, 1995. The Partnership's
original investment in the Montecito local partnership represents approximately
5% of the Partnership's total capital raised. The Partnership's financial
statements reflect no investment in Montecito at December 31, 1995 and 1994.

Housing Programs Corporation II, a general partner of the Partnership, and
certain of its affiliates, on their own behalf and on behalf of the Partnership
and certain other partnerships with which they are associated (collectively, the
"Plaintiff Partnerships"), and NAPICO, and certain of its affiliates, have
entered into a Memorandum of Understanding dated August 11, 1995. In addition to
establishing certain Partnership controls, the Memorandum of Understanding
resolves and settles various management and control issues which were under
discussion for some time and various claims which were raised in a lawsuit filed
in the Los Angeles Superior Court on June 9, 1995 by Housing Programs
Corporation II, the Partnership, and others against, among others , NAPICO ("the
Lawsuit"). All parties entered into the Memorandum of Understanding without any
admission of wrongdoing or liability by any defendant as to any claim in the
Lawsuit, in a desire to avoid continued litigation that would be expensive, time
consuming and complex.

By virtue of the Memorandum of Understanding, the parties thereto have agreed,
among other things, that:

1. An analysis was to be prepared of the books and records of the
Partnership including an analysis of the books and records of
the master disbursement account maintained by an affiliate of
NAPICO. The analysis has recently been completed. NAPICO agreed
that it and its affiliates will pay to the Partnership any
amounts (with interest thereon) properly determined to be owed
to the Partnership as a result of the analysis.

2. HAPI Management, Inc. ("HAPI"), an affiliate of NAPICO shall
continue to manage the five Partnership properties it currently
manages, subject to various agreed-upon modifications to the
existing management agreements, and HAPI will not manage the
other properties of the Partnership. All future management
arrangements with HAPI will be subject to Housing Programs
Corporation II's reasonable approval.

3. The Partnership will reimburse Housing Programs Corporation II
for professional fees paid on behalf of the Partnership in
connection with issues raised in the Memorandum of
Understanding.

5
<PAGE> 7

4. The Partnership will employ an independent Cash Manager,
designated by Housing Programs Corporation II, and approved by
NAPICO, to perform cash management services, including
maintenance of the Partnership's bank accounts and reserves,
payment of property management fees and other accounts payable,
payments to affiliates of NAPICO, and payment of cash
distributions, if any, to the Limited Partners. NAPICO has
agreed to prepare detailed annual budgets to be approved by
Housing Programs Corporation II and thereafter used by the Cash
Manager as a guide and control over Partnership operations. The
Cash Manager has not yet been implemented.

5. The parties to the Memorandum of Understanding agreed to enter
into a formal Settlement Agreement and, concurrently therewith,
(a) the plaintiffs in the Lawsuit will execute a special
release of the defendants with respect to the allegations
contained in the Lawsuit, (b) the defendants in the Lawsuit
will execute a special release of each plaintiff in the Lawsuit
that is a general partner of a Plaintiff Partnership with
respect to all claims which would have been compulsory
counterclaims thereunder, and (c) the defendants will execute a
special release of any claims, other than those regarding
specifically scheduled contractual relations, which any
defendant may have had against this Partnership or any of the
other Plaintiff Partnerships.

6. Upon the uncured breach of certain provisions of the Memorandum
of Understanding, or upon a future breach of NAPICO's fiduciary
duties, Housing Programs Corporation II could cause NAPICO to
resign as a general partner of the Partnership and become a
limited partner thereof.

As of April 8, 1996, certain of the foregoing items enumerated above had yet to
be fully implemented. The parties have had discussions regarding their
respective positions and have agreed to participate in a settlement conference.
If these matters cannot be resolved by agreement, then the parties will submit
their respective positions to arbitration.

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, and it is
not anticipated that any public market will develop for the purchase and sale of
any Limited Partnership Interest. Limited Partnership Interests may be
transferred only if certain requirements are satisfied. Currently, there are
2,870 registered holders of Limited Partnership Interests in the Partnership.
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 dispositions of its
investments in limited partnerships.

6
<PAGE> 8

ITEM 6. SELECTED FINANCIAL DATA:

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Loss From Partnership
Operations $ (1,727,047) $ (1,690,366) $ (1,699,642) $ (1,707,285) $ (1,695,022)

Distribution From Limited
Partnerships Recognized
as Income 307,474 520,001 473,210 172,080 306,582

Equity in Income (Loss)
of Limited Partnerships
and amortization of
acquisition costs 87,795 (210,249) 616,683 101,166 76,236
------------ ------------ ------------ ------------ ------------
Net Loss $ (1,331,778) $ (1,380,614) $ (609,749) $ (1,434,039) $ (1,312,204)
============ ============ ============ ============ ============

Net Loss per Limited
Partner Interest $ (108) $ (111) $ (49) $ (115) $ (105)
============ ============ ============ ============ ============

Total assets $ 15,191,113 $ 15,692,284 $ 15,858,598 $ 16,566,893 $ 16,843,664
============ ============ ============ ============ ============
Investments in
Limited Partnerships $ 14,470,783 $ 14,533,940 $ 15,184,763 $ 16,065,129 $ 16,184,643
============ ============ ============ ============ ============

Notes payable $ 10,169,743 $ 10,177,433 $ 10,177,433 $ 10,260,196 $ 10,345,769
============ ============ ============ ============ ============
Fees and Expenses Due to
General Partners $ 990,393 $ 1,092,620 $ 714,742 $ 1,545,846 $ 1,132,504
============ ============ ============ ============ ============
</TABLE>

7
<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 accounts 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.

CAPITAL RESOURCES

The Partnership received $30,920,000 in subscriptions for units of Limited
Partnership Interests (at $5,000 per unit) during the period September 12, 1984,
to June 30, 1986, pursuant to a registration statement filed on Form S-11.

The Partnership made its capital contributions to the local limited partnerships
in stages, over a period of two to five years, with each contribution due on a
specified date, provided that certain conditions regarding construction or
operation of the project were fulfilled. The Partnership has no further capital
commitments to the local limited partnerships.

In 1993, three limited partnerships (Oxford House, Round Barn Manor and Westwood
Terrace) refinanced their mortgages with taxable and tax-exempt bonds issued by
the Illinois Housing Development Authority. Proceeds from the refinancing were
utilized to retire two secondary mortgages including principal and accrued
interest of $1,811,000 and $1,785,000 for Oxford House and Round Barn Manor,
respectively. The third secondary mortgage of Westwood Terrace was paid down and
has a remaining principal balance of approximately $442,000. After retiring and
paying down the secondary mortgages, the Partnership received excess cash
proceeds of more than $1,467,000 from the refinancings. The three limited
partnerships obtained new mortgage amounts of $5,641,352, $5,318,893 and
$3,172,370 financed for a term of 25 years at a taxable rate of 7.6 percent and
a tax-exempt rate of 6.3 percent.

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 losses for as long as 20 years from the
date of the Partnership investment. 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
has sought to defer income taxes from capital gains by not selling any projects
or project interests.

Each individual limited partner's situation varies and limited partners should
contact their personal tax advisors for an understanding of his or her tax
situation.

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.
Equity in income (loss) of limited partnerships has significantly been affected
as a result of the Partnership not recognizing losses on the limited
partnerships after their respective investment balances have been reduced to
zero, in accordance with the equity method of accounting.

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 partnerships owning
government assisted projects. Available cash is invested providing interest
income as

8
<PAGE> 10

reflected in the statements of operations. These funds can be 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 general partners of the Partnership and is calculated as a
percentage of the Partnership's invested assets. The management fee is paid to
the general partners for their continuing management of Partnership affairs. The
fee is payable beginning with the month following the Partnership's initial
investment in a local partnership.

Operating expenses of the Partnership consist substantially of professional fees
for services rendered to the Partnership, management fees payable to the general
partners and accrued interest on the notes payable. Operating expenses have
remained relatively consistent for 1995, 1994 and 1993, except for legal fees
which increased as a result of the Montecito foreclosure.

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.

9
<PAGE> 11
HOUSING PROGRAMS LIMITED
(a California limited partnership)

FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
DECEMBER 31, 1995

10
<PAGE> 12
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Housing Programs Limited
(A California limited partnership)

We have audited the accompanying balance sheets of Housing Programs Limited (a
California limited partnership) as of December 31, 1995 and 1994, and the
related statements of operations, partners' equity (deficiency) and cash flows
for each of the three years in the period ended December 31, 1995. Our audits
also included the financial statement schedules listed in the index on 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 30 percent and 34 percent of
total assets as of December 31, 1995 and 1994, respectively, and the equity in
income (loss) of these limited partnerships represent 15 percent, 11 percent and
17 percent of the total net loss of the Partnership for the years ended December
31, 1995, 1994 and 1993, 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 Housing Programs Limited as of December 31, 1995 and
1994, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1995 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 29, 1996

11
<PAGE> 13

[LOGO]
[LETTERHEAD]
ALTSCHULER, MELVION AND GLASSER LLP

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
Bannock Arms Second Limited Partnership

We have audited the accompanying balance sheet of BANNOCK ARMS SECOND LIMITED
PARTNERSHIP, FHA Project Number 124-35019-PM, (the "Partnership") as of
December 31, 1995, and the related statements of income, 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. The
financial statements of the Partnership as of and for the year ended December
31, 1994 were audited by other auditors whose report dated February 9, 1995
expressed an unqualified opinion on those statements.

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 1995 financial statements referred to above present fairly,
in all material respects, the financial position of Bannock Arms Second Limited
Partnership as of December 31, 1995, and the results of its operations, changes
in its 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 February 15, 1996 on our consideration of the Partnership's internal
control structure and a report dated February 15, 1996 on its compliance with
laws and regulations

12
<PAGE> 14
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying 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. Such information has been
subjected to the auditing procedures applied in the audit of the 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, MELVION AND GLASSER LLP

Los Angeles, California
February 15, 1996

13
<PAGE> 15
[LETTERHEAD]
REZNICK FEDDER & SILVERMAN

INDEPENDENT AUDITORS' REPORT

To the Partners
Berkeley Gardens Limited Partnership

We have audited the accompanying balance sheet of Berkeley Gardens
Limited Partnership as of December 31, 1995, 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 at
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Berkeley Gardens
Limited Partnership as of December 31, 1995, 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.

14
<PAGE> 16
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 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.

In accordance with Government Auditing Standards, we have also issued
reports dated January 19, 1996 on our consideration of Berkeley Gardens Limited
Partnership 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 Federal Employer
January 19, 1996 Identification Number:
52-1088612

Audit Principal: Craig Birmingham

15
<PAGE> 17
[LETTERHEAD]
LANDSMAN FRANK AND BLOCH

Independent Auditors' Report

Partners
Cape La Croix Apts., Ltd,
(A Missouri Limited Partnership)
FHA Project Number 085-44015-LDP
Indianapolis, Indiana

We have audited the accompanying balance sheets of Cape La Croix
Apts., Ltd. (A Missouri Limited Partnership), FHA Project Number 08544015-LDP,
as of December 31, 1995 and 1994, 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 Cape La Croix
Apts., Ltd. (A Missouri Limited Partnership) as of December 31, 1995 and 1994,
and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

16
<PAGE> 18
Partners
Cape La Croix Apts., Ltd.
(A Missouri Limited Partnership)
Page Two

In accordance with Government Auditing Standards, we have also issued
a report dated January 19, 1996 on our consideration of the Partnership's
internal control structure and reports dated January 19, 1996 on its compliance
with laws and regulations.

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 13 through 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 financial statements
taken as a whole.

LANDSMAN, FRANK AND BLOCH
An Accountancy Corporation

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California Federal Employer Identification
January 19, 1996 Number 95-2783759

Audit Principal:
Alan H. Salz, C.P.A.

17
<PAGE> 19
[LANDSMAN FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

Partners
Cloverdale Heights Apts., Ltd.
(An Indiana Limited Partnership)
FHA Project Number 073-44131-LDP
Indianapolis, Indiana

We have audited the accompanying balance sheets of Cloverdale Heights
Apts., Ltd. (An Indiana Limited Partnership), FHA Project Number 073-44131-LDP,
as of December 31, 1995 and 1994, 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.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cloverdale Heights
Apts., Ltd. (An Indiana Limited Partnership) as of December 31, 1995 and 1994,
and the results of its operations and its cash flows for the years then ended
in conformity with generally accepted accounting principles.

18
<PAGE> 20
Partners
Cloverdale Heights Apts., Ltd.
(An Indiana Limited Partnership)
Page Two

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 13 through 21) 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 financial statements
taken as a whole.

LANDSMAN, FRANK AND BLOCH
An Accountancy Corporation

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California Federal Employer Identification
January 19, 1996 Number 95-2783759

Audit Principal:
Alan H. Salz, C.P.A.

19
<PAGE> 21
[LANDSMAN FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

Partners
Cloverleaf Apts., Ltd.
(An Indiana Limited Partnership)
FHA Project Number 073-35092-PM
Indianapolis, Indiana

We have audited the accompanying balance sheets of Cloverleaf Apts.,
Ltd. (An Indiana Limited Partnership), FHA Project Number 073-35092-PM, as of
December 31, 1995 and 1994, 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.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cloverleaf Apts.,
Ltd. (An Indiana Limited Partnership) as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.

20
<PAGE> 22
Partners
Cloverleaf Apts., Ltd.
(An Indiana Limited Partnership)
Page Two

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 through 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 financial statements
taken as a whole.

LANDSMAN, FRANK AND BLOCH
An Accountancy Corporation

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California Federal Employer Identification
January 19, 1996 Number 95-2783759

Audit Principal:
Alan H. Salz, C.P.A.

21
<PAGE> 23
[LOGO]
[ALTSCHULER, MELVION 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
Deep Lake Shores Associates

We have audited the accompanying balance sheet of DEEP LAKE SHORES ASSOCIATES
(an Illinois limited partnership), FHA Project Number 071-35320-PM-L8, (the
"Partnership") as of December 31, 1995, and the related 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 audit. The financial statements of the Partnership as
of and for the year ended December 31, 1994 were audited by other auditors
whose report dated February 14, 1995, expressed an unqualified opinion on those
statements.

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 1995 financial statements referred to above present fairly,
in all material respects, the financial position of Deep Lake Shores Associates
at December 31, 1995, and the results of its operations, changes in its
partners' equity, and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.

22
<PAGE> 24
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying additional financial
data shown on pages 14 through 20 are presented for purposes of additional
analysis and are not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the 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 15, 1996

23
<PAGE> 25
[COOPERS & LYBRAND L.L.P. LETTERHEAD]

Report of Independent Accountants

To the Partners of
Oshtemo Limited Dividend
Housing Association:

We have audited the accompanying balance sheet of Oshtemo Limited Dividend
Housing Association (a Michigan limited partnership), MSHDA Development No.
544, as of December 31, 1995 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.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oshtemo Limited Dividend
Housing Association, as of December 31, 1995 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 25, 1996 on our consideration of Oshtemo Limited Dividend Housing
Association's internal control structure and a report dated January 25, 1996 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 Oshtemo 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.

24
<PAGE> 26
We have previously audited and expressed an unqualified opinion on the
financial statements of Oshtemo Limited Dividend Housing Association for the
years 1990 through 1994. In our opinion, the supplemental data included on
page 15, relating to the years 1990 through 1995, 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 1983 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 L.L.P.

Detroit, Michigan
January 25, 1996

25
<PAGE> 27
OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION
MSHDA Development No. 544
(a Michigan limited partnership)
BALANCE SHEET
December 31, 1995

<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
Cash:
Operating cash $ 530,346
Operating reserve cash 2,354,344
-----------
$ 2,884,690
Accounts receivable:
Residents 5,888
MSHDA rent subsidy 19,126
-----------
25,014
Prepaid expenses 1,984
Escrows:
Development cost escrow principal 495,570
Development cost escrow interest 1,423,154
Replacement reserve 2,213,390
Real estate taxes 104,370
Insurance 22,681
-----------
4,259,165
Other assets:
Investments in rental properties, at cost:
Land 617,369
Buildings 14,049,790
Furniture and fixtures 653,744
Maintenance equipment 102,500
Vehicles 103,275
-----------

15,526,678
Less accumulated depreciation (5,577,747)
-----------
9,948,931
-----------

$17,119,784
===========
LIABILITIES

Accounts payable, trade $ 26,679
Accrued liabilities:
Property taxes $ 128,482
Interest 53,985
Management fees 8,003
Payroll 4,399
-----------
194,869
Unearned rental income 2,203
Tenants' security deposits 60,065
Less cash held for security deposits (60,065)
-----------
--
Mortgage payable 8,779,230
-----------

9,002,981
PARTNERS' EQUITY

Partners' equity 8,116,803
-----------

$17,119,784
===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

26
<PAGE> 28
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
STATEMENT OF PROFIT AND LOSS

- ----------------------------------------------------------------------------------------------------------------------------------
Part I Description of Account Acct. No.
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5000 - REVENUE ACCOUNTS
- ----------------------------------------------------------------------------------------------------------------------------------

RENTAL INCOME - 5100
Apartments or Members Carrying Charges (Co-ops) . . . . . . . . . . . . . . . 5120 $ 721,173
Tenant Assistance Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 5121 1,591,295
Furniture and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 5130
Stores and Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5140
Garage and Parking Spaces . . . . . . . . . . . . . . . . . . . . . . . . . . 5170
Flexible Subsidy Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5180
Miscellaneous (specify) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5190
--------------
Total Rent Revenue (Potential at 100% Occupancy) $ 2,312,468
- ----------------------------------------------------------------------------------------------------------------------------------

VACANCIES - 5200
Apartments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5220 (21,974)
Furniture and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 5230
Stores and Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5240
Garage and Parking Spaces . . . . . . . . . . . . . . . . . . . . . . . . . . 5270
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5290
--------------
Total Vacancies (21,974)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Rental Revenue (Rent Revenue Less Vacancies) 2,290,494
- ----------------------------------------------------------------------------------------------------------------------------------

ELDERLY AND CONGREGATE SERVICES INCOME - 5300

Total Service Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -
- ----------------------------------------------------------------------------------------------------------------------------------

FINANCIAL REVENUE - 5400
Interest Income - Project Operations . . . . . . . . . . . . . . . . . . . . . 5410 18,411
Income from Investments - Residual Receipts . . . . . . . . . . . . . . . . . 5430 248,123
Income from Investments - Reserve for Replacement . . . . . . . . . . . . . . 5440 126,640
Income from Investments - Miscellaneous . . . . . . . . . . . . . . . . . . . 5490 4,616
--------------
Total Financial Revenue 397,790
- ----------------------------------------------------------------------------------------------------------------------------------

OTHER REVENUE - 5900
Laundry and Vending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5910 2,698
NSF and Late Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5920 342
Damages and Cleaning Fees .. ... . . . . . . . . . . . . . . . . . . . . . . . 5930 4,805
Forfeited Tenant Security Deposits . . . . . . . . . . . . . . . . . . . . . . 5940
Other Revenue (Miscellaneous) . . . . . . . . . . . . . . . . . . . . . . . . 5990 4,266
--------------
Total Other Revenue 12,111

- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE $ 2,700,395
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

27
<PAGE> 29
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
STATEMENT OF PROFIT AND LOSS - CONTINUED

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
For the year January 1, Development Development Name:
to December 31, 1995 Number: 544 Oshtemo Limited Dividend Housing
HUD-92410 (7/91) Substitute Association (a Michigan limited
partnership)
- ----------------------------------------------------------------------------------------------------------------------------------
Part I Description of Account Acct No.
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6000 - PROJECT EXPENSE ACCOUNTS
- ----------------------------------------------------------------------------------------------------------------------------------

ADMINISTRATIVE EXPENSES - 6200/6300
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6210 $ 3,743
Other Administrative Expense . . . . . . . . . . . . . . . . . . . . . . . . . 6250 11,127
Office Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6310 39,944
Office Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6311 13,871
Office or Model Apartment Rent . . . . . . . . . . . . . . . . . . . . . . . . 6312
Management Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6320 112,530
Manager or Superintendent Salaries . . . . . . . . . . . . . . . . . . . . . . 6330 46,365
Manager or Superintendent Rent Free Unit . . . . . . . . . . . . . . . . . . . 6331 251
Legal Expenses (Project) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6340 1,288
Auditing Expenses (Project) . . . . . . . . . . . . . . . . . . . . . . . . . 6350 7,800
Bookkeeping Fees/Accounting Services . . . . . . . . . . . . . . . . . . . . . 6351
Telephone and Answering Service . . . . . . . . . . . . . . . . . . . . . . . 6360 13,280
Bad Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6370 1,042
Miscellaneous Administrative Expenses (specify) . . . . . . . . . . . . . . . 6390 11,216
--------------
Total Administrative Expenses $262,457

- ----------------------------------------------------------------------------------------------------------------------------------

UTILITIES EXPENSE - 6400
Fuel Oil/Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6420
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6450 43,963
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6451 42,491
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6452 43,165
Sewer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6453

Total Utilities Expense 129,619
- ----------------------------------------------------------------------------------------------------------------------------------

OPERATING AND MAINTENANCE EXPENSES - 6500
Janitor and Cleaning Payroll . . . . . . . . . . . . . . . . . . . . . . . . . 6510 13,549
Janitor and Cleaning Supplies . . . . . . . . . . . . . . . . . . . . . . . . 6515 19,081
Janitor and Cleaning Contract . . . . . . . . . . . . . . . . . . . . . . . . 6517 3,146
Exterminating Payroll/Contract . . . . . . . . . . . . . . . . . . . . . . . . 6519
Exterminating Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6520 3,537
Garbage and Trash Removal . . . . . . . . . . . . . . . . . . . . . . . . . . 6525 16,239
Security Payroll/Contract . . . . . . . . . . . . . . . . . . . . . . . . . . 6530 2,554
Grounds Payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6535 44,143
Grounds Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6536 10,986
Grounds Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6537 8,128
Repairs Payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6540 89,814
Repairs Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6541 47,790
Repairs Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6542 34,511
Elevator Maintenance/Contract . . . . . . . . . . . . . . . . . . . . . . . . 6545 7,480
Heating/Cooling Repairs and Maintenance . . . . . . . . . . . . . . . . . . . 6546 17,511
Swimming Pool Maintenance/Contract . . . . . . . . . . . . . . . . . . . . . . 6547 4,342
Snow Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6548 3,471
Decorating Payroll/Contract . . . . . . . . . . . . . . . . . . . . . . . . . 6560 20,405
Decorating Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6561 7,979
Vehicle & Maint. Equip. Operation and Repairs . . . . . . . . . . . . . . . . 6570 18,017
Miscellaneous Operating & Maintenance Expenses . . . . . . . . . . . . . . . . 6590 4,432
--------------
Total Operating & Maintenance Expenses 377,115
- ----------------------------------------------------------------------------------------------------------------------------------

Total Expenses (Carry forward to Page 6) $ 769,191
- ----------------------------------------------------------------------------------------------------------------------------------

</TABLE>

The accompanying notes are an integral part of the Financial statements.

28
<PAGE> 30
U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
STATEMENT OF PROFIT AND LOSS - CONTINUED

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
For the year January 1, Development Development Name:
to December 31, 1995 Number: 544 Oshtemo Limited Dividend Housing Association
HUD-92410 (7/91) Substitute (a Michigan limited partnership)
- ----------------------------------------------------------------------------------------------------------------------------------
Part I Description of Account Acct No.
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
6800 - EXPENSE ACCOUNTS (Continued) Balance Carried Forward from Page 5 $ 769,191
- ----------------------------------------------------------------------------------------------------------------------------------

TAXES AND INSURANCE - 6700
Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6710 $ 128,382

Payroll Taxes (FICA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6711 29,014
Miscellaneous Taxes, Licenses and Permits . . . . . . . . . . . . . . . . . . 6719
Property and Liability Insurance (Hazard) . . . . . . . . . . . . . . . . . . 6720 24,172
Fidelity Bond Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6721
Workmen's Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6722 17,339
Health Insurance & Other Employee Benefits . . . . . . . . . . . . . . . . . . 6723 37,273
Other Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6729 1,592
----------
Total Taxes and Insurance 237,772
- ----------------------------------------------------------------------------------------------------------------------------------

FINANCE EXPENSES - 6800
Memo on Bonds Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6810
Interest on Mortgage Payable . . . . . . . . . . . . . . . . . . . . . . . . . 6820 652,361
Interest on Notes Payable (Long-Term) . . . . . . . . . . . . . . . . . . . . 6830
Interest on Notes Payable (Short-Term) . . . . . . . . . . . . . . . . . . . . 6840
Mortgage Insurance Premium/Service Charge . . . . . . . . . . . . . . . . . . 6850
Miscellaneous Financial Expenses . . . . . . . . . . . . . . . . . . . . . . . 6890
-------------
Total Financial Expenses 652,361
- ----------------------------------------------------------------------------------------------------------------------------------

ELDERLY AND CONGREGATE SERVICE EXPENSES - 6900 6900

-------------
Total Service Expenses (Schedule Attached) . . . . . . . . . . . . . . . . . . . . . --
- ----------------------------------------------------------------------------------------------------------------------------------

Total Cost of Operations before Depreciation 1,659,324
- ----------------------------------------------------------------------------------------------------------------------------------

Profit (Loss) before Depreciation 1,041,071
- ----------------------------------------------------------------------------------------------------------------------------------

Depreciation (Total) - 6600, rental properties, primarily buildings 6600 532,792
- ----------------------------------------------------------------------------------------------------------------------------------

Operating Profit or (Loss) 508,279
- ----------------------------------------------------------------------------------------------------------------------------------

CORPORATE OR MORTGAGOR ENTITY EXPENSES - 7100

Officer Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7110
Legal Expenses (Entity) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7120
Taxes (Federal-State-Entity) . . . . . . . . . . . . . . . . . . . . . . . 7130-32
Other Expenses (specify) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7190
-------------
Total Corporate Expenses --

- ----------------------------------------------------------------------------------------------------------------------------------

Net Profit or (Loss) $ 508,279
- ----------------------------------------------------------------------------------------------------------------------------------

</TABLE>
Miscellaneous or other Income and Expense Sub-Account Groups. If miscellaneous
or other income and/or expense sub-accounts (5190, 5290, 5490, 5990, 6390,
6729, 6890 and 7190) exceed the Account Groupings by 10% or more, attach a
separate schedule describing or explaining the miscellaneous income or expense.

No separate schedules are applicable.

The accompanying notes are an integral part of the financial statements.

29
<PAGE> 31
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
STATEMENT OF PROFIT AND LOSS - CONTINUED

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
For the year January 1, Development Development Name:
to December 31, 1995 Number: 544 Oshtemo Limited Dividend Housing
HUD-92410 (7/91) Substitute Association (a Michigan limited
partnership)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Part II
- ----------------------------------------------------------------------------------------------------------------------------------

1. Total principal payments required under the mortgage, even if payments under
a Workout Agreement are less or more than those required under the mortgage.
$ 132,545
- ----------------------------------------------------------------------------------------------------------------------------------

2. Replacement Reserve deposits required by Regulatory Agreement or Amendments thereto,
even if payments may be temporarily suspended or waived.
$ 72,108
- ----------------------------------------------------------------------------------------------------------------------------------

3. Replacement or Painting Reserve releases which are included as expense items on the Profit and Loss Statement. $ --
- ----------------------------------------------------------------------------------------------------------------------------------

4. Project Improvement Reserve Releases under the Flexible Subsidy Program that are included as
expense items on this Profit and Loss Statement. $ --
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

30
<PAGE> 32
OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION
MSHDA DEVELOPMENT NO. 544
(a Michigan limited partnership)
STATEMENT OF PARTNERS' EQUITY
for the year ended December 31, 1995

<TABLE>
<CAPTION>
GENERAL LIMITED PARTNER
PARTNER SHEARSON/LEHMAN
ASSET COAST SAVINGS
MANAGEMENT HOUSING PARTNERS
TOTAL GROUP LIMITED
----------- -------- -----------
<S> <C> <C> <C>
Profit and loss allocation percentages 100% 1% 99%
=========== ========= ===========

Balances, beginning of year $ 7,687,011 $ 24,114 $ 7,662,897

Net profit for the year 508,279 5,083 503,196

Cash distributions to partners (78,487) 785 (77,702)

Balances, end of year $ 8,116,803 $ 28,412 $ 8,088,391
----------- -------- -----------
</TABLE>

The accompanying notes are an integral part of the financial statements.

31
<PAGE> 33
Oshtemo Limited Dividend Housing Association
MSHDA Development No, 544
(a Michigan limited partnership)
Statement of Cash Flows
for the year ended December 31, 1995

<TABLE>
<S> <C> <C>
Cash flows from operating activities:
Rental receipts $ 2,279,231
Interest receipts 397,790
Other receipts 12,111
Administrative (63,367)
Management fee (112,337)
Utilities (129,619)
Salaries and wages (257,160)
Operating and maintenance (206,850)
Real estate taxes (122,618)
Payroll taxes (29,014)
Property insurance (23,814)
Miscellaneous taxes and insurance (56,204)
Interest on mortgage note (653,176)
Gain on sale of fixed assets (4,266)
------------

Net cash provided by operating activities $ 1,030,707

Cash flows from investing activities:
Investments in rental properties (236,174)
Proceeds from sale of fixed assets 29,144
Increase in:
Escrows (316,650)
Operating cash reserves (132,618)
------------

Net cash used in investing activities (656,298)

Cash flows from financing activities:
Mortgage principal payments (132,545)
Cash distributions paid to partners (78,487)
------------

Net cash used in financing activities (211,032)
------------

Net increase in cash 163,377

Cash, January 1, 1995 366,969
------------

Cash, December 31, 1995 $ 530,346

Net profit $ 508,279
============

Adjustments to reconcile net profit to
net cash provided by operating activities:
Depreciation $ 532,792
Decrease (Increase) in:
Accounts receivable, residents (3,703)
Accounts receivable, MSHDA rent subsidy (5,603)
Prepaid expenses 358
Increase (decrease) in:
Accounts payable, trade (198)
Accrued interest (815)
Accrued property taxes 5,764
Accrued management fees 193
Accrued payroll (137)
Unearned rental Income (1,957)
Gain on sale of fixed assets (4,266)
-------------

Total adjustments 522,428
------------

Net cash provided by operating activities $ 1,030,707
------------
</TABLE>

The accompanying notes are an integral part of the Financial statements.

32
<PAGE> 34
OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION
MSHDA DEVELOPMENT NO. 544
(a Michigan limited partnership)
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The following is a summary of significant accounting policies followed
in the preparation of the financial statements:

a. Depreciation deducted in the statement of profit and loss has
been computed primarily on the straight-line method.

b. Certain real estate taxes are deducted in the statement of
profit and loss in the year in which they become a lien on the
property.

c. Income or loss of the Partnership is allocated 1 percent to
the general partners and 99 percent to the limited partner.
No income tax provision has been included in the financial
statements since income or loss of the Partnership is required
to be reported by the partners on their respective income tax
returns.

d. For purposes of the statement of cash flows, the Partnership
considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.

2. ORGANIZATION:

The Partnership was formed on August 30, 1984 under the Michigan
Uniform Limited Partnership Act for the purpose of acquiring, owning
and operating a 330-unit apartment complex located in Kalamazoo,
Michigan, financed in part with the proceeds of a mortgage loan from
the Michigan State Housing Development Authority ("MSHDA"). Under the
terms of the regulatory agreement, executed in connection with
obtaining the mortgage loan, MSHDA regulates rental rates and
distributions to partners.

3. MORTGAGE PAYABLE:

The cost of the project has been financed by partners' capital
contributions, cash flow from operations during construction and by a
$10,091,166, 40-year, 7.375 percent, nonrecourse, first mortgage note.

The first mortgage note is payable in monthly installments
approximating $65,500, including interest, and matures in August 2019.

33
<PAGE> 35
NOTES TO FINANCIAL STATEMENTS, CONTINUED

3. MORTGAGE PAYABLE, CONTINUED:

The mortgage payable is collateralized by rental properties included in
the accompanying balance sheet and partners' equity. The Partnership has
no liability beyond such collateral with respect to the mortgage.

The maturities on the above debt for the years ended December 31 are as
follows:

<TABLE>
<CAPTION>
YEAR Amount
-------------
<S> <C>
1996 $ 142,658
1997 153,542
1998 165,257
1999 177,864
2000 191,435
Thereafter 7,948,474
-------------

$ 8,779,230
-------------
</TABLE>

Due to the unavailability of insurance or similar subsidies for housing
programs, it is not practical to determine the fair value of such a loan.

4. DEVELOPMENT COST ESCROW:

The development cost escrow is maintained under the control of the
mortgagee for the benefit of the development. This fund may be used for
operating expenses, additional amenities or replacement of assets as
approved by the mortgagee.

5. REPLACEMENT RESERVE:

The replacement reserve is controlled by the mortgagee for the benefit of
the development. Disbursements from this reserve may be made to the
property for reimbursement of capital expenditures, such as the replacement
of assets, upon written approval by the mortgagee.

34
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS, CONTINUED

6. RELATED PARTY TRANSACTIONS:

The following expenses incurred by the development during 1995 were
paid or are payable to the general partners or affiliated companies as
indicated below:

<TABLE>
<S> <C>
Materials and supplies:
Apartment Specialists $ 46,295
==========

West Michigan Supply $ 19,869
==========

Management fee, First Housing corporation,
including premium management fee of
$16,500. Accrued management fee was
$8,003 at December 31, 1995 $ 112,530
==========

Preparation of audit schedules, SAFGO $ 1,800
==========

Aeration of land, SAFGO $ 250
==========
</TABLE>

35
<PAGE> 37
OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION
MSHDA DEVELOPMENT NO. 544
(a Michigan limited partnership)
BALANCE SHEET ITEMS
December 31, 1995

1. ACCOUNTS RECEIVABLE:

<TABLE>
<S> <C>
Residents' accounts receivable:
Current $ 3,775
31 - 60 days 392
Over 60 days 1,721
----------

5,888
MSHDA rent subsidy 19,126
----------

$ 25,014
==========
</TABLE>

2. ACCOUNTS PAYABLE (OPERATING ACCOUNTS PAYABLE ONLY):

<TABLE>
<S> <C>
Trade creditors:
Current $ 9,166
31 - 60 days 17,513
----------

$ 26,679
==========
</TABLE>

3. NONRENTAL UNIT:

At December 31, 1995, the development had one nonrental unit. The
unit was occupied by Tim Greeley, an employee of the development.

36
<PAGE> 38
OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION
MSHDA DEVELOPMENT NO. 544

(a Michigan limited partnership)

FUNDS AVAILABLE FOR DISTRIBUTION - SCHEDULE I
December 31, 1995

<TABLE>
<S> <C> <C>
1. Operating cash $ 530,346
2. MSHDA-held operating reserve account 2,354,344
3. Other nonrestricted cash reserve accounts -
-----------
Total available cash (per audit) $ 2,884,690
-----------
Add:
4A. Resident accounts receivable 5,888
4B. Non-resident receivable -
5. HUD/MSHDA subsidy receivable 19,126
6. Development cost escrow interest 1,423,154
7. Tax/insurance escrow surplus (deficit) -
8. Escrow draws receivable -
-----------
9A. Total additions 1,448,168
-----------
9B. Total cash and additions 4,332,858
-----------
Deduct:
10. Trade accounts and surcharges payable and
accrued expenses 39,081
11. Approved undisbursed limited dividend ("L.D.") payments -
12. Prepaid rent/unearned rental income 2,203
13. Delinquent mortgage principal and interest payment -
14. R/R deferrals, delinquent MSHDA loans/grants -
15. Security deposit not funded (over funded) -
16. One month's gross rent potential 191,381
-----------
17A. Total deductions 232,665
-----------
17B. Surplus funds available for distribution
(Line 9B minus Line 17A) 4,100,193
-----------
Deduct:
18. Current years maximum potential L.D. payment 78,487
-----------
18A. Subtotal (Line 17B minus Line 18) 4,021,706
-----------

Note: Complete Lines 19 through 23A only for 80/20
developments with deferred interest. Read the instructions
before completing Lines 19 through 23A. All others go to Line 24.

Deduct:
19. Prior years cumulative limited dividend payment
-----------
19A. Surplus funds available for payment toward deferred
interest (Line 18A minus Line 19, if negative, insert zero)
-----------
Deduct:
20. Cumulative deferred interest (per MSHDA)
===========
21. Deferred interest payable (lesser of
Lines 19A or 20)
-----------
22. Remaining surplus funds (Line 19A minus Line 21)
-----------

Add:
23. Prior years cumulative L.D. payment (Line 19)
-----------
23A. Subtotal (Line 22 plus 23)
-----------
Deduct:
24. Sum of Lines 2, 6 and 7 3,777,496
-----------
25. Operating reserve cash (to be transferred to MSHDA)
(developments without deferred interest: deduct
Line 24 from Line 18A, others go to
Line 25A) $ 244,206
===========
25A. Operating reserve cash (to be transferred to MSHDA)
developments with deferred interest, see note below)
===========
</TABLE>

Note: If Line 18A is negative, insert "0" on Line 25A. If Line 18A is
positive, and Line 19A is zero subtract Line 24 from Line 18A. If
Lines 18A and 19A are positive, subtract Line 24 from Line 23A

37
<PAGE> 39
OSHTEMO LIMITED DIVIDEND HOUSING ASSOCIATION
MSHDA DEVELOPMENT NO. 544
(a Michigan limited partnership)
FUNDS AVAILABLE FOR DISTRIBUTION - SCHEDULE II
for the years ended December 31, 1983 to 1995

<TABLE>
<S> <C> <C>
1. Owners' initial equity $ 1,121,239
2. Maximum authorized limited dividend payment $ 78,487
3. Cumulative 3% $ 33,637
4. Noncumulative 4% $ 44,850
Cutoff date August 8, 1979
</TABLE>

<TABLE>
<CAPTION>
(II) (III) (IV) (V)
(I) SURPLUS FUNDS POTENTIAL LIMITED ANNUAL LIMITED
YEAR OF AVAILABLE FOR LIMITED DIVIDEND DIVIDEND
OPERATION DISTRIBUTION DIVIDEND PAID CARRYFORWARD
--------- ---------------- ---------- -------- ----------------
<S> <C> <C> <C> <C>
Initial year,
1983 $ 349,175 $ 78,487 $ 78,487
1984 248,008 78,487 $ 52,598 104,376
1985 637,601 78,487 78,487 104,376
1986 905,664 78,487 78,487 104,376
1987 1,413,082 78,487 78,487 104,376
1988 1,999,852 78,487 78,487 104,376
1989 2,379,278 78,487 78,487 104,376
1990 2,622,981 78,487 78,487 104,376
1991 2,870,529 78,487 78,487 104,376
1992 2,845,144 78,487 78,487 104,376
1993 3,245,547 78,487 78,487 104,376
1994 3,685,176 78,487 78,487 104,376
1995 4,100,193 78,487 78,487 104,376
</TABLE>

38
<PAGE> 40
[COOPERS & LYBRAND L.L.P. LETTERHEAD]

INDEPENDENT ACCOUNTANTS' REPORT ON INTERNAL CONTROL STRUCTURE

To the Partners of
Oshtemo Limited Dividend
Housing Association:

We have audited the financial statements of Oshtemo Limited Dividend Housing
Association (a Michigan limited partnership), MSHDA Development No. 544, as of
and for the year ended December 31, 1995, and have issued our report thereon
dated January 25, 1996.

The management of Oshtemo Limited Dividend Housing Association is responsible
for establishing and maintaining an internal control structure. In fulfilling
this responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of internal control structure
policies and procedures. The objectives of an internal control structure are
to provide management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of financial statements in
accordance with generally accepted accounting principles. Because of inherent
limitations in any internal control structure, errors or irregularities may
nevertheless occur and not be detected. Also, projection of any evaluation of
the system to future periods is subject to the risk that procedures may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation of policies and procedures may deteriorate.

In planning and performing our audit of the financial statements of Oshtemo
Limited Dividend Housing Association for the year ending December 31, 1995, we
obtained an understanding of the internal control structure. With respect to
the internal control structure, we obtained an understanding of the design of
relevant policies and procedures and whether they have been placed in operation,
and we assessed control risk in order to determine our auditing procedures for
the purpose of expressing our opinion on the financial statements and do not
provide an opinion on the internal control structure. Accordingly, we do not
express such an opinion.

39
<PAGE> 41
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a reportable condition in which the
design or operation of one or more of the internal control structure elements
does not reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely period
by employees in the normal course of performing their assigned functions. We
noted no matters involving the internal control structure and its operation
that we consider to be material weaknesses as defined above.

Additionally, no management letter was issued in relation to our audit of the
financial statements of Oshtemo Limited Dividend Housing Association, as of and
for the year ended December 31, 1995.

This report is intended for the information of the partners, management and
MSHDA. However, this report is a matter of public record, and its
distributions is not limited.

/s/ COOPERS & LYBRAND L.L.P.

Detroit, Michigan
January 25, 1996

40
<PAGE> 42
[COOPERS & LYBRAND L.L.P. LETTERHEAD]

INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS

To the Partners of
Oshtemo Limited Dividend
Housing Association:

Compliance with laws, regulations, contracts and grants applicable to the
Oshtemo Limited Dividend Housing Association is the responsibility of the
Oshtemo Limited Dividend Housing Association's management. As part of
obtaining reasonable assurance about whether the financial statements are free
of material misstatement, we performed tests of the Oshtemo Limited Dividend
Housing Association's compliance with certain provisions of laws, regulations,
contracts and grants, including compliance with specific provisions of the
MSHDA Regulatory Agreement, MSHDA Directives and HUD regulations and procedures
included in the HUD subsidy contract and MSHDA Multi-Family Audit Guidelines.
However, the objective of our audit of the financial statements was not to
provide an opinion on overall compliance with such provisions. Accordingly, we
do not express such an opinion.

The results of our tests disclosed no instances of noncompliance that are
required to be reported herein under Government Auditing Standards.

41
<PAGE> 43
We have reviewed the December 1995 Monthly Income and Expenditure ("MIE")
Report submitted to MSHDA noting that the operating cash, residents accounts
receivable, security deposit liability and security deposit funded account
balances in such report are in substantial agreement with the corresponding
balances in these financial statements.

The accounts payable balance was not in substantial agreements as follows:

<TABLE>
<S> <C>
Balance per NNE report $34,682
Reconciling items, management fees (8,003)
-------

Balance per the financial statements $26,679
=======
</TABLE>

The difference relates to management fees being classified as accrued
management fees in the financial statements but included in accounts payable in
the December MIE.

We have also examined the accounts payable detail for July 31, 1995, as
included in the MIE Report submitted to MSHDA noting that the accounts payable
listed on Schedule B of the report appears complete.

This report is intended for the information of the partners, management and
MSHDA. However, this report is a matter of public record, and its distribution
is not limited.

/s/ COOPERS & LYBRAND L.L.P.

Detroit, Michigan
January 25, 1996

42
<PAGE> 44
[REZNICK FEDDER & SILVERMAN LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners
Hyattsville Housing Associates

We have audited the accompanying balance sheet of Hyattsville Housing
Associates as of December 31, 1995, 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 Hyattsville Housing
Associates as of December 31, 1995, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.

43
<PAGE> 45
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 28 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information, except for
that portion marked "unaudited," on which we express no opinion, 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.

In accordance with Government Auditing Standards, we have also issued
reports dated January 18, 1996, on our consideration of Hyattsville Housing
Associates' internal control structure and on its compliance with specific
requirements applicable to CDA programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.

/s/ REZNICK FEDDER & SILVERMAN

Baltimore, Maryland Federal Employer
January 18, 1996 Identification Number:
52-1088612

Audit Principal: Richard G. Schaefer

44
<PAGE> 46
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

Partners
Jenny Lind Hall Second Limited Partnership
FHA Project Number 084-35127-L8-PM-WAH
Beverly Hills, California

We have audited the accompanying balance sheets of Jenny Lind Hall
Second Limited Partnership, FHA Project Number 084-35127-L8-PM-WAH, as of
December 31, 1995 and 1994, 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.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Jenny Lind Hall
Second Limited Partnership as of December 31, 1995 and 1994, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

45
<PAGE> 47
Partners
Jenny Lind Hall Second Limited Partnership
Page Two

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 through 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 financial statements
taken as a whole.

LANDSMAN, FRANK AND BLOCH
An Accountancy Corporation

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California Federal Employer Identification
January 19, 1996 Number 95-2783759

Audit Principal:
Alan H. Salz, C.P.A.

46
<PAGE> 48
[LETTERHEAD]
ALTSCHULER, MELVOIN AND GLASSER LLP

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
Lancaster Heights Associates

We have audited the accompanying balance sheet of LANCASTER HEIGHTS ASSOCIATES
(an Illinois limited partnership), IHDA Project No. ML-7, (the "Partnership")
as of December 31, 1995, and the related statements of operations, changes in
partners' deficiency 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. The financial statements of the Partnership as of and for the year
ended December 31, 1994 were audited by other auditors whose report, dated
February 7, 1995 expressed an unqualified opinion on those statements.

In our opinion, the 1995 financial statements referred to above present fairly,
in all material respects, the financial position of Lancaster Heights
Associates as of December 31, 1995, and the results of its operations, changes
in its partners' deficiency, 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 February 21, 1996 on our consideration of the Partnership's internal
control structure and a report dated February 21, 1996 on its compliance with
laws and regulations.

47
<PAGE> 49
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The additional financial data shown on pages 16
through 20 is presented for purposes of additional analysis and is not a
required part of the financial statements. Such information has been subjected
to the auditing procedures applied in the audit of the 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, MELVION AND GLASSER LLP

Los Angeles, California
February 21, 1996

48
<PAGE> 50

[REZNICK FEDDER & SILVERMAN LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

To the Partners
Locust House Associates

We have audited the accompanying balance sheet of Locust House
Associates as of December 31, 1995, 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 Locust House
Associates as of December 31, 1995, and the results of its operations, the
changes in partners' equity and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.

49
<PAGE> 51
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 28 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information, except for
that portion marked "unaudited," on which we express no opinion, 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.

In accordance with Government Auditing Standards, we have also issued
reports dated January 8, 1996, on our consideration of Locust House Associates'
internal control structure and on its compliance with specific requirements
applicable to HUD and CDA programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.

/s/ REZNICK FEDDER & SILVERMAN

Baltimore, Maryland Federal Employer
January 6, 1996 Identification Number: 52-1088612

Audit Principal: Richard G. Schaefer

50
<PAGE> 52
[LANDSMAN FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

Partners
Midpark Towers Second Limited Partnership
FHA Project Number 112-38010-PM-L8
Beverly Hills, California

We have audited the accompanying balance sheets of Midpark Towers Second
Limited Partnership, FHA Project Number 112-38010-PM-L8, as of December 31,
1995 and 1994, 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.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Midpark Towers
Second Limited Partnership as of December 31, 1995 and 1994, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

51
<PAGE> 53
Partners
Midpark Towers Second Limited Partnership
Page Two

In accordance with Government Auditing Standards, we have also issued a
report dated January 24, 1996 on our consideration of the Partnership's
internal control structure and reports dated January 24, 1996 on its compliance
with laws and regulations.

LANDSMAN, FRANK AND BLOCH
An Accountancy Corporation

/S/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California Federal Employer Identification
January 24, 1996 Number 95-2783759

Audit Principal:
Alan H. Salz, C.P.A.

52
<PAGE> 54
[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
OHA Associates

We have audited the accompanying balance sheet of OHA ASSOCIATES (an Illinois
limited partnership), IHDA Project No. ML-99 (the "Partnership"), as of
December 31, 1995, and the related statements of operations, changes in
partners' deficiency 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. The financial statements of the Partnership as of and for the year
ended December 31, 1994 were audited by other auditors whose report dated
February 10, 1995 expressed an unqualified opinion on those statements.

In our opinion, the 1995 financial statements referred to above present fairly,
in all material respects, the financial position of OHA Associates as of
December 31, 1995 and the results of its operations, changes in its partners'
deficiency, and its cash flows for the year then ended in conformity with
generally accepted accounting principles.

53
<PAGE> 55
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying additional financial data shown
on pages 16 through 20 is presented for purposes of additional analysis and is
not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the 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 15, 1996

54
<PAGE> 56
[KPMG PEAT MARWICK LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

The Partners
Plaza Village Group
(A Limited Partnership):

We have audited the accompanying balance sheet of Plaza Village Group (A
Limited Partnership) FHA Project No. 016-44076-LDT-SUP as of December 31, 1995,
and the related statements of profit and loss (in HUD Form 92410) changes in
partners' equity and cash flows for the year then ended. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these Financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Plaza Village Group (A Limited
Partnership) FHA Project No. 016-44076-LDT-SUP at December 31, 1995 and the
results of its operations and its 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 supplementary information required by the
U.S. Department of Housing and Urban Development ("HUD") 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 presented in all material
respects in relation to the basic financial statements taken as a whole.

/S/ KPMG PEAT MARWICK LLP

January 26, 1996

55
<PAGE> 57

[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
Round Barn Manor Associates

We have audited the accompanying balance sheet of ROUND BARN MANOR ASSOCIATES
(an Illinois limited partnership), IHDA Project No. ML-86, (the "Partnership")
as of December 31, 1995, and the related statements of operations, changes in
partners' deficiency 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. The financial statements of the Partnership as of and for the year
ended December 31, 1994 were audited by other auditors whose report dated
February 10, 1995 expressed an unqualified opinion on those statements.

In our opinion, the 1995 financial statements referred to above present fairly,
in all material respects, the financial position of Round Barn Manor Associates
as of December 31, 1995, and the results of its operations, changes in its
partners' deficiency 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 February 20, 1996 on our consideration of the Partnership's internal
control structure and a report dated February 20, 1996 on its compliance with
laws and regulations.

56
<PAGE> 58
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying additional financial data shown
on pages 16 through 20 is presented for purposes of additional analysis and is
not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the 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 20, 1996

57
<PAGE> 59
[LANDSMAN FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

Partners
Santa Fe Towers Second Limited Partnership
FHA Project Number 084-35180-L8-PM-WAH
Beverly Hills, California

We have audited the accompanying balance sheets of Santa Fe Towers
Second Limited Partnership, FHA Project Number 084-35180-L8-PM-WAH, as of
December 31, 1995 and 1994, 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.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Santa Fe Towers
Second Limited Partnership as of December 31, 1995 and 1994, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

58
<PAGE> 60
Partners
Santa Fe Towers Second Limited Partnership
Page Two

LANDSMAN, FRANK AND BLOCH
An Accountancy Corporation

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California Federal Employer Identification
January 24, 1996 Number 95-2783759

Audit Principal:
Alan H. Salz, C.P.A.

59
<PAGE> 61
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]

Independent Auditors' Report

Partners
Walnut Towers Second Limited Partnership
FHA Project Number 102-35090-L8-PM-WAH
Beverly Hills, California

We have audited the accompanying balance sheets of Walnut Towers Second
Limited Partnership, FHA Project Number 102-35090-L8-PM-WAH, as of December 31,
1995 and 1994, 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 Walnut Towers
Second Limited Partnership as of December 31, 1995 and 1994, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

60
<PAGE> 62
Partners
Walnut Towers Second Limited Partnership
Page Two

LANDSMAN, FRANK AND BLOCH
An Accountancy Corporation

/s/ LANDSMAN, FRANK AND BLOCH

Beverly Hills, California Federal Employer Identification
January 24, 1996 Number 95-2783759

Audit Principal:
Alan H. Salz, C.P.A.

61
<PAGE> 63
[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 AND
THE ILLINOIS HOUSING DEVELOPMENT AUTHORITY

To the Partners of
Westwood Terrace Second Limited Partnership

We have audited the accompanying balance sheet of WESTWOOD TERRACE SECOND
LIMITED PARTNERSHIP, IHDA Project No. ML-100, as of December 31, 1995, and the
related statements of operations, changes in 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. The financial statements of
Westwood Terrace Second Limited Partnership as of and for the year ended
December 31, 1994, were audited by other auditors whose report dated January
30, 1995, expressed an unqualified opinion on those statements.

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 an well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the 1995 financial statements referred to above present fairly,
in all material respects, the financial position of Westwood Terrace Second
Limited Partnership as of December 31, 1995, and the results of its operations,
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 January 19, 1996, on our consideration of the Partnership's internal
control structure and a report dated January 19, 1996, on its compliance with
laws and regulations.

62
<PAGE> 64
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional financial data required by the
U.S. Department of Housing and Urban Development shown on pages 15 through 19
are presented for purposes of additional analysis and are not a required part
of the financial statements. Such information has been subjected to the
procedures applied in the audit of the 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

Chicago, Illinois
January 19, 1996

63
<PAGE> 65
HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)

BALANCE SHEETS

DECEMBER 31, 1995 AND 1994

ASSETS

<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS
(Notes 1 and 2) $ 14,470,783 $ 14,533,940

CASH AND CASH EQUIVALENTS (Note 1) 595,330 624,935

SHORT TERM INVESTMENTS (Note 1) 125,000 533,409
------------ ------------
TOTAL ASSETS $ 15,191,113 $ 15,692,284
============ ============

LIABILITIES AND PARTNERS' DEFICIENCY

LIABILITIES:
Notes payable (Notes 3 and 7) $ 10,169,743 $ 10,177,433
Accrued fees and expenses due general
partners (Note 4) 990,393 1,092,620
Accrued interest payable (Notes 3 and 7) 9,864,545 8,917,531
Accounts payable 15,432 21,922
------------ ------------
21,040,113 20,209,506
------------ ------------
COMMITMENTS AND CONTINGENCIES
(Notes 2, 4 and 6)

PARTNERS' EQUITY (DEFICIENCY):
General partners (309,236) (295,918)
Limited partners (5,539,764) (4,221,304)
------------ ------------
(5,849,000) (4,517,222)
------------ ------------
TOTAL LIABILITIES AND PARTNERS'
DEFICIENCY $ 15,191,113 $ 15,692,284
============ ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

64
<PAGE> 66
HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
INTEREST INCOME $ 44,144 $ 26,370 $ 20,316
----------- ----------- -----------

OPERATING EXPENSES:
Management fees - general partner (Note 4) 547,773 568,896 568,896
General and administrative (Note 4) 86,350 88,393 101,445
Legal and accounting 125,941 93,321 83,491
Interest (Note 3) 1,011,127 966,126 966,126
----------- ----------- -----------
Total operating expenses 1,771,191 1,716,736 1,719,958
----------- ----------- -----------
LOSS FROM OPERATIONS (1,727,047) (1,690,366) (1,699,642)

DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED
AS INCOME 307,474 520,001 473,210

EQUITY IN INCOME (LOSS) OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS (Note 2) 87,795 (210,249) 616,683
----------- ----------- -----------
NET LOSS $(1,331,778) $(1,380,614) (609,749)
=========== =========== ========

NET LOSS PER LIMITED PARTNERSHIP
INTEREST $ (108) $ (111) $ (49)
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statement

65
<PAGE> 67
HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)

STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
General Limited
Partners Partners Total
--------- ----------- -----------
<S> <C> <C> <C>
DEFICIENCY, January 1, 1993 $(276,015) $(2,250,844) $(2,526,859)

Net loss, 1993 (6,097) (603,652) (609,749)
--------- ----------- -----------
DEFICIENCY, December 31, 1993 (282,112) (2,854,496) (3,136,608)

Net loss, 1994 (13,806) (1,366,808) (1,380,614)
--------- ----------- -----------
DEFICIENCY, December 31, 1994 (295,918) (4,221,304) (4,517,222)

Net loss, 1995 (13,318) (1,318,460) (1,331,778)
--------- ----------- -----------
DEFICIENCY, December 31, 1995 $(309,236) $(5,539,764) $(5,849,000)
========= =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statem

66
<PAGE> 68

HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,331,778) $(1,380,614) $ (609,749)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Equity in loss (income) of limited partnerships (126,285) 171,759 (655,173)
Amortization of acquisition costs 38,490 38,490 38,490
Decrease in other assets -- -- 3,500
Increase in accrued interest payable 947,014 819,138 828,927
Increase (decrease) in accrued fees and
expenses due general partners (102,227) 377,878 (831,104)
Increase (decrease) in accounts payable (6,490) 17,284 (13,606)
----------- ----------- -----------
Net cash provided by (used in)
operating activities (581,276) 43,935 (1,238,715)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital contributions to limited partnerships (671,865) (1,391,975) (623,248)
Distributions from limited partnerships
recognized as a return of capital 822,817 1,832,549 2,120,297
Decrease (increase) in short term investments 408,409 (408,409) --
----------- ----------- -----------
Net cash provided by investing activities 559,361 32,165 1,497,049
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of notes payable (7,690) -- (82,763)
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (29,605) 76,100 175,571

CASH AND CASH EQUIVALENTS,
beginning of year 624,935 548,835 373,264
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
end of year $ 595,330 $ 624,935 $ 548,835
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION

Cash paid during the year for interest $ 64,113 $ 146,986 $ 137,199
=========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

67
<PAGE> 69
HOUSING PROGRAMS LIMITED
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Housing Programs Limited (the "Partnership"), formed under the California
Uniform Limited Partnership Act, was organized on May 15, 1984. The
Partnership was formed to invest primarily in other limited partnerships
which own or lease and operate federal, state or local
government-assisted housing projects. The general partners of the
Partnership are Housing Programs Corporation II, National Partnership
Investments Corp. (NAPICO), and Coast Housing Investment Associates
(CHIA), a limited partnership. LBI Group Inc. owns 100 percent of the
stock of Housing Programs Corporation II. Casden Investment Corp. owns
100 percent of NAPICO's stock. The limited partner of CHIA is an officer
of NAPICO.

The Partnership offered and issued 6,184 units of limited partnership
interests through a public offering. Each unit was comprised of two
limited partnership interests and one warrant, which entitled the
investor two additional limited partnership interests. An additional
6,184 of interests were issued from the exercise of warrants and the sale
of interests associated with warrants not 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, 2034) from the date of the
formation of the Partnership or upon the occurrence of various other
events as described in the terms of 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' liquidation fee may accrue but
shall not be paid until the limited partners have received distributions
equal to 100 percent of their capital contributions.

Use 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.

Method of Accounting for Investments in Limited Partnerships

The investments in local limited partnerships are accounted for on the
equity method. Acquisition, selection and other costs related to the
acquisition of the projects have been capitalized to the investment

68
<PAGE> 70
HOUSING PROGRAMS LIMITED
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 12,368 for all years presented.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity of three months or less.

Short Term Investments

Short term investments consist of bank certificates of deposit and other
securities 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 18 limited
partnerships. The partnerships own residential rental projects consisting
of 2,686 apartment units. The mortgage loans of these projects are
insured by various governmental agencies.

The Partnership, as a limited partner, is entitled to 99 percent of the
profits and losses of the limited partnerships.

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 investment account is reduced
to zero are not recognized. The cumulative amount of unrecognized equity
in losses of certain limited partnerships was approximately $10,273,000
and $8,837,000 as of December 31, 1995 and 1994, respectively.

Distributions from the limited partnerships are recognized as a reduction
of capital until the investment balance has been reduced to zero or to a
negative amount equal to further capital contributions required.
Subsequent distributions are recognized as income.

69
<PAGE> 71
HOUSING PROGRAMS LIMITED
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995

2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

The following is a summary of the investments in limited partnerships and
reconciliation to the limited partnership accounts:

<TABLE>
<CAPTION>
1995 1994
----------- --------
<S> <C> <C>
Investment balance, beginning of year $14,533,940 $15,184,763
Equity in income (loss) of limited partnerships 126,285 (171,759)
Amortization of capitalized acquisition costs and fees (38,490) (38,490)
Capital Contributions 671,865 1,391,975
Distributions recognized as a return of capital (822,817) (1,832,549)
------------ ------------

Investment balance, end of year $14,470,783 $14,533,940
=========== ===========
</TABLE>

The difference between the investment per the accompanying balance sheets
at December 31, 1995 and 1994, and the equity per the limited
partnerships' combined financial statements is due primarily to
cumulative unrecognized equity in losses of certain limited partnerships,
costs capitalized to the investment account and cumulative distributions
recognized as income.

Selected financial information from the combined financial statements of
the limited partnerships at December 31, 1995 and 1994 and for each of
the three years in the period ended December 31, 1995 is as follows:

Balance Sheets

<TABLE>
<CAPTION>
1995 1994
---------- --------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 60,660 $ 63,357
======== ========
Total assets $ 79,347 $ 81,327
======== ========
Mortgages payable $ 57,914 $ 58,941
======== ========
Total liabilities $ 79,556 $ 79,656
======== ========
Equity of Housing Programs Limited $ 145 $ 2,004
======== ========
Deficiency of other partners $ (354) $ (333)
======== ========
</TABLE>

70
<PAGE> 72
HOUSING PROGRAMS LIMITED
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995

2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

Statements of Operations

<TABLE>
<CAPTION>
1995 1994 1993
--------- ---------- ---------
(in thousands)
<S> <C> <C> <C>

Total revenues $ 17,132 $ 16,817 $ 18,630
======== ======== ========

Interest expense $ 3,706 $ 3,772 $ 4,634
======== ======== ========

Depreciation $ 3,524 $ 3,508 $ 3,812
======== ======== ========

Total expenses $ 18,525 $ 18,439 $ 20,220
======== ======== ========

Net loss $ (1,393) $ (1,622) $ (1,590)
======== ======== ========

Net loss allocable to Housing Programs
Limited $ (1,379) $ (1,606) $ (1,574)
======== ======== ========

</TABLE>

An affiliate of NAPICO is the general partner in 10 of the limited
partnerships included above in 1995 and 1994, and another affiliate
receives property management fees of approximately 5 to 6 percent of
revenues from five of these partnerships. The affiliate received property
management fees of $234,903, $236,149 and $235,859 in 1995, 1994 and
1993, respectively. The following sets forth the significant data for
these partnerships, reflected in the accompanying financial statements
using the equity method of accounting:

<TABLE>
<CAPTION>
1995 1994 1993
---------- --------- -------
(in thousands)
<S> <C> <C> <C>
Total assets $ 41,816 $ 43,316
======== =========

Total liabilities $ 50,007 $ 50,336
======== =========

Deficiency of Housing Programs Limited $ (7,971) $ (6,815)
======== =========

Deficiency of other partners $ (220) $ (205)
======== =========

Total revenue $ 9,283 $ 9,116 $ 10,748
======== ========= =========

Net loss $ (828) $ (1,079) $ (1,533)
======== ========= =========
</TABLE>

The Montecito local partnership had been operating at a deficit, and the
general partner was unsuccessful in its attempt to negotiate a mortgage
modification with the lender to improve the situation. No mortgage

71
<PAGE> 73
HOUSING PROGRAMS LIMITED
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995

2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)

payments to the lender were made subsequent to May 1994. A Notice of
Default and Election To Sell was filed for record on October 27, 1994 in
the LA County Recorder's office. On October 26, 1994, the loan servicer,
on behalf of the lender, filed a complaint for Specific Performance for
Appointment of Receiver and Judicial Foreclosure against the Partnership.
The request for an appointment of a receiver was approved on November 10,
1994. Representatives of the Montecito local partnership and the general
partner met with the loan servicer on November 2, 1994 and on February
22, 1995 to discuss a loan modification proposal. However, the lender
rejected all mortgage modification proposals submitted and foreclosed
upon the property on July 18, 1995. The Partnership's original investment
in the Montecito local partnership represents approximately 5% of the
Partnership's total capital raised. The Partnership's financial
statements reflect no investment in Montecito at December 31, 1995 and
1994.

In 1993, three limited partnerships (Oxford House, Round Barn Manor and
Westwood Terrace) refinanced their mortgages with taxable and tax-exempt
bonds issued by the Illinois Housing Development Authority. Proceeds from
the refinancing were utilized to retire two secondary mortgages including
principal and accrued interest of $1,811,000 and $1,785,000 for Oxford
House and Round Barn Manor, respectively. The third secondary mortgage of
Westwood Terrace was paid down and has a remaining principal balance of
approximately $442,000. After retiring the secondary mortgages, the
Partnership received excess cash proceeds of more than $1,467,000 from
the refinancing. The three limited partnerships now have new mortgage
amounts of $5,641,352, $5,318,893 and $3,172,370 financed for a term of
25 years at a taxable rate of 7.6 percent and a tax-exempt rate of 6.3
percent.

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 for non-recourse
notes payable of $10,169,743, bearing interest at 9.5 and 12.5 percent,
to the sellers of the partnership interests. The interest rate for a note
of $1,500,000 changed in 1995 to 12.5 percent per terms of the note. The
notes have principal maturity dates ranging from October 1996 to December
2001 or upon sale or refinancing of the underlying partnership
properties. These obligations and the related interest are collateralized
by the Partnership's investment 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.

The Partnership is currently negotiating for the sale of Deep Lake
Hermitage, the property that the $1,500,000 note payable and accrued
interest of $1,402,846 due in 1996 relate to. Based on an offer received,
there would not be adequate funds to pay approxiamtely $1,800,000 of the
note payable and related accrued interest. Because the notes and interest
payable are non-recourse liabilities, no loss is expected to be realized
by the Partnership if the investment is foreclosed upon by the lender.

72
<PAGE> 74
HOUSING PROGRAMS LIMITED
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995

3. NOTES PAYABLE (CONTINUED)

Maturity dates on the notes and related accrued interest payable are as
follows:

<TABLE>
<CAPTION>
Accrued
Years Ending December 31, Notes Interest Total
------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
1996 $ 1,500,000 $ 1,402,846 $ 2,902,846
1997 -
1998 -
1999 7,669,743 7,444,580 15,114,323
2000 -
Thereafter 1,000,000 1,017,119 2,017,119
----------- ----------- -----------
$10,169,743 $ 9,864,545 $20,034,288
=========== =========== ===========
</TABLE>

4. FEES AND EXPENSES DUE GENERAL PARTNERS

Under the terms of the Restated Certificate and Agreement of the Limited
Partnership, the Partnership is obligated to the general partners for an
annual management fee equal to .5% of the original invested assets of the
limited 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 limited partnerships.

As of December 31, 1995, the fees and expenses due the general partners
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 $29,845, $28,764, and $29,252 in 1995, 1994 and 1993,
respectively, and is included in operating expenses.

5. 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
or to a negative amount equal to further capital contributions required.

73
<PAGE> 75
HOUSING PROGRAMS LIMITED
(a California limited partnership)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995

6. CONTINGENCIES

NAPICO is a plaintiff in various lawsuits and has also been named as a
defendant in other lawsuits arising from transactions in the ordinary
course of business. In the opinion of management and NAPICO, the claims
will not result in any material liability to the Partnership.

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. 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
income (loss) of limited partnerships reflected in the accompanying
financial statements is based primarily upon audited financial statements
of the investee limited partnerships. The difference, approximately
$31,935, between the estimated nine-month equity in income and the actual
year-to-date equity in loss has been recorded in the fourth quarter.

74
<PAGE> 76
SCHEDULE
(CONTINUED)

HOUSING PROGRAMS LIMITED
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
Year Ended December 31, 1995
------------------------------------------------------------------------------
Cash
Balance Distri- Balance
January Capital butions Equity in December
Limited Partnerships 1, 1995 Contributions Received Income/(Loss) 31, 1995
- -------------------- ------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
Bannock Arms $ 490,588 $ 184,684 $ (229,495) $ 108,103 $ 553,880
Berkeley Gardens 497,349 (78,037) 419,312
Cape La Croix 6,405 (6,405)
Cloverdale
Cloverleaf 6,517 (6,517)
Deep Lake Hermitage 1,189,101 (131,745) 1,057,356
Evergreen Apts. 7,971,008 (77,702) 490,871 8,384,177
Friendship Arms 2,364,500 (35,183) 11,247 2,340,564
Jenny Lind Hall 45,504 (45,504)
Lancaster Heights 24,881 (24,881)
Locust House 1,221,828 (16,897) (67,708) 1,137,223
Midpark Towers 184,124 (184,124)
Montecito Apts. 23,641 (23,641)
Oxford Towers
Plaza Village 799,566 (221,295) 578,271
Round Barn Manor
Santa Fe Towers 95,250 (95,250)
Walnut Towers 69,618 (69,618)
Westwood Terrace 31,241 (31,241)
----------- ---------- ----------- ----------- -----------
$14,533,940 $ 671,865 $ (822,817) $ 87,795 $14,470,783
=========== ========== =========== =========== ===========
</TABLE>

75
<PAGE> 77
SCHEDULE
(CONTINUED)

HOUSING PROGRAMS LIMITED
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
Year Ended December 31, 1994
--------------------------------------------------------------------------------------------------
Cash
Balance Distri- Balance Future Capital
January Capital butions Equity in December Contributions
Limited Partnerships 1, 1994 Contributions Received Income/(Loss) 31, 1994 Payable
- -------------------- ------- ------------- -------- ------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Bannock Arms $ 474,615 $ 334,142 $ (428,773) $ 110,604 $ 490,588 $
Berkeley Gardens 802,066 (304,717) 497,349
Cape La Croix 8,169 (8,169)
Cloverdale 1,163 (1,163)
Cloverleaf 11,079 (11,079)
Deep Lake Hermitage 1,383,038 (21,022) (172,915) 1,189,101
Evergreen Apts. 7,625,595 (77,702) 423,115 7,971,008
Friendship Arms 2,479,083 (35,183) (79,400) 2,364,500
Jenny Lind Hall 150,862 (150,862)
Lancaster Heights 18,836 (18,836)
Locust House 1,330,089 (16,897) (91,364) 1,221,828
Midpark Towers 430,033 (430,033)
Montecito Apts. 90,453
Oxford Towers (19,775) 19,775
Plaza Village 1,090,277 (136,256) (154,455) 799,566
Round Barn Manor (39,108) 39,108
Santa Fe Towers 247,823 (247,823)
Walnut Towers 165,284 (165,284)
Westwood Terrace 24,584 (24,584)
----------- ---------- ----------- ---------- ----------- ---------
$15,184,763 $1,391,975 $(1,832,549) $ (210,249) $14,533,940 $ 90,453
=========== ========== =========== ========== =========== =========
</TABLE>

76
<PAGE> 78
SCHEDULE
(CONTINUED)

HOUSING PROGRAMS LIMITED
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

<TABLE>
<CAPTION>
Year Ended December 31, 1993
--------------------------------------------------------------------------------------------------
Cash
Balance Distri- Balance Future Capital
January Capital butions Equity in December Contributions
Limited Partnerships 1, 1993 Contributions Received Income/(Loss) 31, 1993 Payable
- -------------------- ------- ------------- -------- ------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Bannock Arms $ 229,266 $ 182,910 $ (224,859) $ 287,298 $ 474,615 $
Berkeley Gardens 822,018 (19,952) 802,066
Cape La Croix 23,193 (23,193)
Cloverdale 3,658 (3,658)
Cloverleaf
Deep Lake Hermitage 1,605,143 (104,395) (117,710) 1,383,038
Evergreen Apts. 7,280,591 (77,702) 422,706 7,625,595
Friendship Arms 2,478,793 (35,183) 35,473 2,479,083
Jenny Lind Hall 25,976 (25,976)
Lancaster Heights 21,858 (21,858)
Locust House 1,408,239 (16,897) (61,253) 1,330,089
Midpark Towers 191,316 (191,316)
Montecito Apts. 90,453
Oxford Towers 686,656 (686,656)
Plaza Village 1,020,156 70,121 1,090,277
Round Barn Manor 534,267 (534,267)
Santa Fe Towers 100,683 (100,683)
Walnut Towers 62,842 (62,842)
Westwood Terrace 10,812 (10,812)
----------- ---------- ----------- ---------- ----------- ---------
$16,065,129 $ 623,248 $(2,120,297) $ 616,683 $15,184,763 $ 90,453
=========== ========== =========== ========== =========== =========
</TABLE>

77
<PAGE> 79
SCHEDULE
(CONTINUED)

HOUSING PROGRAMS LIMITED
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED
DECEMBER 31, 1995, 1994 AND 1993

NOTES: 1. Equity in income (losses) of the limited partnerships
represents the Partnership's allocable share of the net
income (loss) 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 on 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.

78
<PAGE> 80
SCHEDULE III
HOUSING PROGRAMS LIMITED
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH H P L HAS INVESTMENTS
DECEMBER 31, 1995

<TABLE>
<CAPTION>
BUILDINGS, FURNISHINGS
& EQUIPMENT
NUMBER OUTSTANDING AMOUNT CARRIED
OF MORTGAGE AT CLOSE OF ACCUMULATED
PARTNERSHIP/LOCATION APTS. LOAN LAND PERIOD TOTAL DEPRECIATION
- -------------------- ------ ----------- ---- -------------- ----- ------------
<S> <C> <C> <C> <C> <C> <C>
Bannock Arms 66 $ 1,481,365 $ 78,000 $ 2,865,472 $ 2,943,472 $ 1,099,271
Boise, ID
Deep Lake Hermitage 144 3,509,305 360,000 6,363,923 6,723,923 2,461,688
Lake Villa, IL
Jenny Lind Hall 78 1,457,260 111,000 2,729,647 2,840,647 1,080,249
Springfield, MO
Lancaster Heights 198 2,313,884 200,000 4,585,123 4,785,123 1,712,398
Normal, IL
Midpark Towers 202 4,255,972 532,593 8,729,209 9,261,802 3,569,902
Dallas, TX
Oxford House 156 5,115,619 300,000 4,796,928 5,096,928 1,872,168
Decatur, IL
Round Barn Manor 156 5,419,770 200,000 4,936,442 5,136,442 1,938,915
Champaign, IL
Santa Fe Towers 252 6,153,921 316,724 11,480,545 11,797,269 4,533,217
Overland Park, KS
Walnut Towers 78 1,461,654 85,229 3,056,802 3,142,031 1,200,169
Winfield, KS
Westwood Terrace 97 3,045,166 109,200 4,197,190 4,306,390 2,281,076
Moline, IL
Friendship Arms 151 4,110,246 262,879 7,713,968 7,976,847 3,521,485
Hyattsville, Mo
Locust House 99 2,225,631 201,113 4,498,708 4,699,821 2,170,478
Westminster, Mo
Berkeley Gardens 132 1,557,011 149,071 3,786,238 3,935,309 2,193,550
Martinsburg, WV
Cape La Croix 125 1,464,549 169,000 2,484,615 2,653,615 1,014,271
Cape Girardeau, MO
Cloverdale 100 1,071,011 100,000 2,051,596 2,151,596 814,486
Crawfordsville, IN
Cloverleaf 94 978,651 123,000 1,901,424 2,024,424 782,954
Indianapolis, IN
Evergreen Apts. 330 8,779,230 617,369 14,909,309 15,526,678 5,577,747
Oshtemo, MI
Plaza Village 228 3,513,665 369,700 7,041,412 7,411,112 3,929,536
Woonsocket, RI
----- ----------- ---------- ----------- ------------ -----------
2,686 $57,913,910 $4,284,878 $98,128,551 $102,413,429 $41,753,560
===== =========== ========== =========== ============ ===========
</TABLE>

79
<PAGE> 81
SCHEDULE III
(CONTINUED)

HOUSING PROGRAMS LIMITED
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH HPL HAS INVESTMENTS
DECEMBER 31, 1995

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 local 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 - limited
partnerships:

<TABLE>
<CAPTION>
Buildings,
Furnishings,
Land and Equipment Total
----------- ------------- -------------
<S> <C> <C> <C>
Balance, January 1, 1993 $ 4,917,424 $ 104,290,516 $ 109,207,940

Net additions in 1993 -- 540,207 540,207
----------- ------------- -------------

Balance, December 31, 1993 4,917,424 104,830,723 109,748,147

Adjustment for foreclosure
of Montecito Property (632,546) (8,060,272) (8,692,818)

Net additions in 1994 -- 814,875 814,875
----------- ------------- -------------

Balance, December 31, 1994 4,284,878 97,585,326 101,870,204

Net additions in 1995 -- 543,225 543,225
----------- ------------- -------------

Balance, December 31, 1995 $ 4,284,878 $ 98,128,551 $ 102,413,429
=========== ============= =============
</TABLE>

80
<PAGE> 82
SCHEDULE III
(CONTINUED)

HOUSING PROGRAMS LIMITED
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH HPL HAS INVESTMENTS
DECEMBER 31, 1995

<TABLE>
<CAPTION>
Buildings,
Furnishings,
and Equipment
-------------
<S> <C>
ACCUMULATED DEPRECIATION:

Balance, January 1, 1993 $ 33,202,228

Net additions for 1993 3,470,933
------------

Balance, December 31, 1993 36,673,161

Adjustment for foreclosure
of Montecito Property (1,805,052)

Net additions for 1994 3,645,567
------------

Balance, December 31, 1994 38,513,676

Net additions for 1995 3,239,884
------------

Balance, December 31, 1995 $ 41,753,560
============
</TABLE>

81
<PAGE> 83

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:

HOUSING PROGRAMS LIMITED (the "Partnership") has no directors or executive
officers of its own.

The general partners of the Partnership are National Partnership Investments
Corp. ("NAPICO"), Coast Housing Investments Associates (an affiliate of NAPICO)
and Housing Programs Corporation II. NAPICO is a wholly-owned subsidiary of
Casden Investment Company, an affiliate of The Casden Company. Housing Programs
Corporation II is a wholly-owned subsidiary of LBI Group Inc. The following
biographical information is presented for the directors and executive officers
of NAPICO and officers of Housing Programs Corporation II with principal
responsibility for the Partnership's affairs.

CHARLES H. BOXENBAUM, 66, 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, 44, 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, 50, 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 Corporation. 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.

82
<PAGE> 84

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, 52, 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, 32, 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, 36, 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, Melvoin &
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, 54, 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.

83
<PAGE> 85

PATRICIA W. TOY, 66, 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, 35, 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.

ROCCO F. ANDRIOLA, 37, serves as President and Chief Financial Officer of
Housing Programs Corporation II and Senior Vice President of Lehman Brothers
Inc. in its Diversified Asset Group. He has held such position with Lehman
since June 1991. From June 1989 through May 1991, Mr. Andriola held the
position of First Vice President in Lehman's Capital Preservation and
Restructuring Group. From November 1986 through May 1989, Mr. Andriola held
the position of Vice President in the Corporate Transactions Group with the
General Counsel's Office of Lehman. From September 1982 through October
1986, Mr. Andriola was employed by the law firm of Donovan Leisure
Newton & Irvine as a corporate and securities attorney. Mr. Andriola
graduated summa cum laude from Fordham University in 1979 with a B.A.
degree in Economics and Political Science. Mr. Andriola received a J.D.
degree and an LL.M degree in Corporate Law from New York University School of
Law in 1982 and 1986, respectively.

JOHN H. NG, 45, is a Vice President of Housing Programs Corporation II and Vice
President of Lehman Brothers Inc. He has been employed by Lehman since
November 1977. He is an asset manager of the Diversified Asset Group of
Lehman and has held such position since 1985. From 1980 to 1985, Mr. Ng
served as Senior Financial Analyst in the Corporate Planning and
Development Department and from 1977 to 1980 he was an analyst in the
Controller's Department. Prior to joining Lehman, he served as a Teaching
Assistant in Finance and Economics at the University of Minnesota. Mr. Ng
received an M.B.A. with a concentration in Corporate Finance from the University
of Minnesota in 1977 and a B.A. magna cum laude in Economics with a
specialization in Monetary Economics from Moorhead State University in 1975.

MARK J. MARCUCCI, 33, is a Vice President of Housing Programs Corporation
II and Vice President of Lehman Brothers Inc. in its Diversified Asset Group.
Since joining Lehman Brothers in 1988, Mr. Marcucci's responsibilities have
been concentrated in the restructuring, asset management, leasing,
financing, refinancing and disposition of commercial office and residential
real estate. Prior to joining Lehman Brothers, Mr. Marcucci was employed
in a corporation lending capacity at Republic National Bank of New York.
Mr. Marcucci received a B.B.A. in Finance from Hofstra University and a
Master of Science in Real Estate from New York University. In addition, Mr.
Marcucci holds both Series 7 and Series 63 securities licenses.

84
<PAGE> 86

ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS:

Housing Programs Limited has no officers, employees, or directors. However,
under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to pay the general partners an annual
management fee. The annual management fee is approximately equal to .5% of the
invested assets, including the Partnership's allocable share of the mortgages
related to real estate properties held by local limited partnerships. The fee is
earned beginning in the month the Partnership makes its initial contribution to
the lcoal partnership. In addition, the Partnership reimburses NAPICO for
certain expenses.

An affiliate of NAPICO 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 Housing Programs Limited. No person is
known to own beneficially in excess of 5% of the outstanding
limited partnership interests.

(b) With the exception of the Initial Limited Partner, Bruce Nelson,
who is an officer of NAPICO, none of the officers or directors of
NAPICO own directly or beneficially any limited partnership
interests in the Partnership.

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 general partners. The transactions with the general
partners are primarily in the form of fees paid by the Partnership to the
general partners for services rendered to the Partnership, as discussed in Item
11 and in the notes to the accompanying financial statements.

85
<PAGE> 87
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORT ON FORM 8-K:

FINANCIAL STATEMENTS

Reports of Independent Public Accountants.

Balance Sheets as of December 31, 1995 and 1994.

Statements of Operations for the years ended December 31, 1995, 1994 and 1993.

Statements of Partners' Equity (Deficiency) for the years ended December 31,
1995, 1994 and 1993.

Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993.

Notes to Financial Statements.

FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO HOUSING PROGRAMS LIMITED AND LIMITED PARTNERSHIPS IN WHICH HOUSING
PROGRAMS LIMITED HAS INVESTMENTS

Schedule - Investments in Limited Partnerships for the years ended December 31,
1995, 1994 and 1993.

Schedule III - Real Estate and Accumulated Depreciation of Property Held by
Local Limited Partnerships, December 31, 1995.

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
#2-92352 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 15, 1984, and the nineteen contracts
representing the partnership's investment in local limited
partnerships as previously filed at the Securities Exchange
Commission, File #2-92352 which is hereby incorporated by
reference.

(13) Annual report to security holders: Pages 64 to 74.

Reports on Form 8-K

No reports on Form 8-K were filed during the year ended December 31, 1995.

86
<PAGE> 88
HOUSING PROGRAMS LIMITED
(A CALIFORNIA LIMITED PARTNERSHIP)

DECEMBER 31, 1995

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.

HOUSING PROGRAMS LIMITED
(a California limited partnership)

By: NATIONAL PARTNERSHIP INVESTMENTS CORP.
The General Partner

/s/ CHARLES H. BOXENBAUM
- --------------------------------------
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer

/s/ BRUCE E. NELSON
- --------------------------------------
Bruce E. Nelson
Director and President

/s/ ALAN I. CASDEN
- --------------------------------------
Alan I. Casden
Director

/s/ HENRY C. CASDEN
- --------------------------------------
Henry C. Casden
Director

/s/ BRIAN D. GOLDBERG
- --------------------------------------
Brian D. Goldberg
Director

/s/ SHAWN D. HORWITZ
- --------------------------------------
Shawn D. Horwitz
Executive Vice President and
Chief Financial Officer

/s/ BOB E. SCHAFER
- --------------------------------------
Bob E. Schafer
Vice President and Corporate Controller

<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>
<CIK> 0000750304
<NAME> HOUSING PROGRAMS LTD

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 595,330
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 720,330
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 15,191,113
<CURRENT-LIABILITIES> 15,432
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (5,849,000)
<TOTAL-LIABILITY-AND-EQUITY> 15,191,113
<SALES> 0
<TOTAL-REVENUES> 439,413
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 760,064
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,011,127
<INCOME-PRETAX> (1,331,778)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,331,778)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,331,778)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0

</TABLE>