FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to _________
Commission file number 0-14457
NATIONAL HOUSING PARTNERSHIP REALTY FUND III
(A Maryland Limited Partnership)
(Exact name of small business issuer as specified in its charter)
Maryland 52-1394972
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
NATIONAL HOUSING PARTNERSHIP REALTY FUND III
(A Maryland Limited Partnership)
Statement of Financial Position
(Unaudited)
(in thousands)
June 30, 2000
ASSETS
Cash and cash equivalents $ 499
Investments in and advances to Local Limited
Partnerships (Note 2) --
$ 499
LIABILITIES AND PARTNERS' (DEFICIT) EQUITY
Liabilities
Administrative and reporting fee payable to
General Partner (Note 3) $ 166
Accrued expenses 9
175
Partners' (deficit) equity
General Partner -- The National Housing
Partnership (NHP) (92)
Original Limited Partner -- 1133 Fifteenth
Street Associates (96)
Other Limited Partners -- 11,490 investment units 512
324
$ 499
See Accompanying Notes to Financial Statements
b)
NATIONAL HOUSING PARTNERSHIP REALTY FUND III
(A Maryland Limited Partnership)
Statements of Operations
(Unaudited)
(in thousands, except per unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Interest income $ 3 $ 6 $ 12 $ 12
costs and expenses:
Administrative and reporting
fees to General Partner 13 22 27 43
Other operating expenses 19 12 30 31
32 34 57 74
Net loss $ (29) $ (28) $ (45) $ (62)
Allocation of net income (loss):
General Partner - NHP -- -- -- (1)
Original Limited Partner --
1133 Fifteenth Street
Associates -- -- -- (1)
Other Limited Partners (29) (28) (45) (60)
Net Loss Per Other Limited
Partnership Interest $(2.52) $(2.35) $(3.92) $(5.22)
See Accompanying Notes to Financial Statements
</TABLE>
c)
NATIONAL HOUSING PARTNERSHIP REALTY FUND III
(A Maryland Limited Partnership)
Statement of Partners' (Deficit) Equity
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
The National 1133
Housing Fifteenth Other
Partnership Street Two Limited
(NHP) Associates Partners Total
(Deficit) equity at
<S> <C> <C> <C> <C>
December 31, 1999 $ (92) $ (96) $ 557 $ 369
Net loss for the six months
ended June 30, 2000 -- -- (45) (45)
(Deficit) equity at
June 30, 2000 $ (92) $ (96) $ 512 $ 324
Percentage interest at
June 30, 2000 1% 1% 98% 100%
(A) (B) (C)
(A) General Partner
(B) Original Limited Partner
(C) Consists of 11,490 investment units
See Accompanying Notes to Financial Statements
</TABLE>
d)
NATIONAL HOUSING PARTNERSHIP REALTY FUND III
(A Maryland Limited Partnership)
Statements of Cash Flows
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Interest received $ 12 $ 12
Operating expenses paid (53) (48)
Net cash used in operating activities (41) (36)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 540 595
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 499 $ 559
RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING
ACTIVITIES:
Net loss $ (45) $ (62)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in administrative and reporting fees
payable 25 43
Decrease in accrued expenses (21) (17)
Total adjustments 4 26
Net cash used in operating activities $ (41) $ (36)
See Accompanying Notes to Financial Statements
</TABLE>
e)
NATIONAL HOUSING PARTNERSHIP REALTY FUND III
(A Maryland Limited Partnership)
Notes to Financial Statements
(Unaudited)
(1) ACCOUNTING POLICIES
Organization
National Housing Partnership Realty Fund III (the "Partnership" or the
"Registrant") is a limited partnership organized under the Maryland Revised
Uniform Limited Partnership Act on May 10, 1985. The Partnership was formed for
the purpose of raising capital by offering and selling limited partnership
interests and then investing in Local Limited Partnerships, each of which either
owns and operates an existing rental housing project or has acquired limited
partnership interests in partnerships which own and operate one or two existing
rental housing projects. All such rental housing projects are financed and/or
operated with one or more forms of rental assistance or financial assistance
from the U.S. Department of Housing and Urban Development ("HUD"). On June 30,
1985, the Partnership began raising capital and acquiring interests in Local
Limited Partnerships.
The National Housing Partnership, a District of Columbia limited partnership
("NHP" or the "General Partner"), was authorized to raise capital for the
Partnership by offering and selling to additional limited partners not more than
11,500 interests at a price of $1,000 per interest. During 1985, the sale of
interests was terminated after the sale of 11,500 interests. Apartment
Investment and Management Company ("AIMCO") and its affiliates ultimately
control the General Partner. The original Limited Partner of the Partnership is
1133 Fifteenth Street Two Associates, whose limited partners were key employees
of the general parter of NHP at the time the Partnership was formed. NHP is the
general partner of 1133 Fifteenth Street Two Associates.
Basis of Presentation
The accompanying unaudited interim financial statements reflect all adjustments
which are, in the opinion of management, necessary for a fair presentation of
the financial condition and results of operations for the interim periods
presented. All such adjustments are of a normal and recurring nature.
While the General Partner believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these financial
statements be read in conjunction with the financial statements and notes
included in the Partnership's Annual Report filed on Form 10-KSB for the year
ended December 31, 1999.
(2) INVESTMENTS IN AND ADVANCES TO LOCAL LIMITED PARTNERSHIPS
The Partnership owned a 94.5% limited partnership interest (98% with respect to
the allocation of losses) in seven Local Limited Partnerships, which were
foreclosed upon during the six months ended June 30, 2000 (see discussion
below): Galion Limited Partnership, Indian Valley I Limited Partnership, Indian
Valley II Limited Partnership, Indian Valley III Limited Partnership, Kimberly
Associates Limited Partnership, Newton Hill Limited Partnership, and Woodmark
Limited Partnership. The Partnership owns a 94.5% limited partnership interest
(98% with respect to the allocation of losses) in Edmond Estates Limited
Partnership. The Partnership also acquired a 99% interest in Meadowwood
Townhouses III Limited Partnership which owns a 99% limited partnership interest
in an operating limited partnership which holds title to one rental housing
property. The Partnership's effective interest in these operating limited
partnerships is 98.01%. Until August 16, 1999, the Partnership also held a 99%
limited partnership interest in Brunswick Village Limited Partnership.
All of the Local Limited Partnerships in which the Partnership has invested
carry notes payable due the original owner of each Property. All of the notes
reached final maturity during 1999. These notes were secured by both the
Partnership's and the General Partner's interests in the Local Limited
Partnerships. Meadowood Townhouses III, Woodmark, Kimberly Associates, Edmond
Estates, Galion, Indian Valley I, Indian Valley II, Indian Valley III and Newton
Hill Limited Partnerships all have notes which were executed by the respective
Limited Partnerships with the seller as part of the acquisition of the property
by the Limited Partnership. The notes are nonrecourse and are subordinated to
the respective mortgage notes on each property for as long as HUD insures the
mortgage notes. Any payments due from project income are payable from surplus
cash, as defined by the HUD Regulatory Agreement. Neither the Limited
Partnership nor any partner thereof, present or future, assume any personal
liability for the payment of the notes. The notes were due in November 1999 for
Meadowood Townhouse III and in December 1999 for the remaining Limited
Partnerships. During the six months ended June 30, 2000, the note holders
foreclosed on the Partnership's interest in Woodmark, Galion, Indian Valley I,
Indian Valley II, Indian Valley III, Newton Hill, and Kimberly Associates. With
the loss of the Partnership's interest to the note holders, the Partnership will
not receive any future benefits from these Local Limited Partnerships and
taxable income generated prior to the foreclosures will be allocated to the
Partnership's investors without any distributable cash for the current year. The
specific impact of the tax consequences is dependent upon each specific
partner's individual tax situation. During the six months ended June 30, 2000,
the note holder began foreclosure proceedings on the Partnership's interest in
Meadowood Townhouses III. Regarding Edmond Estates Limited Partnership, interest
continues to be accrued under the original terms of the note agreement. The note
is in default and the Limited Partnership interest is subject to foreclosure.
The property is currently being marketed for sale, but there can be no assurance
that the property will be sold or, if it is sold, that the sale transaction will
generate sufficient proceeds to pay the accrued interest and principal of the
note. The financial statements do not include any adjustments which might result
from the outcome of this uncertainty.
Brunswick Village Limited Partnership's note payable, plus accrued interest,
became due on February 28, 1999. The Local Limited Partnership did not have the
resources to pay amounts due on the note payable. On August 16, 1999, the note
holders foreclosed on the Partnership's interest on the Brunswick Village
Limited Partnership which secured the Note. No gain or loss was recorded as a
result of this transfer of partnership interest. With the loss of the
Partnership's interest to the note holders, the Partnership will not receive any
future benefits from this Local Limited Partnership.
Because the Partnership, as a limited partner, does not exercise control over
the activities of the Local Limited Partnerships in accordance with the
partnership agreements, the Partnership's investments are accounted for using
the equity method. Thus, the investments (and the advances made to the Local
Limited Partnerships as discussed below) are carried at cost plus the
Partnership's share of the Local Limited Partnerships' profits less the
Partnership's share of the Local Limited Partnerships' losses and distributions.
However, because the Partnership is not legally liable for the obligations of
the Local Limited Partnerships, and is not otherwise committed to provide
additional support to them, it does not recognize losses once its investments,
reduced for its share of losses and cash distributions, reach zero in each of
the individual Local Limited Partnerships. As of December 31, 1996, investments
in all of its current Local Limited Partnerships had been reduced to zero. The
Partnership did not recognize approximately $115,000 and $288,000 of losses from
its Local Limited Partnerships during the six months ended June 30, 2000 and
1999, respectively. As of June 30, 2000, the Partnership has not recognized a
total of approximately $5,718,000 of its allocated share of cumulative losses
from the Local Limited Partnerships in which its investment is zero.
Advances made by the Partnership to the individual Local Limited Partnerships
are considered part of the Partnership's investment in Local Limited
Partnerships. When advances are made, they are charged to operations as a loss
on investment in the Local Limited Partnership using previously unrecognized
cumulative losses. As discussed above, due to the cumulative losses incurred by
the Local Limited Partnerships, the aggregate balance of investments in and
advances to the remaining two Local Limited Partnerships has been reduced to
zero at June 30, 2000. To the extent these advances are repaid by the Local
Limited Partnerships in the future, the repayments will be credited as
distributions and repayments received in excess of investment in Local Limited
Partnerships. These advances are carried as a payable to the Partnership by the
Local Limited Partnerships.
A working capital loan of approximately $5,000 was made by the Partnership to
the Local Limited Partnerships during the six months ended June 30, 2000. No
working capital advances or loans occurred between the Partnership and the Local
Limited Partnerships during the six months ended June 30, 1999. The combined
amount carried as due to the Partnership by the Local Limited Partnerships was
approximately $103,000 as of June 30, 2000. Future advances made will be charged
to operations; likewise, future repayments will be credited to operations.
The following are combined statements of operations for the three and six months
ended June 30, 2000 and 1999, respectively, of the Local Limited Partnerships in
which the Partnership has invested. The statements are compiled from financial
statements of the Local Limited Partnerships, prepared on the accrual basis of
accounting, as supplied by the managing agents of the projects, and are
unaudited.
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Rental income $ 465 $ 1,566 $ 1,138 $ 3,070
Other income 14 68 30 128
Total income 479 1,634 1,168 3,198
Operating expenses 280 1,045 765 1,899
Interest, taxes, and insurance 115 563 383 1,113
Depreciation 62 242 137 479
Total expense 457 1,850 1,285 3,491
Net income (loss) $ 22 $ (216) $ (117) $ (293)
National Housing Partnership
Realty Fund III share of
income (losses) $ 22 $ (210) $ (115) $ (288)
</TABLE>
(3) TRANSACTIONS WITH THE GENERAL PARTNER
During the six month periods ended June 30, 2000 and 1999, the Partnership
accrued administrative and reporting fees to the General Partner in the amount
of approximately $27,000 and $43,000, respectively, for services provided to the
Partnership. The Partnership did not make any payments to the General Partner
for these fees during either of the respective periods. The amount due the
General Partner by the Partnership for administrative and reporting fees was
approximately $166,000 at June 30, 2000.
The advances and accrued administrative and reporting fees payable to the
General Partner will be paid as cash flow permits or from proceeds generated
from the sale or refinancing of one or more of the underlying properties of the
Local Limited Partnerships.
(4) SEGMENT INFORMATION
The Partnership has only one reportable segment. Moreover, due to the very
nature of the Partnership's operations, the General Partner believes that
segment-based disclosures will not result in a more meaningful presentation than
the financial statements as currently presented.
(5) LEGAL PROCEEDINGS
In July 1999, NHP received a grand jury subpoena requesting documents relating
to NHP's management of HUD-assisted or HUD-insured multi-family projects and
NHP's operation of a group purchasing program created by NHP, known as Buyers
Access. The subpoena relates to the same subject matter as subpoenas NHP
received in October and December 1997 from the HUD Inspector General ("IG"). To
date, neither the HUD IG nor the grand jury has initiated any action against NHP
or Apartment Investment and Management Company ("AIMCO"), the ultimate
controlling entity of NHP, or, to NHP's or AIMCO's knowledge, any owner of a HUD
property managed by NHP. AIMCO believes that NHP's operations and programs are
in compliance, in all material respects, with all laws, rules and regulations
relating to HUD-assisted or HUD-insured properties. NHP and AIMCO are
cooperating with the investigations and do not believe that the investigations
will result in a material adverse impact on its operations. However, as with any
similar investigation, there can be no assurance that these will not result in
material fines, penalties or other costs.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operations. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
LIQUIDITY AND CAPITAL RESOURCES
All of the Local Limited Partnerships in which the Partnership has invested
carry notes payable due the original owner of each Property. All of the notes
reached final maturity during 1999. These notes were secured by both the
Partnership's and the General Partner's interests in the Local Limited
Partnerships. Meadowood Townhouses III, Woodmark, Kimberly Associates, Edmond
Estates, Galion, Indian Valley I, Indian Valley II, Indian Valley III and Newton
Hill Limited Partnerships all have notes which were executed by the respective
Limited Partnerships with the seller as part of the acquisition of the property
by the Limited Partnership. The notes are nonrecourse and are subordinated to
the respective mortgage notes on each property for as long as HUD insures the
mortgage notes. Any payments due from project income are payable from surplus
cash, as defined by the HUD Regulatory Agreement. Neither the Limited
Partnership nor any partner thereof, present or future, assume any personal
liability for the payment of the notes. The notes were due in November 1999 for
Meadowood Townhouse III and in December 1999 for the remaining Limited
Partnerships. During the six months ended June 30, 2000, the note holders
foreclosed on the Partnership's interest in Woodmark, Galion, Indian Valley I,
Indian Valley II, Indian Valley III, Newton Hill, and Kimberly Associates. With
the loss of the Partnership's interest to the note holders, the Partnership will
not receive any future benefits from these Local Limited Partnership and taxable
income generated prior to the foreclosures will be allocated to the
Partnership's investors without any distributable cash for the current year. The
specific impact of the tax consequences is dependent upon each specific
partner's individual tax situation. During the six months ended June 30, 2000,
the note holders began foreclosure proceedings on the Partnership's interest in
Meadowood Townhouses III. Regarding Edmond Estates Limited Partnership, interest
continues to be accrued under the original terms of the note agreement. The note
is in default and the Limited Partnership interest is subject to foreclosure.
The property is currently being marketed for sale, but there can be no assurance
that the property will sell or, if it is sold, that the sale transaction will
generate sufficient proceeds to pay the accrued interest and principal of the
note. The financial statements do not include any adjustments which might result
from the outcome of this uncertainty.
Brunswick Village Limited Partnership's note payable, plus accrued interest,
became due on February 28, 1999. The Local Limited Partnership did not have the
resources to pay amounts due on the note payable. On August 16, 1999, the note
holders foreclosed on the Partnership's interest on the Brunswick Village
Limited Partnership which secured the Note. No gain or loss was recorded as a
result of this transfer of partnership interest. With the loss of the
Partnership's interest to the note holders, the Partnership will not receive any
future benefits from this Local Limited Partnership.
The Partnership's liquidity based on cash and cash equivalents decreased to
approximately $499,000 at June 30, 2000, from approximately $540,000 at December
31, 1999. The decrease was due to the fact that the Partnership's operating
expenses more than offset interest received by the Partnership. The
Partnership's existing cash plus any distributions from the underlying
operations of the Local Limited Partnerships is expected to adequately fund the
operations of the Partnership in the current year. However, there can be no
assurance that future distributions will be adequate to fund the operations
beyond the current year.
A working capital loan of approximately $5,000 was made by the Partnership to
the Local Limited Partnerships during the six months ended June 30, 2000. No
working capital advances or loans were made between the Partnership and the
Local Limited Partnerships during the six months ended June 30, 1999. The
combined amount carried as due to the Partnership by the Local Limited
Partnerships was approximately $103,000 at June 30, 2000. Future advances made
will be charged to operations; likewise, future repayments will be credited to
operations.
Distributions received from Local Limited Partnerships represent the
Partnership's proportionate share of the excess cash available for distribution
from the Local Limited Partnerships. As a result of the use of the equity method
of accounting for the Partnership's investments, as of June 30, 2000,
investments in the remaining two Local Limited Partnerships had been reduced to
zero. For these investments, cash distributions received are recorded in income
as distributions received in excess of investment in Local Limited Partnerships.
For those investments not reduced to zero, distributions received are recorded
as distributions from Local Limited Partnerships. There were no cash
distributions during the six months ended June 30, 2000 and 1999. The receipt of
distributions in future quarters and years is dependent upon the operations of
the underlying properties of the Local Limited Partnerships to generate
sufficient cash for distribution in accordance with applicable HUD regulations.
The properties in which the Local Limited Partnerships have invested receive one
or more forms of assistance from the Federal Government. As a result, the Local
Limited Partnerships' ability to transfer funds either to the Partnership or
among themselves in the form of cash distributions, loans or advances is
generally restricted by these government assistance programs. These
restrictions, however, are not expected to impact the Local Limited
Partnerships' ability to meet its cash obligations.
For the past several years, various proposals have been advanced by HUD,
Congress and others proposing the restructuring of HUD's rental assistance
programs under Section 8 of the United States Housing Act of 1937 ("Section 8"),
under which 503 apartment units, 41 percent of the total apartment units owned
by the properties in which the Partnership has invested, receive rental
subsidies. On October 27, 1997, the President signed into law the Multifamily
Assisted Housing Reform and Affordability Act of 1997 (the "1997 Housing Act").
Under the 1997 Housing Act, certain properties assisted under Section 8, with
rents above market levels and financed with HUD-insured mortgage loans, will be
restructured by adjusting subsidized rents to market levels, thereby potentially
reducing rent subsidies, and lowering required debt service costs as needed to
ensure financial viability at the reduced rents and rent subsidies. The 1997
Housing Act retains project-based subsidies for most properties (properties in
rental markets with limited supply, properties serving the elderly, and certain
other properties). The 1997 Housing Act phases out project-based subsidies on
selected properties servicing families not located in rental markets with
limited supply, converting such subsidies to a tenant-based subsidy. Under a
tenant-based system, rent vouchers would be issued to qualified tenants who then
could elect to reside at properties of their choice, provided such tenants have
the financial ability to pay the difference between the selected properties'
monthly rent and the value of the vouchers, which would be established based on
HUD's regulated fair market rent for the relevant geographical areas. The 1997
Housing Act provides that properties will begin the restructuring process in
Federal Fiscal Year 1999 (beginning October 1, 1998), and that HUD will issue
final regulations implementing 1997 Housing Act on or before October 27, 1999.
With respect to Housing Assistance Payments Contracts ("HAP" Contracts) expiring
before October 1, 1998, Congress has elected to renew them for one-year terms,
generally at existing rents, so long as the properties remain in compliance with
the HAP Contracts. While the Partnership does not expect the provisions of the
1997 Housing Act to result in a significant number of tenants relocating from
properties owned by the Local Limited Partnerships, there can be no assurance
that the provisions will not significantly affect the operations of the
properties of the Local Limited Partnerships. Furthermore, there can be no
assurance that other changes in Federal housing subsidy policy will not occur.
Any such changes could have an adverse effect on the operations of the
Partnership.
RESULTS OF OPERATIONS
The Partnership retains an investment as a limited partner in Local Limited
Partnerships which operate two rental housing properties. In prior years,
results of operations of the Partnership were significantly impacted by the
Partnership's share of the losses of the Local Limited Partnerships. These
losses included depreciation and accrued deferred acquisition note interest
expense which are non-cash in nature. Because the investments in and advances to
Local Limited Partnerships have been reduced to zero, the Partnership's share of
the operations of the Local Limited Partnerships is no longer being recorded.
The Partnership had a net loss of approximately $29,000 and $45,000 for the
three and six months ended June 30, 2000, compared to a net loss of
approximately $28,000 and $62,000 for the three and six months ended June 30,
1999. The decrease in net loss was due to a decrease in costs and expenses while
interest income remained constant. The Partnership did not recognize
approximately $115,000 of its allocated share of losses from the Local Limited
Partnerships for the six months ended June 30, 2000, as the Partnership's net
carrying basis in these Partnerships had been previously reduced to zero. The
Partnership's investment equity in the Local Limited Partnerships, if not
limited to its investment account balance, would have decreased approximately
$10,562,000 between the periods ended June 30, 2000 compared to the six months
ended June 30, 1999 primarily due to the foreclosure of the Partnership's
interest in seven Local Limited Partnerships.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In July 1999, NHP received a grand jury subpoena requesting documents relating
to NHP's management of HUD-assisted or HUD-insured multi-family projects and
NHP's operation of a group purchasing program created by NHP, known as Buyers
Access. The subpoena relates to the same subject matter as subpoenas NHP
received in October and December 1997 from the HUD Inspector General ("IG"). To
date, neither the HUD IG nor the grand jury has initiated any action against NHP
or Apartment Investment and Management Company ("AIMCO"), the ultimate
controlling entity of NHP, or, to NHP's or AIMCO's knowledge, any owner of a HUD
property managed by NHP. AIMCO believes that NHP's operations and programs are
in compliance, in all material respects, with all laws, rules and regulations
relating to HUD-assisted or HUD-insured properties. NHP and AIMCO are
cooperating with the investigations and do not believe that the investigations
will result in a material adverse impact on its operations. However, as with any
similar investigation, there can be no assurance that these will not result in
material fines, penalties or other costs.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule
b) Reports on Form 8-K:
None filed during the quarter ended June 30, 2000.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NATIONAL HOUSING PARTNERSHIP REALTY FUND III
(Registrant)
By: The National Housing Partnership,
Its sole General Partner
By: National Corporation for Housing
Partnerships, its sole General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date: August 14, 2000
