August 11, 1995
Securities and Exchange Commission
Filer Support, Edgar
Operation Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312
Re: Boston Financial Qualified Housing Limited Partnership
Report on Form 10-Q Edgar for Quarter Ended June 30, 1995
File No. 0-16796
Dear Sir/Madam:
Pursuant to the requirements of Rule 901(d) of Regulation S-T,
enclosed is one copy of subject report.
Please stamp and return the enclosed copy of this letter in the
enclosed stamped, self-addressed envelope to acknowledge receipt of this
filing.
Very truly yours,
Marie D. Ricciardi
Assistant Controller
QH1-10Q1.DOC
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
(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, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended June 30, 1995 Commission file number 0-16796
Boston Financial Qualified Housing Limited Partnership
(Exact name of registrant as specified in its charter)
Delaware 04-2947737
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Arch Street, Boston, Massachusetts 02110-1106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-3911
Indicate by check mark whether the registrant (1) has 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 .
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, March 31,
1995 1995
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 123,020 $ 308,216
Other current assets 33,270 25,339
------ ------
Total current assets 156,290 333,555
Marketable securities (Note 1) 2,241,315 2,066,336
Investments in Local Limited Partnerships
(net of provision for valuation of $1,297,574
at June 30, 1995 and March 31, 1995 (Note 2) 8,406,238 8,958,277
----------- -----------
Total Assets $10,803,843 $ 11,358,168
=========== ===========
Liabilities and Partners' Equity
Current liabilities:
Accounts payable and accrued expenses $ 103,123 $ 101,803
------- -------
Total current liabilities 103,123 101,803
Partners' Equity 10,700,720 11,256,365
---------- -----------
Total Liabilities and Partners' Equity $10,803,843 $ 11,358,168
=========== ===========
</TABLE>
The accompanying notes are an integral part of thes financial statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended June 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
Revenue:
<S> <C> <C>
Investment $ 32,930 $ -
Other 2,550 6,350
------- -------
Total Revenue 35,480 6,350
------- -------
Expenses:
General and administrative (includes reimbursements
to an affiliate of $36,009 and $33,978
in 1995 and 1994, respectively) 72,695 80,626
Amortization 27,141 27,627
Adjustment to provision for valuation of
investments in Local Limited Partnership - 24,319
------ -------
Total Expenses 99,836 132,572
------ -------
Loss before equity in losses of
Local Limited Partnerships (64,356) (126,222)
Equity in losses of Local
Limited Partnerships (524,898) (410,325)
--------- ----------
Net Loss $(589,254) $(536,547)
========= =========
Net Loss allocated:
To General Partners $ (5,893) $ (5,365)
To Limited Partners (583,361) (531,182)
---------- ----------
$(589,254) $(536,547)
========== ==========
Net Loss per Limited Partnership Unit
(50,000 Units) $ (11.67) $ (10.62)
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
(Unaudited)
For the Three Months Ended June 30, 1995
<TABLE>
<CAPTION>
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partners Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1995 $(321,649) $4,648 $11,601,784 $(28,418) $11,256,365
Unrealized gains on marketable
securities held for sale - - - 33,609 33,609
Net Loss (5,893) - (583,361) - (589,254)
---------- ------ ------------ ------ ------------
Balance at June 30, 1995 $(327,542) $4,648 $11,018,423 $5,191 $10,700,720
========== ====== ============ ====== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended June 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Net cash used for operating activities $ (43,552) $ (31,261)
---------- ---------
Cash flows from investing activities:
Purchases of marketable securities (175,656) (440,007)
Proceeds from sales and maturities
of marketable securities 34,012 961,225
--------- ---------
Net cash provided by (used for)
investing activities (141,644) 521,218
--------- ---------
Net increase (decrease) in cash and cash
equivalents (185,196) 489,957
Cash and cash equivalents, beginning 308,216 44,790
---------- ----------
Cash and cash equivalents, ending $ 123,020 $ 534,747
========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
The unaudited financial statements presented herein have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. These statements should
be read in conjunction with the financial statements and notes thereto
included with the Partnership's 10-K for the year ended March 31,
1995. In the opinion of management, these financial statements include
all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the Partnership's financial position and
results of operations. The results of operations for the periods may
not be indicative of the results to be expected for the year. Certain
reclassifications have been made to prior period financial
statements to conform to current period classifications.
1. Marketable Securities
A summary of marketable securities is as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
Debt securities issued by the
US Treasury and
other US Government
corporations and agencies
<S> <C> <C> <C> <C>
$1,308,220 $ 11,634 $ (5,118) $1,314,736
Mortgage backed securities 516,771 2,747 (7,599) 511,919
Other debt securities 411,133 4,650 (1,123) 414,660
---------- -------- --------- ----------
Marketable securities
at June 30, 1995 $2,236,124 $ 19,031 $(13,840) $2,241,315
========== ======== ========= ==========
Debt securities issued by the
US Treasury and
other US Government
corporations and agencies $1,132,567 $ - $(12,169) $1,120,398
Mortgage backed securities 526,319 1,763 (17,040) 511,042
Other debt securities 435,868 1,143 (2,115) 434,896
---------- ------- --------- ----------
Marketable securities
at March 31, 1995 $2,094,754 $ 2,906 $(31,324) $2,066,336
========== ======= ========= ==========
</TABLE>
The contractual maturities at June 30, 1995 are as follows:
<TABLE>
<CAPTION>
Fair
Cost Value
<S> <C> <C>
Due in one year or less $ 461,167 $ 463,734
Due in one year to five years 1,048,520 1,052,972
Due in five to ten years 209,664 212,690
Mortgage backed securities 516,771 511,919
----------- -----------
$ 2,362,122 $ 2,241,315
=========== ===========
</TABLE>
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (continued)
1. Marketable Securities (continued)
Actual maturities may differ from contractual maturities because some
borrowers have the right to call or prepay obligations. Proceeds from
the sales of fixed maturities were approximately $34,000 in 1995.
Included in investment income are gross gains of $33 and gross losses of
$308 which were realized on these sales.
2. Investments in Local Limited Partnerships
The Partnership has acquired interests in thirty-four Local Limited
Partnerships which own and operate multi-family housing complexes,
all of which are government-assisted. The Partnership, as Investor
Limited Partner pursuant to the various Local Limited Partnership
Agreements, has generally acquired a 99% interest in the profits,
losses, tax credits and cash flows from operations of each of the Local
Limited Partnerships. Upon dissolution, proceeds will be
distributed according to each respective partnership agreement.
The following is a summary of Investments in Local Limited Partnerships:
<TABLE>
<CAPTION>
June 30,
1995
(Unaudited)
Capital contributions to Local Limited
Partnerships and purchase price paid to
withdrawing partners of Local Limited
<S> <C>
Partnerships $ 36,651,930
Cumulative equity in losses of Local
Limited Partnerships (excluding cumulative unrecognized
losses of $7,654,414) (29,753,070)
Cumulative cash distributions received
from Local Limited Partnerships (1,071,108)
Investments in Local Limited Partnerships
before adjustment 5,827,752
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 4,770,577
Accumulated amortization of acquisition
fees and expenses (894,517)
Investments in Local Limited Partnerships 9,703,812
Provision for valuation of Investments in
Local Limited Partnerships (1,297,574)
$ 8,406,238
</TABLE>
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (continued)
2. Investments in Local Limited Partnerships (continued)
Summarized financial information from the combined financial
statements of all Local Limited Partnerships in which the Partnership
has invested is as follows:
Summarized Balance Sheets - March 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
Assets:
<S> <C>
Investment property, net $ 112,699,334
Current assets 3,814,627
Other assets 8,335,361
--------------
Total Assets $ 124,849,322
==============
Liabilities and Partners' Deficit:
Current liabilities $ 6,062,450
Long-term debt 111,497,087
Other liabilities 12,236,616
--------------
Total Liabilities 129,796,153
Partners' Deficit (4,946,831)
--------------
Total Liabilities and Partners' Deficit $ 124,849,322
==============
Summarized Income Statements - For the
three months ended March 31, 1995 (Unaudited)
Rental and other revenue $ 4,975,361
- ---------
Expenses:
Operating 2,270,213
Interest 2,536,725
Depreciation and amortization 1,270,613
--------------
Total Expenses 6,077,551
--------------
Net Loss $ (1,102,190)
===============
Partnership's share of Net Loss $ (1,090,251)
===============
Other Partners' share of Net Loss $ (11,939)
===============
</TABLE>
For the three months ended June 30, 1995, the Partnership has not
recognized $565,353 of equity in losses relating to ten Local Limited
Partnerships where cumulative equity in losses exceeded its total
investments.
3. Other Matters
As previously reported, Terrace Housing Associates, Ltd. ("Terrace"),
Rolling Green Associates, Ltd. ("Rolling Green"), and 2225 New York
Ave. Ltd. ("Pebble Creek") successfully obtained summary judgments
against HUD rolling back their rents. Terrace Housing Associates,
Ltd. v. Cisneros, et al., Civ. 92-786-T (W.D. Okla.), Rolling Green
Housing Associates, Ltd. v. Cisneros, et al., Civ. 92-1372-T (W.D.
Okla.) and 2225 New York Ave. Ltd. v. Cisneros, et al., Civ. Action No.
4-92CV560Y (N.D. Tex.). Terrace, Rolling Green and Pebble Creek are
subsidized under the Mod Rehab Program. On August 9, 1994, and then
again on November 18, 1994, in clear
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (continued)
3. Other Matters (continued)
and strong rulings, the U.S. Courts of Appeals for the Tenth Circuit
and the Fifth Circuit, each respectively affirmed the U.S. District
Courts rulings in Terrace, Rolling Green, and Pebble Creek.
In addition, as previously reported, HUD alleged that Pebble Creek
violated certain requirements relating to the relocation of tenants
at that property while the project was being renovated. HUD demanded
that it be reimbursed for all subsidy payments made with respect to the
so-called 161 "ineligible" units. The latter matter was the subject of
an administrative appeal.
Under the coordination of the General Partner, most Local General
Partners of Mod Rehab Properties have now entered into a settlement
agreement with HUD regarding the Mod Rehab matter.
In summary, the settlement agreement provides that if certain criteria
are met, the mortgages on the Mod Rehab properties will be
refinanced; debt service savings will then be passed along to HUD
in the form of reduced Section 8 payments. In return, HUD has
agreed to release any and all rent rollback or ineligible
unit/relocation claims for Mod Rehab properties which participate in the
settlement. In addition, HUD has agreed to promptly pay certain
rent adjustments which it has previously withheld from certain Mod
Rehab Program Properties. The General Partner believes that the
settlement is favorable to the Partnership and its Properties.
As previously reported, there have been investigations and
prosecutions involving certain developers and other persons related to
the Mod Rehab Program. It appears that such investigations and
prosecutions are winding down, and it is not currently expected that
these matters will have any material adverse impact on the Partnership
and its Properties.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At June 30, 1995, the Partnership has cash and cash equivalents of
$123,020, compared with $308,216 at March 31, 1995. The decrease is
primarily attributable to net cash used by operations and purchases of
marketable securities.
Approximately $1,966,000 of the Gross Proceeds has been reserved and
invested in various securities. The reserves were established to be used
for working capital of the Partnership and contingencies related to
the ownership of Local Limited Partnership interests. Reserves may be
used to fund Partnership operating deficits, if the Managing General
Partner deems funding appropriate. Management believes that the
investment income earned on the reserves, along with cash
distributions received from Local Limited Partnerships, to the extent
available, will be sufficient to fund the Partnership's ongoing
operations and any contingencies that may arise.
Since the Partnership invests as a limited partner, the Partnership
has no contractual duty to provide additional funds to Local
Limited Partnerships beyond its specific investment. Thus, at June
30, 1995, the Partnership had no contractual or other obligation to any
Local Limited Partnerships which had no been paid or provided for.
In the event a Local Limited Partnership encounters operating
difficulties requiring additional funds, the Partnerships management
might deem it in its best interests to provide such funds,
voluntarily, in order to protect its investment. No such event has
occurred to date.
Cash Distributions
No cash distributions were made during the quarter ended June 30, 1995.
In prior years, cash available for distribution was derived from the
interest earned on the temporary investment of Partnership's funds, at
money market rates, prior to the limited funds being contributed to
the Partnership's Local Limited Partnership investment.
In the event that distributions are received from Local Limited
Partnerships the Managing General Partner has decided that such amounts
will be used to increase reserves. No assurance can be given as to the
amounts of future distributions from the Local Limited Partnerships
since many of the Properties benefit from some type of federal or state
subsidy, and as a consequence, are subject to restrictions on
cash distributions. Therefore, it is expected that only a limited
amount of cash will be distributed to investors from this source in the
future.
Results of Operations
The Partnership's results of operations for the quarter ended June
30, 1995 resulted in a net loss of $589,254 as compared to a net loss of
$536,547 for the same period in 1994. The increase in the net loss
position is primarily attributable to an increase in equity in losses
of Local Limited Partnerships which is the result of the difference
between estimated and actual expenses. This increase is partially
offset by an increase in investment revenue and no adjustment to the
provision for the valuation of investments in Local Limited
Partnerships.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Property Discussions
Limited Partnership interests have been acquired in thirty-four Local
Limited Partnerships which own and operate rental properties located in
nineteen states. Fourteen of the properties with 768 apartments were
newly constructed and twenty of the properties with 2,089
apartments were rehabilitated. All of the properties have completed
construction or rehabilitation and initial rent-up.
Most of the thirty-four Local Limited Partnerships have stabilized
operations. The majority of these stabilized properties are
operating at break-even or generating operating cash flow.
A number of properties are experiencing operating difficulties and
cash flow deficits due to a variety of reasons. The Local General
Partners of those properties have funded operating deficits
through project expense loans, subordinated loans or payments from
operating escrows. In certain instances where the Local General
Partners have stopped funding deficits because their obligation to do
so has expired or otherwise, the Managing General Partner is working
with the Local General Partners to increase operating income, reduce
expenses or refinance the debt at lower interest rates in order to
improve cash flow.
Pebble Creek, a property located in Arlington, Texas, generated
positive cash flows in 1993 as a result of a HUD approved special rent
adjustment in March of 1993 and a rent increase effective in May of
1993. However, high turnover and an increase in administrative
expenses have caused the property to operate at a deficit for the year
ending December 31, 1994. The Property continues to require high
maintenance work. In other related matters, Pebble Creek has
successfully obtained a summary judgment preventing HUD from
rolling back rents at the property (which was also sustained on
appeal) as well as reaching a settlement relating to these matters,
both of which are discussed in Note 3 to the Financial Statements.
More recently, the Local General Partners of Pebble Creek have
expressed their desire to sell their ownership interests in the
property. At this time, the Managing General Partner is working with
the Local General Partners to reach an acceptable agreement which
addresses a replacement Local General Partner/management agent
as well as the deferred maintenance issues facing the property.
As previously reported, Elmore Hotel, located in Great Falls, Montana,
and New Medford Hotel, located in Medford, Oregon, restructured
their debt in 1993. These partnerships share a common Local General
Partner. In addition, in each case the Local General Partner obtained
a release of certain operating escrows to address delinquent property
taxes. Under the current workout, each property has been operating
above break-even for the three months ended March 31, 1995.
As previously reported, a lawsuit seeking $225,000 in damages has
been filed against The New Medford Hotel. The lawsuit resulted from a
contractor dispute relating to the reconstruction work undertaken at
the building after a fire in 1990. The Local General Partner believes
that the lawsuit is without merit and is vigorously contesting it. It
was scheduled for trial in February, 1995 but has been delayed
indefinitely.
As previously reported, Logan Plaza, located in New York, New
York, had experienced cash flow deficits due principally to the area's
economic slow-down and a decline in the rental market. The Local
General Partner has been working to increase occupancy and rental
income and to contain operating expenses; as a result, the property
continues to show improvement as it operated at break-even for the
year first quarter of 1995. The Local General Partner has reached
preliminary agreement with the lender to refinance the property's
mortgage; however, the refinancing will be contingent upon the
prevailing interest rate in August 1995, when the bonds can be
refinanced.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Property Discussions (continued)
Cass House, located in Boston, Massachusetts, has been facing a
difficult rental market and operating at a deficit. The Local General
Partner renegotiated the property's SHARP subsidy agreement in
1992 to increase the flow of subsidy; however, the increase was not
sufficient to cure deficits. The Local General Partner has recently
requested additional subsidy needed to stabilize the property.
Under the existing agreement with the lender, the Local General
Partner has been supporting operations by guaranteeing up to $181,000
in funds and by deferring management fees. However, such funding
obligations are limited and no assurance can be given that the Local
General Partner will continue to meet these obligations. MHFA approval
of the restructuring is pending. Verdean Gardens, located in New
Bedford, Massachusetts, which shares a common Local General Partner with
Cass House, continues to operate in a slow rental market. The Local
General Partner renegotiated the property's SHARP subsidy agreement in
1992 thereby increasing the flow of subsidy. Under an agreement with the
lender, the Local General Partner is obligated to support operations;
however, such funding obligations are limited and no assurance can be
given that the Local General Partner will be able to meet these
obligations. The property requires maintenance work and the General
Partner will work with the Local General Partner to determine how to
best accomplish the property's needs.
At Hughes Apartments, located in Mandan, North Dakota, rental losses due
to flood damage have resulted in a mortgage default. The Managing
General Partner is working with the Local General Partner and the lender
to address rental losses and the mortgage default. A proposed
forbearance agreement with the lender includes the use of approximately
$180,000 in fund reserves to make necessary capital improvements and
partially cure the default. The agreement is expected to be finalized
by September 30, 1995.
It was previously reported that an affiliate of The Boston
Financial Group Limited Partnership has been negotiating to purchase
the Local General Partner interests in five properties in which the
Partnership has invested in (collectively, the "Colorado
Partnerships") from Phillip Abrams Ventures, Inc. and PDW, Inc.,
the current Local General Partners. This transaction will require
approval from the U.S. Department of Housing and Urban Development and
the local housing authorities for the substitution of general
partners.
<PAGE>
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K
(a)Exhibits - None
(b)Reports on Form 8-K - No reports on Form 8-K
were filed during the quarter ended June 30, 1995.
<PAGE>
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.
DATED: August 11, 1995 BOSTON FINANCIAL QUALIFIED HOUSING
LIMITED PARTNERSHIP
By: 29 Franklin Street, Inc.,
its Managing General Partner
/s/Georgia Murray
Georgia Murray
A Managing Director, Treasurer
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> JUN-30-1995
<CASH> 123,020
<SECURITIES> 2,241,315
<RECEIVABLES> 30,098
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,172
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,803,843 <F1>
<CURRENT-LIABILITIES> 103,123
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 10,700,720
<TOTAL-LIABILITY-AND-EQUITY> 10,803,843
<SALES> 0
<TOTAL-REVENUES> 35,480
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 99,836
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (589,254) <F2>
<EPS-PRIMARY> $(11.67)
<EPS-DILUTED> 0
<FN>
<F1>Included in total assets is $8,406,238 of investments in
Local Limited Partnerships.
<F2>This amount reflects Equity in Losses of Local Limited
Partnerships in the amount of $524,898.
</TABLE>
