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 December 31, 1994
-----------------------------------------------
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 December 31, 1994 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>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page No.
- - - - ------------------------------ --------
<S> <C>
Item 1. Financial Statements
Balance Sheets - December 31, 1994 (Unaudited)
and March 31, 1994 1
Statements of Operations (Unaudited) - For the Three
and Nine Months Ended December 31, 1994 and 1993 2
Statements of Changes in Partners' Equity (Deficiency) (Unaudited) -
For the Nine Months Ended December 31, 1994 and 1993 3
Statements of Cash Flows (Unaudited) - For the Nine Months
Ended December 31, 1994 and 1993 4
Notes to Financial Statements (Unaudited) 5
Statements of Cash Available for Distribution
(Unaudited) - For the Nine Months Ended
December 31, 1994 and 1993 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 15
SIGNATURE 16
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1994 1994
-------------- -------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 536,226 $ 44,790
Other current assets 30,373 24,973
-------------- -------------
Total current assets 566,599 69,763
Investments in securities (Note 2) 1,555,453 2,279,787
Investments in Local Limited Partnerships,
net of reserve for realization of $1,015,441
and $1,241,427 at December 31, 1994 and
March 31, 1994, respectively (Note 3) 10,648,995 12,138,022
---------- -------------
Total assets $ 12,771,047 $ 14,487,572
============== =============
Liabilities and Partners' Equity
Current liabilities:
Accounts payable and accrued expenses (Note 4) $ 64,852 $ 99,486
-------------- -------------
Total current liabilities 64,852 99,486
Partners' equity 12,706,195 14,388,086
-------------- -------------
Total liabilities and partners' equity $ 12,771,047 $ 14,487,572
============== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENTS OF OPERATIONS (Unaudited)
For the Three and Nine Months Ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
1994 1993 1994 1993
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Investment income $ 23,830 $ 86,050 $ 30,897 $ 181,489
Other income 1,350 1,950 9,700 4,903
---------- ---------- ------------ ------------
25,180 88,000 40,597 186,392
---------- ---------- ------------ ------------
Expenses:
General and administrative
(Note 4) 59,356 106,397 220,734 211,582
Amortization 27,625 28,298 82,878 84,894
---------- ---------- ------------ ------------
86,981 134,695 303,612 296,476
---------- ---------- ------------ ------------
Loss before equity in loss of
Local Limited Partnerships (61,801) (46,695) (263,015) (110,084)
Adjustment to provision for
realization of investments
in Local Limited Partnerships 78,827 71,846 225,986 202,984
Equity in loss of Local Limited
Partnerships (534,812) (648,710) (1,624,635) (1,988,518)
---------- ---------- ------------ ------------
Net loss $ (517,786) $ (623,559) $ (1,661,664) $ (1,895,618)
========== ========== ============ ============
Net loss allocated:
To General Partners $ (5,178) $ (6,236) $ (16,617) $ (18,956)
To Limited Partners (512,608) (617,323) (1,645,047) (1,876,662)
---------- ---------- ------------ ------------
$ (517,786) $ (623,559) $ (1,661,664) $ (1,895,618)
========== ========== ============ ============
Net loss per Limited
Partnership Unit
(50,000 Units) $(10.25) $(12.35) $(32.90) $(37.53)
========== ========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY) (Unaudited)
For the Nine Months Ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
Initial Investor
General Limited Limited Unrealized
Partners Partner Partners Losses Total
--------- ------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1994 $(290,616) $ 4,648 $ 14,674,054 $ - $ 14,388,086
Adjustment to reclassify
unrealized losses at
March 31, 1994 393 - 38,931 (39,324) 0
Net change in unrealized losses - - - (20,227) (20,227)
Net loss (16,617) - (1,645,047) $ - (1,661,664)
--------- ------- ------------ -------- ------------
Balance at December 31, 1994 $(306,840) $ 4,648 $ 13,067,938 $(59,551) $ 12,706,195
========= ======= ============ ======== ============
Balance at March 31, 1993 $(259,741) $ 4,648 $ 17,730,701 $ - $ 17,475,608
Net loss (18,956) - (1,876,662) - (1,895,618)
--------- ------- ------------ -------- ------------
Balance at December 31, 1993 $(278,697) $ 4,648 $ 15,854,039 $ - $ 15,579,990
========= ======= ============ ======== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENTS OF CASH FLOWS (Unaudited)
For the Nine Months Ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
Net cash used by operating activities $ (220,171) $ (46,045)
---------- ----------
Cash flows from investing activities:
Cash distributions received from Local Limited Partnerships 7,500 27,006
Decrease in investments in securities 704,107 82,387
---------- ----------
Net cash provided by investing activities 711,607 109,393
---------- ----------
Net increase in cash and cash equivalents 491,436 63,348
Cash and cash equivalents, beginning 44,790 202,254
---------- ----------
Cash and cash equivalents, ending $ 536,226 $ 265,602
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
Notes to Financial Statements (Unaudited)
1. Significant Accounting Policies
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 Form 10-K for the
year ended March 31, 1994. 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.
2. Investments in Securities
A summary of investments in securities is as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ---- -------- ----------
<S> <C> <C> <C> <C>
Debt securities issued by the US
Treasury and other US govern-
ment corporations and agencies $1,153,140 $710 $(51,693) $1,102,157
Other debt securities 461,864 - (8,568) 453,296
---------- ---- -------- ----------
Investments in securities
at December 31, 1994 $1,615,004 $710 $(60,261) $1,555,453
========== ==== ======== ==========
</TABLE>
The contractual maturities at December 31, 1994 are as follows:
<TABLE>
<CAPTION>
Fair
Cost Value
----------- -----------
<S> <C> <C>
Due in one year or less $ 224,238 $ 224,554
Due in one to five years 727,905 691,463
Due in five to ten years 308,754 296,419
Due after ten years 354,107 343,017
----------- -----------
$ 1,615,004 $ 1,555,453
=========== ===========
</TABLE>
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 $2,586,000 for the nine months ended
December 31, 1994. Included in investment income are gross gains of $426 and
gross losses of $44,604 which were realized on these sales.
5
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
Notes to Financial Statements (Unaudited) (continued)
3. 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 of the Partnership's
interest in the Local Limited Partnerships, proceeds of the sales will be
distributed according to each respective partnership agreement.
The following is a summary of Investments in Local Limited Partnerships:
<TABLE>
<CAPTION>
September 30,
1994
(Unaudited)
-------------
<S> <C>
Capital contributions paid to Local Limited Partnerships
and purchase price paid to withdrawing partners of
Local Limited Partnerships $ 36,651,930
Cumulative equity in loss of Local Limited Partnerships (excluding
cumulative unrecognized losses of $6,174,331) (28,125,805)
Cumulative cash distributions received from Local Limited Partnerships (791,633)
-------------
Investments in Local Limited Partnerships before adjustment 7,734,492
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 4,770,577
Accumulated amortization of acquisition fees and expenses (840,633)
-------------
Investments in Local Limited Partnerships 11,664,436
Reserve for realization of Investments in Local Limited Partnership (1,015,441)
-------------
$ 10,648,995
=============
</TABLE>
6
<PAGE>
3. 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
<TABLE>
<CAPTION>
September 30,
1994
(Unaudited)
<S> <C>
Assets:
Investment property, net $ 115,872,311
Current assets 4,148,443
Other assets 7,381,604
--------------
Total assets $ 127,402,358
==============
Liabilities and Partners' Equity:
Long-term debt $ 111,652,045
Current liabilities 4,317,495
Other liabilities 13,665,522
--------------
Total liabilities 129,635,062
Partners' equity (2,232,704)
--------------
Total liabilities and partners' equity $ 127,402,358
==============
Summarized Income Statements - For the Nine
Months Ended September 30, 1994 (Unaudited)
Rental and other income: $ 14,974,753
--------------
Expenses:
Operating expenses 6,931,750
Interest expense 7,555,536
Depreciation and amortization 3,685,138
--------------
Total expenses 18,172,424
Net loss $ (3,197,671)
==============
Partnership's share of net loss $ (3,163,680)
==============
Other partner's share of net loss $ (33,991)
==============
</TABLE>
For the nine months ended December 31, 1994, the Partnership has not
recognized $1,539,045 in equity in losses relating to nine Local Limited
Partnerships where cumulative equity in losses exceeded its total investments.
7
<PAGE>
4. Compensation to General Partners and Affiliates
An affiliate of the Managing General Partner is reimbursed for the
actual cost of the Partnership's operating expenses. Included in general and
administrative expenses for the nine months ended December 31, 1994 and 1993 is
$81,395 and $86,468, respectively, that the Partnership has paid as
reimbursement for salaries and benefits.
Boston Financial Property Management ("BFPM"), an affiliate of the
Managing General Partner, currently manages Sierra Vista, Windsor Court, Rolling
Green and Terrace, four properties in which the Partnership has invested. The
property management fee charged is equal to 5% of property gross revenues.
Included in operating expenses in the summarized income statements in Note 3 to
the Financial Statements is $140,125 of fees earned by BFPM for the nine months
ended December 31, 1994.
5. 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 HUD's Section 8 Moderate Rehabilitation Program ("Mod
Rehab Program"). On August 9, 1994, and then again on November 18, 1994, the
U.S. Courts of Appeals for the Tenth Circuit and the Fifth Circuit, each
respectively affirmed the U.S. District Court rulings in Terrace, Rolling Green
and Pebble Creek.
In addition, as previously reported, HUD has alleged that Pebble Creek
violated certain requirements relating to the relocation of tenants at that
property while the project was being renovated. This matter is currently the
subject of an administrative appeal.
In light of the favorable rulings in the Terrace, Rolling Green and
Pebble Creek cases, counsel for these properties strongly believes that there
are statutory, regulatory and contractual prohibitions to HUD rolling back the
rents at the properties and to terminating the Housing Assistance Payments
("HAP") contract at Pebble Creek. The Partnership has invested in 20 Mod Rehab
properties, comprising approximately 68% of its portfolio. The Managing General
Partner believes that prior to the litigation, it was HUD's intention to attempt
subsidy reductions and/or HAP terminations in the cases of 9 properties,
comprising approximately 33% of the Partnership's portfolio.
The General Partners believe that they are very close to entering into
a settlement agreement with HUD that will resolve the Mod Rehab matter. Further,
it is expected that the terms of the settlement will have no material adverse
impact on the Partnership or its properties. Such agreement is subject to the
approval of senior HUD officials and the local general partners. If this matter
is not resolved and HUD is ultimately successful in obtaining rent rollbacks or
HAP terminations, the rents from those properties may not be sufficient to meet
operating expenses and/or debt service and foreclosures could result.
Included in general and administrative expenses for the nine months ended
December 31, 1994 is $40,914 of legal fees and related expenses incurred in
connection with this issue.
8
<PAGE>
5. Other Matters (continued)
The Federal Office of Independent Counsel ("OIC") is conducting an
investigation of certain developers and other persons related to the Mod Rehab
Program (the "OIC Investigation"). Various aspects of this investigation have
been reported in prior reports.
9
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENTS OF CASH AVAILABLE FOR DISTRIBUTION
(As Defined in the Partnership Agreement) (Unaudited)
For the Nine Months Ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Net loss $ (1,661,664) $ (1,895,618)
Non-cash expenses and changes in operating
assets and liabilities 1,441,493 1,849,573
Cash distributions received from Local
Limited Partnerships 7,500 27,006
------------- ------------
Net decrease to reserves $ (212,671) $ (19,039)
============ =============
Cash available for distribution per
Limited Partnership Unit (50,000 Units) $ - $ -
============ =============
</TABLE>
10
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Reserves
As of December 31, 1994, the Partnership has invested all of the funds
available for investment in thirty-four Local Limited Partnerships.
At December 31, 1994, approximately $1,989,000 of the Gross Proceeds
has been reserved and is 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.
Approximately $2,500,000 of the Gross Proceeds had initially been
reserved and invested in various securities. Reserves have decreased by $511,000
to approximately $1,989,000 for a number of reasons. First, $152,000 of tax
credit adjusters have been paid to certain Local Limited Partnerships as a
result of their generating higher than expected tax credits to be passed through
to investors. Secondly, the Partnership has paid or accrued approximately
$378,000 for legal fees and related expenses in connection with the Mod Rehab
issue discussed in Note 5 to the Financial Statements. Additionally, legal fees
relating to various property issues totaling approximately $6,000 have also been
paid from reserves. Cash distributions received from Local Limited Partnerships
have enabled the Partnership to restore approximately $25,000 of the reserves at
December 31, 1994.
The Partnership expects to receive additional funds from distributions
of cash flow from operations of the Local Limited Partnerships in future years.
It is expected that this source of funds, along with interest earned on
reserves, will provide adequate working capital to the Partnership. Reserves may
be used to fund Partnership operating deficits, if the Managing General Partner
deems funding appropriate.
The Partnership had an increase in cash and cash equivalents of
$491,436 for the nine months ended December 31, 1994. This increase was
attributable to a decrease in investments in securities of $704,107 and cash
distributions received from Local Limited Partnerships of $7,500. Offsetting
these increases was cash used by operations of $220,171.
The Partnership had an increase in cash and cash equivalents of $63,348
for the nine months ended December 31, 1993. This increase was attributable to a
decrease in investments in securities of $82,387 and cash distributions received
from Local Limited Partnerships of $27,006. Offsetting these increases was cash
used by operations of $46,045.
Results of Operations and Significant Events
Nine Months Ended December 31, 1994
For the nine months ended December 31, 1994, the Partnership had a net
loss of $1,661,664, which included equity in loss of Local Limited Partnerships
of $1,624,635 for the nine months ended September 30, 1994. Also included in the
net loss is an adjustment to the provision for realization of investments in
Local Limited Partnerships of $225,986 to reflect the net loss for the nine
months ended September 30, 1994 of the Local Limited Partnership for which the
reserve was previously established. The Partnership's loss from operations for
the nine months ended December 31, 1994 of $263,015 was attributable to
investment income and other income of $40,597, offset by general and
administrative expenses of $220,734 and amortization of $82,878. Although the
Partnership's operating expenses are
11
<PAGE>
Results of Operations and Significant Events (continued)
Nine Months Ended December 31, 1994 (continued)
expected to remain fairly stable, the net loss for the nine months ended
December 31, 1994 is not necessarily indicative of the results that may be
expected in future periods.
The Local Limited Partnerships' overall net loss of $3,197,671 for the
nine months ended September 30, 1994 was due to rental and other income of
$14,974,753, offset by operating and interest expenses of $14,487,286, and
$3,685,138 of depreciation and amortization expenses. The Partnership's share of
this loss was $3,163,680. However, $1,539,045 of this loss was not recognized by
the Partnership because the cumulative equity in losses relating to nine Local
Limited Partnerships exceeded its total investments. The net losses for the nine
months ended September 30, 1994 are not necessarily indicative of the results
that may be expected in future periods.
Nine Months Ended December 31, 1993
For the nine months ended December 31, 1993, the Partnership had a net
loss of $1,895,618, which included equity in loss of Local Limited Partnerships
of $1,988,518 for the nine months ended September 30, 1993 and an adjustment to
the provision for realization of Investments in Local Limited Partnerships of
$202,984. The Partnership's loss from operations for the nine months ended
December 31, 1993 of $110,084 was attributable to investment income and other
income of $186,392, offset by general and administrative expenses of $211,582
and amortization of $84,894.
The Local Limited Partnerships' overall net loss of $3,771,615 for the
nine months ended September 30, 1993 was primarily due to rental and other
income of $14,363,041, offset by operating and interest expenses of $14,155,732,
and $3,978,924 of depreciation and amortization expenses. The Partnership's
share of this loss was $3,731,082. However, $1,742,564 of this loss was not
recognized by the Partnership because the cumulative equity in losses relating
to six Local Limited Partnerships exceeded its total investments.
1994 versus 1993
The Partnership's results of operations for the nine months ended
December 31, 1994 resulted in a net loss of $1,661,664 as compared to a net loss
of $1,895,618 for the same period in 1993. This decrease in net loss is
primarily attributable to a decrease in the equity in loss of Local Limited
Partnerships of $363,883. The overall loss of the Local Limited Partnerships
decreased for the nine months ended September 30, 1994 as compared to the same
period in 1993, primarily as a result of an increase in rental income for the
current period. Offsetting the decrease in the equity in loss of Local Limited
Partnerships is a decrease in investment and other income of $145,795 due to
losses realized on the sale of investments during the nine months ended December
31, 1994.
Property Discussions
Limited Partnership interests have been acquired in thirty-four Local
Limited Partnerships which own and operate rental properties located in nineteen
states. Seventeen of the properties with 732 apartments were newly constructed
and seventeen of the properties with 2,125 apartments were rehabilitated. All of
the properties have completed construction or rehabilitation and initial
rent-up.
12
<PAGE>
Results of Operations and Significant Events (continued)
Property Discussions (continued)
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 first nine months of 1994. The
Property continues to require high maintenance work. Pebble Creek also faces
certain issues related to the Mod Rehab Program which are discussed in Note 5 to
the Financial Statements.
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 first nine months of 1994.
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 is now scheduled for trial in February
1995.
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; the
property has been operating above break-even for the first nine months of 1994.
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, which is when the bonds can be
refinanced.
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.
13
<PAGE>
Results of Operations and Significant Events (continued)
Property Discussions (continued)
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.
Two other properties have operated at deficits and have ongoing
operating or financial difficulties. The Local General Partners of these
properties are working on alternative solutions to the problems.
It was previously reported that an affiliate of The Boston Financial
Group Limited Partnership ("Boston Financial") has been negotiating to purchase
the Local General Partner interests 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. The parties
have reached agreement on all aspects of the transaction and are currently
awaiting approval from the U.S. Department of Housing and Urban Development
("HUD") and the local housing authorities for the substitution of general
partners. Issues involving the Section 8 Moderate Rehabilitation Program
(discussed more fully under Other Matters in Note 5 to the Financial Statements)
may have some effect on the final outcome of the transaction.
14
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Please see the discussion of legal proceedings under Note 5 to the
Financial Statements.
15
<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: February 13, 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
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> DEC-31-1994
<CASH> 536,226
<SECURITIES> 1,555,453
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