The total number of pages contained in this report and any exhibits or
attachments hereto is ____. Index for Exhibits appears on Page ____.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
March 31, 1995 0-16796
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 04-2947737
(State of organization) (I.R.S. Employer
Identification No.)
101 Arch Street, 16th Floor
Boston, Massachusetts 02110-1106
(Address of Principal executive office) (Zip Code)
Registrant's telephone number, including area code 617/439-3911
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
50,000
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Subsection 229.405 of this chapter) 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. [X]
State the aggregate sales price of partnership units held by nonaffiliates of
the registrant.
$50,000,000 as of March 31, 1995
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS: (2) ANY PROXY OR
INFORMATION STATEMENT AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OR
(c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on
Form 10-K into
Which the Document
Documents incorporated by reference is Incorporated
Post-Effective Amendments Nos. 1 through 3
to the Form S-11 Registration Statement,
File # 33-11910 Part I, Item 1
Report on Form 8-K filed on July 7, 1988 Part I, Item 1
Report on Form 8-K filed on January 20, 1989 Part I, Item 1
Prospectus -- Sections Entitled:
"Other Government Assistance Programs" Part II, Item 7
"Estimated Use of Proceeds" Part III, Item 11
"Management Compensation and Fees" Part III, Item 11
"Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" Part III, Item 11
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1995
TABLE OF CONTENTS
Sequential
PART 1 Page No. Page No.
Item 1 Business K-3
Item 2 Properties K-6
Item 3 Legal Proceedings K-13
Item 4 Submission of Matters to a
Vote of Security Holders K-13
PART II
Item 5 Market for the Registrant's Units
and Related Security Holder Matters K-14
Item 6 Selected Financial Data K-15
Item 7 Management's Discussion and Analysis
of Financial Condition and
Results of Operations K-16
Item 8 Financial Statements and Supplementary Data K-20
Item 9 Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure K-20
PART III
Item 10 Directors and Executive Officers
of the Registrant K-21
Item 11 Management Remuneration K-22
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-24
Item 13 Certain Relationships and Related
Transactions K-24
PART IV
Item 14 Exhibits, Financial Statement Schedule
and Reports on Form 8-K K-25
SIGNATURES K-27
K-2
<PAGE>
PART I
Item 1. Business
Boston Financial Qualified Housing Limited Partnership (the "Partnership") is a
limited partnership formed on January 22, 1987 under the Uniform Limited
Partnership Act of the State of Delaware. The Partnership's partnership
agreement ("Partnership Agreement") authorized the sale of up to 50,000 units of
Limited Partnership Interest ("Units") at $1,000 per Unit, adjusted for certain
discounts. The Partnership raised $49,963,740 ("Gross Proceeds"), net of
discounts of $36,260, through the sale of 50,000 Units. Such amounts exclude
five unregistered Units previously acquired for $5,000 by the Initial Limited
Partner, which is also one of the General Partners. The offering of Units
terminated on April 29, 1988. No further sale of Units is expected.
The Partnership is engaged solely in the business of real estate investment. A
presentation of information about industry segments is not applicable and would
not be material to an understanding of the Partnership's business taken as a
whole.
The Partnership has invested as a limited partner in other limited partnerships
("Local Limited Partnerships") which own and operate residential apartment
complexes ("Properties"), all of which benefit from some form of federal, state
or local assistance programs and which qualify for the low-income housing tax
credits ("Tax Credits") that were added to the Internal Revenue Code (the "Code)
by the Tax Reform Act of 1986. The investment objectives of the Partnership
include the following: (i) to provide current tax benefits in the form of Tax
Credits which qualified limited partners may use to offset their federal income
tax liability; (ii) to preserve and protect the Partnership's capital; (iii) to
provide limited cash distributions from property operations which are not
expected to constitute taxable income during the expected duration of the
Partnership's operations; and (iv) to provide cash distributions from sale or
refinancing transactions. There cannot be any assurance that the Partnership
will attain any or all of these investment objectives.
Table A on the following page lists the properties owned by the Local Limited
Partnerships in which the Partnership has invested. Item 7 of this Report
contains other significant information with respect to such Local Limited
Partnerships. As required by applicable rules, the terms of the acquisition of
Local Limited Partnership interests have been described in supplements to the
Prospectus and collected in three post-effective amendments to the Registration
Statement and in two Form 8-K filings listed in Part IV of this Report on Form
10-K (collectively, the "Acquisition Reports"); such descriptions are
incorporated herein by this reference.
K-3
<PAGE>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
Properties owned by Date
Local Limited Interest
Partnerships Location Acquired
------------------------ --------------- ----------
Barrington Manor Fargo, ND 12/31/87
Bingham Bingham, ME 12/30/87
Birmingham Randolph, ME 12/30/87
Bittersweet Randolph, MA 10/27/87
Boulevard Commons Chicago, IL 07/14/88
Brentwood Manor II Nashua, NH 01/20/89
Cass House/Roxbury Hills Boston, MA 06/08/88
Chestnut Lane Newnan, GA 08/01/88
Coronado Courts Douglas, AZ 12/18/87
Country Estates Glennville, GA 03/01/88
600 Dakota Wahpeton, ND 10/01/88
Delmar Gillette, WY 10/01/88
Duluth Sioux Falls, SD 10/01/88
Elmore Hotel Great Falls, MT 12/22/87
Graver Inn Fargo, ND 12/31/87
Hazel-Winthrop Chicago, IL 12/30/87
Heritage Court Dundalk, MD 01/20/89
Hughes Mandan, ND 12/31/87
Lakeview Heights Clearfield, UT 12/30/87
Logan Plaza New York, NY 05/10/88
New Medford Hotel Medford, OR 12/22/87
Heritage View New Sweden, ME 12/30/87
Pebble Creek Arlington, TX 06/20/88
Hillcrest III Perryville, MO 03/31/89
Pine Village Pine Mountain, GA 03/01/88
Rolling Green Edmond, OK 09/30/87
Sierra Pointe Las Vegas, NV 09/01/87
Sierra Vista Aurora, CO 09/30/87
Talbot Village Talbotton, GA 03/01/88
Terrace Oklahoma City, OK 11/20/87
Trenton Salt Lake City, UT 12/30/87
Verdean Gardens New Bedford, MA 05/31/88
Willowpeg Village Rincon, GA 03/01/88
Windsor Court Aurora, CO 12/30/87
* The Partnership's interest in profits and losses of each Local Limited
Partnership arising from normal operations is 99%, with the exception of
three Local Limited Partnerships in which the Partnership acquired a 98%
interest, a 98.99% interest and a 98.974% interest. Profits and losses
arising from sale or refinancing transactions are allocated in accordance
with the respective Local Limited Partnership Agreements.
K-4
<PAGE>
Although the Partnership's investments in Local Limited Partnerships are not
subject to seasonal fluctuations, the Partnership's equity in loss of Local
Limited Partnerships, to the extent it reflects the operations of individual
properties, may vary from quarter to quarter based upon changes in occupancy and
operating expenses as a result of seasonal factors.
Under the terms of the Partnership Agreement, the Partnership initially set
aside 5% of the Gross Proceeds from the sale of Units as a reserve for working
capital of the Partnership and contingencies related to ownership of Local
Limited Partnership interests. The Managing General Partner may increase or
decrease such reserves from time to time, as it deems appropriate. As of March
31, 1995, the level of reserves has decreased to approximately $1,979,000. The
primary cause of the decrease is approximately $375,000 paid for legal fees and
related expenses in connection with the Mod Rehab issue discussed in Note 7 to
the Financial Statements under Item 8 of this Report on Form 10-K. Additionally,
the Partnership has paid approximately $152,000 of tax credit adjusters to
certain Local Limited Partnerships as a result of their generating higher than
expected Tax Credits to be passed through to investors. Also, legal fees
relating to various property issues totaling approximately $18,000 have also
been paid from reserves. Cash distributions received from Local Limited
Partnerships have enabled the Partnership to add approximately $25,000 to
reserves at March 31, 1995.
The Partnership's primary source of working capital is investment income earned
on the reserves. Additionally, the Partnership expects to receive distributions
from cash flows from operations of its Local Limited Partnership interests in
future years. It is expected that these sources of funds will provide adequate
working capital to the Partnership.
Each Local Limited Partnership has, as its general partners ("Local General
Partners"), one or more individuals or entities not affiliated with the
Partnership or its General Partners. In accordance with the partnership
agreements under which such entities are organized ("Local Limited Partnership
Agreements"), the Partnership depends on the Local General Partners for the
management of each Local Limited Partnership. As of March 31, 1995, the
following Local Limited Partnerships have a common Local General Partner or
affiliated group of Local General Partners accounting for the specified
percentage of the net investment in Local Limited Partnerships: (i) Rolling
Green, Sierra Vista, Terrace, Windsor, and Sierra Point Limited Partnerships,
representing 28%, have Phillip Abrams Ventures, Inc. and PWD, Inc., as Local
General Partners; (ii) Graver Inn, Barrington Manor, Hughes, 600 Dakota and
Duluth Limited Partnerships, representing 9.0%, have Jerry L. Meide and RABB,
Inc. as General Partners; (iii) New Medford and Oregon Landmark Limited
Partnerships, representing 6.0%, have WHP Holdings, Inc. as the Local General
Partner; (iv) Trenton and Lakeview Heights Limited Partnerships, representing
2.0%, have PSC Real Estate, Inc. and J. Michael Queenan & Associates, Inc.
(which is a corporation controlled by J. Michael Queenan) as Local General
Partners; and (v) Bingham, Birmingham, and New Sweden Limited Partnerships,
representing 1.0%, have Charles B. Mattson and Todd Mattson as Local General
Partners. The net investment in the following Local Limited Partnerships has
reached zero as of March 31, 1995: (i) Delmar Limited Partnership has J. Michael
Queenan as Local General Partner; and (ii) Willowpeg Village, Pine Village,
Glennville, Talbot Village and Chestnut Lane Limited Partnership have Michael G.
Kistler and William E. Johnson as General Partners. The Local General Partners
of the remaining Local Limited Partnerships are identified in the Acquisition
Reports, which are incorporated herein by reference.
The Properties owned by Local Limited Partnerships in which the Partnership has
invested are, and will continue to be, subject to competition from existing and
future apartment complexes in the same areas. The continued success of the
Partnership will depend on many outside factors, most of which are beyond the
control of the Partnership and which cannot be predicted at this time. Such
factors include general economic and real estate market conditions, both on a
national basis and in those areas where the Properties are located, the
availability and cost of borrowed funds, real estate tax rates, operating
expenses, energy costs, and government regulations. In addition, other risks
inherent in real estate investment may influence the ultimate success of the
Partnership, including (i) possible reduction in rental income due to an
inability to maintain high occupancy levels or adequate rental levels, (ii)
possible adverse changes in general economic conditions and adverse local
conditions, such as competitive overbuilding, or a decrease in employment or
adverse changes in real estate laws, including building codes, and (iii) the
possible future adoption of rent control legislation which would not permit
increased costs to be
K-5
<PAGE>
passed on to the tenants in the form of rent increases, or which would suppress
the ability of the Local Limited Partnerships to generate operating cash flow.
Since all of the Properties benefit from some form of government assistance, the
Partnership is subject to the risks inherent in that area including decreased
subsidies, difficulties in finding suitable tenants and obtaining permission for
rent increases. In addition, any Tax Credits allocated to investors with respect
to a Property are subject to recapture to the extent that the Property or any
portion thereof ceases to qualify for the Tax Credits. Other future changes in
federal and state income tax laws affecting real estate ownership or limited
partnerships could have a material and adverse affect on the business of the
Partnership.
The Partnership is managed by 29 Franklin Street, Inc., the Managing General
Partner of the Partnership. The other General Partner of the Partnership is
Franklin 29 Limited Partnership. To economize on direct and indirect payroll
costs, the Partnership, which does not have any employees, reimburses The Boston
Financial Group Limited Partnership, an affiliate of the General Partner, for
certain expenses and overhead costs. A complete discussion of the management of
the Partnership is set forth in Item 10 of this Report.
Item 2. Properties
The Partnership owns limited partnership interests in thirty-four Local Limited
Partnerships which own and operate Properties, all of which benefit from some
form of federal, state or local assistance programs which qualify for the Tax
Credits added to the Code by the Tax Reform Act of 1986. The Partnership's
ownership interest in each Local Limited Partnership is generally 99%, except
for Hazel-Winthrop, Logan Plaza and Boulevard Commons, where the Partnership's
ownership interest is 98.99%, 98% and 98.974%, respectively, of each.
Each of the Local Limited Partnerships has received an allocation of Tax Credits
by its relevant state tax credit agency. In general, the Tax Credit runs for ten
years from the date the Property is placed in service. The required holding
period (the "Compliance Period") of the Properties is fifteen years. During
these fifteen years, the Properties must satisfy rent restrictions, tenant
income limitations and other requirements, as promulgated by the Internal
Revenue Service, in order to maintain eligibility for the Tax Credit at all
times during the Compliance Period. Once a Local Limited Partnership has become
eligible for the Tax Credits, it may lose such eligibility and suffer an event
of recapture if its Property fails to remain in compliance with the
requirements. To date, none of the Local Limited Partnerships have suffered an
event of recapture of Tax Credits.
The schedules on the following pages provide certain key information on the
Local Limited Partnership interests acquired by the Partnership.
K-6
<PAGE>
<TABLE>
<CAPTION>
Local Limited Capital Contributions
Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apt. Units March 31, 1995 March 31, 1995 December 31, 1994 Subsidy* 1995
- - ----------------------- ---------- -------------- --------------- ----------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Barrington Manor
Limited Partnership
Barrington Manor
Fargo, ND 18 175,200 175,200 665,000 Section 8 100%
Bingham Family Housing
Associates (A Limited
Partnership)
Bingham
Bingham, ME 24 240,900 240,900 1,170,959 FmHA 100%
Birmingham Housing
Associates
(A Limited Partnership)
Birmingham Village
Randolph, ME 24 236,520 236,520 1,165,549 FmHA 96%
MB Bittersweet Associates
Limited Partnership
(a Massachusetts
Limited Partnership)
Bittersweet
Randolph, MA 35 620,500 620,500 2,539,957 Loans 100%
Boulevard Commons
Limited Partnership
Boulevard Commons
Chicago, IL 212 4,527,850 4,527,850 10,425,105 Section 8 91%
Michael J. Dobens
Limited Partnership I
Brentwood Manor II
Nashua, NH 22 300,000 300,000 791,857 Section 8 100%
K-7
<PAGE>
Local Limited Capital Contributions
Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apt. Units March 31, 1995 March 31, 1995 December 31, 1994 Subsidy* 1995
- - ----------------------- ---------- -------------- --------------- ----------------- --------- -------------
Cass House Associates Limited
Partnership (a Massachusetts
Limited Partnership)
Cass House/Roxbury Hills
Boston, MA 111 2,141,090 2,141,090 8,310,668 Loans 96%
Chestnut Lane Limited
Partnership (A Limited
Partnership)
Chestnut Lane
Newnan, GA 50 282,510 282,510 1,480,305 FmHA 96%
Coronado Courts Limited
Partnership
Coronado Courts
Douglas, AZ 145 1,800,000 1,800,000 3,817,996 Section 8 99%
Glennville Properties
(A Limited Partnership)
Country Estates
Glennville, GA 24 121,910 121,910 598,326 FmHA 96%
600 Dakota Properties
Limited Partnership
600 Dakota
Wahpeton, ND 28 113,000 113,000 704,397 Section 8 89%
Delmar Housing Associates
Limited Partnership
Delmar
Gillette, WY 16 128,000 128,000 425,932 Section 8 100%
K-8
<PAGE>
Local Limited Capital Contributions
Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apt. Units March 31, 1995 March 31, 1995 December 31, 1994 Subsidy* 1995
- - ----------------------- ---------- -------------- --------------- ----------------- --------- -------------
Duluth Limited Partnership
Duluth
Sioux Falls, SD 11 107,000 107,000 263,038 Section 8 96%
Oregon Landmark-Three
Limited Partnership
Elmore Hotel
Great Falls, MT 60 1,022,000 1,022,000 3,456,848 Section 8 99%
Graver Inn
Limited Partnership
Graver Inn
Fargo, ND 70 819,500 819,500 2,126,086 Section 8 98%
Hazel-Winthrop
Apartments
(An Illinois Limited
Partnership)
Hazel-Winthrop
Chicago, IL 30 350,400 350,400 2,135,844 Section 8 100%
Heritage Court
Limited Partnership
Park Terrace
Dundalk, MD 101 2,048,750 2,048,750 1,725,000 Loans 100%
Hughes Apartments
Limited Partnership
Hughes
Mandan, ND 47 343,100 343,100 1,210,000 Section 8 68%
K-9
<PAGE>
Local Limited Capital Contributions
Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apt. Units March 31, 1995 March 31, 1995 December 31, 1994 Subsidy* 1995
- - ----------------------- ---------- -------------- --------------- ----------------- --------- -------------
Lakeview Heights
Apartments, Ltd.
(A Limited Partnership)
Lakeview Heights
Clearfield, UT 83 584,000 584,000 2,866,493 Section 8 98%
Logan Plaza Associates
Logan Plaza
New York NY 130 2,240,000 2,240,000 11,490,127 Loans 93%
New Medford Hotel
Associates
Limited Partnership
New Medford Hotel
Medford, OR 74 1,417,765 1,417,765 3,286,176 Section 8 100%
New Sweden Housing
Associates
(A Limited Partnership)
Heritage View
New Sweden, ME 24 237,250 237,250 1,171,014 FmHA 96%
2225 New York Avenue, Ltd
(A Limited Partnership)
Pebble Creek
Arlington, TX 352 2,512,941 2,512,941 7,968,916 Section 8 92%
Perryville Associates I, L.P
(A Limited Partnership)
Hillcrest III
Perryville, MO 24 128,115 128,115 594,173 FmHA 100%
K-10
<PAGE>
Local Limited Capital Contributions
Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apt. Units March 31, 1995 March 31, 1995 December 31, 1994 Subsidy* 1995
- - ----------------------- ---------- -------------- --------------- ----------------- --------- -------------
Pine Village Limited
Partnership
(A Limited Partnership)
Pine Village
Pine Mountain, GA 36 188,340 188,340 944,327 FmHA 72%
Rolling Green Housing
Associates, Ltd
(a Limited Partnership)
Rolling Green
Edmond, OK 166 1,855,650 1,855,650 4,869,635 Section 8 97%
Sierra Vista Housing
Associates, Ltd
(a Limited Partnership)
Sierra Pointe
Las Vegas, NV 160 3,016,008 3,016,008 7,252,518 Section 8 99%
Sundance Housing
Associates, Ltd
(A Limited Partnership)
Sierra Vista
Aurora, CO 209 2,271,751 2,271,751 6,393,867 Section 8 100%
Talbot Village
Limited Partnership
(A Limited Partnership)
Talbot Village
Talbotton, GA 24 121,180 121,180 604,798 FmHA 100%
Terrace Housing
Associates, Ltd.
(a Limited Partnership)
Terrace
Oklahoma City, OK 206 1,950,550 1,950,550 5,319,946 Section 8 92%
K-11
<PAGE>
Local Limited Capital Contributions
Partnership Total Paid Mtge. Loans Occupancy at
Property Name Number of Committed at Through Payable at Type of March 31,
Property Location Apt. Units March 31, 1995 March 31, 1995 December 31, 1994 Subsidy* 1995
- - ----------------------- ---------- -------------- --------------- ----------------- --------- -------------
Trenton Apartments, Ltd.
(A Limited Partnership)
Trenton
Salt Lake City, UT 37 237,250 237,250 856,869 Section 8 97%
Verdean Gardens Associates Limited
Partnership (a Massachusetts
limited partnership)
Verdean Gardens
New Bedford, MA 110 2,409,000 2,409,000 7,857,105 Loans 85%
Willowpeg Village Limited Partnership
(A Limited Partnership)
Willowpeg Village
Rincon, GA 57 288,400 288,400 1,486,014 FmHA 100%
Windsor Court Housing Associates,
Ltd. (a Limited Partnership)
Windsor Court
Aurora, CO 143 1,815,500 1,815,500 4,558,551 Section 8 96%
----------- ----------- ------------
$36,651,930 $36,651,930 $110,533,396
=========== =========== ============
</TABLE>
* Loans This subsidy can be one or a combination of different types
of loans. For instance, the loans may be 1) below-market-rate
interest loans; 2) be provided by the redevelopment agency of the
town or city in which the property is located at favorable terms;
3) have repayment terms that are based on a percentage of cash
flow; or 4) be a combination of any of the above.
FmHA This subsidy, which is authorized under Section 515 of the Housing
Act of 1949, can be one or a combination of different types of
financing. For instance, FmHA may provide 1) direct
below-market-rate mortgage loans for rural rental housing; 2)
mortgage interest subsidies which effectively lower the interest
rate of the loan to 1%; 3) a rental assistance subsidy to tenants
which allows them to pay no more than 30% of their monthly income
as rent with the balance paid by the federal government; or 4) a
combination of any of the above.
Section 8 This subsidy, which is authorized under Section 8 of Title II of
the Housing and Community Development Act of 1974, allows qualified
low-income tenants to pay 30% of their monthly income as rent with
the balance paid by the federal government.
K-12
<PAGE>
One Local Limited Partnership, Boulevard Commons, invested in by the Partnership
represents more than 10% of the total capital contributions to be made to Local
Limited Partnerships by the Partnership. Boulevard Commons is a 212-unit
rehabilitation apartment complex with six buildings located in Chicago,
Illinois.
Boulevard Commons is financed by a first mortgage at 10% interest, insured by
the U.S. Department of Housing and Urban Development ("HUD"), and was refinanced
at 8.875% on April 1, 1995. The maturity date of the refinanced note is April 1,
2030. The apartment project is pledged as collateral for the note. In addition
to this, there is a junior mortgage payable to the City of Chicago which bears
interest at 3% per annum.
The duration of the leases for occupancy in the Properties described above is
six to twelve months. The Managing General Partner believes the Properties
described herein are adequately covered by insurance.
Additional information required under this Item, as it pertains to the
Partnership, is contained in Items 1, 7, and 8 of this Report.
Item 3. Legal Proceedings
The Partnership is not a party to any pending legal or administrative
proceeding, and to the best of its knowledge, no legal or administrative
proceeding is threatened or contemplated against it. However, attention is
called to the discussion of the Moderate Rehabilitation Program Properties in
Item 7 of this Report.
Item 4. Submission of Matters to a Vote of Security Holders
None.
K-13
<PAGE>
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that a public
market will develop. If a Limited Partner desires to sell Units, the buyer of
those Units will be required to comply with the minimum purchase and retention
requirements and investor suitability standards imposed by applicable federal or
state securities laws and the minimum purchase and retention requirements
imposed by the Partnership. The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers, will be subject
to negotiation by the Limited Partner seeking to sell his Units. Units will not
be redeemed or repurchased by the Partnership.
The Partnership Agreement does not impose on the Partnership or its General
Partners any obligation to obtain periodic appraisals of assets or to provide
Limited Partners with any estimates of the current value of Units.
As of March 31, 1995, there were 3,351 record holders of Units of the
Partnership.
Cash distributions, when made, are paid annually. No cash distributions were
paid for the years ended March 31, 1995, 1994 and 1993.
K-14
<PAGE>
Item 6. Selected Financial Data
The following table sets forth selected financial information regarding the
Partnership's financial position and operating results. This information should
be read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Financial Statements and Notes
thereto, which are included in Items 7 and 8 of this Report.
<TABLE>
<CAPTION>
March 31, March 31, March 31, March 31, March 31,
1995 1994 1993 1992 1991
------------ ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenue $ 77,348 $ 204,552 $ 176,681 $ 177,648 $ 172,566
Equity in loss of
Local Limited
Partnerships (2,732,227) (3,076,265) (4,468,387) (4,312,822) (6,147,427)
Net loss (3,142,627) (3,048,198) (4,532,734) (6,435,819) (6,305,596)
Per Limited
Partnership Unit (62.22) (60.35) (89.75) (127.43) (124.85)
Cash, cash equivalents
and investments
in securities 2,374,552 2,324,577 2,299,837 2,342,896 2,791,470
Investment in Local
Limited Partnerships,
at original cost 41,422,507 41,422,507 41,422,507 41,422,507 41,081,241
Total assets (A) 11,358,168 14,487,572 17,626,031 22,072,094 28,683,796
Cash distribution (C) -- -- -- 202,270 622,131
Per Limited
Partnership Unit (C) -- -- -- 4.00 12.44
Other Data:
Passive loss (B) (6,757,956) (7,213,910) (7,195,871) (8,849,490) (8,761,947)
Per Limited
Partnership Unit (B) (133.81) (142.84) (142.48) (175.22) (173.49)
Portfolio income (B) 321,042 420,572 609,370 607,908 726,322
Per Limited
Partnership Unit (B) 6.36 8.33 12.07 12.04 14.38
Low-Income Housing
Tax Credits (B) 7,512,822 7,490,806 7,479,988 7,522,003 11,163,450
Per Limited
Partnership Unit (B) 148.55 148.11 147.89 148.74 222.61
Local Limited
Partnership interests
owned at end of period 34 34 34 34 34
</TABLE>
(A) Total assets include the net investment in Local Limited Partnerships.
(B) Income tax information is as of December 31, the year end of the
Partnership for income tax purposes. The Low-Income Housing Tax Credit per
Limited Partnership Unit for 1994, 1993, 1992, 1991 and 1990, represents
the amount distributed to individual investors. Corporate investors
received Low-Income Housing Tax Credits of $158.40, $158.11, $157.89,
$158.40 and 148.46 per Unit in 1994, 1993, 1992, 1991 and 1990,
respectively.
(C) All cash distributions represent a return of capital.
K-15
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
During the year ended March 31, 1995, the Partnership had an increase in cash
and cash equivalents of $263,426 from $44,790 at March 31, 1994 to $308,216 at
March 31, 1995. The increase is attributable to cash distributions received from
Local Limited Partnerships and proceeds from the sales and maturities of
securities in excess of cash expenditures for the purchase of marketable
securities. Partially offsetting these increases in cash is cash used for
operations.
At March 31, 1995, approximately $1,979,000 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.
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.
Since the Partnership invests as a limited partner, the Partnership has no
contractual duty to provide additional funds to Local Limited Partnerships
beyond its specified investment. Thus, at March 31, 1995, the Partnership had no
contractual or other obligation to any Local Limited Partnership which had not
been paid or provided for.
In the event a Local Limited Partnership encounters operating difficulties
requiring additional funds, the Partnership's 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 to Limited Partners were made in the three years ended
March 31, 1995. In prior years, cash available for distribution was derived from
the interest earned on the temporary investment of the Partnership's funds, at
money market rates, prior to the funds being contributed to the Partnership's
Local Limited Partnership investments. As of March 31, 1995, all required
capital contributions have been made to Local Limited Partnerships. The interest
that is earned on the funds held in reserves, as well as any cash distributions
received from Local Limited Partnerships, will first be used to fund operations
of the Partnership.
The Managing General Partner has decided to add to reserves with distributions
which may be received from Local Limited Partnerships. 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
1995 versus 1994
The Partnership's results of operations for the year ended March 31, 1995
resulted in a net loss of $3,142,627, as compared to a net loss of $3,048,198
for the same period in 1994. The slight increase is primarily attributable to an
increase in the provision for valuation of Investments in the Local Limited
Partnerships and a decline in investment income resulting from lower investment
rates. These increases were partially offset by a decline in equity in losses of
Local Limited Partnership.
K-16
<PAGE>
The increases in the provision for valuation of Investments in Local Limited
Partnerships is the result of a $273,000 reserve against the Partnership's
investment in one Local Limited Partnership to net realizable value. Partially
offsetting this amount is a decrease in the reserve amount related to 2225 New
York Avenue, L.P. The decrease occured because of a smaller loss realized by the
property for the year ended December 31, 1994 as compared to the same period in
1993. The decrease is primarily attributable to a decrease in operating expenses
and entity expenses.
The equity in losses of Local Limited Partnerships decreased for the year ended
March 31, 1995, as compared with the same period in 1994 primarily as a result
of an increase in rental income in 1994 and a decrease in depreciation as assets
become or approach being fully depreciated.
The Financial Accounting Standards Board has issued Statement of Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which is effective for fiscal years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability. Impairment losses are recognized when future
cash flows or other benefits are less than the carrying amount of the asset. The
Partnership plans to adopt the new standard for its year ending March 31, 1997,
however, it is not expected to have a significant effect on financial position
or results of operations.
Low-Income Housing Tax Credits
The 1994, 1993 and 1992 Low-Income Housing Tax Credits per Unit for individuals
were $148.55, $148.11 and $147.89, respectively. The 1994, 1993 and 1992
Low-Income Housing Tax Credits per Unit for corporations were $158.40, $158.11
and $157.89, respectively. The Tax Credits per Limited Partnership Unit
stabilized in 1991 at approximately $148.00 per Unit for individuals and $158.00
per Unit for corporations. The credits are expected to remain stable for the
three years subsequent to 1994 and then they are expected to decrease as certain
properties reach the end of the ten-year credit period.
1994 versus 1993
The Partnership's results of operations for the year ended March 31, 1994
resulted in a net loss of $3,048,198, as compared to a net loss of $4,532,734
for the same period in 1993. This decrease in net loss is primarily attributable
to a decline in equity in losses of Local Limited Partnerships of $1,392,122 and
a decrease to the provision for realization of Investments in Local Limited
Partnerships (discussed in more detail below) of $150,000. Other factors
contributing to the fluctuations in net loss are a $27,871 increase in revenue
accompanied by a $200,715 decrease in general and administrative expenses in the
1994 period.
The equity in losses of Local Limited Partnerships decreased for the year ended
March 31, 1994, as compared with the same period in 1993 primarily as a result
of (i) Coronado Courts had retroactive rental income of $120,000 in the year
ended December 31, 1993, (ii) the depreciation at Heritage Court decreased by
$154,000 in 1993 because in 1992 there was a change in the estimated useful life
of the building from a 40-year life to a 30-year life and (iii) there were
unrecognized losses relating to eight Local Limited Partnerships whose
cumulative equity in losses exceeded the Partnership's total investments.
The $150,000 decrease in the provision for valuation of Investments in Local
Limited Partnerships occurred because of a smaller loss realized by 2225 New
York Avenue, LP for the year ended December 31, 1993 as compared to the same
period in 1992. The decrease is primarily attributable to a HUD approved rent
increase of $201,000 and a decrease in entity expenses of $99,000.
The decrease in general and administrative expenses for the year ended March 31,
1994 as compared to the same period in 1993 is primarily attributable to a
decrease in accounting expense for the 1994 period and a decrease of $164,000
for legal fees and related expenses incurred in connection with the Mod Rehab
issue discussed in more detail below.
K-17
<PAGE>
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 the Mod Rehab Program, both of which are discussed in Note 7 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 year ending December 31, 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 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; the
property has been operating above break-even for the year ending December 31,
1994 due mainly to a strengthening sub-market. 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.
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.
K-18
<PAGE>
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 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 ("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 7 to the Financial Statements)
may have some effect on the final outcome of the transaction.
Since all of the Properties in the Fund benefit from some form of government
assistance, the Partnership is subject to the risks inherent in that area
including decreased subsidies, difficulties in finding suitable tenants, and
obtaining permission for rent increases. In addition, any Tax Credits allocated
to investors with respect to a Property are subject to recapture to the extent
that the Property or any portion thereof ceases to qualify for the Tax Credits.
Certain of the Properties listed in this report are located in areas suffering
from poor economic conditions. Such conditions could have an adverse effect on
the rent or occupancy levels at such Properties. Nevertheless, the Managing
General Partner believes that the generally high demand for below market rate
housing will tend to negate such factors. However, no assurance can be given in
this regard.
The Partnership has invested 68% of its Gross Proceeds in Properties which
benefit from the Section 8 Moderate Rehabilitation Program ("Mod Rehab
Program"). As previously reported, the Mod Rehab Program has been the subject of
governmental reviews and litigation.
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, 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 has 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.
In light of the very 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.
K-19
<PAGE>
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.
HUD has recently proposed to Congress a plan that would involve major changes
with respect to properties with expiring project-based Section 8 contracts. Such
plan, which is generally referred to as "Mark-to-Market," would involve the
restructuring of the insured mortgage debt on the properties and replacing
project-based rental assistance with portable vouchers for tenants. If adopted,
Mark-to-Market will have a profound impact on subsidized housing in the United
States. However, Mark-to-Market is not expected to have any material impact on
the Partnership or its Properties any time soon because of the long-term nature
of the Section 8 contracts which the Properties are parties to. Boston Financial
is an active participant in the Mark-to-Market debate; William E. Haynsworth,
the Managing General Partner's Chief Operating Officer, recently testified
before a U.S. Senate Subcommittee on the issue. It is expected that future
reports will include updates on the progress of Mark-to-Market.
Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the
Partnership for the years ended March 31, 1995, 1994 and 1993.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index to Financial Statements and Schedules on page F-1 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
K-20
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The Managing General Partner of the Partnership is 29 Franklin Street, Inc., a
Massachusetts corporation (the "Managing General Partner" or "Franklin, Inc."),
an affiliate of The Boston Financial Group Limited Partnership ("Boston
Financial"), a Massachusetts limited partnership. In March of 1993, David S.
Kirk, a Vice President of the Managing General Partner, 29 Franklin Street, Inc.
retired from his position. George Fantini, Jr., a Vice President of the Managing
General Partner, 29 Franklin Street, Inc. resigned his position effective June
30, 1995.
The Managing General Partner was incorporated in January 1987. William E.
Haynsworth is the Chief Operating Officer of the Managing General Partner, and
had the primary responsibility for evaluating, selecting and negotiating
investments for the Partnership. The Investment Committee of the Managing
General Partner approved all investments. The names and positions of the
principal officers and the directors of the Managing General Partner are set
forth below.
Name Position
Georgia Murray Managing Director, Treasurer
and Chief Financial Officer
Fred N. Pratt, Jr. Managing Director
William E. Haynsworth Managing Director, Vice President and
Chief Operating Officer
Paul F. Coughlan Vice President
Peter G. Fallon, Jr. Vice President
Donna C. Gibson Vice President
Randolph G. Hawthorne Vice President
A. Harold Howell Vice President
The other General Partner of the Partnership is Franklin 29 Limited Partnership,
a Massachusetts limited partnership ("Franklin L.P.") that was organized in
January 1987. The General Partners of Franklin L.P.
are Messrs. Pratt, Hawthorne, Coughlan and Fallon.
The Managing General Partner provides day-to-day management of the Partnership.
Compensation is discussed in Item 11 of this report. Such day-to-day management
does not include the management of the Properties.
The business experience of each of the persons listed above is described below.
There is no family relationship between any of the persons listed in this
section.
Georgia Murray, age 44, is a graduate of Newton College of the Sacred Heart
(B.A., 1972). She joined Boston Financial Management Company in 1973 and is
currently a Senior Vice President of Boston Financial and a member of its Board
of Directors. Ms. Murray currently serves on the firm's senior leadership team,
and oversees the firm's efforts in structuring tax credit investments for
corporate investors. Previously she managed Boston Financial's Investment Real
Estate, Asset Management, and Property Management divisions. She is a member of
the Board of Directors of the General Partner of Boston Financial. She also
serves as a director of Atlantic Bank and Trust Company.
Fred N. Pratt, Jr., age 50, graduated from Tufts University and the Amos Tuck
School of Business Administration at Dartmouth College. Mr. Pratt was one of the
original employees of Boston Financial when it was founded in late 1969. He
currently serves as Boston Financial's Chief Executive Officer and Chairman of
the Board of Directors of the General Partner of Boston Financial.
K-21
<PAGE>
William E. Haynsworth, age 55, graduated from Dartmouth College and Harvard Law
School. Mr. Haynsworth was Acting Executive Director of the Massachusetts
Housing Finance Agency, where he was also General Counsel, prior to becoming a
Vice President of Boston Financial in 1977 and a Senior Vice President in 1986.
He has also served as Director of Non-Residential Development of the Boston
Redevelopment Authority and as an associate of the law firm of Goodwin, Procter
& Hoar in Boston. Mr. Haynsworth is a member of the Firm's Board of Directors
and senior leadership team, participating in the structuring of real estate
investments and the development of new business opportunities.
Paul F. Coughlan, age 51, is a graduate of Brown University (A.B., 1965) and
served in the United States Navy before entering the securities business in
1969. He was employed as an investment broker by Bache & Company until 1972, and
then by Reynolds Securities Inc. He joined Boston Financial in 1975 as a Vice
President in the real estate investment marketing area and was named a Senior
Vice President in 1986. He currently participates in marketing the firm's
Institutional Tax Credit product.
Peter G. Fallon, Jr., age 56, graduated from the College of The Holy Cross
(B.S., 1960) and Babson College (M.B.A., 1965). He joined Boston Financial in
1970, shortly after its formation, and is currently a Senior Vice President with
responsibility for marketing the firm's Institutional Tax Credit product.
Donna C. Gibson, age 53, who previously served as Chairman of the Commonwealth
of Massachusetts Board of Registration for Real Estate Brokers and Salesmen, and
as President of Community Workshop, Inc., joined Boston Financial Property
Management in 1978. She was a Vice President of Hunneman & Company, Inc., a
Boston real estate firm, for fifteen years, and from 1976 to 1978 she was a
Senior Management Analyst for the Massachusetts Housing Finance Agency. She is a
member of the firm's senior leadership team and oversees the administration and
financial control of Boston Financial's Property Management division. She is a
member of the Board of Directors of the General Partner of Boston Financial.
Randolph G. Hawthorne, age 45, is a graduate of Massachusetts Institute of
Technology and Harvard Graduate School of Business. He has been associated with
Boston Financial since 1973 and has served as the Treasurer of Boston Financial.
Currently a Senior Vice President of Boston Financial and a member of its Board
of Directors, Mr. Hawthorne's primary responsibility is the structuring of real
estate investments and the development of new business opportunities. He serves
as Vice Chairman of the National Multi-Family Housing Council and is a former
president of the National Housing and Rehabilitation Association.
A. Harold Howell, age 53, graduated from Harvard College and the Amos Tuck
School of Business Administration at Dartmouth College. He has been employed by
Boston Financial since 1970. For most of this time he has been active in the
overall administration of Boston Financial and its affiliates, but has also been
involved in other areas of its business. Mr. Howell has served as head of Boston
Financial's property management division and also as its Chief Financial Officer
and Chief Executive Officer. He currently is a Senior Vice President and a
member of the Board of Directors, involved in the overall management of the
firm. Mr. Howell recently spent a two-year sabbatical from Boston Financial as a
Visiting Professor at the Instituto de Estudios Superiores de la Empresa, a
highly regarded international M.B.A. program in Barcelona, Spain. While there he
taught courses in business strategy and real estate finance.
Item 11. Management Remuneration
Neither the directors or officers of Franklin, Inc., nor the partners of
Franklin L.P., nor any other individual with significant involvement in the
business of the Partnership receives any current or proposed remuneration from
the Partnership.
The Partnership was required to pay certain fees to and reimburse certain
expenses of the Managing General Partner or its affiliates (including Boston
Financial) in connection with the organization of the Partnership and the
offering of Units. The Partnership is also required to pay certain fees to and
reimburse certain expenses of the
K-22
<PAGE>
Managing General Partner or its affiliates (including Boston Financial) in
connection with the administration of the Partnership and its acquisition and
disposition of investments in Local Limited Partnerships. In addition, the
General Partners are entitled to certain Partnership distributions under the
terms of the Partnership Agreement. Also, an affiliate of the General Partners
will receive up to $10,000 from the sale or refinancing proceeds of each Local
Limited Partnership, if it is still a limited partner at the time of such
transaction. All such fees, expenses and distributions paid in the three years
ended March 31, 1995 are described below and in the sections of the Prospectus
entitled "Estimated Use of Proceeds", "Management Compensation and Fees" and
"Profits and Losses for Tax Purposes, Tax Credits and Cash Distributions". Such
sections are incorporated herein by reference. In addition, Boston Financial
Property Management, an affiliate of the Managing General Partner, serves as
property management agent for one of the properties in which the Partnership
invested.
The Partnership is permitted to enter into transactions involving affiliates of
the Managing General Partner, subject to certain limitations established in the
Partnership Agreement.
Salaries, benefits and administrative expense reimbursements
An affiliate of the Managing General Partner is reimbursed for the cost of the
Partnership's salaries, benefits and administrative expenses. The reimbursements
are based upon the size and complexity of the Partnership's operations.
Reimbursements made in each of the three years ended March 31, 1995 are as
follows:
1995 1994 1993
---------- ---------- -------
Salaries, benefits and
administrative
expense reimbursements $152,309 $136,097 $129,475
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the
Partnership, Franklin, Inc. and Franklin Limited Partnership, receive 1% of cash
distributions made to partners.
No cash distributions were paid to the General Partners in each of the three
years ended March 31, 1995.
Additional information concerning cash distributions and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Boston Financial and its affiliates during each
of the three years ended March 31, 1995 is presented in Note 5 to the Financial
Statements.
K-23
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person is known to the Partnership to be the beneficial owner of more than 5%
of the outstanding Units.
The equity securities registered by the Partnership under Section 12(g) of the
Act consist of 50,000 Units, all of which have been sold to the public. Holders
of Units are permitted to vote on matters affecting the Partnership only in
certain unusual circumstances and do not generally have the right to vote on the
operation or management of the Partnership.
As of March 31, 1995, Franklin L.P. owns five (unregistered) Units not included
in the 50,000 Units sold to the public.
Except as described in the preceding paragraph, neither Franklin, Inc., Franklin
L.P., Boston Financial, nor any of their executive officers, directors,
partners, or affiliates is the beneficial owner of any Units. None of the
foregoing persons possesses a right to acquire beneficial ownership of Units.
The Partnership does not know of any existing arrangement that might at a later
date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions
If, as described in Item 7, Boston Financial or its affiliate ("BF Affiliate")
acquires the Local General Partner interests of the Colorado Partnerships, the
Local General Partner, Boston Financial or BF Affiliate is entitled to receive
certain Partnership distributions and expense reimbursements under the terms of
the Local Limited Partnership Agreements.
Boston Financial Property Management, an affiliate of the Managing General
Partner, currently manages four of the five properties owned by the Colorado
Partnerships and earned management fees of $189,800 in 1994, $186,882 in 1993
and $187,123 in 1992. The property management fee charged to each property is
equal to 5% of property gross revenues.
Additional information required under this Item is contained in Note 5 to the
Financial Statements presented as a separate section of this Report. The
affiliates of the Managing General Partner which have received fee payments and
expense reimbursements from the Partnership are as follows:
Salary, benefits and
administrative
expense reimbursements The Boston Financial Group Limited Partnership
K-24
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report
In response to this portion of Item 14, the financial statements, financial
statement schedules, and the auditors' reports relating thereto, are submitted
as a separate section of this Report. See Index to Financial Statements and
Schedules on page F-1 hereof.
The reports of auditors of the Local Limited Partnerships relating to the
audits of the financial statements of such Local Limited Partnerships appear in
Exhibit (28)(1) of this Report.
All other financial statement schedules and exhibits for which provision is
made in the applicable accounting regulation of the Securities and Exchange
Commission are not required under related instructions or are inapplicable, and
therefore have been omitted.
(a)(3)(b) None.
(a)(3)(c) Exhibits
Page Number
Number and Description in Accordance with Incorporation
Item 601 of Regulation S-K by Reference to
-------------------------- ---------------
4. Instruments defining the rights of
security holders, including
indentures
4.1 Amended and Restated Agreement Exhibit A to Prospectus
Certificate of Limited contained and in Form S-11
of June 13, 1987 Registration Partnership
dated as Statement,
File Number 33-11910
28. Additional Exhibits
(a) 28.1 Reports of Other Independent
Auditors ---------------
K-25
<PAGE>
(a)(3)(c) Exhibits (continued)
Page Number or
Number and Description in Accordance with Incorporation
Item 601 of Regulation S-K by Reference to
-------------------------- ---------------
(b) Audited financial
statements of
Local Limited Partnerships ---------------
1. Cass House
2. Verdean Gardens
(c) Reports on Form 8-K dated:
July 7, 1988 ---------------
January 20, 1989 ---------------
(d) Post-Effective Amendment No. 1-3 to
Form S-11 Registration Statement ---------------
(e) Prospectus - Sections Entitled:
"Other Government Assistance Programs" ---------------
"Estimated Use of Proceeds" ---------------
"Management Compensation and Fees" ---------------
"Profits and Losses for Tax Purposes,
Tax Credits and Cash Distributions" ---------------
(a)(3)(d) None.
K-26
<PAGE>
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.
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
By: 29 Franklin Street, Inc.
its Managing General Partner
By: /s/Georgia Murray Date: June 28, 1995
----------------- -------------
Georgia Murray,
A Managing Director and Chief
Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Managing General
Partner of the Partnership and in the capacities and on the dates indicated:
By: /s/Georgia Murray Date: June 28, 1995
----------------- -------------
Georgia Murray,
A Managing Director and
Chief Financial Officer
By: /s/Fred N. Pratt, Jr., Date: June 28, 1995
---------------------- -------------
Fred N Pratt, Jr.,
A Managing Director
K-27
<PAGE>
Item 8. Financial Statements and Supplementary Data
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
Annual Report on Form 10-K For the Year Ended March 31, 1995
Index
Sequential
Page No. Page No.
Report of Independent Public Accountants F-2
Financial Statements
Balance Sheets - March 31, 1995 and 1994 F-3
Statements of Operations - Years Ended
March 31, 1995, 1994 and 1993 F-4
Statements of Changes in Partners'
Equity (Deficiency) - Years Ended
March 31, 1995, 1994 and 1993 F-5
Statements of Cash Flows - Years Ended
March 31, 1995, 1994 and 1993 F-6
Notes to Financial Statements F-7
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation F-16
See also Index to Exhibits on Page K-25 for the financial statements of the
Local Limited Partnerships included as a separate exhibit in this Annual Report
on Form 10-K.
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners
Boston Financial Qualified Housing Limited Partnership:
We have audited the accompanying balance sheets of Boston Financial Qualified
Housing Limited Partnership (A Limited Partnership) as of March 31, 1995 and
1994, and the related statements of operations, changes in partners' equity
(deficiency) and cash flows for each of the three years ended March 31, 1995.
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 did not audit certain of the financial
statements of the Local Limited Partnerships for each of the three years ended
March 31, 1995, the investments in which are recorded using the equity method of
accounting (see Note 2). The investments in these partnerships represent 79% and
84% of the Partnership's assets as of March 31, 1995 and 1994, and the equity in
their losses represents 100% of the equity in loss of the Local Limited
Partnerships for each of the three years ended March 31, 1995. Those statements
were audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included for the Local 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 audits 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 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 Boston Financial Qualified Housing Limited Partnership
as of March 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years ended March 31, 1995 in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed under Item 14 in the
index is presented for purpose of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states, in all
material respects, the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts
June 16, 1995
F-2
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
BALANCE SHEETS - MARCH 31, 1995 AND 1994
1995 1994
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 308,216 $ 44,790
Other current assets 25,339 24,973
----------- -----------
Total current assets 333,555 69,763
Marketable securities (Note 3) 2,066,336 2,279,787
Investments in Local Limited Partnerships
(net of provision for valuation of
$1,297,574 and $1,241,427 in
1995 and 1994) (Note 4) 8,958,277 12,138,022
----------- -----------
Total Assets $11,358,168 $14,487,572
=========== ===========
Liabilities and Partners' Equity
Current liabilities:
Accounts payable and accrued expenses 101,803 99,486
----------- -----------
Total current liabilities 101,803 99,486
Partners' Equity 11,256,365 14,388,086
----------- -----------
Total Liabilities and Partners' Equity $11,358,168 $14,487,572
=========== ===========
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Revenue:
Investment, net (Note 3) $ 54,550 $ 191,970 $ 170,606
Other 22,798 12,582 6,075
----------- ----------- -----------
Total Revenue 77,348 204,552 176,681
----------- ----------- -----------
Expenses:
General and administrative (includes
reimbursements to an affiliate of $152,309,
$136,097 and $129,475) (Note 5) 321,980 311,171 511,886
Amortization (Note 4) 109,621 112,521 126,349
Provision for valuation of
Investments in Local
Limited Partnerships (Note 4) 56,147 (247,207) (397,207)
----------- ----------- -----------
Total Expenses 487,748 176,485 241,028
----------- ----------- -----------
Income (Loss) before equity in losses
of Local Limited Partnerships (410,400) 28,067 (64,347)
Equity in losses of Local Limited
Partnerships (Note 4) (2,732,227) (3,076,265) (4,468,387)
----------- ----------- -----------
Net Loss $(3,142,627) $(3,048,198) $(4,532,734)
=========== =========== ===========
Net Loss allocated
To General Partners (31,426) $ (30,482) $ (45,327)
To Limited Partners (3,111,201) (3,017,716) (4,487,407)
----------- ----------- -----------
$(3,142,627) $(3,048,198) $(4,532,734)
=========== =========== ===========
Net Loss per Limited Partnership
Unit (50,000 Units) $ (62.22) $ (60.35) $ (89.75)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
YEARS ENDED MARCH 31, 1995, 1994 AND 1993
<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, 1992 $(214,414) $4,648 $22,218,108 $ -- $22,008,342
Net Loss (45,327) -- (4,487,407) -- (4,532,734)
--------- ------ ----------- -------- -----------
Balance at March 31, 1993 (259,741) 4,648 17,730,701 -- 17,475,608
Net Loss (30,482) -- (3,017,716) -- (3,048,198)
Unrealized losses on
marketable securities
held for sale (Note 3) -- -- -- (39,324) (39,324)
---------- ------ ----------- ------- -----------
Balance at March 31, 1994 (290,223) 4,648 14,712,985 (39,324) 14,388,086
Net Loss (31,426) -- (3,111,201) -- (3,142,627)
Unrealized gains on
marketable securities
held for sale -- -- -- 10,906 10,906
---------- ------ ----------- --------- -----------
Balance at March 31, 1995 $(321,649) $4,648 $11,601,784 ($28,418) $11,256,365
========= ====== =========== ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Loss $(3,142,627) $(3,048,198) $(4,532,734)
Adjustments to reconcile net loss to net
cash used for operating activities:
Equity in loss of Local Limited Partnerships 2,732,227 3,076,265 4,468,387
Distribution income included in cash distribution
received from Local Limited Partnerships (5,225) -- --
Provision for valuation of Investments in
Local Limited Partnerships 56,147 (247,207) (397,207)
Loss on sale of marketable securities 46,361 -- --
Amortization 109,621 112,521 126,349
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Other current assets (366) 8,714 (6,485)
Accounts payable and accrued expenses 2,317 (50,937) 86,671
----------- ----------- -----------
Net cash used for operating activities (201,545) (148,842) (255,019)
----------- ----------- -----------
Cash flows from investing activities:
Purchases of marketable securities (2,916,220) -- --
Proceeds from sales and maturities
of marketable securities 3,094,216 -- --
Marketable securities, net -- (221,528) 112,469
Cash distributions received from Local
Limited Partnerships 286,975 212,906 211,960
----------- ----------- -----------
Net cash provided by (used for) investing activities 464,971 (8,622) 324,429
----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents 263,426 (157,464) 69,410
Cash and cash equivalents, beginning 44,790 202,254 132,844
----------- ----------- -----------
Cash and cash equivalents, ending $ 308,216 $ 44,790 $ 202,254
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS
1. Organization
Boston Financial Qualified Housing Limited Partnership ("the Partnership") was
formed on January 22, 1987 under the laws of the State of Delaware for the
primary purpose of investing, as a limited partner, in other limited
partnerships ("Local Limited Partnerships"), each of which own and operate
apartment complexes benefiting from some form of federal, state or local
assistance program and each of which qualify for low-income housing tax credits.
The Partnership's objectives are to (i) provide current tax benefits in the form
of tax credits which qualified investors may use to offset their federal income
tax liability, (ii) preserve and protect the Partnership's capital, (iii)
provide limited cash distributions from property operations which are not
expected to constitute taxable income during Partnership operations, and iv)
provide cash distributions from sale or refinancing transactions. The General
Partners of the Partnership are 29 Franklin Street Inc., which serves as the
Managing General Partner, and Franklin 29 Limited Partnership, which serves as
the Initial Limited Partner. Both of the General Partners are affiliates of The
Boston Financial Group Limited Partnership ("Boston Financial"). The fiscal year
of the Partnership ends on March 31.
Generally, profits, losses, tax credits and cash flows from operations are
allocated 99% to the Limited Partners and 1% to the General Partners. Net
proceeds from a sale or refinancing will be allocated 95% to the Limited
Partners and 5% to the General Partners after certain priority payments.
2. Significant Accounting Policies
Basis of Presentation
The Partnership accounts for its investments in Local Limited Partnerships using
the equity method of accounting. Under the equity method, the investment is
carried at cost, adjusted for changes in the net assets and for cash
distributions from the Local Limited Partnerships; equity in income or loss of
the Local Limited Partnerships is included currently in the Partnership's
operations. Under the equity method, a Limited Partnership Investment will not
be carried below zero. To the extent that equity losses are incurred when a
Local Limited Partnership's respective asset value has been reduced to a zero
balance, the losses will be suspended to be used against future income. Also,
when a Local Limited Partnership with a carrying value of zero distributes cash
to the Partnership, that distribution is recorded as revenue on the books of the
Partnership in the accompanying financial statements.
Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the
Partnership. These fees and expenses, which are part of the Partnership's
Investments in Local Limited Partnerships, are being amortized on a
straight-line basis over 35 years.
The Partnership recognizes a decline in the carrying value of its investment in
Local Limited Partnerships when there is evidence of a non-temporary decline in
the recoverable amount of the investment.
An affiliate of Boston Financial has been negotiating to purchase the Local
General Partner interests in Sierra Vista Associates, Windsor Court Associates,
Rolling Green Associates, Terrace Housing Associates, and Sundance Housing
Associates (collectively, the "Colorado Partnerships") from Phillip Abrams
Ventures, Inc. and PDW, Inc., the current Local General Partners which will
require approval from the U.S. Department of Housing and Urban Development
("HUD") and the local housing authorities
F-7
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
for the substitution of general partners. Issues involving the Section 8
Moderate Rehabilitation ("Mod Rehab") Program (discussed more fully under Other
Matters in Note 7 to the Financial Statements) may have some effect on the final
outcome of the transaction.
If the transactions are completed, the substitute general partner in each of the
Colorado Partnerships will be one or more limited partnerships controlled by
substantially the same group of individuals who control the Managing General
Partner. If completed, no Partnership funds will be involved in the acquisition.
In addition, such acquisition will not affect the Partnership's economic
interests in the Colorado Partnerships. Currently, Boston Financial manages four
of the five properties owned by the Colorado Partnerships. After the
acquisition, Boston Financial would manage all five properties. It is not
expected that this acquisition will have any significant impact on the
operations of the Partnership. However, if the acquisition occurs, the
Partnership will be deemed to have control over the Colorado Partnerships. As
such, the Partnership would no longer account for its investment in the Colorado
Partnerships on the equity method, but rather would combine the balance sheets,
results of operations and cash flows of the Colorado Partnerships with the
financial statements of the Partnership.
In connection with the Partnership's fiscal year-end of March 31, the General
Partner has decided to report the results of the Local Limited Partnerships on a
lag basis. The Local Limited Partnerships will continue to report their results
on a calendar year basis.
Cash Equivalents
Cash equivalents consist of short-term money market instruments with original
maturities of 90 days or less at acquisition.
Marketable Securities
Marketable securities consist primarily of U.S. Treasury instruments and various
asset-backed investment vehicles. On March 31, 1994, the Partnership adopted
Statement of Financial Accounting Standards No. 115 - Accounting for Certain
Investments in Debt and Equity Securities. Under this statement, the
Partnership's investments in securities are classified as "Available for Sale"
securities and reported at fair value as reported by the brokerage firm at which
the securities are held. Realized gains and losses from the sales of securities
are based on the specific identification method. Unrealized gains and losses are
excluded from earnings and reported as a separate components of partners'
equity.
Reserves
Under the terms of the Partnership Agreement, the Partnership originally set
aside 5% or $2,500,000 of the Gross Proceeds from the sale of Units as a reserve
for working capital of the Partnership and contingencies related to ownership of
Local Limited Partnership interests. The Managing General Partner may increase
or decrease such amounts from time to time, as it deems appropriate. As of March
31, 1995, the level of reserves has decreased to approximately $1,979,000.
F-8
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Income Taxes
No provision for income taxes has been made as the liability for such taxes is
the obligation of the partners of the Partnership.
Reclassifications
Certain amounts in the prior year financial statements have been reclassified
herein to conform with the current year presentation.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board has issued Statement of Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which is effective for fiscal years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability. Impairment losses are recognized when future
cash flows or other benefits are less than the carrying amount of the asset. The
Partnership plans to adopt the new standard for its year ending March 31, 1997,
however, it is not expected to have a significant effect on financial position
or results of operations.
3. Marketable Securities
A summary of marketable 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 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
========== ========== ========== ==========
Debt securities issued by the
US Treasury and
other US Government
corporations and agencies $1,298,841 $ 50 $ (32,730) $1,266,161
Mortgage backed securities 662,015 3,378 (11,284) 654,109
Other debt securities 358,255 2,845 (1,583) 359,517
---------- ---------- ---------- ----------
Marketable securities
at March 31, 1994 $2,319,111 $ 6,273 $ (45,597) $2,279,787
========== ========== ========== ==========
</TABLE>
F-9
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
3. Marketable Securities (continued)
The contractual maturities at March 31, 1995 are as follows:
<TABLE>
<CAPTION>
Fair
Cost Value
<S> <C> <C>
Due in one year or less $ 97,490 $ 97,444
Due in one year to five years 1,261,281 1,247,325
Due in five to ten years 209,664 210,525
Mortgage backed securities 526,319 511,042
---------- ----------
$2,094,754 $2,066,336
========== ==========
</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 $3,094,000 in 1995. Included in investment income
are gross gains of $1,349 and gross losses of $47,710 which were realized on
these sales.
4. 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 at
March 31:
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Capital contributions to Local Limited
Partnerships and purchase price paid to
withdrawing partners of Local Limited
Partnerships $ 36,651,930 $ 36,651,930 $ 36,651,930
Cumulative equity in losses of Local
Limited Partnerships (29,228,172) (26,501,170) (23,424,905)
Cumulative cash distributions received
from Local Limited Partnerships (1,071,108) (784,133) (571,227)
------------ ------------ ------------
Investments in Local Limited Partnerships
before adjustment 6,352,650 9,366,627 12,655,798
F-10
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
1995 1994 1993
------------ ------------ ------------
Excess of investment cost over
the underlying net assets
acquired:
Acquisition fees and expenses 4,770,577 4,770,577 4,770,577
Accumulated amortization of acquisition
fees and expenses (867,376) (757,755) (645,234)
------------ ------------ ------------
Investments in Local Limited
Partnerships 10,255,851 13,379,449 16,781,141
Provision for valuation of Investments in
Local Limited Partnerships (1,297,574) (1,241,427) (1,488,634)
------------ ------------ ------------
$ 8,958,277 $ 12,138,022 $ 15,292,507
============ ============ ============
</TABLE>
The 1994, 1993 and 1992 financial statements of 2225 New York Avenue, LTD ("2225
New York Avenue"), a Local Limited Partnership in which the Partnership
invested, were prepared assuming that 2225 New York Avenue will continue as a
going concern. 2225 New York Avenue, which owns Pebble Creek in Arlington,
Texas, incurred significant net losses in 1994, 1993 and 1992, has severe
liquidity problems and recurring cash deficits. Pebble Creek did operate at
break-even in 1993, however, the Property continues to have high maintenance
expenses. These factors, among others, raise substantial doubt as to 2225 New
York Avenue's ability to continue as a going concern. As such, the Partnership
provided a reserve for realization of $1,885,841 against its investment in 2225
New York Avenue at March 31, 1992. This reserve has been adjusted in the
financial statements to reflect the Partnership's share of the net losses of
2225 New York Avenue for the years ended December 31, 1992 through 1994.
The Partnership has also provided a provision for valuation for its investment
in one other Local Limited Partnership, Graver Inn, because there is evidence of
a non-temporary decline in the recoverable amount of the investment.
Summarized financial information from the combined financial statements of all
Local Limited Partnerships in which the Partnership has invested at December 31:
Summarized Balance Sheets
1994 1993 1992
------------ ------------ ------------
Assets:
Investment property, net $113,394,758 $118,787,133 $123,717,167
Current assets 2,337,205 4,703,067 3,519,563
Other assets 10,375,151 7,784,957 7,911,758
------------ ------------ ------------
Total Assets $126,107,114 $131,275,157 $135,148,488
============ ============ ============
Liabilities and Partners' Deficit:
Current liabilities $ 5,087,134 $ 3,691,228 $ 3,499,639
Other liabilities 14,981,385 14,290,147 12,002,507
Long-term debt 110,046,887 111,849,410 112,552,968
------------ ------------ ------------
Total Liabilities 130,115,406 129,830,785 128,055,114
------------ ------------ ------------
F-11
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
<TABLE>
<CAPTION>
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
Partners' Equity:
Partnership (Deficit) Equity (3,556,895) 1,867,549 6,859,877
Other Partners' (Deficit) Equity (451,397) (423,177) 233,497
------------- ------------- -------------
Total Partners' (Deficit) Equity (4,008,292) 1,444,372 7,093,374
------------- ------------- -------------
Total Liabilities and
Partners' Equity $ 126,107,114 $ 131,275,157 $ 135,148,488
============= ============= =============
Summarized Income Statements
Rental and other income $ 19,884,870 $ 19,518,022 $ 18,778,703
------------- ------------- -------------
Expenses:
Interest 10,540,501 10,289,246 9,789,316
Operating 9,480,068 9,375,483 9,533,583
Depreciation and amortization 5,100,823 5,226,659 5,561,779
------------- ------------- -------------
Total Expenses 25,121,392 24,891,388 24,884,678
------------- ------------- -------------
Net Loss $ (5,236,522) $ (5,373,366) $ (6,105,975)
============= ============= =============
Partnership's share of Net Loss $ (5,180,778) $ (5,315,332) $ (6,040,603)
============= ============= =============
Other Partners' share of Net Loss $ (55,744) $ (58,034) $ (65,372)
============= ============= =============
</TABLE>
For the years ended March 31, 1995, 1994 and 1993, the Partnership has not
recognized $2,453,775 $2,239,067 and $1,572,216, respectively, in equity in
losses relating to nine Local Limited Partnerships where cumulative equity in
losses exceeded its total investments.
The Partnership's deficit as reflected by the Local Limited Partnerships of
$(3,556,895) differs from the Partnership's Investments in Local Limited
Partnerships of $6,352,650 principally because: a) the Partnership has not
recognized $7,089,061 of equity in losses relating to Local Limited Partnerships
whose cumulative equity in losses exceeded their total investments; b) purchase
price paid to original Limited Partners by the Partnership have not been
reflected in the balance sheets of certain Local Limited Partnerships and c)
cash distributions paid to the Partnership during the quarter ended March 31,
1995 are not reflected in the equity of certain Local Limited Partnerships at
December 31, 1994.
5. 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 years ended March 31, 1995, 1994 and 1993 is $152,309, $136,097
and $129,475, respectively, that the Partnership paid as reimbursement for
salaries, benefits and administrative expenses.
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 to each property is equal to 5% of property gross
revenues. Included in operating expenses in the summarized income statements in
Note 4 to the Financial Statements is $189,800, $186,882 and $187,123 of fees
earned by BFPM for the years ended December 31, 1994, 1993 and 1992,
respectively.
F-12
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
6. Federal Income Taxes
A reconciliation of the loss reported in the Statements of Operations for the
periods ended March 31, 1995, 1994 and 1993 to the loss reported for federal
income tax purposes for the years ended December 31, 1994, 1993 and 1992 is as
follows:
1995 1994 1993
----------- ----------- -----------
Net Loss per Statements of
Operations $(3,142,627) $(3,048,198) $(4,532,734)
Adjustment to reflect
March 31, fiscal
year-end to December 31,
taxable year-end (16,932) 7,561 26,450
Provision for realization
of Investments in Local
Limited Partnerships not
deductible for tax purposes 56,147 (247,207) (397,207)
Amortization of acquisition
fees and expenses and
organization costs for tax
purposes over amortization
for financial reporting purposes (63,855) (60,955) (53,793)
Adjustment for equity in
loss of Local Limited
Partnerships for financial
reporting purposes under
equity in losses for tax purposes (3,269,647) (3,445,155) (1,629,217)
----------- ----------- -----------
Net loss for federal
income tax purposes $(6,436,914) $(6,793,954) $(6,586,501)
=========== =========== ===========
The carrying value of the Partnership's Investment in Local Limited Partnerships
is approximately $14,107,000 greater for financial reporting purposes than for
tax return purposes because (i) the equity in losses of the Local Limited
Partnerships is approximately $8,347,000 greater for tax purposes because of
accelerated tax depreciation methods used; (ii) the Partnership has not
recognized approximately $7,089,000 of equity in losses of the Local Limited
Partnerships for financial reporting purposes; (iii) the Partnership has
provided a provision for valuation of approximately $1,298,000 against two of
its investments in Local Limited Partnerships for financial reporting purposes
and (iv) the amortization of acquisition fees for tax purposes exceeds financial
reporting purposes by approximately $248,000.
F-13
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE FINANCIAL STATEMENTS (continued)
7. 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 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 has 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.
In light of the very 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.
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.
F-14
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
SCHEDULE OF CASH AVAILABLE FOR DISTRIBUTION
(As Defined in the Partnership Agreement)
Years ended March 31, 1995, 1994 and 1993
(Unaudited)
1995 1994 1993
----------- ----------- -----------
Net Loss $(3,142,627) $(3,048,198) $(4,532,734)
Non-cash expenses and changes
in operating assets and
liabilities 2,899,946 2,899,356 4,287,546
Cash distributions received
from Local Limited
Partnerships 286,975 212,906 211,960
Decrease (restoration) of
reserves (44,294) (64,064) 33,228
----------- ----------- -----------
Cash available for
distribution $ - $ - $ -
=========== =========== ===========
Cash available for
distribution per
Limited Partnership Unit
(50,000 Units) $ - $ - $ -
=========== =========== ===========
F-15
<PAGE>
Boston Financial Qualified Housing Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships in
which Registrant has invested at March 31, 1995
<TABLE>
<CAPTION>
COST OF INTEREST AT AQUISITION DATE
-----------------------------------
NET IMPROVEMENTS
NUMBER TOTAL BUILDINGS/ CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO
DESCRIPTION UNITS BRANCES* LAND & EQUIPMENT ACQUISITION
- - ----------- ----- -------- ---- ----------- -----------
<S> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment Complexes
Barrington Manor 18 $ 665,000 $ 30,000 $ 555,638 $ 242,106
Fargo, ND
Bingham Housing Associates 24 1,170,959 48,934 362,172 1,109,534
Bingham, ME
Birmingham Village 24 1,165,549 61,900 190,424 1,163,445
Randolph, ME
Bittersweet Lane 35 2,539,957 69,300 2,884,207 361,911
Randolph , MA
Coronodo Courts 145 3,817,996 452,331 4,995,460 32,976
Douglas, AZ
Elmore Hotel 60 3,456,848 12,500 2,976,388 336,134
Great Falls, MT
Graver Inn 70 2,126,086 30,000 2,208,960 843,462
Fargo, ND
Hazel Winthrop Apartments 30 2,135,844 45,000 2,548,540 (128,438)
Chicago, IL
Hughes Apartments 47 1,210,000 28,000 1,260,066 193,133
Mandan, ND
Lakeview Heights 83 2,866,493 217,588 2,896,224 134,084
Clearfield, UT
Medford Hotel 74 3,286,176 12,500 2,747,997 1,816,079
Medford, OR
Heritage View 24 1,171,014 64,800 690,736 670,358
New Sweden, ME
Rolling Green Apartments 166 4,869,635 286,350 6,254,575 77,036
Edmond, OK
Sierra Vista Apartments 209 6,393,867 382,000 8,001,390 61,726
Aurora, CO
Terrace Apartments 206 5,319,946 350,000 6,470,754 (287,404)
Oklahoma City, OK
Trenton Apartments 37 856,869 154,000 899,293 49,519
Salt Lake City, UT
Windsor Court Apartments 143 4,558,551 280,000 5,579,636 (262,075)
Aurora, CO
Sierra Pointe 160 7,252,518 434,866 8,056,238 885,271
Las Vegas, NV
Willow Peg Village 57 1,486,014 125,000 1,741,799 2,980
Ricon, GA
Pebble Creek 352 7,968,916 794,000 9,563,687 130,648
Arlington, TX
Pine Village 36 944,327 40,000 960,000 189,618
Pine Mountain, GA
Talbot Village 24 604,798 21,775 545,547 192,054
Talbolton, GA
Logan Plaza 130 11,490,127 969,289 13,287,069 318,077
New York, NY
Cass House 111 8,310,668 222,000 11,423,209 (38,087)
Boston, MA
Verdean Gardens 110 7,857,105 214,992 8,891,168 2,042,800
New Bedford, MA
Country Estates 24 598,326 22,500 734,409 0
Glenville, GA
Boulevard Commons 212 10,425,105 318,000 3,580,316 10,791,842
Chicago, IL
Chestnut Lane 50 1,480,305 93,484 848,922 885,901
Newman, GA
600 Dakota Properties 28 704,397 64,353 769,608 4,317
Wahpeton, ND
Duluth 11 263,038 24,000 363,810 13,214
Souix Falls, SD
Delmar 16 425,932 75,000 495,203 12,636
Gillette, WY
Park Terrace 101 1,725,000 393,713 4,781,404 142,467
Dundalk, MD
Brentwood Manor II 22 791,857 44,980 1,118,947 2,432
Nashua, NH
Hillcrest Apts 3 24 594,173 17,000 727,587 1,515
Perryville, MO
----- ------------ ---------- ------------ -----------
2,863 $110,533,396 $6,400,155 $119,411,383 $21,901,541
===== ============ ========== ============ ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1994 LIFE ON
WHICH
BUILDINGS DEPRECIATION
LAND AND AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION IMPROVEMENTS IMPROVEMENTS TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
- - ----------- ------------ ------------ ----- ------------ ----- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment Complexes
Barrington Manor $ 32,011 $ 795,733 $ 827,744 $ 156,110 1927 7, 35 12/31/87
Fargo, ND
Bingham Housing Associates 48,934 1,381,706 1,430,640 325,759 1988 7, 27.5 12/30/87
Bingham, ME
Birmingham Village 61,900 1,353,869 1,415,769 316,196 1988 7, 27.5 12/30/87
Randolph, ME
Bittersweet Lane 69,300 3,246,118 3,315,418 836,812 1988 Useful Lives 10/27/87
Randolph , MA
Coronodo Courts 452,331 5,028,436 5,480,767 1,379,669 1945 Useful Lives 12/18/87
Douglas, AZ
Elmore Hotel 12,500 3,312,522 3,325,022 904,568 1917 Useful Lives 12/22/87
Great Falls, MT
Graver Inn 40,914 3,041,508 3,082,422 613,972 1917 7, 35 12/31/87
Fargo, ND
Hazel Winthrop Apartments 45,000 2,420,102 2,465,102 473,604 1910 Useful Lives 12/30/87
Chicago, IL
Hughes Apartments 29,008 1,452,191 1,481,199 305,105 1926 5, 35 12/31/87
Mandan, ND
Lakeview Heights 217,588 3,030,308 3,247,896 707,801 1972 7, 35 12/30/87
Clearfield, UT
Medford Hotel 12,500 4,564,076 4,576,576 808,459 1915 Useful Lives 12/22/87
Medford, OR
Heritage View 64,800 1,361,094 1,425,894 327,100 1988 7, 27.5 12/30/87
New Sweden, ME
Rolling Green Apartments 291,241 6,326,990 6,618,231 1,821,774 1974 7, 28 09/30/87
Edmond, OK
Sierra Vista Apartments 434,866 8,010,250 8,445,116 2,422,416 1973 Useful Lives 09/30/87
Aurora, CO
Terrace Apartments 352,821 6,180,529 6,533,350 1,895,541 1970 5-7, 28 11/20/87
Oklahoma City, OK
Trenton Apartments 154,000 948,812 1,102,812 225,873 1925 10, 35 12/30/87
Salt Lake City, UT
Windsor Court Apartments 280,500 5,317,061 5,597,561 1,600,832 1974 5, 7, 28 12/30/87
Aurora, CO
Sierra Pointe 385,087 8,991,288 9,376,375 2,756,859 1963 7, 10, 28 09/01/87
Las Vegas, NV
Willow Peg Village 125,000 1,744,779 1,869,779 459,572 1989 Useful Lives 03/01/88
Ricon, GA
Pebble Creek 734,800 9,753,535 10,488,335 1,793,512 1977/81 5, 40 06/20/88
Arlington, TX
Pine Village 40,000 1,149,618 1,189,618 286,624 1988 Useful Lives 03/01/88
Pine Mountain, GA
Talbot Village 20,000 739,376 759,376 177,269 1988 Useful Lives 03/01/88
Talbolton, GA
Logan Plaza 969,289 13,605,146 14,574,435 3,120,022 1988 Useful Lives 05/10/88
New York, NY
Cass House 222,000 11,385,122 11,607,122 2,609,556 1988 5, 30 06/08/88
Boston, MA
Verdean Gardens 214,992 10,933,968 11,148,960 2,302,125 1989 5, 30 05/31/88
New Bedford, MA
Country Estates 22,500 734,409 756,909 210,008 1988 Useful Lives 03/01/88
Glenville, GA
Boulevard Commons 318,000 14,372,158 14,690,158 3,147,653 1920 Useful Lives 07/14/88
Chicago, IL
Chestnut Lane 93,322 1,734,985 1,828,307 407,856 1989 Useful Lives 08/01/88
Newman, GA
600 Dakota Properties 63,670 774,608 838,278 146,268 1988 7, 40 10/01/88
Wahpeton, ND
Duluth 24,000 377,024 401,024 70,381 1989 7, 35-40 10/01/88
Souix Falls, SD
Delmar 75,000 507,839 582,839 126,763 1988 Useful Lives 10/01/88
Gillette, WY
Park Terrace 393,713 4,923,871 5,317,584 1,091,488 1989 Useful Lives 01/20/89
Dundalk, MD
Brentwood Manor II 44,980 1,121,379 1,166,359 340,694 1971 Useful Lives 01/20/89
Nashua, NH
Hillcrest Apts 3 17,000 729,102 746,102 150,080 1989 Useful Lives 03/31/89
Perryville, MO
---------- ------------ ------------ -----------
$6,363,567 $141,349,512 $147,713,079 $34,318,321
========== ============ ============ ===========
(1) The aggregate cost for Federal Income Tax purposes is approximately $147,713,079.
* Mortgage notes payable generally represent non-recourse financing of
low-income housing projects payable with terms of up to 40 years with
interest payable at rates ranging from 9.75% to 12%. The Partnership has
not guaranteed any of these mortgage notes payable.
Summary of property owned and accumulated depreciation:
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Property Owned December 31, 1994 Accumulated Depreciation December 31, 1994
Balance at beginning of period $148,207,928 Balance at beginning of period $29,420,795
Additions during period: Additions during period:
Acquisitions through foreclosure $0 Depreciation 4,897,526
-----------
Other acquisitions 27,064 Balance at close of period $34,318,321
Improvements etc. 228,450 ===========
--------
255,514
Deductions during period:
Cost of real estate and fixed assets sold (750,363)
Reclassification to intangible assets 0
---------
(750,363)
------------
Balance at close of period $147,713,079
============
Property Owned December 31, 1993 Accumulated Depreciation December 31, 1993
Balance at beginning of period $148,026,160 Balance at beginning of period $24,308,993
Additions during period: Additions during period:
Acquisitions through foreclosure $0 Depreciation 5,111,802
-----------
Other acquisitions 60,593 Balance at close of period $29,420,795
===========
Improvements etc. 199,195
--------
259,788
Deductions during period:
Cost of real estate sold 0
Reclassification to intangible assets (78,020)
--------
(78,020)
------------
Balance at close of period $148,207,928
============
Property Owned December 31, 1992 Accumulated Depreciation December 31, 1992
Balance at beginning of period $147,638,359 Balance at beginning of period $18,888,248
Additions during period: Additions during period:
Acquisitions through foreclosure $0 Depreciation 5,420,745
-----------
Other acquisitions 0 Balance at close of period $24,308,993
===========
Improvements etc. 387,801
--------
387,801
Deductions during period:
Cost of real estate sold 0
Reclassification to intangible assets 0
--------
0
------------
Balance at close of period $148,026,160
============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 308,216
<SECURITIES> 2,066,336
<RECEIVABLES> 18,995
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 333,555
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 11,358,168
<CURRENT-LIABILITIES> 101,803
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 11,256,365
<TOTAL-LIABILITY-AND-EQUITY> 11,358,168
<SALES> 000
<TOTAL-REVENUES> 77,348
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 487,748
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (3,142,627)
<EPS-PRIMARY> $ (62.22)
<EPS-DILUTED> 000
</TABLE>
