November 13, 1996
Securities and Exchange Commission
Filer Support, Edgar
Operation Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312
Re: Boston Financial Qualified Housing Limited Partnership
Report on Form 10-Q for Quarter Ended September 30, 1996
File No. 0-16796
Dear Sir/Madam:
Pursuant to the requirements of Rule 901(d) of Regulation S-T, enclosed is one
copy of subject report.
Please stamp and return the enclosed copy of this letter in the enclosed
stamped, self-addressed envelope to acknowledge receipt of this filing.
Very truly yours,
/s/Marie D. Reynolds
Marie D. Reynolds
Assistant Controller
QH1-10Q2.DOC
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934
(Mark One)
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended September 30, 1996 Commission file number 0-16796
Boston Financial Qualified Housing Limited Partnership
(Exact name of registrant as specified in its charter)
Delaware 04-2947737
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Arch Street, Boston, Massachusetts 02110-1106
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-3911
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No .
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page No.
- ------------------------------ --------
Item 1. Financial Statements
Combined Balance Sheets - September 30, 1996 (Unaudited)
and March 31, 1996 1
Combined Statements of Operations (Unaudited) - For the Three and
Six Months Ended September 30, 1996 and 1995 2
Statement of Changes in Partners' Equity (Deficiency) (Unaudited) -
For the Six Months Ended September 30, 1996 3
Combined Statements of Cash Flows (Unaudited) - For the Six
Months Ended September 30, 1996 and 1995 4
Notes to the Combined Financial Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
PART II - OTHER INFORMATION
Items 1-6 14
SIGNATURE 15
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, March 31,
1996 1996
(Unaudited)
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 286,076 $ 678,567
Accounts receivable 195,515 45,444
Tenant security deposits 4,183 4,067
Other current assets 20,181 22,039
------------ ------------
Total current assets 505,955 750,117
Investments in Local Limited Partnerships
(net of reserve for valuation of
$622,924 and $787,526 in September and
March, respectively) (Note 2) 5,355,609 6,447,339
Marketable securities, at fair value (Note 1) 2,091,722 1,998,381
Rental property at cost, net of
accumulated depreciation 1,170,561 1,135,368
Mortgage escrow deposits 10,416 5,816
Bond trusts 70,140 70,140
Deferred charges, net of accumulated
amortization of $30,633 and $29,021 in
September and March, respectively 49,981 51,593
------------ ------------
Total Assets $ 9,254,384 $ 10,458,754
============ ============
Liabilities and Partners' Equity
Current liabilities:
Accounts payable to affiliates $ 11,030 $ 16,763
Accounts payable and accrued expenses 30,451 94,274
Current portion of bonds payable 117,975 117,975
Accrued interest 68,819 68,819
Tenant security deposits payable 4,925 2,936
------------ ------------
Total current liabilities 233,200 300,767
Bonds payable 1,092,025 1,092,025
------------ ------------
Total Liabilities 1,325,225 1,392,792
------------ ------------
Minority interest in Local Limited Partnership 58,872 59,219
------------ ------------
General, Initial and Investor Limited Partners' Equity 7,878,465 9,006,780
Net unrealized losses on marketable securities (8,178) (37)
------------- ------------
Total Partners' Equity 7,870,287 9,006,743
------------ ------------
Total Liabilities and Partners' Equity $ 9,254,384 $ 10,458,754
============ ============
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
COMBINED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
-------------- -------------- ------------- ---------
(Note 2) (Note 2)
<S> <C> <C> <C> <C>
Revenues:
Rental $ 58,123 $ - $ 104,424 $ -
Investment 36,821 31,643 67,863 64,573
Other 1,314 3,049 5,671 5,599
------------- ------------- ------------- -------------
Total Revenue 96,258 34,692 177,958 70,172
------------- ------------- ------------- -------------
Expenses:
General and administrative
(includes reimbursements to
affiliates in the amounts of
$72,089 and $63,208 in 1996
and 1995, respectively) 3,439 62,429 81,781 135,124
Rental Operations, exclusive
of depreciation 28,487 - 55,436 -
Depreciation 10,319 - 20,364 -
Amortization 20,301 25,850 47,376 52,991
Interest 35,204 - 65,239 -
Adjustment to provision for
valuation of investments
in Local Limited Partnerships (42,485) (238,409) (164,602) (238,409)
------------- ------------- -------------- -------------
Total Expenses 55,265 (150,130) 105,594 (50,294)
------------- ------------- ------------- -------------
Income before equity in
income (losses) of Local
Limited Partnerships 40,993 184,822 72,364 120,466
Minority interest in loss of
Local Limited Partnership 156 - 347
Equity in income (losses) of
Local Limited Partnerships (675,676) 69,726 (1,201,026) (455,172)
------------- ------------- ------------- -------------
Net Income (Loss) $ (634,527) $ 254,548 $ (1,128,315) $ (334,706)
============= ============= ============= =============
Net Income (Loss) allocated:
To General Partners $ (6,345) $ 2,546 $ (11,283) $ (3,347)
To Limited Partners (628,182) 252,002 (1,117,032) (331,359)
------------- ------------- ------------- -------------
$ (634,527) $ 254,548 $ (1,128,315) $ (334,706)
============= ============= ============= =============
Net Income (Loss) per Limited
Partnership Unit (50,000 Units) $ (12.56) $ 5.04 $ (22.34) $ (6.63)
============ ============= ============ =============
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
(Unaudited)
For the Six Months Ended September 30, 1996
<TABLE>
<CAPTION>
Initial Investor Net
General Limited Limited Unrealized
Partners Partners Partners Losses Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1996 $ (344,429) $ 4,648 $ 9,346,561 $ (37) $ 9,006,743
Net change in net unrealized
losses on marketable securities
available for sale - - - (8,141) (8,141)
Net Loss (11,283) - (1,117,032) - (1,128,315)
----------- ------- ----------- --------- ------------
Balance at September 30, 1996 $ (355,712) $ 4,648 $8,229,529 $ (8,178) $ 7,870,287
=========== ======= =========== ============= ============
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
COMBINED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended September 30, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------------- ---------
<S> <C> <C>
Net cash used for operating activities $ (304,883) $ (129,422)
------------ -----------
Cash flows from investing activities:
Purchases of marketable securities (885,037) (979,735)
Proceeds from sales and maturities of
marketable securities 824,777 875,948
Cash distributions received from Local
Limited Partnerships 28,209 -
Purchase of rental property (55,557) -
------------ -----------
Net cash used for investing activities (87,608) (103,787)
------------ -----------
Net decrease in cash and cash equivalents (392,491) (233,209)
Cash and cash equivalents, beginning 678,567 308,216
------------ -----------
Cash and cash equivalents, ending $ 286,076 $ 75,007
============ ===========
Supplemental disclosure:
Cash paid for interest $ 65,239 $ -
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS
(Unaudited)
The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the financial
statements and notes thereto included with the Partnership's 10-K for the year
ended March 31, 1996. In the opinion of management, these financial statements
include all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the Partnership's financial position and results of
operations. Certain amounts in the prior period financial statements have been
reclassified herein to conform with the current period presentation. The results
of operations for the periods may not be indicative of the results to be
expected for the year.
1. 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 $ 1,510,477 $ 4,526 $(10,296) $ 1,504,707
Mortgage backed securities 449,266 434 (3,376) 446,324
Other debt securities 140,157 677 (143) 140,691
----------- -------- -------- -----------
Marketable securities
at September 30, 1996 $ 2,099,900 $ 5,637 $(13,815) $ 2,091,722
=========== ======== ======== ===========
Debt securities issued by the
US Treasury and
other US Government
corporations and agencies $ 1,394,653 $ 2,050 $ (7,271) $ 1,389,432
Mortgage backed securities 247,382 1,792 (164) 249,010
Other debt securities 356,383 3,783 (227) 359,939
----------- -------- -------- -----------
Marketable securities
at March 31, 1996 $ 1,998,418 $ 7,625 $ (7,662) $ 1,998,381
=========== ======== ======== ===========
</TABLE>
The contractual maturities at September 30, 1996 are as follows:
<TABLE>
<CAPTION>
Fair
Cost Value
<S> <C> <C>
Due in one year or less $ 295,730 $ 298,560
Due in one year to five years 1,354,904 1,346,838
Mortgage backed securities 449,266 446,324
----------- -----------
$ 2,099,900 $ 2,091,722
=========== ===========
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
(Unaudited)
1. Marketable Securities (continued)
Actual maturities may differ from contractual maturities because some borrowers
have the right to call or prepay obligations. Proceeds from sales and maturities
were approximately $825,000 and $876,000 for the six months ended September 30,
1996 and 1995, respectively. Included in investment income are gross gains of
$45,632 and $3,730 and gross losses of $4,410 and $7,094 which were realized on
these sales during the six months ended September 30, 1996 and 1995,
respectively.
2. Investments in Local Limited Partnerships
The Partnership has acquired interests in thirty-three Local Limited
Partnerships, excluding Hughes Apartments Ltd. ("Hughes"), 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.
On October 27, 1995, an affiliate of the Partnership's Managing General
Partners, BF Harbour View, Inc., became the Local General Partner of Hughes, a
Local Limited Partnership in which the Partnership has invested. Since the Local
General Partner of Hughes is an affiliate of the Partnership, these combined
financial statements include all activity of Hughes Apartments, Ltd., beginning
on March 31, 1996. All significant intercompany balances have been eliminated.
A summary of Investments in Local Limited Partnerships, excluding Hughes, at
September 30, 1996, is as follows:
<TABLE>
<CAPTION>
<S> <C>
Capital contributions to Local Limited Partnerships and purchase
price paid to withdrawing partners of Local Limited Partnerships $ 36,308,830
Cumulative equity in losses of Local Limited Partnerships
(excluding cumulative unrecognized losses of $10,731,471) (32,639,007)
Cumulative cash distributions received from Local Limited Partnerships (1,442,748)
----------------
Investments in Local Limited Partnerships before adjustment 2,227,075
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 4,770,577
Accumulated amortization of acquisition fees and expenses (1,019,119)
----------------
Investments in Local Limited Partnerships 5,978,533
Reserve for Valuation of Investments in
Local Limited Partnerships (622,924)
$ 5,355,609
----------------
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
(Unaudited)
2. Investments in Local Limited Partnerships (continued)
Summarized financial information from the combined financial statements of the
Local Limited Partnerships in which the Partnership has invested, excluding
Hughes, is as follows:
<TABLE>
<CAPTION>
Summarized Balance Sheets - June 30, 1996 (Unaudited)
<S> <C>
Assets:
Investment property, net $ 106,951,772
Current assets 2,135,740
Other assets 9,632,683
--------------
Total Assets $ 118,720,195
==============
Liabilities and Partners' Deficit:
Current liabilities $ 4,534,700
Long-term debt 121,903,198
Other liabilities 3,264,052
--------------
Total Liabilities 129,701,950
Partners' Deficit (10,981,755)
---------------
Total Liabilities and Partners' Deficit $ 118,720,195
==============
Summarized Income Statements - for the
six months ended June 30, 1996 (Unaudited)
Rental and other income $ 10,468,726
--------------
Expenses:
Operating 5,459,483
Interest 4,970,831
Depreciation and amortization 2,386,304
--------------
Total Expenses 12,816,618
Net Loss $ (2,347,892)
==============
Partnership's share of Net Loss $ (2,324,010)
==============
Other Partners' share of Net Loss $ (23,882)
==============
</TABLE>
For the six months ended September 30, 1996, the Partnership has not recognized
$1,141,651 of equity in losses relating to fourteen Local Limited Partnerships
where cumulative equity in losses and cumulative distributions exceeded its
total investments.
3. Transactions with Affiliates
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 2 to the financial statements is $90,438 of fees earned by BFPM for the six
months ended September 30, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
(Unaudited)
4. Supplemental Combining Schedules
<TABLE>
<CAPTION>
Balance Sheets
Boston Financial
Qualified Housing Hughes
Tax Credits Apartments
L.P. (A) Ltd.(B) Eliminations Combined
Assets
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 284,809 $ 1,267 $ - $ 286,076
Accounts receivable 242,492 6,512 (53,489) 195,515
Tenant security deposits - 4,183 - 4,183
Other current assets 20,181 - - 20,181
------------ ------------ -------- -------------
Total current assets 547,482 11,962 (53,489) 505,955
Investments in Local Limited
Partnerships, net 5,262,837 - 92,772 5,355,609
Marketable securities, at fair value 2,091,722 - - 2,091,722
Rental property at cost, net of
accumulated depreciation - 1,170,561 - 1,170,561
Mortgage escrow deposits - 10,416 - 10,416
Bond trusts - 70,140 - 70,140
Deferred charges, net - 49,981 - 49,981
------------ ------------ -------- -------------
Total Assets $ 7,902,041 $ 1,313,060 $ 39,283 $ 9,254,384
============ ============ ======== =============
Liabilities and Partners' Equity (Deficiency)
Current liabilities:
Accounts payable to affiliate $ 11,030 $ 53,489 $(53,489) $ 11,030
Accounts payable and accrued
expenses 20,724 9,727 - 30,451
Current portion of bonds payable - 117,975 - 117,975
Accrued interest - 68,819 - 68,819
Tenant security deposits payable - 4,925 - 4,925
------------ ------------ -------- -------------
Total current liabilities 31,754 254,935 (53,489) 233,200
Bonds payable - 1,092,025 - 1,092,025
------------ ------------ -------- -------------
Total Liabilities 31,754 1,346,960 (53,489) 1,325,225
------------ ------------ -------- -------------
Minority interest in Local Limited
Partnership - - 58,872 58,872
------------ ------------ -------- -------------
General, Initial and Investor
Limited Partners' Equity 7,878,465 (33,900) 33,900 7,878,465
Net unrealized losses (8,178) - - (8,178)
------------- ------------ -------- -------------
Total Partners' Equity 7,870,287 (33,900) 33,900 7,870,287
------------ ------------ -------- -------------
Total Liabilities and
Partners' Equity $ 7,902,041 $ 1,313,060 $ 39,283 $ 9,254,384
============ ============ ======== =============
</TABLE>
(A) As of September 30, 1996.
(B) As of June 30, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
(Unaudited)
4. Supplemental Combining Schedules (continued)
Statements of Operations
For the Three Months Ended September 30, 1996
<TABLE>
<CAPTION>
Boston Financial
Qualified Housing Hughes
Tax Credits Apartments
L.P. (A) Ltd.(B) Eliminations Combined
<S> <C> <C> <C> <C>
Revenue:
Rental $ - $ 58,123 $ - $ 58,123
Investment 36,798 23 - 36,821
Other 400 914 - 1,314
------------- ------------ --------- ------------
Total Revenue 37,198 59,060 - 96,258
------------- ------------ --------- ------------
Expenses:
General and administrative 3,439 - - 3,439
Rental operations, exclusive
of depreciation - 28,487 - 28,487
Depreciation - 10,319 - 10,319
Amortization 19,495 806 - 20,301
Interest - 35,204 - 35,204
Adjustment to provision
for valuation of
investments in Local
Limited Partnerships (42,485) - - (42,485)
------------- ------------ --------- ------------
Total Expenses (19,551) 74,816 - 55,265
------------- ------------ --------- ------------
Income (Loss) before equity in losses
of Local Limited Partnerships 56,749 (15,756) - 40,993
Minority interest in loss of
Local Limited Partnership - - 156 156
Equity in losses of Local
Limited Partnerships (691,276) - 15,600 (675,676)
------------- ------------ --------- ------------
Net Loss $ (634,527) $ (15,756) $ 15,756 $ (634,527)
============= ============ ========= ============
</TABLE>
(A) For the three months ended September 30, 1996.
(B) For the three months ended June 30, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
(Unaudited)
4. Supplemental Combining Schedules (continued)
Statements of Operations
For the Six Months Ended September 30, 1996
<TABLE>
<CAPTION>
Boston Financial
Qualified Housing Hughes
Tax Credits Apartments
L.P. (A) Ltd.(B) Eliminations Combined
<S> <C> <C> <C> <C>
Revenue:
Rental $ - $ 104,424 $ - $ 104,424
Investment 67,840 23 - 67,863
Other 2,300 3,371 - 5,671
------------- ------------ --------- ------------
Total Revenue 70,140 107,818 - 177,958
------------- ------------ --------- ------------
Expenses:
General and administrative 81,781 - - 81,781
Rental operations, exclusive
of depreciation - 55,436 - 55,436
Depreciation - 20,364 - 20,364
Amortization 45,764 1,612 - 47,376
Interest - 65,239 - 65,239
Adjustment to provision
for valuation of
investments in Local
Limited Partnerships (164,602) - - (164,602)
------------- ------------ --------- ------------
Total Expenses (37,057) 142,651 - 105,594
------------- ------------ --------- ------------
Income (Loss) before equity in
losses of Local Limited
Partnerships 107,197 (34,833) - 72,364
Minority interest in loss of
Local Limited Partnership - - 347 347
Equity in losses of Local
Limited Partnerships (1,235,512) - 34,486 (1,201,026)
------------- ------------ --------- ------------
Net Loss $ (1,128,315) $ (34,833) $ 34,833 $ (1,128,315)
============= ============ ========= ============
</TABLE>
(A) For the six months ended September 30, 1996.
(B) For the six months ended June 30, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
(Unaudited)
4. Supplemental Combining Schedules (continued)
Statements of Cash Flows
<TABLE>
<CAPTION>
Boston Financial
Qualified Housing Hughes
Tax Credits Apartments
L.P. (A) Ltd.(B) Eliminations Combined
<S> <C> <C> <C> <C>
Net cash provided by (used for)
operating activities $ (335,623) $ 30,740 $ - $ (304,883)
----------- ---------- --------- ------------
Cash flows from investing activities:
Purchases of marketable securities (885,037) - - (885,037)
Proceeds from sales and maturities
of marketable securities 824,777 - - 824,777
Cash distributions received from
Local Limited Partnerships 28,209 - - 28,209
Purchase of rental property - (55,557) - (55,557)
----------- ---------- --------- ------------
Net cash used for investing activities (32,051) (55,557) - (87,608)
----------- ---------- --------- ------------
Net decrease in cash and cash equivalents (367,674) (24,817) - (392,491)
Cash and cash equivalents, beginning 652,483 26,084 - 678,567
----------- ---------- --------- ------------
Cash and cash equivalents, ending $ 284,809 $ 1,267 $ - $ 286,076
=========== ========== ========= ============
</TABLE>
(A) For the six months ended September 30, 1996.
(B) For the six months ended June 30, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
At September 30, 1996, the Partnership, including the combined entity, had cash
and cash equivalents of $286,076 compared with $678,567 at March 31, 1996. The
decrease is attributable to cash used for operations and purchase of rental
property offset by cash distributions received from Local Limited Partnerships.
At September 30, 1996, approximately $1,825,000 of cash, cash equivalents and
marketable securities has been designated as Reserves. 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 deficit, if the Managing General Partner
deems funding appropriate.
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 September 30, 1996, 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 interest to provide such funds, voluntarily, in order to protect its
investment. To date, the Partnership has provided approximately $200,000 to two
Local Limited Partnerships.
Cash Distributions
No cash distributions to Limited Partners were made during the six months ended
September 30, 1996.
Results of Operations
The Partnership's results of operations for the three and six months ended
September 30, 1996, resulted in a net loss of $634,527 and $1,128,315,
respectively, as compared to net income of $254,548 and a net loss of $334,706
for the same periods in 1995. The increase in net losses is primarily
attributable to an increase in equity in losses of Local Limited Partnerships
and an adjustment to the provision for valuation of investments in Local Limited
Partnerships.
The increase in equity in losses of Local Limited Partnerships is due to a prior
year receipt of rent rollback and ineligible unit relocation claims which were
previously withheld by HUD. The provision for valuation of investments in Local
Limited Partnerships reflects the current period equity in losses and
amortization attributable to one Local Limited Partnership.
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 774 apartments were newly constructed and twenty
of the properties with 2,091 apartments were rehabilitated.
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.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Property Discussions (continued)
At Pebble Creek, continued deficits caused by high security and repair costs,
and high turnover has resulted in a mortgage default and subsequent mortgage
assignment to HUD. The Arlington Housing Authority ("AHA") has withheld October
rents totaling approximately $140,000 due to failure to complete requested
capital repairs and has threatened to abate the November rents as well. An
affiliate of the Managing General Partner is actively pursuing a workout plan to
address the mortgage default and deferred maintenance issues. Should these
negotiations fail to achieve a feasible workout plan for the property, it is
unlikely that the Partnership will be able to retain its interest in the
property for the long-term. Such a loss would result in a recapture of tax
credits for the investors. The carrying value of the Partnership's investment in
this Local Limited Partnership is zero at September 30, 1996.
Cass House and Verdean Gardens, Massachusetts properties which share a common
Local General Partner, continue to operate below break-even in a slow rental
market. The SHARP subsidy agreements for both properties were renegotiated in
1992 and provided additional subsidies. However, since the properties continue
to operate at a deficit and Verdean Gardens requires maintenance work, the Local
General Partner has applied for further subsidies. The restructuring of Cass
House closed in June of 1996. The closing for Verdean Gardens is expected to
occur subsequent to September 30, 1996. This restructuring will also require
contributions from Partnership reserves. Under the existing subsidy agreement,
the Local General Partner has been supporting the properties' operations through
deferred management fees and guarantees or letters of credit. The carrying value
of the Partnership's investment in these Local Limited Partnerships is zero at
September 30, 1996.
At Hughes Apartments, located in Mandan, North Dakota, construction to repair
the damaged units is ongoing, and occupancy has reached 100%. The Managing
General Partner negotiated a forbearance agreement with the lender which
included an infusion of additional capital to cure the mortgage default and fund
capital repairs. A portion of the capital repairs will be funded from
Partnership Reserves. As a result of the above actions, the property's occupancy
level, as well as property operations have significantly improved as of
September 30, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K
(a)Exhibits - None
(b)Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended September 30, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DATED: November 13, 1996 BOSTON FINANCIAL QUALIFIED HOUSING
LIMITED PARTNERSHIP
By: 29 Franklin Street, Inc.,
its Managing General Partner
/s/ Georgia Murray
Georgia Murray
A Managing Director, Treasurer
and Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1996
<CASH> 286,076
<SECURITIES> 2,091,722
<RECEIVABLES> 195,515
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 24,364<F1>
<PP&E> 1,170,561
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,254,384<F2>
<CURRENT-LIABILITIES> 233,200<F3>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 7,870,287
<TOTAL-LIABILITY-AND-EQUITY> 9,254,384<F4>
<SALES> 0
<TOTAL-REVENUES> 177,958<F5>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 40,355<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 65,239
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,128,315)<F7>
<EPS-PRIMARY> (22.34)
<EPS-DILUTED> 0
<FN>
<F1>Included in current assets is $4,183 of tenant security deposits and$20,181
of other current assets.
<F2>Included in total assets is $5,355,609 of Investments in Local Limited
Partnerships, Mortgage escrow deposits $10,416, Bond trusts $70,140,
Deferred charges, net of amortization $49,981.
<F3>Included in current liabilities: Accounts payable to affiliate $11,030,
Accounts payable and accrued expenses $30,451, Current bonds payable
$117,975, Accrued interest $68,819, Security deposits $4,925.
<F4>Included in total liabilities and equity is $58,872 of minority interest in
the Local Limited Partnership and Bond payable $1,092,025.
<F5>Total revenue includes Rental $104,424, Investment $67,863, Other $5,671.
<F6>Included in Other Expenses is an adjustment to the provision for valuation
of investments in Local Limited Partnerships of $(164,602), General and
administrative $81,781, Rental Operations, exclusive of depreciation
$55,436, Depreciation $20,364, and Amortization $47,376.
<F7>Net loss reflects: equity in losses of Local Limited Partnerships of
$1,201,026, Minority interest in loss of Local Limited Partnerships $347.
</FN>
</TABLE>
