February 12, 1997
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 December 31, 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/Veronica J. Curioso
Veronica J. Curioso
Assistant Controller
QH1-10Q3.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 December 31,1996
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 December 31, 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 - December 31, 1996 (Unaudited)
and March 31, 1996 1
Combined Statements of Operations (Unaudited) - For the Three and
Nine Months Ended December 31, 1996 and 1995 2
Statement of Changes in Partners' Equity (Deficiency) (Unaudited) -
For the Nine Months Ended December 31, 1996 3
Combined Statements of Cash Flows (Unaudited) - For the Nine
Months Ended December 31, 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>
December 31, March 31,
1996 1996
(Unaudited)
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 361,452 $ 678,567
Accounts receivable 326,136 45,444
Tenant security deposits 4,900 4,067
Other current assets 19,064 22,039
------------ ------------
Total current assets 711,552 750,117
Investments in Local Limited Partnerships,
net of reserve for valuation of
$552,008 and $787,526 in December and
March, respectively (Note 2) 4,824,018 6,447,339
Marketable securities, at fair value (Note 1) 1,877,546 1,998,381
Rental property at cost, net of
accumulated depreciation 1,160,379 1,135,368
Mortgage escrow deposits 13,176 5,816
Bond trusts 70,140 70,140
Deferred charges, net of accumulated
amortization of $31,439 and $29,021 in
December and March, respectively 49,175 51,593
------------ ------------
Total Assets $ 8,705,986 $ 10,458,754
============ ============
Liabilities and Partners' Equity
Current liabilities:
Accounts payable to affiliates $ - $ 16,763
Accounts payable and accrued expenses 36,348 94,274
Current portion of bonds payable 117,975 117,975
Accrued interest 68,819 68,819
Tenant security deposits payable 4,900 2,936
------------ ------------
Total current liabilities 228,042 300,767
Bonds payable 1,092,025 1,092,025
------------ ------------
Total Liabilities 1,320,067 1,392,792
------------ ------------
Minority interest in Local Limited Partnership 58,806 59,219
------------ ------------
General, Initial and Investor Limited Partners' Equity 7,327,304 9,006,780
Net unrealized losses on marketable securities (191) (37)
------------ ------------
Total Partners' Equity 7,327,113 9,006,743
------------ ------------
Total Liabilities and Partners' Equity $ 8,705,986 $ 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 Nine Months Ended December 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31, December 31, December 31,
1996 1995 1996 1995
------------- ------------- ------------- ---------
(Note 2) (Note 2)
<S> <C> <C> <C> <C>
Revenues:
Rental $ 58,028 $ - $ 162,452 $ -
Investment 32,949 38,236 100,812 102,809
Other 2,094 141,470 7,765 147,069
------------- ------------- ------------- -------------
Total Revenue 93,071 179,706 271,029 249,878
------------- ------------- ------------- -------------
Expenses:
General and administrative
(includes reimbursements to
affiliates in the amounts of
$94,050 and $95,457 in
1995 and 1994, respectively) 50,350 34,432 132,131 169,556
Rental operations, exclusive of
depreciation 18,259 - 73,695 -
Depreciation 10,182 - 30,546 -
Amortization 23,673 27,451 71,049 80,442
Interest 35,432 - 100,671 -
Adjustment to provision for
valuation of investments
in Local Limited Partnerships (70,916) (156,758) (235,518) (395,167)
------------- ------------- ------------- -------------
Total Expenses 66,980 (94,875) 172,574 (145,169)
------------- ------------- ------------- -------------
Income before equity in
losses of Local
Limited Partnerships 26,091 274,581 98,455 395,047
Minority interest in loss of
Local Limited Partnership 66 - 413 -
Equity in losses of
Local Limited Partnerships (577,318) (703,200) (1,778,344) (1,158,372)
------------- ------------- ------------- -------------
Net Loss $ (551,161) $ (428,619) $ (1,679,476) $ (763,325)
============= ============= ============= =============
Net Loss allocated:
To General Partners $ (5,512) $ (4,286) $ (16,795) $ (7,633)
To Limited Partners (545,649) (424,333) (1,662,681) (755,692)
-------------- ------------- ------------- -------------
$ (551,161) $ (428,619) $ (1,679,476) $ (763,325)
============== ============= ============= =============
Net Loss per Limited
Partnership Unit (50,000 Units) $ (10.91) $ (8.48) $ (33.25) $ (15.11)
============ ============= ============= =============
</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 Nine Months Ended December 31, 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 - - - (154) (154)
Net Loss (16,795) - (1,662,681) - (1,679,476)
----------- ------------- ---------- --------- ------------
Balance at December 31, 1996 $ (361,224) $ 4,648 $ 7,683,880 $ (191) $ 7,327,113
============ ============= =========== ========= ============
</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 Nine Months Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------------- ---------
<S> <C> <C>
Net cash used for operating activities $ (150,012) $ (48,568)
------------ -----------
Cash flows from investing activities:
Investment in Local Limited Partnership - (36,353)
Purchases of marketable securities (885,036) (1,547,205)
Proceeds from sales and maturities of
marketable securities 1,061,610 1,629,695
Capital contribution to Local Limited Partnership (3,000) -
Advances to Local Limited Partnerships (318,651) -
Cash distributions received from Local
Limited Partnerships 33,531 9,250
Purchase of rental property (55,557) -
------------ -----------
Net cash provided by (used for) investing activities (167,103) 55,387
------------ -----------
Net increase (decrease) in cash and cash
equivalents (317,115) 6,819
Cash and cash equivalents, beginning 678,567 308,216
------------ -----------
Cash and cash equivalents, ending $ 361,452 $ 315,035
============ ===========
Supplemental disclosure:
Cash paid for interest $ 100,671 $ -
============ ===========
</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 $ 1,362,225 $ 5,141 $ (6,210) $ 1,361,156
Mortgage backed securities 439,733 813 (272) 440,274
Other debt securities 75,779 337 - 76,116
----------- -------- -------- -----------
Marketable securities
at December 31, 1996 $ 1,877,737 $ 6,291 $ (6,482) $ 1,877,546
=========== ======== ========= ===========
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 December 31, 1996 are as follows:
<TABLE>
<CAPTION>
Fair
Cost Value
<S> <C> <C>
Due in one year or less $ 246,923 $ 249,691
Due in one year to five years 1,191,081 1,187,581
Mortgage backed securities 439,733 440,274
----------- -----------
$ 1,877,737 $ 1,877,546
=========== ===========
</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 $1,062,000 and $1,630,000 for the nine months ended December
31, 1996 and 1995, respectively. Included in investment income are gross gains
of $60,415 and $9,950 and gross losses of $4,522 and $7,177 which were realized
on these sales during the nine months ended December 31, 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
December 31, 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 $ 36,311,830
Cumulative equity in losses of Local Limited Partnerships
(excluding cumulative unrecognized losses of $11,765,895) (33,221,647)
Cumulative cash distributions received from Local Limited Partnerships (1,442,748)
----------------
Investments in Local Limited Partnerships before adjustment 1,647,435
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 4,770,577
Accumulated amortization of acquisition fees and expenses (1,041,986)
----------------
Investments in Local Limited Partnerships 5,376,026
Reserve for Valuation of Investments in
Local Limited Partnerships (552,008)
$ 4,824,018
</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 - September 30, 1996 (Unaudited)
<S> <C>
Assets:
Investment property, net $ 106,494,989
Current assets 2,104,888
Other assets 9,681,204
--------------
Total Assets $ 118,281,081
==============
Liabilities and Partners' Deficit:
Current liabilities $ 4,629,665
Long-term debt 121,330,670
Other liabilities 4,018,427
--------------
Total Liabilities 129,978,762
Partners' Deficit (11,697,681)
---------------
Total Liabilities and Partners' Deficit $ 118,281,081
==============
Summarized Income Statements - for the
nine months ended September 30, 1996 (Unaudited)
Rental and other income $ 15,241,870
--------------
Expenses:
Operating 7,998,309
Interest 7,636,719
Depreciation and amortization 3,583,134
--------------
Total Expenses 19,218,162
Net Loss $ (3,976,292)
==============
Partnership's share of Net Loss $ (3,935,752)
==============
Other Partners' share of Net Loss $ (40,540)
==============
</TABLE>
For the nine months ended December 31, 1996, the Partnership has not recognized
$2,176,075 of equity in losses relating to fourteen Local Limited Partnerships
where cumulative equity in losses and cumulative distributions exceeded its
total investments.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
(Unaudited)
3. Supplemental Combining Schedules
Balance Sheets
<TABLE>
<CAPTION>
Boston Financial
Qualified Housing Hughes
Tax Credits Apartments
L.P. (A) Ltd.(B) Eliminations Combined
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 360,089 $ 1,363 $ - $ 361,452
Accounts receivable 372,140 7,485 (53,489) 326,136
Tenant security deposits - 4,900 - 4,900
Other current assets 19,064 - - 19,064
------------ ------------ -------- -------------
Total current assets 751,293 13,748 (53,489) 711,552
Investments in Local Limited
Partnerships, net 4,724,881 - 99,137 4,824,018
Marketable securities, at fair value 1,877,546 - - 1,877,546
Rental property at cost, net of
accumulated depreciation - 1,160,379 - 1,160,379
Mortgage escrow deposits - 13,176 - 13,176
Bond trusts - 70,140 - 70,140
Deferred charges, net - 49,175 - 49,175
------------ ------------ -------- -------------
Total Assets $ 7,353,720 $ 1,306,618 $ 45,648 $ 8,705,986
============ ============ ======== =============
Liabilities and Partners' Equity (Deficiency)
Current liabilities:
Accounts payable to affiliate $ - $ 53,489 $(53,489) $ -
Accounts payable and accrued
expenses 26,607 9,741 - 36,348
Current portion of bonds payable - 117,975 - 117,975
Accrued interest - 68,819 - 68,819
Tenant security deposits payable - 4,900 - 4,900
------------ ------------ -------- -------------
Total current liabilities 26,607 254,924 (53,489) 228,042
Bonds payable - 1,092,025 - 1,092,025
------------ ------------ -------- -------------
Total Liabilities 26,607 1,346,949 (53,489) 1,320,067
------------ ------------ -------- -------------
Minority interest in Local Limited
Partnership - - 58,806 58,806
------------ ------------ -------- -------------
General, Initial and Investor
Limited Partners' Equity 7,327,304 (40,331) 40,331 7,327,304
Net unrealized losses (191) - - (191)
------------- ------------ -------- --------------
Total Partners' Equity 7,327,113 (40,331) 40,331 7,327,113
------------ ------------ -------- -------------
Total Liabilities and
Partners' Equity $ 7,353,720 $ 1,306,618 $ 45,648 $ 8,705,986
============ ============ ======== =============
</TABLE>
(A) As of December 31, 1996.
(B) As of September 30, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
(Unaudited)
3. Supplemental Combining Schedules (continued)
Statements of Operations
For the Three Months Ended December 31, 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 $ - $ 58,028 $ - $ 58,028
Investment 32,923 26 - 32,949
Other 1,900 194 - 2,094
------------- ------------ --------- ------------
Total Revenue 34,823 58,248 - 93,071
------------- ------------ --------- ------------
Expenses:
General and administrative 50,350 - - 50,350
Rental operations, exclusive
of depreciation - 18,259 - 18,259
Depreciation - 10,182 - 10,182
Amortization 22,867 806 - 23,673
Interest - 35,432 - 35,432
Adjustment to provision
for valuation of
investments in Local
Limited Partnerships (70,916) - - (70,916)
------------- ------------ --------- -------------
Total Expenses 2,301 64,679 - 66,980
------------- ------------ --------- ------------
Income (Loss) before equity in losses
of Local Limited Partnerships 32,522 (6,431) - 26,091
Minority interest in loss of
Local Limited Partnership - - 66 66
Equity in losses of Local
Limited Partnerships (583,683) - 6,365 (577,318)
------------- ------------ --------- ------------
Net Loss $ (551,161) $ (6,431) $ 6,431 $ (551,161)
============= ============ ========= ============
</TABLE>
(A) For the three months ended December 31, 1996.
(B) For the three months ended September 30, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
(Unaudited)
3. Supplemental Combining Schedules (continued)
Statements of Operations
For the Nine Months Ended December 31, 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 $ - $ 162,452 $ - $ 162,452
Investment 100,763 49 - 100,812
Other 4,200 3,565 - 7,765
------------- ------------ --------- ------------
Total Revenue 104,963 166,066 - 271,029
------------- ------------ --------- ------------
Expenses:
General and administrative 132,131 - - 132,131
Rental operations, exclusive
of depreciation - 73,695 - 73,695
Depreciation - 30,546 - 30,546
Amortization 68,631 2,418 - 71,049
Interest - 100,671 - 100,671
Adjustment to provision
for valuation of
investments in Local
Limited Partnerships (235,518) - - (235,518)
------------- ------------ --------- ------------
Total Expenses (34,756) 207,330 - 172,574
------------- ------------ --------- ------------
Income (Loss) before equity in losses
of Local Limited Partnerships 139,719 (41,264) - 98,455
Minority interest in loss of
Local Limited Partnership - - 413 413
Equity in losses of Local
Limited Partnerships (1,819,195) - 40,851 (1,778,344)
------------- ------------ --------- ------------
Net Loss $ (1,679,476) $ (41,264) $ 41,264 $ (1,679,476)
============= ============ ========= ============
</TABLE>
(A) For the nine months ended December 31, 1996.
(B) For the nine months ended September 30, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING LIMITED PARTNERSHIP
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
(Unaudited)
3. Supplemental Combining Schedules (continued)
<TABLE>
<CAPTION>
Statements of Cash Flows
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 $ (127,359) $ 30,836 $ (53,489) $ (150,012)
----------- ---------- --------- ------------
Cash flows from investing activities:
Purchases of marketable securities (885,036) - - (885,036)
Proceeds from sales and maturities
of marketable securities 1,061,610 - - 1,061,610
Capital contributions to Local
Limited Partnership (3,000) - - (3,000)
Advances to Local Limited Partnerships (372,140) - 53,489 (318,651)
Cash distributions received from
Local Limited Partnerships 33,531 - - 33,531
Purchase of rental property - (55,557) - (55,557)
----------- ---------- --------- ------------
Net cash used for investing activities (165,035) (55,557) 53,489 (167,103)
----------- ---------- --------- ------------
Net decrease in cash and cash equivalents (292,394) (24,721) - (317,115)
Cash and cash equivalents, beginning 652,483 26,084 - 678,567
----------- ---------- --------- ------------
Cash and cash equivalents, ending $ 360,089 $ 1,363 $ - $ 361,452
=========== ========== ========= ============
</TABLE>
(A) For the nine months ended December 31, 1996.
(B) For the nine months ended September 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 December 31, 1996, the Partnership, including the combined entity, had cash
and cash equivalents of $361,452 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
and the proceeds from the sales and maturities of marketable securities.
At December 31, 1996, approximately $1,647,000 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 December 31, 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 $372,000 to four
Local Limited Partnerships.
Cash Distributions
No cash distributions to Limited Partners were made during the nine months ended
December 31, 1996.
Results of Operations
The Partnership's results of operations for the three and nine months ended
December 31, 1996 resulted in a net loss of $551,161 and $1,679,476,
respectively, as compared to net losses of $428,619 and $763,325 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)
As previously reported, Pebble Creek, located in Arlington, Texas, continues to
generate operating deficits. The property has been experiencing significant
operating problems primarily due to considerable resident turnover and high
security and capital repair costs. The problems resulted in a mortgage default
and subsequent mortgage assignment to HUD. Notwithstanding the Managing General
Partner's efforts to achieve a mutually satisfactory workout plan with the Local
General Partner, local housing authority and HUD, the local housing authority
withheld October rents due to failure to complete requested capital repairs and
threatened to abate the November rents as well. An affiliate of the Managing
General Partner reached an agreement with the local housing authority which
prevented the November rent abatement and enabled capital repairs to commence in
December of 1996. This action will allow the Partnership to retain its interest
in Pebble Creek, at least in the short-term. However, there remains a
substantial risk that the Partnership will not be able to retain its interest in
the property for the long-term. Such a loss would result in a recapture of one
third of the tax credits for the investors. The carrying value of the
Partnership's investment in this Local Limited Partnership is zero at December
31, 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 the Cass
House subsidy closed in June of 1996. The closing for Verdean Gardens occurred
in December of 1996. Both restructurings required 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 December 31, 1996.
Hughes Apartments, located in Mandan, North Dakota, continues to generate
operating deficits, despite the fact that construction to repair the damaged
units is ongoing, and occupancy has reached 100%. As we previously reported, 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 is being funded from
Partnership Reserves. The managing General Partner continues to monitor property
operations closely and to work with the local General Partner on a strategy to
stabilize property operations.
<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 December 31, 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: February 12, 1997 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> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-31-1996
<CASH> 361,452
<SECURITIES> 1,877,546
<RECEIVABLES> 326,136
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23,964<F1>
<PP&E> 1,160,379
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,705,986<F2>
<CURRENT-LIABILITIES> 228,042<F3>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 7,327,113
<TOTAL-LIABILITY-AND-EQUITY> 8,705,986<F4>
<SALES> 0
<TOTAL-REVENUES> 271,029<F5>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 71,903<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 100,671
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,679,476)<F7>
<EPS-PRIMARY> (33.25)
<EPS-DILUTED> 0
<FN>
<F1>Included in current assets is $4,900 of tenant security deposits and $19,064
of other current assets.
<F2>Included in total assets is $4,824,018 of Investments in Local Limited
Partnerships, Mortgage escrow deposits of $13,176, Bond trusts of$70,140,
Deferred charges, net of amortization of $49,175.
<F3>Included in current liabilities are Accounts payable and accrued expenses of
$36,348, Current bonds payable of $117,975, Accrued interest of $68,819
and Security deposits liability of $4,900.
<F4>Included in total liabilities and equity are $58,806 of minority interest in
the Local Limited Partnership and Bond payable of $1,092,025.
<F5>Total revenue includes Rental of $162,452, Investment of $100,812 and Other
of $7,765.
<F6>Included in Other Expenses is an adjustment to the provision for valuation
of investments in Local Limited Partnerships of $(235,518), General and
administrative of $132,131, Rental Operations, exclusive of depreciation
of $73,695, Depreciation of $30,546, and Amortization of $71,049.
<F7>Net loss reflects equity in losses of Local Limited Partnerships of
$1,778,344 and Minority interest in loss of Local Limited Partnership of
$413.
</FN>
</TABLE>
