<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 December 31, 1996
Commission File Number
0-17669
-------
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
I.R.S. Employer Identification No. 04-2981989
----------
2335 North Bank Drive, Columbus, OH 43220
Registrant's Telephone Number, Including Area Code: (614) 451-9929
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
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 twelve 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
or Regulation S-K 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)
The Exhibit Index is located on page 26 of this Report.
This Report contains 35 pages.
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
A DELAWARE LIMITED PARTNERSHIP
1996 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Item 1. BUSINESS........................................... 3
Item 2. Properties......................................... 4
Item 3. Legal proceedings.................................. 4
Item 4. Submission of matters to a vote of security holders 4
PART II
Item 5. Market for the registrant's partnership
interests and related partnership matters.......... 5
Item 6. Selected financial data............................ 6
Item 7. Management's discussion and analysis of
financial condition and results of operations...... 7
Item 8. Financial statements and supplementary data........ 10
PART III
Item 9. Changes in and disagreements with accountants on
accounting and financial disclosure................ 24
Item 10. Directors and executive officers of the registrant 24
Item 11. Executive compensation............................. 24
Item 12. Security ownership of certain beneficial owners
and management..................................... 25
Item 13. Certain relationships and related transactions..... 25
PART IV
Item 14. Exhibits, financial statement schedules and reports
on Form 8-K........................................ 25
</TABLE>
FORM 10-K AVAILABLE
A copy of the National Housing Trust Limited Partnership 1996 Form 10-K, Annual
Report to the Securities and Exchange Commission, is available free of charge to
any partner by writing to:
Charles R. Santer
President
NHT, Inc.
2335 North Bank Drive
Columbus, OH 43220
2
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PART I
------
ITEM 1 BUSINESS
National Housing Trust Limited Partnership (NHTLP), a Delaware limited
partnership (the "Investment Partnership"), was formed on July 9, 1987 to invest
in low-income housing developments throughout the United States through
acquisition of a 98.9% limited partnership interest in project specific
Operating Partnerships. NHT, Inc. (The "General Partner" or "NHT") serves as a
General Partner of the Investment Partnership and as a General Partner, in most
cases a .1% General Partner of the Operating Partnerships. The Investment
Partnership and the Operating Partnerships are referred to collectively as the
"Partnerships".
NHT, Inc., the sole General Partner of the Investment Partnership, is a
Delaware, Section 501(c)(3), nonprofit corporation which holds a 1% General
Partner's interest in the Investment Partnership. Shearson Lehman Hutton Low-
Income Housing, Inc., a Delaware corporation, is a Special Limited Partner in
the Investment Partnership with a .01% limited partnership interest.
National Affordable Housing Trust, Inc. (the "Trust"), a Maryland, Section
501(c)(3), nonprofit corporation, is the sole member of the General Partner.
The Trust in turn has three members: National Church Residences, an Ohio,
Section 501(c)(3), nonprofit corporation formed in 1961, Retirement Housing
Foundation, a California, Section 501(c)(3), nonprofit corporation also formed
in 1961, and as of March 15, 1996 Volunteers of America, Inc., a New York,
Section 501(c)(3), nonprofit corporation formed in 1896 (the "Trust Members").
The purpose of the Investment Partnership is to acquire, hold, dispose of and
otherwise deal with limited partnership interests in Operating Partnerships
which will acquire, maintain, operate and dispose of low-income housing
developments (the "Properties"). Additionally, the purpose is to engage in any
other activities related and incidental to providing current tax benefits to
Unit holders, particularly the Low Income Housing Credit, to preserve and
protect Investment Partnership capital, and to cause the Properties to be sold
to the highest bidder who intends to preserve the Properties as affordable
housing for persons of low income.
On October 7, 1988, the Investment Partnership completed a public offering of
1,014,668 units of limited partnership interest at $20.00 per unit, from which
the Investment Partnership received gross proceeds of approximately $20,293,000.
After paying Shearson Lehman Hutton, Inc. $2,079,000 for costs related to the
offering and paying the Trust $965,000 for organizational and offering
expenses, the net proceeds of the offering available to invest in Operating
Partnerships amounted to $17,249,000.
Since completion of the public offering, the Investment Partnership has acquired
a 98.9% limited partnership interest in 31 Operating Partnerships. The Operating
Partnerships acquire, maintain and operate the Properties, each of which
qualifies for an allocation of the low-income housing tax credit established by
the Tax Reform Act of 1986. Each Property is financed and/or operated with one
or more forms of rental or financial assistance from the U.S. Department of
Housing and Urban Development (HUD), the U.S. Department of Agriculture Farmers
Home Administration (FmHA), or various state and local housing finance agencies.
NHT, Inc. holds a .1% - 1.1% General Partner interest in each Operating
Partnership.
The Investment Partnership does not have any employees. The General Partner
and/or its affiliates perform services for the Investment Partnership.
The principal executive offices of the Investment Partnership and NHT, Inc. are
located at 2335 North Bank Drive, Columbus, Ohio 43220, and their telephone
number is (614) 451-9929.
3
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ITEM 2 PROPERTIES
The Investment Partnership has acquired a 98.9% interest in 31 Operating
Partnerships since the completion of the public offering in 1988. These
Operating Partnerships, and the states in which their respective properties are
located, the number of units and occupied units as of December 31, 1996, are
listed below:
<TABLE>
<CAPTION>
Occupancy Number
Partnership Name State of Units of Units
- - ------------------- ---------- ---------- ---------
<S> <C> <C> <C>
Aspen NHT Apartments Company Limited Partnership Michigan 46 48
Birch Lake NHT Apartments Company Limited Partnership Michigan 46 48
Century Place NHT Apartments Company Limited Partnership Michigan 74 96
Glendale NHT Apartments Company Limited Partnership Michigan 26 28
Lakeside NHT Apartments Company Limited Partnership Michigan 61 64
Park Terrace NHT Apartments Company Limited Partnership Michigan 48 48
Traverse Woods NHT Apartments Company Limited Partnership Michigan 48 48
Traverse Woods II NHT Apartments Company Limited Partnership Michigan 80 80
RP Limited Dividend Housing Association Limited Partnership Michigan 223 245
YM Limited Dividend Housing Association Limited Partnership Michigan 148 153
Bingham Terrace Limited Partnership Ohio 54 56
Griggs Village Limited Partnership Ohio 42 44
Hebron Village Limited Partnership Ohio 37 40
Melrose Village I Limited Partnership Ohio 54 56
Stygler Village Limited Partnership Ohio 149 150
Summit Square Limited Partnership Ohio 142 152
Washington Court House I Limited Partnership Ohio 59 60
Wildwood Village I Limited Partnership Ohio 86 94
Wildwood Village II Limited Partnership Ohio 82 86
Wildwood Village III Limited Partnership Ohio 87 92
W-C Apartments Limited Partnership Oklahoma 55 64
W-G Apartments Limited Partnership Oklahoma 44 47
W-P Apartments Limited Partnership Oklahoma 69 76
W-R Apartments Limited Partnership Oklahoma 74 76
Coal Township Limited Partnership Pennsylvania 98 101
Hazelwood Limited Partnership Pennsylvania 99 100
Mahanoy Limited Partnership Pennsylvania 124 125
West Allegheny Partners Limited Partnership Pennsylvania 42 45
Springchase Apartments Limited Partnership Texas 150 164
Trinidad Apartments Limited Partnership Texas 113 124
St. Martins Associates Washington 53 53
</TABLE>
ITEM 3 LEGAL PROCEEDINGS
None.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
None.
4
<PAGE>
PART II
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ITEM 5 MARKET FOR THE REGISTRANT'S PARTNERSHIP
INTERESTS AND RELATED PARTNERSHIP MATTERS
At December 31, 1996 there were approximately 1,100 registered holders of units
of limited partnership interest in NHTLP ("Units"). The Units were sold through
a public offering underwritten by Shearson Lehman Hutton, Inc. The Units may be
transferred only if certain requirements are satisfied; a public market for the
purchase and sale of the Units has not developed to date, and no such market is
expected to develop. The General Partner does not anticipate that the
Investment Partnership will distribute cash to holders of Units in circumstances
other than refinancing or disposition of the Investment Partnership's
investments in the Operating Partnerships.
5
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ITEM 6 SELECTED FINANCIAL DATA
The following information has been derived from the combined financial
statements of the Investment Partnership and its substantially wholly-owned
Operating Partnerships.
<TABLE>
<CAPTION>
(In thousands, except per Unit data)
1996 1995 1994 1993 1992
-------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Combined Statement of Operations Data:
Rental revenues $ 12,689 $12,723 $12,566 $13,132 $12,890
Rental expenses (11,645) (9,168) (9,134) (8,687) (8,290)
Depreciation and amortization (2,995) (3,073) (3,025) (2,975) (2,959)
-------- ------- ------- ------- -------
Income (loss) from rental operations (1,951) 482 407 1,470 1,641
-------- ------- ------- ------- -------
Other revenues and expenses
Interest income 252 265 260 267 282
Interest expense (3,490) (3,627) (3,639) (3,622) (3,569)
Partnership management fees (315) (307) (291) (283) (281)
-------- ------- ------- ------- -------
Net loss $ (5,504) $(3,187) $(3,263) $(2,168) $(1,927)
======== ======= ======= ======= =======
Net loss per Unit $(5.42) $(3.14) $ (3.22) $(2.14) $(1.90)
======== ======= ======= ======= =======
Combined Balance Sheet Data:
Total assets $ 70,340 $74,039 $76,430 $78,989 $80,958
======== ======= ======= ======= =======
Term debt (1) $ 70,824 $69,526 $68,761 $68,119 $68,518
======== ======= ======= ======= =======
Partners' capital $ (3,693) $ 1,797 $ 4,986 $ 8,367 $ 9,477
======== ======= ======= ======= =======
Cash dividends declared per Unit $ None $ None $ None $ None $ None
======== ======= ======= ======= =======
</TABLE>
(1) Includes current maturities of term debt.
6
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ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General
- - -------
In 1988, the Investment Partnership raised $20,293,000 in gross proceeds through
a public offering. Upon paying the selling, offering and organization expenses
of the offering the Investment Partnership had $17,249,000 in net proceeds. Of
the net proceeds, $260,000 was deposited in the Investment Partnership reserve
and $16,989,000 was invested in 31 Operating Partnerships. The 31 Operating
Partnerships that were acquired own low-income housing developments (the
"Properties") that were eligible for the low-income housing tax credit. One of
the Properties was also eligible for the historic rehabilitation tax credit.
The 31 acquisitions occurred from October 1988 through March 1990.
Each Operating Partnership's Property qualifies for the low-income housing tax
credit (LIHTC). The LIHTC was created by the 1986 Tax Reform Act and is
governed by Section 42 of the Internal Revenue Code. The Investment Partnership
serves as a conduit of the Operating Partnerships' tax credits, passive losses,
portfolio income and other tax information to the holders of Units of limited
partnership interest in the Investment Partnership (the "Unit holders"). The
tax credits are allocated to the Unit holders for 10 years after a property has
been placed in service and rented up. The tax credits were first allocated to
Unit holders in 1988 and are anticipated to continue until 2001. In addition,
in order for a Property to qualify for the tax credits, the Property must be
utilized as a low-income property for 15 years before it can be sold. The
General Partner anticipates the Properties to be sold in the years 2003 through
2008.
The Investment Partnership elected a special option available in 1990 to
accelerate the LIHTC for individuals who had an interest in the Investment
Partnership before October 26, 1990. Qualifying Unit holders received a tax
credit of 150% of the credit otherwise allowable for the first tax year ending
December 31, 1990. The remaining tax credit available for 1991 and subsequent
tax years is being reduced on a pro rata basis by the amount of the 1990
increased credit. Non-qualifying Unit holders will receive the original
unaccelerated tax credit for the remaining qualifying tax years of their
investment.
Properties
- - ----------
Two properties located in Ft. Worth, Texas are experiencing cash flow
difficulties and have experienced a decline in value (See Footnote 5 of the
Combined Financial Statements). During 1993, the General Partner resolved a
dispute with a former Managing General Partner who had not made mortgage
payments on one of the properties and failed to comply with its Operating
Deficit Guarantee. An agreement completed in May 1993 ordered the former
Managing General Partner to make a lump sum payment of $20,000 and continue to
pay an additional amount totaling $40,000 over 36 months. All these payments
have been received.
Due to the nonpayment of the two properties' mortgages by the former Managing
General Partner, the mortgages were assigned to the U.S. Department of Housing
and Urban Development (HUD). In September 1995, HUD auctioned off the mortgage
loans for these properties. The General Partner bid on the mortgage loans, but
a Texas bank was the successful bidder. Due to HUD disclosure policies, the
General Partner did not learn who bought the mortgages until November 9, 1995.
With respect to one property, the bank demanded by letter received November 13,
1995, that the loan be brought current by December 4, 1995 and threatened to
foreclose if payment was not received by that date. The Operating Partnership
did not have sufficient capital to bring the mortgages current. By letter
proposal on November 22, 1995, the General Partner commenced negotiation with
the bank seeking a consensual agreement to restructure the debt. The bank
responded with a counter proposal on February 22, 1996. The General Partner
evaluated the bank's proposal, found it unworkable, and responded with a counter
proposal on March 14, 1996. The General Partner received notice later that
same day, by letter dated March 12, 1996, that the bank accelerated the maturity
of the indebtedness under the Notes, demanded payment in full and gave notice
that if the indebtedness is not paid in full, the bank would cause the trustee
under the deeds of trust securing the Notes to conduct a foreclosure sale on
April 2, 1996. The consequences of foreclosure
7
<PAGE>
would be a recapture of a portion of the tax credits previously received by the
investors and the reduction of tax credits in future years. A foreclosure in
1997 could result in a reduction of an investor's return from approximately 14%
to approximately 10% in 1997 and to approximately 13% each year thereafter
through the year 2000. The General Partner will employ all actions to minimize
the effect on the investors. As part of its strategy, the General Partner filed
on March 26, 1996 with respect to Trinidad Apartments Limited Partnership and on
March 28, 1996 with respect to Springchase Apartments Limited Partnership in the
Northern District of Texas, Fort Worth Division, Case #496-41284 and Case #496-
4136 respectfully, petitions for relief under Chapter 11 to enable the Operating
Partnerships to reorganize. A hearing is currently scheduled for April 10, 1997.
However, there can be no assurance as to the outcome at this time.
In January 1994, the General Partner removed a Managing General Partner from its
management responsibilities at a Property located in Philadelphia, Pennsylvania.
The removal was due to nonpayment of the mortgage and failure to fulfill the
operating deficit guarantee. During 1994, the General Partner completed a debt
restructure with the Pennsylvania Housing Finance Agency (PHFA). The
restructuring required the Investment Partnership to loan money to the Operating
Partnership in order to pay off part of the first mortgage. PHFA provided funds
to pay off the remaining balance. In total, the Investment Partnership has
loaned $283,000 to the Operating Partnership for operations and debt
restructuring. Due to the debt restructuring the Property is not required to
service any debt unless there is sufficient cash flow after expenses relating to
the Property. All of the units are operational and available to rent to
qualifying tenants. An agreement was entered into in December, 1995 between the
City of Philadelphia, through the Office of Services to the Homeless and Adults
(OSHA) and the Operating Partnership to provide project-based rental units for
the shelter plus care program. These 14 units are being utilized by eligible
homeless individuals.
In June 1994, the Unit holders approved, through a consent solicitation, the
withdrawal of a Managing General Partner and its replacement by a successor
Managing General Partner of four Operating Partnerships that own Properties in
Bartlesville, Oklahoma.
As of December 31, 1996, average occupancy of the Properties was 94%.
Liquidity and Capital Resources
- - -------------------------------
Liquidity is defined as an Operating Partnership's ability to meet its current
and long-term financial obligations. If a Property were to lose its governmental
rent, interest subsidy or mortgage insurance, the Operating Partnership holding
such Property might be unable to fund expenses on an ongoing basis.
Liquidity shortfalls might be covered by new federal governmental subsidy
programs, by state and local agencies, by funds from the Investment Partnership
reserve, or general partner operating deficit guarantees, although there is no
assurance that such sources would be available or, if available, sufficient to
cover any liquidity shortfall. A liquidity shortfall, for whatever reason, might
result in a sale, refinancing, or foreclosure of the property, any one of which
could have material adverse tax consequences to a Unit holder, including a
partial recapture of previously allocated low-income housing tax credits.
The programs of the U.S. Department of Housing and Urban Development (HUD) are
subject to being restructured, and the Clinton Administration and various
members of Congress have proposed a variety of program modifications. Most
proposals call for restructuring debt on assisted housing to reflect current
market values and reducing subsidized rents accordingly. In addition, many
proposals call for the conversion of subsidies from project-based subsidies to
tenant-based subsidies.
Public Law 104-204, effective October 1, 1996, provided that HUD generally will
renew Section 8 rental assistance contracts that expire in fiscal year 1997
(October 1, 1996 through September 30, 1997) for one year so long as the
subsidized rents on the properties do not exceed 120% of HUD-published Fair
Market Rents (FMRs) for the market areas in which the properties are located.
With respect to most properties with rents in excess of 120% of FMRs and Section
8 contracts that expire in fiscal year 1997, Congress
8
<PAGE>
authorized a demonstration program to initiate restructuring of the loans and
rent subsidies. The Operating Partnerships own 14 properties whose Section 8
contracts expire in 1997, of which two have rents in excess of 120% of FMRs. The
General Partner anticipates that HUD will renew for one year the Section 8
contracts for the 12 properties with rents at or below 120% of FMRs, and
assuming agreement by the general partners of the respective Operating
Partnerships, the General Partner currently anticipates submitting proposals to
participate in the demonstration with respect to the two properties with Section
8 contracts with rents in excess of 120% of FMRs that expire in fiscal year
1997. In addition, two other properties owned by Operating Partnerships have
Section 8 contracts with rents in excess of 120% of FMRs that expire after
fiscal year 1997.
The ramifications of these proposed changes could affect demand for and cash
flow of many of the Properties, as well as potentially create debt forgiveness
taxable income. The General Partner is monitoring and preparing for the
potential impact of the proposed restructuring of HUD programs. The General
Partner is unable to predict with certainty the impact of HUD program
restructuring on the Operating Partnerships, but it is possible that a
restructuring could have a material adverse effect on one or more of the
Properties, which in turn could have a material adverse effect on the Investment
Partnership.
At December 31, 1996 assets limited as to use were $5,146,000. The assets were
composed of the Investment Partnership reserve of $279,000 and Operating
Partnership reserves of $4,867,000. The Investment Partnership reserves are
available to fund repairs and maintenance as well as operational expenses, while
the reserves maintained by an Operating Partnership are typically available only
for the Property owned by such Operating Partnership. Historically, the
Investment Partnership reserve has been available to fund obligations of the
Investment Partnership, including the management fee payable by the Investment
Partnership to the General Partner. In 1996 the General Partner deferred
payment of $195,000 of its Management Fee due to a reduced level of the
Investment Partnership reserve. In light of the current level, the General
Partner is again considering deferring payment of a portion of its fee in 1997
to maintain an appropriate level of Investment Partnership reserve. There can
be no assurance, however, that the Investment Partnership reserve will be
sufficient to satisfy the liquidity requirements of any given Operating
Partnership in the event that the reserves of such Operating Partnership are
insufficient for this purpose. The deposits and withdrawals from the Operating
Partnership reserves are generally regulated by a governing federal, state or
local agency.
Low-income housing projects frequently generate limited cash flow and,
therefore, the potential for cash flow deficits exists. The General Partner
does not anticipate that the Investment Partnership will distribute cash to Unit
holders in circumstances other than refinancing or disposition of its
investments in the Operating Partnerships.
Results of Operations
- - ---------------------
The 1996 net loss of $5,504,000 increased 73% from the 1995 net loss of
$3,187,000, while the 1995 net loss decreased 2% from the 1994 net loss of
$3,263,000. The operational reasons for the differences are discussed below.
An impairment loss of $2,300,000 was recorded in first quarter 1996 for the two
Fort Worth, Texas properties. (see NOTE 5).
During 1996, 1995 and 1994, total rental revenue was $12,689,000, $12,723,000
and $12,566,00, respectively. Rental income decreased $34,000 (.3%) in 1996
compared to 1995 and increased $157,000 (1.2%) in 1995 compared to 1994.
Total rental expenses exclusive of depreciation and impairment loss for 1996,
1995, and 1994 are $9,345,000, $9,168,000 and $9,134,000, respectively. The
$177,000 (1.9%) increase in rental expense between 1996 and 1995 was primarily
due to a $80,000 (4.7%) increase in administrative expenses, and a $96,000
(5.7%) increase in utility expenses. The $34,000 (.4%) increase in rental
expenses between 1995
9
<PAGE>
and 1994 was primarily due to a $76,000 (4.3%) increase in taxes and insurance,
offset by decreases of $38,000 (1.3%) and $5,000 (.5%) in operating and
maintenance expenses and management fees.
The administrative expense increases in 1996 are primarily attributable to
several properties increase in social services and salary expenses relating to
repairs and maintenance. The utility expense increases in 1996 primarily relate
to the hot, dry summer in Oklahoma and increased water bills at the Michigan
properties. The tax and insurance increases in 1995 are primarily attributable
to increased insurance costs at the Texas and Michigan properties. Operating
and maintenance expenses increased in 1994 due to planned and routine
improvements on the properties. The utility expense increase in 1994 are
primarily due to increases in the cost of utilities at the Ohio, Michigan and
Texas properties.
During the past three year period rental income, after the HUD rent adjustments,
has been increasing an average of (.7%) which has not been sufficient to cover
increases in rental expenses (excluding depreciation and impairment loss) of
(2.5%). The primary expense categories that have been steadily increasing are
administration (2.2%) and utilities (4.2%). TO DATE, INFLATION HAS NOT HAD A
SIGNIFICANT IMPACT ON THE PARTNERSHIPS' COMBINED OPERATIONS. HOWEVER, RENT
LEVELS OF THE PROPERTIES ARE GENERALLY LIMITED BY THE REQUIREMENTS OF THE LOW-
INCOME HOUSING TAX CREDIT AND ARE SUBJECT TO STRICT GOVERNMENTAL REGULATION. IN
THE EVENT OF SIGNIFICANT INFLATION, THE OPERATING PARTNERSHIPS MAY BE UNABLE TO
INCREASE RENTS SUFFICIENTLY TO COMPENSATE FOR INCREASES IN EXPENSES. DUE TO THE
PROPOSED CHANGES IN HUD PROGRAMS FUTURE INCREASES IN SUBSIDY INCOME MAY BE
LIMITED. OVERALL, THE PROPERTIES ARE IN GOOD PHYSICAL CONDITION AFTER TAKING
INTO ACCOUNT THE PLANNED REPAIRS AND MAINTENANCE DISCUSSED ABOVE, ARE PRODUCING
POSITIVE CASH FLOW AND THE MANAGING GENERAL PARTNERS AND MANAGEMENT COMPANIES
ARE CONSISTENTLY SEEKING MEANS TO IMPROVE OPERATIONAL RESULTS.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The combined financial statements of National Housing Trust Limited Partnership
and its substantially wholly-owned Operating Partnerships as of December 31,
1996 and 1995 and for each of the three years in the period ended December 31,
1996 are listed below and included on pages 10 through 24 of this report.
Audited Combined Financial Statements
Report of Independent Auditors - Ernst & Young LLP.. 11
Combined Balance Sheets............................. 12
Combined Statements of Operations................... 14
Combined Statements of Partners' Capital............ 15
Combined Statements of Cash Flows................... 16
Notes to Combined Financial Statements.............. 17
Financial Statements Schedules - Schedule I......... 29
Financial Statements Schedules - Schedule III....... 31
10
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REPORT OF INDEPENDENT AUDITORS
To the Partners
National Housing Trust Limited Partnership
We have audited the accompanying combined balance sheets of National Housing
Trust Limited Partnership and its substantially wholly-owned Operating
Partnerships (the Partnership) as of December 31, 1996 and 1995, and the related
combined statements of operations, partners' capital, and cash flows for each of
the three years in the period ended December 31, 1996 and the financial
statement schedules listed in the accompanying index. These combined financial
statements and schedules are the responsibility of the Partnerships' management.
Our responsibility is to express an opinion on these combined financial
statements and schedules based on our audits. We did not audit the financial
statements of 12 substantially wholly owned Operating Partnerships, which
statements reflect total assets of $29,222,434 and $32,240,474 at December 31,
1996 and 1995, respectively, and total revenues of $5,752,895 and $5,716,433 for
the years then ended. Those statements were audited by other auditors whose
reports have been furnished to us, and our opinion, insofar as it relates to
data included for those substantially wholly-owned Operating 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 audit 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 and schedules. 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 combined financial position of National Housing Trust Limited Partnership
and its substantially wholly-owned Operating Partnerships at December 31, 1996
and 1995, and the combined results of their operations and their cash flows for
each of the three years in the period ended December 31, 1996, in conformity
with generally accepted accounting principles. Further, in our opinion the
financial statement schedules referred to above, when considered in relation to
the combined financial statements taken as a whole, present fairly in all
material respects the information set for therein.
ERNST & YOUNG LLP
Columbus, Ohio
March 17, 1997
11
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NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
COMBINED BALANCE SHEETS, DECEMBER 31, 1996 AND 1995
(In Thousands)
<TABLE>
<CAPTION>
ASSETS December 31
-------------------
1996 1995
-------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,313 $ 1,130
Tenants' security deposits 446 415
Mortgage escrow deposits 620 642
Prepaid expenses and other assets 731 724
-------- --------
Total current assets 3,110 2,911
-------- --------
Assets limited as to use 5,146 4,966
-------- --------
Rental property (Notes 3, 5 and 6):
Buildings and improvements 75,900 77,599
Furniture and equipment 2,523 2,428
-------- --------
78,423 80,027
Less accumulated depreciation (20,379) (18,235)
-------- --------
58,044 61,792
Land 3,968 4,269
-------- --------
62,012 66,061
Prepaid land leases, affiliates, less current
maturities (Note 2) 72 101
-------- --------
Total assets $ 70,340 $ 74,039
======== ========
</TABLE>
The accompanying notes are an integral
part of the combined financial statements.
12
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
COMBINED BALANCE SHEETS, CONTINUED
(In Thousands, except Investment Units)
<TABLE>
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL December 31
-----------------
1996 1995
-----------------
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses $ 1,944 $ 1,791
Rents received in advance 36 25
Deposits held 461 462
Accrued interest, mortgage notes payable 255 438
Current maturities of term debt (Notes 3 and 5) 933 3,631
------- -------
Total current liabilities 3,629 6,347
------- -------
Term debt, less current maturities (Notes 3 and 5):
Mortgage notes payable 41,903 42,678
Promissory notes, including accrued
interest payable of $8,004 and
$6,625 in 1996 and 1995, respectively 24,893 23,217
------- -------
66,796 65,895
------- -------
Liabilities subject to compromise (Notes 5 and 6): 3,608 -
------- -------
Partners' capital:
General Partners:
NHT, Inc. (8) (2)
Other operating General Partners 14 54
Limited partners:
Issued and outstanding 1,014,668
investment units (3,699) 1,745
------- -------
(3,693) 1,797
------- -------
Total liabilities and partners' capital $70,340 $74,039
======= =======
</TABLE>
The accompanying notes are an integral
part of the combined financial statements.
13
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(In Thousands, except per Unit Amounts)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Rental revenues (Notes 4 and 5):
Rental revenues $12,434 $12,365 $12,321
Other income 255 358 245
------- ------- -------
Total rental revenues 12,689 12,723 12,566
------- ------- -------
Rental expenses:
Administration 1,799 1,719 1,724
Operating and maintenance 2,873 2,905 2,943
Management fees, primarily affiliates (Note 2) 1,026 1,027 1,032
Utilities 1,777 1,681 1,675
Taxes and insurance 1,870 1,836 1,760
Depreciation and amortization 2,995 3,073 3,025
Impairment loss (Note 5): 2,300 - -
------- ------- -------
Total rental expenses 14,640 12,241 12,159
------- ------- -------
Income (loss) from rental operations (1,951) 482 407
------- ------- -------
Other revenues and expenses:
Interest income 252 265 260
Interest expense (3,490) (3,627) (3,639)
Partnership management fees, affiliates (Note 2) (315) (307) (291)
------- ------- -------
Net loss $(5,504) $(3,187) $(3,263)
======= ======= =======
Net loss per limited partnership unit $(5.42) $(3.14) $(3.22)
======= ======= =======
</TABLE>
The accompanying notes are an integral
part of the combined financial statements
14
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
COMBINED STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(In Thousands)
<TABLE>
<CAPTION>
GENERAL
PARTNERS' INTEREST LIMITED PARTNERS' INTEREST TOTAL
--------------------------- ------------------------------------------- -----------
Other General Investment Operating Partners'
NHT, Inc. Partners Partnership Partnerships Total Capital
----------- ---------- ------------- -------------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balances as of January 1, 1994 $ 6 $ 237 $ 894 $ 7,230 $ 8,124 $ 8,367
Allocation of net loss (3) (33) (35) (3,192) (3,227) (3,263)
General Partner contributions 11 11
General Partner distributions (1) (128) (129)
------ ---------- ------- --------- -------- --------
Balances as of December 31, 1994 2 87 859 4,038 4,897 4,986
Allocation of net loss (3) (32) (35) (3,117) (3,152) (3,187)
General Partner distributions (1) (1) (2)
------ ---------- ------- --------- -------- --------
Balances as of December 31, 1995 (2) 54 824 921 1,745 1,797
Allocation of net loss (5) (55) (60) (5,384) (5,444) (5,504)
General Partner contributions 16 16
General Partner distributions (1) (1) (2)
------ ---------- ------- --------- -------- --------
Balances as of December 31, 1996 $ (8) $ 14 $ 764 $ (4,463) $ (3,699) $ (3,693)
====== ========== ======= ========= ======== ========
</TABLE>
The accompanying notes are an integral
part of the combined financial statements.
15
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(In Thousands)
<TABLE>
<CAPTION>
1996 1995 1994
-------- ------- -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(5,504) $(3,187) $(3,263)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization 2,995 3,073 3,025
Impairment loss 2,300 - -
Loss on fixed asset disposal - - 38
Accrued interest on promissory notes 1,379 1,376 1,297
Changes in operating assets and liabilities:
Decrease (increase) in deposits,
prepaids and other assets (16) (59) 183
Increase in accounts payable and
accrued expenses 285 130 170
Increase (decrease) in other current liabilities 208 (97) 10
------- ------- -------
Cash provided by operating activities 1,647 1,236 1,460
------- ------- -------
Investing activities:
Additions to buildings, furniture and
equipment (1,217) (1,286) (1,530)
(Deposits) withdrawals to assets
limited as to use, net (180) 587 803
------- ------- -------
Cash used for investing activities (1,397) (699) (727)
------- ------- -------
Financing Activities:
General Partners cash (distributions) contributions, net 14 (2) (118)
Additions to term debt 676 139 806
Payments of term debt (757) (750) (1,521)
------- ------- -------
Cash used for financing activities (67) (613) (833)
------- ------- -------
Increase (decrease) in cash and cash equivalents 183 (76) (100)
Cash and cash equivalents, beginning of year 1,130 1,206 1,306
------- ------- -------
Cash and cash equivalents, end of year $ 1,313 $ 1,130 $ 1,206
======= ======= =======
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 1,890 $ 2,243 $ 2,544
======= ======= =======
</TABLE>
The accompanying notes are an integral
part of the combined financial statements
16
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1. Summary of the Organization and Its Significant Accounting Policies:
--------------------------------------------------------------------
National Housing Trust Limited Partnership, a Delaware limited partnership (the
"Investment Partnership") was formed on July 9, 1987 to invest in low-income
housing developments throughout the United States through the acquisition of a
98.9% limited partnership interest in project specific Operating Partnerships.
NHT, Inc. (The "General Partner" or "NHT") serves as a General Partner of the
Investment Partnership and as a General Partner, in most cases a .1% General
Partner of the Operating Partnerships. The Investment Partnership and the
Operating Partnerships are referred to collectively as the "Partnerships".
NHT, Inc., the sole General Partner of the Investment Partnership is a
Delaware, 501(c)(3), nonprofit corporation which holds a 1% General Partner's
interest in the Investment Partnership. Shearson Lehman Hutton Low-Income
Housing, Inc., a Delaware corporation, is a Special Limited Partner in the
Investment Partnership with a .01% limited partnership interest.
The Operating Partnerships acquire, maintain and operate low-income housing
developments that are eligible for and have been allocated the low-income
housing tax credit established by the Tax Reform Act of 1986. Each housing
project is financed and/or operated with one or more forms of rental or
financial assistance from the U.S. Department of Housing and Urban Development
(HUD), the U.S. Department of Agriculture Farmers Home Administration (FmHA),
or various state/local housing finance agencies. NHT, Inc. holds a .1% - 1.1%
General Partner interest in each Operating Partnership.
National Affordable Housing Trust, Inc. (the "Trust"), a Maryland, 501(c)(3),
nonprofit corporation, is the sole member of the General Partner. The Trust in
turn has three members: National Church Residences, an Ohio, 501(c)(3),
nonprofit corporation formed in 1961, Retirement Housing Foundation, a
California, 501(c)(3), nonprofit corporation also formed in 1961, and as of
March 15, 1996 Volunteers of America, Inc., a New York, Section 501(c)(3), non
profit corporation formed in 1896 (the "Trust Members").
On October 7, 1988, the Investment Partnership completed a public offering of
1,014,668 units of limited partnership interests at $20.00 per unit, from which
the Investment Partnership received gross proceeds of approximately
$20,293,000. After paying Shearson Lehman Hutton, Inc. $2,079,000 for costs
related to the offering and paying the Trust $965,000 for organizational and
offering expenses, the net proceeds of the offering were $17,249,000.
Since completion of the public offering, the Partnership has acquired a 98.9%
limited partnership interest in 31 Operating Partnerships. No acquisitions
occurred during 1996, 1995 or 1994.
Annual distributions, if any, from the Operating Partnerships are limited under
the terms of various agreements with governmental agencies. Any cash available
for distribution from the Operating Partnerships will be distributed 98.9% to
the Investment Partnership and 1.1% to the General Partners. Any Investment
Partnership net income (loss), or cash available for distribution will be
distributed 98.99% to unitholders, .01% to the Special Limited Partner and 1.0%
to NHT, Inc. Cash distributions to Partners, if any, shall be made at such time
or times as the General Partner may determine. Net loss per limited
partnership unit is based on the average number of limited partnership units
outstanding during the period of operating activity.
17
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Principles of Combination:
- - --------------------------
The combined financial statements include the accounts of the Investment
Partnership and Operating Partnerships in which it has acquired 98.9% limited
partnership interests. Although the Investment Partnership does not have any
significant liability to the Operating Partnerships beyond its original
investment, and the net assets of each Operating Partnership are not available
for the benefit of any other Operating Partnership or for the Investment
Partnership, combined financial statements have been presented because of the
significant interest the Investment Partnership has in the Operating
Partnerships. All related entity accounts and transactions have been eliminated.
The Operating Partnerships that are included in the combined financial
statements are the following:
<TABLE>
<CAPTION>
Date
Partnership Name State Acquired
- - ----------------- ---------- ---------
<S> <C> <C>
Stygler Village Limited Partnership Ohio 10/07/88
St. Martins Associates Washington 01/31/89
W-C Apartments Limited Partnership Oklahoma 03/02/89
W-G Apartments Limited Partnership Oklahoma 03/02/89
W-P Apartments Limited Partnership Oklahoma 03/02/89
W-R Apartments Limited Partnership Oklahoma 03/02/89
Springchase Apartments Limited Partnership (Notes 5 and 6) Texas 10/31/89
Trinidad Apartments Limited Partnership (Notes 5 and 6) Texas 10/31/89
Wildwood Village I Limited Partnership Ohio 12/01/89
Wildwood Village II Limited Partnership Ohio 12/01/89
Wildwood Village III Limited Partnership Ohio 12/01/89
Melrose Village I Limited Partnership Ohio 12/01/89
Summit Square Limited Partnership Ohio 12/01/89
Washington Court House I Limited Partnership Ohio 12/01/89
Griggs Village Limited Partnership Ohio 12/01/89
Hebron Village Limited Partnership Ohio 12/01/89
Aspen NHT Apartments Company Limited Partnership Michigan 12/28/89
Birch Lake NHT Apartments Company Limited Partnership Michigan 12/28/89
Century Place NHT Apartments Company Limited Partnership Michigan 12/28/89
Glendale NHT Apartments Company Limited Partnership Michigan 12/28/89
Lakeside NHT Apartments Company Limited Partnership Michigan 12/28/89
Park Terrace NHT Apartments Company Limited Partnership Michigan 12/28/89
Traverse Woods NHT Apartments Company Limited Partnership Michigan 12/28/89
Traverse Woods II NHT Apartments Company Limited Partnership Michigan 12/28/89
Bingham Terrace Limited Partnership Ohio 12/28/89
Coal Township Limited Partnership Pennsylvania 12/29/89
Hazelwood Limited Partnership Pennsylvania 12/29/89
Mahanoy Limited Partnership Pennsylvania 12/29/89
RP Limited Dividend Housing Association Limited Partnership Michigan 12/31/89
YM Limited Dividend Housing Association Limited Partnership Michigan 12/31/89
West Allegheny Partners Limited Partnership Pennsylvania 03/27/90
</TABLE>
18
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Cash Equivalents:
- - -----------------
For purposes of the combined statement of cash flows, the Investment Partnership
and its Operating Partnerships define cash equivalents as short-term, highly
liquid investments with original maturities of three months or less when
pruchased.
Assets Limited as to Use:
- - -------------------------
Assets limited as to use consisted of Operating Partnerships' property reserves
of $4,867,000 and $4,713,000 in 1996 and 1995, respectively and Investment
Partnership reserves of $279,000 and $253,000 in 1996 and 1995, respectively.
Property reserves represent amounts required by HUD or other governmental
agencies to be maintained with respect to each of the individual properties
acquired by the Operating Partnerships. Withdrawals are subject to written
permission of the governmental agency. Under the applicable governmental
regulations, the property reserves maintained with respect to each individual
property are not available as supplementary capital for any other property or
for the Investment Partnership. The purpose of these reserves is to ensure
funding is available for repairs and other expenditures which may be needed for
the designated property. At December 31, 1996 and 1995, these assets were
maintained in demand deposit accounts with various financial institutions.
Investment Partnership reserves represent the amount that is available to
supplement the Operating Partnerships' property reserves, or to pay certain
operating expenses of the Investment Partnership. At December 31, 1996 and 1995
these assets were invested in certificates of deposits, U.S. government
obligations, commercial paper and demand deposit accounts. Cost approximated
market value at December 31, 1996 and 1995.
Rental Property:
- - ----------------
Rental property is held for investment and is recorded at cost, net of any
provisions for value impairment. Upon the sale, retirement or disposition of
assets the carrying value and related accumulated depreciation are eliminated
from the accounts and any resulting gain or loss is recorded.
Depreciation is computed on the straight-line and accelerated methods using
estimated useful lives of 27.5 years in general for buildings, 25 years for
improvements, and 5 to 10 years for furniture and equipment.
Income Taxes:
- - -------------
The Partnership is not taxed on its income. The partners are taxed in their
individual capacities upon their share of the Partnership's taxable loss. During
1996, 1995, and 1994, the following low-income housing tax credits were
generated by the Partnership:
(In Thousands) 1996 1995 1994
---- ---- ----
Low-income housing tax credits $2,957 $2,952 $2,948
19
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
The Revenue Reconciliation Act of 1990 permitted the Partnership to accelerate
low-income housing tax credits to individual taxpayers who held interests on
October 26, 1990. Consequently, the Partnership has passed the accelerated
credit through to all qualifying partners of record on October 26, 1990. During
1990, the accelerated low-income housing tax credit was $4,104,000. The housing
credit for subsequent tax years must be reduced on a pro rata basis by the
amount of the increased credit. Non-qualifying unitholders will receive the
original unaccelerated low-income housing tax credit for the remaining
qualifying tax years of their investment.
Use of Estimates:
-----------------
The preparation of the financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Fair Value of Financial Instruments:
------------------------------------
The following disclosure of the estimated fair value of financial instruments
is made in accordance with the requirements of Financial Accounting Standards
Board Statement No. 107, Disclosure About Fair Value of Financial instruments.
The fair value of Cash, Deposits and Assets limited as to use is equal to their
carrying amount. Given the nature of the components of the Partnership's term
debt, including interest rates, repayment terms and restrictions, management
believes because of excessive costs that estimation of fair value is
impracticable.
2. Related Party Transactions:
---------------------------
The Trust provides certain administrative services for the Investment
Partnership, for which, if charged, the Partnerships are required to reimburse
the Trust. No such charges by the Trust were made in any year presented.
General Partners or affiliates of General Partners of the Investment and the
Operating Partnerships provide certain management, investing, and accounting
services to various Operating Partnerships for which a management fee is
charged; the amount of such fees, including incentive management fees, were
$756,000, $814,000 and $836,000 in 1996, 1995 and 1994, respectively, including
$176,000, $170,000, and $166,000 in 1996, 1995 and 1994, respectively to an
affiliate of NHT, Inc.
Two Operating Partnerships have entered into land leases of 51 years and 99
years with affiliates of the General Partners. The Operating Partnerships
prepaid the first ten to fifteen years of the leases at a cost of approximately
$330,000 and account for the prepaid leases using the interest method.
The Partnership is also obligated to pay NHT, Inc. a supervisory management fee
equal to .5% of the annual gross revenues of the Operating Partnerships in
which an affiliate of a Trust member is not the property manager. This fee
amounted to $51,000, $51,000 and $42,000 in 1996, 1995 and 1994, respectively.
Additionally, the Partnership has an obligation to pay an annual program
management fee to NHT, Inc. equal to the lesser of approximately $264,000,
$256,000 and $249,000 in 1996, 1995 and 1994, respectively or .5% of the
aggregate cost of all properties acquired by the Operating Partnerships as of
December 31, 1996, 1995 and 1994. The fees paid in 1996, 1995 and 1994 were
$185,000, $269,000 and $264,000, respectively. The balance accrued for these
fees was $195,000, $65,000 and $27,000 as of December 31, 1996, 1995 and 1994,
respectively.
20
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
3. Term Debt:
----------
Concurrent with the Investment Partnership's investment in the Operating
Partnerships, the Operating Partnerships assumed the outstanding mortgage loans
payable from the sellers and also issued promissory notes payable to the
sellers.
The mortgage loans were originally issued under various provisions of the
National Housing Act from HUD, FmHA, or various state/local housing agencies.
The mortgage loan agreements generally require the Operating Partnerships to
comply with the terms of regulatory agreements with governmental agencies.
These agreements govern, among other things, the funding of replacement
reserves and escrows for taxes and insurance, annual distribution to partners
and rental of units to low-income individuals and or/families. These loans are
collateralized by the Operating Partnerships' land, buildings, and rental
income. They have maturity dates ranging from January 1999 to November 2028 and
bear interest at rates varying from 7% to 11.25%.
As a result of the defaults of mortgages on two properties as more fully
described in NOTES 5 AND 6, THE RELATED TERM DEBT IN THE AMOUNT OF $2,742,000
HAS BEEN CLASSIFIED IN LIABILITIES SUBJECT TO COMPROMISE AT DECEMBER 31, 1996
AND AS CURRENT AT DECEMBER 31, 1995.
Substantially all of the promissory notes are collateralized by a second
mortgage on the Operating Partnerships, land and buildings and are primarily
nonamortizing until the properties are refinanced or sold. The notes bear
interest at rates ranging from non-interest bearing to 11.25% with principal
and interest due at various dates, some of which are not determinable as they
are contingent upon certain events, such as sale or refinancing of a property.
Included in promissory notes is a note and related accrued interest in the
amount of $2,131,000 and $1,965,000 at December 31, 1996 and 1995 which is due
to an affiliate of the Investment Partnership.
Estimated principal requirements on these loans during the next five years and
thereafter are
(in thousands):
1997 $ 933
1998 980
1999 1,003
2000 1,084
2001 1,163
Thereafter 62,566
--------
Total $ 67,729
========
4. Uncertainties:
--------------
HUD Housing Assistance Payments (HAP) Contracts:
------------------------------------------------
Many of the Operating Partnerships receive their revenues from HUD under the
terms of Housing Assistance Payments Contracts ("HAP Contracts"), which provide
for rental assistance payments to the Operating Partnerships on behalf of low-
income tenants who meet certain qualifications. At the present
21
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
time, HUD is considering various alternatives to continuing project-based
subsidies, which may include the nonrenewal of the existing HAP contracts
between the Operating Partnerships and HUD. HUD is considering replacing the
project-based subsidy program with a tenant voucher system, which would allow
residents to use the vouchers to pay rent at any project of their choice. Most
proposals call for restructuring debt on assisted housing to reflect current
market values and reducing subsidized rents accordingly. At the present time,
it is not possible to determine the ultimate changes that HUD might make to the
subsidy program, if any, or the impact of any change upon the future operations
of the Operating Partnerships and, as a result, the Investment Partnership.
The Operating Partnerships received approximately $6,273,000 of rental
assistance payments from HUD for the year ended December 31, 1996.
5. Impairment of Long-Lived Assets:
--------------------------------
The Investor Partnership has two Fort Worth, Texas Operating Partnerships which
had been in default of their mortgage obligations for two properties with
mortgages held by HUD. In November 1995, the General Partner was notified that
the mortgage loans on these two properties had been acquired from HUD by a
Texas bank who demanded that the mortgages be brought current immediately. On
March 14, 1996 the bank notified the General Partner that the properties would
be foreclosed upon if the related mortgages were not paid in full by April 2,
1996. On March 26 and 28, 1996 the General Partner filed a petition for relief
under Chapter 11 of the Bankruptcy Code for each of the two Operating
Partnerships.
In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of", which requires impairment losses to be recognized
for long-lived assets used in operations when indicators of impairment are
present and the undiscounted cash flows are not sufficient to recover the
assets' carrying amount. The impairment loss is measured by comparing the
fair value of the asset to its carrying amount. The Investment Partnership has
adopted Statement 121 in the first quarter of 1996. The new impairment rules
resulted in the recognition of an impairment loss of $2.3 million related to
the two properties referred to above that was charged against operations in the
first quarter of 1996. The fair value was based on the purchase price of the
mortgages of the two Operating Partnerships.
The financial statements for these two properties were audited by other
auditors who expressed uncertainty in their audit reports about the ability of
these two operating partnerships to continue as going concerns. The bankruptcy
hearing is currently scheduled for April 10, 1997. In the event these two
properties are unable to successfully reorganize as a result ot the Chapter 11
filings, the related impact is not expected to be material to the Investment
Partnership which expects to continue to operate as a going concern entity.
Further, if the lender is successful in its foreclosure proceedings, the debt
and related accrued interest would be recorded as an extraordinary gain in the
period the foreclosure is consummated. A foreclosure or sale of the properties
would result in adverse tax consequences to the investors of the Investor
Partnership, including the recapture of a portion of the low income housing tax
credits allocated to these two properties as well as a reduction of tax credits
in future years.
22
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS, CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Combined separate condensed financial information for the two Operating
Partnerships at December 31, 1996 and 1995 is as follows:
1996 1995
---------- ----------
Total Assets $1,390,000 $3,594,000
---------- ----------
Total Liabilities $3,791,000 $3,684,000
---------- ----------
Total Revenues $1,159,000 $1,180,000
---------- ----------
Net Loss $2,311,000 $ 319,000
---------- ----------
6. Liabilities Subject to Compromise:
On March 26 and 28, 1996, the two Fort Worth, Texas Operating Partnerships (see
Note 5) filed petitions for relief under Chapter 11 of the Bankruptcy Code in
the Northern District of Texas, Fort Worth Division.
Under Chapter 11, certain claims (including the mortgage notes payable) against
each of the Operating Partnerships in existence prior to the filing are
automatically stayed while the Operating Partnerships continue business
operations as a debtor-in-possession. The claims have been reflected in the
accompanying balance sheet as "liabilities subject to compromise". Additional
claims may arise subsequent to the filing date resulting from various sources,
including a determination of allowed claims by the bankruptcy court. The
additional claims will be reflected as "liabilities subject to compromise" when
the likelihood of the claim is probable and the allowed claim can be reasonably
estimated.
As of the date of this report, the Operating Partnerships have submitted their
proposed Plans of Reorganization. It is indeterminable at this time what
impact, if any, the Plans of Reorganization will have on the Operating
Partnerships. Management believes that a Plan, once filed and approved, will
allow each of the Operating Partnerships to continue as a going concern; but
there can be no assurance that the court will approve such a plan.
Liabilities subject to compromise consist of the following as of December 31,
1996:
Mortgage notes payable $2,742,000
Accrued interest
mortgage notes
payable 381,000
Promissory notes 353,000
Accounts payable and
accrued expenses 132,000
----------
$3,608,000
==========
23
<PAGE>
PART III
--------
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership has no officers and directors. Officers and trustees of the
General Partner are as follows:
<TABLE>
<CAPTION>
Name Age Office Term Expires
- - ---- ---- -------- ------------
<S> <C> <C> <C>
Charles R. Santer 41 President, Chief Executive Officer and Trustee 1998
Robert M. Snow 44 Vice President, Secretary and Trustee 1998
Joseph R. Kasberg 44 Assistant Treasurer and Trustee 1998
Susan E. Basting 35 Controller and Treasurer 1998
</TABLE>
CHARLES R. SANTER is president and chief executive officer of the National
Affordable Housing Trust and NHT, Inc. Previously he served as chief executive
officer of the Ohio Real Estate Commission and as president of a Columbus, Ohio
real estate company. Mr. Santer graduated from Ohio University.
ROBERT M. SNOW is vice president of National Affordable Housing Trust, Inc. and
NHT, Inc. Mr. Snow is in charge of asset management for NHTLP and has been an
officer since 1992. Mr. Snow received a Bachelor's Degree from Lafayette
University.
JOSEPH R. KASBERG is vice president and chief financial officer for National
Church Residences. Mr. Kasberg, a certified public accountant, has been a
financial officer of National Affordable Housing Trust, Inc. since July 1988.
Mr. Kasberg received a Bachelor's Degree in Accounting from The Ohio State
University in 1974 and an MBA from Xavier University in 1985.
SUSAN E. BASTING is Treasurer of the National Affordable Housing Trust, Inc. and
NHT, Inc. Ms. Basting, a certified public accountant and certified management
accountant, worked in public accounting and accounting management prior to
joining the staff. Ms. Basting is a graduate of Wright State University.
ITEM 11 EXECUTIVE COMPENSATION
National Housing Trust Limited Partnership has no officers or directors.
However, as outlined in the offering, various fees and reimbursements are paid
to the General Partners and affiliates. The following is a summary of such fees
paid or accrued for the years ended December 31, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
Fee or (In thousands)
Reimbursement Type Payee 1996 1995 1994
- - ------------------- -------------- ------ ----- -----
<S> <C> <C> <C> <C>
Property management fees General Partners of
Operating Partnerships $ 756 $ 814 $ 836
Partnership management fees NHT, Inc. $ 315 $ 307 $ 291
</TABLE>
24
<PAGE>
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
None.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership has not had material transactions or business relationships with
NHT, Inc. or its affiliates, except as described in Items 8, 9 and 10.
PART IV
-------
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as a part of this report:
1. Financial Statements
The combined financial statements, related notes, and accountant's
report listed below are included herein:
Page
----
Independent Auditors' Reports - Ernst & Young LLP 11
Combined balance sheets as of December 31, 1996 and 1995 12
Combined statements of operations for the years ended
December 31, 1996, 1995 and 1994 14
Combined statements of partners' capital for the years ended
December 31, 1996, 1995 and 1994 15
Combined statements of cash flows for the years ended
December 31, 1996, 1995 and 1994 16
Notes to combined financial statements 17
2. Financial Statement Schedules
Schedule I 29
Schedule III 31
All other schedules have been omitted. The required information is not
present or is not present in amounts sufficient to require submission
of the schedules.
(b) Reports on 8-K:
None.
25
<PAGE>
3. Exhibits
-----------
(a) Exhibits
Exhibit No. Description
- - ----------- --------------
*3.1 Form of Amended and Restated Agreement of Limited Partnership
of the Registrant (attached to the Prospectus as Exhibit A)
*3.2 Certificate of Limited Partnership of the Registrant.
*10.1 Escrow Agreement between FirsTier Bank, N.A. and Registrant.
*10.2 Form of Purchase and Sale Agreement (including form of
Purchase Money Note).
*10.3 Form of Operating Partnership Agreement.
**10.4 Guarantee Agreement between the Trust and the Partnership.
**10.5 Letter Agreement between the Trust and the Selling Agent
relating to capitalization of the General Partner.
**10.6 Letter Agreement between the Trust and the General Partner
relating to capitalization of the General Partner.
**10.7 Letter Agreement between National Church Residences and the
Selling Agent relating to withdrawal from the Trust or from
Operating Partnerships by Retirement Housing Foundation or
its affiliates.
**10.8 Letter Agreement between Retirement Housing Foundation and
the Selling Agent relating to withdrawal from the Trust or
from Operating Partnerships by Retirement Housing Foundation
or its affiliates.
**10.9 Letter Agreement between the Trust and the Selling Agent
relating to the repayment or refinancing of Purchase Money
Notes.
**10.10 Letter Agreement between National Church Residences that the
Selling Agent relating to the repayment or refinancing of
Purchase Money Notes.
**10.11 Letter Agreement between Retirement Housing Foundation and
the Selling Agent relating to the repayment or refinancing of
Purchase Money Notes.
26
<PAGE>
***10.12(a) Purchase and Sale Agreement, with amendments, by and among
Willow Creek Apartments, Ltd., Willow Park Apartments, Ltd.,
Willow Garden Apartments, and Willow Rock Apartments, Ltd.,
and the March Company dated May 6, 1988.
***10.13(a) Operating Partnership Agreement for W-R Apartments, L.P.,
dated March 2, 1989.
***10.12(b) Purchase and Sale Agreement with amendments, by and among
Trinidad Apartments, and Springchase Apartments.
***10.13(b) Operating Partnership Agreement for Trinidad Apartments and
Springchase Apartments.
***10.12(c) Purchase and Sale Agreement with amendments, by and among
Melrose Village.
***10.13(c) Operating Partnership Agreement for Melrose Village, Limited
Partnership, dated December 1, 1989.
***10.12(d) Purchase and Sale Agreement with amendments, by and among
Aspen Apartments.
***10.13(d) Operating Partnership Agreement for Aspen NHT Apartments
Limited Partnership, dated December 28, 1989.
***10.12(e) Purchase and Sale Agreement with amendments, by and among
Bingham Terrace Apartments.
***10.13(e) Operating Partnership Agreement for Bingham Terrace Limited
Partnership, dated December 29, 1989.
***10.12(f) Purchase and Sale Agreement with amendments, by and among
Coal Township Elderly, Hazelwood Apartments, and Mahanoy
Elderly.
***10.13(f) Operating Partnership Agreement for Coal Township Elderly,
Hazelwood Apartments, and Mahanoy Elderly dated December 29,
1989.
***10.12(g) Purchase and Sale Agreement with amendments, by and among
Research Park and Young Manor.
***10.13(g) Operating Partnership Agreement for RP Limited Dividend
Housing Association Limited Partnership and YM Limited
Dividend Housing Association Limited Partnership, dated
December 31, 1989.
27
<PAGE>
****10.12(h) Purchase and Sale Agreement with amendments, by and among
West Allegheny Partnership, L.P.
****10.13(h) Operating Partnership Agreement for West Allegheny
Partnership, L.P., dated March 27, 1990.
99.1 Reports of other Independent Auditors
* Filed under the identical Exhibit Number in Amendment No. 2 to the
Registrant's Registration Statement on Form S-11 (Commission File No. 33-
15285) and incorporated herein by reference.
** Filed under the identical Exhibit Number on Form 10-K for the fiscal year
ended December 31, 1987 and incorporated herein by reference.
*** Filed under the identical Exhibit Number on Form 8-Ks filed for the 1989
Operating Partnership acquisitions identified in note #1 to the Combined
Financial Statements and incorporated herein by reference.
**** Filed under the identical Exhibit Number on Form 8-K filed for the 1990
Operating Partnership acquisition identified in note #1 to the Combined
Financial Statements and incorporated herein by reference.
28
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT-NATIONAL HOUSING TRUST
LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
Condensed Balance Sheets December 31,
------------------------
1996 1995
-------- --------
(In Thousands)
<S> <C> <C>
Assets
Current assets:
Cash $ 279 $ 253
Accounts receivable, Operating Partnerships 548 525
------- -------
Total current assets 827 778
Notes receivable, Operating Partnership 283 283
------- -------
$ 1,110 $ 1,061
======= =======
Liabilities and Partners' Capital
Current liabilities:
Accounts payable, primarily general partner $ 200 $ 68
(Equity) deficit in Operating Partnerships 4,617 (750)
Partners' Capital (Deficit) (3,707) 1,743
------- -------
$ 1,110 $ 1,061
======= =======
Condensed Statements of Operations Years Ended December 31
----------------------------------
1996 1995 1994
------- ------- --------
(In Thousands)
Revenues:
Program management fees from Operating
Partnerships $ 157 $ 157 $ 156
Interest 15 15 19
------- ------- -------
172 172 175
------- ------- -------
Expenses:
Program management fees, general partner $ 315 $ 307 $ 291
Administrative 58 70 109
------- ------- -------
373 377 400
------- ------- -------
Loss before equity in Operating Partnerships (201) (205) (225)
Equity in loss of Operating Partnerships (5,248) (2,950) (3,005)
------- ------- -------
Net loss $(5,449) $(3,155) $(3,230)
======= ======= =======
</TABLE>
29
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
SCHEDULE I
CONDENSED FINANCIAL INFORMATION OF REGISTRANT-NATIONAL HOUSING TRUST
LIMITED PARTNERSHIP (CONTINUED)
<TABLE>
<CAPTION>
Condensed Statements of Cash Flows Years Ended December 31
--------------------------
1996 1995 1994
-------- ------- -------
(In Thousands)
<S> <C> <C> <C>
Cash used in operating activities $ (92) $(207) $(379)
Financing activities, distributions from Operating
Partnerships, net 118 99 64
----- ----- -----
Increase/(decrease) in cash $ 26 $(108) $(315)
===== ===== =====
</TABLE>
Notes to Condensed Financial Statements
Note A - Basis of Presentation:
In the financial statements of National Housing Trust Limited Partnership
(NHTLP), its investment in substantially wholly-owned Operating Partnerships is
stated at cost plus equity in undistributed earnings and less losses of the
Operating Partnerships since the date of acquisition.
Note B - Notes Receivable, Operating Partnership:
The notes receivable from an Operating Partnership bear interest at varying
rates, are repayable out of distributable cash flow and are due through 2006.
30
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
FOR YEAR ENDED DECEMBER 31, 1996
( 1 OF 3)
(In Thousands)
<TABLE>
<CAPTION>
COST
CAPITALIZED GROSS
INITIAL COST TO SUBSEQUENT TO AMOUNT AT WHICH CARRIED
PARTNERSHIP ACQUISITION AT CLOSE OF PERIOD
-------------------------------------------------------------------
PARTNERSHIP BUILDINGS & BUILDINGS &
NAME DESCRIPTION ENCUMBRANCES LAND IMPROVEMENT IMPROVEMENTS LAND IMPROVEMENTS TOTAL
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stygler Village Low-income housing project $5,333 $4,717 $ 82 $4,799 $4,799
Located in Gahanna, Ohio
St. Martins Low-income housing project 1,571 2,094 96 2,190 2,190
Located in Seattle, Washington
Willow Creek Low-income housing project 1,074 $123 1,573 107 $123 1,479 1,602
Located in Bartlesville, OK
Willow Gardens Low-income housing project 1,319 94 1,630 73 94 1,703 1,797
Located in Bartlesville, OK
Willow Park Low-income housing project 1,200 157 1,513 120 157 1,633 1,790
Located in Bartlesville, OK
Willow Rock Low-income housing project 1,280 148 1,508 152 148 1,660 1,808
Located in Bartlesville, OK
Springchase Low-income housing project 1,645 300 1,909 134 428 562
Located in Fort Worth, TX
Trinidad Low-income housing project 1,450 250 1,745 115 408 523
Located in Fort Worth, TX
Wildwood I Low-income housing project 1,155 123 1,783 109 123 1,861 1,984
Located in Columbus, OH
Wildwood II Low-income housing project 946 117 1,526 46 117 1,527 1,644
Located in Columbus, OH
Wildwood III Low-income housing project 1,079 178 1,725 178 1,700 1,878
Located in Columbus, OH
LIFE ON WHICH
DEPRECIATION IN
LATEST INCOME
PARTNERSHIP ACCMULATED DATE STATEMENTS
NAME DESCRIPTION DEPRECIATION ACQUIRED IS COMPUTED
- - --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stygler Village Low-income housing project $1,450 10/07/88 27 1/2 years
Located in Gahanna, Ohio
St. Martins Low-income housing project 646 1/31/89 27 1/2 years
Located in Seattle, Washington
Willow Creek Low-income housing project 422 3/02/89 27 1/2 years
Located in Bartlesville, OK
Willow Gardens Low-income housing project 487 3/02/89 27 1/2 years
Located in Bartlesville, OK
Willow Park Low-income housing project 464 3/02/89 27 1/2 years
Located in Bartlesville, OK
Willow Rock Low-income housing project 471 3/02/89 27 1/2 years
Located in Bartlesville, OK
Springchase Low-income housing project 12 12/31/89 27 1/2 years
Located in Fort Worth, TX
Trinidad Low-income housing project 13 10/31/89 27 1/2 years
Located in Fort Worth, TX
Wildwood I Low-income housing project 469 12/01/89 27 1/2 years
Located in Columbus, OH
Wildwood II Low-income housing project 383 12/01/89 27 1/2 years
Located in Columbus, OH
Wildwood III Low-income housing project 438 12/01/89 27 1/2 years
Located in Columbus, OH
</TABLE>
CONTINUED
31
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
FOR YEAR ENDED DECEMBER 31, 1996
( 2 OF 3)
(In Thousands)
<TABLE>
<CAPTION>
COST
CAPITALIZED GROSS
INITIAL COST TO SUBSEQUENT TO AMOUNT AT WHICH CARRIED
PARTNERSHIP ACQUISITION AT CLOSE OF PERIOD
-------------------------------------------------------------------
PARTNERSHIP BUILDINGS & BUILDINGS &
NAME DESCRIPTION ENCUMBRANCES LAND IMPROVEMENT IMPROVEMENTS LAND IMPROVEMENTS TOTAL
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Melrose Village Low-income housing project 620 89 983 89 983 1,072
Located in Findlay, OH
Summit Square Low-income housing project 1,811 105 3,327 7 105 3,334 3,439
Located in Dayton, OH
Washington Court Low-income housing project 564 81 932 81 922 1,003
House Located in Washington CH
OH
Griggs Village Low-income housing project 323 36 610 36 601 637
Located in Columbus, OH
Hebron Village Low-income housing project 372 45 603 45 603 643
Located in Hebron, OH
Aspen I Low-income housing project 949 70 997 18 70 1,015 1,085
Located in Gaylord, MI
Birch Lake Low-income housing project 808 56 805 58 56 863 919
Located in Ludington, MI
Century Place Low-income housing project 2,287 138 1,990 477 138 2,467 2,605
Located in Greenville, MI
Glendale Low-income housing project 394 27 414 27 414 441
Located in Scottville, MI
Lakeside Low-income housing project 1,277 76 1,023 239 76 1,262 1,338
Located in Cadillac, MI
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION IN
LATEST INCOME
PARTNERSHIP ACCUMULATED DATE STATEMENTS IS
NAME DESCRIPTION DEPRECIATION ACQUIRED COMPUTED
- - -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Melrose Village Low-income housing project 253 12/01/89 27 1/2 years
Located in Findlay, OH
Summit Square Low-income housing project 857 12/01/89 27 1/2 years
Located in Dayton, OH
Washington Court Low-income housing project 238 12/01/89 27 1/2 years
House Located in Washington CH
OH
Griggs Village Low-income housing project 155 12/01/89 27 1/2 years
Located in Columbus, OH
Hebron Village Low-income housing project 155 12/01/89 27 1/2 years
Located in Hebron, OH
Aspen I Low-income housing project 260 12/28/89 27 1/2 years
Located in Gaylord, MI
Birch Lake Low-income housing project 215 12/28/89 27 1/2 years
Located in Ludington, MI
Century Place Low-income housing project 519 12/28/89 27 1/2 years
Located in Greenville, MI
Glendale Low-income housing project 108 12/28/89 27 1/2 years
Located in Scottville, MI
Lakeside Low-income housing project 293 12/28/89 27 1/2 years
Located in Cadillac, MI
</TABLE>
CONTINUED
32
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
FOR YEAR ENDED DECEMBER 31, 1996
( 3 OF 3)
(In Thousands)
<TABLE>
<CAPTION>
COST
CAPITALIZED GROSS
INITIAL COST TO SUBSEQUENT TO AMOUNT AT WHICH CARRIED
PARTNERSHIP ACQUISITION AT CLOSE OF PERIOD
-------------------------------------------------------------------
PARTNERSHIP BUILDINGS & BUILDINGS &
NAME DESCRIPTION ENCUMBRANCES LAND IMPROVEMENT IMPROVEMENTS LAND IMPROVEMENTS TOTAL
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Park Terrace Low-income housing project 936 73 1,065 73 1,084 1,157
Located in Williamston, MI
Traverse Woods Low-income housing project 948 71 1,054 47 71 1,101 1,172
Located in Petoskey, MI
Traverse Woods Low-income housing project 1,585 117 1,733 622 117 2,355 2,472
II Located in Petoskey, MI
Bingham Terrace Low-income housing project 1,243 16 1,092 386 20 1,473 1,493
Located in Cadiz, OH
Coal Township Low-income housing project 4,445 150 4,511 602 150 5,113 5,263
Located in Coal Township, PA
Hazelwood Low-income housing project 4,659 200 4,379 243 200 4,622 4,822
Located in Luzerne County,
PA
Mahanoy Low-income housing project 5,416 125 5,915 797 125 6,712 6,837
Located in Mahanoy City, PA
Research Park Low-income housing project 9,965 850 9,678 482 850 10,070 10,920
Located in Detroit, MI
Young Manor Low-income housing project 6,623 400 6,512 157 400 6,637 7,037
Located in Detroit, MI
West Allegheny Low-income housing project 2,648 50 836 4,044 50 4,881 4,931
Located in Philadelphia, PA
---------------------------------------------------------------------------------
TOTALS $65,925 $4,265 $69,982 $8,964 $3,968 $75,900 $79,868
=================================================================================
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION IN
LATEST INCOME
PARTNERSHIP ACCUMULATED DATE STATEMENTS IS
NAME DESCRIPTION DEPRECIATION ACQUIRED COMPUTED
- - -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Park Terrace Low-income housing project 278 12/28/89 27 1/2 years
Located in Williamston, MI
Traverse Woods Low-income housing project 280 12/28/89 27 1/2 years
Located in Petoskey, MI
Traverse Woods Low-income housing project 494 12/28/89 27 1/2 years
II Located in Petoskey, MI
Bingham Terrace Low-income housing project 236 12/29/89 40 years
Located in Cadiz, OH
Coal Township Low-income housing project 1,240 12/29/89 27 1/2 years
Located in Coal Township, PA
Hazelwood Low-income housing project 1,142 12/29/89 27 1/2 years
Located in Luzerne County,
PA
Mahanoy Low-income housing project 1,623 12/29/89 27 1/2 years
Located in Mahanoy City, PA
Research Park Low-income housing project 2,463 12/31/89 27 1/2 years
Located in Detroit, MI
Young Manor Low-income housing project 1,647 12/31/89 27 1/2 years
Located in Detroit, MI
West Allegheny Low-income housing project 599 3/27/90 40 years
Located in Philadelphia, PA
------------------------------------------
TOTALS $18,310
=========
</TABLE>
33
<PAGE>
Schedule III, Continued
(In Thousands)
<TABLE>
<CAPTION>
December 31,
-------------------------
Real Estate: 1996 1995 1994
- - -------------- ------- ------- -------
<S> <C> <C> <C>
Balance at beginning of period: $81,868 $80,788 $79,538
Additions during period:
Improvements 1,120 1,080 1,250
Deductions during period **: 3,120 None None
------- ------- -------
Balance at end of period *: $79,868 $81,868 $80,788
======= ======= =======
Accumulated Depreciation:
- - -------------------------
Balance at beginning of period: $16,744 $13,981 $11,221
Additions during period:
Depreciation expense 2,386 2,763 2,760
Deductions during period: 820 None None
------- ------- -------
Balance at end of period: $18,310 $16,744 $13,981
======= ======= =======
</TABLE>
* Aggregate costs for federal income tax purposes were $79,868,000, $81,868,000
and $80,788,000 at December 31, 1996, 1995, and 1994 respectively.
** Includes deductions for impairment loss and write off of fully depreciated
assets.
34
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) or the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
National Housing Trust Limited Partnership
By: NHT, Inc. General Partner
Date: March 21, 1997 /s/Charles R. Santer
----------------------------------------------
Charles R. Santer, President
and Chief Executive Officer, NHT, Inc.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Date: March 21, 1997 By /s/Charles R. Santer
------------------------------------
Charles R. Santer, Trustee
President and CEO, NHT, Inc.
Date: March 21, 1997 By /s/Robert M. Snow
------------------------------------
Robert M. Snow, Trustee,
Vice President and Secretary, NHT, Inc.
Date: March 21, 1997 By /s/Susan E. Basting
------------------------------------
Susan E. Basting, Trustee
Controller and Treasurer, NHT, Inc.
35
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,313,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,110,000
<PP&E> 78,423,000
<DEPRECIATION> 20,379,000
<TOTAL-ASSETS> 70,340,000
<CURRENT-LIABILITIES> 3,629,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (3,693,000)
<TOTAL-LIABILITY-AND-EQUITY> 70,340,000
<SALES> 12,434,000
<TOTAL-REVENUES> 12,689,000
<CGS> 0
<TOTAL-COSTS> 14,640,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,490,000
<INCOME-PRETAX> (5,504,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,504,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,504,000)
<EPS-PRIMARY> (5.42)
<EPS-DILUTED> (5.42)
</TABLE>
