June 27, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC. 20549
Boston Financial Qualified Housing Tax Credits L. P. II
Annual Report on Form 10-K for the Year Ended March 31, 1997
Commission File No. 0-17777
Gentlemen:
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act of
1934, there is filed herewith one copy of the subject report.
Very truly yours,
/s/Veronica Curioso
Veronica Curioso
Assistant Controller
QH210K-K.97
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
March 31, 1997 0-17777
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L. P. II
(Exact name of registrant as specified in its charter)
Delaware 04-3002607
(State of organization) (I.R.S. Employer
Identification No.)
101 Arch Street, 16th Floor
Boston, Massachusetts 02110-1106
(Address of Principal executive office) (Zip Code)
Registrant's telephone number, including area code 617/439-3911
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
60,000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Subsection 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]
State the aggregate sales price of partnership units held by nonaffiliates of
the registrant.
$60,000,000 as of March 31, 1997
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS; (2) ANY PROXY OR
INFORMATION STATEMENT; AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OR
(c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on
Form 10-K into
Which the Document
Documents incorporated by reference is Incorporated
Post-Effective Amendment No. 1 to the
Form S-11 Registration Statement, dated
November 8, 1988, File # 33-20719 Part I, Item 1
Report on Form 8-K filed on January 20, 1989 Part I, Item 1
June 21, 1990. November 20, 1990 and December 7, 1990
Acquistion Reports Part I, Item 1
Prospectus - Sections Entitled:
"Estimated Use of Proceeds" Part III, Item 13
"Management Compensation and Fees" Part III, Item 13
"Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions" Part III, Item 13
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1997
TABLE OF CONTENTS
Page No.
PART I
Item 1 Business K-3
Item 2 Properties K-6
Item 3 Legal Proceedings K-14
Item 4 Submission of Matters to a Vote of
Security Holders K-14
PART II
Item 5 Market for the Registrant's Units and
Related Security Holder Matters K-14
Item 6 Selected Financial Data K-15
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations K-16
Item 8 Financial Statements and Supplementary Data K-19
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure K-19
PART III
Item 10 Directors and Executive Officers
of the Registrant K-19
Item 11 Management Remuneration K-21
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-21
Item 13 Certain Relationships and Related Transactions K-21
PART IV
Item 14 Exhibits, Financial Statement Schedule and
Reports on Form 8-K K-23
SIGNATURES K-24
<PAGE>
PART I
Item 1. Business
Boston Financial Qualified Housing Tax Credits L.P. II (the "Partnership") is a
limited partnership formed on March 10, 1988 under the Uniform Limited
Partnership Act of the State of Delaware. The Partnership's partnership
agreement ("Partnership Agreement") authorized the sale of up to 60,000 units of
Limited Partnership Interest ("Units") at $1,000 per Unit, adjusted for certain
discounts. The Partnership raised $59,981,240 ("Gross Proceeds"), net of
discounts of $18,760, through the sale of 60,000 Units. Such amounts exclude
five unregistered Units previously acquired for $5,000 by the Initial Limited
Partner, which is also one of the General Partners. The offering of Units
terminated on October 28, 1988. No further sale of Units is expected.
The Partnership is engaged solely in the business of real estate investment.
Accordingly, a presentation of information about industry segments is not
applicable and would not be material to an understanding of the Partnership's
business taken as a whole. As described more fully under Item 3 - Legal
Proceedings, an affiliate of the Managing General Partner, BF Alabama, Inc., was
assigned a 51% voting interest in the General Partner of Garden Cove Apartments,
Ltd. In addition, an affiliate of the Managing General Partner, Boston Financial
GP-1, L.L.C., assumed the Local General Partner interest in Shannon Creste
Apartments, L.P. As a result, the Partnership is deemed to have control over
Garden Cove and Shannon Creste, and the accompanying financial statements are
presented in combined form to conform with the required accounting treatment
under generally accepted accounting principles. However, this change only
affects the presentation of the Partnership's operating results, not the
business of the Partnership.
The Partnership has invested as a limited partner in forty limited partnerships
("Local Limited Partnerships") which own and operate forty residential apartment
complexes ("Properties") most of which benefit from some form of federal, state
or local assistance programs and all of which qualify for the low-income housing
tax credits ("Tax Credits") that were added to the Internal Revenue Code (the
"Code") by the Tax Reform Act of 1986. The investment objectives of the
Partnership include the following: (i) to provide current tax benefits in the
form of Tax Credits which qualified limited partners may use to offset their
federal income tax liability; (ii) to preserve and protect the Partnership's
capital; (iii) to provide limited cash distributions from property operations
which are not expected to constitute taxable income during the expected duration
of the Partnership's operations; and (iv) to provide cash distributions from
sale or refinancing transactions. There cannot be any assurance that the
Partnership will attain any or all of these investment objectives.
Table A on the following page lists the properties owned by the Local Limited
Partnerships in which the Partnership has invested. Item 7 of this Report
contains other significant information with respect to such Local Limited
Partnerships. As required by applicable rules, the terms of the acquisition of
Local Limited Partnership interests have been described in supplements to the
Prospectus and collected in the post-effective amendment to the Registration
Statement and in a Form 8-K (collectively, the "Acquisition Reports"); such
descriptions are incorporated herein by this reference.
<PAGE>
<TABLE>
<CAPTION>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
(Unaudited)
Local Limited Date Interest
Partnerships* Location Acquired
- -------------------------------------------- ------------------------- --------------------------
<S> <C> <C>
Americus Properties L.P. Americus, GA 10/01/88
Atlantic Terrace L.P. Washington, DC 12/01/88
B&C Housing II Assoc. Tulsa, OK 12/01/88
B&C Housing III Assoc. Moore, OK 10/01/88
Bamberg Properties L.P. Bamberg, SC 01/20/89
Birch Associates Reno, NV 07/10/88
Blair Senior Housing I, L.P. Blair, NE 01/03/89
Brighton Manor Apartments, L.P. Douglasville, GA 12/29/89
Buckfield Housing Assoc. Buckfield, ME 08/01/88
Chapparal Housing Assoc. Midland, TX 12/01/88
DeSoto Associates L.P. DeSoto, MO 03/31/89
Durham Park L.P. Tigard, OR 12/29/88
Eastmont Estates Assoc. Greenburg, PA 12/01/88
Garden Cove Apartments, Ltd. Huntsville, AL 05/11/89
Grayton Pointe Assoc. Macon, GA 12/27/88
La Center Associates, L.P. La Center, KY 03/31/89
Lamar Assoc., L.P. Lamar, AR 12/01/88
Linden Housing Assoc. Inc. Reno, NV 08/01/88
McKinley-Walker Ltd. Fitzgerald, GA 02/08/89
Milo Housing Assoc., L.P. Milo, ME 12/20/89
Monroe Properties L.P. Monroe, GA 12/01/88
Mulberry Assoc. I L.P. Mulberry, AR 12/01/88
Newport Housing Assoc. Newport, ME 08/01/88
Paragould Associates Paragould, AR 12/01/88
San Antonio Ltd., S.E. Aguadilla, PR 10/01/88
Shadow Wood Housing Ltd. Chickasha, OK 12/01/88
Shannon Creste Apts. L.P. Union City, GA 07/10/89
Snapfinger Creste Apts. L.P.** Decatur, GA 12/30/88
Springhill Housing L.P. I Casper, WY 10/01/88
Springhill Housing L.P. II Casper, WY 10/01/88
Springhill Housing L.P. III Casper, WY 10/01/88
Strafford Assoc. L.P. Strafford, MO 03/31/89
Unity Family Housing Assoc. Unity, ME 08/01/88
Ward Manor Associates L.P. Ward, AR 12/01/88
Warrenton Assoc. L.P. Warrenton, MO 03/31/89
Wayne Apartment Project L.P. Boston, MA 12/22/88
Waynesboro Properties L.P. Waynesboro, GA 12/01/88
Willow Creek Housing L.P. Reno, NV 08/01/88
Willowpeg Lane II, L.P. Rincon, GA 10/01/88
Winona Associates I, L.P. Winona, MO 12/01/88
</TABLE>
* The Partnership's interest in profits and losses of each Local Limited
Partnership arising from normal operations is 99%. Profits and losses
arising from sale or refinancing transactions are allocated in accordance
with the respective Local Limited Partnership Agreements.
** The Partnership has written off this investment.
<PAGE>
Although the Partnership's investments in Local Limited Partnerships are not
subject to seasonal fluctuations, the Partnership's equity in losses of Local
Limited Partnerships, to the extent it reflects the operations of individual
Properties, may vary from quarter to quarter based upon changes in occupancy and
operating expenses as a result of seasonal factors.
The Partnership's primary source of working capital is investment income earned
on the Reserves. Additionally, the Partnership expects to receive distributions
from cash flow from operations of its Local Limited Partnership interests. It is
expected that these sources of funds will provide adequate working capital to
the Partnership. At March 31, 1997, the Managing General Partner has designated
approximately $1,018,000 of marketable securities as such Reserve.
Each Local Limited Partnership has, as its general partners ("Local General
Partners"), one or more individuals or entities not affiliated with the
Partnership or its General Partners, with the exception of Garden Cove and
Shannon Creste. In accordance with the partnership agreements under which such
entities are organized ("Local Limited Partnership Agreements"), the Partnership
depends on the Local General Partners for the management of each Local Limited
Partnership. As of March 31, 1997, the following Local Limited Partnerships have
a common Local General Partner or affiliated group of Local General Partners
accounting for the specified percentage of the original investment in Local
Limited Partnerships: (i) B&C Housing II, B&C Housing III, Shadow Wood Housing,
and Chaparral Housing, representing 7.91%, have Interstate Realty as Local
General Partner; (ii) Waynesboro Properties, Monroe Properties, Bamberg
Properties, Americus Properties, McKinley-Walker Ltd. and Willowpeg Village,
representing 3.81%, have Norsouth Corporation as Local General Partner; (iii)
Lamar Associates, Mulberry Associates, Paragould Associates, Ward Manor
Associates, Blair Senior Housing, DeSoto Associates, La Center Associates,
Strafford Associates, Warrenton Associates, and Winona Associates representing
2.26%, have Joseph A. Shepard and the Lockwood Group as Local General Partners;
(iv) Buckfield Housing, Newport Housing, Milo Housing and Unity Family Housing,
representing 2.25%, have Charles B. Mattson and Todd J. Mattson as Local General
Partners; (v) Birch Associates, Linden Housing, and Willow Creek Housing,
representing 3.07% have Robert F. Nielsen, Dennis F. Johnson, and J. Michael
Queenan as Local General Partners; (vi) Springhill Housing I, Springhill Housing
II, and Springhill Housing III, representing 3.73%, have Delwood Ventures, Inc.
as Local General Partner; and (vii) Grayton Pointe Associates and Snapfinger
Creste representing 14.35%, have Bill G. Sanders, Asbury D. Snow, Jr. and the
Sanbury Group as Local General Partners. The Local General Partners of the
remaining Local Limited Partnerships are identified in the Acquisition Reports,
which are incorporated herein by reference.
The Properties owned by Local Limited Partnerships in which the Partnership has
invested are and will continue to be subject to competition from existing and
future apartment complexes in the same areas. The continued success of the
Partnership will depend on many outside factors, most of which are beyond the
control of the Partnership and which cannot be predicted at this time. Such
factors include general economic and real estate market conditions, both on a
national basis and in those areas where the Properties are located, the
availability and cost of borrowed funds, real estate tax rates, operating
expenses, energy costs and government regulations. In addition, other risks
inherent in real estate investment may influence the ultimate success of the
Partnership, including: (i) possible reduction in rental income due to an
inability to maintain high occupancy levels or adequate rental levels; (ii)
possible adverse changes in general economic conditions and adverse local
conditions, such as competitive over-building, or a decrease in employment or
adverse changes in real estate laws, including building codes; and (iii)
possible future adoption of rent control legislation which would not permit
increased costs to be passed on to the tenants in the form of rent increases, or
which would suppress the ability of the Local Limited Partnerships to generate
operating cash flow. Since most of the Properties benefit from some form of
government assistance, the Partnership is subject to the risks inherent in that
area including decreased subsidies, difficulties in finding suitable tenants and
obtaining permission for rent increases. In addition, any Tax Credits allocated
to investors with respect to a Property are subject to recapture to the extent
that the Property or any portion thereof ceases to qualify for the Tax Credits.
Other future changes in federal and state income tax laws affecting real estate
ownership or limited partnerships could have a material and adverse affect on
the business of the Partnership.
The Partnership is managed by Arch Street, Inc., the Managing General Partner of
the Partnership. The other General Partner of the Partnership is Arch Street
Limited Partnership. To economize on direct and indirect payroll costs, the
Partnership, which does not have any employees, reimburses The Boston Financial
Group Limited Partnership, an affiliate of the General Partners, for certain
expenses and overhead costs. A complete discussion of the management of the
Partnership is set forth in Item 10 of this Report.
<PAGE>
Item 2. Properties
The Partnership owns limited partnership interests in forty Local Limited
Partnerships which own and operate forty properties, some of which benefit from
some form of federal, state or local assistance programs and all of which
qualify for the Tax Credit added to the Code by the Tax Reform Act of 1986. The
Partnership's ownership interest in each Local Limited Partnership is 99%.
Each of the Local Limited Partnerships has received an allocation of Tax Credits
from its relevant state tax credit agency. In general, the Tax Credit runs for
ten years from the date the Property is placed in service. The required holding
period (the "Compliance Period") of the Properties is fifteen years. During
these fifteen years, the Properties must satisfy rent restrictions, tenant
income limitations and other requirements, as promulgated by the Internal
Revenue Service, in order to maintain eligibility for the Tax Credit at all
times during the Compliance Period. Once a Local Limited Partnership has become
eligible for the Tax Credits, it may lose such eligibility and suffer an event
of recapture if its Property fails to remain in compliance with the
requirements. To date, none of the Local Limited Partnerships have suffered an
event of recapture of Tax Credits.
In addition, some of the Local Limited Partnerships have obtained one or a
combination of different types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable terms; or iii) loans that have repayment
terms that are based on a percentage of cash flow.
The schedules on the following pages provide certain key information on the
Local Limited Partnership interests acquired by the Partnership.
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mtge. loans
Local Limited Partnership Number committed at through payable at Type Occupancy at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- ---------------------------------------- ---------- -------------- -------------- ------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Americus Properties Limited Partnership
Meadowbrook
Americus, GA 55 $ 333,000 $ 333,000 $ 1,468,278 FmHA 98%
Atlantic Terrace Limited Partnership
Atlantic Terrace
Washington, DC 198 3,073,000 3,073,000 11,194,402 Section 8 95%
B&C Housing Associates, II,
A Limited Partnership
Patrick Henry
Tulsa, OK 56 345,000 345,000 1,555,827 Section 8 96%
B&C Housing Associates, III,
A Limited Partnership
Nottingham Square
Moore, OK 162 1,612,500 1,612,500 4,255,778 Section 8 97%
Bamberg Properties Limited Partnership
Bamberg Garden
Bamberg, SC 24 162,750 162,750 734,888 FmHA 100%
Birch Associates Limited Partnership
Reno Birchwood
Reno, NV 138 780,000 780,000 4,263,129 Section 8 97%
Blair Senior Housing L.P.
Rustic Oaks
Blair, NE 12 78,000 78,000 358,718 FmHA 92%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mtge. loans
Local Limited Partnership Number committed at through payable at Type Occupancy at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- ------------------------------------ ---------- ------------- ------------- ---------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Brighton Manor Apartments,
A Limited Partnership
Brighton Manor
Douglasville, GA 40 1,050,000 1,050,000 1,226,160 None 98%
Buckfield Housing Associates
(A Limited Partnership)
Nezinscott Village
Buckfield, ME 20 234,000 234,000 1,083,930 FmHA 95%
Chapparal Housing Associates, Ltd.,
An Oklahoma Limited Partnership
Chapparal
Midland, TX 124 1,104,050 1,104,050 3,297,766 Section 8 96%
DeSoto Associates III, L.P.
(A Limited Partnership)
Parkview II
DeSoto, MO 24 118,500 118,500 562,715 FmHA 95%
Durham Park Limited Partnership
Durham Park
Tigard, OR 224 4,100,000 4,100,000 5,788,098 None 98%
Eastmont Estates Associates
(A Limited Partnership)
Eastmont Estates
Greenburg, PA 103 950,000 950,000 2,790,433 Section 8 92%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mtge. loans
Local Limited Partnership Number committed at through payable at Type Occupancy at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- ------------------------------------ ---------- -------------- -------------- --------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Garden Cove Apartments, Ltd.
(A Limited Partnership)**
Garden Cove
Huntsville, AL 200 3,264,264 3,264,264 5,112,191 None 92%
Grayton Pointe Apartments, L.P.
Grayton Pointe
Macon, GA 184 2,525,000 2,525,000 4,595,397 None 85%
La Center Associates Limited Partnership
La Center
La Center, KY 12 85,125 85,125 396,989 FmHA 92%
Lamar Associates Limited Partnership
Lamar
Lamar, AR 20 137,250 137,250 624,164 FmHA 95%
Linden Housing Associates, Ltd.
Linden
Reno, NV 40 342,750 342,750 1,403,686 Section 8 88%
McKinley-Walker Limited Partnership
(A Limited Partnership)
McKinley Lane
Fitzgerald, GA 48 330,000 330,000 1,413,669 FmHA 100%
Milo Housing Associates (A Limited Partnership)
Milo
Milo, ME 24 273,000 273,000 1,260,110 FmHA 100%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mtge. loans
Local Limited Partnership Number committed at through payable at Type Occupancy at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- -------------------------------------- ---------- -------------- ------------ --------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Monroe Properties Limited Partnership
Highland Village
Monroe, GA 55 321,750 321,750 1,460,558 FmHA 98%
Mulberry Associates I Limited Partnership
Quail Run
Mulberry, AR 24 164,250 164,250 751,814 FmHA 88%
Newport Housing Associates (A Limited Partnership)
Newport Family
Newport, ME 24 271,500 271,500 1,259,944 FmHA 100%
Paragould Associates I, Limited Partnership
Paragould
Paragould, AR 14 101,625 101,625 465,581 FmHA 93%
San Antonio Limited Dividend Partnership S.E.
Nuevo San Antonio
Aquadilla, PR 100 800,250 800,250 3,841,767 FmHA 100%
Shadow Wood Housing Associates, Limited,
An Oklahoma Limited Partnership
Shadow Wood
Chickasha, OK 61 450,000 450,000 779,841 Section 8 98%
Shannon Creste Apartments, L.P.**
Shannon Creste
Union City, GA 200 3,635,000 3,635,000 6,162,814 None 79%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mtge. loans
Local Limited Partnership Number committed at through payable at Type Occupancy at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- ---------------------------------------- ---------- ------------- -------------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Snapfinger Creste Apartments, L.P.
Snapfinger Creste
Decatur, GA 210 3,850,000 3,850,000 7,439,971 None 61%
Spring Hill Housing Associates I, Ltd.
(A Limited Partnership)
Springhill I
Casper, WY 32 408,500 408,500 1,034,607 Section 8 100%
Spring Hill Housing Associates II, Ltd.
(A Limited Partnership)
Springhill II
Casper, WY 48 597,000 597,000 1,412,729 Section 8 98%
Spring Hill Housing Associates III, Ltd.
(A Limited Partnership)
Springhill III
Casper, WY 47 653,000 653,000 1,496,778 Section 8 94%
Strafford II Rural Housing L.P.
Strafford Arms
Strafford, MO 12 64,500 64,500 293,982 FmHA 100%
Unity Family Housing Associates
(A Limited Partnership)
Unity Family
Unity, ME 20 222,000 222,000 1,008,129 FmHA 100%
Ward Manor Associates I Limited Partnership
Ward Manor
Ward, AR 16 114,750 114,750 523,845 FmHA 86%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mtge. loans
Local Limited Partnership Number committed at through payable at Type Occupancy at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- ----------------------------------------- ---------- -------------- -------------- ------------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Warrenton Associates I, L.P.
(A Limited Partnership)
Warrenton
Warrenton, MO 16 78,375 78,375 374,998 FmHA 100%
Wayne Apartments Project Limited Partnership
(a Massachusetts Limited Partnership)
Wayne
Boston, MA 349 10,937,500 10,600,000 13,892,416 Section 8 99%
Waynesboro Properties Limited Partnership
(A Limited Partnership)
Ashton Place
Waynesboro, GA 36 217,500 217,500 948,278 FmHA 100%
Willow Creek Housing Associates, Ltd.
(A Limited Partnership)
Willow Creek
Reno, NV 25 240,000 240,000 939,220 Section 8 96%
Willowpeg Lane Limited Partnership
(A Limited Partnership)
Willowpeg Lane
Rincon, GA 48 325,500 325,500 1,474,555 FmHA 100%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
Total Paid Mtge. loans
Local Limited Partnership Number committed at through payable at Type Occupancy at
Property Name of March 31, March 31, December 31, of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- ----------------------------------------- ---------- ------------- ------------ -------------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Winona Associates I, L.P.
Winona
Winona, MO 12 62,250 62,250 279,677 FmHA 100%
------- ------------ ----------- -------------
3,057 44,413,439 44,075,939 99,227,832
=======
Less Combined Entities** 6,899,264 6,899,264 11,275,005
------------ ----------- -------------
$37,514,175 $37,176,675 $ 87,952,827
=========== =========== =============
</TABLE>
* FmHA This subsidy, which is authorized under Section 515 of the
Housing Act of 1949, can be one or a combination of different
types of financing. For instance, FmHA may provide: 1) direct
below-market-rate mortgage loans for rural rental housing;
2) mortgage interest subsidies which effectively lower the
interest rate of the loan to 1%; 3) a rental assistance
subsidy to tenants which allows them to pay no more than 30%
of their monthly income as rent with the balance paid by the
federal government; or 4) a combination of any of the above.
Section 8 This subsidy, which is authorized under Section 8 of Title
II of the Housing and Community Development Act of 1974,
allows qualified low-income tenants to pay 30% of their
monthly income as rent with the balance paid by the federal
government.
<PAGE>
One Local Limited Partnership, Wayne Apartment Project L.P., invested in by the
Partnership represents more than 10% of the total capital contributions made to
Local Limited Partnerships by the Partnership. Wayne, a Massachusetts Limited
Partnership, representing 24.6% of the total original investment in the Local
Limited Partnerships, is a 349 unit apartment complex located in Boston,
Massachusetts. Wayne is financed by a combination of private and public sources,
including a first mortgage at 7% interest and financing for a completed
rehabilitation program at 10.75% interest. In addition to this, additional
financing for the rehabilitation program is being provided by the U.S. Housing
and Urban Development at an interest rate of 9.25%.
The duration of the leases for occupancy in the Properties described above are
six to twelve months. The Managing General Partner believes the Properties
described herein are adequately covered by insurance.
Additional information required under this Item, as it pertains to the
Partnership, is contained in Items 1, 7 and 8 of the Report.
Item 3. Legal Proceedings
The Partnership has reached a settlement regarding the legal proceeding
described below.
As previously reported, the Partnership, Garden Cove Apartments LTD. ("Garden
Cove") and the Managing General Partner were involved in litigation with the
former managing general partner of Garden Cove. On March 11, 1996 a jury trial
began. Four days into the trial, an out of court settlement was reached, which
is believed by management to be favorable for the Partnership. Briefly, the
settlement involved a $262,500 payment by the Partnership to the former managing
general partners and a $285,000 payment to a bank which had claims against both
Garden Cove and the former local managing general partners. $375,000 of these
payments were covered by the Partnership's insurance. However, the Partnership
also incurred significant litigation expenses in this matter. The settlement
agreement also included the mutual release of certain liabilities and made
permanent the previously described injunction.
Garden Cove is again involved in litigation. In the current matter, the
project's general contractor claims that there are amounts due it (about
$225,000) under the construction contract. The Partnership was aware of this
potential claim when it settled the previous dispute with the former managing
general partners and did not release them from liability with respect to it. The
Partnership is currently evaluating what liability exposure the Garden Cove
partnership may have in connection with this litigation.
The Partnership is not a party to any other pending legal or administrative
proceeding, and to the best of its knowledge, no other legal or administrative
proceeding is threatened or contemplated against it.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters
There is no public market for the Units, and it is not expected that a public
market will develop. If a Limited Partner desires to sell Units, the buyer of
those Units will be required to comply with the minimum purchase and retention
requirements and investor suitability standards imposed by applicable federal or
state securities laws and the minimum purchase and retention requirements
imposed by the Partnership. The price to be paid for the Units, as well as the
commissions to be received by any participating broker-dealers, will be subject
to negotiation by the Limited Partner seeking to sell his Units. Units will not
be redeemed or repurchased by the Partnership.
The Partnership Agreement does not impose on the Partnership or its General
Partners any obligation to obtain periodic appraisals of assets or to provide
Limited Partners with any estimates of the current value of Units.
As of March 31, 1997, there were 4,130 record holders of Units of the
Partnership.
Cash distributions, when made, are paid annually. For the years ended March 31,
1997, 1996 and 1995, no cash distributions were made.
Item 6. Selected Financial Data
The following table sets forth selected financial information regarding the
Partnership's financial position and operating results. This information should
be read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Financial Statements and Notes
thereto, which are included in Items 7 and 8 of this Report.
<TABLE>
<CAPTION>
March 31, March 31, March 31, March 31, March 31,
1997 1996 1995 1994 1993
------------ ------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Revenue (C) $ 1,265,748 $ 947,856 $ 953,580 $ 996,730 $ 1,070,582
Equity in losses of Local Limited
Partnerships (C) (3,340,844) (2,808,887) (4,475,806) (4,360,009) (4,302,466)
Extraordinary item 265,381 - - - -
Net loss (4,914,046) (3,770,322) (5,531,873) (5,155,439) (5,361,753)
Per Limited Partnership Unit (81.08) (62.21) (91.28) (85.06) (88.47)
Cash, cash equivalents and
marketable securities (C) 1,637,950 1,903,813 3,191,723 3,639,474 3,787,840
Investment in Local Limited
Partnerships, at original cost 49,637,119 49,637,119 48,787,119 48,787,119 48,787,119
Total assets (A) 23,553,010 22,891,866 27,513,613 32,894,160 37,929,733
Total liabilities (C) 11,891,610 6,062,741 6,969,001 6,809,678 6,632,601
Cash distribution - - - - -
Per Limited Partnership Unit - - - - -
Other Data
Passive loss (B) (4,239,701) (4,710,892) (5,841,796) (5,494,466) (5,577,615)
Per Limited Partnership Unit (B) (69.96) (77.73) (96.39) (90.66) (92.03)
Portfolio income (B) 235,195 402,609 204,369 352,145 473,133
Per Limited Partnership Unit (B) 3.88 6.64 3.37 5.81 7.81
Low-Income Housing Tax Credits (B) 8,894,928 8,905,714 8,897,453 8,893,337 8,887,426
Per Limited Partnership Unit (B) 146.77 146.67 146.54 146.47 146.38
Local Limited Partnership interests
owned at end of period 40 40 40 40 40
</TABLE>
(A) Total assets include the net investment in Local Limited Partnerships.
(B) Income tax information is as of December 31, the year end of the
Partnership for income tax purposes. The Low-Income Housing Tax Credit
per Limited Partnership Unit for 1996, 1995, 1994, 1993 and 1992
represents the amount distributed to individual investors. Corporate
investors received $153.93, $154.11, $153.98, $153.91 and $153.82 per
Unit in 1996, 1995, 1994, 1993 and 1992, respectively.
(C) March 31, 1997 revenue includes $1,145,805 of total revenue from Garden
Cove and Shannon Creste that is included in combined revenue on the
statement of operations. March 31, 1996, 1995 and 1994 revenue includes
$775,200, $767,745 and $763,335, respectively, of total revenue from
Garden Cove that is included in combined revenue on the Statement of
Operations.
March 31, 1997 equity in losses of Local Limited Partnerships does not
include $267,382 of losses from Garden Cove and Shannon Creste that have
been combined with the Partnership's loss in the statement of
operations. March 31, 1996, 1995 and 1994 equity in losses of Local
Limited Partnerships does not include $510,735, $568,887 and $514,225,
respectively, of losses from Garden Cove that have been combined with
the Partnership's loss in the Statement of Operations.
March 31, 1997 cash, cash equivalents and marketable securities includes
$18,660 of cash and cash equivalents from Garden Cove and Shannon Creste
that has been combined with the Partnership in the balance sheet. March
31, 1996, 1995 and 1994 cash, cash equivalents and marketable securities
includes, $39,820, $17,488 and $13,642, respectively, of cash and cash
equivalents from Garden Cove that has been combined with the
Partnership's Balance Sheet.
March 31, 1997 total liabilities include $11,628,066 of liabilities from
Garden Cove and Shannon Creste that have been combined with the
Partnership on the balance sheet. March 31, 1996, 1995 and 1994 total
liabilities include $5,248,781, $6,811,086 and $6,665,780, respectively,
of liabilities from Garden Cove that have been combined with the
Partnership's Balance Sheet.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
At March 31, 1997, the Partnership, including the Combined Entities, had cash
and cash equivalents of $318,451 as compared to $164,590 at March 31, 1996. The
increase is primarily attributable to cash distributions received from Local
Limited Partnerships, proceeds from sales of marketable securities in excess of
purchases of marketable securities offset by cash used for operating activities.
The Managing General Partner initially designated 3% of the Gross Proceeds to
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. The Managing General Partner may increase or decrease
such Reserves from time to time, as it deems appropriate. During the year ended
March 31, 1993, the Managing General Partner decided to increase the reserve
level to 4% and it transferred the additional funds to the Reserve account. To
date, approximately $149,000 has been withdrawn from the Reserve account to pay
legal and other costs related to the Mod Rehab issue. Additionally, legal fees
relating to various property issues totaling approximately $25,000 have been
paid from Reserves. The Partnership also advanced approximately $992,000 to four
Local Limited Partnerships.
Management believes that the investment income earned on the Reserves, along
with cash distributions received from Local Limited Partnerships, to the extent
available, will be sufficient to fund the Partnership's ongoing operations.
Reserves may be used to fund Partnership operating deficits, if the Managing
General Partner deems funding appropriate. At March 31, 1997, approximately
$1,018,000 of marketable securities has been designated as Reserves.
At March 31, 1997, the Partnership has committed to make future capital
contributions and to pay future purchase price installments on its investments
in Local Limited Partnerships. These future payments are contingent upon the
achievement of certain criteria as set forth in the Local Limited Partnership
Agreements and total approximately $337,500.
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, as of March 31, 1997, the Partnership had
no contractual or other obligation to any Local Limited Partnership which had
not been paid or provided for, except as disclosed above.
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.
Cash Distributions
No cash distributions were made during the three years ended March 31, 1997.
Based on the results of 1996 operations, the Local Limited Partnerships are not
expected to distribute significant amounts of cash to the Partnership because
such amounts will be needed to fund Property operating costs. In addition, many
of the properties benefit from some type of federal or state subsidy, and as a
consequence, are subject to restrictions on cash distributions. Therefore, it is
expected that only a limited amount of cash will be distributed to investors
from this source in the future.
<PAGE>
Results of Operations
1997 versus 1996
The Partnership's results of operations for the year ended March 31, 1997
resulted in a net loss of $4,914,046 as compared to a net loss of $3,770,322 for
the same period in 1996. The increase in net loss is primarily due to an
increase in equity in losses of Local Limited Partnerships associated with two
Local Limited Partnerships that were affected by weak rental markets, costs
associated with unit turnover and increased maintenance issues. Another Local
Limited Partnership had a significant increase in its loss due to the
recognition of additional rental income and interest refund in the year ended
March 31, 1996. The increase in equity in losses is offset by fewer losses being
recognized in 1997 because more Local Limited Partnerships have cumulative
equity in losses in excess of their total investments as compared to the
previous year, cancellation of debt income recognized in the year ended March
31, 1997 for one Combined Entity and an increase in rental revenue.
Additionally, during the year ended March 31, 1997, the Partnership wrote off
its investment in one Local Limited Partnership (Snapfinger Creste) because
there was evidence of a non-temporary decline in the recoverable amount of the
investment (see section entitled "Property Discussions" for additional
information). These increases to net loss are offset by an increase in rental
revenue due to the combination of Shannon Creste, effective September 1, 1996.
1996 versus 1995
The Partnership's results of operations for the year ended March 31, 1996
resulted in a net loss of $3,770,322 as compared to a net loss of $5,531,873 for
the same period in 1995. The decrease in net loss is primarily due to a decrease
in equity in losses of Local Limited Partnerships. The decrease in equity in
losses of Local Limited Partnerships is due primarily to the receipt by one
property of back rents from HUD, lower operating and maintenance expenses at
certain Local Limited Partnerships and lower interest expense due to the
refinancing of two Local Limited Partnerships' mortgages.
Effect of recently issued Accounting Standards
The Financial Accounting Standards Board has issued Statement of Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which is effective for fiscal years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability. Impairment losses are recognized when events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. The Partnership adopted the new standard for its year ending
March 31, 1997, however, it did not have a significant effect on financial
position or results of operations.
Low-Income Housing Tax Credits
The 1996, 1995 and 1994 Low-Income Housing Tax Credits per Unit for individuals
were $146.77, $146.67 and $146.54, respectively. The 1996, 1995 and 1994
Low-Income Housing Tax Credits per Unit for corporations were $153.93, $154.11
and $153.98, respectively. The Tax Credits per Limited Partnership Unit
stabilized in 1991 at approximately $146.00 per Unit for individuals and $153.00
per Unit for corporations. The credits are expected to be stable for the six
years subsequent to 1991 and then they are expected to decrease as certain
properties reach the end of the ten-year credit period.
Property Discussions
Limited Partnership interests have been acquired in forty Local Limited
Partnerships which own and operate forty rental properties located in fifteen
states, Washington, D.C. and Puerto Rico. Thirty of the properties with 2,325
apartments were newly constructed, and eight properties with 733 apartments were
rehabilitated. All of the properties have completed construction or
rehabilitation and initial rent-up. Most of the forty properties have stable
operations and are operating at break-even or generating operating cash flow.
A few 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 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.
As previously reported, despite high occupancy and a debt restructuring,
Atlantic Terrace, located in Washington, D.C., continues to experience unstable
operations due primarily to costs associated with unit turnover, and increased
maintenance and utility expenses. Deteriorating market conditions are also
impacting the property. The managing agent is addressing these issues through
enhanced tenant screening, social programs and more careful expense monitoring.
Garden Cove, located in Huntsville, Alabama, continues to generate operating
deficits which are being funded from Partnership Reserves. The Managing General
Partner continues to work with the management agent to find further ways to
curtail the operating shortfalls. Inasmuch as the property remains unable to
fully cover debt service from operating income due to depressed rents, the
Managing General Partner has entered into workout negotiations which include
exploring opportunities to restructure the first mortgage. This restructure may
result in converting a portion of the first mortgage into a cash flow second
mortgage. It is likely that without a modification, the lender will exercise its
rights to foreclose on the property. A foreclosure would result in recapture for
investors of one third of the tax credit benefits, the allocation of taxable
income to the Partnership and loss of future benefits associated with this
property.
Shadow Wood Housing, located in Chickasha, Oklahoma, continues to generate
operating deficits resulting from high security costs, low Section 8 contract
rates and high debt service payments. The Local General Partners are working to
improve operating results through contract rent increases and debt service
relief. The management agent is currently funding operating deficits.
As previously reported, Snapfinger Creste and Grayton Pointe, located in Georgia
and which share the same Local General Partner, continue to be affected by a
weak rental market and deferred maintenance issues. The Local General Partner is
obligated to fund deficits and has made advances and deferred management fees.
The Partnership expects to transfer its interests in Snapfinger Creste through a
foreclosure by July 1, 1997 unless current negotiations are successful in
averting this event. In recent weeks, extensive negotiations have not provided
for a satisfactory agreement between the parties, however, the Managing and
Local General Partners will continue their discussions with the Lender to avoid
the transfer. If negotiations with the lenders and Local General Partner prove
to be unsatisfactory, it is unlikely that the Partnership will be able to retain
its interest in these properties for the long-term. This may result in recapture
for investors of one third of the tax credit benefits in 1997, the allocation of
taxable income to the Partnership and loss of future benefits associated with
these properties. The Partnership's investment in Snapfinger Creste has been
written off as of March 31, 1997.
Negotiations with the lender for Grayton Pointe are still underway. To date,
negotiations have been unsuccessful which has resulted in a foreclosure posting
by the second mortgagee for July 1, 1997. The Managing General Partner continues
to negotiate with the first and second mortgagees to create as favorable a
disposition as possible to reduce the taxable impact on the Partnership's
partners. If negotiations with the lenders and Local General Partner prove to be
unsatisfactory, it is unlikely that the Partnership will be able to retain its
interest in these properties for the long-term. This may result in recapture for
investors of one third of the tax credit benefits in 1997, the allocation of
taxable income to the Partnership and loss of future benefits associated with
these properties. The carrying value of this investment for financial reporting
purposes is zero.
The mortgage on Shannon Creste was successfully modified in January 1997. An
affiliate of the Managing General Partner assumed the local general partner
interest and management at the property. Currently, property management is
finalizing its capital needs assessment and will initiate an extensive capital
improvement plan during the summer 1997.
<PAGE>
Inflation and Other Economic Factors
Inflation had no material impact on the operating or financial conditions of the
Partnership for the years ended March 31, 1997, 1996 and 1995.
Since most of the properties benefit from some form of government assistance,
the Partnership is subject to the risks inherent in that area including
decreased subsidies, difficulties in finding suitable tenants and obtaining
permission for rent increases. In addition, any Tax Credits allocated to
investors with respect to a property are subject to recapture to the extent that
the property or any portion thereof ceases to qualify for the Tax Credits.
Certain of the properties listed in this report are located in areas suffering
from poor economic conditions. Such conditions could have an adverse effect on
the rent or occupancy levels at such properties. Nevertheless, management
believes that the generally high demand for below market rate housing will tend
to negate such factors. However, no assurance can be given in this regard.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
On November 10, 1995, the firm of Arthur Andersen LLP was dismissed as the
principal accountant to audit the registrant's financial statements. The report
on the financial statements of the registrant by Arthur Andersen LLP for the
year ending March 31, 1995 did not contain an adverse opinion or disclaimer of
opinion and was not qualified or modified as to uncertainty, audit scope or
accounting principles. The decision to change accountants was approved by the
Board of Directors of the General Partner of the registrant.
During the year ending March 31, 1995 and for the subsequent interim period,
April 1, 1995 through November 10, 1995, there were no disagreements with Arthur
Andersen LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure.
The firm of Coopers & Lybrand L.L.P. has been engaged as principal accountant to
audit the registrant's financial statements.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Managing General Partner of the Partnership is Arch Street, Inc., a
Massachusetts corporation (the "Managing General Partner"), an affiliate of The
Boston Financial Group Limited Partnership ("Boston Financial"), a Massachusetts
limited partnership. George Fantini, Jr. and Donna C. Gibson, Vice Presidents of
the Managing General Partner, resigned their positions effective June 30, 1995
and September 13, 1996, respectively.
<PAGE>
The Managing General Partner was incorporated in February 1988. William E.
Haynsworth is the Chief Operating Officer of the Managing General Partner and
had the primary responsibility for evaluating, selecting and negotiating
investments for the Partnership. The Investment Committee of the Managing
General Partner approved all investments. The names and positions of the
principal officers and the directors of the Managing General Partner are set
forth below.
Name Position
Georgia Murray Managing Director, Treasurer and
Chief Financial Officer
Fred N. Pratt, Jr. Managing Director
William E. Haynsworth Managing Director, Vice President, and
Chief Operating Officer
Paul F. Coughlan Vice President
Peter G. Fallon, Jr. Vice President
Randolph G. Hawthorne Vice President
A. Harold Howell Vice President
The other General Partner of the Partnership is Arch Street Limited Partnership,
a Massachusetts Limited Partnership ("Arch Street L.P.") that was organized in
August 1988. The General Partners of Arch Street L.P. are Messrs. Howell and
Haynsworth.
The Managing General Partner provides day-to-day management of the Partnership.
Compensation is discussed in Item 13 of this report. Such day-to-day management
does not include the management of the Properties.
The business experience of each of the persons listed above is described below.
There is no family relationship between any of the persons listed in this
section.
Georgia Murray, age 46, is a graduate of Newton College of the Sacred Heart
(B.A., 1972). She joined Boston Financial Management Company in 1973 and is
currently a Senior Vice President of Boston Financial. Ms. Murray is a member of
the Senior Leadership Team and Board of Directors and leads the Property
Management division. Previously, she led the company's Institutional Tax Credit
Team and managed Boston Financial's Investment Real Estate and Asset Management
divisions. Ms. Murray currently serves as a director of Atlantic Bank and Trust
Company, President of the Institute for Multi-Family Housing, Director of the
Investment Program Association and member of the Direct Investment Committee of
the Securities Industry Association. Previously, she served as the Industry
Advisor to the Management Policy Review Committee of the Massachusetts Housing
Finance Agency and as a commissioner of the Boston Public Facilities Department.
Fred N. Pratt, Jr., age 52, graduated from Tufts University and the Amos Tuck
School of Business Administration at Dartmouth College. Mr. Pratt was one of
the original employees of Boston Financial when it was founded in late 1969. He
currently serves as Boston Financial's Chief Executive Officer and Chairman of
the Board of the General Partner of Boston Financial.
William E. Haynsworth, age 57, graduated from Dartmouth College and Harvard Law
School. Mr. Haynsworth was Acting Executive Director of the Massachusetts
Housing Finance Agency, where he was also General Counsel, prior to becoming a
Vice President of Boston Financial in 1977 and a Senior Vice President in 1986.
He has also served as Director of Non-Residential Development of the Boston
Redevelopment Authority and as an associate of the law firm of Goodwin, Procter
& Hoar in Boston. Mr. Haynsworth is a member of the firm's Senior Leadership
Team and participates in the structuring of real estate investments and the
development of new business opportunities.
Paul F. Coughlan, age 53, is a graduate of Brown University (A.B., 1965) and
served in the United States Navy before entering the securities business in
1969. He was employed as an Account Executive by Bache & Company until 1972, and
then by Reynolds Securities Inc. He joined Boston Financial in 1975 and is
currently a Senior Vice President on the Institutional Tax Credit Team.
Peter G. Fallon, Jr., age 58, graduated from the College of The Holy Cross
(B.S., 1960) and Babson College (M.B.A., 1965). He joined Boston Financial in
1970, shortly after its formation, and is currently a Senior Vice President and
a member of the Investment Real Estate Division with responsibility for the
marketing of the firm's Institutional Tax Credit product.
Randolph G. Hawthorne, age 47, is a graduate of the Massachusetts Institute of
Technology (B.S., 1971) and Harvard Graduate School of Business (M.B.A., 1973).
He joined Boston Financial in 1973 and has served as Treasurer and managed the
firm's Investment Real Estate division. He is a Senior Vice President serving on
the Investment Acquisitions Team with 22 years of experience in property
acquisitions. Mr. Hawthorne has primary responsibility for structuring real
estate investments and developing new business opportunities. He is a member of
the Investment Committee. He is Chairman of the National Multi -Housing Council,
a past president of the National Housing and Rehabilitation Association, a
member of the Residential Development Council of the Urban Land Institute as
well as a member of the Advisory Board of the Berkeley Real Estate Center at the
University of California. A speaker at industry conferences, he is also on the
Editorial Advisory Board of the Tax Credit Advisor.
A. Harold Howell, age 56, graduated from Harvard College and the Amos Tuck
School of Business Administration at Dartmouth College. He has been employed by
Boston Financial since 1970. For most of this time, he has been active in the
overall administration of Boston Financial and its affiliates but has also been
involved in other areas of its business. Mr. Howell has served as head of Boston
Financial's Property Management Division and also as its Chief Financial Officer
and Chief Executive Officer. He currently is a Senior Vice President and is in
charge of a program being developed for properties managed by Boston Financial
whereby heads-of-households who want to further their education can enroll in a
program on-site which teaches economic self sufficiency, computer and internet
skills, problem solving skills and related real-world skills. Mr. Howell
recently spent a two year sabbatical from Boston Financial as a Visiting
Professor at the Instituto de Estudios Superiores de la Empresa, a highly
regarded International M.B.A. Program in Barcelona, Spain. While there, he
taught courses in business strategy and real estate finance.
Item 11. Management Remuneration
Neither the directors or officers of Arch Street, Inc., the partners of Arch
Street L.P., nor any other individual with significant involvement in the
business of the Partnership receives any current or proposed remuneration from
the Partnership.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person is known to the Partnership to be the beneficial owner of more than 5%
of the outstanding Units.
The equity securities registered by the Partnership under Section 12(g) of the
Act consist of 60,000 Units, all of which have been sold to the public. Holders
of Units are permitted to vote on matters affecting the Partnership only in
certain unusual circumstances and do not generally have the right to vote on the
operation or management of the Partnership.
As of March 31, 1997, Arch Street L.P. owns five (unregistered) Units not
included in the 60,000 Units sold to the public.
Except as described in the preceding paragraph, neither Arch Street, Inc., Arch
Street L.P., Boston Financial, nor any of their executive officers, directors,
partners, or affiliates is the beneficial owner of any Units. None of the
foregoing persons possesses a right to acquire beneficial ownership of Units.
The Partnership does not know of any existing arrangement that might at a later
date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions
The Partnership was required to pay certain fees to and reimburse certain
expenses of the Managing General Partner or its affiliates (including Boston
Financial) in connection with the organization of the Partnership and the
offering of Units. The Partnership is also required to pay certain fees to and
reimburse certain expenses of the Managing General Partner or its affiliates
(including Boston Financial) in connection with the administration of the
Partnership and its acquisition and disposition of investments in Local Limited
Partnerships. In addition, the General Partners are entitled to certain
Partnership distributions under the terms of the Partnership Agreement. Also, an
affiliate of the General Partners will receive up to $10,000 from the sale or
refinancing proceeds of each Local Limited Partnership, if it is still a limited
partner at the time of such transaction. All such fees, expenses and
distributions paid in the three years ending March 31, 1997 are described below
and in the sections of the Prospectus entitled "Estimated Use of Proceeds",
"Management Compensation and Fees" and "Profits and Losses for Tax Purposes, Tax
Credits and Cash Distributions". Such sections are incorporated herein by
reference.
The Partnership is permitted to enter into transactions involving affiliates of
the Managing General Partner, subject to certain limitations established in the
Partnership Agreement as follows:
Organizational fees and expenses and selling expenses
In accordance with the Partnership Agreement, the Partnership was required to
pay certain fees to and reimburse expenses of the General Partners and others in
connection with the organization of the Partnership and the offering of its
Limited Partnership Units. Selling commissions, fees and accountable expenses
related to the sale of the Units totaling $7,056,416 have been charged directly
to Limited Partners' equity. In connection therewith, $4,781,240 of selling
expenses and $2,275,176 of offering expenses incurred on behalf of the
Partnership have been paid to an affiliate of the General Partner. The
Partnership has capitalized an additional $50,000 of organizational costs which
was reimbursed to an affiliate of the General Partner. These costs are fully
amortized as of March 31, 1997. Total organization and offering expenses
exclusive of selling commissions and underwriting advisory fees did not exceed
5.5% of the Gross Proceeds and organizational and offering expenses, inclusive
of selling commissions and underwriting advisory fees, did not exceed 15.0% of
the Gross Proceeds. No organizational fees and expenses and selling expenses
were paid during the three years ended March 31, 1997.
Acquisition fees and expenses
In accordance with the Partnership Agreement, the Partnership was required to
pay acquisition fees to and reimburse acquisition expenses of the Managing
General Partner or its affiliates for selecting, evaluating, structuring,
negotiating and closing the Partnership's investments in Local Limited
Partnerships. Acquisition fees total 8% of the gross offering proceeds.
Acquisition expenses include such expenses as legal fees and expenses, travel
and communications expenses, costs of appraisals and accounting fees and
expenses. Acquisition fees totaling $4,800,000 for the closing of the
Partnership's Local Limited Partnership Investments have been paid to an
affiliate of the Managing General Partner. Acquisition expenses totaling
$761,180 were incurred and have been reimbursed to an affiliate of the Managing
General Partner. No acquisition fees or expenses were paid during the three
years ended March 31, 1997.
<PAGE>
Asset Management Fees
In accordance with the Partnership Agreement, an affiliate of the Managing
General Partner is paid an annual fee for services in connection with the
administration of the affairs of the Partnership. The affiliate currently
receives the base amount of $6,820 per property (as adjusted by the CPI factor)
of Gross Proceeds annually as the Asset Management Fee. Fees earned in each of
the three years ended March 31, 1997 are as follows:
1997 1996 1995
--------- ----------- ----------
Asset management fees $272,905 $265,722 $258,864
Salaries, benefits and administrative expense reimbursements
An affiliate of the Managing General Partner is reimbursed for the cost of the
Partnership's salaries and benefits. The reimbursements are based upon the size
and complexity of the Partnership's operations. Reimbursements paid or payable
in each of the three years ended March 31, 1997 are as follows:
1997 1996 1995
------------ ----------- ----------
Salaries and benefits $107,933 $114,145 $105,507
Property Management Fees
On August 20, 1996, Boston Financial Property Management ("BFPM"), an affiliate
of the Managing General Partner, became the management agent for Grayton Pointe
Apartments, a property in which the Partnership has invested. The property
management fee charged is 4% of the property's gross revenues. Included in
operating expenses in the summarized income statements in Note 4 to the Combined
Financial Statements is $8,864 of fees earned by BFPM for the period ended
December 31, 1996.
Additionally, BFPM is the management agent for Garden Cove and Shannon Creste,
properties in which the Partnership has invested. The property management fee
charged is equal to 5% and 4%, respectively, of cash receipts. Included in the
Combined Statements of Operations for the three years ended March 31, 1997 are
fees earned by BFPM for the years ended December 31, 1996, 1995 and 1994,
respectively, are as follows:
1997 1996 1995
----------- ----------- ----------
Property management fees $50,797 $36,328 $35,806
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the
Partnership, Arch Street V, Inc. and Arch Street V Limited Partnership receive
1% of cash distributions made to partners. No cash distributions have been paid
to the General Partners during the three years ended March 31, 1997.
Additional information concerning cash distributions and other fees paid or
payable to the Managing General Partner and its affiliates and the reimbursement
of expenses paid or payable to Boston Financial and its affiliates during each
of the three years ended March 31, 1997 is presented in Note 6 to the Financial
Statements.
Information required under this Item is contained in Note 6 to the Financial
Statements presented as a separate section of this Report.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report
In response to this portion of Item 14, the financial statements, financial
statement schedules and the auditors' reports relating thereto are submitted as
a separate section of this Report. See Index on page F-1 hereof.
The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
(28)(1) of this Report.
All other financial statement schedules and exhibits for which provision is made
in the applicable accounting regulations of the Securities and Exchange
Commission are not required under related instructions or are inapplicable and
therefore have been omitted.
(a)(3) Exhibit Index contained herein
(a)(3)(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended
March 31, 1997.
(a)(3)(c) Exhibits
<PAGE>
Number and Description in Accordance with
Item 601 of Regulation S-K
27.Financial Data Schedule
28.Additional Exhibits
(a) 28.1 Reports of Other Independent Auditors
(b) Audited financial statements of
Local Limited Partnerships
1. Wayne Apartments Project Limited Partnership
2. Snapfinger Creste Apartments Limited Partnership
(a)(3)(d) None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
By:Arch Street Inc.
its Managing General Partner
By: /s/William E. Haynsworth Date:
William E. Haynsworth,
Managing Director, Vice President and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Managing General
Partner of the Partnership and in the capacities and on the dates indicated:
By: /s/William E. Haynsworth Date:
William E. Haynsworth,
Managing Director, Vice President and
Chief Operating Officer
By: /s/Fred N. Pratt Date:
Fred N. Pratt, Jr.,
A Managing Director
<PAGE>
Item 8. Financial Statement and Supplementary Data
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Annual Report on Form 10-K for the Year Ended March 31, 1997
Index
Page No.
Reports of Independent Accountants
For the years ended March 31, 1997 and 1996 F-2
For the year ended March 31, 1995 F-3
Financial Statements
Combined Balance Sheets - March 31, 1997 and 1996 F-4
Combined Statements of Operations - Years Ended
March 31, 1997, 1996 and 1995 F-5
Combined Statements of Changes in Partners' Equity (Deficiency)
- Years Ended March 31, 1997, 1996 and 1995 F-6
Combined Statements of Cash Flows - Years Ended
March 31, 1997, 1996 and 1995 F-7
Notes to the Combined Financial Statements F-9
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated
Depreciation F-25
See also Index to Exhibits on Page K-24 for the financial statements of the
Local Limited Partnerships included as a separate exhibit in this Annual Report
on Form 10-K.
Other schedules have been omitted as they are either not required or the
information required to be presented therein is available elsewhere in the
financial statements and the accompanying notes and schedules.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Boston Financial Qualified Housing Tax Credits L.P. II:
We have audited the accompanying combined balance sheets of Boston Financial
Qualified Housing Tax Credits L.P. II (A Limited Partnership) (the
"Partnership") as of March 31, 1997 and 1996 and the related combined statements
of operations, changes in partners' equity (deficiency) and cash flows and the
financial statement schedule listed in Item 14(a) of this Report on Form 10-K,
for the years ended March 31, 1997 and 1996. These financial statements and
financial statement schedule are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits. As of March 31,
1997 and 1996, 74% and 71% of total assets, and for the years ended March 31,
1997 and 1996, 88% and 100% of the equity in losses of Local Limited
Partnerships, reflected in the financial statements of the Partnership, relate
to Local Limited Partnerships for which we did not audit the financial
statements. The financial statements of these Local Limited Partnerships were
audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to those investments in Local Limited
Partnerships, is based solely on the reports of other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements and financial statement schedule referred to above present
fairly, in all material respects, the combined financial position of the
Partnership as of March 31, 1997 and 1996, and the combined results of its
operations and its cash flows for the years ended March 31, 1997 and 1996, in
conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, present fairly, in
all material respects, the information required to be included therein.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 25, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Boston Financial Qualified Housing Tax Credits L.P. II:
We have audited the accompanying combined statements of operations, changes in
partners' equity (deficiency) and cash flows of Boston Financial Qualified
Housing Tax Credits L.P. II (A Limited Partnership) and Garden Cove Apartments
LTD. (the Partnerships) for the year ended March 31, 1995. These financial
statements are the responsibility of the Partnerships' management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of certain of the Local
Limited Partnerships for the year ended March 31, 1995, the investments in which
are recorded using the equity method of accounting (see Note 2). The equity in
losses of these partnerships represents 70% of the equity in loss of the Local
Limited Partnerships for the year ended March 31, 1995. Those financial
statements were audited by other auditors whose reports have been furnished to
us and our opinion, insofar as it relates to the amounts included for the Local
Limited Partnerships, is based solely on the reports of other auditors.
We conducted our audit 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. 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 audit and the reports of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audit and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the results of operations and cash flows of the Partnerships for the year ended
March 31, 1995, in conformity with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
June 16, 1995
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
<TABLE>
COMBINED BALANCE SHEETS
MARCH 31, 1997 AND 1996
<CAPTION>
1997 1996
----------- -------
Assets
<S> <C> <C>
Cash and cash equivalents $ 318,451 $ 164,590
Marketable securities, at fair value (Note 3) 1,319,499 1,739,223
Accounts receivable 100,572 51,424
Notes and interest receivable (Note 5) - 81,908
Insurance proceeds receivable (Note 11) - 375,000
Tenant security deposits 30,976 32,644
Investments in Local Limited Partnerships
(Note 4) 8,506,576 14,387,959
Rental property at cost, net of
accumulated depreciation (Note 7) 12,293,738 5,645,672
Mortgage escrow deposits 139,547 50,121
Operating reserves 337,353 -
Replacement reserves 74,617 69,262
Deferred fees (net of accumulated amortization
of $147,413 and $39,786, respectively) 337,219 264,472
Other assets 94,462 29,591
------------- ------------
Total Assets $ 23,553,010 $ 22,891,866
============= ============
Liabilities and Partners' Equity
Mortgage notes payable (Note 8) $ 11,271,738 $ 5,133,950
Note payable 9,800 -
Accounts payable to affiliate (Note 6) 251,522 86,178
Accounts payable and accrued expenses (Note 11) 269,009 774,568
Accrued interest payable (Note 8) 38,128 38,291
Security deposits payable 51,413 29,754
------------- ------------
Total Liabilities 11,891,610 6,062,741
------------- ------------
Minority interests in Local Limited Partnerships (149,588) 97,466
------------- ------------
Commitments (Note 10)
General, Initial and Investor Limited Partners' Equity 11,811,938 16,725,984
Net unrealized gains (losses) on marketable securities (950) 5,675
------------- ------------
Total Partners' Equity 11,810,988 16,731,659
------------- ------------
Total Liabilities and Partners' Equity $ 23,553,010 $ 22,891,866
============= ============
</TABLE>
The accompanying notes are an integral part of these combined
financial statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
<TABLE>
COMBINED STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 1997, 1996 AND 1995
<CAPTION>
1997 1996 1995
----------- ----------- -------
<S> <C> <C> <C>
Revenue:
Rental $ 1,093,703 $ 752,707 $ 731,535
Investment (Note 4) 112,513 151,685 122,578
Other 59,532 43,464 99,467
------------ ------------ ------------
Total Revenue 1,265,748 947,856 953,580
------------ ------------ ------------
Expenses:
Asset management fees - related party (Note 6) 272,905 265,722 258,864
General and administrative
(includes reimbursements to an affiliate
in the amount of $107,933, $114,145 and
$105,507) (Note 6) 203,382 221,974 260,775
Rental operations, exclusive of depreciation 592,266 464,173 385,886
Property management fees, related party (Note 6) 50,797 36,328 35,806
Interest (Note 8) 636,940 498,745 598,572
Write-off of Investment in Local
Limited Partnership 812,892 - -
Depreciation 385,057 279,083 278,509
Amortization 150,878 148,374 196,981
------------ ------------ ------------
Total Expenses 3,105,117 1,914,399 2,015,393
------------ ------------ ------------
Loss before equity in losses of Local
Limited Partnerships and cancellation
of indebtedness (1,839,369) (966,543) (1,061,813)
Minority interest in loss of Local
Limited Partnership 786 5,108 5,746
Equity in losses of Local Limited
Partnerships (Note 4) (3,340,844) (2,808,887) (4,475,806)
------------ ------------ ------------
Loss before extraordinary item (5,179,427) (3,770,322) (5,531,873)
Extraordinary gain on cancellation of indebtedness
(Note 12) 265,381 - -
------------ ------------ ------------
Net Loss $ (4,914,046) $(3,770,322)$ (5,531,873)
============ =========== ==================
Net Loss allocated:
To the General Partners $ (49,140) $ (37,703) $ (55,319)
To the Limited Partners (4,864,906) (3,732,619) (5,476,554)
------------ ------------ ------------
$ (4,914,046) $(3,770,322) $ (5,531,873)
============ =========== ============
Loss before extraordinary item per Limited
Partnership Unit (60,000 Units) $ (85.46) $ (62.21) $ (91.28)
============ =========== ===========
Extraordinary gain on cancellation of indebtedness
per Limited Partnership Unit (60,000 Units) $ 4.38 $ - $ -
============= ========== =========
Net Loss per Limited
Partnership Unit (60,000 Units) $ (81.08) $ (62.21) $ (91.28)
============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these combined
financial statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
<TABLE>
COMBINED STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
YEARS ENDED MARCH 31, 1997, 1996 AND 1995
<CAPTION>
Net
Initial Investor Unrealized
General Limited Limited Gain
Partners Partners Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1994 $ (267,036) $ 5,000 $ 26,290,215 $ (52,017) $ 25,976,162
Net change in unrealized losses
on marketable securities
available for sale - - - (2,251) (2,251)
Net Loss (55,319) - (5,476,554) - (5,531,873)
----------- --------- ------------ --------- --------------
Balance at March 31, 1995 (322,355) 5,000 20,813,661 (54,268) 20,442,038
Net change in unrealized losses
on marketable securities
available for sale - - - 59,943 59,943
Net Loss (37,703) - (3,732,619) - (3,770,322)
----------- --------- ------------ --------- --------------
Balance at March 31, 1996 (360,058) 5,000 17,081,042 5,675 16,731,659
Net change in unrealized losses
on marketable securities
available for sale - - - (6,625) (6,625)
Net Loss (49,140) - (4,864,906) - (4,914,046)
------------ --------- ------------ --------- --------------
Balance at March 31, 1997 $ (409,198) $ 5,000 $ 12,216,136 $ (950) $ 11,810,988
=========== ========= ============ ========= ==============
</TABLE>
The accompanying notes are an integral part of these combined
financial statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
<TABLE>
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1997, 1996 AND 1995
<CAPTION>
1997 1996 1995
------------ ------------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Loss $ (4,914,046) $(3,770,322) $(5,531,873)
Adjustments to reconcile net loss to
net cash used for operating activities:
Equity in losses of Local Limited Partnerships 3,340,844 2,808,887 4,475,806
Extraordinary gain on cancellation of indebtness (265,381) - -
Minority interest in loss of
Local Limited Partnerships (786) (5,108) (5,746)
Cash distribution income included in cash
distributions from Local Limited Partnerships (5,913) (1,046) -
(Gain) loss on sale of marketable securities 5,473 (723) 48,486
Write-off of Investment in Local Limited Partnership 812,892 - -
Depreciation and amortization 535,935 427,457 475,489
Decrease in due to developer - (282,030) -
Increase (decrease) in cash arising from changes in operating assets and
liabilities:
Interest receivable (3,861) (6,222) (6,842)
Insurance proceeds receivable 375,000 - -
Accounts receivable (7,883) 9,870 (4,789)
Tenant security deposits 3,946 (84) 906
Other assets (55,008) 22,727 (1,153)
Accounts payable to affiliates 165,344 14,513 7,383
Accounts payable and accrued expenses (685,397) 269,322 13,439
Accrued interest (163) (148) (7,530)
Security deposits payable (2,240) (1,570) (1,027)
------------- ------------ ------------
Net cash used for operating activities (701,244) (514,477) (537,451)
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from notes receivable 85,769 - -
Purchases of marketable securities (958,177) (2,275,163) (2,587,506)
Proceeds from sales and maturities
of marketable securities 1,365,803 3,174,072 3,514,274
Capital contributions to Local Limited Partnerships - (850,000) -
Cash distributions received from Local
Limited Partnerships 450,686 74,771 62,377
Cash received upon assumption of General Partner
interest in a Combined Entity 8,593 - -
Purchase of rental property (23,870) (100,508) -
Advances to affiliate (85,789) (6,777) (44,108)
Replacement reserve deposits - (37,159) (25,454)
Disbursement from replacement reserves (5,355) 113,213 -
------------ ------------ ------------
Net cash provided by investing activities 837,660 92,449 919,583
------------ ------------ ------------
Cash flows from financing activities:
Repayment of mortgage notes payable (31,021) (19,902) (10,392)
Proceeds from refinancing - - 32,864
Payment of deferred charges - - (46,837)
Mortgage escrow deposits (2,418) (7,737) 47,401
Advances from developer - - 124,586
Advances from affiliate 50,884 - -
------------ ------------ ------------
Net cash provided by (used for) financing activities 17,445 (27,639) 147,622
------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of these combined financial
statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
<TABLE>
COMBINED STATEMENTS OF CASH FLOWS (continued)
FOR THE YEARS ENDED MARCH 31, 1997, 1996 AND 1995
<CAPTION>
1997 1996 1995
------------ ----------- -------
<S> <C> <C> <C>
Net increase (decrease) in cash and cash
equivalents 153,861 (449,667) 529,754
Cash and cash equivalents, beginning 164,590 614,257 84,503
------------ ----------- -----------
Cash and cash equivalents, ending $ 318,451 $ 164,590 $ 614,257
============ =========== ===========
Supplemental disclosure:
Cash paid for interest $ 637,103 $ 498,893 $ 606,102
============ =========== ===========
Non-cash disclosure:
Release of amount Due to
developer in connection
with the Garden Cove settlement $ - $1,261,445 $ -
============ ========== ===========
Conversion of project expense
loan liability to capital contribution,
special limited partner of Shannon Creste $ 245,524 $ - $ -
============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these combined
financial statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements
1. Organization
Boston Financial Qualified Housing Tax Credits L.P. II (the "Partnership") was
formed on March 10, 1988 under the laws of the State of Delaware for the primary
purpose of investing, as a limited partner, in other limited partnerships
("Local Limited Partnerships"), each of which owns and operates apartment
complexes benefiting from some form of federal, state or local assistance, and
each of which qualifies for low-income housing tax credits. The Partnership's
objectives are to: (i) provide current tax benefits in the form of tax credits
which qualified investors may use to offset their federal income tax liability;
(ii) preserve and protect the Partnership's capital; (iii) provide limited cash
distributions which are not expected to constitute taxable income during
Partnership operations; and (iv) provide cash distributions from sale or
refinancing transactions. The General Partners of the Partnership are Arch
Street, Inc., which serves as the Managing General Partner, and Arch Street
Limited Partnership, which also serves as the Initial Limited Partner. Both of
the General Partners are affiliates of The Boston Financial Group Limited
Partnership ("Boston Financial"). The fiscal year of the Partnership ends on
March 31.
The Partnership's partnership agreement ("Partnership Agreement") authorized the
sale of up to 60,000 units of Limited Partnership Interest ("Units") at $1,000
per Unit, adjusted for certain discounts. The Partnership raised $59,981,240
("Gross Proceeds"), net of discounts of $18,760, through the sale of 60,000
Units. Such amounts exclude five unregistered Units previously acquired for
$5,000 by the Initial Limited Partner, which is also one of the General
Partners. The offering of Units terminated on October 28, 1988.
Generally, profits, losses, tax credits and cash flows from operations are
allocated 99% to the Limited Partners and 1% to the General Partners. Net
proceeds from a sale or refinancing will be allocated 95% to the Limited
Partners and 5% to the General Partners after certain priority payments.
Under the terms of the Partnership Agreement, the Partnership initially
designated 3% of the Gross Proceeds from the sale of Units as a reserve for
working capital of the Partnership and contingencies related to ownership of
Local Limited Partnership interests. During the year ended March 31, 1993, the
Managing General Partner decided to increase the Reserve level to 4%, and
accordingly, it transferred the additional funds to the Reserve. At March 31,
1997, the Managing General Partner has designated approximately $1,018,000 of
marketable securities as such Reserve.
2. Significant Accounting Policies
Basis of Presentation and Combination
The Partnership accounts for its investments in Local Limited Partnerships, with
the exception of the Combined Entities (defined below), using the equity method
of accounting, because the Partnership does not have a majority control of the
major operating and financial policies of the Local Limited Partnerships in
which it invests. Under the equity method, the investment is carried at cost,
adjusted for the Partnerships share of income or loss of the Local Limited
Partnerships, additional investments and cash distributions from the Local
Limited Partnerships. Equity in income or loss of the Local Limited Partnerships
is included currently in the Partnership's operations. The Partnership has no
obligation to fund liabilities of the Local Limited Partnerships beyond its
investment, therefore, a Local Limited Partnership's investment will not be
carried below zero. To the extent that equity losses are incurred when a Local
Limited Partnership's respective investment balance has been reduced to zero,
the losses will be suspended to be used against future income. Distributions
received from Local Limited Partnerships whose respective investment balance has
been reduced to zero are included in income.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
2. Significant Accounting Policies (continued
Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the
Partnership. These fees and expenses are included in the Partnership's
Investments in Local Limited Partnerships and are being amortized on a
straight-line basis over 35 years. The Partnership recognizes a decline in the
carrying value of its investment in Local Limited Partnerships when there is
evidence of a non-temporary decline in the recoverable amount of the investment.
There is a possibility that the estimates relating to reserves for non-temporary
declines in carrying value of investments in Local Limited Partnerships may be
subject to material near term adjustments.
The Partnership, as a limited partner in the Local Limited Partnerships, is
subject to risks inherent in the ownership of property which are beyond its
control, such as fluctuations in occupancy rates and operating expenses,
variations in rental schedules, proper maintenance and continued eligibility for
tax credits. If the cost of operating a property exceeds the rental income
earned thereon, the Partnership may deem it in its best interest to voluntarily
provide funds in order to protect its investment.
The Managing General Partner has elected to report results of the Local Limited
Partnerships on a 90-day lag basis because the Local Limited Partnerships report
their results on a calendar year basis. Accordingly, the financial information
of the Local Limited Partnerships that is included in the accompanying combined
financial statements is as of December 31, 1996, 1995 and 1994.
On July 25, 1991, an affiliate of the Partnership's General Partners, SLP, Inc.
deemed it necessary to take control of the management of Garden Cove Apartments,
Ltd. ("Garden Cove"), a Local Limited Partnership in which the Partnership has
invested. SLP, Inc. organized BF Alabama, Inc., which was admitted as an
additional General Partner with a 51% voting interest in management matters
related to Garden Cove Apartments, Ltd. and is responsible for the management of
the property. BF Alabama, Inc. replaced the previous management agent with
Boston Financial Property Management, an affiliate of the General Partner. Since
the controlling General Partner of Garden Cove is an affiliate of the
Partnership, these combined financial statements include all financial activity
of Garden Cove Apartments, Ltd. for the years ended December 31, 1996, 1995 and
1994. All significant inter-company balances and transactions have been
eliminated.
On August 20, 1996, an affiliate of the Managing General Partner, Boston
Financial GP-1, L.L.C. became the Local General Partner, responsible for all
management decisions in Shannon Creste Apartments, L.P. ("Shannon Creste").
Boston Financial GP-I L.L.C. replaced the previous management agent with Boston
Financial Property Management, an affiliate of the General Partner. Since the
Local General Partner of Shannon Creste is now an affiliate of the Partnership,
these combined financial statements include financial activity of Shannon Creste
for the period from September 1, 1996 through December 31, 1996. All significant
intercompany balances and transactions have been eliminated.
The Partnership has elected to report the results of Garden Cove and Shannon
Creste on a 90-day lag basis, consistent with the presentation of the financial
information of all Local Limited Partnerships. As used herein, the "Combined
Entities" refers to Garden Cove and Shannon Creste after the transfer of control
described above.
Cash Equivalents
Cash equivalents consist of short-term money market investments with original
maturities of ninety days or less at acquisition and approximate fair value.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
2. Significant Accounting Policies (continued)
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Marketable Securities
Marketable securities consists primarily of U.S. Treasury instruments and
mortgage-backed investment vehicles. The Partnership's marketable securities are
classified as "Available for Sale" securities and are reported at fair value as
reported by the brokerage firm at which the securities are held. Realized gains
and losses from the sales of securities are based on the specific identification
method. Unrealized gains and losses are excluded from earnings and reported as a
separate component of partners' equity.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board has issued Statement of Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which is effective for fiscal years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability. Impairment losses are recognized when events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. The Partnership has adopted the new standard for its year ended
March 31, 1997, however, it did not have a significant effect on financial
position or results of operations.
Deferred Fees
Garden Cove's deferred charges consist of financing fees, which are being
amortized using the straight-line method over the 40-year term of the mortgage
note, and organizational costs, which are being amortized using the
straight-line method over a five-year period.
Shannon Creste's deferred charges consist of financing fees, which are being
amortized using the straight-line method over the 10-year term of the mortgage
note, and compliance monitoring fees, which are being amortized over the
remaining 12 year term of the tax credit compliance period.
Rental Property
Real estate and personal property are recorded at the lower of cost or net
realizable value. Depreciation is provided for in amounts sufficient to relate
to the cost of depreciable assets to operations over their estimated service
lives by use of the straight-line and accelerated methods for financial
reporting purposes. For income tax purposes, accelerated lives and methods are
used.
Rental Income
Rental income, principally from short-term leases on the Combined Entities
apartment units, is recognized as income as the rentals become due.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
2. Significant Accounting Policies (continued)
Fair Value of Financial Instruments
Statements of Financial Accounting Standards No. 107 ("SFAS No. 107"),
Disclosures About Fair Value of Financial Instruments, requires disclosure for
the fair value of most on- and off-balance sheet financial instruments for which
it is practicable to estimate that value. The scope of SFAS No. 107 excludes
certain financial instruments, such as trade receivables and payables when the
carrying value approximates the fair value and investments accounted for under
the equity method, and all nonfinancial assets, such as real property. The fair
values of the Partnership's assets and liabilities which qualify as financial
instruments under SFAS No. 107 approximate their carrying amounts in the
accompanying balance sheets except as otherwise disclosed.
Income Taxes
No provision for income taxes has been made as the liability for such taxes is
the obligation of the partners of the Partnership.
Reclassifications
Certain amounts in prior years' financial statements have been reclassified
herein to conform with the current year presentation.
3. Marketable Securities
A summary of marketable securities is as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Debt securities issued by
the US Treasury and
other US government
corporations and agencies $ 763,961 $ 5,932 $ (2,176) $ 767,717
Mortgage backed securities 516,513 99 (4,800) 511,812
Other debt securities 39,975 - (5) 39,970
----------- -------- ------- -----------
Marketable securities
at March 31, 1997 $ 1,320,449 $ 6,031 $ (6,981) $ 1,319,499
=========== ======== ======== ===========
Debt securities issued by
the US Treasury and
other US government
corporations and agencies $ 1,025,378 $ 10,410 $ (7,636) $ 1,028,152
Mortgage backed securities 348,843 1,366 (977) 349,232
Other debt securities 359,327 3,183 (671) 361,839
----------- -------- ------- -----------
Marketable securities
at March 31, 1996 $ 1,733,548 $ 14,959 $ (9,284) $ 1,739,223
=========== ======== ======== ===========
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
3. Marketable Securities (continued)
The contractual maturities at March 31, 1997 are as follows:
<TABLE>
<CAPTION>
Cost Fair Value
<S> <C> <C>
Due in one year or less $ 271,169 $ 275,090
Due in one year to five years 532,767 532,597
Mortgage backed securities 516,513 511,812
----------- -----------
$ 1,320,449 $ 1,319,499
=========== ===========
</TABLE>
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 $1,366,000, $3,174,000 and $3,514,000 in 1997, 1996 and 1995,
respectively. Included in investment income are gross gains of $8,957, $19,251
and $3,804 and gross losses of $14,430, $18,528 and $52,290 which were realized
on these sales in 1997, 1996 and 1995, respectively.
4. Investments in Local Limited Partnerships
The Partnership has acquired limited partner interests in thirty-seven Local
Limited Partnerships (excluding the Combined Entities and Snapfinger Creste,
which has been written off) which own and operate multi-family housing
complexes, most of which are government-assisted. The Partnership, as Investor
Limited Partner pursuant to the various Local Limited Partnership Agreements,
has acquired a 99% interest in the profits, losses, tax credits and cash flows
from operations of each of the Local Limited Partnerships. Upon dissolution,
proceeds will be distributed according to each respective partnership agreement.
The following is a summary of investments in Local Limited Partnerships,
excluding the Combined Entities and excluding Snapfinger Creste in 1997, at
March 31:
<TABLE>
<CAPTION>
1997 1996 1995
------------- ------------ ---------
<S> <C> <C> <C>
Capital contributions paid to Local Limited
Partnerships and purchase price paid
to withdrawing partners of Local
Limited Partnerships $ 33,326,675 $40,811,675 $39,961,675
Cumulative equity in losses of Local Limited
Partnerships (excluding cumulative unrecognized
losses of $1,948,556, $912,349 and $425,631) (27,806,907) (30,295,178) (27,487,337)
Cumulative cash distributions received
from Local Limited Partnerships (869,645) (484,476) (409,705)
------------ ------------ -----------
Investments in Local Limited Partnerships
before adjustment 4,650,123 10,032,021 12,064,633
Excess of investment costs over the underlying net assets acquired:
Acquisition fees and expenses 5,084,529 5,561,180 5,561,180
Accumulated amortization of acquisition
fees and expenses (1,228,076) (1,205,242) (1,064,474)
------------ ------------ -----------
Investments in Local Limited Partnerships $ 8,506,576 $14,387,959 $16,561,339
============ =========== ===========
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
4. Investments in Local Limited Partnerships (continued)
Summarized financial information for each of the three years ended December 31,
1996, 1995 and 1994 (due to the Partnership's policy of reporting the financial
information of its Local Limited Partnership interests on a 90 day lag basis) of
all Local Limited Partnerships in which the Partnership has invested as of that
date (excluding the Combined Entities) is as follows:
Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>
1996 1995 1994
------------- ------------ ---------
<S> <C> <C> <C>
Assets:
Investment property, net $ 94,754,454 $ 106,293,817 $110,712,692
Current assets 2,033,994 2,590,314 2,017,687
Other assets 5,833,632 6,216,946 5,573,714
------------- -------------- --------------
Total Assets $ 102,622,080 $ 115,101,077 $118,304,093
============= ============== ============
Liabilities and Partners' Equity:
Long-term debt $ 84,909,248 $ 94,673,640 $ 94,696,368
Current liabilities (includes current
portion of long-term debt) 7,080,276 3,242,430 3,676,287
Other liabilities 8,956,403 10,126,946 10,171,251
------------- -------------- --------------
Total Liabilities 100,945,927 108,043,016 108,543,906
------------- -------------- --------------
Partners' Equity:
Partnership's Equity 3,195,732 8,690,159 12,445,251
Less capital contributions receivable (337,501) (337,501) (1,187,500)
------------- -------------- --------------
2,858,231 8,352,658 11,257,751
Other Partners' Equity (1,182,078) (1,294,597) (1,497,564)
------------- -------------- --------------
Total Partners' Equity 1,676,153 7,058,061 9,760,187
------------- -------------- --------------
Total Liabilities and Partners' Equity $ 102,622,080 $ 115,101,077 $118,304,093
============= ============== ============
Summarized Income Statements - for
the years ended December 31,
Rental and other income $ 17,934,257 $ 19,728,805 $ 18,646,098
------------- -------------- --------------
Expenses:
Operating 9,945,887 9,446,565 9,560,459
Interest 7,585,562 8,535,963 8,773,795
Depreciation and amortization 4,829,056 5,074,826 5,140,041
------------- -------------- --------------
Total Expenses 22,360,505 23,057,354 23,474,295
------------- -------------- --------------
Net Loss $ (4,426,248) $ (3,328,549) $ (4,828,197)
============= ============== ==============
Partnership's share of net loss $ (4,371,138) $ (3,294,559) $ (4,779,915)
============= ============== ==============
Other Partners' share of net loss $ (55,110) $ (33,990) $ (48,282)
============= ============== ==============
</TABLE>
The summarized financial information of the Local Limited Partnerships does not
include Garden Cove for the years ended December 31, 1996, 1995 and 1994 and
does not include Shannon Creste for the period September 1, 1996 through
December 31, 1996. The balance sheets and statements of operations of these
Local Limited Partnership are combined with the Partnership's financial
statements as of the dates control was taken over by an affiliate of the
Partnership. As a result, this summarized information is not comparable from
year to year.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
4. Investments in Local Limited Partnerships (continued)
For the years ended March 31, 1997, 1996 and 1995, the Partnership has not
recognized $1,036,207, $486,718 and $304,109, respectively, of equity in losses
relating to seventeen Local Limited Partnerships where cumulative equity in
losses exceeds their total investment.
During the year ended March 31, 1997, the Partnership wrote off its investment
in one Local Limited Partnership, Snapfinger Creste, because there was evidence
of a non-temporary decline in the recoverable amount of the investment. The
Partnership expects to relinquish its interest in this Local Limited Partnership
in July 1997.
The Partnership's equity as reflected by the Local Limited Partnerships of
$2,858,231 differs from the Partnership's Investments in Local Limited
Partnerships before adjustment of $4,650,123 principally because: a) the
Partnership has not recognized $1,948,556 of equity in losses relating to Local
Limited Partnerships whose cumulative equity in losses exceeded their total
investments; b) purchase prices paid to original Limited Partners by the
Partnership have not been reflected in the balance sheets of certain Local
Limited Partnerships; and c) cash distributions paid to the Partnership during
the quarter ended March 31, 1997 are not reflected in the equity of certain
Local Limited Partnerships at December 31, 1996.
5. Notes and Interest Receivable
On December 15, 1993, the Partnership executed promissory notes with Linden
Housing Associates, Limited Partnership ("Linden") and Willow Creek Housing
Associated, Ltd. ("Willow Creek"), two Local Limited Partnerships in which it
has invested, for $87,294 and $56,742, respectively, for the reimbursement of
expenses incurred by the Partnership on their behalf in relation to the Mod
Rehab issue. Interest on the unpaid principal of these notes is calculated at
the prime rate. The prime rate as of March 31, 1997 and 1996 was 8.25%. The
outstanding balance of the notes plus accrued interest was paid in full on March
7, 1997.
6. Transactions with Affiliates
An affiliate of the Managing General Partner currently receives the base amount
of $6,820 (as adjusted by the CPI factor) per Local Limited Partnership annually
as the Asset Management Fee for administering the affairs of the Partnership.
Included in the Statements of Operations are Asset Management Fees of $272,905,
$265,722 and $258,864 for the years ended March 31, 1997, 1996 and 1995,
respectively. Included in accounts payable to affiliates is $205,237 and $67,668
of Asset Management Fees due to an affiliate of the Managing General Partner at
March 31, 1997 and 1996, respectively.
An affiliate of the Managing General Partner is reimbursed for the actual cost
of the Partnership's operating expenses. Included in general and administrative
expenses for the years ended March 31, 1997, 1996 and 1995, is $107,933,
$114,145 and $105,507, respectively, that the Partnership has paid as
reimbursement for salaries and benefits. At March 31, 1997 and 1996, $26,677 and
$13,048, respectively, is payable to an affiliate of the Managing General
Partner.
On August 20, 1996, Boston Financial Property Management ("BFPM"), an affiliate
of the Managing General Partner, became the management agent for Grayton Pointe
Apartments, a property in which the Partnership invested. The property
management fee charged is 4% of the property's gross revenues. Included in
operating expenses in the summarized income statements in Note 4 to the Combined
Financial Statements is $8,864 of fees earned by BFPM for the period ended
December 31, 1996.
Additionally, BFPM is the management agent for Garden Cove and Shannon Creste
(effective August 20, 1996), properties in which the Partnership has invested.
The property management fee charged is equal to 5% and 4%, respectively, of cash
receipts. Included in the Combined Statements of Operations for the three years
ended March 31, 1997 is $50,797, $36,328 and $35,806 of fees earned by BFPM for
the period ended December 31, 1996 and for the years ended December 31, 1995 and
1994, respectively.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
7. Rental Property
Real estate and personal property belonging to the Combined Entities are
recorded at cost, the components of which are as follows at December 31:
<TABLE>
<CAPTION>
1996 1995
------------- ---------
<S> <C> <C>
Buildings $14,725,712 $ 6,298,110
Land and land improvements 1,287,465 692,670
Furniture and fixtures 325,005 318,897
------------ ----------
16,338,182 7,309,677
Less: accumulated depreciation 4,044,444 1,664,005
------------ -----------
Total $ 12,293,738 $5,645,672
============ ==========
</TABLE>
8. Mortgage Notes Payable
Garden Cove
During 1994, Garden Cove refinanced its mortgage note payable with an increase
in principal of $32,864 and a reduction in the interest rate from 10.75% to
8.95%.
The mortgage note, collateralized by the land and buildings, is payable in
monthly payments of $40,031 for principal and interest at 8.95% through February
2031. Additional monthly remittances are due for property insurance, real estate
taxes and mortgage insurance escrows. In connection with the refinancing,
$46,837 in fees were incurred and have been deferred. These fees are being
amortized over the life of the loan.
Approximate principal payments to be made on the mortgage note for each of the
next five years and thereafter are as follows:
Year ended December 31:
1997 $ 23,788
1998 26,007
1999 28,432
2000 31,084
2001 33,983
Thereafter 4,968,897
-----------
$5,112,191
Garden Cove is obligated by an agreement with HUD to make monthly deposits of
$2,211 with the mortgagee to establish a reserve to cover costs of any future
major replacements. The amount of the required deposit may be increased or
decreased at the option of the mortgagee, and disbursements from the reserve are
controlled by the mortgagee.
It is not practical to estimate the fair value of this mortgage because programs
with similar characteristics are not currently available.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
8. Mortgage Notes Payable (continued)
Shannon Creste
The mortgage note payable in the original amount of $6,400,000 is collateralized
by a deed of trust on the rental property. The note is payable to Citicorp,
Mortgage Division, and bears interest at the rate of 10.375% per annum.
Principal and interest are payable by Shannon Creste in monthly installments of
$57,946 based on an amortization period of 30 years.
Effective October 1, 1996, the mortgage note payable with Citicorp was modified.
Commencing on November 1, 1996 and continuing on the first day of each and every
month thereafter, up to and including April 1, 1999 interest at the rate of
seven percent (7%) per annum shall be due and payable monthly. On April 1, 1999
the interest shall be adjusted and increased to the rate of nine and
three-quarters percent (9.75%) per annum. Commencing May 1, 1999 and continuing
on the first day of each and every month thereafter, up to and including
February 1, 2001, principal and interest, at the adjusted interest rate, shall
be due and payable in equal, consecutive monthly installments of $52,920. The
entire remaining outstanding principal balance together with all accrued but
unpaid interest shall be due and payable on February 1, 2001.
The liability of Shannon Creste under the mortgage note is limited to the
underlying value of the real estate collateral plus other amounts deposited with
the lender.
Approximate principal payments to be made on the mortgage note for each of the
next five years are as follows:
Year ended December 31:
1997 $ 0
1998 0
1999 20,612
2000 38,171
2001 6,100,764
-----------
$ 6,159,547
It is not practical to estimate the fair value of this mortgage because programs
with similar characteristics are not currently available.
9. Due to Developer
Under the terms of the Development Agreement, the Developer agreed to advance to
Garden Cove such funds as may be required to pay certain defined costs, which
include certain operating expenses. Any funds so advanced are to be repaid by
Garden Cove only in certain circumstances. In connection with the March 1996
settlement of the Garden Cove litigation (Note 11), Garden Cove was released of
its obligation to repay the developer $1,543,475. For financial reporting
purposes, $1,261,445 has been reflected as a reduction of Garden Cove's property
basis, and $282,030, representing the developer's operating advances, was offset
against the settlement loss in the year ended March 31, 1996.
10. Commitments
At March 31, 1997, the Partnership has committed to make future capital
contributions and to pay future purchase price installments on its investments
in Local Limited Partnerships. These future payments are contingent upon the
achievement of certain criteria as set forth in the Local Limited Partnership
Agreements and total approximately $337,500.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
11. Litigation
The Partnership has reached a settlement regarding the legal proceeding
described below.
As previously reported, the Partnership, Garden Cove Apartments LTD. ("Garden
Cove") and the Managing General Partner were involved in litigation with the
former managing general partner of Garden Cove. On March 11, 1996 a jury trial
began. Four days into the trial, an out of court settlement was reached, which
is believed by management to be favorable for the Partnership. Briefly, the
settlement involved a $262,500 payment by the Partnership to the former managing
general partners and a $285,000 payment to a bank which had claims against both
Garden Cove and the former local managing general partners. $375,000 of these
payments were covered by the Partnership's insurance. However, the Partnership
also incurred significant litigation expenses in this matter. The settlement
agreement also included the mutual release of certain liabilities and made
permanent the previously described injunction.
Garden Cove is again involved in litigation. In the current matter, the
project's general contractor claims that there are amounts due it (about
$225,000) under the construction contract. The Partnership was aware of this
potential claim when it settled the previous dispute with the former managing
general partners and did not release them from liability with respect to it.
The Partnership is currently evaluating what liability exposure the Garden Cove
partnership may have in connection with this litigation.
The Partnership is not a party to any other pending legal or administrative
proceeding, and to the best of its knowledge, no other legal or administrative
proceeding is threatened or contemplated against it.
12. Extraordinary Gain on Cancellation of Indebtedness
During the year ended December 31, 1996, Shannon Creste's prior management agent
forgave accrued management fees totalling $265,381.
13. Federal Income Taxes
A reconciliation of the losses reported in the Combined Statements of Operations
for the periods ended March 31, 1997, 1996 and 1995 to the losses reported for
federal income tax purposes for the years ended December 31, 1996, 1995 and 1994
is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------- ----------- -------
<S> <C> <C> <C>
Net Loss per Combined Statements of Operations $ (4,914,046) $(3,770,322) $(5,531,873)
Adjustment for equity in losses of Local
Limited Partnerships for financial
reporting purposes over equity
in loss for tax purposes 1,070,305 25,337 268,471
Equity in losses of Local Limited Partnerships
not recognized for financial reporting purposes (1,036,207) (486,718) (304,109)
Adjustment to reflect March 31 fiscal
year-end to December 31, tax year-end (4,051) 1,945 (18,990)
Adjustment for expenses not currently
deductible for tax purposes 203,004 66,018 64,259
Adjustment for accelerated amortization
for tax purposes over amortization
for financial reporting purposes (68,611) (65,213) (52,615)
Other income (loss) recognized for tax purposes
but not recognized for book purposes - (15,048) 692,533
Write-off of Investment in Local Limited
Partnership not recognized for tax purposes 812,892 - -
Cash distributions included in loss for
financial reporting purposes (1,774) - -
Related party expenses paid in current year but
expensed for book purposes in prior year (66,018) (64,282) (62,592)
------------ ------------ ------------
Net Loss for federal income tax purposes $ (4,004,506) $(4,308,283) $(4,944,916)
============ =========== ===========
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
13. Federal Income Taxes (continued)
The differences in the assets and liabilities of the Partnership for financial
reporting purposes and tax reporting purposes for the year ended March 31, 1997
are as follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 8,506,576 $ 11,646,466 $(3,139,890)
============ ============ ============
Other assets $ 15,046,434 $ 9,651,139 $ 5,395,295
============ ============ ============
Liabilities $ 11,891,610 $ 29,329 $ 11,862,281
============ ============ ============
</TABLE>
The differences in the assets and liabilities of the Partnership for financial
reporting purposes are primarily attributable to: i) for financial reporting
purposes the Partnership combines the financial statements of two Local Limited
Partnerships with its financial statements; for tax purposes, these entities are
carried on the equity method; ii) the cumulative equity in loss from Local
Limited Partnerships, including the Combined Entities, for tax reporting
purposes is approximately $1,474,000 lower than for financial reporting
purposes, including approximately $1,949,000 of losses the Partnership has not
recognized relating to seventeen Local Limited Partnerships whose cumulative
equity in losses exceeded their total investments; iii) organizational and
offering costs of approximately $7,056,000 that have been capitalized for tax
reporting purposes are charged to Limited Partners' equity for financial
reporting purposes; and iv) for financial reporting purposes, the Partnership
wrote off its investment in one Local Limited Partnership of $812,892.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules
<TABLE>
Balance Sheets
<CAPTION>
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations Combined (A)
Assets
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 299,791 $ 18,660 $ - $ 318,451
Marketable securities, at fair value 1,319,499 - - 1,319,499
Accounts receivable 991,791 23,115 (914,334) 100,572
Tenant security deposits - 30,976 - 30,976
Investments in Local Limited
Partnerships 9,446,261 - (939,685) 8,506,576
Rental property at cost, net of
accumulated depreciation - 12,293,738 - 12,293,738
Mortgage escrow deposits - 139,547 - 139,547
Operating reserves - 337,353 - 337,353
Replacement reserves - 74,617 - 74,617
Deferred fees (net of accumulated
amortization of $147,413) - 337,219 - 337,219
Other assets 17,190 77,272 - 94,462
-------------- ------------ ------------ --------------
Total Assets $ 12,074,532 $ 13,332,497 $ (1,854,019) $ 23,553,010
============== ============ ============ ==============
Liabilities and Partners' Equity
Liabilities:
Mortgage notes payable $ - $ 11,271,738 $ - $ 11,271,738
Note payable - 9,800 - 9,800
Accounts payable to affiliates 231,914 19,608 - 251,522
Accounts payable and accrued
expenses 31,630 237,379 - 269,009
Advances from Limited Partner - 914,334 (914,334) -
Accrued interest payable - 38,128 - 38,128
Security deposits payable - 51,413 - 51,413
-------------- ------------ ------------ --------------
Total Liabilities 263,544 12,542,400 (914,334) 11,891,610
-------------- ------------ ------------ --------------
Minority interest in Local Limited
Partnership - - (149,588) (149,588)
-------------- ------------ ------------ --------------
General, Initial and Investor
Limited Partners' Equity 11,811,938 790,097 (790,097) 11,811,938
Net unrealized losses on
marketable securities (950) - - (950)
-------------- ------------ ------------ --------------
Total Partners' Equity 11,810,988 790,097 (790,097) 11,810,988
-------------- ------------ ------------ --------------
Total Liabilities and Partners' Equity $ 12,074,532 $ 13,332,497 $ (1,854,019) $ 23,553,010
============== ============ ============ ==============
</TABLE>
(A) March 31, 1997.
(B) December 31, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules (continued)
<TABLE>
Statements of Operations
<CAPTION>
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations Combined (A)
Revenue:
<C> <C> <C> <C> <C>
Rental $ - $ 1,093,703 $ - $ 1,093,703
Investment 101,819 10,694 - 112,513
Other 18,124 41,408 - 59,532
-------------- ------------ ----------- ------------
Total Revenue 119,943 1,145,805 - 1,265,748
-------------- ------------ ----------- ------------
Expenses:
Asset management fees -
related party 272,905 - - 272,905
General and administrative 203,382 - - 203,382
Rental operations, exclusive
of depreciation - 592,266 - 592,266
Property management fees,
related party - 50,797 - 50,797
Interest - 636,940 - 636,940
Write-off of Investment in Local
Limited Partnership 812,892 - - 812,892
Depreciation - 385,057 - 385,057
Amortization 137,370 13,508 - 150,878
-------------- ------------ ----------- ------------
Total Expenses 1,426,549 1,678,568 - 3,105,117
-------------- ------------ ----------- ------------
Loss before equity in losses of
Local Limited Partnerships and
cancellation of indebtedness (1,306,606) (532,763) - (1,839,369)
Minority interest in loss of
Local Limited Partnership - - 786 786
Equity in losses of Local
Limited Partnerships (3,607,440) - 266,596 (3,340,844)
-------------- ------------ ----------- ------------
Loss before extraordinary item (4,914,046) (532,763) 267,382 (5,179,427)
Extraordinary gain on
cancellation of indebtedness - 265,381 - 265,381
-------------- ------------ ----------- ------------
Net Loss $ (4,914,046) $ (267,382) $ 267,382 $ (4,914,046)
============== ============ =========== ============
</TABLE>
(A) For the year ended March 31, 1997.
(B) For the year ended December 31, 1996.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules (continued)
<TABLE>
Statements of Cash Flows
<CAPTION>
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations
Combined (A)
Cash flows from operating activities:
<S> <C> <C> <C> <C>
Net Loss $ (4,914,046) $ (267,382) $ 267,382 $ (4,914,046)
Adjustments to reconcile net loss to
net cash used for operating activities:
Equity in losses of Local Limited
Partnerships 3,607,440 - (266,596) 3,340,844
Extraordinary gain on cancellation of
indebtedness - (265,381) - (265,381)
Minority interest in loss of Local
Limited Partnerships - - (786) (786)
Cash distribution income included
in cash distributions from Local
Limited Partnership (5,913) - - (5,913)
Gain on sale of marketable securities 5,473 - - 5,473
Write-off of Investment in Local
Limited Partnership 812,892 - - 812,892
Depreciation and amortization 137,370 398,565 - 535,935
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Interest receivable (3,861) - - (3,861)
Insurance proceeds receivable 375,000 - - 375,000
Accounts receivable - (7,883) - (7,883)
Tenant security deposits - 3,946 - 3,946
Other assets 1,259 (56,267) - (55,008)
Accounts payable to affiliates 151,198 14,146 - 165,344
Accounts payable and
accrued expenses (701,614) 16,217 - (685,397)
Accrued interest payable - (163) - (163)
Security deposits payable - (2,240) - (2,240)
-------------- ------------ ----------- -------------
Net cash used for operating activities (534,802) (166,442) - (701,244)
-------------- ------------ ----------- -------------
Cash flows from investing activities:
Proceeds from notes receivable 85,769 - - 85,769
Purchases of marketable securities (958,177) - - (958,177)
Proceeds from sales and maturities
of marketable securities 1,365,803 - - 1,365,803
Cash distributions received from
Local Limited Partnerships 450,686 - - 450,686
Cash received upon assumption of General
Partner interest in a Combined Entity - 8,593 - 8,593
Purchase of rental property - (23,870) - (23,870)
Advances to affiliates (234,258) - 148,469 (85,789)
Disbursements from
replacement reserves - (5,355) - (5,355)
-------------- ------------ ----------- -------------
Net cash provided by (used for)
investing activities 709,823 (20,632) 148,469 837,660
-------------- ------------ ----------- -------------
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules (continued)
<TABLE>
Statements of Cash Flows (Continued)
<CAPTION>
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations
Combined (A)
Cash flows from financing activities:
<S> <C> <C> <C> <C>
Repayment of mortgage notes payable - (31,021) - (31,021)
Mortgage escrow deposits - (2,418) - (2,418)
Advances from affiliate - 199,353 (148,469) 50,884
-------------- ------------ ------------ -----------
Net cash provided by financing activities - 165,914 (148,469) 17,445
-------------- ------------ ------------ -----------
Net increase (decrease) in cash
and cash equivalents 175,021 (21,160) - 153,861
Cash and cash equivalents, beginning 124,770 39,820 - 164,590
-------------- ------------ ------------ -----------
Cash and cash equivalents, ending $ 299,791 $ 18,660 $ - $ 318,451
============== ============ ============ ===========
</TABLE>
(A) For the year ended March 31, 1997.
(B) For the year ended December 31, 1996.
<PAGE>
<TABLE>
Boston Financial Qualified Housing Tax Credits, L.P. II
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships in
Which Registrant has Invested at March 31, 1997
<CAPTION>
COST AT INTEREST AT
ACQUISITION DATE
--------------------------------
NET
IMPROVEMENTS
NUMBER TOTAL BUILDINGS / CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO
DESCRIPTION UNITS BRANCES * LAND & EQUIPMENT ACQUISITION
Low and Moderate
Income Apartment Complexes
<S> <C> <C> <C> <C> <C>
Eastmont 103 $2,790,433 $100,000 $2,629,117 $1,285,796
Greenburg, PA
Reno/Birch 138 4,263,129 382,333 5,298,594 52,632
Reno, NV
Buckfield 20 1,083,930 50,000 559,836 722,685
Buckfield, ME
Newport Family Housing 24 1,259,944 66,950 637,538 839,012
Newport, ME
Willow Creek Apartments 25 939,220 71,982 1,261,654 17,614
Reno, NV
Linden Apartments 40 1,403,686 110,251 1,855,036 22,262
Reno, NV
Unity Family Housing 20 1,008,129 47,500 690,892 505,606
Unity, ME
Spring Hill 127 3,944,114 229,702 4,940,334 (106,647)
Casper, WY
B&C III Housing 162 4,255,778 377,292 5,462,420 4,159
Moore, OK
San Antonio 100 3,841,767 165,200 4,467,166 353,316
Aquadilla, PR
Atlantic Terrace 198 11,194,402 210,000 5,314,668 7,151,707
Washington, D.C.
Shadow Wood Housing 61 779,841 2,045 1,424,111 28,975
Chickasha, OK
B&C II Housing 56 1,555,827 23,102 1,853,438 28,173
Tulsa, OK
Grayton Pointe Associates 184 4,595,397 540,250 5,005,586 2,001,543
Macon, GA
Snapfinger Creste 210 7,439,971 697,876 166,097 9,665,129
Decatur, GA
Wayne Apartments 349 13,892,416 265,817 9,443,627 20,673,262
Boston, MA
Chapparal Housing 124 3,297,766 381,880 1,290,206 2,654,242
Midland, TX
Durham Park 224 5,788,098 486,000 5,600,540 4,079,944
Tigard, OR
Willow Peg Lane 48 1,474,555 107,500 603,138 1,139,036
Rincon, GA
Meadowbrook Village 55 1,468,278 85,037 159,388 1,620,253
Americus, GA
Waynesboro Properties 36 948,278 40,700 31,020 1,137,361
Waynesboro, GA
Monroe Properties 55 1,460,558 115,905 55,882 1,681,022
Monroe, GA
Mulberry Associates 24 751,814 30,000 211,179 718,796
Mulberry, AR
Ward Manor 16 523,845 22,000 152,984 486,087
Ward, AR
Paragould Associates 14 465,581 18,500 212,874 354,627
Paragould, AR
</TABLE>
<TABLE>
<CAPTION>
COST AT INTEREST AT
ACQUISITION DATE
--------------------------------
NET
IMPROVEMENTS
NUMBER TOTAL BUILDINGS / CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO
DESCRIPTION UNITS BRANCES * LAND & EQUIPMENT ACQUISITION
Low and Moderate
Income Apartment Complexes
<S> <C> <C> <C> <C> <C>
Lamar Associates 20 624,164 23,100 259,086 506,416
Lamar, AR
Winona Apartments 12 279,677 4,000 212,719 136,931
Winona, MO
Blair Senior Housing 12 358,718 19,100 446,700 7,804
Blair, NE
McKinley-Walker 48 1,413,669 83,000 1,760,235 2,586
Fitzgerald, GA
Warrenton Apartments 16 374,998 23,000 445,188 0
Warrenton, MO
Strafford II Apartments 12 293,982 10,000 360,423 1,167
Strafford, MO
La Center Apartments 12 396,989 24,500 473,512 2,545
La Center, KY
DeSoto III Apartments 24 562,715 35,000 668,817 1,515
Webster Grove, MO
Garden Cove Apartments 200 5,112,191 647,924 3,899,850 2,785,773
Huntsville, AL
Shannon Creste Apartments 200 6,162,814 594,795 4,258,031 4,151,809
Union City, GA
Milo Senior Housing 24 1,260,110 66,950 660,837 822,736
Milo, ME
Brighton Manor Apartments 40 1,226,160 139,130 227,776 1,466,550
Douglasville, GA
Bamberg Garden Apartments 24 734,888 53,400 891,576 4,675
----------------------------------------------------------------------------
Bamberg, SC
SUBTOTAL 3,057 99,227,832 6,351,721 73,892,075 67,007,099
LESS: Combined Entities 400 11,275,005 1,242,719 8,157,881 6,937,582
----------------------------------------------------------------------------
TOTAL 2,657 $87,952,827 $5,109,002 $65,734,194 $60,069,517
============================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1996 LIFE ON
---------------------------------------------------------
WHICH
BUILDINGS / DEPRECIATION
LAND AND IMPROVEMENTS ACCUMULATED DATE IS DATE
COMPUTED
DESCRIPTION IMPROVEMENTS & EQUIPMENT TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
Low and Moderate
Income Apartment Complexes
<S> <C> <C> <C> <C> <C> <C> <C>
Eastmont $100,000 $3,914,913 $4,014,913 $799,263 1952 7-10, 12/01/88
40
Greenburg, PA
Reno/Birch 382,333 5,351,226 5,733,559 1,864,632 1988 5-7, 07/10/88
27.5
Reno, NV
Buckfield 50,000 1,282,521 1,332,521 249,471 1990 7, 08/01/88
27.5
Buckfield, ME
Newport Family 66,950 1,476,550 1,543,500 283,006 1990 27.5 08/01/88
Housing
Newport, ME
Willow Creek 71,982 1,279,268 1,351,250 419,911 1988 7, 08/01/88
Apartments 27.5
Reno, NV
Linden Apartments 110,251 1,877,298 1,987,549 615,872 1988 5-7, 08/01/88
27.5
Reno, NV
Unity Family 47,500 1,196,498 1,243,998 235,298 1990 7, 08/01/88
Housing 27.5
Unity, ME
Spring Hill 171,780 4,891,609 5,063,389 1,449,025 1989 Useful 10/01/88
Lives
Casper, WY
B&C III Housing 377,292 5,466,579 5,843,871 1,735,964 1962/1973 5-7, 10/01/88
27.5
Moore, OK
San Antonio 165,200 4,820,482 4,985,682 2,041,617 1988 Useful 10/01/88
Lives
Aquadilla, PR
Atlantic Terrace 304,170 12,372,205 12,676,375 3,174,839 1990 5-12, 12/01/88
20,
27.5,
40
Washington, D.C.
Shadow Wood Housing 2,045 1,453,086 1,455,131 447,142 1972 5, 7, 12/01/88
27.5
Chickasha, OK
B&C II Housing 23,102 1,881,611 1,904,713 652,040 1976 7, 12/01/88
27.5
Tulsa, OK
Grayton Pointe 540,925 7,006,454 7,547,379 1,990,964 1989 5, 28 12/27/88
Associates
Macon, GA
Snapfinger Creste 697,877 9,831,226 10,529,103 2,807,286 1989 5, 28 12/30/88
Decatur, GA
Wayne Apartments 265,817 30,116,889 30,382,706 8,085,841 1990 7, 27.5 12/22/88
Boston, MA
Chapparal Housing 381,880 3,944,448 4,326,328 1,105,165 1989 7, 27.5 12/01/88
Midland, TX
Durham Park 486,000 9,680,484 10,166,484 3,061,268 1989 7, 27.5 12/29/88
Tigard, OR
Willow Peg Lane 107,500 1,742,174 1,849,674 538,550 1988 Useful 10/01/88
Lives
Rincon, GA
Meadowbrook Village 92,987 1,771,691 1,864,678 536,867 1989 Useful 10/01/88
Lives
Americus, GA
Waynesboro 44,100 1,164,981 1,209,081 346,705 1989 Useful 12/01/88
Properties Lives
Waynesboro, GA
Monroe Properties 115,905 1,736,904 1,852,809 517,468 1989 Useful 12/01/88
Lives
Monroe, GA
Mulberry 30,000 929,975 959,975 263,081 1989 7, 27.5 12/01/88
Associates
Mulberry, AR
Ward Manor 22,000 639,071 661,071 181,071 1989 7, 12/01/88
27.5
Ward, AR
Paragould 20,000 566,001 586,001 164,281 1989 7, 12/01/88
Associates 27.5
Paragould, AR
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31, 1996 LIFE ON
---------------------------------------------------------
WHICH
BUILDINGS / DEPRECIATION
LAND AND IMPROVEMENTS ACCUMULATED DATE IS DATE
COMPUTED
DESCRIPTION IMPROVEMENTS & EQUIPMENT TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
Low and Moderate
Income Apartment Complexes
<S> <C> <C> <C> <C> <C> <C> <C>
Lamar Associates 23,100 765,502 788,602 222,611 1989 7, 12/01/88
27.5
Lamar, AR
Winona Apartments 4,000 349,650 353,650 107,469 1989 7, 12/01/88
27.5
Winona, MO
Blair Senior 19,100 454,504 473,604 123,127 1989 7, 01/03/89
Housing 27.5
Blair, NE
McKinley-Walker 83,000 1,762,821 1,845,821 526,489 1989 Useful 02/08/89
Lives
Fitzgerald, GA
Warrenton 23,000 445,188 468,188 128,675 1989 Useful 03/31/89
Apartments Lives
Warrenton, MO
Strafford II 10,000 361,590 371,590 104,142 1989 5, 7, 03/31/89
Apartments 27.5
Strafford, MO
La Center 24,500 476,057 500,557 136,128 1989 7, 03/31/89
Apartments 27.5,
40
La Center, KY
DeSoto III 35,000 670,332 705,332 183,166 1989 Useful 03/31/89
Apartments Lives
Webster Grove, MO
Garden Cove 692,670 6,640,877 7,333,547 1,944,916 1990 Useful 05/11/89
Apartments Lives
Huntsville, AL
Shannon Creste 594,795 8,409,840 9,004,635 2,099,528 1990 5, 27.5 07/10/89
Apartments
Union City, GA
Milo Senior 66,950 1,483,573 1,550,523 254,696 1990 7, 27.5 12/20/89
Housing
Milo, ME
Brighton Manor 140,095 1,693,361 1,833,456 533,340 1990 10, 30 12/29/89
Apartments
Douglasville, GA
Bamberg Garden 53,400 896,251 949,651 271,791 1989 Useful 01/20/89
Apartments Lives
---------------------------------------------------------
Bamberg, SC
SUBTOTAL 6,447,206 140,803,690 147,250,896 40,202,705
LESS: Combined 1,287,465 15,050,717 16,338,182 4,044,444
Entities
---------------------------------------------------------
TOTAL $5,159,741 $125,752,973 $130,912,714 $36,158,261
=========================================================
</TABLE>
(1) The aggregate cost for Federal Income Tax purposes is approximately
$130,913,000.
* Mortgage notes payable generally represent non-recourse financing of
low-income housing projects payable with terms of up to 40 years
with interest payable at rates ranging from 9.75% to 12%. The
Partnership has not guaranteed any of these mortgage notes payable.
<PAGE>
<TABLE>
<CAPTION>
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1996 Accumulated Depreciation December 31, 1996
- ------------------------------------------------------------ --------------------------------------------
<S> <C> <C> <C> <C>
Balance at beginning of period $139,702,097 Balance at beginning of period $33,408,280
Additions during period: Additions during period:
Add prior year Garden Cove $7,309,677 Add prior year Garden Cove 1,664,005
Less current year Garden (7,333,547) Less current year Garden (1,944,916)
Cove Cove
Less current year Shannon (9,004,635) Less current year Shannon (2,099,528)
Creste Creste
Acquisitions through 0 Depreciation 5,130,420
foreclosure
-------------
Other acquisitions 100,645 Balance at close of period $36,158,261
=============
Improvements etc. 155,868
-------------
(8,771,992)
Deductions during period:
Cost of real estate and (17,391)
fixed assets sold
Reclassification to 0
intangible assets
-------------
(17,391)
--------------
Balance at close of period $130,912,714
==============
Property Owned December 31, 1995 Accumulated Depreciation December 31, 1995
- ------------------------------------------------------------ --------------------------------------------
Balance at beginning of period $139,464,764 Balance at beginning of period $28,752,072
Additions during period: Additions during period:
Add prior year Garden Cove $8,470,614 Add prior year Garden Cove 1,384,922
Less current year Garden (7,309,677) Less current year Garden (1,664,005)
Cove Cove
Acquisitions through 0 Depreciation 4,935,291
foreclosure
-------------
Other acquisitions 157,978 Balance at close of period $33,408,280
=============
Improvements etc. 179,863
-------------
1,498,778
Deductions during period:
Cost of real estate and 0
fixed assets sold
Reduction of Garden Cove (1,261,445)
property basis
-------------
(1,261,445)
--------------
Balance at close of period $139,702,097
==============
Property Owned December 31, 1994 Accumulated Depreciation December 31, 1994
- ------------------------------------------------------------ --------------------------------------------
Balance at beginning of period $140,025,222 Balance at beginning of period $23,706,878
Additions during period: Additions during period:
Add prior year Garden Cove $8,470,614 Add prior year Garden Cove 1,106,413
Less current year Garden (8,470,614) Less current year Garden (1,384,922)
Cove Cove
Acquisitions through 0 Depreciation 5,323,703
foreclosure
-------------
Other acquisitions 73,743 Balance at close of period $28,752,072
=============
Improvements etc. 63,846
-------------
137,589
Deductions during period:
Cost of real estate and (698,047)
fixed assets sold
Reclassification to 0
intangible assets
-------------
(698,047)
--------------
Balance at close of period $139,464,764
==============
</TABLE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS II
(A Limited Partnership)
Annual Report on form 10-K
For The Year Ended March 31, 1997
Reports of Independent Auditors
<PAGE>
[Letterhead]
[LOGO]
MACDONALDPAGE
Independent Auditors' Report
February 4, 1997
Newport Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Newport Housing Associates (a
limited partnership) as of December 31, 1996, and the related statements of
profit and loss, changes in partners' capital and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Newport Housing Associates as
of December 31, 1996, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
MACDONALDPAGE
Independent Auditors' Report
February 14, 1996
Newport Housing Associates
(a Limited Partnership)
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Newport Housing Associates (a
Limited Partnership) as of December 31, 1995, and the related statements of
profit and loss, changes in partners' capital and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Newport Housing Associates (a
Limited Partnership) as of December 31, 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
MACDONALDPAGE
Independent Auditors' Report
February 10, 1995
Newport Housing Associates
(a Limited Partnership)
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying statement of assets, liabilities and partners'
capital - income tax basis of Newport Housing Associates (a Limited Partnership)
as of December 31, 1994, and the related statements of revenue and expenses -
income tax basis, changes in partners' capital - income tax basis, and cash
flows income tax basis for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
As described in Note 1, these financial statements were prepared on the basis of
accounting the Partnership uses for income tax purposes, which is a
comprehensive basis of accounting other than generally accepted accounting
principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of Newport
Housing Associates (a Limited Partnership) as of December 31, 1994 and its
revenue and expenses, changes in partners' capital, and cash flows for the year
then ended on the basis of accounting described in Note 1.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
MACDONALDPAGE
Independent Auditors' Report
February 4, 1997
Unity Family Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Unity Family Housing
Associates (a Limited Partnership) as of December 31, 1996, and the related
statements of profit and loss, changes in partners' capital, and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Unity Family Housing Associates
as of December 31, 1996, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
MACDONALDPAGE
Independent Auditors' Report
February 14, 1996
Unity Family Housing Associates
(a Limited Partnership)
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying statement of assets, liabilities and partners'
capital - income tax basis of Unity Family Housing Associates (a Limited
Partnership) as of December 31, 1995, and the related statements of revenue and
expenses - income tax basis, changes in partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Unity Family Housing Associates
as of December 31, 1995, and the results of its operations and cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
MACDONALDPAGE
Independent Auditors' Report
February 10, 1995
Unity Family Housing Associates
(a Limited Partnership)
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying statement of assets, liabilities and partners'
capital - income tax basis of Unity Family Housing Associates (a Limited
Partnership) as of December 31, 1994, and the related statements of revenue and
expenses - income tax basis, changes in partners' capital - income tax basis,
and cash flows - income tax basis for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
As described in Note 1, these financial statements were prepared on the basis of
accounting the Partnership uses for income tax purposes, which is a
comprehensive basis of accounting other than generally accepted accounting
principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of Unity
Family Housing Associates (a Limited Partnership) as of December 31, 1994, and
its revenue and expenses, changes in partners' capital, and cash flows for the
year then ended on the basis of accounting described in Note 1.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
MACDONALDPAGE
Independent Auditors' Report
February 4, 1997
Buckfield Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Buckfield Housing Associates
(a limited partnership) as of December 31, 1996, and the related statements of
profit and loss, changes in partners' capital and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Buckfield Housing Associates as
of December 31, 1996, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
MACDONALDPAGE
Independent Auditors' Report
February 14, 1996
Buckfield Housing Associates
(a Limited Partnership)
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Buckfield Housing Associates
(a Limited Partnership) as of December 31, 1995, and the related statements of
profit and loss, changes in partners' capital and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Buckfield Housing Associates (a
Limited Partnership) as of December 31, 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners
Willow Creek Housing Associates, Ltd.
HUD Project No. 125-94008
Reno, Nevada
We have audited the accompanying balance sheet of Willow Creek Housing
Associates, Ltd., dba Willow Creek Apartments, HUD Project No. 125-94008, as of
December 31, 1996, and the related statements of income and partners' equity,
and cash flows for the year then ended. These financial statements are the
responsibility of the Project's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Willow Creek Housing Associates, Ltd. dba
Willow Creek Apartments, HUD Project No. 125-94008 as of December 31, 1996, and
the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Goverment Auditing Standards, we have also issued a report
dated February 10, 1997, on our consideration of Willow Creek Housing
Associates, Ltd. dba Willow Creek Apartments, HUD Project No. 125-94006,
internal control structure and reports dated February 10, 1997, on its
compliance with laws and regulations.
To the General Partners
Willow Creek Housing Associates, Ltd.
Page 2
The accompanying supplementary information shown on pages 13 to 21 is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of the Partnership. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
February 10, 1997
<PAGE>
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners
Willow Creek Housing Associates, Ltd.
HUD Project No. 125-94008
Reno, Nevada
We have audited the accompanying balance sheet of Willow Creek Housing
Associates, Ltd., HUD Project No. 125-94008, as of December 31, 1995, and the
related statement of income and partners' equity, and statement of cash flows
for the year then ended. These financial statements are the responsibility of
the Project's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion. In our opinion, the financial statements present fairly, in all
material respects, the financial position of Willow Creek Housing Associates,
Ltd., HUD Project No. 125-94008 as of December 31, 1995 and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Goverment Auditing Standards and the Consolidated Audit Guide
for Audits of HUD Programs issued by the U.S. Department of Housing and Urban
Development, we have also issued a report dated January 31, 1996, on our
consideration of Willow Creek Housing Associates, Ltd., HUD Project No.
125-94006, internal control structure and reports dated January 31, 1996, on its
compliance with specific requirements applicable to major HUD programs, specific
requirements applicable to Affirmative Fair Housing, and specific requirements
applicable to nonmajor HUD program transactions.
To the General Partners
Willow Creek Housing Associates, Ltd.
Page 2
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 13 to 20 is presented for purpose of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
January 31, 1996
<PAGE>
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners
Willow Creek Housing Associates, Ltd.
HUD Project No. 125-10515 REF
Reno, Nevada
We have audited the accompanying balance sheet of Willow Creek Housing
Associates, Ltd., (a Limited Partnership), HUD Project No. 125-10515, REF as of
December 31, 1994, and the related statement of income and partners' equity, and
statement of cash flows for the year then ended. These financial statements are
the responsibility of the Project's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide"), issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General, in July 1993. Those statements and the Guide require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Willow Creek Housing Associates, Ltd., HUD
Project No. 125-10515 REF as of December 31, 1994, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles. The supplemental information included
in these financial statements shown on pages 13 through 20 has been subjected to
the same auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is presented fairly in all material respects in
relation to the basic financial statements taken as a whole.
/s/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
February 15, 1995
<PAGE>
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners
Birch Associates Limited Partnership
dba Reno Apartments I-IV
HUD Project No. 125-94006
Reno, Nevada
We have audited the accompanying balance sheet of Birch Associates Limited
Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, as of December
31, 1996, and the related statements of income and partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Project's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Birch Associates Limited Partnership, dba
Reno Apartments I-IV, HUD Project No. 125-9400, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Goverment Auditing Standards, we have also issued a report
dated February 10, 1997, on our consideration of of Birch Associates Limited
Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, internal
control structure and reports dated February 10, 1997, on its compliance with
laws and regulations.
<PAGE>
To the General Partners
Birch Associates Limited Partnership
Page 2
The accompanying supplementary information shown on pages 13 to 21 is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of the Partnership. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
February 10, 1997
<PAGE>
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners
Birch Associates Limited Partnership
dba Reno Apartments I-IV
HUD Project No. 125-94006
Reno, Nevada
We have audited the accompanying balance sheet of Birch Associates Limited
Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, as of December
31, 1995, and the related statements of income and partners' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Project's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Birch Associates Limited Partnership, dba
Reno Apartments I-IV, HUD Project No. 125-94006 as of December 31, 1995, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Goverment Auditing Standards, we have also issued a report
dated February 9, 1996, on our consideration of of Birch Associates Limited
Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, internal
control structure and reports dated February 9, 1996, on its compliance with
specific requirements applicable to major HUD programs, specific requirements
applicable to Affirmative Fair Housing, and specific requirements applicable to
nonmajor HUD program transactions.
<PAGE>
To the General Partners Birch
Associates Limited Partnership Page 2
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole.The Accompanying supplementary information
shown on pages 13 to 20 is presented for purposes of additional analysis and is
not a required part of the basic financial statements of the Partnership. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
February 9, 1996
<PAGE>
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners
Birch Associates Limited Partnership
dba Reno Apartments I-IV
HUD Project No. 125-10508 REF
Reno, Nevada
We have audited the accompanying balance sheet of Birch Associates Limited
Partnership, dba Reno Apartments I-IV, HUD Project No. 125-10508 REF, as of
December 31, 1994, and the related statement of income and partners' equity, and
statement of cash flows for the year then ended. These financial statements are
the responsibility of the Project's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide"), issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General, in July 1993. Those statements and the Guide require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Birch Associates Limited Partnership, dba
Reno Apartments I-IV HUD Project No. 125-10508 REF as of December 31, 1994, and
the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles. The supplemental
information included in these financial statements shown on pages 13 through 18
has been subjected to the same auditing procedures applied in the audit of the
basic financial statements and, in our opinion, is presented fairly in all
material respects in relation to the basic financial statements taken as a
whole.
/s/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
February 15, 1995
<PAGE>
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners
Linden Housing Associates, Ltd.
dba Linden Apartments
HUD Project No. 125-94007
Reno, Nevada
We have audited the accompanying balance sheet of Linden Housing Associates,
Ltd., dba Linden Apartments, HUD Project No. 125-94007, as of December 31, 1996,
and the related statement of income and partners' equity, and cash flows for the
year then ended. These financial statements are the responsibility of the
Project's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position Linden Housing Associates, Ltd,
dba Linden Apartments, HUD Project No. 125-94007 as of December 31, 1996, and
the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Goverment Auditing Standards we have also issued a report
dated February 10, 1997, on our consideration of Linden Housing Associates,
Ltd., dba Linden Apartments, HUD Project No. 125-94007, internal control
structure and reports dated February 10, 1997, on its compliance with laws and
regulations
To the General Partners
Linden Housing Associates, Ltd.
Page 2
The accompanying supplementary information shown on pages 13 to 21 is presented
for purposes of additional analysis and is not a required part of the basic
financial statements of the Partnership. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
February 10, 1997
<PAGE>
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners
Linden Housing Associates, Ltd.
dba Linden Apartments
HUD Project No. 125-94007
Reno, Nevada
We have audited the accompanying balance sheet of Linden Housing Associates,
Ltd., dba Linden Apartments, HUD Project No. 125-94007, as of December 31, 1995,
and the related statement of income and partners' equity, and statement of cash
flows for the year then ended. These financial statements are the responsibility
of the Project's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position Linden Housing Associates, Ltd,
dba Linden Apartments, HUD Project No. 125-94007 as of December 31, 1995, and
the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Goverment Auditing Standards and the Consolidated Audit Guide
for Audits of HUD Programs issued by the U.S. Department of Housing and Urban
Development, we have also issued a report dated January 26, 1996, on our
consideration of Linden Housing Associates, Ltd., dba Linden Apartments, HUD
Project No. 125-94007, internal control structure and reports dated January 26,
1996, on its compliance with specific requirements applicable to major HUD
programs, specific requirements applicable to Affirmative Fair Housing, and
specific requirements applicable to nonmajor HUD program transactions.
To the General Partners
Linden Housing Associates, Ltd.
Page 2
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Accompanying supplementary
information shown on pages 13 to 20 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financia
statements taken as a whole.
/s/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
January 26, 1996
<PAGE>
[Letterhead]
INDEPENDENT AUDITORS' REPORT
To the General Partners
Linden Housing Associates, Ltd.
dba Linden Apartments
FHA Project No. 125-10511 REF
Reno, Nevada
We have audited the accompanying balance sheet of Linden Housing Associates,
Ltd., (a Limited Partnership), dba Linden Apartments, FHA Project No. 125-10511
REF, as of December 31, 1994, and the related statement of income and partners'
equity, and statement of cash flows for the year then ended. These financial
statements are the responsibility of the Project's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States, and the Consolidated Audit Guide for Audits of HUD Programs (the
"Guide"), issued by the U.S. Department of Housing and Urban Development, Office
of Inspector General, in July 1993. Those statements and the Guide require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, financial position of Linden Housing Associates, Ltd., dba Linden
Apartments, FHA Project No. 125-10511 REF as of December 31, 1994, and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles. The supplemental
information included in these financial statements shown on pages 13 through 18
has been subjected to the same auditing procedures applied in the audit of the
basic financial statements and, in our opinion, is presented fairly in all
material respects in relation to the basic financial statements taken as a
whole.
/s/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
February 15, 1995
<PAGE>
<PAGE>
[Letterhead]
[LOGO]
R.D. HOAG & ASSOCIATES
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Eastmont Estates Associates
We have audited the accompanying balance sheets of HUD No. 033-35194-PM-SR (the
"Project") of Eastmont Estates Associates (A Limited Partnership) as of December
31, 1996 and 1995, and the related statements of operations and changes in
partners' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Project's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We have conducted our audits in accordance with generally accepted auditing
standards and Goverment Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HUD Project No. 033-35194-PM-SR
of Eastmont Estates Associates as of December 31, 1996 and 1995, and the results
of its operations and changes in partners' equity, and cash flows for the years
then ended, in conformity with generally accepted accounting principles.
In accordance with Goverment Auditing Standards and the Consolidated Audit Guide
for Audits of HUD Programs issued by the U.S. Department of Housing and Urban
Development, we have also issued a report dated February 7, 1997, on our
consideration of HUD Project No. 033-35194-PM-SR (The "Project") of Eastmont
Estates Associates
internal control structure, and reports dated February 7, 1997, on its
compliance with specific requirements applicable to major HUD programs, specific
requirements applicable to Affirmative Fair Housing, and specific requirements
applicable to nonmajor HUD program transactions.
/s/R.D. Hoag & Assoc. P.C.
R.D. Hoag & Associates,
A Professional Corporation
February 7, 1997
Pittsburgh, Pennsylvania
<PAGE>
[Letterhead]
[LOGO]
R.D. HOAG & ASSOCIATES
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Eastmont Estates Associates
We have audited the accompanying balance sheets of HUD No. 033-35194-PM-SR (the
"Project") of Eastmont Estates Associates (A Limited Partnership) as of December
31, 1995 and 1994, and the related statements of operations and changes in
partners' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Project's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We have conducted our audits in accordance with generally accepted auditing
standards and Goverment Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of HUD Project No. 033-35194-PM-SR
of Eastmont Estates Associates, as of December 31, 1995 and 1994, and the
results of its operations and changes in partners' equity, and cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
In accordance with Goverment Auditing Standards and the Consolidated Audit Guide
for Audits of HUD Programs issued by the U.S. Department of Housing and Urban
Development, we have also issued a report
dated February 13, 1996, on our consideration of Eastmont Estates Associates,
Ltd, HUD Project No. 033-35194-PM-SR (The "Project") of internal control
structure, and reports dated February 13, 1996, on its compliance with specific
requirements applicable to major HUD programs, specific requirements applicable
to Affirmative Fair Housing, and specific requirements applicable to nonmajor
HUD program transactions.
/s/R.D. Hoag & Assoc. P.C.
R.D. Hoag & Associates,
A Professional Corporation
February 13, 1996
Pittsburgh, Pennsylvania
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of
Spring Hill Housing Associates I, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates
I, Ltd. (a limited partnership), HUD Project No. 109-94001, as of December 31,
1996, and the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position Spring Hill Housing Associates I,
Ltd., HUD Project No. 109-94001, as of December 31, 1996, and the results of its
operations and the changes in its partners' equity (deficiency) and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/Stark Tinter & Associates
January 30, 1997
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of
Spring Hill Housing Associates I, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates
I, Ltd. (a limited partnership), HUD Project No. 109-94001, as of December 31,
1995, and the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position Spring Hill Housing Associates I,
Ltd., HUD Project No. 109-94001 as of December 31, 1995, and the results of its
operations and the changes in partners' equity (deficiency) and its cash flows
for the year then ended, in conformity with generally accepted accounting
principles.
/s/Stark Tinter & Associates
January 30, 1996
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of
Spring Hill Housing Associates I, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates
I, Ltd. (a limited partnership), HUD Project No. 109-94001, as of December 31,
1994, and the related statements of profit and loss, changes in partners' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Spring Hill Housing Associates
I, Ltd., HUD Project No. 109-94001 as of December 31, 1994, and the results of
its operations and the changes in its partners' equity and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
/s/Stark Tinter & Associates
February 5, 1995
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of
Spring Hill Housing Associates II, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates
II, Ltd. (a limited partnership), HUD Project No. 109-94002 as of December 31,
1996, and the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Spring Hill Housing Associates
II, Ltd., HUD Project No. 109-94002, as of December 31, 1996, and the results of
its operations and the changes in its partners' equity (deficiency) and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/Stark Tinter & Associates
January 30, 1997
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of
Spring Hill Housing Associates II, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates
II, Ltd. (a limited partnership), HUD Project No. 109-94002 as of December 31,
1995, and the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Spring Hill Housing Associates
II, Ltd., HUD Project No. 109-94002, as of December 31, 1995, and the results of
its operations and the changes in its partners' equity (deficiency) and its cash
flows for the year then ended, in conformity with generally accepted accounting
principles.
/s/Stark Tinter & Associates
January 30, 1996
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of
Spring Hill Housing Associates II, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates
II, Ltd. (a limited partnership), HUD Project No. 109-94002 as of December 31,
1994, and the related statements of profit and loss, changes in partners' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Spring Hill Housing Associates
II, Ltd., HUD Project No. 109-94002, as of December 31, 1994, and the results of
its operations and the changes in its partners' equity and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
/s/Stark Tinter & Associates
February 5, 1995
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of
Spring Hill Housing Associates III, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates
III, Ltd. (a limited partnership), HUD Project No. 109-94003, as of December 31,
1996, and the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Spring Hill Housing Associates
III, Ltd., HUD Project No. 109-94003, as of December 31, 1996, and the results
of its operations and the changes in its partners' equity (deficiency) and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
/s/Stark Tinter & Associates
January 30, 1997
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of
Spring Hill Housing Associates III, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates
III, Ltd. (a limited partnership), HUD Project No. 109-94003, as of December 31,
1995, and the related statements of profit and loss, changes in partners' equity
(deficiency) and cash flows for the year then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Spring Hill Housing Associates
III, Ltd., HUD Project No. 109-94003, as of December 31, 1995, and the results
of its operations and the changes in its partners' equity (deficiency) and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
/s/Stark Tinter & Associates
January 30, 1996
<PAGE>
[Letterhead]
[LOGO]
STARK TINTER & ASSOCIATES, LLC
INDEPENDENT AUDITORS' REPORT
To the Partners of
Spring Hill Housing Associates III, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Associates III,
Ltd. (a limited partnership), HUD Project No. 109-94003, as of December 31,
1994, and the related statements of profit and loss, changes in partners' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Spring Hill Housing Associates
III, Ltd., HUD Project No. 109-94003, as of December 31, 1994, and the results
of its operations and the changes in its partners' equity and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
/s/Stark Tinter & Associates
February 5, 1995
<PAGE>
[Letterhead]
[LOGO]
Floyd & Company
306 Commercial Drive Suite 202 Post Office Box 14251
Savannah, Georgia 31406 Savannah, Georgia 31416
Phone:(912)355-9969
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Willowpeg Lane Limited Partnership
We have audited the accompanying balance sheets of Willowped Lane Limited
Partnership (a Georgia limited partnership) as of December 31, 1996 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
The financial statement information for the year ending December 31, 1995 was
audited by another independent certified public accountant who expressed and
unqualified opinion dated March 16, 1996.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
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 provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Willowpeg Lane Limited
Partnership (a Georgia limited partnership) as of December 31, 1996 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company, C.P.A.
/s/R. Doug Floyd
February 28, 1997
<PAGE>
[Letterhead]
[LOGO]
David C. Moja, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Willowpeg Lane Limited Partnership
We have audited the accompanying balance sheets of Willowped Lane Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1995 and December
31, 1994, and the related statements of operations, partners' equity (deficit)
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
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 provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Willowpeg Lane Limited
Partnership (a Georgia Limited Partnership), as of December 31, 1995 and
December 31, 1994, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information listed in the
table of contents is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information, except for
the portion marked "unaudited", on which we express no opinion, has been
subjected to the procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly presented in all material respects in
relation to the basic financial statements taken as a whole.
/s/David C. Moja
David C. Moja, C.P.A., P.C.
March 12, 1996
Savannah, Georgia
<PAGE>
<PAGE>
[Letterhead]
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DAVID G. PELLICIONE, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Americus Properties Limited Partnership
We have audited the accompanying balance sheets of AMERICUS PROPERTIES LIMITED
PARTNERSHIP (a Limited Partnership), as of December 31, 1996 and 1995, and the
related statement of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards issued by the Comptroller General of the United
States. 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AMERICUS PROPERTIES LIMITED
PARTNERSHIP as of December 31, 1996 and 1995 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements of AMERICUS PROPERTIES LIMITED PARTNERSHIP taken as a whole. The
accompanying financial information listed as supplementary data in the table of
contents is presented for purposes of additional analysis as required by Farmers
Home Administration. The information in these schedules has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements of AMERICUS PROPERTIES LIMITED PARTNERSHIP, taken as a
whole.
/s/David G. Pellicione
Savannah, Georgia
February 25, 1997
<PAGE>
[Letterhead]
[LOGO]
DAVID G. PELLICIONE, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Americus Properties Limited Partnership
We have audited the accompanying balance sheets of AMERICUS PROPERTIES LIMITED
PARTNERSHIP (a Limited Partnership), as of December 31, 1995 and 1994, and the
related statement of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AMERICUS PROPERTIES LIMITED
PARTNERSHIP as of December 31, 1995 and 1994 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements of AMERICUS PROPERTIES LIMITED PARTNERSHIP taken as a whole. The
accompanying financial information listed as supplementary data in the table of
contents is presented for purposes of additional analysis as required by Farmers
Home Administration. The information in these schedules has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements of AMERICUS PROPERTIES LIMITED PARTNERSHIP, taken as a
whole.
/s/David G. Pellicione
Savannah, Georgia
March 1, 1996
<PAGE>
[Letterhead]
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Coopers & Lybrand L.L.P.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Atlantic Terrace Limited Partnership:
We have audited the accompanying balance sheet of Atlantic Terrace Limited
Partnership as of December 31, 1995, and the related statements of profit and
loss, partners' capital (deficiency), and cash flows for the year then ended.
These financial statements are the responsibility of the management of Atlantic
Terrace Limited Partnership. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Atlantic Terrace Limited
Partnership as of December 31, 1995, and the results of its operations, and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 9, 1996 on our consideration of Atlantic Terrace Limited
Partnership's internal control structure and a report dated February 9, 1996 on
its compliance with laws and regulations.
/s/Coopers & Lybrand L.L.P
Boston, Massachusetts
February 9, 1996
<PAGE>
<PAGE>
[Letterhead]
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Reznick Fedder & Silverman
Independent Auditors' Report
To the Partners
Garden Cove Apartments, Ltd.
We have audited the accompanying balance sheet of Garden Cove Apartments, Ltd.
as of December 31, 1996, and the related statements of profit and loss (on HUD
Form No. 92410), partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Garden Cove Apartments, Ltd as
of December 31, 1996, and the results of its operations, the changes in
partners' equity and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary information on pages 20 to 26 is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
<PAGE>
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HUD Programs", we have also issued reports dated January 20,
1997 on our consideration of Garden Cove Apartments, Ltd.'s internal control
structure and on its compliance with specific requirements applicable to major
HUD programs, affirmative fair housing, and laws and regulations applicable to
the financial statements.
/s/Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 20, 1997 Identification Number
52-1088612
Audit Principal: Philip A. Weitzel
<PAGE>
[Letterhead]
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John D. Schuler
Independent Auditor's Report
To the Partners
B & C Housing Associates, III
Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates,
III, A Limited Partnership, HUD Project No. 117-94008, as of December 31, 1996,
and 1995, and the related statements of income and expense, changes in partners'
capital and cash flows for the year ended December 31, 1996. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of B & C Housing Associates, III,
as of December 31, 1996 and 1995, and the results of its operations and the
changes in partners' capital and cash flows for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 18, 1997 on our
consideration of B & C Housing Associates, III's internal control structure and
reports dated January 18, 1997, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
progam transactions.
<PAGE>
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 14 to 19 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/John D. Schuler
Tulsa, Oklahoma
January 18, 1997
<PAGE>
[Letterhead]
[LOGO]
John D. Schuler
Independent Auditor's Report
To the Partners
B & C Housing Associates, III
Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates,
III, A Limited Partnership, HUD Project No. 117-94008, as of December 31, 1995,
and 1994, and the related statements of income and expense, changes in partners'
capital and cash flows for the year ended December 31, 1995. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of B & C Housing Associates, III,
as of December 31, 1995 and 1994, and the results of its operations and the
changes in partners' capital and cash flows for the year ended December 31,
1995, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 20, 1996 on our
consideration of B & C Housing Associates, III's internal control structure and
reports dated January 20, 1996, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
progam transactions.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 14 to 19 is presented for the purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/John D. Schuler
Tulsa, Oklahoma
January 20, 1996
<PAGE>
[Letterhead]
[LOGO]
Velez, Semprit, Nieves & Co.
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
Partners
San Antonio Limited Dividend Partnership S.E.
San Juan, Puerto Rico
We have audited the accompanying balance sheets of San Antonio Limited Dividend
Partnership S.E. as of December 31, 1996 and 1995, and the related statements of
operations, partners' equity (deficiency) and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We 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. 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 provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of San Antonio Limited Dividend
Partnership S.E. as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/Velez, Semprit Nieves & Co.
February 4, 1997
Stamp number 1411418 was
affixed to the original of this report
<PAGE>
[Letterhead]
[LOGO]
Velez, Semprit, Nieves & Co.
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
Partners
San Antonio Limited Dividend Partnership S.E.
San Juan, Puerto Rico
We have audited the accompanying balance sheets of San Antonio Limited Dividend
Partnership S.E. as of December 31, 1995 and 1994, and the related statements of
operations, partners' equity (deficiency) and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We 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. 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 provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of San Antonio Limited Dividend
Partnership S.E. as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/Velez, Semprit Nieves & Co.
February 2, 1996
Stamp number 1340312 was
affixed to the original of this report
<PAGE>
[Letterhead]
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Floyd & Company
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Waynesboro Properties Limited Partnership
We have audited the accompanying balance sheets of Waynesboro Properties Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
related statements of operations, partners' equity (deficit) and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
The financial statement information for the year ending December 31, 1995 was
audited by another independent certified public accountant who expressed and
unqualified opinion dated March 16, 1996.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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 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 provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Waynesboro Properties Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company, CPA
/s/R. Doug Floyd
February 28, 1997
<PAGE>
[Letterhead]
[LOGO]
David C. Moja, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the General Partners of
Waynesboro Properties Limited Partnership
We have audited the accompanying balance sheets of Waynesboro Properties Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1995 and December
31, 1994, and the related statements of operations, partners' equity (deficit)
and cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our auditsin accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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 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 provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Waynesboro Properties Limited
Partnership (a Georgia Limited Partnership), as of December 31, 1995 and
December 31, 1994, and the results of its operations and cash flows for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information listed in the
table of contents is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information. except for
the portion marked "unaudited", on which we express no opinion, has been
subjected to the procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly presented in all material respects in
relation to the basic financial statements taken as a whole.
/s/David C. Moja
David C. Moja, C.P.A., P.C.
March 12, 1996
Savannah, Georgia
<PAGE>
[Letterhead]
[LOGO]
DAVID G. PELLICIONE, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Monroe Properties Limited Partnership
We have audited the accompanying balance sheets of MONROE PROPERTIES LIMITED
PARTNERSHIP (A Limited Partnership), as of December 31, 1996 and 1995, and the
related statement of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards issued by the Comptroller General of the
United States. 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MONROE PROPERTIES LIMITED
PARTNERSHIP as of December 31, 1996 and 1995 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements of MONROE PROPERTIES LIMITED PARTNERSHIP taken as a whole. The
accompanying financial information listed as supplementary data in the table of
contents is presented for purposes of additional analysis as required by Farmers
Home Administration. The information in these schedules has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements of MONROE PROPERTIES LIMITED PARTNERSHIP, taken as a
whole.
/s/David G. Pellicione
Savannah, Georgia
February 25, 1997
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[Letterhead]
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DAVID G. PELLICIONE, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Monroe Properties Limited Partnership
We have audited the accompanying balance sheets of MONROE PROPERTIES LIMITED
PARTNERSHIP (A Limited Partnership), as of December 31, 1995 and 1994, and the
related statement of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MONROE PROPERTIES LIMITED
PARTNERSHIP as of December 31, 1995 and 1994 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements of MONROE PROPERTIES LIMITED PARTNERSHIP taken as a whole. The
accompanying financial information listed as supplementary data in the table of
contents is presented for purposes of additional analysis as required by Farmers
Home Administration. The information in these schedules has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly presented in all material respects in relation to
the financial statements of MONROE PROPERTIES LIMITED PARTNERSHIP, taken as a
whole.
/s/David G. Pellicione
Savannah, Georgia
March 1, 1996
<PAGE>
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Braunsdorf, Carlson and Clinkinbeard
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Mulberry Associates I, L.P.
Mulberry, Arkansas
We have audited the accompanying balance sheet of Mulberry Associates I, L.P. (a
Missouri limited partnership) FmHA Case No: 30-170-431435777 as of December 31,
1995, and the related statements of loss, partners' equity and cash flows for
the year ended December 31, 1994. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mulberry Associates I, L.P., as
of December 31, 1995, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 13, 1996
<PAGE>
[Letterhead]
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Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners
Ward Manor Associates Limited Partnership
Ward, Arkansas
We have audited the accompanying balance sheet of Ward Manor Associates Limited
Partnership (a Missouri limited partnership) Rural Development Case No:
03-043-431482892 as of December 31, 1996, and the related statements of loss,
partners' equity and cash flows for the year ended December 31, 1996. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit 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. 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 audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ward Manor Associates Limited
Partnership as of December 31, 1996 and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
January 21, 1997
<PAGE>
[Letterhead]
[LOGO]
Braunsdorf, Carlson and Clinkinbeard
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Ward Manor Associates Limited Partnership
Ward, Arkansas
We have audited the accompanying balance sheet of Ward Manor Associates Limited
Partnership (a Missouri limited partnership) FmHA Case No: 03-043-431482892 as
of December 31, 1994, and the related statements of loss, partners' equity and
cash flows for the year ended December 31, 1994. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audit 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. 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 audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ward Manor Associates Limited
Partnership as of December 31, 1994 and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 25, 1995
<PAGE>
[Letterhead]
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Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners
Paragould Associates I, Limited Partnership
Paragould, Arkansas
We have audited the accompanying balance sheet of Paragould Associates I,
Limited Partnership (a Missouri limited partnership) Rural Development Case No.
: as of December 31, 1996, and the related statements of loss, partners' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Paragould Associates I, Limited
Partnership as of December 31, 1996, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
January 21, 1997
<PAGE>
[Letterhead]
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Braunsdorf, Carlson and Clinkinbeard
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Paragould Associates I, Limited Partnership
Paragould, Arkansas
We have audited the accompanying balance sheet of Paragould Associates I,
Limited Partnership (a Missouri limited partnership) as of December 31, 1994 and
1993, and the related statements of loss, partners' equity and cash flows for
the year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Paragould Associates I, Limited
Partnership as of December 31, 1994 and 1993, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 24, 1995
<PAGE>
[Letterhead]
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Braunsdorf, Carlson and Clinkinbeard
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Lamar Associates, Limited Partnership
Lamar, Arkansas
We have audited the accompanying balance sheet of Lamar Associates, Limited
Partnership (a Missouri limited partnership) RECD Case No.: 03-036-431424399 as
of December 31, 1995, and the related statements of loss, partners' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lamar Associates, Limited
Partnership as of December 31, 1995, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 7, 1996
<PAGE>
[Letterhead]
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John D. Schuler
Independent Auditor's Report
To the Partners
B & C Housing Associates, II
Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates, II,
a Limited Partnership, HUD Project No. 118-94005, as of December 31, 1996, and
1995, and the related statements of income and expense, changes in partners'
(deficiency) and cash flows for the year ended December 31, 1996. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of B & C Housing Associates, II,
as of December 31, 1996 and 1995, and the results of its operations and the
changes in partners' (deficiency) and cash flows for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 18, 1997, on our
consideration of B & C Housing Associates, II's internal control structure and
reports dated January 18, 1997, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
progam transactions.
<PAGE>
Our audit was conducted for the purpose of forming
an opinion on the basic financial statements taken as a whole. The accompanying
supplementary information shown on pages 14 to 19 is presented for purposes of
additional analysis and is not a required part of the basic financial statements
of the Partnership. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/John D. Schuler
Tulsa, Oklahoma
January 18, 1997
<PAGE>
[Letterhead]
[LOGO]
John D. Schuler
Independent Auditor's Report
To the Partners
B & C Housing Associates, II
Marlton, New Jersey
We have audited the accompanying balance sheets of B & C Housing Associates, II,
a Limited Partnership, HUD Project No. 118-94005, as of December 31, 1995, and
1994, and the related statements of income and expense, changes in partners'
(deficiency) and cash flows for the year then ended December 31, 1995. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of B & C Housing Associates, II,
as of December 31, 1995 and 1994, and the results of its operations and the
changes in partners' (deficiency) and cash flows for the year ended December 31,
1995, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 20, 1996, on our
consideration of B & C Housing Associates, II's internal control structure and
reports dated January 20, 1996, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
progam transactions.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 14 to 19 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/John D. Schuler
Tulsa, Oklahoma
January 20, 1996
<PAGE>
[Letterhead]
[LOGO]
John D. Schuler
Independent Auditor's Report
To the Partners
Shadow Wood Housing Associates, Limited
Marlton, New Jersey
We have audited the accompanying balance sheets of Shadow Wood Housing
Associates, Limited, An Oklahoma Limited Partnership, HUD Project No. 117-94009,
as of December 31, 1996, and 1995, and the related statements of income and
expense, changes in partners' equity and cash flows for the year then ended
December 31, 1996. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Shadow Wood Housing Associates,
Limited, as of December 31, 1996, and 1995, and the results of its operations
and the changes in partners'equity and cash flows for the year ended December
31, 1996, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 18, 1997, on our
consideration of Shadow Wood Housing Associates, Limited's internal control
structure and reports dated January 18, 1997, on its compliance with specific
requirements applicable to major HUD programs, specific requirements applicable
to Affirmative Fair Housing, and specific requirements applicable to nonmajor
HUD progam transactions.
<PAGE>
Our audit was conducted for the purpose of
forming an opinion on the basic financial statements taken as a whole. The
accompanying supplementary information shown on pages 14 to 19 is presented for
purposes of additional analysis and is not a required part of the basic
financial statements of the Partnership. Such information has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/John D. Schuler
Tulsa, Oklahoma
January 18, 1997
<PAGE>
[Letterhead]
[LOGO]
John D. Schuler
Independent Auditor's Report
To the Partners
Shadow Wood Housing Associates, Limited
Marlton, New Jersey
We have audited the accompanying balance sheets of Shadow Wood Housing
Associates, Limited, An Oklahoma Limited Partnership, HUD Project No. 117-94009,
as of December 31, 1995, and 1994, and the related statements of income and
expense, changes in partners' equity and cash flows for the year then ended
December 31, 1995. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Shadow Wood Housing Associates,
Limited, as of December 31, 1995, and 1994, and the results of its operations
and the changes in partners'equity and cash flows for the year ended December
31, 1995, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 20, 1996, on our
consideration of Shadow Wood Housing Associates, Limited's internal control
structure and reports dated January 20, 1996, on its compliance with specific
requirements applicable to major HUD programs, specific requirements applicable
to Affirmative Fair Housing, and specific requirements applicable to nonmajor
HUD progam transactions.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 14 to 19 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/John D. Schuler
Tulsa, Oklahoma
January 20, 1996
<PAGE>
[Letterhead]
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Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners
Wayne Senior Housing , A Limited Partnership
Wayne, Nebraska
We have audited the accompanying balance sheet of Wayne Senior Housing, A
Limited Partnership (a Kansas limited partnership) Rural Development Case No.:
32-090-481008237 as of December 31, 1996, and the related statements of loss,
partners' equity and cash flows for the year ended December 31, 1996. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wayne Senior Housing , A
Limited Partnership as of December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
January 21, 1997
<PAGE>
[Letterhead]
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ZINER & COMPANY, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners of
Wayne Apartments Project Limited Partnership
We have audited the accompanying balance sheet of Wayne Apartments Project
Limited Partnership (a Massachusetts limited partnership) (Project No.
023-44269) as of December 31, 1996, and the related statements of changes in
partners' capital, profit and loss, and cash flows for the year then ended.
These financial statements are the responsibility of Wayne Apartments Project
Limited Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wayne Apartments Project
Limited Partnership as of December 31, 1996, and the results of its operations,
its cash flows and its changes in partners' capital for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Govenment Auditing Standards, we have also issued a report
dated January 23, 1997 on our consideration of Wayne Apartments Project Limited
Partnership's internal control structure and a report dated January 23, 1997 on
its compliance with laws and regulations.
/s/Ziner & Company, P.C.
January 23, 1997
<PAGE>
[Letterhead]
[LOGO]
ZINER & COMPANY, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners of
Wayne Apartments Project Limited Partnership
We have audited the accompanying balance sheet of Wayne Apartments Project
Limited Partnership (a Massachusetts limited partnership) (Project No.
023-44269) as of December 31, 1995 and the related statements of changes in
partners' capital, profit and loss, and cash flows for the year then ended.
These financial statements are the responsibility of Wayne Apartments Project
Limited Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wayne Apartments Project
Limited Partnership as of December 31, 1995, and the results of its operations,
its cash flows and its changes in partners' capital for the year then ended, in
conformity with generally accepted accounting principles.
In accordance with Govenment Auditing Standards, we have also issued a report
dated January 26, 1996 on our consideration of Wayne Apartments Project Limited
Partnership's internal control structure and a report dated January 26, 1996 on
its compliance with laws and regulations.
/s/Ziner & Company, P.C.
January 26, 1996
<PAGE>
[Letterhead]
[LOGO]
ZINER & COMPANY, P.C.
Independent Auditor's Report
To the Partners of
Wayne Apartments Project Limited Partnership
We have audited the accompanying balance sheet of Wayne Apartments Project
Limited Partnership (a Massachusetts limited partnership) (Project No.
023-44269) as of December 31, 1994, and the related statements of changes in
partners' capital, profit and loss, and cash flows for the year then ended.
These financial statements are the responsibility of the Wayne Apartments
Project Limited Partnership's general partner. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by the general partner, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wayne Apartments Project
Limited Partnership, as of December 31, 1994, and the results of its operations,
its cash flows and its changes in partners' capital for the year then ended in
conformity with generally accepted accounting principles.
/s/Ziner & Company, P.C.
January 23, 1995
<PAGE>
[Letterhead]
[LOGO]
John D. Schuler
Independent Auditors' Report
To the Partners
Chaparral Housing Associates, Ltd.
Marlton, New Jersey
We have audited the accompanying balance sheets of Chaparral Housing Associates,
Ltd., An Oklahoma Limited Partnership, HUD Project No. 133-94005, as of December
31, 1996, and 1995, and the related statements of income and expense, changes in
partners' capital and cash flows for the year ended December 31, 1996. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of th
United States. 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chaparral Housing Associates,
Ltd., as of December 31, 1996, and 1995, and the results of its operations and
the changes in partners' capital and cash flows for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 18, 1997, on our
consideration of Chaparral Housing Associates, Ltd.'s internal control structure
and reports dated January 18, 1997, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
progam transactions.
<PAGE>
Our audit was conducted for the purpose of forming
an opinion on the basic financial statements taken as a whole. The accompanying
supplementary information shown on pages 14 to 19 is presented for purposes of
additional analysis and is not a required part of the basic financial statements
of the Partnership. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/John D. Schuler
Tulsa, Oklahoma
January 18, 1997
<PAGE>
[Letterhead]
[LOGO]
John D. Schuler
Independent Auditors' Report
To the Partners
Chaparral Housing Associates, Ltd.
Marlton, New Jersey
We have audited the accompanying balance sheets of Chaparral Housing Associates,
Ltd., An Oklahoma Limited Partnership, HUD Project No. 133-94005, as of December
31, 1995, and 1994, and the related statements of income and expense, changes in
partners' capital and cash flows for the year ended December 31, 1995. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chaparral Housing Associates,
Ltd., as of December 31, 1995, and 1994, and the results of its operations and
the changes in partners' capital and cash flows for the year ended December 31,
1995, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 20, 1996, on our
consideration of Chaparral Housing Associates, Ltd.'s internal control structure
and reports dated January 20, 1996, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
progam transactions.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information shown on pages 14 to 19 is presented for purposes of additional
analysis and is not a required part of the basic financial statements of the
Partnership. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/John D. Schuler
Tulsa, Oklahoma
January 20, 1996
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Snapfinger Creste Apartments, L.P.
We have audited the accompanying balance sheet of SNAPFINGER CRESTE APARTMENTS,
L.P., as of December 31, 1996, and the related statements of changes in
partners' equity (deficit), operations, and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
As discussed in Note 1 to the financial statements, the Partnership has been in
default of its mortgage loan agreement with its lender since March of 1996 when
the Partnership ceaseed making its monthly mortgage payment and required escrow
deposits. The Partnership and the lender have been in negotiation regarding
various workout arrangements; however, at this time no agreement has been
reached and there is substantial doubt about the Partnership's ability to
continue as going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SNAPFINGER CRESTE APARTMENTS,
L.P., as of December 31, 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 21, 1997
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Snapfinger Creste Apartments, L.P.
We have audited the accompanying balance sheet of SNAPFINGER CRESTE APARTMENTS,
L.P., as of December 31, 1995, and the related statements of changes in
partners' equity, operations, and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SNAPFINGER CRESTE APARTMENTS,
L.P., as of December 31, 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 31, 1996
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Snapfinger Creste Apartments, L.P.
We have audited the accompanying balance sheet of SNAPFINGER CRESTE APARTMENTS,
L.P., as of December 31, 1994, and the related statements of changes in
partners' equity [deficit], operations, and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SNAPFINGER CRESTE APARTMENTS,
L.P., as of December 31, 1994, and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplementary information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
February 1, 1995
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Grayton Pointe Apartments, L.P.
We have audited the accompanying balance sheets of GRAYTON POINTE APARTMENTS
L.P. [a Georgia Limited Partnership], as of December 31, 1996, and the related
statements of changes in partners' equity (deficit), operations, and cash flows
for the year then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GRAYTON POINTE APARTMENTS, L.P.
as of December 31, 1996, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
As discussed in Note H to the financial statements, the Partnership's first
mortgage loan will mature on March 1, 1997. In addition, the Partnership has
been in default of its second mortgage loan agreement with its lender since
November of 1995 when the partnership ceased making its monthly mortgage
payment. The Partnership and its lenders have been in negotiation regarding
various extensions and workout agreements; however, at this time no agreement
has been reached, and there is substantial doubt about the Partnership's ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 31, 1997
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Grayton Pointe Apartments, L.P.
We have audited the accompanying balance sheets of GRAYTON POINTE APARTMENTS
L.P. [a Georgia Limited Partnership], as of December 31, 1995, and the related
statements of changes in partners' equity, operations, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GRAYTON POINTE APARTMENTS, L.P.
as of December 31, 1995, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 31, 1996
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Grayton Pointe Apartments, L.P.
We have audited the accompanying balance sheet of GRAYTON POINTE APARTMENTS,
L.P. [a Georgia Limited Partnership], as of December 31, 1994, and the related
statements of changes in partners' equity, operations, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GRAYTON POINT APARTMENTS, L.P.
as of December 31, 1994, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
February 1, 1995
<PAGE>
[Letterhead]
[LOGO]
ARTHUR ANDERSON LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Durham Park Limited Partnership
We have audited the accompanying balance sheets of DURHAM PARK LIMITED
PARTNERSHIP (an Oregon limited partnership) as of December 31, 1996 and 1995,
and the related statements of operations, partners' capital, and cash flows for
each of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Durham Park Limited Partnership
as of December 31, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/Arthur Anderson LLP
Denver, Colorado
February 12, 1997
<PAGE>
[Letterhead]
[LOGO]
ARTHUR ANDERSON LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Durham Park Limited Partnership
We have audited the accompanying balance sheets of DURHAM PARK LIMITED
PARTNERSHIP, (an Oregon limited partnership) as of December 31, 1995 and 1994,
and the related statements of operations, partners' capital, and cash flows for
each of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Durham Park Limited Partnership
as of December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
/s/Arthur Anderson LLP
Denver, Colorado
February 1, 1996
<PAGE>
[Letterhead]
[LOGO]
David G. Pelliccione, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Bamberg Properties Limited Partnership
We have audited the accompanying balance sheets of BAMBERG PROPERTIES LIMITED
PARTNERSHIP (A Limited Partnership), as of December 31, 1996 and 1995, and the
related statement of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BAMBERG PROPERTIES LIMITED
PARTNERSHIP as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ David G. Pelliccione
Savannah, Georgia
February 25, 1997
<PAGE>
[Letterhead]
[LOGO]
David G. Pelliccione, C.P.A., P.C.
INDEPENDENT AUDITOR'S REPORT
To the Partners
Bamberg Properties Limited Partnership
We have audited the accompanying balance sheets of BAMBERG PROPERTIES LIMITED
PARTNERSHIP (A Limited Partnership), as of December 31, 1995 and 1994, and the
related statement of operations, changes in partners' equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of BAMBERG PROPERTIES LIMITED
PARTNERSHIP as of December 31, 1995, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
/s/ David G. Pelliccione
Savannah, Georgia
March 1, 1996
<PAGE>
[Letterhead]
[LOGO]
Floyd & Company
INDEPENDENT AUDITORS' REPORT
To the General Partners of
McKinley-Walker Limited Partnership
We have audited the accompanying balance sheets of McKinley-Walker Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
related statements of operations, partners' equity (deficit) and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
The financial statement information for the year ending December 31, 1995 was
audited by another independent certified public accountant who expressed and
unqualified opinion dated March 31, 1996.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. An audit
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 provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of McKinley-Walker Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1996 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Floyd & Company, CPA
/s/R. Doug Floyd
February 28, 1997
<PAGE>
[Letterhead]
[LOGO]
David C. Moja, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the General Partners of
McKinley-Walker Limited Partnership
We have audited the accompanying balance sheets of McKinley-Walker Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1995 and 1994,
and the related statements of operations, partners' equity (deficit) and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Goverment Auditing Standards, issued by the Comptroller General of the
United States. 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. An audit
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 provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of McKinley-Walker Limited
Partnership (a Georgia Limited Partnership) as of December 31, 1995 and 1994,
and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information listed in the
table of contents is presented for purpose of additional analysis and is not a
required part of the basic financial statements. Such information except for the
portion marked "unaudited", on which we express no opinion, has been subjected
to the procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly presented in all material respects in relation to the
basic financial statements taken as a whole.
/s/David C. Moja
David C. Moja, C.P.A., P.C.
March 12, 1996
Savannah, Georgia
<PAGE>
[Letterhead]
[LOGO]
MUELLER, WALLA & ALBERTSON, P.C.
INDEPENDENT AUDITORS' REPORT
The Partners
DeSoto Associates III, L.P.
St. Louis,Missouri
We have audited the accompanying balance sheet of DeSoto Associates III,L.P. (a
limited partnership) as of December 31, 1996, and the related statements of
operations, partners' capital, and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit 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. An audit also includes
assessing the accounting principles used and signifiacant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 1996 financial statements referred to above present fairly,
in all material respects, the financial position of DeSoto Associates III,
L.P.as of December 31, 1996, and the results of its operations, changes in
partners' capital and cash flows for the year then ended in conformity with
generally accepted accounting principles.
The 1995 financial statements were compiled by us and our report thereon, dated
February 9, 1996, stated thta we did not audit or review those financial
statements and, accordingly, expressed no opinion or other form of assurance on
them.
/s/Mueller, Walla & Albertson, P.C.
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
February 7, 1997
<PAGE>
[Letterhead]
[LOGO]
MUELLER, WALLA & ALBERTSON, P.C.
INDEPENDENT AUDITORS' REPORT
The Partners
Warrenton Associates I, L.P.
Warrenton, Missouri
We have compiled the accompanying balance sheet of Warrenton Associates I, L.P.
(a limited partnership) as of December 31, 1996, and the related statements of
operations, partners' capital and cash flows for the year then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
The financial statements for the year ended December 31, 1995, were audited by
us, and we expressed an unqualified opinion on them in our report dated February
6, 1996, but we have not performed any auditing proceedures since that date.
/s/Mueller, Walla & Albertson, P.C.
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
February 10, 1997
<PAGE>
[Letterhead]
[LOGO]
MUELLER & WALLA, P.C.
INDEPENDENT AUDITORS' REPORT
The Partners
Warrenton Associates I, L.P.
Warrenton, Missouri
We have audited the accompanying balance sheet of Warrenton Associates I, L.P.
(a limited partnership) as of December 31, 1995, and the related statements of
operations, partners' capital and cash flows for the year then ended. These
financial statements are the responsibility of the partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit 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. 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 audit provide a reasonable basis for our opinion.
In our opinion, the 1995 financial statements referred to above present fairly,
in all material respects, the financial position of Warrenton Associates, I,
L.P. as of December 31, 1995, and the results of its operations, changes in
partners' capital and cash flows for the year then ended in conformity with
generally accepted accounting principles.
The 1994 financial statements were compiled by us and our report thereon, dated
February 3, 1995, stated that we did not audit or review those financial
statements and, accordingly, express no opinion or other form of assurance on
them.
/s/Mueller & Walla, P.C.
Mueller & Walla, P.C.
Certified Public Accountants
February 6, 1995
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Shannon Creste Apartments, L.P.
We have audited the accompanying balance sheet of SHANNON CRESTE APARTMENTS,
L.P., [a Georgia Limited Partnership], as of December 31, 1996, and the related
statements of changes in partners' equity, operations, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SHANNON CRESTE APARTMENTS, L.P.
as of December 31, 1996, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 31, 1997
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Shannon Creste Apartments, L.P.
We have audited the accompanying balance sheet of SHANNON CRESTE APARTMENTS,
L.P., [a Georgia Limited Partnership], as of December 31, 1995, and the related
statements of changes in partners' equity, operations, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SHANNON CRESTE APARTMENTS, L.P.
as of December 31, 1995, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 31, 1996
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Shannon Creste Apartments, L.P.
We have audited the accompanying balance sheet of SHANNON CRESTE APARTMENTS,
L.P., [a Georgia Limited Partnership], as of December 31, 1994, and the related
statements of changes in partners' equity, operations, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SHANNON CRESTE APARTMENTS, L.P.
as of December 31, 1994, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 31, 1995
<PAGE>
[Letterhead]
[LOGO]
MACDONALDPAGE
Independent Auditor's Report
February 4, 1997
Milo Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Milo Housing Associates (a
limited partnership) as of December 31, 1996, and the related statements of
profit and loss, changes in partners' capital, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Milo Housing Associates as of
December 31, 1996, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
MACDONALDPAGE
Independent Auditor's Report
February 14, 1996
Milo Housing Associates
(a Limited Partnership)
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheet of Milo Housing Associates (a
Limited Partnership) as of December 31, 1995, and the related statements of
profit and loss, changes in partners' capital, and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Milo Housing Associates (a
Limited Partnership) as of December 31, 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[LETTERHEAD]
[LOGO]
MACDONALDPAGE
Independent Auditor's Report
February 10, 1995
Milo Housing Associates
(a Limited Partnership)
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying statement of assets, liabilities and partners'
capital - income tax basis of Milo Housing Associates (a Limited Partnership) as
of December 31, 1994, and the related statements of revenue and expenses -
income tax basis, changes in partners' capital - income tax basis, and cash
flows -income tax basis for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
As described in Note 1, these financial statements were prepared on the basis of
accounting the Partnership uses for income tax purposes, which is a
comprehensive basis of accounting other than generally accepted accounting
principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' capital of Milo
Housing Associates (a Limited Partnership) as of December 31, 1994 and its
revenue and expenses, changes in partners' capital, and cash flows for the year
then ended on the basis of accounting described in Note 1.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors' Report
The Partners
Brighton Manor Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Brighton Manor Apartments, A
Limited Partnership as of December 31, 1996 and 1995, and the related statements
of loss, partners' capital (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
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 of the financial statements includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brighton Manor Apartments, A
Limited Partnership as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/KPMG Peat Marwick LLP
January 24, 1997
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors' Report
The Partners
Brighton Manor Apartments,
A Limited Partnership:
We have audited the balance sheets of Brighton Manor Apartments, A Limited
Partnership as of December 31, 1995 and 1994, and the related statements of
loss, partners' capital (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
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 of the financial statements includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brighton Manor Apartments, A
Limited Partnership as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/KPMG Peat Marwick LLP
February 2, 1996
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
FINANCIAL STATEMENTS
AND
SUPPLEMENTARY INFORMATION
PROJECT NO. 023-44269
For the Year Ended December 31, 1996
<PAGE>
TABLE OF CONTENTS
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statement of Changes in Partners' Capital 4
Statement of Profit and Loss 5
Statement of Cash Flows 7
Notes to Financial Statements 9
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION 12
SUPPLEMENTARY INFORMATION
HUD Supporting Data 13
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL STRUCTURE 19
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE BASED ON AN AUDIT
OF FINANCIAL STATEMENTS 22
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC
REQUIREMENTS APPLICABLE TO MAJOR HUD PROGRAMS 23
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH SPECIFIC
REQUIREMENTS APPLICABLE TO AFFIRMATIVE FAIR HOUSING 24
AUDITORS' COMMENTS ON AUDIT RESOLUTION MATTERS RELATING
TO HUD PROGRAMS 25
MANAGEMENT AGENT'S CERTIFICATE 26
MORTGAGOR'S CERTIFICATE 27
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners of
Wayne Apartments Project Limited Partnership
We have audited the accompanying balance sheet of Wayne Apartments
Project Limited Partnership (a Massachusetts limited partnership) (Project No.
023-44269) as of December 31, 1996, and the related statements of changes in
partners' capital, profit and loss, and cash flows for the year then ended.
These financial statements are the responsibility of Wayne Apartments Project
Limited Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. 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. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Wayne Apartments
Project Limited Partnership as of December 31, 1996, and the results of its
operations, its cash flows and its changes in partners' capital for the year
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 23,1997 on our consideration of Wayne Apartments Project
Limited Partnership's internal control structure and a report dated January
23,1997 on its compliance with laws and regulations.
/s/Ziner & Company, P.C.
January 23,1997
-1-
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
BALANCE SHEET
December 31, 1996
ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT ASSETS
Cash in bank $ 1,388
Tenant accounts receivable $ 46,769
Less allowance for doubtful accounts (27,455) 19,314
---------------
Accounts receivable - HUD 74,099
Accounts receivable - Other 50,000
-------------
144,801
DEPOSITS HELD IN TRUST - FUNDED
Tenant security deposits 68,837
PREPAID EXPENSES
Property insurance 67,667
Mortgage insurance 38,682
106,349
RESTRICTED DEPOSITS AND FUNDED RESERVES
Mortgagee escrow deposits 64,154
Reserve for replacements 560,226
Capital contributions escrow 300,000
-------------
924,380
FIXED ASSETS, at cost
Land 265,817
Buildings and improvements 6,948,290
Building rehabilitation costs 22,775,160
Furnishings and equipment 393,439
-------------
30,382,706
(8,085,841)
Accumulated depreciation 22,296,865
OTHER ASSETS
Unamortized finance fees 239,352
Deposit 1,800
241,152
$ 23,782,384
</TABLE>
The accompanying notes are an integral part of the
financial statements.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
BALANCE SHEET (continued)
December 31, 1996
LIABILITIES AND PARTNERS CAPITAL
<TABLE>
<CAPTION>
<S> <C>
CURRENT LIABILITIES
Accounts payable $ 177,769
Accrued interest payable 82,117
Accrued operating expenses 24,281
Mortgages payable - current portion 298,669
-----------------
582,836
DEPOSITS AND PREPAYMENT LIABILITIES
Tenant security deposits 57,998
Prepaid rent 33,247
91,245
LONG-TERM LIABILITY
Mortgages payable 13,892,416
Less current portion (298,669)
13,593,747
OTHER LIABILITIES
Development fee payable 300,000
Flexible subsidy loan and accrued interest 6,993,285
Residual receipts notes and accrued interest 306,598
-----------------
7,599,883
TOTAL LIABILITIES 21,867,711
PARTNERS' CAPITAL 1,914,673
$ 23,782,384
</TABLE>
The accompanying notes are an integral part of the
financial statements.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
CAPITAL CONTRIBUTIONS $ 10,600,000
-------------
ACCUMULATED LOSSES
Balance at beginning of year (7,319,537)
Net loss for the year (1,348,388)
(8,667,925)
DISTRIBUTIONS
Current year (10,171)
Prior years (7,231)
(17,402)
ENDING PARTNERS' CAPITAL $ 1,914,673
</TABLE>
The accompanying notes are an integral part of the financial statements.
U.S. Department of Housing and Urban Development
Office of Housing Federal Housing Commissioner
STATEMENT OF PROFIT AND LOSS
For the Year Ended December 31, 1996
Public Reporting Burden for this collection of information is estimated to
average 1.0 hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information. Send comments regarding
this burden estimate or any other aspect of this collection of information,
including suggestions for reducing this burden, to the Reports Management
Officer, Office of Information Policies and Systems, U.S. Department of Housing
and Urban Development, Washington, D.C. 20410-3600 and to the Office of
Management and Budget, Paperwork Reduction Project (2502-0052), Washington, D.C.
20503. Do not send this completed form to either of these addressees.
For month /period Project Number Project Name
Beginning Ending Wayne Apartments Project
January 1, 1996 December 31, 1996 023-44269 Limited Partnership
<TABLE>
<CAPTION>
Part I
<S> <C>
Rental Income
Apartment or Member Carrying Charges (Coops) $ 952,045
Tenant Assistance Payments $ 2,624,925
-----------------
Total Rent Revenue Potential at 100% Occupancy 3,576,970
-----------------
Vacancies
Apartments (150,165)
-----------------
Total Vacancies (150,165)
-----------------
Net Rental Revenue Less Vacancies 3,426,805
Interest Income - Project Operations 2,061
Income from investments - Reserves for Replacements 14,974
-----------------
Total Financial Revenue 17,035
-----------------
Other Revenue
- -------------
Laundry and Vending 2,643
Other Revenue (specify) 2,035
-----------------
Total Other Revenue 4,678
-----------------
Total Revenue 3,448,518
-----------------
Administrative Expenses
Other Administrative Expense 4,206
Office Salaries 56,806
Office Supplies 85,007
Office or Model Apartment 22,139
Management 167,818
Manager or Superintendent Salaries 89,887
Legal Expenses (Project) 66,891
Auditing Expenses (Project) 9,996
</TABLE>
he accompanying notes are an integral part of the financial statements.
Limited Partnership 023-44269
<TABLE>
<CAPTION>
<S> <C>
Telephone and Answering Service 13,488
Bad Debts 34,670
Miscellaneous Administrative Expenses (specify) 4,188
-----------------
Total Administrative Expenses 555,096
-----------------
Fuel Oil/ Coalnse 79,591
Electricity (Light and Misc. Power) 52,700
Water 183,349
Gas 158,206
Total Utilities Expense 473,846
Operating and Maintenance Expense
Janitor and Cleaning Supplies 8,083
Janitor and Cleaning Contract 108,900
Exterminating Payroll/ Contract 7,237
Garbage and Trash Removal 33,796
Security Payroll/ Contract 57,222
Grounds Supplies 485
Grounds Contract 15,160
Repairs Payroll 200,056
Repairs Material 82,894
Repairs Contract 71,800
Heating/ Cooling Repairs and Maintenance 46,508
Snow Removal 29,523
Decorating Payroll/ Contract 123,060
Decorating Supplies 6,365
Other 28,876
-----------------
Total Operating and Maintenance Expenses 819,965
-----------------
Real Estate Taxes 164,903
Payroll Taxes (FICA) 41,331
Property and Liability Insurance (Hazard) 96,195
Workmen's Compensation 16,024
Health Insurance and Other Employee Benefits 48,985
-----------------
Total Taxes and Insurance 367,438
-----------------
Interest on Mortgage Payable 996,703
Interest on Notes Payable (Long-Term) 391,064
Mortgage Insurance Premium /Service Charge 70,136
Miscellaneous Financial Expenses 318
-----------------
Total Financial Expenses 1,458,221
-----------------
Total Service Expenses-Schedule Attached (220)
Total Cost of Operations Before Depreciation 3,674,346
-----------------
Profit (Loss) before Depreciation (225,828)
Depreciation (Total) 1,122,560
-----------------
Operating Profit or (Loss) (1,348,388)
-----------------
Net Profit or (Loss) (1,348,388)
=================
</TABLE>
The accompanying notes are an integral part of the financial statements.
Part II
1. Total principal payments required under the mortgage,
even if payments under a Workout Agreement are less or
more than those required under the mortgage 272,524
2. Replacement Reserve deposits required by the Regulatory
Agreement or Amendments thereto, even if payments may be
temporarily suspended or waived 96,486
The accompanying notes are an integral part of the financial statements.
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
STATEMENT OF CASH FLOWS
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Sources
Rental receipts $ 3,301,673
Interest receipts 2,061
Other receipts 4,678
--------------
3,308,412
Uses
Administrative 205,815
Management fees 143,030
Payroll, related taxes and fringe benefits 446,028
Utilities 425,226
Operating and maintenance 610,154
Insurance 89,199
Taxes - real estate 164,903
Interest on mortgage 998,665
Mortgage insurance premium 69,437
Other interest 318
--------------
3,152,775
Cash provided by operations before other items
Changes in mortgagee escrow deposits 155,637
Changes in tenants' security deposits, net 21,139
Decrease in deposits (5,230)
Service expense 750
NET CASH PROVIDED BY OPERATING ACTIVITIES 220
--------------
172,516
CASH FLOWS FROM INVESTING ACTIVITIES
Replacement reserve payments (96,486)
Withdrawals from replacement reserves 175,738
NET CASH PROVIDED BY INVESTING ACTIVITIES 79,252
--------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of interest on flexible subsidy loan (10,171)
Distributions to partners (10,171)
Mortgage principal payments (272,524)
--------------
NET CASH USED BY FINANCING ACTIVITIES (292,866)
--------------
NET DECREASE IN CASH (41,098)
CASH BALANCE AT BEGINNING OF YEAR 42,486
--------------
CASH BALANCE AT END OF YEAR $ 1,388
==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
STATEMENT OF CASH FLOWS - continued
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
RECONCILIATION OF NET LOSS TO CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C>
Net loss $ (1,348,388)
Noncash items included in net loss
Depreciation and amortization 1,122,560
Interest not payable currently 391,064
Reserve for replacement interest (14,974)
Changes in:
Accounts receivable and prepaid expenses (54,736)
Accounts payable and accrued expenses 38,362
Prepaid rent 21,969
Tenants' security deposits, net (5,230)
Change in deposits 750
Mortgagee escrow deposits 21,139
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 172,516
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization
Wayne Apartments Project Limited Partnership (Partnership) was
organized on January 21, 1986 under the laws of the Commonwealth of
Massachusetts to operate a 349 unit complex (the "Project") in Boston,
Massachusetts. Operations of the Project, including the amount of monthly rental
charges, are regulated by the U. S. Department of Housing and Urban Development
(HUD). The Partnership acquired the Project from Wayne Apartments Company under
a transfer of physical assets on December 27, 1988.
Method of Accounting
Financial records are maintained on the accrual method of accounting in
conformity with generally accepted accounting principles. Financial statements
are presented in the regulatory format prescribed by HUD.
Property Depreciation and Amortization
Building costs are being depreciated primarily on a straight line basis
over the useful life of the buildings, which is estimated to be 27.5 years.
Furnishings and equipment are being depreciated over 7 years using an
accelerated method.
Repairs and maintenance are expensed as incurred.
Financing costs of $349,724 are being amortized over 25 years on a
straight line basis.
Income Taxes
No provision has been made for income taxes or related credits in the
Partnership's financial statements since the results of operations are included
in each partner's tax return.
Low-Income Housing Tax Credit
The Project is eligible for low-income housing tax credits over a ten
year period which commenced in 1989 and which are calculated at approximately 4%
of certain expenditures incurred in connection with the acquisition of the
property and 9% of certain expenditures incurred in connection with the building
rehabilitation.
Provisions of the enabling legislation regarding the credit restrict
occupancy to qualified low-income tenants for a 15 year period. Recapture
provisions of the legislation could result in a required repayment of a portion
of the credits if these provisions are not met.
Allocation of Profits and Losses
Operating profits and losses are allocated 1% to the general partner
and 99% to Boston Financial Qualified Housing Tax Credits L.P. II (investor
limited partner).
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE B - CAPITAL CONTRIBUTIONS
On December 27, 1988, the Partnership was syndicated and the investor
limited partner was admitted. Under the terms of the partnership agreement, the
investor limited partner has agreed to make capital contributions totaling
$10,600,000, subject to adjustment during the construction phase and initial
operating years. As of December 31, 1996, $300,000 of capital contributions
remain in escrow to pay the remaining development fee.
An additional $337,500 of capital contributions will be due in 2005 but
has not been recorded because the investor limited partner is not required to
pay if certain conditions have not been satisfied.
NOTE C - FINANCING
Permanent financing on the acquired assets is being provided by a
mortgage which is secured by the property and is insured by HUD. This loan bears
interest at the rate of 7% per annum and is payable in monthly installments of
$41,203 for principal and interest until January 2015. Additional monthly
remittances include escrow payments of $20,238 for real estate taxes, property
insurance and mortgage insurance and payments of $2,210 to fund reserve for
replacements. As of December 31, 1996, the outstanding balance amounted to
$5,064,101.
HUD is assisting the project by making monthly interest reduction
payments directly to the mortgagee in the amount of $26,510. The project
received subsidies of $318,183 during 1996.
Financing for the completed rehabilitation program is in the form of a
HUD insured mortgage under the Section 241 program, and is being amortized over
a 25 year period. This loan bears interest at the rate of 10.75% per annum.
Installments of $91,245 for principal and interest are due monthly through
November 2015. Additional monthly remittances include $3,301 to fund a mortgage
insurance escrow and $5,831 to fund reserve for replacements. As of December 31,
1996, the outstanding balance amounted to $8,828,315.
Additional financing for the completed rehabilitation program has been
provided by HUD in the form of a flexible subsidy loan of $4,195,287. This loan
bears simple interest at the rate of 9.25% per annum. Payments of principal and
interest shall be made only to the extent the Project has surplus cash. The note
matures on the earlier of November 2015 or upon sale, foreclosure, refinancing,
and assignment or disposition of the project, at which time the entire principal
and accrued interest is due. As of December 31, 1996, interest of $2,797,998 has
accrued on this loan, including $388,064 in 1996.
HUD loaned $300,000 to the project in 1985 to pay for delinquent
utility charges. This loan is evidenced by a residual receipts note which bears
interest at 1% per annum. Accrued interest and principal on this note are
payable from surplus cash, as defined by HUD, prior to distributions to the
partners. The entire principal balance, plus any accrued interest, is due upon
refinancing or maturity of the mortgage note, or upon the sale, foreclosure, or
any disposition of the project. The note stipulates that no interest deduction
may be claimed for income tax purposes until the amounts are actually paid.
During 1996, interest of $10,171 was paid from annual distributions. As of
December 31, 1996, accrued interest of $6,598 is outstanding, including $3,000
expensed in 1996.
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE C - FINANCING (continued)
<TABLE>
<CAPTION>
Annual maturities of long-term debt for the ensuing five years are
summarized as follows:
<S> <C>
1997 $298,669
1998 326,495
1999 357,036
2000 390,569
2001 426,957
</TABLE>
Subject to HUD regulations, the Partnership is limited to a maximum
annual distribution of $156,607, which is 6% of the Partnership's initial
investment as determined by HUD. During 1996, cash distributions of $10,171 were
paid. As of December 31, 1996, the Partnership has cumulative unpaid
distributions totaling $922,240 and the Project had no surplus cash.
NOTE D - RENTAL REVENUE
Tenants' rents are being subsidized by HUD under its Section 8 Housing
Assistance Payments program. This program restricts assistance to those tenants
who qualify by meeting certain HUD established criteria, including maximum
income limitations. The assistance contract obligates HUD to provide rent
subsidies through 2005.
During 1996, the project had vacancies of $150,165. In accordance with
HUD regulations, the project is entitled to be partially reimbursed for
vacancies for a period up to two months after a unit becomes vacant. Management
has estimated such reimbursements related to 1996 vacancy losses to be $60,000
for which a receivable has been recorded in these financial statements. As of
December 31, 1996, application for reimbursement of vacancies has not been filed
with HUD and such application when filed is subject to adjustment by HUD. Actual
reimbursement could differ from estimated amount.
As of December 31, 1996, the Partnership is owed funding of $50,000 for
services provided in connection with the Drug Elimination Program.
NOTE E - OBLIGATIONS OF THE GENERAL PARTNER
Should the Partnership require funds after the rehabilitation period
for any project expenses, the general partner is obligated to lend the required
funds up to a maximum of $1,500,000.
NOTE F - RELATED PARTY TRANSACTIONS
For its services in connection with the completed rehabilitation of the
Project, the developer, an affiliate of the general partner, has earned
development fees of which $300,000 remains payable at December 31, 1996. Unpaid
development fees may be paid from proceeds of the capital contribution escrow
once certain conditions are met.
Management services have been provided by an affiliate of the general
partner at a fee of 5% of net collected income. During 1996, $167,818 was
incurred for such services. Additional amounts have been paid to reimburse
payroll, in-house legal counsel, and certain other office costs. As of December
31, 1996, this affiliate is owed $13,802 for management services and $31,849 for
reimbursable expenses.
<PAGE>
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION
To the Partners of
Wayne Apartments Project Limited
Partnership
Our report on our audit of the basic financial statements of Wayne
Apartments Project Limited Partnership for 1996 appears on page 1. That audit
was made for the purpose of forming an opinion on the basic financial statements
taken as a whole. HUD Supporting Data is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/Ziner & Company, P.C.
January 23,1997
-12-
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
SUPPORTING DATA REQUIRED BY HUD
December 31, 1996
<TABLE>
<CAPTION>
Number Amount
DELINQUENT TENANT ACCOUNTS RECEIVABLE of Tenants Past Due
<S> <C> <C>
Delinquent - 30 days and under 89 $ 15,367
- 31-60 days 12 4,095
- 61-90 days 6 2,132
- over 90 days 31 25,175
---------
$ 46,769
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE OF ACCOUNTS RECEIVABLE - OTHER
<S> <C>
Drug elimination program funding $ 50,000
========
MORTGAGEE ESCROW DEPOSITS
Estimated amount required for
future payment of:
City, state and county taxes $ 27,444
Mortgage insurance 34,286
Property insurance 10,718
---------
72,448
Amount confirmed by mortgagee 64,154
Amount of estimated requirements in excess of amount on deposit $ (8,294)
========
</TABLE>
TENANT SECURITY DEPOSITS
Tenant security deposits are held in a separate bank account in the name of
the project.
RESERVE FOR REPLACEMENTS
In accordance with the provisions of the regulatory agreements, restricted
cash is held by Chemical Bank and Continental Wingate Associates to be used for
replacement of property with the approval of HUD as follows:
<TABLE>
<CAPTION>
<S> <C>
Balance, January 1, 1996 $624,504
Monthly deposits ($5830.66 x 10) ($80.66 x 1) ($11,580.66 x 1)($2,210 x 12) 96,486
Interest earned 14,974
Withdrawals (175,738)
---------
Balance, December 31, 1996 - confirmed by mortgagees $560,226
========
</TABLE>
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
SUPPORTING DATA REQUIRED BY HUD - continued
December 31, 1996
SCHEDULE OF ACCOUNTS PAYABLE (OTHER THAN TRADE CREDITORS) NONE
SCHEDULE OF ACCRUED TAXES NONE
SCHEDULE OF NOTES PAYABLE - OTHER THAN MORTGAGES NONE
====
COMPENSATION OF PARTNERS
No compensation was paid to the partners from operating funds in 1996.
LISTING OF IDENTITY OF INTEREST COMPANIES AND ACTIVITIES DOING BUSINESS WITH
OWNER
<TABLE>
<CAPTION>
Amount
Company Name Type of Service Received
<S> <C> <C>
Cruz Management Company Management fees $143,030
Cruz Management Company Payroll reimbursement 446,028
Cruz Management Company Reimbursement for central
office, maintenance, and
other costs 209,051
</TABLE>
$798,109
UNAUTHORIZED DISTRIBUTIONS
There were no unauthorized distributions paid in 1996.
<TABLE>
<CAPTION>
OTHER OPERATING AND MAINTENANCE EXPENSES
<S> <C>
Motor vehicle repairs $ 28,876
========
</TABLE>
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
SUPPORTING DATA REQUIRED BY HUD - continued
December 31, 1996
<TABLE>
<CAPTION>
DRUG ELIMINATION PROGRAM
<S> <C>
Program funding $ 50,000
--------
Office expenses
Office supplies 5,150
Miscellaneous 1,209
6,359
Program
Social activities 9,145
Program coordinator
Salary, payroll taxes and benefits 34,276
Total program costs 49,780
Program funding in excess of costs $ 220
=========
</TABLE>
Ziner & Company, P.C.
7 Winthrop Square
Boston, MA 02110
617-542-8880
Fed. I.D. #04-3174717
Lead Auditor: Robert P. Langley
<PAGE>
Computation of Surplus Cash, U.S. Department of Housing
Distributions and Residual and Urban Development
Receipts Office of Housing
Federal Housing Commissioner
Project Name Fiscal Period Ended Project Number
Wayne Apartments Project
Limited Partnesrhip December 31, 1996 023-44269
<TABLE>
<CAPTION>
Part A Compute Surplus Cash
<S> <C> <C>
Cash 70,225
Tenant subsidy vouchers due for period covered by financial statements 14,099
------
(a) Total Cash 84,324
Accrued mortgage interest payable 82,177
Accounts payable (due within 30days) 177,769
Deficient Tax Insurance or MIP Escrow deposits 8,294
Accrued expenses (not escrowed) 24,281
Prepaid rents 33,247
Tenant security deposits liability 57,998
------
(b) Less Total Current Obligations 383,766
(c) Surplus Cash (Deficiency) (Line (a)minus Line (b)) (299,442)
</TABLE>
Part B - Compute Distributions To Owners and Required Deposit To Residual
Receipts
<TABLE>
<CAPTION>
1 Surplus cash
<S> <C> <C>
2A Annual Distribution Earned During Fiscal Period
Covered by the Statement 156,607
2B Distribution Accrued and Unpaid as of the End
of the Prior Fiscal Period 775,804
2C Distributions Paid During Fiscal Period Covered by
Statement (10,171)
------------
3 Amount to be Carried on Balance Sheet as Distribution
Earned but Unpaid (Line 2A plus 2B minus 2C) 922,240
============
</TABLE>
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
SUPPORTING DATA REQUIRED BY HUD - continued
December 31, 1996
SCHEDULE OF CHANGES IN FIXED ASSET ACCOUNTS
<TABLE>
<CAPTION>
Assets Depreciation Reserve
Carrying
Balance Balance Balance Balance Value at
January 1, December 31, January 1, December 31, December 31,
Fixed Assets 1996 Additions Deductions 1996 1996 Additions Deductions 1996 1996
- ------------ ----------- --------- ---------- ------------ ------------ --------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Land $ 265,817 $ 0 $ 0 $ 265,817 $ 0 $ 0 $ 0 $ 0 $ 265,817
Buildings
and
improvements 29,723,450 0 0 29,723,450 6,622,384 1,080,853 0 7,703,237 22,020,213
Furnishings
and
equipment 393,439 0 0 393,439 354,886 27,718 0 382,604 10,835
-------------- ------- ------- --------- ------------ ----------- ------- ------------ -------------
Totals $30,382,706 $ 0 $ 0 $30,382,706 $6,977,270 $1,108,571 $ 0 $8,085,841 $22,296,865
=========== ====== ====== =========== ========== ========== ====== ========== ===========
</TABLE>
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
SUPPORTING DATA REQUIRED BY HUD - continued
December 31, 1996
SCHEDULE OF FUNDS IN FINANCIAL INSTITUTIONS
<TABLE>
<CAPTION>
A. Funds Held by Mortgagor, Regular Operating Account:
<S> <C> <C>
Bank of Boston (Checking) (1) $ 1,288
U. S. Trust 100
-----------
$ 1,388
</TABLE>
<TABLE>
<CAPTION>
B. Funds Held by Mortgagor in Trust, Tenant Security Deposit:
<S> <C> <C>
Boston Bank of Commerce (Savings, 2.65%) (1) 68,837
---------
Funds Held by Mortgagor, TOTAL $ 70,225
========
</TABLE>
<TABLE>
<CAPTION>
C. Funds Held By Mortgagee I, (Chemical Mortgage Company) in Trust:
<S> <C> <C> <C>
1. Tax, Insurance and MIP escrow (1) $ 57,042
2. Reserve Fund for Replacements:
Money Market (1) 84,063
</TABLE>
<TABLE>
<CAPTION>
Funds Held by Mortgagee II, (Continental Wingate Associates) in Trust:
<S> <C> <C> <C>
1. MIP escrow (1) 7,112
2. Reserve Fund for Replacements:
U. S. Treasury Fund (1) 476,163
---------
Funds Held by Mortgagees, TOTAL $624,380
TOTAL FUNDS HELD IN FINANCIAL INSTITUTIONS $694,605
========
</TABLE>
(1) Balances confirmed
<PAGE>
INDEPENDENT AUDITORS' REPORT ON
INTERNAL CONTROL STRUCTURE
To the Partners of
Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project
Limited Partnership (a Massachusetts limited partnership) (Project No.
023-44269) as of and for the year ended December 31, 1996, and have issued our
report thereon dated January 23,1997. We have also audited Wayne Apartments
Project Limited Partnership=s compliance with requirements applicable to major
HUD-assisted programs and have issued our reports thereon dated January 23,1997.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide"), issued by the U. S. Department of Housing and Urban Development,
Office of the Inspector General in July 1993. Those standards and the Guide
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement and about
whether Wayne Apartments Project Limited Partnership complied with laws and
regulations, noncompliance with which would be material to a major HUD-assisted
program.
The management of the Project is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies and
procedures. The objectives of an internal control structure are to provide
management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit the preparation of financial statements in
accordance with generally accepted accounting principles, and that HUD-assisted
programs are managed in compliance with applicable laws and regulations. Because
of inherent limitations in any internal control structure, errors,
irregularities, or instances of noncompliance may nevertheless occur and not be
detected. Also, projection of any evaluation of the structure to future periods
is subject to the risk that procedures may become inadequate because of changes
in conditions or that the effectiveness of the design and operation of policies
and procedures may deteriorate.
In planning and performing our audit we obtained an understanding of
the design of relevant internal control structure policies and procedures and
determined whether they have been placed in operation and we assessed control
risk in order to determine our auditing procedures for the purpose of expressing
our opinion on the Partnership's basic financial statements and on its
compliance with specific requirements applicable to its major HUD-assisted
program and to report on the internal control structure in accordance with the
provisions of the Guide and not to provide any assurance on the internal
structure.
<PAGE>
For the purpose of this report, we have classified the significant
internal control structure policies and procedures in the following categories:
Accounting Applications
. Cash Receipts/Revenue
. Purchases/Cash Disbursements
. General Ledger
. External Financial Reporting
Specific Compliance Requirements
. Federal Financial Reports
. Affirmative Fair Housing
. Mortgage Status
. Replacement Reserve
. Residual Receipts
. Security Deposits
. Cash Receipts
. Cash Disbursements
. Tenant Application, Eligibility, and Recertification
. Management Functions
. Distributions to Owners
We performed tests of controls, as required by the Guide, to evaluate
the effectiveness of the design and operation of internal control structure
policies and procedures that we considered relevant to preventing or detecting
material noncompliance with specific requirements applicable to the
Partnership's major HUD-assisted program. Our procedures were less in scope than
would be necessary to render an opinion on internal control structure policies
and procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and
its operation that we considered to be reportable conditions under standards
established by the American Institute of Certified Public Accountants.
Reportable conditions involve matters coming to our attention relating to
significant deficiencies in the design or operation of the internal control
structure that, in our judgement, could adversely affect the organization's
ability to record, process, summarize and report financial data consistent with
management=s assertions in the financial statements or to administer
HUD-assisted programs in accordance with applicable laws and regulations.
The auditee did not submit vacancy claims to HUD in 1996.
A material weakness is a reportable condition in which the design or
operation of one or more of the internal control structure elements does not
reduce to a relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the financial statements being
audited or that noncompliance with laws and regulations that would be material
to a HUD-assisted program may occur and not be detected within a timely period
by employees in the normal course of performing their assigned functions.
<PAGE>
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure that might be
reportable conditions and, accordingly, would not necessarily disclose all
reportable conditions that are also considered to be material weaknesses as
defined above. However, we noted the following matters involving the internal
control structure and its operation that we consider to be material weaknesses
as defined above. This condition, as noted previously also as a reportable
condition, and was considered in determining the nature, timing and extent of
the procedures performed in our audit of the financial statements of Wayne
Apartments Project Limited Partnership for the year ended December 31, 1996.
This report is intended for the information of the general partner,
management and the Department of Housing and Urban Development. However, this
report is a matter of public record and its distribution is not limited.
/s/Ziner & Company, P.C.
January 23,1997
<PAGE>
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE
BASED ON AN AUDIT OF FINANCIAL STATEMENTS
To the Partners of
Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project
Limited Partnership (a Massachusetts limited partnership) (Project No.
023-44269) as of and for the year ended December 31, 1996, and have issued our
report thereon dated January 23,1997.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement.
Compliance with laws, regulations, contracts and grants applicable to
the Project is the responsibility of the Project's management. As part of
obtaining reasonable assurance about whether the financial statements are free
of material misstatements, we performed tests of the Project's compliance with
certain provisions of laws, regulations, contracts and grants. However, the
objective of our audit of the financial statements was not to provide an opinion
on overall compliance with such provisions.
Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that
are required to be reported herein under Government Auditing Standards.
This report is intended for the information of the general partner,
management and the Department of Housing and Urban Development. However, this
report is a matter of public record and its distribution is not limited.
/s/Ziner & Company, P.C.
January 23, 1997
<PAGE>
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR
HUD PROGRAMS
To the Partners of
Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project
Limited Partnership (a Massachusetts limited partnership) (Project No.
023-44269) as of and for the year ended December 31, 1996, and have issued our
report thereon dated January 23,1997.
We have also audited the Partnership's compliance with the specific
program requirements governing federal financial reports, affirmative fair
housing, mortgage status, replacement reserves, residual receipts, security
deposits, cash receipts, cash disbursements, management functions, distribution
to owners and tenant application, eligibility and recertification that are
applicable to its major HUD-assisted program for the year ended December 31,
1996. The management of the Partnership is responsible for compliance with those
requirements. Our responsibility is to express an opinion on compliance with
those requirements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards, issued by the Comptroller General of
the United States, and the Consolidated Audit Guide for Audits of HUD Programs
(the "Guide") issued by the U. S. Department of Housing and Urban Development,
Office of Inspector General in July 1993. Those standards and the Guide require
that we plan and perform the audit to obtain reasonable assurance about whether
material noncompliance with the requirements referred to above occurred. An
audit includes examining, on a test basis, evidence about the Partnership's
compliance with those requirements. We believe that our audit provides a
reasonable basis for our opinion.
The results of our audit procedures disclosed a material instance of
noncompliance with the requirements referred to in the second paragraph of this
report that are described in the Auditors' Comments on Audit Resolution Matters
Relating to HUD Programs. We considered this instance of noncompliance in
forming our opinion on compliance, which is expressed in the following
paragraph.
In our opinion, except for the instance of noncompliance referred to in
the fourth paragraph of this report and identified in the Auditors' Comments on
Audit Resolution Matters Relating to HUD Programs, the Partnership complied, in
all material respects, with the requirements referred to in the second paragraph
that are applicable to its major HUD assisted program for the year ended
December 31, 1996.
This report is intended for the information of the general partner,
management and the Department of Housing and Urban Development. However, this
report is a matter of public record and its distribution is not limited.
/s/Ziner & Company, P.C.
January 23,1997
<PAGE>
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE
TO AFFIRMATIVE FAIR HOUSING
To the Partners of
Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project
Limited Partnership (a Massachusetts limited partnership) (Project No.
023-44269) as of and for the year ended December 31, 1996, and have issued our
report thereon dated January 23,1997.
We have also applied procedures to test Wayne Apartments Project
Limited Partnership=s compliance with the Affirmative Fair Housing requirements
applicable to its HUD assisted programs for the year ended December 31, 1996.
Our procedures were limited to the applicable compliance requirement
described in the Consolidated Audit Guide for Audits of HUD Programs (the Guide)
issued by the U. S. Department of Housing and Urban Development, Office of
Inspector General in July 1993. Our procedures were substantially less in scope
than an audit, the objective of which is the expression of an opinion on Wayne
Apartments Project Limited Partnership=s compliance with the Affirmative Fair
Housing requirements. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that
are required to be reported herein under the Guide.
This report is intended for the information of the general partner,
management and the Department of Housing and Urban Development. However, this
report is a matter of public record and its distribution is not limited.
/s/Ziner & Company, P.C.
January 23,1997
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
SCHEDULE OF AUDITORS' COMMENTS ON AUDIT
RESOLUTION MATTERS RELATING TO HUD PROGRAMS
For the Year Ended December 31, 1996
The following are findings from the December 31, 1995 Schedule Findings
and Questioned Costs.
Finding #1
During the year, the auditee maintained cash in excess of FDIC insured
$100,000 limit.
Status
Cash balances are now maintained below the $100,000 FDIC limit.
Finding #2
The auditee did not submit HUD claims for vacancy losses in 1995.
Status
The auditee did not submit claims for 1995 or 1996 vacancy losses.
However, the auditee is currently in the process of preparing applications for
1996 vacancy loss claims.
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
December 31, 1996
MANAGEMENT AGENT'S CERTIFICATE
We hereby certify that we have examined the accompanying financial
statements and supplementary information of Wayne Apartments Project Limited
Partnership (Project No. 023-44269)and, to the best of our knowledge and belief,
the same is complete and accurate.
/s/Michael Rich 2/28/97
Michael Rich, Controller Date
Cruz Management Company, Inc.
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
December 31, 1996
MORTGAGOR'S CERTIFICATE
I hereby certify that I have examined the accompanying financial statements
and supplementary information of Wayne Apartments Project Limited Partnership
(Project No. 023-44269) and, to the best of my knowledge and belief, the same is
complete and accurate.
/s/John B. Cruz, Jr 2/28/97
John B. Cruz, Jr. (Date)
Vice president of Gemini Housing Corporation
Partnership Federal
Identification Number 04-3053950
<PAGE>
SNAPFINGER CRESTE APARTMENTS, L.P.
FINANCIAL STATEMENTS
DECEMBER 31, 1996
<PAGE>
SNAPFINGER CRESTE APARTMENTS, L.P.
TABLE OF CONTENTS
PAGE
Independent auditor's report 1
Financial statements:
Balance sheet 2
Statement of changes in partners' equity (deficit) 3
Statement of operations 4
Statement of cash flows 5 - 6
Notes to financial statements 7 - 11
Supplemental information 12 - 13
<PAGE>
[Letterhead]
[LOGO]
Habif, Arogeti & Wynne, P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Snapfinger Creste Apartments, L.P.
We have audited the accompanying balance sheet of SNAPFINGER CRESTE APARTMENTS,
L.P., as of December 31, 1996, and the related statements of changes in
partners' equity (deficit), operations, and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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. 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 audit provides a reasonable basis for our opinion.
As discussed in Note 1 to the financial statements, the Partnership has been in
default of its mortgage loan agreement with its lender since March of 1996 when
the Partnership ceased making its monthly mortgage payment and required escrow
deposits. The Partnership and the lender have been in negotiation regarding
various workout arrangements; however, at this time no agreement has been
reached and there is substantial doubt about the Partnership's ability to
continue as going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SNAPFINGER CRESTE APARTMENTS,
L.P., as of December 31, 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying supplemental information is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements. Such information has not been subjected to the
auditing procedures applied in the audit of the basic financial statements.
/s/Habif, Arogeti & Wynne, P.C.
Atlanta, Georgia
January 21, 1997
<PAGE>
SNAPFINGER CRESTE APARTMENTS, L.P.
BALANCE SHEET
DECEMBER 31, 1996
<TABLE>
<CAPTION>
ASSETS
Current assets
<S> <C>
Cash $ 118,103
Tenant rent receivable 14,549
------------
Total current assets 132,652
Deposits held in trust
Tenant security deposits 12,086
Restricted deposits and funded reserves
Operating reserve escrow 414,118
Rental property and equipment, at cost
Land 697,877
Building 9,791,801
Equipment 20,635
Furniture 18,790
-------------
10,529,103
Accumulated depreciation [ 2,807,286]
7,721,817
Other assets
Deferred financing costs, net of
accumulated amortization of $45,419 23,036
Compliance monitoring fee, net of
accumulated amortization of $4,725 14,175
------------
37,211
$ 8,317,884
</TABLE>
<PAGE>
See auditors' report and accompanying notes
<TABLE>
<CAPTION>
LIABILITIES AND PARTNERS' ACCUMULATED DEFICIT
Current liabilities
<S> <C>
Accounts payable $ 8,898
Accrued mortgage interest 470,325
Advance from mortgage lender 187,868
Current portion of mortgage note including
accrued late payment fees of $32,191 167,972
Current portion of note payable 3,780
------------
Total current liabilities 838,843
Deposits and prepayment liabilities
Tenant security deposits 15,883
Deferred rent 22,955
-----------
38,838
Other liabilities
Mortgage note payable, net of current portion 7,271,999
Note payable, net of current portion 3,780
Accrued acquisition price 159,639
Project expense loans 25,900
-----------
7,461,318
Partners' accumulated deficit [ 21,115]
$ 8,317,884
</TABLE>
<PAGE>
See auditors' report and accompanying notes
SNAPFINGER CRESTE APARTMENTS, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY [DEFICIT]
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
<S> <C> <C> <C>
Partners' equity [deficit], beginning
of year $[580,868] $ 1,205,206 $ 624,338
Net loss [ 6,455] [ 638,998] [645,453]
Partners' equity [deficit], end
of year $[587,323] $ 566,208 $[ 21,115]
======= ========= =========
</TABLE>
<PAGE>
See auditors' report and accompanying notes
SNAPFINGER CRESTE APARTMENTS, L.P.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Revenues
<S> <C>
Gross rent potential $ 1,713,792
Vacancies, concessions and uncollectible rent 1,024,159
Rental revenues less vacancies 689,633
Other revenue 110,154
799,787
Expenses
Administrative 82,326
Management fees 19,462
Utilities 80,628
Operating and maintenance 150,162
Real estate taxes 92,298
Other taxes and insurance 34,665
Mortgage interest 600,793
Late payment charges 32,191
Depreciation and amortization 366,833
1,459,358
[ 659,571]
Other income
Interest income 14,118
Net loss $[ 645,453]
</TABLE>
<PAGE>
See auditors' report and accompanying notes
SNAPFINGER CRESTE APARTMENTS, L.P.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Cash flows from operating activities Revenues:
<S> <C>
Rental receipts $ 692,383
Other receipts 110,154
Interest receipts 14,118
816,655
Expenses:
Administrative 44,466
Management fees 25,961
Utilities 83,903
Operating and maintenance 142,337
Real estate taxes 78,104
Other taxes and insurance 34,665
Salaries and wages 79,393
Mortgage interest 181,627
670,456
Net cash provided by operating activities 146,199
-------
Cash flows from investing activities
Increase in tenant security deposits [ 7,125]
Increase in operating reserve escrow [ 14,118]
Net cash used by investing activities [ 21,243]
Cash flows from financing activities
Principal payments on mortgage note [ 22,377]
Net increase in cash 102,579
Cash, beginning of year 15,524
Cash, end of year $ 118,103
=======
</TABLE>
<PAGE>
See auditors' report and accompanying notes
SNAPFINGER CRESTE APARTMENTS, L.P.
STATEMENT OF CASH FLOWS [CONTINUED]
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Reconciliation of net loss to net cash provided by operating activities:
<S> <C>
Net loss $[645,453]
-------
Adjustments to reconcile net loss to net
cash provided by operating activities:
Amortization 7,280
Depreciation 359,553
Increase in tenant rent receivable [ 1,305]
Decrease in accounts payable [ 51,326]
Increase in accrued mortgage interest 419,166
Increase in advance from mortgage lender 14,194
Increase in accrued late payment fees 32,191
Decrease in accrued management fees [ 6,499]
Increase in deferred rent 18,398
--------
Total adjustments 791,652
Net cash provided by operating activities $ 146,199
=======
</TABLE>
<PAGE>
SNAPFINGER CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The partnership was organized as a limited partnership under the laws of
the state of Georgia during December of 1988. The partnership was formed
to develop, construct, own, maintain and operate a rental housing project
of 210 units located in Atlanta, Georgia. The Project is operating under
the name of Snapfinger Creste Apartments.
The following significant accounting policies have been followed in the
preparation of the financial statements:
a. Basis of Accounting:
The financial statements of the partnership are prepared on the
accrual basis of accounting and in accordance with generally
accepted accounting principles.
b. Tenant Rent Receivables:
Management considers tenant rent receivables to be fully
collectible; accordingly, no allowance for doubtful accounts is
required. Uncollectible rent receivables are charged to operations
upon management's determination that collection of the receivable is
unlikely.
c. Depreciation and Capitalization:
Rental property and equipment have been recorded at cost.
Depreciation has been provided for in amounts sufficient to relate
the cost of depreciable assets to operations over their estimated
service lives of twenty-eight years for real property and five years
for personal property primarily by use of the straight-line method
for financial reporting. Improvements are capitalized, while
expenditures for maintenance and repairs are charged to expense as
incurred.
d. Amortization:
Permanent loan costs consist of fees for obtaining the permanent
mortgage and are amortized over the 10-year term of the note using
the straight-line method. Compliance monitoring fees consist of a
fee paid to the Georgia Housing and Finance Authority to oversee
compliance by the project with the requirements of the low-income
housing tax credit program and are amortized over the remaining 12
year term of the tax credit compliance period.
e. Rental Income:
Rental income is recognized as rentals become due. Rental payments
received in advance are deferred until earned. All leases between
the partnership and the tenants of the property are short-term
operating leases.
SNAPFINGER CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1996
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: [Continued]
f. Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
disclosures.
g. Income Taxes:
Income or loss and credits of the partnership will be allocated 1%
to the general partners and 99% to the Investor Limited Partners. No
income tax provision has been included in the financial statements
since income or loss of the partnership is required to be reported
by the respective partners on their income tax returns.
The adjustment of book basis loss to tax basis loss for the year
ended December 31, 1996 is summarized as follows:
<TABLE>
<CAPTION>
<S> <C>
Net loss as shown by financial statements $645,453
Items decreasing loss
Amortization of acquisition price
not deductible for tax purposes 37,218
Net loss as shown by the tax return $608,235
=======
</TABLE>
B. PERMANENT OPERATING RESERVE:
Pursuant to its operating deficit agreement, the Partnership deposited
$400,000 into a permanent operating reserve fund on December 19, 1995. The
funds are to be held in escrow on behalf of the investor limited partner
who holds a first security interest. The operating deficit agreement
restricts the release of these funds and requires specific authorization
of the investor limited partner prior to any release of funds from the
reserve. The activity in the reserve fund for the year ended December 31,
1996 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Balance, January 1, 1996 $ 400,000
Add: Interest earned 14,118
--------
Balance, December 31, 1996 $ 414,118
=======
</TABLE>
<PAGE>
SNAPFINGER CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1996
C. MORTGAGE NOTE PAYABLE:
The mortgage note payable in the original amount of $7,600,000 is
collateralized by a deed of trust on the rental property. The original
note had a term of ten years with final maturity date of May 1, 2000. For
the initial five years of the loan term, according to the original terms,
payments were due and payable monthly in the amount of $66,695, based on a
pay rate of 10% with a thirty-year amortization period. The mortgage rate
was accruing at a rate of 3.5% above the rate established for United
States Treasury Bills with thirteen-week maturities and included upper and
lower limits, which resulted in negative amortization on the mortgage. On
May 29, 1992, the mortgage note payable was modified with the Resolution
Trust Corporation, Conservator of Investors Federal Savings Bank. In
September 1992, the Resolution Trust Corporation reassigned the mortgage
to a REMIC trust with Banker Trust as trustee for the certificate holders.
Pursuant to the terms of the loan modification, the original principal
amount of $7,600,000 was increased to $7,670,093 and bears interest at 8%
per annum. Principal and interest are payable by the partnership in
monthly installments of $56,280 commencing on April 1, 1992 based on a
360-month amortization with all unpaid principal due at the maturity of
the note on November 1, 1999.
The partnership has been in default of the mortgage loan agreement since
March of 1996, when the partnership ceased making its monthly mortgage
payment and required escrow deposits. The partnership has been negotiating
with its lender regarding various workout arrangements; however, at this
time, the parties have not reached an agreement. As of December 31, 1996,
the Partnership owes past due principal payments of $55,466 along with
past due interest of $470,325 and late payment penalties of $32,191.
The liability of the partnership under the mortgage note is limited to the
underlying value of the real estate collateral plus other amounts
deposited with the lender.
The aggregate of the mortgage note payable to the mortgagee is as follows:
<TABLE>
<CAPTION>
Amount
<S> <C> <C>
Current___
Past due $ 55,466
1997 80,315
-----------
$ 135,781
Long-term
1998 88,811
1999 7,183,188
---------
7,271,999
$7,407,780
</TABLE>
<PAGE>
SNAPFINGER CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1996
D. NOTE PAYABLE:
The note payable in the original amount of $18,900 is payable to the
Georgia Housing and Finance Authority. The note bears no interest and is
payable in annual installments of $3,780 until April 15, 1998.
The note payable matures as follows:
<TABLE>
<CAPTION>
Amount
<S> <C>
Current
1997 $ 3,780
Long-term
1998 3,780
-----
$7,560
</TABLE>
E. ADVANCE FROM MORTGAGE LENDER:
The mortgage lender has funded $187,868 of real estate taxes for 1992,
1993 and 1996 on behalf of the partnership. The partnership is required to
make monthly payments of $24,730.58 to the mortgage lender until the
balance is settled. However, no payment has been made since April 1996.
F. PROJECT EXPENSE LOANS:
The general partners have advanced the partnership $25,900 as of December
31, 1996 to fund operating deficits of the partnership. These advances are
to be paid by future operations or from sale or refinancing of the
project.
G. LOW INCOME HOUSING TAX CREDITS:
The partnership has received an allocation of low-income housing tax
credits for the Project of $7,878,570 from the Georgia Housing and Finance
Authority to be claimed over a ten-year period beginning upon rent-up of
the units with eligible tenants. The partnership has received the annual
allocation of $787,857 pursuant to Internal Revenue Code Section 42[a].
The annual credit amount is contingent upon the Project maintaining a
qualified basis of $8,545,092 and complying with certain requirements
regarding tenant eligibility, rent charges and operating methods. The
partnership has claimed cumulative credits of $5,117,928 as of December
31, 1996.
The partnership agreement has special provisions that will apply, should
the Project fail to qualify for all or a portion of the credit allocation
or fail to comply with eligibility requirements during the compliance
period of fifteen years.
<PAGE>
SNAPFINGER CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1996
H. RELATED PARTY TRANSACTIONS:
The project was managed by Pointe Properties, Inc. d/b/a MPS, Inc., a
wholly-owned subsidiary of Sanbury Corporation through June 19, 1996.
Stockholders of Sanbury Corporation are the general partners of the
partnership. Management fees of 4% of gross receipts were not charged to
the property. Pointe Properties, Inc. also advanced the project $8,394 to
cover operating shortfalls that was forgiven during the year.
I. COMMITMENTS AND CONTINGENCIES:
The project has contracted with Hediger Enterprises, Inc. to manage the
property subsequent to June 19, 1996. Management fees of 5% of gross
receipts totalling $19,462 were incurred for these services for the year
ended December 31,1996.
J. GOING CONCERN UNCERTAINTY:
As reflected in the accompanying financial statements, the partnership is
in default of its mortgage loan agreement with its lender since March of
1996. At this time, the partnership has been negotiating with its lender
regarding various workout arrangements; however, the parties have not
reached an agreement. Based upon the partnership's continued operating
deficits and its inability to reach an agreement with its lender, there is
substantial doubt about the partnership's ability to continue as a going
concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
See auditors' report
SNAPFINGER CRESTE APARTMENTS, L.P.
SUPPLEMENTAL INFORMATION
SCHEDULE OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Gross rent potential $1,713,792
Vacancies, concessions, and uncollectible rent
Vacancies $746,925
Bad debts/uncollectible rent 78,858
Rent concessions 198,376
1,024,159
689,633
Other revenue
Laundry and vending income 297
NSF and late charges 14,547
Security deposit forfeit 1,611
Forgiveness of debt 8,394
Interest income 14,118
Other revenue 85,305
124,272
Net revenues 813,905
Administrative expenses
Advertising 2,010
Other renting expenses 6,345
Office salaries 35,755
Office supplies 2,524
Management fee 19,462
Manger rent free uni 14,343
Legal expense 12,518
Auditing expense 5,000
Telephone 3,831
-------
101,788
</TABLE>
<PAGE>
See auditors' report
SNAPFINGER CRESTE APARTMENTS, L.P.
SUPPLEMENTAL INFORMATION [CONTINUED]
SCHEDULE OF OPERATIONS [CONTINUED]
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Utilities
<S> <C> <C>
Electricity $ 27,264
Water and sewer 29,485
Gas 23,879
--------
80,628
Operating and maintenance expenses
Cable 1,214
Security contract 1,797
Fire protection 1,231
Ground contract 7,100
Repairs payroll 43,638
Repairs material 27,593
Repairs contract 45,469
Exterminating 3,510
Garbage and trash removal 18,610
150,162
Taxes and insurance expenses
Real estate taxes 92,298
Payroll taxes 7,866
Property and liability insurance 19,004
Worker's compensation insurance 4,726
Health insurance 3,069
126,963
Financial expenses
Interest on mortgage 600,793
Late charges 32,191
632,984
Depreciation and amortization
Depreciation 359,553
Amortization 7,280
366,833
Total expenses 1,459,358
Net loss $[ 645,453]
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 318,451
<SECURITIES> 1,319,499
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 12,293,738
<DEPRECIATION> 000
<TOTAL-ASSETS> 23,553,010<F1>
<CURRENT-LIABILITIES> 000
<BONDS> 000
000
000
<COMMON> 000
<OTHER-SE> 11,810,988
<TOTAL-LIABILITY-AND-EQUITY> 23,553,010<F2>
<SALES> 000
<TOTAL-REVENUES> 1,265,748<F3>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 2,468,177<F4>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 636,940
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (4,914,046)<F5>
<EPS-PRIMARY> (81.08)
<EPS-DILUTED> 000
<FN>
<F1>Included in Total Assets: Accounts receivable of $100,572, tenant security
deposits of $30,976, Investments in Local Limited Partnerships of $8,506,576,
Mortgagee escrow deposits of $139,547, Operating reserves of $337,353,
Replacement reserves of $74,617, Deferred fees, net of $337,219 and Other assets
of $94,462. <F2>Included in Total Liabilities and Equity: Mortgage notes payable
of $11,271,738, Note payable of $9,800, Accounts Payable to Affiliates of
$251,522, Accounts Payable and accrued expenses of $269,009, Accrued interest
payable of $38,128, Security deposits payable of $51,413 and minority interest
in Local Limited Partnerships of ($149,588). <F3>Total Revenue includes: Rental
of $1,093,703, Investment of $112,513 and Other of $59,532. <F4>Included in
Other Expenses: Asset Management fees of $272,905, General and Administrative of
$203,382, Rental Operations, exclusive of depreciation of $592,266, Property
Management fees of $50,797, Write-off of Investment in Local Limited Partnership
$812,892, Depreciation of $385,057 and Amortization of $150,878. <F5>Net loss
reflects: Equity in losses of Local Limited Partnerships of $3,340,844, minority
interest in loss of Local Limited Partnership of $786 and Extraordinary gain on
cancellation of indebtedness of $265,381.
</FN>
</TABLE>
