June 29, 1998
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, 1998
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/Dianne Groark
Dianne Groark
Assistant Controller
QH210K-K.98
<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, 1998 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, 1998
--------------------------------
<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
Acquisition 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, 1998
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-15
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 originally 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 these investments.
<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, 1998, the Managing General Partner has designated
approximately $1,266,000 of cash, cash equivalents and 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, 1998, 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 total capital contributions in
Local Limited Partnerships: (i) B&C Housing II, B&C Housing III, Shadow Wood
Housing, and Chaparral Housing, representing 9.31%, have Interstate Realty as
Local General Partner; (ii) Waynesboro Properties, Monroe Properties, Bamberg
Properties, Americus Properties, McKinley-Walker Ltd. and Willowpeg Village,
representing 4.48%, 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
2.66%, have Joseph A. Shepard and the Lockwood Group as Local General Partners;
(iv) Buckfield Housing, Newport Housing, Milo Housing and Unity Family Housing,
representing 2.65%, have Charles B. Mattson and Todd J. Mattson as Local General
Partners; (v) Birch Associates, Linden Housing and Willow Creek Housing,
representing 3.61%, have Robert F. Nielsen, Dennis F. Johnson and J. Michael
Queenan as Local General Partners; and (vi) Springhill Housing I, Springhill
Housing II and Springhill Housing III, representing 4.40%, have Delwood
Ventures, Inc. as Local General Partner. 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, 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.
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.
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 1998 1998 1997 Subsidy* 1998
- ---------------------------------------- ---------- ------------ ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Americus Properties Limited Partnership
Meadowbrook
Americus, GA 55 $ 333,000 $ 333,000 1,465,618 FmHA 100%
Atlantic Terrace Limited Partnership
Atlantic Terrace
Washington, DC 198 3,073,000 3,073,000 11,144,880 Section 8 96%
B&C Housing Associates, II,
A Limited Partnership
Patrick Henry
Tulsa, OK 56 345,000 345,000 1,540,124 Section 8 96%
B&C Housing Associates, III,
A Limited Partnership
Nottingham Square
Moore, OK 162 1,612,500 1,612,500 4,239,101 Section 8 93%
Bamberg Properties Limited Partnership
Bamberg Garden
Bamberg, SC 24 162,750 162,750 733,556 FmHA 100%
Birch Associates Limited Partnership
Reno Birchwood
Reno, NV 138 780,000 780,000 4,068,699 Section 8 98%
Blair Senior Housing L.P.
Rustic Oaks
Blair, NE 12 78,000 78,000 357,968 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 1998 1998 1997 Subsidy* 1998
- ------------------------------------ ---------- -------------- -------------- -------------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Brighton Manor Apartments,
A Limited Partnership
Brighton Manor
Douglasville, GA 40 1,050,000 1,050,000 1,213,033 None 97%
Buckfield Housing Associates
(A Limited Partnership)
Nezinscott Village
Buckfield, ME 20 234,000 234,000 1,081,935 FmHA 95%
Chapparal Housing Associates, Ltd.,
An Oklahoma Limited Partnership
Chapparal
Midland, TX 124 1,104,050 1,104,050 3,284,896 Section 8 98%
DeSoto Associates III, L.P.
(A Limited Partnership)
Parkview II
DeSoto, MO 24 118,500 118,500 561,744 FmHA 100%
Durham Park Limited Partnership
Durham Park
Tigard, OR 224 4,100,000 4,100,000 5,746,634 None 93%
Eastmont Estates Associates
(A Limited Partnership)
Eastmont Estates
Greenburg, PA 103 950,000 950,000 2,739,361 Section 8 89%
</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 1998 1998 1997 Subsidy* 1998
- ------------------------------------------ ---------- ------------- ---------- ------------- -------- -------------
<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 5,088,403 None 92%
Grayton Pointe Apartments, L.P. (A)
Grayton Pointe
Macon, GA
La Center Associates Limited Partnership
La Center
La Center, KY 12 85,125 85,125 396,287 FmHA 100%
Lamar Associates Limited Partnership
Lamar
Lamar, AR 20 137,250 137,250 623,033 FmHA 100%
Linden Housing Associates, Ltd.
Linden
Reno, NV 40 342,750 342,750 1,338,606 Section 8 100%
McKinley-Walker Limited Partnership
(A Limited Partnership)
McKinley Lane
Fitzgerald, GA 48 330,000 330,000 1,410,501 FmHA 90%
Milo Housing Associates
(A Limited Partnership)
Milo
Milo, ME 24 273,000 273,000 1,257,631 FmHA 96%
</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 1998 1998 1997 Subsidy* 1998
- ---------------------------------------------- ---------- ------------- --------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Monroe Properties Limited Partnership
Highland Village
Monroe, GA 55 321,750 321,750 1,457,277 FmHA 100%
Mulberry Associates I Limited Partnership
Quail Run
Mulberry, AR 24 164,250 164,250 750,473 FmHA 88%
Newport Housing Associates
(A Limited Partnership)
Newport Family
Newport, ME 24 271,500 271,500 1,257,625 FmHA 100%
Paragould Associates I, Limited Partnership
Paragould
Paragould, AR 14 101,625 101,625 464,738 FmHA 100%
San Antonio Limited Dividend Partnership S.E.
Nuevo San Antonio
Aquadilla, PR 100 800,250 800,250 3,835,449 FmHA 100%
Shadow Wood Housing Associates, Limited,
An Oklahoma Limited Partnership
Shadow Wood
Chickasha, OK 61 450,000 450,000 744,811 Section 8 82%
Shannon Creste Apartments, L.P.**
Shannon Creste
Union City, GA 200 3,635,000 3,635,000 6,162,814 None 91%
</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 1998 1998 1997 Subsidy* 1998
- --------------------------------------- ---------- ------------ ------------ ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Snapfinger Creste Apartments, L.P.(B)
Snapfinger Creste
Decatur, GA
Spring Hill Housing Associates I, Ltd.
(A Limited Partnership)
Springhill I
Casper, WY 32 408,500 408,500 1,030,781 Section 8 100%
Spring Hill Housing Associates II, Ltd.
(A Limited Partnership)
Springhill II
Casper, WY 48 597,000 597,000 1,407,505 Section 8 100%
Spring Hill Housing Associates III, Ltd.
(A Limited Partnership)
Springhill III
Casper, WY 47 653,000 653,000 1,491,243 Section 8 100%
Strafford II Rural Housing L.P.
Strafford Arms
Strafford, MO 12 64,500 64,500 293,432 FmHA 92%
Unity Family Housing Associates
(A Limited Partnership)
Unity Family
Unity, ME 20 222,000 222,000 1,005,922 FmHA 100%
Ward Manor Associates I Limited
Partnership
Ward Manor
Ward, AR 16 114,750 114,750 522,911 FmHA 81%
</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 1998 1998 1997 Subsidy* 1998
- --------------------------------------------- ---------- ------------ ---------- --------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Warrenton Associates I, L.P.
(A Limited Partnership)
Warrenton
Warrenton, MO 16 78,375 78,375 374,345 FmHA 94%
Wayne Apartments Project Limited Partnership
(A Massachusetts Limited Partnership)
Wayne
Boston, MA 349 10,937,500 10,600,000 13,594,589 Section 8 93%
Waynesboro Properties Limited Partnership
(A Limited Partnership)
Ashton Place
Waynesboro, GA 36 217,500 217,500 947,973 FmHA 100%
Willow Creek Housing Associates, Ltd.
(A Limited Partnership)
Willow Creek
Reno, NV 25 240,000 240,000 895,140 Section 8 96%
Willowpeg Lane Limited Partnership
(A Limited Partnership)
Willowpeg Lane
Rincon, GA 48 325,500 325,500 1,471,863 FmHA 98%
</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 1998 1998 1997 Subsidy* 1998
- ---------------------------------- ---------- -------------- ------------- --------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Winona Associates I, L.P.
Winona
Winona, MO 12 62,250 62,250 279,154 FmHA 92%
------- ------------ ------------ -------------
2,663 38,038,439 37,700,939 86,280,055
=======
Less Combined Entities** 6,899,264 6,899,264 11,251,217
------------ ------------ -------------
$ 31,139,175 $ 30,801,675 $ 75,028,838
============ ============= ==============
</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.
(A) The Partnership's investment in Grayton Pointe Apartments, L.P. was
written off as of October 7, 1997.
(B) The Partnership's investment in Snapfinger Creste Apartments, L.P. was
written off as of March 31, 1997.
<PAGE>
Two Local Limited Partnerships invested in by the Partnership each represent
more than 10% of the total capital contributions to be made to Local Limited
Partnerships by the Partnership. The first is Wayne Apartment Project Limited
Partnership. Wayne, representing 28.12% of the total capital contributions in
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 other Local Limited Partnership which represents more than 10% of the total
capital contributions made to Local Limited Partnerships is Durham Park Limited
Partnership. Durham Park, representing 10.88% of the total capital contributions
in Local Limited Partnerships, is a 224 -unit apartment complex located in
Tigard, Oregon.
Durham Park is financed through a mortgage secured through Travelers Insurance
Company at 10.25%. The loan is amortized over 30 years, with a balloon
payment due at maturity.
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
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
was 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 plus interest) 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. It appears that a favorable settlement of the Saunders matter is
achievable but only makes sense in the broader context of a mortgage
restructuring for this property (which is experiencing substantial deficits).
The Managing General Partner will soon learn whether a mortgage restructuring
and settlement can be obtained.
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 June 15, 1998, there were $4,125 record holders of Units of the
Partnership.
Cash distributions, when made, are paid annually. For the years ended March 31,
1998, 1997 and 1996, 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,
1998 1997 1996 1995 1994
------------ ------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Revenue (C) $ 2,268,532 $ 1,265,748 $ 947,856 $ 953,580 $ 996,730
Equity in losses of Local Limited
Partnerships (C) (2,249,569) (3,340,844) (2,808,887) (4,475,806) (4,360,009)
Extraordinary item - 265,381 - - -
Net loss (3,219,105) (4,914,046) (3,770,322) (5,531,873) (5,155,439)
Per Limited Partnership Unit (53.12) (81.08) (62.21) (91.28) (85.06)
Cash and cash equivalents 722,737 318,451 164,590 614,257 84,503
Marketable securities (C) 966,668 1,319,499 1,739,223 2,577,466 3,554,971
Investment in Local Limited
Partnerships 5,985,365 8,506,576 14,387,959 16,561,339 21,252,887
Total assets (A) 20,546,738 23,553,010 22,891,866 27,513,613 32,894,160
Long-term debt (C) 11,247,950 11,271,738 5,133,950 5,153,852 5,131,380
Total liabilities (C) 12,105,704 11,891,610 6,062,741 6,969,001 6,809,678
Cash distribution - - - - -
Per Limited Partnership Unit - - - - -
Other Data
Passive loss (B) (2,423,158) (4,239,701) (4,710,892) (5,841,796) (5,494,466)
Per Limited Partnership Unit (B) (39.99) (69.96) (77.73) (96.39) (90.66)
Portfolio income (B) 234,460 235,195 402,609 204,369 352,145
Per Limited Partnership Unit (B) 3.87 3.88 6.64 3.37 5.81
Low-Income Housing Tax Credits (B) 7,629,830 8,894,928 8,905,714 8,897,453 8,893,337
Per Limited Partnership Unit (B) 125.89 146.77 146.67 146.54 146.47
Recapture of Low-Income Housing
Tax Credits (B) 4,785,777 - - - -
Per Limited Partnership Unit (B) 78.97 - - - -
Local Limited Partnership interests
owned at end of period 38 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 1997, 1996, 1995, 1994 and 1993
represents the amount distributed to individual investors. Corporate
investors received $131.82, $153.93, $154.11, $153.98 and $153.91 per
Unit in 1997, 1996, 1995, 1994 and 1993, respectively.
(C) March 31, 1998 and 1997 revenue includes $1,926,634 and $1,145,805,
respectively, 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, 1998 and 1997 equity in losses of Local Limited Partnerships
does not include $702,467 and $267,382, respectively, 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, 1998 and 1997 cash and cash equivalents includes $36,819 and
$18,660, respectively, 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 and cash equivalents
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.
For March 31, 1998 and 1997, the long-term debt is related to Garden
Cove and Shannon Creste. For March 31, 1996, 1995 and 1994, the long-
term debt is related to Garden Cove.
March 31, 1998 and 1997 total liabilities include $11,573,343 and
$11,628,066, respectively, 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, 1998, the Partnership, including the Combined Entities, had cash
and cash equivalents of $722,737 as compared to $318,451 at March 31, 1997. The
increase is primarily attributable to cash provided by operating activities,
cash distributions received from Local Limited Partnerships, proceeds from sales
of marketable securities in excess of purchases of marketable securities offset
by purchases of rental property.
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 $39,000 have been
paid from Reserves. The Partnership also advanced approximately $1,231,000 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, 1998, approximately
$1,266,000 of cash, cash equivalents and marketable securities has been
designated as Reserves.
At March 31, 1998, 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 $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, 1998, 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, 1998.
Based on the results of 1997 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.
Results of Operations
1998 versus 1997
The Partnership's results of operations for the year ended March 31, 1998
resulted in a net loss of $3,219,105 as compared to a net loss of $4,914,046 for
the same period in 1997. The decrease in net loss is primarily due to an
increase in rental and other income and a decrease in equity in losses of Local
Limited Partnerships. In addition, during the year ended March 31, 1997, the
Partnership wrote off its investment in two Local Limited Partnerships
(Snapfinger Creste and Grayton Pointe). Also, the Partnership recognized
cancellation of debt income during the year ended March 31, 1997 for one
Combined Entity. These decreases to net loss are offset by increases to rental
operations, property management fees, interest expense, depreciation and bad
debt expense. Other income increased due to the return of an escrow the
Partnership had funded for Grayton Pointe which was returned once the Local
Limited Partnership was written off. The decrease in equity in losses is due to
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. The increases in rental income, rental
operations, property management fees, interest expenses and depreciation are due
to the combination of Shannon Creste, which was effective for only a portion of
the year ended March 31, 1997. The increase in bad debt expense is due to the
Partnership's write off of receivables from Snapfinger Creste and Grayton
Pointe.
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.
Effect of recently issued Accounting Standards
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. The standard
requires that changes in comprehensive income be shown in a financial statement
that is displayed with the same prominence as other financial statements. The
standard is effective for fiscal years beginning after December 15, 1997. The
Partnership will adopt the new standard beginning in the first quarter of the
fiscal year ending March 31, 1999, but it is not expected to have a significant
effect on the Partnership's financial position or results of operations.
Low-Income Housing Tax Credits
The 1997, 1996 and 1995 Low-Income Housing Tax Credits per Unit for individuals
were $125.67, $146.77 and $146.67, respectively. The 1997, 1996 and 1995
Low-Income Housing Tax Credits per Unit for corporations were $131.82, $153.93
and $154.11, 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 were expected to be stable for the six
years subsequent to 1991 and then to decrease as certain properties reach the
end of the ten-year credit period.
Property Discussions
Prior to the transfer of two Local Limited Partnerships, Limited Partnership
interests had been acquired in forty Local Limited Partnerships which own and
operate 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
properties have stable operations and are operating at break-even or generating
operating cash flow.
Some of the 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.
Chapparal, Nottingham Square, Patrick Henry and Shadow Wood, all of which are
located in Oklahoma and have the same Local General Partner, are experiencing
operating difficulties. In particular, Shadow Wood has experienced severe
operating deficits due to high security costs, low Section 8 contract rates and
high debt service payments. Given the severity of the operating deficits for
Shadow Wood, it is possible that the Partnership will not be able to retain its
interest in the property through 1998. A foreclosure would result in recapture
for investors of one third of the cumulative tax credit benefits, the allocation
of taxable income to the Partnership and loss of future benefits associated with
this property. The Local General Partners are working to improve operating
results for these properties through contract rent increases and debt service
relief. Due to the Managing General Partner's concerns regarding the long term
viability of these properties, negotiations are underway with the Local General
Partner to develop a plan that will address these concerns.
Garden Cove, located in Huntsville, Alabama, remains unable to fully cover debt
service from operating income due to depressed rents and collection problems.
These deficits are being funded from Partnership Reserves. The Managing General
Partner continues to work with the management agent to find further ways to
decrease the operating deficits while implementing capital improvement
strategies that will improve property marketability. Further, 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 and
increasing the replacement reserve monthly deposits. It is likely that without a
modification, the lender will exercise its right to foreclose on the property. A
foreclosure would result in recapture for investors of one third of the
cumulative tax credit benefits.
As previously reported, Snapfinger Creste and Grayton Pointe, both of which are
located in Georgia and share the same Local General Partner, were affected by a
weak rental market and deferred maintenance issues. Although the initial
foreclosure deadline was extended, the Partnership transferred its interests in
Snapfinger Creste through a foreclosure on August 5, 1997. Despite further
extensive negotiations, the lender exercised its option to foreclose on Grayton
Pointe on October 7, 1997. These transfers resulted in recapture for investors
of one third of the cumulative tax credit benefits in 1997, the allocation of
taxable income to the Partnership and loss of future benefits associated with
these properties. For financial reporting purposes, the Partnership's investment
in Snapfinger Creste was written off as of March 31, 1997 and Grayton Pointe was
written off as of October 7, 1997.
In accordance with Financial Accounting Standard 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, the
Partnership has implemented policies and practices for assessing impairment of
its real estate assets and investments in local limited partnerships. Each asset
is analyzed by real estate experts to determine if an impairment indicator
exists. If so, the current value is compared to the fair value, and if there is
a significant impairment in value, a provision to write down the asset to fair
value will be charged against income.
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, 1998, 1997 and 1996.
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
None.
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., a Vice President of the Managing
General Partner, resigned his position effective June 30, 1995. Donna Gibson, a
Vice President of the Managing General Partner, resigned from her position on
September 13, 1996. Georgia Murray resigned as Managing Director, Treasurer and
Chief Financial Officer of the General Partner on May 25, 1997. Fred N. Pratt,
Jr. resigned as Managing Director of the General Partner on May 28, 1997.
William E. Haynsworth resigned as Managing Director, Vice President and Chief
Operating Officer of the General Partner on March 23, 1998.
The Managing General Partner was incorporated in February 1988. Randolph G.
Hawthorne 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
Jenny Netzer Managing Director and President
Michael H. Gladstone Managing Director, Vice President and Clerk
Randolph G. Hawthorne Managing Director, Vice President and
Chief Operating Officer
James D. Hart Chief Financial Officer and Treasurer
Paul F. Coughlan Vice President
Peter G. Fallon, Jr. Vice President
William E. Haynsworth 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 Partner of Arch Street L.P. are Messrs. A. Harold
Howell and William E. Haynsworth.
The Managing General Partner provides day-to-day management of the Partnership.
Compensation is discussed in Item 11 of this report. Such day-to-day management
does not include the management of the Properties.
The business experience of each of the persons listed above is described below.
There is no family relationship between any of the persons listed in this
section.
Jenny Netzer, age 42, graduated from Harvard University (B.A., 1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982. She joined Boston Financial in 1987 and is a Senior Vice President
leading the Institutional Tax Credit Team. She is also a member of the Senior
Leadership Team. Previously, Ms. Netzer led Boston Financial's new business
initiatives and managed the firm's Asset Management division, which is
responsible for the performance of 750 properties and providing service to
35,000 investors. Before joining Boston Financial, she was Deputy Budget
Director for the Commonwealth of Massachusetts where she was responsible for
the Commonwealth's health care and public pension programs' budgets. Ms. Netzer
was also Assistant Controller at Yale University and has been a member of the
Watertown Zoning Board of Appeals.
Michael H. Gladstone, age 41, graduated from Emory University (B.A. 1978) and
Cornell University (J.D., MBA, 1982). He joined Boston Financial in 1985 and
currently serves as Vice President and as the company's General Counsel. Prior
to joining Boston Financial, Mr. Gladstone was associated with the law firm of
Herrick & Smith. Mr. Gladstone is a member of the National Realty Committee and
has served on the advisory board to the Housing and Development Reporter, a
national publication on housing issues.
Randolph G. Hawthorne, age 48, is a graduate of Massachusetts Institute of
Technology (B.S., 1971) and Harvard Graduate School of Business (M.B.A., 1973).
He has been associated with Boston Financial since 1973 and has served as the
Treasurer of Boston Financial. Currently a Senior Vice President of the firm,
Mr. Hawthorne's primary responsibility is structuring and acquiring real estate
investments. Mr. Hawthorne is Past Chairman of the Board of the National Multi
Housing Council, having served on the board since 1989. He is a past president
of the National Housing and Rehabilitation Association, is 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. In addition to speaking at industry conferences, he is on the
Editorial Advisory Boards of the Tax Credit Advisor and Multi-Housing News.
James D. Hart, age 40, earned his Bachelor of Arts degree from Trinity College
and his Masters of Business Administration from the Amos Tuck School at
Dartmouth College. Mr. Hart serves as Chief Financial Officer and is a member of
the Senior Leadership Team. Prior to joining Boston Financial, Mr. Hart was
engaged in venture capital management on behalf of institutional investors,
including the negotiation and structuring of private equity and mezzanine
transactions as a Vice President of Interfid Ltd., and later in the operational
management of a venture-backed software company, as Managing Director and Chief
Financial Officer of Bitstream Inc. Mr. Hart has also served on the Board of
Directors of several investee companies, including those that went on to
complete initial public offerings.
Paul F. Coughlan, age 54, is a graduate of Brown University (B.A., 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 59, 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, to raise capital for the firm's investments.
He is currently a Senior Vice President and a member of the Institutional Tax
Credits Team with responsibility for marketing institutional investments.
Previously, he has served as president of BFG Securities, as a director of
Boston Financial and as marketing director for public and corporate funds. Mr.
Fallon has also served as Chairman of the Board of Directors for Boston College
High School as well as a director of a local bank.
William E. Haynsworth, age 58, is a graduate of Dartmouth College (B.A., 1961)
and Harvard Law School (L.L.B., 1964; L.L.M., 1969). Prior to joining Boston
Financial in 1977, Mr. Haynsworth was Acting Executive Director and General
Counsel of the Massachusetts Housing Finance Agency. He was also the Director of
Non-Residential Development of the Boston Redevelopment Authority and an
associate of the law firm of Goodwin, Procter & Hoar. Appointed Senior Vice
President in 1986, Mr. Haynsworth brings over 25 years of experience structuring
real estate investments. Mr. Haynsworth is a member of the Executive Committee
and the Board of Directors of the Affordable Housing Tax Credit Coalition. He is
a member of the Senior Leadership Team, the firm's Executive Committee and the
Board of Directors of Boston Financial.
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, 1998, 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, 1998 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, 1998. 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, 1998.
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 totaled 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, 1998.
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 $6,979 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, 1998 are as follows:
1998 1997 1996
------------ ----------- ------------
Asset management fees $ 277,743 $ 272,905 $ 265,722
<PAGE>
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, 1998 are as follows:
1998 1997 1996
-------- -------- --------
Salaries and benefits $118,425 $107,933 $114,145
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, 1998 are
fees earned by BFPM for the years ended December 31, 1997, 1996 and 1995,
respectively, are as follows:
1998 1997 1996
------------ ----------- -----------
Property management fees $79,942 $50,797 $36,328
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the
Partnership, Arch Street, Inc. and Arch Street 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, 1998.
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, 1998 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.
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, 1998.
(a)(3)(c) Exhibits
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
Wayne Apartments Project 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/Randolph G. Hawthorne Date: 6/29/98
Randolph G. Hawthorne,
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/ Randolph G. Hawthorne Date: 6/29/98
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
By: /s/Michael H. Gladstone Date: 6/29/98
Michael H. Gladstone,
A Managing Director
F-1
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Annual Report on Form 10-K for the Year Ended March 31, 1998
Index
Page No.
Reports of Independent Accountants
For the years ended March 31, 1998, 1997 and 1996 F-2
Financial Statements
Combined Balance Sheets - March 31, 1998 and 1997 F-3
Combined Statements of Operations - Years Ended
March 31, 1998, 1997 and 1996 F-4
Combined Statements of Changes in Partners' Equity
(Deficiency) - Years Ended March 31, 1998, 1997 and 1996 F-5
Combined Statements of Cash Flows - Years Ended
March 31, 1998, 1997 and 1996 F-6
Notes to the Combined Financial Statements F-8
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated
Depreciation F-24
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, 1998 and 1997 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 each of the three years in the period ended March 31, 1998. 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, 1998 and 1997, 76% and 75% of total assets, and for the years ended
March 31, 1998, 1997 and 1996, 85% , 88% and 100% of the equity in losses,
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 and the reports of other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements and financial statement schedule referred to above present
fairly, in all material respects, the combined financial position of the
Partnership as of March 31, 1998 and 1997, and the combined results of its
operations and its cash flows for each of the three years in the period ended
March 31, 1998, 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,
presents fairly, in all material respects, the information required to be
included therein.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 11, 1998
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
COMBINED BALANCE SHEETS
MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
------------- ------------
Assets
<S> <C> <C>
Cash and cash equivalents $ 722,737 $ 318,451
Marketable securities, at fair value (Note 3) 966,668 1,319,499
Accounts receivable 30,589 100,572
Tenant security deposits 46,223 30,976
Investments in Local Limited Partnerships
(Note 4) 5,985,365 8,506,576
Rental property at cost, net of
accumulated depreciation (Note 7) 12,141,809 12,293,738
Mortgage escrow deposits 136,287 139,547
Operating reserves 35,926 337,353
Replacement reserves 105,759 74,617
Deferred fees (net of accumulated amortization
of $172,729 and $147,413, respectively) 311,903 337,219
Other assets 63,472 94,462
------------- ------------
Total Assets $ 20,546,738 $ 23,553,010
============= ============
Liabilities and Partners' Equity
Mortgage notes payable (Note 8) $ 11,247,950 $ 11,271,738
Note payable 3,266 9,800
Accounts payable to affiliate (Note 6) 566,352 251,522
Accounts payable and accrued expenses (Note 11) 162,072 269,009
Accrued interest payable (Note 8) 71,753 38,128
Security deposits payable 54,311 51,413
------------- ------------
Total Liabilities 12,105,704 11,891,610
------------- ------------
Minority interests in Local Limited Partnerships (159,824) (149,588)
------------- ------------
Commitments (Note 10)
General, Initial and Investor Limited Partners' Equity 8,592,833 11,811,938
Net unrealized gains (losses) on marketable securities 8,025 (950)
------------- ------------
Total Partners' Equity 8,600,858 11,810,988
------------- ------------
Total Liabilities and Partners' Equity $ 20,546,738 $ 23,553,010
============= ============
The accompanying notes are an integral part of these combined financial statements
</TABLE>
<PAGE>
COMBINED STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
----------- ------------ ------------
<S> <C> <C> <C>
Revenue:
Rental $ 1,870,527 $ 1,093,703 $ 752,707
Investment (Note 3) 95,837 112,513 151,685
Other 302,168 59,532 43,464
------------ ------------ ------------
Total Revenue 2,268,532 1,265,748 947,856
------------ ------------ ------------
Expenses:
Asset management fees - related party (Note 6) 277,743 272,905 265,722
General and administrative
(includes reimbursements to an affiliate
in the amount of $118,425, $107,933 and
$114,145) (Note 6) 214,600 203,382 221,974
Bad debt expense 14,555 - -
Rental operations, exclusive of depreciation 1,078,426 592,266 464,173
Property management fees, related party (Note 6) 79,942 50,797 36,328
Interest (Note 8) 887,572 636,940 498,745
Write-off of Investment in Local
Limited Partnership - 812,892 -
Depreciation 557,845 385,057 279,083
Amortization 137,621 150,878 148,374
------------ ------------ ------------
Total Expenses 3,248,304 3,105,117 1,914,399
------------ ------------ ------------
Loss before minority interest
in loss of Local Limited Partnership,
equity in losses of Local
Limited Partnerships and
cancellation of indebtedness (979,772) (1,839,369) (966,543)
Minority interest in loss of Local
Limited Partnership 10,236 786 5,108
Equity in losses of Local Limited
Partnerships (Note 4) (2,249,569) (3,340,844) (2,808,887)
------------ ------------ ------------
Loss before extraordinary item (3,219,105) (5,179,427) (3,770,322)
Extraordinary gain on cancellation of indebtedness
(Note 12) - 265,381 -
------------ ------------ ------------
Net Loss $ (3,219,105) $ (4,914,046) $ (3,770,322)
============ ============ ============
Net Loss allocated:
To the General Partners $ (32,191) $ (49,140) $ (37,703)
To the Limited Partners (3,186,914) (4,864,906) (3,732,619)
------------ ------------ ------------
$ (3,219,105) $ (4,914,046) $ (3,770,322)
============ ============ ============
Loss before extraordinary item per Limited
Partnership Unit (60,000 Units) $ (53.12) $ (85.46) $ (62.21)
============ ============ ===========
Extraordinary gain on cancellation of indebtedness
per Limited Partnership Unit (60,000 Units) $ - $ 4.38 $ -
============ ============ ============
Net Loss per Limited
Partnership Unit (60,000 Units) $ (53.12) $ (81.08) $ (62.21)
============ =========== ===========
The accompanying notes are an integral part of these combined financial statements
</TABLE>
<PAGE>
COMBINED STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
YEARS ENDED MARCH 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
Net
Initial Investor Unrealized
General Limited Limited Gain
Partners Partners Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1995 $ (322,355) $ 5,000 $ 20,813,661 $ (54,268) $ 20,442,038
Net change in net 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 net unrealized gains
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
Net change in net unrealized
losses on marketable securities
available for sale 8,975 8,975
Net Loss (32,191) - (3,186,914) - (3,219,105)
----------- --------- ------------ --------- --------------
Balance at March 31, 1998 $ (441,389) $ 5,000 $ 9,029,222 $ 8,025 $ 8,600,858
=========== ========= ============ ========= ==============
</TABLE>
<PAGE>
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Loss $ (3,219,105) $(4,914,046) $(3,770,322)
Adjustments to reconcile net loss to
net cash provided by (used for) operating activities:
Equity in losses of Local Limited Partnerships 2,249,569 3,340,844 2,808,887
Extraordinary gain on cancellation of indebtness - (265,381) -
Minority interest in loss of
Local Limited Partnerships (10,236) (786) (5,108)
Cash distribution income included in cash
distributions from Local Limited Partnerships (5,303) (5,913) (1,046)
Decrease in operating reserves 301,427 - -
(Gain) loss on sale of marketable securities 1,343 5,473 (723)
Bad debt expense 14,555 - -
Write-off of Investment in Local Limited Partnership - 812,892 -
Depreciation and amortization 695,466 535,935 427,457
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)
Insurance proceeds receivable - 375,000 -
Accounts receivable (7,474) (7,883) 9,870
Tenant security deposits (15,247) 3,946 (84)
Other assets 30,990 (55,008) 22,727
Accounts payable to affiliates 314,830 165,344 14,513
Accounts payable and accrued expenses (106,937) (685,397) 269,322
Accrued interest payable 33,625 (163) (148)
Security deposits payable 2,898 (2,240) (1,570)
------------ ----------- -----------
Net cash provided by (used for) operating activities 280,401 (701,244) (514,477)
------------ ----------- -----------
Cash flows from investing activities:
Proceeds from notes receivable - 85,769 -
Purchases of marketable securities (848,387) (958,177) (2,275,163)
Proceeds from sales and maturities
of marketable securities 1,208,850 1,365,803 3,174,072
Capital contributions to Local Limited Partnerships - - (850,000)
Cash distributions received from Local
Limited Partnerships 164,640 450,686 74,771
Cash received upon assumption of General Partner
interest in a Combined Entity - 8,593 -
Purchase of rental property (405,916) (23,870) (100,508)
Advances to affiliate - (85,789) (6,777)
Replacement reserve deposits - - (37,159)
Disbursement from replacement reserves (31,142) (5,355) 113,213
------------ ----------- -----------
Net cash provided by investing activities 88,045 837,660 92,449
------------ ----------- -----------
Cash flows from financing activities:
Repayment of mortgage notes payable (23,788) (31,021) (19,902)
Repayment of note payable (6,534) - -
Mortgage escrow deposits 3,260 (2,418) (7,737)
Advances from affiliate 62,902 50,884 -
------------ ----------- -----------
Net cash provided by (used for) financing activities 35,840 17,445 (27,639)
------------ ----------- -----------
The accompanying notes are an integral part of these combined financial statements
</TABLE>
<PAGE>
COMBINED STATEMENTS OF CASH FLOWS (continued)
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
------------ ----------- -----------
<S> <C> <C> <C>
Net increase (decrease) in cash and cash
equivalents 404,286 153,861 (449,667)
Cash and cash equivalents, beginning 318,451 164,590 614,257
------------ ----------- -----------
Cash and cash equivalents, ending $ 722,737 $ 318,451 $ 164,590
============ =========== ===========
Supplemental disclosure:
Cash paid for interest $ 853,948 $ 637,103 $ 498,893
============ =========== ===========
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 $ -
============ =========== ===========
The accompanying notes are an integral part of these combined financial statements
</TABLE>
<PAGE>
F-25
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,
1998, the Managing General Partner has designated approximately $1,266,000 of
cash, cash equivalents and 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 Partnership's 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>
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, 1997, 1996 and 1995.
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 General Partner of Garden Cove is an affiliate of the Partnership and has a
controlling financial interest in Garden Cove, as set forth in paragraph 22 of
ARB 51, these combined financial statements include all financial activity of
Garden Cove Apartments, Ltd. for the years ended December 31, 1997, 1996 and
1995. 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-1 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
and has a controlling financial interest in Shannon Creste, as set forth in
paragraph 22 of ARB 51, these combined financial statements include financial
activity of Shannon Creste for the year ended December 31, 1997 and 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>
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 Standards
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. The standard
requires that changes in comprehensive income be shown in a financial statement
that is displayed with the same prominence as other financial statements. The
standard is effective for fiscal years beginning after December 15, 1997. The
Partnership will adopt the new standard beginning in the first quarter of the
fiscal year ending March 31, 1999, but it is not expected to have a significant
effect on the Partnership's 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 of the Combined Entities are recorded in
accordance with SFAS 121. 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>
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.
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 $ 731,850 $ 5,314 $ (179) $ 736,985
Mortgage backed securities 218,970 2,904 - 221,874
Other debt securities 7,823 - (14) 7,809
------------- ----------- ---------- -------------
Marketable securities
at March 31, 1998 $ 958,643 $ 8,218 $ (193) $ 966,668
============= =========== =========== =============
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
============= =========== ========== =============
</TABLE>
<PAGE>
Notes to the Combined Financial Statements (continued)
3. Marketable Securities (continued)
The contractual maturities at March 31, 1998 are as follows:
Cost Fair Value
Due in one year or less $ 399,121 $ 399,301
Due in one year to five years 340,552 345,493
Mortgage backed securities 218,970 221,874
------------- -------------
$ 958,643 $ 966,668
============= =============
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 $1,209,000, $1,366,000 and $3,174,000 in 1997, 1996 and 1995,
respectively. Included in investment income are gross gains of $4,375, $8,957
and $19,251 and gross losses of $5,718, $14,430 and $18,528 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-six Local
Limited Partnerships (excluding Snapfinger Creste and Grayton Pointe, which have
been written off, and the Combined Entities) 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, Snapfinger Creste in 1998 and 1997 and Grayton
Pointe in 1998, at March 31:
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------- -------------
<S> <C> <C> <C>
Capital contributions paid to Local Limited
Partnerships and purchase price paid
to withdrawing partners of Local
Limited Partnerships $ 30,801,675 $ 33,326,675 $ 40,811,675
Cumulative equity in losses of Local Limited
Partnerships (excluding cumulative unrecognized
losses of $2,241,841, $1,948,556 and $912,349
in 1998, 1997 and 1996, respectively) (27,298,985) (27,806,907) (30,295,178)
Cumulative cash distributions received
from Local Limited Partnerships (1,009,909) (869,645) (484,476)
------------- ------------- -------------
Investments in Local Limited Partnerships
before adjustment 2,492,781 4,650,123 10,032,021
Excess of investment costs over the
underlying net assets acquired:
Acquisition fees and expenses 4,771,921 5,084,529 5,561,180
Accumulated amortization of acquisition
fees and expenses (1,279,337) (1,228,076) (1,205,242)
------------- ------------- -------------
Investments in Local Limited Partnerships $ 5,985,365 $ 8,506,576 $ 14,387,959
============= ============= =============
</TABLE>
<PAGE>
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,
1997, 1996 and 1995 (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>
1997 1996 1995
------------- -------------- ---------------
<S> <C> <C> <C>
Assets:
Investment property, net $ 77,825,299 $ 94,754,454 $ 106,293,817
Current assets 1,927,060 2,033,994 2,590,314
Other assets 4,807,697 5,833,632 6,216,946
------------- -------------- --------------
Total Assets $ 84,560,056 $ 102,622,080 $ 115,101,077
============= ============== ===============
Liabilities and Partners' Equity:
Long-term debt $ 74,043,101 $ 84,909,248 $ 94,673,640
Current liabilities (includes current
portion of long-term debt) 3,032,307 7,080,276 3,242,430
Other liabilities 8,467,246 8,956,403 10,126,946
------------- -------------- ---------------
Total Liabilities 85,542,654 100,945,927 108,043,016
------------- -------------- ---------------
Partners' Equity:
Partnership's Equity 236,061 3,195,732 8,690,159
Less capital contributions receivable (337,501) (337,501) (337,501)
------------- -------------- ---------------
(101,440) 2,858,231 8,352,658
Other Partners' Equity (881,158) (1,182,078) (1,294,597)
------------- -------------- ---------------
Total Partners' Equity (982,598) 1,676,153 7,058,061
------------- -------------- --------------
Total Liabilities and Partners' Equity $ 84,560,056 $ 102,622,080 $ 115,101,077
============= ============== ===============
Summarized Income Statements - for
the years ended December 31,
Rental and other income $ 15,388,644 $ 17,934,257 $ 19,728,805
------------- -------------- ---------------
Expenses:
Operating 8,516,582 9,945,887 9,446,565
Interest 5,943,200 7,585,562 8,535,963
Depreciation and amortization 3,975,747 4,829,056 5,074,826
------------- -------------- ---------------
Total Expenses 18,435,529 22,360,505 23,057,354
------------- -------------- ---------------
Net Loss $ (3,046,885) $ (4,426,248) $ (3,328,549)
============= ============== ===============
Partnership's share of net loss $ (3,016,416) $ (4,371,138) $ (3,294,559)
============= ============== ===============
Other Partners' share of net loss $ (30,469) $ (55,110) $ (33,990)
============= ============== ===============
</TABLE>
The summarized financial information of the Local Limited Partnerships does not
include Garden Cove for the years ended December 31, 1997, 1996 and 1995 and
does not include Shannon Creste for the year ended December 31, 1997 and 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>
Notes to the Combined Financial Statements (continued)
4. Investments in Local Limited Partnerships (continued)
For the years ended March 31, 1998, 1997 and 1996, the Partnership has not
recognized $772,152, $1,036,207 and $486,718, respectively, of equity in losses
relating to nineteen Local Limited Partnerships where cumulative equity in
losses exceeds their total investment.
Snapfinger Creste and Grayton Pointe, located in Georgia, were affected by a
weak rental market and deferred maintenance issues. The Local General Partner
was obligated to fund deficits and had made advances and deferred management
fees. Although the initial foreclosure deadline was extended, the Partnership
transferred its interest in Snapfinger Creste through a foreclosure on August 5,
1997. In recent months, continuing negotiations did not provide for a
satisfactory agreement between the parties. The transfer will 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 this property. For financial reporting purposes, the
Partnership's investment in Snapfinger Creste was written off as of March 31,
1997.
Despite extensive negotiations, the lender exercised its option to foreclose on
Grayton Pointe on October 7, 1997. This will result in recapture for investors
of one third of the tax credit benefits, the allocation of taxable income to the
Partnership on the 1997 tax return and loss of future benefits associated with
this property. For financial reporting purposes, the investment in Grayton
Pointe was written off as of October 7, 1997
The Partnership's equity as reflected by the Local Limited Partnerships of
$(101,440) differs from the Partnership's Investments in Local Limited
Partnerships before adjustment of $2,492,781 principally because: a) the
Partnership has not recognized $2,241,841 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, 1998 are not reflected in the equity of certain
Local Limited Partnerships at December 31, 1997.
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 was calculated at
the prime rate. The prime rate as of March 7, 1997 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 $6,979 (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 $277,743,
$272,905 and $265,722 for the years ended March 31, 1998, 1997 and 1996,
respectively. Included in accounts payable to affiliates is $482,980 and
$205,237 of Asset Management Fees due to an affiliate of the Managing General
Partner at March 31, 1998 and 1997, 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, 1998, 1997 and 1996 is $118,425, $107,933
and $114,145, respectively, that the Partnership has paid as reimbursement for
salaries and benefits. At March 31, 1998 and 1997, $17,173 and $26,677,
respectively, is payable to an affiliate of the Managing General Partner.
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%,
Notes to the Combined Financial Statements (continued)
6. Transactions with Affiliates (continued)
respectively, of cash receipts. Included in the Combined Statements of
Operations for the three years ended March 31, 1997 is $79,942, $50,797 and
$36,328 of fees earned by BFPM for the year ended December 31, 1997, the period
ended December 31, 1996 and the year ended December 31, 1995, respectively.
7. Rental Property
Real estate and personal property belonging to the Combined Entities are
recorded in accordance with SFAS 121, the components of which are as follows at
December 31:
1998 1997
------------- -------------
Buildings $ 14,348,742 $ 14,725,712
Land and land improvements 1,980,744 1,287,465
Furniture and fixtures 414,612 325,005
------------- -------------
16,744,098 16,338,182
Less: accumulated depreciati 4,602,289 4,044,444
------------- -------------
Total $ 12,141,809 $ 12,293,738
============= =============
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.
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.
In December 1997, Garden Cove did not make its minimum debt service payment and
is considered in default of the mortgage. Therefore, at December 31, 1997, the
entire mortgage principal balance of $5,088,403 is considered current.
It is not practicable to estimate the fair value of this mortgage because
neither current refinancing terms nor programs with similar characteristics are
currently available.
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, 1997, the mortgage note payable with Citicorp was modified.
Commencing on November 1, 1997 and continuing on the first day of each and every
month thereafter, up to and including April 1, 1999, interest
Notes to the Combined Financial Statements (continued)
8. Mortgage Notes Payable (continued)
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 on 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:
1998 $ 0
1999 20,612
2000 38,171
2001 6,100,764
-------------
$ 6,159,547
As the terms of the mortgage were modified under current market conditions,
management believes carrying value of the note approximates fair value as of
March 31, 1998.
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, 1998, 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 $337,500.
11. Litigation
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
was 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.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
Notes to the Combined Financial Statements (continued)
11. Litigation (continued)
Garden Cove is again involved in litigation. In the current matter, the
project's general contractor claims that there are amounts due it
(approximately $225,000 plus interest) 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. It appears that a favorable settlement of
the Saunders matter is achievable but only makes sense in the broader
context of a mortgage restructuring for this property (which is experiencing
substantial deficits). The Managing General Partner will soon learn whether a
mortgage restructuring and settlement can be obtained.
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 totaling $265,381.
13. Federal Income Taxes
A reconciliation of the losses reported in the Combined Statements of Operations
for the periods ended March 31, 1998, 1997 and 1996 to the losses reported for
federal income tax purposes for the years ended December 31, 1997, 1996 and 1995
is as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------- --------------
<S> <C> <C> <C>
Net Loss per Combined Statements of Operations $ (3,219,105) $ (4,914,046) $ (3,770,322)
Adjustment for equity in losses of Local
Limited Partnerships for financial
reporting purposes over equity
in loss for tax purposes 1,430,317 1,070,305 25,337
Equity in losses of Local Limited Partnerships
not recognized for financial reporting purposes (772,152) (1,036,207) (486,718)
Adjustment to reflect March 31 fiscal
year-end to December 31, tax year-end (227,888) (4,051) 1,945
Adjustment for expenses not currently
deductible for tax purposes 414,940 203,004 66,018
Adjustment for accelerated amortization
for tax purposes over amortization
for financial reporting purposes (77,357) (68,611) (65,213)
Other income (loss) recognized for tax purposes
but not recognized for book purposes - - (15,048)
Write-off of Investment in Local Limited
Partnership not recognized for tax purposes 470,736 812,892 -
Cash distributions included in loss for
financial reporting purposes (5,185) (1,774) -
Related party expenses paid in current year but
expensed for book purposes in prior year (203,004) (66,018) (64,282)
------------- ------------- --------------
Net Loss for federal income tax purposes $ (2,188,698) $ (4,004,506) $ (4,308,283)
============= ============= ==============
</TABLE>
<PAGE>
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, 1998
are as follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 5,985,365 $ 9,481,736 $ (3,496,371)
============ ============ ============
Other assets $ 14,561,373 $ 9,625,781 $ 4,935,592
============ ============ ============
Liabilities $ 12,105,704 $ 27,939 $ 12,077,765
============ ============ ============
</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 reporting 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 $3,359,000 lower than for financial
reporting purposes, including approximately $2,242,000 of losses the
Partnership has not recognized relating to nineteen 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 two Local Limited Partnerships of
$812,892; for tax purposes, the write off of investment for the two Local
Limited Partnerships totaled $470,736.
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 reporting 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>
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules
<TABLE>
<CAPTION>
Balance Sheets
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations Combined (A)
<S> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ 685,918 $ 36,819 $ - $ 722,737
Marketable securities, at fair value 966,668 - - 966,668
Accounts receivable 1,231,169 30,589 (1,231,169) 30,589
Tenant security deposits - 46,223 - 46,223
Investments in Local Limited
Partnerships 6,232,819 - (247,454) 5,985,365
Rental property at cost, net of
accumulated depreciation - 12,141,809 - 12,141,809
Mortgage escrow deposits - 136,287 - 136,287
Operating reserves - 35,926 - 35,926
Replacement reserves - 105,759 - 105,759
Deferred fees (net of accumulated
amortization of $172,729) - 311,903 - 311,903
Other assets 16,645 46,827 - 63,472
-------------- ------------ ------------ --------------
Total Assets $ 9,133,219 $ 12,892,142 $ (1,478,623) $ 20,546,738
============== ============ ============ ==============
Liabilities and Partners' Equity
Mortgage notes payable $ - $ 11,247,950 $ - $ 11,247,950
Note payable - 3,266 - 3,266
Accounts payable to affiliates 500,153 66,199 - 566,352
Accounts payable and accrued
expenses 32,208 129,864 - 162,072
Advances from Limited Partner - 1,231,169 (1,231,169) -
Accrued interest payable - 71,753 - 71,753
Security deposits payable - 54,311 - 54,311
-------------- ------------ ------------ --------------
Total Liabilities 532,361 12,804,512 (1,231,169) 12,105,704
-------------- ------------ ------------ --------------
Minority interest in Local Limited
Partnership - - (159,824) (159,824)
-------------- ------------ ------------ --------------
General, Initial and Investor
Limited Partners' Equity 8,592,833 87,630 (87,630) 8,592,833
Net unrealized losses on
marketable securities 8,025 - - 8,025
-------------- ------------ ------------ --------------
Total Partners' Equity 8,600,858 87,630 (87,630) 8,600,858
-------------- ------------ ------------ --------------
Total Liabilities and Partners' Equity $ 9,133,219 $ 12,892,142 $ (1,478,623) $ 20,546,738
============== ============ ============ ==============
</TABLE>
(A) March 31, 1998. (B) December 31, 1997.
<PAGE>
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules (continued)
Statements of Operations
<TABLE>
<CAPTION>
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations Combined (A)
<S> <C> <C> <C> <C>
Revenue:
Rental $ - $ 1,870,527 $ - $ 1,870,527
Investment 90,582 5,255 - 95,837
Other 251,316 50,852 - 302,168
-------------- ------------ ----------- ------------
Total Revenue 341,898 1,926,634 - 2,268,532
-------------- ------------ ----------- ------------
Expenses:
Asset management fees -
related party 277,743 - - 277,743
General and administrative 214,600 - - 214,600
Bad debt expense 14,555 - - 14,555
Rental operations, exclusive
of depreciation - 1,078,426 - 1,078,426
Property management fees,
related party - 79,942 - 79,942
Interest - 887,572 - 887,572
Depreciation - 557,845 - 557,845
Amortization 112,305 25,316 - 137,621
-------------- ------------ ----------- ------------
Total Expenses 619,203 2,629,101 - 3,248,304
-------------- ------------ ----------- ------------
Loss before minority interest in
loss of Local Limited Partnership
and equity in losses of
Local Limited Partnerships (277,305) (702,467) - (979,772)
Minority interest in loss of
Local Limited Partnerships - - 10,236 10,236
Equity in losses of Local
Limited Partnerships (2,941,800) - 692,231 (2,249,569)
-------------- ------------ ----------- ------------
Net Loss $ (3,219,105) $ (702,467) $ 702,467 $ (3,219,105)
============== ============ =========== ============
</TABLE>
(A) For the year ended March 31, 1998. (B) For the year ended December 31, 1997.
<PAGE>
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules (continued)
<TABLE>
<CAPTION>
Statements of Cash Flows
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations Combined (A)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net Loss $ (3,219,105) $ (702,467) $ 702,467 $ (3,219,105)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Equity in losses of Local Limited
Partnerships 2,941,800 - (692,231) 2,249,569
Minority interest in loss of Local
Limited Partnerships - - (10,236) (10,236)
Cash distribution income included
in cash distributions from Local
Limited Partnership (5,303) - - (5,303)
Decrease in operating reserves - 301,427 - 301,427
Loss on sale of marketable securities 1,343 - - 1,343
Bad debt expense 14,555 - - 14,555
Depreciation and amortization 112,305 583,161 - 695,466
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Accounts receivable - (7,474) - (7,474)
Tenant security deposits - (15,247) - (15,247)
Other assets 545 30,445 - 30,990
Accounts payable to affiliates 268,239 46,591 - 314,830
Accounts payable and
accrued expenses 578 (107,515) - (106,937)
Accrued interest payable - 33,625 - 33,625
Security deposits payable - 2,898 - 2,898
-------------- ------------ ----------- -------------
Net cash provided by operating activities 114,957 165,444 - 280,401
-------------- ------------ ----------- -------------
Cash flows from investing activities:
Purchases of marketable securities (848,387) - - (848,387)
Proceeds from sales and maturities
of marketable securities 1,208,850 - - 1,208,850
Cash distributions received from
Local Limited Partnerships 164,640 - - 164,640
Purchase of rental property - (405,916) - (405,916)
Advances to affiliates (253,933) - 253,933 -
Disbursements from
replacement reserves - (31,142) - (31,142)
-------------- ------------ ----------- -------------
Net cash provided by (used for)
investing activities 271,170 (437,058) 253,933 88,045
-------------- ------------ ----------- -------------
</TABLE>
<PAGE>
Notes to the Combined Financial Statements (continued)
14. Supplemental Combining Schedules (continued)
Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations Combined (A)
Combined (A)
<S> <C> <C> <C> <C>
Cash flows from financing activities:
Repayment of mortgage notes payable - (23,788) - (23,788)
Repayment of note payable - (6,534) - (6,534)
Mortgage escrow deposits - 3,260 - 3,260
Advances from affiliate - 316,835 (253,933) 62,902
------------------ ------------- ------------ -------------
Net cash provided by financing activities - 289,773 (253,933) 35,840
------------------ ------------- ------------ -------------
Net increase in cash and cash equivalents 386,127 18,159 - 404,286
Cash and cash equivalents, beginning 299,791 18,660 - 318,451
------------------ ------------- ------------ -------------
Cash and cash equivalents, ending $ 685,918 $ 36,819 $ - $ 722,737
================== ============= ============ =============
</TABLE>
(A) For the year ended March 31, 1998. (B) For the year ended December 31, 1997.
<PAGE>
<TABLE>
<CAPTION>
COST AT INTEREST AT GROSS AMOUNT
ACQUISITION DATE AT WHICH
CARRIED AT
DECEMBER 31,
1997
-------------------------------- ----------------
NET IMPROVEMENTS
NUMBER TOTAL BUILDINGS / CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO LAND AND
DESCRIPTION UNITS BRANCES * LAND & EQUIPMENT ACQUISITION IMPROVEMENTS
----------- ----- --------- ---- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment Complexes
Eastmont 103 $2,739,361 $100,000 $2,629,117 $1,288,629 $100,000
Greenburg, PA
Reno/Birch 138 4,068,699 382,333 5,298,594 53,077 382,333
Reno, NV
Buckfield 20 1,081,935 50,000 559,836 718,164 50,000
Buckfield, ME
Newport Family Housing 24 1,257,625 66,950 637,538 839,012 66,950
Newport, ME
Willow Creek Apartments 25 895,140 71,982 1,261,654 17,824 71,982
Reno, NV
Linden Apartments 40 1,338,606 110,251 1,855,036 22,474 110,251
Reno, NV
Unity Family Housing 20 1,005,922 47,500 690,892 504,243 47,500
Unity, ME
Spring Hill 127 3,929,529 229,702 4,940,334 (106,647) 171,780
Casper, WY
B&C III Housing 162 4,239,101 377,292 5,462,420 4,159 377,292
Moore, OK
San Antonio 100 3,835,449 165,200 4,467,166 358,911 165,200
Aquadilla, PR
Atlantic Terrace 198 11,144,880 210,000 5,314,668 7,245,971 306,557
Washington, D.C.
Shadow Wood Housing 61 744,811 2,045 1,424,111 78,875 2,045
Chickasha, OK
B&C II Housing 56 1,540,124 23,102 1,853,438 28,173 23,102
Tulsa, OK
Grayton Pointe Associates (A) 184 0 540,250 5,005,586 (5,545,836) 0
Macon, GA
Snapfinger Creste (B) 210 0 697,876 166,097 (863,974) 0
Decatur, GA
Wayne Apartments 349 13,594,589 265,817 9,443,627 20,708,539 265,817
Boston, MA
Chapparal Housing 124 3,284,896 381,880 1,290,206 2,654,242 381,880
Midland, TX
Durham Park 224 5,746,634 486,000 5,600,540 4,113,688 486,000
Tigard, OR
Willow Peg Lane 48 1,471,863 107,500 603,138 1,140,222 107,500
Rincon, GA
Meadowbrook Village 55 1,465,618 85,037 159,388 1,621,436 92,987
Americus, GA
Waynesboro Properties 36 947,973 40,700 31,020 1,137,361 44,100
Waynesboro, GA
Monroe Properties 55 1,457,277 115,905 55,882 1,699,518 115,905
Monroe, GA
Mulberry Associates 24 750,473 30,000 211,179 722,091 30,000
Mulberry, AR
Ward Manor 16 522,911 22,000 152,984 487,125 22,000
Ward, AR
Paragould Associates 14 464,738 18,500 212,874 354,627 20,000
Paragould, AR
Lamar Associates 20 623,033 23,100 259,086 506,416 23,100
Lamar, AR
Winona Apartments 12 279,154 4,000 212,719 136,931 4,000
Winona, MO
Blair Senior Housing 12 357,968 19,100 446,700 7,804 19,100
Blair, NE
McKinley-Walker 48 1,410,501 83,000 1,760,235 2,586 83,000
Fitzgerald, GA
Warrenton Apartments 16 374,345 23,000 445,188 0 23,000
Warrenton, MO
Strafford II Apartments 12 293,432 10,000 360,423 1,167 10,000
Strafford, MO
La Center Apartments 12 396,287 24,500 473,512 2,545 24,500
La Center, KY
DeSoto III Apartments 24 561,744 35,000 668,817 1,515 35,000
Webster Grove, MO
Garden Cove Apartments 200 5,088,403 647,924 3,899,850 2,785,773 1,383,864
Huntsville, AL
Shannon Creste Apartments 200 6,162,815 594,795 4,258,031 4,557,725 596,880
Union City, GA
Milo Senior Housing 24 1,257,631 66,950 660,837 822,736 66,950
Milo, ME
Brighton Manor Apartments 40 1,213,033 139,130 227,776 1,479,745 140,095
Douglasville, GA
Bamberg Garden Apartments 24 733,556 53,400 891,576 6,888 53,400
---------------------------------------------------------------------------------------
Bamberg, SC
SUBTOTAL 3,057 86,280,056 6,351,721 73,892,075 49,593,735 5,904,070
LESS: Combined Entities 400 11,251,218 1,242,719 8,157,881 7,343,498 1,980,744
---------------------------------------------------------------------------------------
TOTAL 2,657 $75,028,838 $5,109,002 $65,734,194 $42,250,237 $3,923,326
=======================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIFE ON
WHICH
BUILDINGS / DEPRECIATION
IMPROVEMENTS ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION & EQUIPMENT TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
----------- ----------- ----- ------------ ----- ------- --------
<S> <C> <C> <C> <C> <C>
Low and Moderate
Income Apartment Complexes
Eastmont $3,917,746 $4,017,746 $ 900,116 1952 7-10, 40 12/01/88
Greenburg, PA
Reno/Birch 5,351,671 5,734,004 2,054,429 1988 5-7, 27.5 07/10/88
Reno, NV
Buckfield 1,278,000 1,328,000 276,900 1990 7, 27.5 08/01/88
Buckfield, ME
Newport Family Housing 1,476,550 1,543,500 319,920 1990 27.5 08/01/88
Newport, ME
Willow Creek Apartments 1,279,478 1,351,460 465,037 1988 7, 27.5 08/01/88
Reno, NV
Linden Apartments 1,877,510 1,987,761 682,042 1988 5-7, 27.5 08/01/88
Reno, NV
Unity Family Housing 1,195,135 1,242,635 263,889 1990 7, 27.5 08/01/88
Unity, ME
Spring Hill 4,891,609 5,063,389 1,630,975 1989 Useful Lives 10/01/88
Casper, WY
B&C III Housing 5,466,579 5,843,871 1,930,693 1962/1973 5-7, 27.5 10/01/88
Moore, OK
San Antonio 4,826,077 4,991,277 2,291,490 1988 Useful Lives 10/01/88
Aquadilla, PR
Atlantic Terrace 12,464,082 12,770,639 3,617,650 1990 5-12, 20, 12/01/88
27.5, 40
Washington, D.C.
Shadow Wood Housing 1,502,986 1,505,031 501,179 1972 5, 7, 27.5 12/01/88
Chickasha, OK
B&C II Housing 1,881,611 1,904,713 721,001 1976 7, 27.5 12/01/88
Tulsa, OK
Grayton Pointe Associates 0 0 0 1989 5, 28 12/27/88
(A)
Macon, GA
Snapfinger Creste (B) 0 0 0 1989 5, 28 12/30/88
Decatur, GA
Wayne Apartments 30,152,166 30,417,983 9,182,840 1990 7, 27.5 12/22/88
Boston, MA
Chapparal Housing 3,944,448 4,326,328 1,248,820 1989 7, 27.5 12/01/88
Midland, TX
Durham Park 9,714,228 10,200,228 3,407,866 1989 7, 27.5 12/29/88
Tigard, OR
Willow Peg Lane 1,743,360 1,850,860 599,346 1988 Useful Lives 10/01/88
Rincon, GA
Meadowbrook Village 1,772,874 1,865,861 600,871 1989 Useful Lives 10/01/88
Americus, GA
Waynesboro Properties 1,164,981 1,209,081 388,197 1989 Useful Lives 12/01/88
Waynesboro, GA
Monroe Properties 1,755,400 1,871,305 581,769 1989 Useful Lives 12/01/88
Monroe, GA
Mulberry Associates 933,270 963,270 298,424 1989 7, 27.5 12/01/88
Mulberry, AR
Ward Manor 640,109 662,109 204,038 1989 7, 27.5 12/01/88
Ward, AR
Paragould Associates 566,001 586,001 184,406 1989 7, 27.5 12/01/88
Paragould, AR
Lamar Associates 765,502 788,602 250,519 1989 7, 27.5 12/01/88
Lamar, AR
Winona Apartments 349,650 353,650 119,808 1989 7, 27.5 12/01/88
Winona, MO
Blair Senior Housing 454,504 473,604 139,489 1989 7, 27.5 01/03/89
Blair, NE
McKinley-Walker 1,762,821 1,845,821 588,042 1989 Useful Lives 02/08/89
Fitzgerald, GA
Warrenton Apartments 445,188 468,188 144,208 1989 Useful Lives 03/31/89
Warrenton, MO
Strafford II Apartments 361,590 371,590 117,050 1989 5, 7, 27.5 03/31/89
Strafford, MO
La Center Apartments 476,057 500,557 153,126 1989 7, 27.5, 40 03/31/89
La Center, KY
DeSoto III Apartments 670,332 705,332 207,089 1989 Useful Lives 03/31/89
Webster Grove, MO
Garden Cove Apartments 5,949,683 7,333,547 2,180,607 1990 Useful Lives 05/11/89
Huntsville, AL
Shannon Creste 8,813,671 9,410,551 2,421,682 1990 5, 27.5 07/10/89
Apartments
Union City, GA
Milo Senior Housing 1,483,573 1,550,523 291,894 1990 7, 27.5 12/20/89
Milo, ME
Brighton Manor Apartments 1,706,556 1,846,651 601,273 1990 10, 30 12/29/89
Douglasville, GA
Bamberg Garden 898,464 951,864 303,739 1989 Useful Lives 01/20/89
Apartments
-------------------------------------------------
Bamberg, SC
SUBTOTAL 123,933,462 129,837,532 39,870,424
LESS: Combined Entities 14,763,354 16,744,098 4,602,289
-------------------------------------------------
TOTAL $109,170,108 $113,093,434 $35,268,135
=================================================
</TABLE>
<PAGE>
(1) The aggregate cost for Federal Income Tax purposes is approximately $
129,838,000.
* 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 7% to
11.5%. The Partnership has not guaranteed any of
these mortgage notes payable.
(A) Grayton Pointe was foreclosed upon on October 7,
1997. The Partnership wrote off its investment as
of October 7, 1997.
(B) The Partnership transferred its interest in
Snapfinger Creste through a foreclosure on August
5, 1997. The investment was written off as of
March 31, 1997.
<PAGE>
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1997
- -------------------------------------------------------------------------
Balance at beginning of period $130,912,714
Additions during period:
Add prior year Garden Cove $7,333,547
Add prior year Shannon Creste 9,004,635
Less current year Garden Cove (7,333,547)
Less current year Shannon Creste (9,410,551)
Acquisitions through foreclosure 0
Other acquisitions 289,671
Improvements etc. 379,331
----------------
263,086
Deductions during period:
Cost of real estate and fixed assets sold (5,884)
Write off of properties transferred (18,076,482)
Reclassification to intangible assets 0
----------------
(18,082,366)
---------------
Balance at close of period $113,093,434
===============
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1996
- -------------------------------------------------------------------------
Balance at beginning of period $139,702,097
Additions during period:
Add prior year Garden Cove $7,309,677
Less current year Garden Cove (7,333,547)
Less current year Shannon Creste (9,004,635)
Acquisitions through foreclosure 0
Other acquisitions 100,645
Improvements etc. 155,868
----------------
(8,771,992)
Deductions during period:
Cost of real estate and fixed assets sold (17,391)
Reclassification to intangible assets 0
----------------
(17,391)
---------------
Balance at close of period $130,912,714
===============
<PAGE>
Accumulated Depreciation December 31, 1997
- -------------------------------------------------
Balance at beginning of period $36,158,261
Additions during period:
Add prior year Garden Cove 1,944,916
Add prior year Shannon Creste 2,099,528
Less current year Garden Cove (2,180,607)
Less current year Shannon Creste (2,421,682)
Write off of properties transferred (4,798,250)
Depreciation 4,465,969
---------------
Balance at close of period $35,268,135
===============
Accumulated Depreciation December 31, 1996
- -------------------------------------------------
Balance at beginning of period $ 33,408,280
Additions during period:
Add prior year Garden Cove 1,664,005
Less current year Garden Cove (1,944,916)
Less current year Shannon Creste (2,099,528)
Depreciation 5,130,420
---------------
Balance at close of period $36,158,261
===============
<PAGE>
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1995
- -------------------------------------------------------------------------
Balance at beginning of period $139,464,764
Additions during period:
Add prior year Garden Cove $8,470,614
Less current year Garden Cove (7,309,677)
Acquisitions through foreclosure 0
Other acquisitions 157,978
Improvements etc. 179,863
----------------
1,498,778
Deductions during
period:
Cost of real estate and fixed assets sold 0
Reduction of Garden Cove property basis (1,261,445)
----------------
(1,261,445)
---------------
Balance at close of period $139,702,097
===============
<PAGE>
Accumulated Depreciation December 31, 1995
- -------------------------------------------------
Balance at beginning of period $28,752,072
Additions during period:
Add prior year Garden Cove 1,384,922
Less current year Garden Cove (1,664,005)
Depreciation 4,935,291
---------------
Balance at close of period $33,408,280
===============
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS II
(A Limited Partnership)
Annual Report on form 10-K
For The Year Ended March 31, 1998
Reports of Independent Auditors
<PAGE>
MACDONALD PAGE
Certified Public Accountants
30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701
P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
Independent Auditors' Report
February 5, 1998
Newport Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheets of Newport Housing Associates (a
limited partnership) as of December 31, 1997 and 1996, and the related
statements of profit and loss, changes in partners' capital 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 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 audits 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, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
MACDONALD PAGE
Certified Public Accountants
30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701
P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
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>
MACDONALD PAGE
Certified Public Accountants
30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701
P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
Independent Auditors' Report
February 5, 1998
Unity Family Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheets of Unity Family Housing
Associates (a Limited Partnership) as of December 31, 1997 and 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 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 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, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
MACDONALD PAGE
Certified Public Accountants
30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701
P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
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>
MACDONALD PAGE
Certified Public Accountants
30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701
P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
Independent Auditors' Report
February 5, 1998
Buckfield Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheets of Buckfield Housing Associates
(a limited partnership) as of December 31, 1997 and 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 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 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, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
MACDONALD PAGE
Certified Public Accountants
30 Long Creek Drive South Portland, Maine 04106 (207) 774-5701
P.O. Box 2389 Augusta, Maine 04388 (207) 621-0330
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.
dba Willow Creek Apartments
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, 1997, and the related statements of income, 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
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 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, 1997, 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.
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 February 10, 1998, on our
consideration of Willow Creek Housing Associates, Ltd. dba Willow Creek
Apartments, HUD Project No. 125-94008, internal control and reports dated
February 10, 1998, on its compliance with specific requirements applicable to
major HUD programs, specific requirements applicable to Fair Housing and
Non-Discrimination, and specific requirements applicable to nonmajor HUD program
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 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
February 10, 1998
<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 Government 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 Government 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.
<PAGE>
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 Government 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 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 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.
<PAGE>
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
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, 1997, and the related statements of income, 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
and Government 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 Birch Associates Limited
Partnership, dba Reno Apartments I-IV, HUD Project No. 125-94006, 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.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD programs issued by The U.S. Development of Housing and
Urban Development, we have also issued a report dated February 10, 1998, on our
consideration of Birch Associates Limited Partnership, dba Reno Apartments I-IV,
HUD Project No. 125-94006, internal control and reports dated February 10, 1998,
on its compliance with specific requirements applicable to major HUD programs,
specific requirements applicable to Fair Housing and Non-Discrimination, and
specific requirements applicable to nonmajor HUD program transactions.
Our audit was conducted for the purpose of forming an opinion on the basis
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 10, 1998
<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 Government 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 Government Auditing Standards, we have also issued a report
dated February 10, 1997, on our consideration 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 Government 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 Government Auditing Standards, we have also issued a report
dated February 9, 1996, on our consideration 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
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, 1997,
and the related statements of income, 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
and Government 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, 1997, 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.
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 February 10, 1998, on our
consideration of Linden Housing Associates, Ltd., dba Linden Apartments, HUD
Project No. 125-94007, internal control and reports dated February 10, 1998,
on its compliance with specific requirements applicable to major HUD programs,
specific requirements applicable to Fair Housing and Non-Discriminations, and
specific requirements applicable to nonmajor HUD program 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 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 10, 1998
<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 Government 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 Government 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
<PAGE>
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 Government 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 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 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.
<PAGE>
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 financial
statements taken as a whole.
/s/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
January 26, 1996
<PAGE>
[Letterhead]
[LOGO]
RD 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, 1997 and 1996, 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 Government 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, 1997 and 1996, 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 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 29, 1998, on our
consideration of HUD Project No. 033-35194-PM-SR (The "Project") of Eastmont
Estates Associates internal control, and reports dated January 29, 1998, on its
compliance with specific requirements applicable to major HUD programs, specific
requirements applicable to Fair Housing and Non-Discrimination.
/s/R.D. Hoag & Assoc. P.C.
R.D. Hoag & Associates,
A Professional Corporation
January 29, 1998
Pittsburgh, Pennsylvania
<PAGE>
[Letterhead]
[LOGO]
RD 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 Government 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 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 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]
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,
1997, 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 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 Spring Hill Housing Associates I,
Ltd., HUD Project No. 109-94001, as of December 31, 1997, and the results of its
operations and the changes in its partners' equity (deficiency) and its changes
in cash 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 28, 1998 on our consideration of Spring Hill Housing Associates,
I,
LTD's, internal controls and reports dated January 28, 1998 on its compliance
with specific requirements applicable to major HUD Programs and specific
requirements applicable to Fair Housing ad Non-Discrimination.
/s/Stark Tinter & Associates
Englewood, Colorado
January 28, 1998
<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 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 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
Englewood, Colorado
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 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 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
Englewood, Colorado
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,
1997, 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 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 Spring Hill Housing Associates
II, Ltd., HUD Project No. 109-94002, as of December 31, 1997, and the results of
its operations and the changes in its partners' equity (deficiency) and its
changes in cash 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 28, 1998 on our consideration of Spring Hill
Housing Associates, II,
LTD's, internal control structure and reports dated January 28, 1998 on its
compliance with specific requirements applicable to major HUD Programs and
specific requirements applicable to Fair Housing ad Non-Discrimination.
/s/Stark Tinter & Associates
Englewood, Colorado
January 28, 1998
<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 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 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
Englewood, Colorado
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 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 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
Englewood, Colorado
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 Housing Associates
III, Ltd. (a limited partnership), HUD Project No. 109-94003, as of December 31,
1997, 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 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 Spring Hill Housing Associates
III, Ltd., HUD Project No. 109-94003, as of December 31, 1997, and the results
of its operations and the changes in its partners' equity (deficiency) and its
changes in cash 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 28, 1998 on our consideration of Spring Hill Housing Associates,
III,
LTD's, internal controls and reports dated January 28, 1998 on its compliance
with specific requirements applicable to major HUD Programs and specific
requirements applicable to Fair Housing ad Non-Discrimination.
/s/Stark Tinter & Associates
Englewood, Colorado
January 28, 1998
<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 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 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
Englewood, Colorado
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 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 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
Englewood, Colorado
January 30, 1996
<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 Willowpeg Lane Limited
Partnership (a Georgia limited partnership) as of December 31, 1997 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.
We conducted our audits 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 audits 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 Willowpeg Lane Limited
Partnership (a Georgia limited partnership) as of December 31, 1997 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, 1998
<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 Willowpeg 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 Government 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 Willowpeg 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 Government 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>
[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, 1997 and 1996, 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 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 AMERICUS PROPERTIES LIMITED
PARTNERSHIP as of December 31, 1997 and 1996 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 23, 1998 on our consideration of AMERICUS PROPERTIES LIMITED
PARTNERSHIP internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts, and grants.
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 23, 1998
<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, 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 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 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>
Coopers & Lybrand
Report of Independent Accountants
To the Partners of
Atlantic Terrace Limited Partnership:
We have audited the accompanying balance sheet of Atlantic Terrace Partnership
as of December 31, 1997, 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 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 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, 1997, 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 January 30, 1998 on our consideration of Atlantic Terrace Limited
Partnership's internal control and a report dated January 30, 1998 on its
compliance with laws and regulations.
/s/ Coopers & Lybrand
Boston, Massachusetts
January 30, 1998
<PAGE>
Coopers & Lybrand
Report of Independent Accountants
To the Partners of
Atlantic Terrace Limited Partnership:
We have audited the accompanying balance sheet of Atlantic Terrace Partnership
as of December 31, 1996, 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 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 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, 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 Government Auditing Standards, we have also issued a report
dated January 31, 1997 on our consideration of Atlantic Terrace Limited
Partnership's internal control structure and a report dated January 31, 1997 on
its compliance with laws and regulations.
/s/ Coopers & Lybrand
Boston, Massachusetts
January 31, 1997
<PAGE>
[Letterhead]
[LOGO]
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 Government 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>
[Letterhead]
[LOGO]
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, 1997, 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 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 Garden Cove Apartments, Ltd as
of December 31, 1997, 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 25 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 29,
1998 on our consideration of Garden Cove Apartments, Ltd.'s internal control and
on its compliance with specific requirements applicable to major HUD programs,
fair housing and non-discrimination, and laws and regulations applicable to the
financial statements.
/s/Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 29, 1998 Identification Number
52-1088612
Audit Principal: Philip A. Weitzel
<PAGE>
[Letterhead]
[LOGO]
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 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 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>
To the Partners
Garden Cove Apartments, Ltd.
Page 2
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]
[LOGO]
Reznick Fedder & Silverman
Certified Public Accountants Business Consultants
A Professional Corporation
745 Atlantic Avenue
Suite 800
Boston, MA 02111-2735
(617) 423-5855
Fax (617) 423-6651
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, 1995, 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 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 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, 1995, 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 supplemental information on pages 21
through 26 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 as a
whole.
<PAGE>
Page 2
In accordance with Government Auditing Standards, we have also issued
reports dated February 24, 1996 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
Identification # 52-1088612
February 24, 1996
Audit Principal: Philip A. Weitzel
<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, 1997,
and 1996, and the related statements of income and expense, changes in partners'
capital and cash flows for the year ended December 31, 1997. 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 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 B & C Housing Associates, III,
as of December 31, 1997 and 1996, and the results of its operations and the
changes in partners' capital and cash flows for the year ended December 31,
1997, 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 16, 1998 on our
consideration of B & C Housing Associates, III's internal control structure and
reports dated January 16, 1998, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing and Non-Discrimination, and specific requirements
applicable to nonmajor HUD program 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 18 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 16, 1998
<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, 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 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 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
program transactions.
<PAGE>
To the Partners
B & C Housing Associates, III
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 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 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 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 18, 1996 on our
consideration of B & C Housing Associates, III's internal control structure and
reports dated January 18, 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 Partners
B & C Housing Associates, III
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 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, 1996
<PAGE>
[Letterhead]
[LOGO]
Horwath Velez, Semprit & Co.
San Juan, PR
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, 1997 and 1996, 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, 1997 and 1996, and the results of its
operations, its changes in partners' equity (deficiency) and its cash flows for
the years then ended in conformity with generally accepted accounting
principles.
/s/Horwath Velez, Semprit & Co.
February 2, 1998
Stamp number 1478597 was
affixed to the original of this report
<PAGE>
[Letterhead]
[LOGO]
Velez, Semprit, Nieves & Co.
San Juan, PR
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]
Floyd & Company
Savannah, Georgia
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, 1997 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 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 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, 1997 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, 1998
<PAGE>
[Letterhead]
[LOGO]
Floyd & Company
Savannah, Georgia
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 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 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 audits 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 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, 1997 and 1996, 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 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 MONROE PROPERTIES LIMITED
PARTNERSHIP as of December 31, 1997 and 1996 and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report
dated February 23, 1998 on our consideration of MONROE PROPERTIES LIMITED
PARTNERSHIP'S internal control over financial reporting and our test of its
compliance with certain provisions of laws, regulations, contracts and grants.
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 23, 1998
<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 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 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
<PAGE>
[Letterhead]
[LOGO]
Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITOR'S REPORT
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) Rural Development Case No: 03-017-431435777 as of
December 31, 1997, and the related statements of loss, partners' 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 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, 1997, and the results of its operations, changes in partners'
deficit and 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, 1998
<PAGE>
[Letterhead]
[LOGO]
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
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]
[LOGO]
Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
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) Rural Development Case No.:
03-036-431424399 as of December 31, 1997, and the related statements of
operations, partners' 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 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, 1997, and the results of its operations, changes
in partners' deficit and 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, 1998
<PAGE>
[Letterhead]
[LOGO]
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]
[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, 1997, and
1996, and the related statements of income and expense, changes in partners'
(deficiency) and cash flows for the year ended December 31, 1997. 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 Government 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, 1997 and 1996, and the results of its operations and the
changes in partners' (deficiency) and cash flows for the year ended December 31,
1997, 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 16, 1998, on our
consideration of B & C Housing Associates, II's internal control structure and
reports dated January 16, 1998, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and Non-Discrimination and specific requirements
applicable to nonmajor HUD program 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 18 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 16, 1998
<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, 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 Government 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
program transactions.
<PAGE>
To the Partners
B & C Housing Associates, II
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 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 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 Government 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 18, 1996, on our
consideration of B & C Housing Associates, II's internal control structure and
reports dated January 18, 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 Partners
B & C Housing Associates, II
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 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, 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, 1997 and 1996, and the related statements of income and
expense, changes in partners' equity and cash flows for the year ended December
31, 1997. 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 Government 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, 1997 and 1996, and the results of its operations and
the changes in partners' equity and cash flows for the year ended December 31,
1997 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 16, 1998 on our
consideration of Shadow Wood Housing Associates, Limited's internal control
structure and reports dated January 16, 1998 on its compliance with specific
requirements applicable to major HUD programs, specific requirements applicable
to Affirmative Fair Housing and Non-Discrimination, and specific requirements
applicable to nonmajor HUD program 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 18 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 16, 1998
<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 Government 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 program transactions.
<PAGE>
To the Partners
Shadow Wood Housing Associates, Limited
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 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 Government 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 18, 1996, on our
consideration of Shadow Wood Housing Associates, Limited's internal control
structure and reports dated January 18, 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 Partners
Shadow Wood Housing Associates, Limited
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 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]
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, 1997, and the related statements of loss,
partners' equity and cash flows for the year ended December 31, 1997. 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, 1997, 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, 1998
<PAGE>
[Letterhead]
[LOGO]
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]
[LOGO]
ZINER & COMPANY, P.C.
7 Winthrop Street
Boston, MA 02110-1256
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, 1997, 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, 1997, 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 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 16, 1998 on our
consideration of Wayne Apartments Project Limited Partnership's internal control
and reports
dated January 16, 1998 on its compliance with specific requirements applicable
to major HUD programs, and specific requirements applicable to Fair Housing and
Non-Discrimination.
/s/Ziner & Company, P.C.
January 16, 1998
<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, 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
Boston, Massachusetts
<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 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, 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 Government 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
Boston, Massachusetts
<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, 1997, and 1996, and the related statements of income and expense, changes in
partners' capital and cash flows for the year ended December 31, 1997. 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 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 Chaparral Housing Associates,
Ltd., as of December 31, 1997, and 1996, and the results of its operations and
the changes in partners' capital and cash flows for the year ended December 31,
1997, 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 16, 1998, on our
consideration of Chaparral Housing Associates, Ltd.'s internal control structure
and reports dated January 16, 1997, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing and Non-Discrimination, and specific requirements
applicable to nonmajor HUD program 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 18 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 16, 1998
<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 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 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
program 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 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 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 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 18, 1996, on our
consideration of Chaparral Housing Associates, Ltd.'s internal control structure
and reports dated January 18, 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.
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, 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 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>
[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
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]
HENICK & YLVISAKER, Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
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, 1997, 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 audits. The Balance Sheet for the year ended
December 31, 1996 and the related statements of operations, changes in partners'
capital and cash flows for the years ended December 31, 1996 and 1995 were
audited by other auditors whose report, dated February 12, 1997, expressed on
unqualified opinion on those statements.
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 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, 1997, and the results of its operations and its cash flows
for the year then ended, in conformity with generally accepted accounting
principles.
/s/HENICK & YLVISAKER
Portland, Oregon
February 8, 1998
<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]
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, 1997 and 1996, 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, 1997, 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 23, 1998
<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, 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 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 23, 1997
<PAGE>
[Letterhead]
[LOGO]
Floyd & Company
Savannah, Georgia
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, 1997 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 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 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, 1997 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, 1998
<PAGE>
[Letterhead]
[LOGO]
Floyd & Company
Savannah, Georgia
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 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
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 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
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.
Kirkwood, Missouri
INDEPENDENT AUDITORS' REPORT
The Partners
DeSoto Associates III, L.P.
St. Louis, Missouri
We have audited the accompanying balance sheets of DeSoto Associates III, L.P.
(a limited partnership) as of December 31, 1997 and 1996, and the related
statements of operations, partners' capital, 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 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 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 DeSoto Associates III, L.P. as
of December 31, 1997 and 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.
/s/Mueller, Walla & Albertson, P.C.
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
January 27, 1998
<PAGE>
[Letterhead]
[LOGO]
Mueller & Walla, P.C.
Certified Public Accountants
10714 Manchester Road
Suite 202
Kirkwood, Missouri 63122
(314) 822-6575
Accountants' Compilation Report
The Partners
DeSoto Associates III, L.P.
St. Louis, Missouri
We have compiled the accompanying balance sheet of DeSoto Associates III, 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, 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, 1994, were audited by
us, and we expressed an unqualified opinion on them in our report dated February
3, 1995, but we have not performed any auditing procedures since that date.
/s/Mueller & Walla, P.C.
Mueller & Walla, P.C.
Certified Public Accountants
February 9, 1996
<PAGE>
Mueller & Walla, P.C.
Certified Public Accountants
10714 Manchester Road
Suite 202
Kirkwood, Missouri 63122
ACCOUNTANTS' COMPILATION REPORT
The Partners
Warrenton Associates I, L.P.
Warrenton, Missouri
We have compiled the accompanying balance sheets of Warrenton Associates I, L.P.
(a limited partnership) as of December 31, 1997 and 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 statement's
information that is the representation of the 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.
/s/Mueller, Walla & Albertson, P.C.
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
February 11, 1998
<PAGE>
Mueller & Walla, P.C.
Certified Public Accountants
10714 Manchester Road
Suite 202
Kirkwood, Missouri 63122
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, 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, 1997, 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 SHANNON CRESTE APARTMENTS, L.P.
as of December 31, 1997, and the results of its operations, its changes in
partners' equity (deficit), 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 30, 1998
<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]
MACDONALD PAGE
South Portland, Maine
Independent Auditor's Report
February 5, 1998
Milo Housing Associates
224 Maine Avenue
Gardiner, Maine
We have audited the accompanying balance sheets of Milo Housing Associates (a
limited partnership) as of December 31, 1997 and 1996, and the related
statements of profit and loss, changes in partners' capital, 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 Milo Housing Associates as of
December 31, 1997 and 1996, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
/s/Macdonald Page & Co.
Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
MACDONALD PAGE
South Portland, Maine
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]
KPMG Peat Marwick LLP
Atlanta, Georgia
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, 1997 and 1996, 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 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 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, 1997 and 1996 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 16, 1998
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, Georgia
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
Wayne Apartments Project Limited Partnership
(a Massachusetts Limited Partnership)
Financial Statements
and
Supplementary Information
For the Year Ended December 31, 1997
<PAGE>
Table of Contents
Page
Independent Auditors' Report 1
Financial Statements
Balance Sheet 2
Statement of Changes in Partners' Capital 3
Statement of Profit and Loss 4
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 18
Independent Auditors' Report on Compliance with Specific
Requirements applicable to Major HUD Programs 20
Independent Auditors' Report on Compliance with Specific
Requirements applicable to Fair Housing and Non-Discrimination 21
Auditors' comments on audit resolution matters relating to HUD
Programs 22
Management's Agent's Certificate 23
Mortgagor's Certificate 24
<PAGE>
1
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, 1997, 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 of
these financial statements based on our audit.
We conducted our audits 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, 1997, 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 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 16, 1998 on our
consideration of Wayne Apartments Projects Limited Partnership's internal
control and reports dated January 16, 1998 on its compliance with specific
requirements applicable to major HUD Programs, and specific requirements
applicable to Fair Housing and Non-Discrimination.
//s// Ziner & Company, P.C.
January 16, 1998
<PAGE>
Wayne Apartments Project Limited Partnership
(a Massachusetts limited Partnership)
The accompanying notes are an integral part of the
financial statements.
3
<TABLE>
<CAPTION>
Balance Sheet - December 31, 1997
ASSETS
<S> <C>
Cash in bank $ 8,000
Tenant accounts receivable 62,399
Less allowance for doubtful accounts (21,094)
Accounts receivable - HUD 22,483
71,788
Deposits HELD IN TRUST - FUNDED
Tenant security deposits 70,679
PREPAID EXPENSES
Property insurance 50,833
Mortgage insurance 37,958
88,791
Restricted Deposits and Funded Reserves
Mortgagee escrow deposits 63,661
Reserve for replacements 621,467
685,128
FIXED ASSETS, at costs
Land 265,817
Buildings and improvements 6,948,290
Building rehabilitation costs 22,779,271
Furnishings and equipment 424,605
---------------
30,417,983
Accumulated depreciation (9,182,840)
21,235,143
OTHER ASSETS
Unamoritzed finance fees 225,363
Deposit 1,800
227,163
$ 22,378,692
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Accounts payable $ 281,775
Accrued interest payable 79,964
Accrued operating expenses 29,091
Mortgages payable - current portion 326,495
---------------
717,325
Deposits and Prepayment Liabilities
Tenant security deposits 64,973
Prepaid rent 34,328
99,301
Long-Term Liability
Mortgages payable 13,594,589
Less current portion (326,495)
13,268,094
Other Liabilities
Flexible subsidy loan and accrued interest 7,381,349
Residual receipts notes and accrued interest 309,598
7,690,947
Total Liabilities 21,775,667
Partners' Capital 603,025
$ 22,378,692
---------------
</TABLE>
Statement of Changes in Partners' Capital
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Capital Contributions $ 10,600,000
----------------
Accumulated Losses
Balance at beginning of year (8,667,925)
Net Loss for the year (1,311,648)
(9,979,573)
Distributions
Current year -
Prior years (17,402)
(17,402)
Ending Partners' Capital $ 603,025
================
</TABLE>
<PAGE>
Statement of Profit and Loss
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Part I
<S> <C>
Rental Income
Apartment or member carrying charges (Coops) $ 937,701
Tenant assistance payments 2,638,875
---------------
Total Rental Revenue Potential at 100% Occupancy $ 3,576,576
---------------
Vacancies
Apartments $ (106,636)
---------------
Total vacancies (106,636)
---------------
Net rental revenue rent revenue less vacancies $ 3,469,940
---------------
Financial Revenue
Interest income - project operations $ 1,842
Income from investments - reserve for replacement 19,926
---------------
Total Financial Revenue $ 21,768
---------------
Other Revenue
Laundry and vending $ 3,905
Other revenue (specify) 2,203
---------------
Total Other Revenue $ 6,108
---------------
Total Revenue $ 3,497,816
---------------
Administrative Expense
Advertising $ 433
Other administrative expense 10,190
Office salaries 68,165
Office supplies 69,038
Office or model apartment rent 23,434
Management 170,088
Manager or superintendent salaries 78,135
Legal expenses (Project) 56,613
Auditing expenses (Project) 13,995
Telephone and answering service 12,258
Bad debts 104,908
Miscellaneous administrative expenses (specify) 43,675
---------------
Total Administrative Expenses $ 650,932
---------------
Utilities Expense
Fuel oil/coal $ 76,976
Electricity (light and misc. power) 61,513
Water 206,223
Gas 172,882
---------------
Total Utilities Expense $ 517,594
---------------
</TABLE>
<PAGE>
Statement of Profit and Loss (continued)
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Part I
<S> <C>
Operating/Maintenance Expense
Janitor and cleaning payroll $ 844
Janitor and cleaning supplies 7,731
Janitor and cleaning contract 101,980
Exterminating payroll/contract 9,124
Garbage and trash removal 38,279
Security payroll/contract 33,613
Grounds supplies 597
Grounds contract 9,705
Repairs payroll 198,948
Repairs material 114,201
Repairs contract 51,181
Heating/cooling repairs and maintenance 34,568
Snow removal 16,646
Decorating payroll/contract 97,655
Decorating supplies 12,510
Other 12,696
---------------
Total Operating & Maintenance Expenses $ 740,278
---------------
Taxes and Insurance
Real estate taxes $ 165,291
Payroll taxes (FICA) 42,836
Property and Liability Insurance (Hazard) 85,303
Workmen's compensation 15,225
Health insurance and other employee benefits 49,179
---------------
Total Taxes and Insurance $ 357,834
---------------
Financial Expenses
Interest on mortgage payable $ 971,960
Interest on notes payable 391,064
Mortgage insurance premium/service charge 68,659
Miscellaneous financial expenses 155
---------------
Total Finance Expenses $ 1,431,838
---------------
Elderly & Congregate Service Expenses
Total cost of operations before depreciation 3,698,476
---------------
Profit (loss) before depreciation (200,660)
Depreciation (total) - 60 specify 1,110,988
---------------
Operating profit or (loss) (1,311,648)
---------------
Net Profit or (Loss) $ (1,311,648)
</TABLE>
<PAGE>
Statement of Profit and Loss (continued)
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Part II
<S> <C>
Total principal payments required under the mortgage, even if payments under a
Workout Agreement are less or more
than those required under the mortgage. $ 297,827
Replacement reserve deposits required by the Regulatory
Agreement or Amendments thereto, even if payments may be
temporarily suspended or waived. $ 96,488
Replacement or painting reserve releases which are included
as expense items on this Profit and Loss Statement. $ 19,896
Project improvement reserve releases under the Flexible Subsidy
project that are included as expense items on this Profit and Loss Statement $ -
</TABLE>
<PAGE>
Statement of Cash Flows
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Cash Flows from Operating Activities
Sources
Rental receipts $ 3,445,738
Interest receipts 1,842
Other receipts 6,108
----------------
3,453,688
Uses
Administrative 229,005
Management fees 192,868
Payroll, related taxes and fringe benefits 451,432
Utilities 411,705
Operating and maintenance 517,310
Insurance 68,469
Taxes-real estate 165,291
Interest on mortgage 974,113
Mortgage insurance premium 67,935
Other interest 155
----------------
3,078,283
Cash provided by operations before other items 375,405
Changes in mortgagee escrow deposits 493
Changes in tenants' security deposits, net 5,133
----------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 381,031
----------------
Cash flows from investing activities
Purchase of fixed assets (35,277)
Replacement reserve payments (96,488)
Withdrawals from replacement reserves 55,173
----------------
NET CASH PROVIDED BY INVESTING ACTIVITIES (76,592)
----------------
Cash flows from financing activities
Mortgage principal payments (297,827)
NET CASH USED BY FINANCING ACTIVITIES (297,827)
Net increase in cash 6,612
Cash balance at beginning of year 1,388
----------------
Cash balance at end of year $ 8,000
================
</TABLE>
<PAGE>
Statement of Cash Flows (continued)
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Reconciliation of Net Loss to Cash Flow from Operating Activities
<S> <C>
Net loss $ (1,311,648)
Noncash items included in net loss
Depreciation and amortization 1,110,988
Interest not payable currently 391,064
Reserve for replacement interest (19,926)
Changes in:
Accounts receivable and prepaid expenses 97,183
Accounts payable and accrued expenses 106,663
Prepaid rent 1,081
Tenants' security deposits, net 5,133
Mortgagee escrow deposits 493
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 381,031
=============
Noncash Financing Activities
Capital contributions escrow $ 300,000
Development fee payable 300,000
-------------
$ 0
=============
</TABLE>
<PAGE>
Wayne Apartments Project Limited Partnership
(a Massachusetts limited Partnership)
12
Notes to Financial Statements
December 31, 1997
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.
Notes to Financial Statements
December 31, 1997
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 made capital contributions totaling $10,600,000. In the
prior year financial statements, a capital contributions escrow of $300,000 with
an offsetting development fee payable were presented on the balance sheet. It
has been determined that this escrow is owned by the developer and therefore
such transaction has been eliminated from the current year balance sheet
presentation.
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 $21,642 for real estate taxes, property insurance and
mortgage insurance and payments of $2,210 to fund reserve for replacements. As
of December 31, 1997, the outstanding balance amounted to $4,919,576.
HUD is assisting the project by making monthly interest reduction payments
directly to the mortgagee in the amount of $26,447. The project received
subsidies of $317,369 during 1997.
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 $3,589 to fund a mortgage
insurance escrow and $5,831 to fund reserve for replacements. As of December 31,
1997, the outstanding balance amounted to $8,675,013.
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, 1997, interest of $3,186,062 has
accrued on this loan, including $388,064 in 1997.
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. As of December 31,
1997, accrued interest of $9,598 is outstanding, including $3,000 expensed in
1997.
<PAGE>
Notes to Financial Statements
December 31, 1997
NOTE C - FINANCING (continued)
Annual maturities of long-term debt for the ensuing five years are summarized as
follows:
1998 $ 326,495
1999 357,036
2000 390,569
2001 426,957
2002 466,895
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. As of December 31, 1997, the Partnership has cumulative
unpaid distributions totaling $1,078,847 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 subsidy represents approximately 74% of the total rents
of the Partnership. The assistance contract obligates HUD to provide rent
subsidies through 2005.
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
Management services have been provided by an affiliate of the general partner at
a fee of 5% of net collected income. During 1997, $170,088 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, 1997, this affiliate
is owed $2,097 for management services and $22,197 for reimbursable expenses.
<PAGE>
Zinger & Company, P.C.
Certified Public Accountants
7 Winthrop Square
Boston, Massachusetts 02110-1256
Phone: (617) 542-8880
Fax: (617) 542-8715
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 1997 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 16,1998
<PAGE>
Wayne Apartments Project Limited Partnership
(a Massachusetts Limited Partnership)
15
SUPPORTING DATA REQUIRED BY HUD
December 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Number Amount
DELINQUENT TENANT ACCOUNTS RECEIVABLE of Tenants Past Due
---------- --------
Delinquent - 30 days and under 45 $ 7,397
- 31-60 days 19 8,452
- 61-90 days 10 4,359
- over 90 days 32 42,191
--------
$ 62,399
SCHEDULE OF ACCOUNTS RECEIVABLE - OTHER NONE
====
MORTGAGEE ESCROW DEPOSITS
Estimated amount required for
future payment of:
City, state and county taxes $ 26,920
Mortgage insurance 29,972
Property insurance 1,292
---------
58,184
Amount confirmed by mortgagee 63,661
Amount on deposit in excess of estimated requirements $ 5,477
========
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:
Balance, January 1, 1997 $560,226
Monthly deposits ($5830.66 x 12) ($2,210 x 12) 96,488
Interest earned 19,926
Withdrawals (55,173)
-----------
Balance, December 31, 1997 - confirmed by mortgagees $621,467
========
</TABLE>
<PAGE>
SUPPORTING DATA REQUIRED BY HUD - continued
December 31, 1997
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 1997.
LISTING OF IDENTITY OF INTEREST COMPANIES AND ACTIVITIES DOING BUSINESS
WITH OWNER
Amount
Company Name Type of Service Received
Cruz Management Company Management fees $192,868
Cruz Management Company Payroll reimbursement 451,432
Cruz Management Company Reimbursement for central
office, maintenance, and
other costs 214,222
$858,522
UNAUTHORIZED DISTRIBUTIONS
There were no unauthorized distributions paid in 1997.
OTHER OPERATING AND MAINTENANCE EXPENSES
Motor vehicle repairs $ 12,696
========
BAD DEBTS
Prior year receivable for vacancy reimbursement $ 60,000
Current year bad debt write offs 44,908
----------
$104,908
MISCELLANEOUS ADMINISTRATIVE
Neighborhood Network Learning Center operations $ 43,675
=========
Ziner & Company, P.C.
7 Winthrop Square
Boston, MA 02110
617-542-8880
Fed. I.D. # 04-3174717
Lead Auditor: Robert P. Langley
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND RESIDUAL RECEIPTS
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Cash $ 78,679
Tenant subsidy vouchers due for period covered by financial statements 19,266
Other (describe) approved reserve for replacement withdrawal) 57,433
----------------
Total cash $ 155,378
----------------
Accrued mortgage interest payable $ 79,964
Accounts payable (due with 30 days) 281,775
Accrued expenses (Note esrowed) 29,091
Prepaid rents 34,328
Tenant security deposits liability (account 2191) 64,973
----------------
Less Total Current Obligations $ 490,131
----------------
Surplus Cash $ (334,753)
================
Part B - Compute Distributions to Owners and Required Deposit to Residual Receipts
Ltd Div. Project
Annual distribution earned during fiscal period covered by the statement $ 156,607
Distribution accrued and unpaid as of the end of the prior fiscal period 922,240
----------------
Amount to be carried on balance sheets as distribution earned but unpaid $ 1,078,847
</TABLE>
<PAGE>
24
SUPPORTING DATA REQUIRED BY HUD - (continued)
December 31, 1997
<TABLE>
<CAPTION>
SCHEDULE OF CHANGES IN FIXED ASSET ACCOUNTS
Assets Depreciation Reserve
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance Balance Balance Balance Carrying Value
January 1, December 31, January 1, December 31, at December 31,
Fixed Assets 1997 Additions Deductions 1997 1997 Additions Deductions 1997 1997
- ------------ --------------- --------- --------- ------------------------- --------- ---------- -------------- ---------------
Land $ 265,817 $ 0 $ 0 $ 265,817 $ 0 $ 0 $ 0 $ 0 $ 265,817
Buildings
and
improvements 29,723,450 4,111 0 29,727,561 7,703,237 1,080,959 0 8,784,196 20,943,365
Furnishings
and
equipment 393,439 31,166 0 424,605 382,604 16,040 0 398,644 25,961
-------------- -------- ------- -------------------------- ----------- ---- -------------- --------------
Totals $30,382,706 $35,277 $ 0 $30,417,983 $ 8,085,841 $1,096,999 $ 0 $ 9,182,840 $ 21,235,143
=========== ======= ====== =========== ========== ========== ====== ========== ===========
</TABLE>
<PAGE>
SUPPORTING DATA REQUIRED BY HUD - (continued)
December 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
SCHEDULE OF FUNDS IN FINANCIAL INSTITUTIONS
A. Funds Held by Mortgagor, Regular Operating Account:
U. S. Trust (Checking accounts) (1) $ 7,914
Bank Boston (Checking accounts) 86
---------
$ 8,000
B. Funds Held by Mortgagor in Trust, Tenant Security Deposit:
Boston Bank of Commerce (Savings, 2.68%) (1) $ 70,679
--------
Funds Held by Mortgagor, TOTAL $ 78,679
========
C. Funds Held By Mortgagee I, (Chemical Mortgage Company) in Trust:
1. Tax, Insurance and MIP escrow (1) 56,477
2. Reserve Fund for Replacements:
Money Market (1) 116,480
Funds Held by Mortgagee II, (Continental Wingate Associates) in Trust:
1. MIP escrow (1) 7,184
2. Reserve Fund for Replacements: (1) 504,987
---------
U. S. Treasury Fund
Funds Held by Mortgagees, TOTAL $685,128
TOTAL FUNDS HELD IN FINANCIAL INSTITUTIONS $763,807
========
(1) Balances confirmed
</TABLE>
<PAGE>
Zinger & Company, P.C.
Certified Public Accountants
7 Winthrop Square
Boston, Massachusetts 02110-1256
Phone: (617) 542-8880
Fax: (617) 542-8715
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, 1997, and have issued our report thereon
dated January 16, 1998. We have also audited Beech Hill Development Company's
compliance with requirements applicable to major HUD-assisted programs and have
issued our report thereon dated January 16, 1998.
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. 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
internal control. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
controls. The objectives of internal control 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, errors, irregularities, or instances of noncompliance may
nevertheless occur and not be detected. Also, projection of any evaluation of
internal control 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 controls may deteriorate.
In planning and performing our audits we obtained an understanding of the design
of relevant internal controls 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 in
accordance with the provisions of the Guide and not to provide any assurance on
internal control.
We performed tests of controls, as required by the Guide, to evaluate the
effectiveness of the design and operation of controls 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
such internal control. Accordingly, we do not express such an opinion.
Our consideration of internal control would not necessarily disclose all matters
in internal control 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 matter
involving internal control and its operation that we consider to be a material
weakness as defined above. This condition as previously noted as a reportable
condition and was considered in determining the nature, timing, and extent of
the procedures to be performed in our audits of the financial statements of
Wayne Apartments Project Limited Partnership and of its compliance with
requirements applicable to its major program for the year ended December 31,
1997, and this report does not affect our reports thereon dated January 16,
1998.
This report is intended for the information of the general partners, 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 16, 1998
<PAGE>
Zinger & Company, P.C.
Certified Public Accountants
7 Winthrop Square
Boston, Massachusetts 02110-1256
Phone: (617) 542-8880
Fax: (617) 542-8715
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, 1997, and have issued our report thereon
dated January 16, 1998.
We have also audited the Partnership's compliance with the specific program
requirements governing federal financial reports, mortgage status, replacement
reserves, residual receipts, security deposits, cash receipts, cash
disbursements, distributions to owners, management functions and tenant
application, eligibility and rectification that are applicable to its major
HUD-assisted program, for the year ended December 31, 1997. 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. 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 first paragraph of this
report that are described in the accompanying Schedule of 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 material noncompliance with the
requirements applicable to Wayne Apartments Project Limited Partnership referred
to in the fourth paragraph of this report and identified in the accompanying
Schedule of Auditors Comments on Audit Resolution Matters Relating to HUD
Programs, Wayne Apartments Project Limited Partnership complied, in all material
respects, with the requirements described above that are applicable to each of
its major HUD-assisted programs for the year ended December 31, 1997.
This report is intended for the information of the general partners, 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 16, 1998
Zinger & Company, P.C.
Certified Public Accountants
7 Winthrop Square
Boston, Massachusetts 02110-1256
Phone: (617) 542-8880
Fax: (617) 542-8715
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
SPECIFIC REQUIREMENTS APPLICABLE
TO FAIR HOUSING AND NON-DISCRIMINATION
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, 1997, and have issued our report thereon
dated January 16, 1998.
We have also applied procedures to test Wayne Apartments Project Limited
Partnership's compliance with the Fair Housing and Non-Discrimination
requirements applicable to its HUD assisted programs for the year ended December
31, 1997.
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. 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 Fair Housing and Non-Discrimination
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 partners, 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 16, 1998
Zinger & Company, P.C.
Certified Public Accountants
7 Winthrop Square
Boston, Massachusetts 02110-1256
Phone: (617) 542-8880
Fax: (617) 542-8715
AUDITORS' COMMENTS ON AUDIT RESOLUTION
MATTERS RELATING TO HUD PROGRAMS
To the Partners of
Wayne Apartments Project Limited Partnership
We have audited the financial statements of Wayne Apartments Project Limited
Partnership as of and for the year ended December 31, 1997, and have issued our
report thereon dated January 16, 1998.
During our audit, we noted that the project has not taken corrective action on
findings from our report on compliance with specific requirements applicable to
major HUD programs, dated January 23, 1997.
Finding #2
The auditee did not submit HUD claims for vacancy losses.
Status
The auditee has not submitted vacancy loss claims for the year 1995 through
1997. The auditee intends to process and file such claims in 1998.
//s// Ziner & Company, P.C.
January 16, 1998
<PAGE>
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.
Name Date
Management Agent Date
Management Company
Federal Identification Number 04-3053950
<PAGE>
For the Year Ended December 31, 1997
(Unaudited
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.
John B. Cruz, Jr.
Vice President of Gemini Housing Corporation Date
Partnership Federal
Identification Number 04-3053950
<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
$798,109
</TABLE>
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>
Wayne Apartments Project Limited Partnership
(a Massachusetts Limited Partnership)
Financial Statements
and
Supplementary Information
For the Year Ended December 31, 1995
<PAGE>
Table of Contents
Page
Independent Auditors' Report 1
Financial Statements
Balance Sheet 2
Statement of Changes in Partners' Capital 3
Statement of Profit and Loss 4
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 18
Independent Auditors' Report on Compliance Based on an Audit
of Financial Statements 20
Independent Auditors' Report on Compliance with Specific
Requirements applicable to Major HUD Programs 21
Independent Auditors' Report on Compliance with Specific
Requirements applicable to Affirmative Fair Housing 22
Schedule of Findings and Questioned Costs 23
Management's Agent's Certificate 24
Mortgagor's Certificate 25
<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, 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 of
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, 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 Government Auditing Standards, we have also issued a report
dated January 26, 1996 on our consideration of Wayne Apartments Projects Limited
Partnership's internal control structure and report dated January 26, 1996 on
its compliance with laws and regulations.
//s// Ziner & Company, P.C.
January 26, 1996
<PAGE>
Wayne Apartments Project Limited Partnership
(a Massachusetts limited Partnership)
Balance Sheet - December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
Cash in bank $ 42,486
Tenant accounts receivable $ 55,944
Less allowance for doubtful accounts (28,853) 27,091
Accounts receivable - HUD 3,891
---------------
73,468
Deposits HELD IN TRUST - FUNDED
Tenant security deposits 67,039
PREPAID EXPENSES
Property insurance 74,663
Mortgage insurance 39,381
114,044
Restricted Deposits and Funded Reserves
Mortgagee escrow deposits 85,293
Reserve for replacements 624,504
Capital contributions escrows 300,000
---------------
1,009,797
FIXED ASSETS, at costs
Land 265,817
Buildings and improvements 6,948,290
Building rehabilitation costs 22,775,160
Furnishings and equipment 393,439
---------------
30,382,706
Accumulated depreciation (6,977,270)
23,405,436
OTHER ASSETS
Unamoritzed finance fees 253,341
Deposit 2,550
255,891
$ 24,925,675
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Accounts payable $ 86,523
Accrued interest payable 84,079
Accrued operating expenses 25,203
Mortgages payable - current portion 273,310
---------------
469,115
Deposits and Prepayment Liabilities
Tenant security deposits 61,430
Prepaid rent 11,278
72,708
Long-Term Liability
Mortgages payable 14,164,940
Less current portion (273,310)
13,891,630
Other Liabilities
Development fee payable 300,000
Flexible subsidy loan and accrued interest 6,605,221
Residual receipts notes and accrued interest 313,769
---------------
7,218,990
Total Liabilities 21,652,443
Partners' Capital 3,273,232
---------------
$ 24,925,675
===============
</TABLE>
<PAGE>
Statement of Changes in Partners' Capital
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Capital Contributions $ 10,600,000
----------------
Accumulated Losses
Balance at beginning of year (5,996,064)
Net Loss for the year (1,323,473)
(7,319,537)
Distributions
Current year (1,620)
Prior years (5,611)
(7,231)
Ending Partners' Capital $ 3,273,232
================
</TABLE>
<PAGE>
Statement of Profit and Loss
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Part I
Rental Income
Apartment or member carrying charges (Coops) $ 839,735
Tenant assistance payments 2,736,493
---------------
Total Rental Revenue Potential at 100% Occupancy $ 3,576,228
---------------
Vacancies
Apartments $ (120,323)
---------------
Total vacancies (120,323)
---------------
Net rental revenue rent revenue less vacancies $ 3,455,905
---------------
Financial Revenue
Interest income - project operations $ 2,521
Income from investments - reserve for replacement 15,066
---------------
Total Financial Revenue $ 17,587
---------------
Other Revenue
Laundry and vending $ 2,058
Total Other Revenue 2,058
---------------
Total Revenue $ 3,475,550
---------------
Administrative Expense
Advertising $ 186
Other administrative expense 11,982
Office salaries 57,043
Office supplies 50,906
Office or model apartment rent 13,479
Management 173,353
Manager or superintendent salaries 95,540
Legal expenses (Project) 79,748
Auditing expenses (Project) 14,950
Telephone and answering service 8,991
Bad debts 20,434
Miscellaneous administrative expenses (specify) 14,910
---------------
Total Administrative Expenses $ 541,522
---------------
Utilities Expense
Fuel oil/coal $ 63,533
Electricity (light and misc. power) 62,417
Water 211,261
Gas 154,648
---------------
Total Utilities Expense $ 491,859
---------------
</TABLE>
<PAGE>
Statement of Profit and Loss (continued)
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Part I
Operating/Maintenance Expense
Janitor and cleaning supplies $ 2,373
Janitor and cleaning contract 108,900
Exterminating payroll/contract 13,908
Garbage and trash removal 35,680
Security payroll/contract 8,504
Grounds payroll 6,008
Grounds supplies 690
Grounds contract 6,185
Repairs payroll 190,820
Repairs material 98,593
Repairs contract 104,663
Heating/cooling repairs and maintenance 35,318
Snow removal 13,869
Decorating payroll/contract 105,852
Decorating supplies 12,137
Other 18,510
---------------
Total Operating & Maintenance Expenses $ 762,010
---------------
Taxes and Insurance
Real estate taxes $ 134,543
Payroll taxes (FICA) 41,992
Property and Liability Insurance (Hazard) 139,165
Workmen's compensation 17,060
Health insurance and other employee benefits 56,320
---------------
Total Taxes and Insurance $ 389,080
---------------
Financial Expenses
Interest on mortgage payable $ 1,019,243
Interest on notes payable 391,064
Mortgage insurance premium/service charge 71,451
Miscellaneous financial expenses 1,440
---------------
Total Finance Expenses $ 1,483,198
---------------
Elderly & Congregate Service Expenses
Total cost of operations before depreciation 3,667,669
---------------
Profit (loss) before depreciation (192,119)
Depreciation (total) - 60 specify 1,131,354
---------------
Operating profit or (loss) (1,323,473)
---------------
Net Profit or (Loss) $ (1,323,473)
</TABLE>
<PAGE>
Statement of Profit and Loss (continued)
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Part II
Total principal payments required under the mortgage, even if
payments under a Workout Agreement are less or more
than those required under the mortgage. $ 249,458
Replacement reserve deposits required by the Regulatory
Agreement or Amendments thereto, even if payments may be
temporarily suspended or waived. $ 165,488
Replacement or painting reserve releases which are included
as expense items on this Profit and Loss Statement. $ -
Project improvement reserve releases under the Flexible Subsidy
project that are included as expense items on this Profit and Loss Statement $ -
</TABLE>
<PAGE>
Statement of Cash Flows
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Cash Flows from Operating Activities
Sources
Rental receipts $ 3,472,010
Interest receipts 2,521
Other receipts 2,058
----------------
3,476,589
----------------
Uses
Administrative 190,353
Management fees 186,311
Payroll, related taxes and fringe benefits 459,123
Utilities 482,938
Operating and maintenance 500,461
Insurance 101,922
Taxes-real estate 134,543
Interest on mortgage 1,021,030
Mortgage insurance premium 70,868
Other interest 1,440
----------------
3,148,989
----------------
Cash provided by operations before other items 327,600
Changes in mortgagee escrow deposits 29,088
Changes in tenants' security deposits, net 420
Decrease in deposits 1,400
NET CASH PROVIDED BY OPERATING ACTIVITIES 358,508
Cash flows from investing activities
Replacement reserve payments (165,488)
Withdrawals from replacement reserves 42,721
Withdrawal from capital contribution escrow 150,000
Payment of development fee (150,000)
----------------
NET CASH PROVIDED BY INVESTING ACTIVITIES (122,767)
----------------
Cash flows from financing activities
Payment of interest flexible subsidy loan (1,620)
Distributions to partners (1,620)
Mortgage principal payments (249,458)
-----------------
NET CASH USED BY FINANCING ACTIVITIES (252,698)
-----------------
Net decrease in cash (16,957)
Cash balance at beginning of year 59,443
----------------
Cash balance at end of year $ 42,486
================
</TABLE>
<PAGE>
Statement of Cash Flows (continued)
For the Year Ended December 31, 1995
Reconciliation of Net Loss to Cash Flow from Operating Activities
Net loss $ (1,323,473)
Noncash items included in net loss
Depreciation and amortization 1,131,354
Interest not payable currently 391,064
Reserve for replacement interest (15,066)
Changes in:
Accounts receivable and prepaid expenses 144,497
Accounts payable and accrued expenses 17,830
Prepaid rent (18,606)
Tenants' security deposits, net 420
Change in deposits 1,400
Mortgagee escrow deposits 29,088
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 358,508
=============
<PAGE>
Notes to Financial Statements
December 31, 1995
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 .
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures.
Notes to Financial Statements
December 31, 1995
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 made capital contributions totaling $10,600,000, subject to
adjustments during the construction phase and initial operating years. As of
December 31, 1995, $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 $23,833 for real estate taxes, property insurance and
mortgage insurance and payments of $2,210 to fund reserve for replacements. As
of December 31, 1995, the outstanding balance amounted to $5,198,882.
HUD is assisting the project by making monthly interest reduction payments
directly to the mortgagee in the amount of $26,569. The project received
subsidies of $318,829 during 1995.
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 $3,595 to fund a mortgage
insurance escrow and $11,581 to fund reserve for replacements. As of December
31, 1995, the outstanding balance amounted to $8,966,058.
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, 1995, interest of $2,409,934 has
accrued on this loan, including $388,064 in 1995.
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 1995,
interest of $1,620 was paid from annual distributions. As of December 31, 1995,
interest of $13,769 has accrued, including $3,000 in 1995.
<PAGE>
Notes to Financial Statements
December 31, 1995
NOTE C - FINANCING (continued)
Annual maturities of long-term debt for the ensuing five years are summarized as
follows:
1996 $ 273,310
1997 298,669
1998 326,495
1999 357,036
2000 390,569
Management believes it is not practicable to estimate the fair value of
mortgages payable because it is not determinate as to whether financing with
similar characteristics is currently available to the Partnership.
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 1995, cash distributions of $1,620 were paid. As of
December 31, 1995, the Partnership has cumulative unpaid distributions totaling
$775,804 and surplus cash of $20,342.
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.
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 developers, an affiliate of the general partner, has earned development
fees. During 1995, $150,000 of such fees were paid and $300,000 remains payable
at December 31, 1995. 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 1995, $173,353 was incurred for such
services. Additional amounts have been paid to reimburse payroll, in-house legal
counsel, and certain other office costs.
The Partnership maintains cash balances at several banks and with the mortgage
servicing agent. Accounts at these various financial institutions are insured up
to $100,000 per depositor by the Federal Deposit Insurance Corporation (FDIC).
At December 31, 1995, the Partnership had cash balances in the capital
contributions escrow and reserve for replacement in excess of FDIC insured
limits by $263,568.
<PAGE>
Zinger & Company, P.C.
Certified Public Accountants
7 Winthrop Square
Boston, Massachusetts 02110-1256
Phone: (617) 542-8880
Fax: (617) 542-8715
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 1995 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 26,1996
<PAGE>
Wayne Apartments Project Limited Partnership
(a Massachusetts Limited Partnership)
15
SUPPORTING DATA REQUIRED BY HUD
December 31, 1995
Number Amount
DELINQUENT TENANT ACCOUNTS RECEIVABLE of Tenants Past Due
---------- --------
Delinquent - 30 days and under 119 $ 18,508
- 31-60 days 39 6,962
- 61-90 days 29 4,709
- over 90 days 32 25,765
--------
$55,944
SCHEDULE OF ACCOUNTS RECEIVABLE - OTHER NONE
====
MORTGAGEE ESCROW DEPOSITS
Estimated amount required for
future payment of:
City, state and county taxes $32,605
Mortgage insurance 32,129
Property insurance 20,858
--------
85,592
Amount confirmed by mortgagee 85,293
Amount on deposit in excess of estimated requirements $ (299)
========
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:
Balance, January 1, 1995 $486,671
Monthly deposits ($11,580.66 x 12) ($2,210 x 12) 165,488
Interest earned 15,066
Withdrawals (42,721)
-----------
Balance, December 31, 1995 - confirmed by mortgagees $624,504 *
========
* As of December 31, 1995, The Partnership has an approved withdrawal of
$175,738 which has not been received.
<PAGE>
SUPPORTING DATA REQUIRED BY HUD - continued
December 31, 1995
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 1995.
LISTING OF IDENTITY OF INTEREST COMPANIES AND ACTIVITIES DOING BUSINESS WITH
OWNER
Amount
Company Name Type of Service Received
Cruz Management Company Management fees $ 186,311
Cruz Management Company Payroll reimbursement 459,123
Cruz Management Company Reimbursement for central
office, maintenance, and
other costs 147,329
---------
$729,763
=========
UNAUTHORIZED DISTRIBUTIONS
There were no unauthorized distributions paid in 1995.
MISCELLANEOUS ADMINISTRATIVE
TAP program education costs $ 8,376
Handicap analysis report 4,700
Other 1,834
---------
$ 14,910
OTHER OPERATING AND MAINTENANCE EXPENSES =========
Motor vehicle repairs $ 18,510
=========
Ziner & Company, P.C.
7 Winthrop Square
Boston, MA 02110
617-542-8880
Fed. I.D. # 04-3174717
Lead Auditor: John F. Mackey
COMPUTATION OF SURPLUS CASH, DISTRIBUTIONS AND RESIDUAL RECEIPTS
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Cash $ 109,525
Tenant subsidy vouchers due for period covered by financial statements 3,891
Other (describe) approved reserve for replacement withdrawal) 175,738
----------------
Total cash $ 289,154
----------------
Accrued mortgage interest payable $ 84,079
Accounts payable (due with 30 days) 86,523
Deficient Tax Insurance of MIP Escrow deposits 299
Accrued expenses (Note escrowed) 25,203
Prepaid rents 11,278
Tenant security deposits liability (account 2191) 61,430
----------------
Less Total Current Obligations $ 268,812
----------------
Surplus Cash $ 20,342
================
Part B - Compute Distributions to Owners and Required Deposit to Residual Receipts
Ltd Div. Project
Annual distribution earned during fiscal period covered by the statement $ 156,607
Distribution accrued and unpaid as of the end of the prior fiscal period 620,817
Distributions paid during fiscal period covered by statement (1,620)
Amount to be carried on balance sheets as distribution earned but unpaid $ 775,804
Deposit due residual receipts (Must be deposited with mortgage within
60 days after the Fiscal Period ends) $ 20,342
</TABLE>
<PAGE>
SUPPORTING DATA REQUIRED BY HUD - (continued)
December 31, 1995
SCHEDULE OF CHANGES IN FIXED ASSET ACCOUNTS
<TABLE>
<CAPTION>
Assets Depreciation Reserve
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Carrying
Balance Balance Balance Balance Value at
January 1, December 31, January 1, December 31, December 31,
Fixed Assets 1995 Additions Deductions 1995 1995 Additions Deductions 1995 1995
- ------------ ------------- --------- ---------- ------------ ----------- --------- ----------- ----------- ------------
Land $ 265,817 $ 0 $ 0 $ 265,817 $ 0 $ 0 $ 0 $ 0 $ 265,817
Buildings
and
improvements 29,723,450 0 0 29,723,450 5,541,532 1,080,852 0 6,626,384 23,101,066
Furnishings
and
equipment 393,439 0 0 393,439 318,373 36,513 0 354,886 38,553
------------ ------- ------- ------------ ------------ ---------- ------ ------------ ------------
Totals $ 30,382,706 $ 0 $ 0 $ 30,382,706 $ 5,859,905 $1,117,365 $ 0 $ 6,977,270 $ 23,405,436
============ ======= ====== ============ ============ ========== ====== ============ ============
</TABLE>
<PAGE>
SUPPORTING DATA REQUIRED BY HUD - (continued)
December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
SCHEDULE OF FUNDS IN FINANCIAL INSTITUTIONS
A. Funds Held by Mortgagor, Regular Operating Account:
Bank of Boston (Checking) (1) $ 42,386
U.S. Trust (2) 100
------------
$ 42,486
B. Funds Held by Mortgagor in Trust, Tenant Security Deposit:
Boston Bank of Commerce (Savings, 2.65%) (3) $ 67,039
------------
Funds Held by Mortgagor, TOTAL $ 109,525
============
C. Funds Held By Mortgagee I, (Chemical Mortgage Company) in Trust:
1. Tax, Insurance and MIP escrow (4) 77,767
2. Reserve Fund for Replacements:
Money Market 163,568
Funds Held by Mortgagee II, (Continental Wingate Associates) in Trust:
1. MIP escrow (5) 7,526
2. Reserve Fund for Replacements: (5) 460,936
------------
U. S. Treasury Fund
Funds Held by Mortgagees, TOTAL $709,797
TOTAL FUNDS HELD IN FINANCIAL INSTITUTIONS $819,322
============
</TABLE>
(1) Balances confirmed by Bank of Boston
(2) Balances confirmed by U.S. Trust
(3) Balances confirmed by Boston Bank of Commerce
(4) Balances confirmed by Chemical Bank
(5) Balances confirmed by Continental Wingate Associates
* Based upon HUD mortgagee letter 96-03, balances in excess of the $100,000
FDIC insurance limitation is permissible by the mortgage service agent.
Therefore,this condition is not disclosed as a finding.
<PAGE>
Zinger & Company, P.C.
Certified Public Accountants
7 Winthrop Square
Boston, Massachusetts 02110-1256
Phone: (617) 542-8880
Fax: (617) 542-8715
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, 1995, and have issued our report thereon
dated January 26, 1996. We have also audited Wayne Apartments Project Limited
Partnership's compliance with requirements applicable to major HUD-assisted
programs and have issued our report thereon dated January 26, 1996.
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
internal control. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
controls. The objectives of internal control 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, 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 controls may deteriorate.
In planning and performing our audits 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 in accordance with the provisions of the Guide
and not to provide any assurance on internal control.
For the purposes 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
Affirmative fair housing
Mortgage status
Replacement reserve
Security Deposits
Cash receipts
Cash disbursements
Tenant application, eligibility, and recertifiation
Management functions
We performed tests of controls, as required by the Guide, to evaluate the
effectiveness of the design and operation of 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 such 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 judgment , could adversely affect the organization's
ability to record, process, summarize and report financial data consistent with
management's ascertains 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 1995.
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 with a timely period by employees in the
normal course of performing their assigned functions.
Our consideration of internal control would not necessarily disclose all matters
in 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 internal control structure and its operation
that we consider to be material weaknesses as defined above. However, we believe
the reportable condition described above is not a material weakness.
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 26, 1996
Zinger & Company, P.C.
Certified Public Accountants
7 Winthrop Square
Boston, Massachusetts 02110-1256
Phone: (617) 542-8880 Fax: (617) 542-8715
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, 1995, and have issued our report thereon
dated January 26, 1996.
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 Projects management. As part of obtaining
reasonable assurance about whether the financial statements are free of material
misstatements, we performed test 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 in 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 26, 1996
<PAGE>
Zinger & Company, P.C.
Certified Public Accountants
7 Winthrop Square
Boston, Massachusetts 02110-1256
Phone: (617) 542-8880 Fax: (617) 542-8715
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, 1995, and have issued our report thereon
dated January 26, 1996.
We have also audited the Partnership's compliance with the specific program
requirements governing affirmative fair housing, mortgage status, replacement
reserves, residual receipts, security deposits, cash receipts, cash
disbursements, management functions and tenant application, eligibility and
recertification that are applicable to its major HUD-assisted program for the
year ended December 31, 1995. 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 accompanying schedule of findings and
questioned costs. 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 accompanying schedule of
findings and questioned costs, the Partnership complied, in all material
respects, with the requirements described above that are applicable to each of
its major HUD-assisted programs for the year ended December 31, 1995.
This report is intended for the information of the general partners, 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 26, 1996
<PAGE>
Zinger & Company, P.C.
Certified Public Accountants
7 Winthrop Square
Boston, Massachusetts 02110-1256
Phone: (617) 542-8880 Fax: (617) 542-8715
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, 1995, and have issued our report thereon
dated January 26, 1996.
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, 1995.
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 16, 1998
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
December 31 1995
Funding #1
Condition
During the year, the auditee maintained cash balances in excess of FDIC
insured $100,000 limited
Criteria
Regulations of the Department of Housing and Urban Development (HUD)
require that the entire cash balance must be federally insured.
Effect
Auditee is not in compliance with the HUD regulations in regards to is cash
accounts.
Cause
Monthly HUD subsidy payments are greater than $100,000 and are wire
transferred into a single project account.
Recommendation
Auditee should consider temporarily transferring funds to another financial
institution on the day the subsidy payment is received.
Finding #2
Condition
The auditee did not submit to HUD claims for vacancy losses in 1995.
Criteria
Regulations of the HUD require that claims for vacancy losses be submitted.
Effect
Auditee is not in compliance with HUD regulations
Cause
Lack of compliance in filing vacancy loss claims was on oversight of
management.
Recommendation
File vacancy loss claims for 1995 and implement a system to ensure timely
filing in future years.
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
December 31, 1995
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.
- ------------------------------- -----------------------
Michael Rich, Controller Date
Cruz Management Corporation, Inc.
<PAGE>
WAYNE APARTMENTS PROJECT LIMITED PARTNERSHIP
(a Massachusetts limited partnership)
December 31, 1995
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.
------------------------------------- -----------------
John B. Cruz///
President of Gemini Housing Corporation Date
Partnership Federal
Identification Number 04-3053950
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 722,737
<SECURITIES> 966,668
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 12,141,809
<DEPRECIATION> 000
<TOTAL-ASSETS> 20,546,738<F1>
<CURRENT-LIABILITIES> 12,105,704<F2>
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 8,600,858
<TOTAL-LIABILITY-AND-EQUITY> 20,546,738<F3>
<SALES> 000
<TOTAL-REVENUES> 2,268,532<F4>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 2,360,732<F5>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 887,572
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (3,219,105)<F6>
<EPS-PRIMARY> (53.12)
<EPS-DILUTED> 000
<FN>
<F1>Included in Total Assets: Accounts receivable of $30,589, tenant security
deposits of $46,223, Investments in Local Limited Partnerships of $5,985,365,
Mortgage escrow deposits of $136,287, Operating reserves of $35,926, Replacement
reserves of $105,759, Deferred fees, net of $311,903 and Other assets of
$63,472. <F2>Included in other liabilities: Mortgage notes payable of
$11,247,950, Note payable of $3,266, Accounts Payable to Affiliates of $566,352,
Accounts Payable and accrued expenses of $162,072, Accrued interest payable of
$71,753 and Security deposits payable of 54,311. <F3>Included in Total
Liabilities and Equity: Minority interest in Local Limited Partnerships of
$159,824. <F4>Total Revenue includes: Rental of $1,870,527, Investment of
$95,837 and Other of $302,168. <F5>Included in Other Expenses: Asset Management
fees of $277,743, General and Administrative of $214,600, Rental Operations,
exclusive of depreciation of $1,078,426, Property Management fees of $79,942,
Bad debt expense of $14,555, Depreciation of $557,845 and Amortization of
$137,621. <F6>Net loss reflects: Equity in losses of Local Limited Partnerships
of $2,249,569 and minority interest in loss of Local Limited Partnership of
$10,236.
</FN>
</TABLE>
