June 25, 1999
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC. 20549
Boston Financial Qualified Housing Tax Credits L. P. II
Annual Report on Form 10-K for the Year Ended March 31, 1999
Commission File Number 0-17777
Dear Sir/Madam:
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/Stephen Guilmette
Stephen Guilmette
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, 1999 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, 1999
<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, 1999
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-15
PART II
Item 5 Market for the Registrant's Units and
Related Security Holder Matters K-16
Item 6 Selected Financial Data K-16
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations K-17
Item 7A Quantitative and Qualitative Disclosures about
Market Risk K-21
Item 8 Financial Statements and Supplementary Data K-21
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure K-21
PART III
Item 10 Directors and Executive Officers
of the Registrant K-21
Item 11 Management Remuneration K-23
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-23
Item 13 Certain Relationships and Related Transactions K-23
PART IV
Item 14 Exhibits, Financial Statement Schedule and
Reports on Form 8-K K-26
SIGNATURES K-27
<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 A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
(Unaudited)
Local Limited Date Interest
Partnerships* Location Acquired
- -------------------------------------------------------------------------------
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
* 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, 1999, the Managing General Partner has designated
approximately $1,775,000 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, 1999, 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. The Partnership, which does not have any employees,
reimburses The Boston Financial Group Limited Partnership, an affiliate of the
General Partners, for certain expenses and overhead costs. A complete discussion
of the management of the Partnership is set forth in Item 10 of this Report.
<PAGE>
Item 2. Properties
The Partnership owns limited partnership interests in thirty-eight Local Limited
Partnerships which own and operate thirty-eight 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>
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 1999 1999 1998 Subsidy* 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Americus Properties Limited Partnership
Meadowbrook
Americus, GA 55 $ 333,000 $ 333,000 1,462,694 FmHA 98%
Atlantic Terrace Limited Partnership
Atlantic Terrace
Washington, DC 198 3,073,000 3,073,000 11,090,442 Section 8 97%
B&C Housing Associates, II,
A Limited Partnership
Patrick Henry
Tulsa, OK 56 345,000 345,000 1,522,904 Section 8 91%
B&C Housing Associates, III,
A Limited Partnership
Nottingham Square
Moore, OK 162 1,612,500 1,612,500 4,220,586 Section 8 96%
Bamberg Properties Limited Partnership
Bamberg Garden
Bamberg, SC 24 162,750 162,750 732,094 FmHA 100%
Birch Associates Limited Partnership
Reno Birchwood
Reno, NV 138 780,000 780,000 3,823,126 Section 8 97%
Blair Senior Housing L.P.
Rustic Oaks
Blair, NE 12 78,000 78,000 357,148 FmHA 100%
<PAGE>
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 1999 1999 1998 Subsidy* 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Brighton Manor Apartments,
A Limited Partnership
Brighton Manor
Douglasville, GA 40 1,050,000 1,050,000 1,198,710 None 100%
Buckfield Housing Associates
(A Limited Partnership)
Nezinscott Village
Buckfield, ME 20 234,000 234,000 1,079,741 FmHA 100%
Chapparal Housing Associates, Ltd.,
An Oklahoma Limited Partnership
Chapparal
Midland, TX 124 1,104,050 1,104,050 3,270,644 Section 8 99%
DeSoto Associates III, L.P.
(A Limited Partnership)
Parkview II
DeSoto, MO 24 118,500 118,500 560,676 FmHA 100%
Durham Park Limited Partnership
Durham Park
Tigard, OR 224 4,100,000 4,100,000 9,444,094 None 93%
Eastmont Estates Associates
(A Limited Partnership)
Eastmont Estates
Greenburg, PA 103 950,000 950,000 2,687,505 Section 8 91%
<PAGE>
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 1999 1999 1998 Subsidy* 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Garden Cove Apartments, Ltd.
(A Limited Partnership)**
Garden Cove
Huntsville, AL 200 3,264,264 3,264,264 5,300,307 None 78%
Grayton Pointe Apartments, L.P. (A)
Grayton Pointe
Macon, GA
La Center Associates Limited Partnership
La Center
La Center, KY 12 85,125 85,125 395,515 FmHA 92%
Lamar Associates Limited Partnership
Lamar
Lamar, AR 20 137,250 137,250 621,790 FmHA 90%
Linden Housing Associates, Ltd.
Linden
Reno, NV 40 342,750 342,750 1,261,481 Section 8 95%
McKinley-Walker Limited Partnership
(A Limited Partnership)
McKinley Lane
Fitzgerald, GA 48 330,000 330,000 1,407,029 FmHA 90%
Milo Housing Associates (A Limited Partnership)
Milo
Milo, ME 24 273,000 273,000 1,254,920 FmHA 96%
<PAGE>
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 1999 1999 1998 Subsidy* 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Monroe Properties Limited Partnership
Highland Village
Monroe, GA 55 321,750 321,750 1,453,699 FmHA 100%
Mulberry Associates I Limited Partnership
Quail Run
Mulberry, AR 24 164,250 164,250 749,000 FmHA 83%
Newport Housing Associates (A Limited Partnership)
Newport Family
Newport, ME 24 271,500 271,500 1,255,075 FmHA 100%
Paragould Associates I, Limited Partnership
Paragould
Paragould, AR 14 101,625 101,625 463,811 FmHA 100%
San Antonio Limited Dividend Partnership S.E.
Nuevo San Antonio
Aquadilla, PR 100 800,250 800,250 3,831,612 FmHA 100%
Shadow Wood Housing Associates, Limited,
An Oklahoma Limited Partnership
Shadow Wood
Chickasha, OK 61 450,000 450,000 706,114 Section 8 87%
Shannon Creste Apartments, L.P.**
Shannon Creste
Union City, GA 200 3,635,000 3,635,000 6,159,547 None 100%
<PAGE>
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 1999 1999 1998 Subsidy* 1999
- -----------------------------------------------------------------------------------------------------------------------------------
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 1,053,700 Section 8 97%
Spring Hill Housing Associates II, Ltd.
(A Limited Partnership)
Springhill II
Casper, WY 48 597,000 597,000 1,437,700 Section 8 98%
Spring Hill Housing Associates III, Ltd.
(A Limited Partnership)
Springhill III
Casper, WY 47 653,000 653,000 1,522,500 Section 8 98%
Strafford II Rural Housing L.P.
Strafford Arms
Strafford, MO 12 64,500 64,500 292,827 FmHA 100%
Unity Family Housing Associates
(A Limited Partnership)
Unity Family
Unity, ME 20 222,000 222,000 1,003,509 FmHA 95%
Ward Manor Associates I Limited Partnership
Ward Manor
Ward, AR 16 114,750 114,750 521,884 FmHA 88%
<PAGE>
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 1999 1999 1998 Subsidy* 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Warrenton Associates I, L.P.
(A Limited Partnership)
Warrenton
Warrenton, MO 16 78,375 78,375 373,628 FmHA 95%
Wayne Apartments Project Limited Partnership
(A Massachusetts Limited Partnership)
Wayne
Boston, MA 349 10,937,500 10,600,000 13,268,999 Section 8 91%
Waynesboro Properties Limited Partnership
(A Limited Partnership)
Ashton Place
Waynesboro, GA 36 217,500 217,500 946,112 FmHA 100%
Willow Creek Housing Associates, Ltd.
(A Limited Partnership)
Willow Creek
Reno, NV 25 240,000 240,000 842,992 Section 8 96%
Willowpeg Lane Limited Partnership
(A Limited Partnership)
Willowpeg Lane
Rincon, GA 48 325,500 325,500 1,469,859 FmHA 100%
<PAGE>
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 1999 1999 1998 Subsidy* 1999
- -----------------------------------------------------------------------------------------------------------------------------------
Winona Associates I, L.P.
Winona
Winona, MO 12 62,250 62,250 278,581 FmHA 83%
------- ------------ ----------- -------------
2,663 38,038,439 37,700,939 89,322,555
=====
Less Combined Entities** 6,899,264 6,899,264 11,459,854
------------ ------------ -------------
$31,139,175 $30,801,675 $ 77,862,701
=========== =========== =============
</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 Amresco Services,
L.P. at 6.96%. 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.
As previously reported, Garden Cove was involved in additional litigation. In
this 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.
As previously reported, it appeared that a favorable settlement of the Saunders
matter was achievable but only made sense in the broader context of a mortgage
restructuring for this property (which has been experiencing substantial
deficits). In January 1999, the Managing General Partner was successful in
negotiations with the lender and recently closed on a mortgage restructuring to
the Garden Cove mortgage. This mortgage restructuring involves a reduction of
the first mortgage along with delinquent mortgage payments to be included in a
soft second mortgage.
<PAGE>
As a result of the restructuring of the Garden Cove mortgage, the Managing
General Partner was able to settle the litigation instituted by the project's
general contractor. The settlement included a release of all claims in exchange
for a payment to the general contractor of an amount equal to less than half of
the original contract sum. The Partnership and one of the former General
Partners will be paying the settlement amount.
As previously reported, Chapparal, Nottingham Square, Patrick Henry and Shadow
Wood, all located in Oklahoma and have the same Local General Partner, are
experiencing operating difficulties. In particular, Shadow Wood is experiencing
severe operating deficits due to high security costs, low Section 8 contract
rates and high debt service payments. Due to concerns regarding the long-term
viability of these properties, the Managing General Partner negotiated a plan
with the Local General Partner that will ultimately transfer ownership of each
property to the Local General Partner. The plan includes provisions to minimize
the risk of recapture. HUD approved the plan and effective July 1, 1998, the
Managing General Partner consummated the transfer of 49.5% of the Partnership's
capital and profits in the properties to the Local General Partner. The Managing
General Partner has the right to transfer the Partnership's remaining interest
in the properties to the Local General Partner any time after one year has
elapsed. The Partnership will retain its full share of tax credits until such
time as the remaining interest is put to the Local General Partner. In addition,
the Local General Partner has the right to call the remaining interest after the
tax credit period has expired.
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.
<PAGE>
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, 1999, there were 4,097 record holders of Units of the
Partnership.
Cash distributions, when made, are paid annually. For the years ended March 31,
1999, 1998 and 1997, 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>
March 31, March 31, March 31, March 31, March 31,
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Revenue (C) $ 2,582,792 $ 2,268,532 $ 1,265,748 $ 947,856 $ 953,580
Equity in losses of Local Limited
Partnerships (C) (2,785,420) (2,249,569) (3,340,844) (2,808,887) (4,475,806)
Extraordinary item - - 265,381 - -
Net loss (3,586,431) (3,219,105) (4,914,046) (3,770,322) (5,531,873)
Per Limited Partnership Unit (59.18) (53.12) (81.08) (62.21) (91.28)
Cash and cash equivalents 319,540 722,737 318,451 164,590 614,257
Marketable securities (C) 1,959,842 966,668 1,319,499 1,739,223 2,577,466
Investment in Local Limited
Partnerships 1,430,095 5,351,116 7,847,922 14,059,668 16,221,501
Total assets (A) 16,767,216 20,546,738 23,553,010 22,891,866 27,513,613
Long-term debt (C) 11,233,062 11,247,950 11,271,738 5,133,950 5,153,852
Total liabilities (C) 11,918,749 12,105,704 11,891,610 6,062,741 6,969,001
Cash distribution - - - - -
Per Limited Partnership Unit - - - - -
Other Data
Passive loss (B) (5,739,732) (2,423,158) (4,239,701) (4,710,892) (5,841,796)
Per Limited Partnership Unit (B) (94.71) (39.99) (69.96) (77.73) (96.39)
Portfolio income (B) 233,595 234,460 235,195 402,609 204,369
Per Limited Partnership Unit (B) 3.85 3.87 3.88 6.64 3.37
Low-Income Housing Tax Credits (B) 7,338,700 7,629,830 8,894,928 8,905,714 8,897,453
Per Limited Partnership Unit (B) 121.09 125.89 146.77 146.67 146.54
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 38 40 40 40
</TABLE>
<PAGE>
(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 1998, 1997, 1996, 1995 and 1994
represents the amount distributed to individual investors. Corporate
investors received $126.93, $131.82, $153.93, $154.11 and $153.98 per
Unit in 1998, 1997, 1996, 1995 and 1994, respectively.
(C) March 31, 1999, 1998 and 1997 revenue includes $2,195,273, $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 and 1995 revenue includes $775,200 and
$767,745, respectively, of total revenue from Garden Cove that is
included in combined revenue on the Statement of Operations.
March 31, 1999, 1998 and 1997 equity in losses of Local Limited
Partnerships does not include $604,343, $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 and 1995 equity in losses of Local Limited
Partnerships does not include $510,735 and $568,887, respectively, of
losses from Garden Cove that have been combined with the Partnership's
loss in the Statement of Operations.
March 31, 1999, 1998 and 1997 cash and cash equivalents includes
$46,044, $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 and 1995 cash and cash
equivalents includes $39,820 and $17,488, respectively, of cash and cash
equivalents from Garden Cove that has been combined with the
Partnership's Balance Sheet.
For March 31, 1999, 1998 and 1997, the long-term debt is related to
Garden Cove and Shannon Creste. For March 31, 1996 and 1995, the long-
term debt is related to Garden Cove.
March 31, 1999, 1998 and 1997 total liabilities include $11,798,377,
$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 and 1995 total liabilities include
$5,248,781 and $6,811,086, 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
Certain matters discussed herein constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. The
Partnership intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements, and are including this
statement for purposes of complying with these safe harbor provisions. Although
the Partnership believes the forward-looking statements are based on reasonable
assumptions, the Partnership can give no assurance that their expectations will
be attained. Actual results and timing of certain events could differ materially
from those projected in or contemplated by the forward-looking statements due to
a number of factors, including, without limitation, general economic and real
estate conditions, interest rates, and unanticipated delays or expenses on the
part of the Partnership and their suppliers in achieving year 2000 compliance.
Liquidity and Capital Resources
At March 31, 1999, the Partnership, including the Combined Entities, had cash
and cash equivalents of $319,540 as compared to $722,737 at March 31, 1998. The
decrease is primarily attributable to cash used for operating activities,
purchases of rental property and purchases of marketable securities in excess of
proceeds from sales of marketable securities. These are partially offset by cash
distributions received from Local Limited Partnerships.
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 $68,000 have been
paid from Reserves. The Partnership also advanced approximately $1,211,000 to
four Local Limited Partnerships.
<PAGE>
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, 1999, approximately
$1,775,000 of cash, cash equivalents and marketable securities has been
designated as Reserves.
At March 31, 1999, 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, 1999, 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, 1999.
Based on the results of 1998 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
1999 versus 1998
The Partnership's results of operations for the year ended March 31, 1999
resulted in a net loss of $3,586,431 as compared to a net loss of $3,219,105 for
the same period in 1998. The increase in net loss is primarily attributable to
increases in equity in losses of Local Limited Partnerships and rental
operations. The increase to equity in losses is related to four Local Limited
Partnerships which have been experiencing operational difficulties. These
increases to net loss are offset by increases to investment income related to
the ownership of marketable securities by the Partnership.
1998 versus 1997
The Partnership's results of operations for the year ended March 31, 1998
resulted is 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 its receivables from Snapfinger Creste and Grayton
Pointe. Low-Income Housing Tax Credits
<PAGE>
The 1998, 1997 and 1996 Low-Income Housing Tax Credits per Unit for individuals
were $120.87, $125.67 and $146.77, respectively. The 1998, 1997 and 1996
Low-Income Housing Tax Credits per Unit for corporations were $126.93, $131.82
and $153.93, 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 reached the
end of the ten-year credit period. However, because the compliance periods
should extend significantly beyond the tax credit periods, the Partnership is
expected to retain most of its interests in the Local Limited Partnerships for
the foreseeable future.
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 forty rental properties located in fifteen states, Washington, D.C. and
Puerto Rico. Thirty of the properties with 2,325 apartments were newly
constructed, and eight properties with 733 apartments were rehabilitated. Most
of the thirty-eight 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, Atlantic Terrace, located in Washington, D.C., has
experienced unstable operations due primarily to costs associated with unit
turnover, increased maintenance and utility expenses. However, for the past
three quarters operations have improved and occupancy stabilized. As of March
31, 1999, the occupancy was 97%. The managing agent continues to work with the
local housing authority to improve tenant screening, social programs and expense
monitoring.
As previously reported, Chapparal, Nottingham Square, Patrick Henry and Shadow
Wood, all located in Oklahoma and have the same Local General Partner, are
experiencing operating difficulties. In particular, Shadow Wood is experiencing
severe operating deficits due to high security costs, low Section 8 contract
rates and high debt service payments. Due to concerns regarding the long-term
viability of these properties, the Managing General Partner negotiated a plan
with the Local General Partner that will ultimately transfer ownership of each
property to the Local General Partner. The plan includes provisions to minimize
the risk of recapture. HUD approved the plan and effective July 1, 1998, the
Managing General Partner consummated the transfer of 49.5% of the Partnership's
capital and profits in the properties to the Local General Partner. The Managing
General Partner has the right to transfer the Partnership's remaining interest
in the properties to the Local General Partner any time after one year has
elapsed. The Partnership will retain its full share of tax credits until such
time as the remaining interest is put to the Local General Partner. In addition,
the Local General Partner has the right to call the remaining interest after the
tax credit period has expired.
As previously reported, Garden Cove, located in Huntsville, Alabama, was
involved in litigation. In this litigation, the project's general contractor
claimed there were 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 in 1996 with the former managing general
partners and did not release them from liability with respect to it.
As previously reported, it appeared that a favorable settlement of the Saunders
matter was achievable but only made sense in the broader context of a mortgage
restructuring for this property (which has been experiencing substantial
deficits). In January 1999, the Managing General Partner was successful in
negotiations with the lender and recently closed on a mortgage restructuring to
the Garden Cove mortgage. This mortgage restructuring involves a reduction of
the first mortgage along with delinquent mortgage payments to be included in a
soft second mortgage.
As a result of the restructuring of the Garden Cove mortgage, the Managing
General Partner was able to settle the litigation instituted by the project's
general contractor. The settlement included a release of all claims in exchange
for a payment to the general contractor of an amount equal to less than half of
the original contract sum. The Partnership and one of the former General
Partners will be paying the settlement amount.
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",
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 carrying value is compared to the undiscounted future cash
flows expected to be derived from the asset and, if there is a significant
impairment in value, a provision to write down the asset to fair value will be
charged against income.
<PAGE>
Inflation and Other Economic Factors
Inflation had no material impact on the operating or financial conditions of the
Partnership for the years ended March 31, 1999, 1998 and 1997.
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.
Impact of the Year 2000
The Managing General Partner's plan to resolve year 2000 issues involves the
following four phases: assessment, remediation, testing and implementation. To
date, the Managing General Partner has fully completed an assessment of all
information systems that may not be operative subsequent to 1999 and has begun
the remediation, testing and implementation phase on both hardware and software
systems. Because the hardware and software systems of both the Partnership and
Local Limited Partnerships are generally the responsibility of obligated third
parties, the plan primarily involves ongoing discussions with and obtaining
written assurances from these third parties that pertinent systems will be 2000
compliant. In addition, neither the Partnership nor the Local Limited
Partnerships are incurring significant additional costs since such expenses are
principally covered under the service contracts with vendors. As of June 1999,
the General Partner is in the final stages of its Year 2000 remediation plan and
believes all major systems are compliant; any systems still being updated are
not considered significant to the Partnership's operations. However, despite the
likelihood that all significant year 2000 issues are expected to be resolved in
a timely manner, the Managing General Partner has no means of ensuring that all
systems of outside vendors or other entities that impact operations will be 2000
compliant. The Managing General Partner does not believe that the inability of
third parties to address their year 2000 issues in a timely manner will have a
material impact on the Partnership. However, the effect of non-compliance by
third parties is not readily determinable.
Management has also evaluated a worst case scenario projection with respect to
the year 2000 and expects any resulting disruption of either the Managing
General Partner's activities or any Local Limited Partnership's operations to be
short-term inconveniences. Such problems, however, are not likely to fully
impede the ability to carry out necessary duties of the Partnership. Moreover,
because expected problems under a worst case scenario are not extensively
detrimental, and because the likelihood that all systems affecting the
Partnership will be compliant before 2000, the Managing General Partner has
determined that a formal contingency plan that responds to material system
failures is not necessary.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The table below provides information about the Partnership's market risk
sensitive instruments.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 Thereafter Face Value
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Debt Obligations
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Long Term Debt:
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Fixed Rate 66,826 90,092 6,156,265 59,329 63,423 5,018,172 11,454,107
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Average interest rate 8.81% 9.85% 9.85% 9.25% 9.25% 9.25%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
The fair value of these instruments approximate their face values at March 31,
1999.
<PAGE>
In addition to the debt obligations included in this table, the Partnership has
invested in marketable securities with aggregate fair values of $1,959,842 at
March 31, 1999; these securities, with rates ranging from 4.91% to 6.49%, do not
subject the Partnership to significant market risk because of their short term
maturities and high liquidity.
The Partnership has no other exposure to market risk associated with activities
in derivative financial instruments, derivative commodity instruments, or other
financial instruments.
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. Peter G. Fallon
resigned as a Vice President of the General Partner on June 1, 1999.
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
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.
<PAGE>
Jenny Netzer, age 43, graduated from Harvard University (B.A., 1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982. Ms. Netzer 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, the firm's Executive Committee. 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 42, graduated from Emory University (B.A., 1978) and
Cornell University (J.D., M.B.A., 1982). Mr. Gladstone joined Boston Financial
in 1985 and serves as Vice President and General Counsel. He is also a member
of the Senior Leadership Team. Prior to joining Boston Financial, Mr. Gladstone
was associated with the Boston law firm of Herrick & Smith. Mr. Gladstone is on
the Advisory Board of the Housing and Development Reporter. He is also a member
of the Investment Program Association, The National Realty Committee, Cornell
Real Estate Council, National Housing Conference and the Massachusetts Bar.
Randolph G. Hawthorne, age 49, is a graduate of Massachusetts Institute of
Technology (S.B., 1971) and Harvard Graduate School of Business (M.B.A., 1973).
Mr. Hawthorne joined Boston Financial in 1973 and is currently a Vice President
responsible for structuring and acquiring real estate investments. Previously,
Mr. Hawthorne served as Treasurer of Boston Financial. 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, 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 41, graduated from Trinity College (B.A.) and Amos Tuck
School at Dartmouth College (M.B.A.). Mr. Hart joined Boston Financial in 1997
and 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 companies,
including those that went on to complete initial public offerings.
Paul F. Coughlan, age 55, is a graduate of Brown University (A.B., 1965). Mr.
Coughlan joined Boston Financial in 1975 and is currently a Senior Vice
President and a member of the Investment Management division with responsibility
for marketing institutional investments. Previously, he was national sales
manager for Boston Financial's retail tax credit funds. Prior to joining Boston
Financial, Mr. Coughlan was an investment broker with Bache & Company and
Reynolds Securities, Inc.
William E. Haynsworth, age 59, is a graduate of Dartmouth College (A.B., 1961)
and Harvard Law School (L.L.B., 1964; L.L.M., 1969). Mr. Haynsworth joined
Boston Financial in 1977 and is a Senior Vice President responsible for the
structuring of real estate investments and the acquisition of property
interests. Prior to joining Boston Financial, 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. 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 and the Board of Directors of Boston Financial. Mr.
Haynsworth has over 25 years of real estate experience.
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.
<PAGE>
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, 1999, 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, 1999 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, 1999. 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, 1999.
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, 1999.
<PAGE>
Asset Management Fees
In accordance with the Partnership Agreement, an affiliate of the Managing
General Partner is paid an annual fee for services in connection with the
administration of the affairs of the Partnership. The affiliate currently
receives the base amount of $7,087 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, 1999 are as follows:
1999 1998 1997
------------- ----------- ---------
Asset management fees $ 276,766 $ 277,743 $ 272,905
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, 1999 are as follows:
1999 1998 1997
------------- ----------- ---------
Salaries and benefits $ 101,029 $ 118,425 $ 107,933
Property Management Fees
Boston Financial Property Management ("BFPM"), an affiliate of the Managing
General Partner, 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, 1999 are
fees earned by BFPM for the years ended December 31, 1998, 1997 and 1996,
respectively, are as follows:
1998 1997 1996
------------- ----------- ---------
Property management fees $ 92,438 $ 79,942 $ 50,797
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, 1999.
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, 1999 is presented in Note 5 to the Financial
Statements.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) and (a)(2) Documents filed as a part of this Report
In response to this portion of Item 14, the financial statements, financial
statement schedules and the auditors' reports relating thereto are submitted as
a separate section of this Report. See Index on page F-1 hereof.
The reports of auditors of the Local Limited Partnerships relating to the audits
of the financial statements of such Local Limited Partnerships appear in Exhibit
(28)(1) of this Report.
All other financial statement schedules and exhibits for which provision is made
in the applicable accounting regulations of the Securities and Exchange
Commission are not required under related instructions or are inapplicable and
therefore have been omitted.
(a)(3) Exhibit Index contained herein
(a)(3)(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the year ended March 31,
1999.
(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
Durham Park L.P.
Shannon Creste Apt. L.P.
(a)(3)(d) None
<PAGE>
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: June 25, 1999
------------------------ --------------
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: June 25, 1999
------------------------------ --------------
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
By: /s/Michael H. Gladstone Date: June 25, 1999
------------------------------ ----------------
Michael H. Gladstone,
A Managing Director
<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, 1999
Index
Page No.
Reports of Independent Accountants
For the years ended March 31, 1999, 1998 and 1997 F-2
Financial Statements
Combined Balance Sheets - March 31, 1999 and 1998 F-3
Combined Statements of Operations - Years Ended
March 31, 1999, 1998 and 1997 F-4
Statements of Changes in Partners' Equity
(Deficiency) - Years Ended March 31, 1999, 1998 and 1997 F-5
Combined Statements of Cash Flows - Years Ended
March 31, 1999, 1998 and 1997 F-6
Notes to the Combined Financial Statements F-8
Financial Statement Schedule:
Schedule III - Real Estate and Accumulated
Depreciation F-25
See also Index to Exhibits on Page K-24 for the financial statements of the
Local Limited Partnerships included as a separate exhibit in this Annual Report
on Form 10-K.
Other schedules have been omitted as they are either not required or the
information required to be presented therein is available elsewhere in the
financial statements and the accompanying notes and schedules.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Boston Financial Qualified Housing Tax Credits L.P. II:
In our opinion, based on our audits and the reports of other auditors, the
combined financial statements listed in the accompanying index present fairly,
in all material respects, the financial position of Boston Financial Qualified
Housing Tax Credits L.P. II (the "Partnership") at March 31, 1999 and 1998, and
the results of its operations and its cash flows for each of the three years in
the period ended March 31, 1999, in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedule listed in the accompanying index presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related combined financial statements. 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. We did not audit the financial
statements of certain local limited partnerships for which total assets of
$11,104,965 and $14,750,673, are included in these financial statements as of
March 31, 1999 and 1998, respectively, and for which net losses of $3,094,636,
$2,608,181, and $3,438,525 are included in the accompanying financial statements
as of March 31, 1999, 1998, 1997, respectively. Those statements were audited by
other auditors whose reports thereon have been furnished to us, and our opinion
expressed herein, insofar as it relates to the amounts included for the Local
Limited Partnerships, is based solely on the reports of the other auditors. We
conducted our audits of these statements in accordance with generally accepted
auditing standard, which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits and the reports of other auditors provide a reasonable basis for the
opinions expressed above.
/s/PricewaterhouseCoopers LLP
June 18, 1999
Boston, Massachusetts
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
COMBINED BALANCE SHEETS - MARCH 31, 1999 AND 1998
<TABLE>
1999 1998
------------- ---------
Assets
<S> <C> <C>
Cash and cash equivalents $ 319,540 $ 722,737
Marketable securities, at fair value (Note 3) 1,959,842 966,668
Accounts receivable 30,019 30,589
Tenant security deposits 62,027 46,223
Investments in Local Limited Partnerships
(Note 4) 1,430,095 5,351,116
Rental property at cost, net of
accumulated depreciation (Note 6) 12,359,393 12,776,058
Mortgage escrow deposits 99,226 136,287
Operating reserves 38,229 35,926
Replacement reserves 126,181 105,759
Deferred fees (net of accumulated amortization
of $198,373 and $172,729, respectively) 286,259 311,903
Other assets 56,405 63,472
------------- -------------
Total Assets $ 16,767,216 $ 20,546,738
============= =============
Liabilities and Partners' Equity
Mortgage notes payable (Note 7) $ 11,233,062 $ 11,247,950
Note payable 6,533 3,266
Accounts payable to affiliates (Note 5) 295,487 566,352
Accounts payable and accrued expenses 60,557 162,072
Accrued interest payable (Note 7) 262,723 71,753
Security deposits payable 60,387 54,311
------------- -------------
Total Liabilities 11,918,749 12,105,704
------------- -------------
Minority interests in Local Limited Partnerships (168,373) (159,824)
------------- -------------
Commitments (Note 8)
General, Initial and Investor Limited Partners' Equity 5,006,402 8,592,833
Net unrealized gains on marketable securities 10,438 8,025
------------- -------------
Total Partners' Equity 5,016,840 8,600,858
------------- -------------
Total Liabilities and Partners' Equity $ 16,767,216 $ 20,546,738
============= =============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
<TABLE>
1999 1998 1997
------------- ------------- ----------
Revenue:
<S> <C> <C> <C>
Rental $ 2,144,067 $ 1,870,527 $ 1,093,703
Investment (Note 3) 148,359 95,837 112,513
Other 290,366 302,168 59,532
------------- ------------- -------------
Total Revenue 2,582,792 2,268,532 1,265,748
------------- ------------- -------------
Expenses:
Asset management fees - related party (Note 5) 276,766 277,743 272,905
General and administrative (includes reimbursements
to an affiliate in the amount of $101,029, $118,425
and $107,933 in 1999, 1998 and 1997, respectively) (Note 5) 213,042 214,600 203,382
Bad debt expense 11,861 14,555 -
Rental operations, exclusive of depreciation 1,223,067 1,078,426 592,266
Property management fees, related party (Note 5) 92,438 79,942 50,797
Interest (Note 7) 885,336 887,572 636,940
Write-off of Investment in Local
Limited Partnership - - 812,892
Depreciation 573,131 557,845 385,057
Amortization 116,711 137,621 150,878
------------- ------------- -------------
Total Expenses 3,392,352 3,248,304 3,105,117
------------- ------------- -------------
Loss before minority interests in losses of Local Limited
Partnerships, equity in losses of Local Limited Partnerships
and extraordinary gain on cancellation of indebtedness (809,560) (979,772) (1,839,369)
Minority interests in losses of Local
Limited Partnerships 8,549 10,236 786
Equity in losses of Local Limited
Partnerships (Note 4) (2,785,420) (2,249,569) (3,340,844)
------------- ------------- -------------
Loss before extraordinary item (3,586,431) (3,219,105) (5,179,427)
Extraordinary gain on cancellation of indebtedness
(Note 11) - - 265,381
------------- ------------- -------------
Net Loss $ (3,586,431) $ (3,219,105) $ (4,914,046)
============= ============= =============
Net Loss allocated:
General Partners $ (35,864) $ (32,191) $ (49,140)
Limited Partners (3,550,567) (3,186,914) (4,864,906)
------------- ------------- -------------
$ (3,586,431) $ (3,219,105) $ (4,914,046)
============= ============= =============
Loss before extraordinary item per Limited
Partnership Unit (60,000 Units) $ (59.18) $ (53.12) $ (85.46)
============ ============= =============
Extraordinary gain on cancellation of indebtedness
per Limited Partnership Unit (60,000 Units) $ - $ - $ 4.38
============= ============= =============
Net Loss per Limited
Partnership Unit (60,000 Units) $ (59.18) $ (53.12) $ (81.08)
============ ============ =============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
<TABLE>
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partners Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1996 $ (360,058) $ 5,000 $ 17,081,042 $ 5,675 $ 16,731,659
----------- --------- ------------ --------- --------------
Comprehensive Loss:
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)
----------- --------- ------------ --------- --------------
Comprehensive Loss (49,140) - (4,864,906) (6,625) (4,920,671)
----------- --------- ------------ --------- --------------
Balance at March 31, 1997 (409,198) 5,000 12,216,136 (950) 11,810,988
----------- --------- ------------ --------- --------------
Comprehensive Income (Loss):
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)
----------- --------- ------------ --------- --------------
Comprehensive Income (Loss) (32,191) - (3,186,914) 8,975 (3,210,130)
----------- --------- ------------ --------- --------------
Balance at March 31, 1998 (441,389) 5,000 9,029,222 8,025 8,600,858
----------- --------- ------------ --------- --------------
Comprehensive Income (Loss):
Net change in net unrealized gains
on marketable securities
available for sale - - - 2,413 2,413
Net Loss (35,864) - (3,550,567) - (3,586,431)
----------- --------- ------------ --------- --------------
Comprehensive Income (Loss) (35,864) - (3,550,567) 2,413 (3,584,018)
----------- --------- ------------ --------- --------------
Balance at March 31, 1999 $ (477,253) $ 5,000 $ 5,478,655 $ 10,438 $ 5,016,840
=========== ========= ============ ========= ==============
The accompanying notes are an integral part of these combined financial statements.
</TABLE>
<PAGE>
<TABLE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
1999 1998 1997
------------- ------------- ---------
Cash flows from operating activities:
<S> <C> <C> <C>
Net Loss $ (3,586,431) $ (3,219,105) $ (4,914,046)
Adjustments to reconcile net loss to
net cash provided by (used for) operating activities:
Equity in losses of Local Limited Partnerships 2,785,420 2,249,569 3,340,844
Extraordinary gain on cancellation of indebtedness - - (265,381)
Minority interests in losses of
Local Limited Partnerships (8,549) (10,236) (786)
Cash distribution income included in cash
distributions from Local Limited Partnerships (491,408) (5,303) (5,913)
(Increase) decrease in operating reserves (2,303) 301,427 -
(Gain) loss on sales and maturities of marketable securities (2,691) 1,343 5,473
Bad debt expense 26,416 14,555 -
Write-off of Investment in Local Limited Partnership - - 812,892
Depreciation and amortization 689,842 695,466 535,935
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Interest receivable - - (3,861)
Insurance proceeds receivable - - 375,000
Accounts receivable 570 (7,474) (7,883)
Tenant security deposits (15,804) (15,247) 3,946
Other assets 7,067 30,990 (55,008)
Accounts payable to affiliates (270,865) 314,830 165,344
Accounts payable and accrued expenses (101,515) (106,937) (685,397)
Accrued interest payable 190,970 33,625 (163)
Security deposits payable 6,076 2,898 (2,240)
------------- ------------- -------------
Net cash provided by (used for) operating activities (773,205) 280,401 (701,244)
------------- ------------- -------------
Cash flows from investing activities:
Proceeds from notes receivable - - 85,769
Purchases of marketable securities (3,419,369) (848,387) (958,177)
Proceeds from sales and maturities
of marketable securities 2,431,299 1,208,850 1,365,803
Cash distributions received from Local
Limited Partnerships 1,560,347 164,640 450,686
Cash received upon assumption of General Partner
interest in a Combined Entity - - 8,593
Purchase of rental property (180,871) (405,916) (23,870)
Advances to affiliates (26,416) - (85,789)
Disbursements from replacement reserves (20,422) (31,142) (5,355)
------------- ------------- -------------
Net cash provided by investing activities 344,568 88,045 837,660
------------- ------------- -------------
Cash flows from financing activities:
Repayment of mortgage notes payable (14,888) (23,788) (31,021)
Proceeds from (repayment of) note payable 3,267 (6,534) -
Mortgage escrow deposits 37,061 3,260 (2,418)
Advances from affiliate - 62,902 50,884
------------- ------------- -------------
Net cash provided by financing activities 25,440 35,840 17,445
------------- ------------- -------------
The accompanying notes are an integral part of these combined financial statements.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
COMBINED STATEMENTS OF CASH FLOWS (continued)
FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997
1999 1998 1997
------------- ------------- ---------
Net increase (decrease) in cash and cash
equivalents (403,197) 404,286 153,861
Cash and cash equivalents, beginning 722,737 318,451 164,590
------------- ------------- -------------
Cash and cash equivalents, ending $ 319,540 $ 722,737 $ 318,451
============= ============= =============
Supplemental disclosure:
Cash paid for interest $ 694,366 $ 853,948 $ 637,103
============= ============= =============
Non-cash disclosure:
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>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
F-60
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,
1999, the Managing General Partner has designated approximately $1,775,000 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 over 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>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Basis of Presentation and Combination (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 investments 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, 1998, 1997 and 1996.
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, these combined financial
statements include all financial activity of Garden Cove Apartments, Ltd. for
the years ended December 31, 1998, 1997 and 1996. 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, these combined
financial statements include financial activity of Shannon Creste for the years
ended December 31, 1998 and 1997 and for the period September 1, 1996 through
December 31, 1996. All significant intercompany balances and transactions have
been eliminated.
The Partnership has elected to report the results of Garden Cove and Shannon
Creste on a 90-day lag basis, consistent with the presentation of the financial
information of all Local Limited Partnerships. As used herein, the "Combined
Entities" refers to Garden Cove and Shannon Creste after the transfer of control
described above.
Cash Equivalents
Cash equivalents consist of short-term money market investments with original
maturities of ninety days or less at acquisition and approximate fair value.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Marketable Securities
Marketable securities consists primarily of U.S. Treasury instruments and
mortgage-backed investment vehicles. The Partnership's marketable securities are
classified as "Available for Sale" securities and are reported at fair value as
reported by the brokerage firm at which the securities are held. Realized gains
and losses from the sales of securities are based on the specific identification
method. Unrealized gains and losses are excluded from earnings and reported as a
separate component of partners' equity.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board 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 adopted the new standard effective April 1, 1998 and its adoption
did not have a significant effect on the Partnership's financial position or
results of operations. The only component of the Partnership's other accumulated
comprehensive income is net unrealized gains and losses on marketable
securities.
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 at cost.
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.
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",
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 carrying value is compared to the undiscounted future cash
flows expected to be derived from the asset and, if there is a significant
impairment in value, a provision to write down the asset to fair value will be
charged against income.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
2. Significant Accounting Policies (continued)
Rental Income
Rental income, principally from short-term leases on the Combined Entities'
apartment units, is recognized as income as the rentals become due.
Reclassifications
Certain reclassifications have been made to prior year financial statements to
conform to the current year presentation.
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>
Gross Gross
Unrealized Unrealized Fair
Cost Gains Losses Value
Debt securities issued by
the US Treasury and
other US government
<S> <C> <C> <C> <C>
corporations and agencies $ 1,792,056 $ 9,656 $ (2,631) $ 1,799,081
Mortgage backed securities 157,348 3,413 - 160,761
------------- ----------- ---------- -------------
Marketable securities
at March 31, 1999 $ 1,949,404 $ 13,069 $ (2,631) $ 1,959,842
============= =========== ========== =============
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
============= =========== =========== =============
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
3. Marketable Securities (continued)
The contractual maturities at March 31, 1999 are as follows:
Cost Fair Value
Due in less than one year $ 567,545 $ 571,766
Due in one year to five years 1,224,511 1,227,315
Mortgage backed securities 157,348 160,761
------------- -------------
$ 1,949,404 $ 1,959,842
============= =============
Actual maturities may differ from contractual maturities because some borrowers
have the right to call or prepay obligations. Proceeds from the sales of
marketable securities were approximately $823,000, $833,000 and $955,000 during
the fiscal years ended March 31, 1999, 1998 and 1997, respectively. Proceeds
from the maturities of marketable securities were approximately $1,608,000,
$376,000 and $411,000 during the fiscal years ended March 31, 1999, 1998 and
1997, respectively. Included in investment income are gross gains of $2,776,
$4,375 and $8,957 and gross losses of $85, $5,718 and $14,430 which were
realized on the sales during the fiscal years ended March 31, 1999, 1998 and
1997, 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 1999, 1998 and 1997 and
Grayton Pointe in 1999 and 1998, at March 31:
<TABLE>
1999 1998 1997
------------- ------------- ---------
Capital contributions paid to Local Limited Partnerships
and purchase price paid to withdrawing partners of Local
<S> <C> <C> <C>
Limited Partnerships $ 30,801,675 $ 30,801,675 $ 33,326,675
Cumulative equity in losses of Local Limited Partnerships
(excluding cumulative unrecognized losses of
$3,765,263, $2,241,841 and $1,948,556
in 1999, 1998 and 1997, respectively) (29,592,997) (27,298,985) (27,806,907)
Cumulative cash distributions received
from Local Limited Partnerships (2,570,256) (1,009,909) (869,645)
------------- ------------- -------------
Investments in Local Limited Partnerships
before adjustment (1,361,578) 2,492,781 4,650,123
Excess of investment costs over the underlying net assets acquired:
Acquisition fees and expenses 3,917,757 3,917,757 4,230,365
Accumulated amortization of acquisition
fees and expenses (1,126,084) (1,059,422) (1,032,566)
------------- ------------- -------------
Investments in Local Limited Partnerships $ 1,430,095 $ 5,351,116 $ 7,847,922
============= ============= =============
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
Summarized financial information as of December 31, 1998, 1997 and 1996 (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>
1998 1997 1996
------------- ------------- --------
Assets:
<S> <C> <C> <C>
Investment property, net $ 74,256,344 $ 77,825,299 $ 94,754,454
Current assets 2,034,443 1,927,060 2,033,994
Other assets 4,876,698 4,807,697 5,833,632
------------- ------------- -------------
Total Assets $ 81,167,485 $ 84,560,056 $ 102,622,080
============= ============= =============
Liabilities and Partners' Equity (Deficiency):
Long-term debt $ 76,644,643 $ 74,043,101 $ 84,909,248
Current liabilities (includes current
portion of long-term debt) 3,363,210 3,032,307 7,080,276
Other liabilities 9,122,924 8,467,246 8,956,403
------------- ------------- -------------
Total Liabilities 89,130,777 85,542,654 100,945,927
------------- ------------- -------------
Partners' Equity (Deficiency):
Partnership's Equity (Deficiency) (5,157,999) 236,061 3,195,732
Less capital contributions receivable (337,501) (337,501) (337,501)
------------- ------------- -------------
(5,495,500) (101,440) 2,858,231
Other Partners' Deficiency (2,467,792) (881,158) (1,182,078)
------------- ------------- -------------
Total Partners' Equity (Deficiency) (7,963,292) (982,598) 1,676,153
------------- ------------- -------------
Total Liabilities and Partners' Equity (Deficiency) $ 81,167,485 $ 84,560,056 $ 102,622,080
============= ============= =============
Summarized Income Statements - for
the years ended December 31,
Rental and other income $ 15,814,705 $ 15,388,644 $ 17,934,257
------------- ------------- -------------
Expenses:
Operating 9,573,474 8,516,582 9,945,887
Interest 5,693,088 5,943,200 7,585,562
Depreciation and amortization 4,404,136 3,975,747 4,829,056
------------- ------------- -------------
Total Expenses 19,670,698 18,435,529 22,360,505
------------- ------------- -------------
Net Loss $ (3,855,993) $ (3,046,885) $ (4,426,248)
============= ============= =============
Partnership's share of Net Loss $ (3,817,434) $ (3,016,416) $ (4,371,138)
============= ============= =============
Other partners' share of Net Loss $ (38,559) $ (30,469) $ (55,110)
============= ============= =============
</TABLE>
The summarized financial information of the Local Limited Partnerships does not
include Garden Cove for the years ended December 31, 1998, 1997 and 1996 and
does not include Shannon Creste for the years ended December 31, 1998 and 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>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
4. Investments in Local Limited Partnerships (continued)
For the years ended March 31, 1999, 1998 and 1997, the Partnership has not
recognized $1,523,422, $772,152 and $1,036,207, respectively, of equity in
losses relating to twenty-three 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. 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. For financial reporting purposes, the
investment in Grayton Pointe was written off as of October 7, 1997.
The Partnership's deficiency as reflected by the Local Limited Partnerships of
$5,495,500 differs from the Partnership's Investments in Local Limited
Partnerships before adjustment of $1,361,578 principally because: a) the
Partnership has not recognized $3,765,263 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, 1999 are not reflected in the equity of certain
Local Limited Partnerships at December 31, 1998.
5. Transactions with Affiliates
An affiliate of the Managing General Partner currently receives the base amount
of $7,087 (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 $276,766,
$277,743 and $272,905 for the years ended March 31, 1999, 1998 and 1997,
respectively. Included in accounts payable to affiliates is $72,646 and $482,980
of Asset Management Fees due to an affiliate of the Managing General Partner at
March 31, 1999 and 1998, 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, 1999, 1998 and 1997 is $101,029, $118,425
and $107,933, respectively, that the Partnership has paid as reimbursement for
salaries and benefits. At March 31, 1999 and 1998, $19,656 and $17,173,
respectively, is payable to an affiliate of the Managing General Partner.
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 is
$92,438, $79,942 and $50,797 of fees earned by BFPM for the years ended December
31, 1998 and 1997 and the period ended December 31, 1996, respectively.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
6. Rental Property
Real estate and personal property belonging to the Combined Entities are
recorded at cost, the component of which, excluding certain acquisition costs of
$609,844 and $634,249 as of December 31, 1998 and 1997, respectively paid by the
Partnership and included in basis, are as follows at December 31:
1998 1997
------------- ---------
Buildings $ 14,484,869 $ 14,348,742
Land and land improvements 1,990,292 1,980,744
Furniture and fixtures 449,808 414,612
------------- -------------
16,924,969 16,744,098
Less: accumulated depreciation (5,175,420) (4,602,289)
------------- -------------
Total $ 11,749,549 $ 12,141,809
============= =============
7. 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.
During 1998, Garden Cove did not make its minimum debt service payment and is
considered in default of the mortgage. On January 21, 1999, Garden Cove
completed a restructuring of its existing mortgage of $5,073,515 and accrued
interest of $226,792. As a result of the restructuring, Garden Cove is obligated
under two mortgage notes as follows:
Principal Interest
First mortgage $3,521,319 Not to exceed 7%
Second mortgage $ 1,773,241 6.16%
Both loans mature on February 1, 2031. The first mortgage is payable in monthly
installments of principal and interest of approximately $23,000. The second
mortgage is payable from surplus cash, as defined by HUD, based on a semi-annual
calculation. In addition, a 0.5% servicing fee will be charged on the
outstanding principal balance of the second mortgage. The terms of the
restructuring provide for 95% of the calculated surplus cash to be used for
payments on the second mortgage and certain other restructure covenants.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
7. Mortgage Notes Payable (continued)
Garden Cove (continued)
Aggregate annual maturities of the mortgage notes payable for each of the next
five years and thereafter following December 31, 1998, giving effect to the
restructuring, are as follows:
December 31, 1999 $ 46,214
2000 55,921
2001 51,501
2002 59,329
2003 63,423
Thereafter 5,018,172
---------------
$ 5,294,560
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, 1999.
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 at the rate of 7%
per annum shall be due and payable monthly. On April 1, 1999 the interest shall
be adjusted and increased to the rate of 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 three years are as follows:
December 31, 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, 1999.
8. Commitments
At March 31, 1999, 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.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
9. Transfer of Interests in Local Limited Partnerships
As previously reported, Chapparal, Nottingham Square, Patrick Henry and Shadow
Wood, all located in Oklahoma and have the same Local General Partner, are
experiencing operating difficulties. In particular, Shadow Wood is experiencing
severe operating deficits due to high security costs, low Section 8 contract
rates and high debt service payments. Due to concerns regarding the long-term
viability of these properties, the Managing General Partner negotiated a plan
with the Local General Partner that will ultimately transfer ownership of each
property to the Local General Partner. The plan includes provisions to minimize
the risk of recapture. HUD approved the plan and effective July 1, 1998, the
Managing General Partner consummated the transfer of 49.5% of the Partnership's
capital and profits in the properties to the Local General Partner. The Managing
General Partner has the right to transfer the Partnership's remaining interest
in the properties to the Local General Partner any time after one year has
elapsed. The Partnership will retain its full share of tax credits until such
time as the remaining interest is put to the Local General Partner. In addition,
the Local General Partner has the right to call the remaining interest after the
tax credit period has expired.
10. 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, 1997 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 was involved in litigation. In this 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).
As previously reported, it appeared that a favorable settlement of the Saunders
matter was achievable but only made sense in the broader context of a mortgage
restructuring for this property (which has been experiencing substantial
deficits). In January 1999, the Managing General Partner was successful in
negotiations with the lender and recently closed on a mortgage restructuring to
the Garden Cove mortgage. This mortgage restructuring involves a reduction of
the first mortgage along with delinquent mortgage payments to be included in a
soft second mortgage.
As a result of the restructuring of the Garden Cove mortgage, the Managing
General Partner was able to settle the litigation instituted by the project's
general contractor. The settlement included a release of all claims in exchange
for a payment to the general contractor of an amount equal to less than half of
the original contract sum. The Partnership and one of the former General
Partners will be paying the settlement amount.
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.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
11. 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.
12. Federal Income Taxes
A reconciliation of the losses reported in the Combined Statements of Operations
for the fiscal years ended March 31, 1999, 1998 and 1997 to the losses reported
for federal income tax purposes for the years ended December 31, 1998, 1997 and
1996 is as follows:
<TABLE>
1999 1998 1997
------------ ------------- ---------
<S> <C> <C> <C>
Net Loss per Combined Statements of Operations $ (3,586,431) $ (3,219,105) $ (4,914,046)
Adjustment for equity in losses of Local
Limited Partnerships for financial
reporting purposes over equity
in loss for tax purposes 347,378 1,430,317 1,070,305
Equity in losses of Local Limited Partnerships
not recognized for financial reporting purposes (1,523,422) (772,152) (1,036,207)
Adjustment to reflect March 31, fiscal
year-end to December 31, tax year-end 142,123 (227,888) (4,051)
Adjustment for expenses not currently
deductible for tax purposes - 414,940 203,004
Adjustment for accelerated amortization
for tax purposes over amortization
for financial reporting purposes (85,449) (77,357) (68,611)
Write-off of Investment in Local Limited
Partnership not recognized for tax purposes 14,555 470,736 812,892
Cash distributions included in loss for
financial reporting purposes (399,951) (5,185) (1,774)
Related party expenses paid in current year but
expensed for book purposes in prior year (414,940) (203,004) (66,018)
------------- ------------- -------------
Net Loss for federal income tax purposes $ (5,506,137) $ (2,188,698) $ (4,004,506)
============= ============= =============
</TABLE>
The differences in the assets and liabilities of the Partnership for financial
reporting purposes and tax reporting purposes for the year ended March 31, 1999
are as follows:
<TABLE>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 1,430,095 $ 3,130,906 $(1,700,811)
============ ============ ============
Other assets $ 15,337,121 $ 10,471,600 $ 4,865,521
============ ============ ============
Liabilities $ 11,918,749 $ 29,065 $ 11,889,684
============ ============ ============
</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 $1,691,000 lower than for financial
reporting purposes, including
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
12. Federal Income Taxes (continued)
approximately $3,765,000 of losses the Partnership has not recognized relating
to twenty-three 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 the 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, 1998
are as follows:
<TABLE>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 5,351,116 $ 9,481,736 $ (4,130,620)
============ ============ ============
Other assets $ 15,195,622 $ 9,625,781 $ 5,569,841
============ ============ ============
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.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
13. Supplemental Combining Schedules
Balance Sheets
<TABLE>
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations Combined (A)
Assets
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 273,496 $ 46,044 $ - $ 319,540
Marketable securities, at fair value 1,959,842 - - 1,959,842
Accounts receivable 1,184,879 30,019 (1,184,879) 30,019
Tenant security deposits - 62,027 - 62,027
Investments in Local Limited
Partnerships 1,691,599 - (261,504) 1,430,095
Rental property at cost, net of
accumulated depreciation - 11,749,549 609,844 12,359,393
Mortgage escrow deposits - 99,226 - 99,226
Operating reserves - 38,229 - 38,229
Replacement reserves - 126,181 - 126,181
Deferred fees (net of accumulated
amortization of $198,373) - 286,259 - 286,259
Other assets 27,396 29,009 - 56,405
-------------- ------------ ------------ --------------
Total Assets $ 5,137,212 $ 12,466,543 $ (836,539) $ 16,767,216
============== ============== ============ ============
Liabilities and Partners' Equity
Mortgage notes payable $ - $ 11,233,062 $ - $ 11,233,062
Note payable - 6,533 - 6,533
Accounts payable to affiliates 92,302 203,185 - 295,487
Accounts payable and accrued
expenses 28,070 32,487 - 60,557
Advances from Limited Partner - 1,184,879 (1,184,879) -
Accrued interest payable - 262,723 - 262,723
Security deposits payable - 60,387 - 60,387
-------------- ------------ ------------ --------------
Total Liabilities 120,372 12,983,256 (1,184,879) 11,918,749
-------------- ------------ ------------ --------------
Minority interests in Local Limited
Partnerships - - (168,373) (168,373)
-------------- ------------ ------------ --------------
General, Initial and Investor
Limited Partners' Equity (Deficiency) 5,006,402 (516,713) 516,713 5,006,402
Net unrealized gains on
marketable securities 10,438 - - 10,438
-------------- ------------ ------------ --------------
Total Partners' Equity (Deficiency) 5,016,840 (516,713) 516,713 5,016,840
-------------- ------------ ------------ --------------
Total Liabilities and Partners' Equity $ 5,137,212 $ 12,466,543 $ (836,539) $ 16,767,216
============== ============ ============ ==============
(A) As of March 31, 1999.
(B) As of December 31, 1998 - See Note 2.
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
13. Supplemental Combining Schedules (continued)
Statements of Operations
<TABLE>
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations Combined (A)
Revenue:
<S> <C> <C> <C> <C>
Rental $ - $ 2,144,067 $ - $ 2,144,067
Investment 139,183 9,176 - 148,359
Other 248,336 42,030 - 290,366
-------------- ------------ ----------- ------------
Total Revenue 387,519 2,195,273 - 2,582,792
-------------- ------------ ----------- ------------
Expenses:
Asset management fees -
related party 276,766 - - 276,766
General and administrative 213,042 - - 213,042
Bad debt expense 11,861 - - 11,861
Rental operations, exclusive
of depreciation - 1,223,067 - 1,223,067
Property management fees,
related party - 92,438 - 92,438
Interest - 885,336 - 885,336
Depreciation - 573,131 - 573,131
Amortization 91,067 25,644 - 116,711
-------------- ------------ ----------- ------------
Total Expenses 592,736 2,799,616 - 3,392,352
-------------- ------------ ----------- ------------
Loss before minority interests in
losses of Local Limited Partnerships
and equity in losses of Local
Limited Partnerships (205,217) (604,343) - (809,560)
Minority interests in losses of
Local Limited Partnerships - - 8,549 8,549
Equity in income (losses) of Local
Limited Partnerships (3,381,214) - 595,794 (2,785,420)
-------------- ------------ ----------- ------------
Net Income (Loss) $ (3,586,431) $ (604,343) $ 604,343 $ (3,586,431)
============== ============ =========== ============
</TABLE>
(A) For the year ended March 31, 1999.
(B) For the year ended December 31, 1998 - See Note 2.
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
13. Supplemental Combining Schedules (continued)
Statements of Cash Flows
<TABLE>
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations Combined (A)
Cash flows from operating activities:
<S> <C> <C> <C> <C>
Net Loss $ (3,586,431) $ (604,343) $ 604,343 $ (3,586,431)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Equity in losses of Local Limited
Partnerships 3,381,214 - (595,794) 2,785,420
Minority interests in losses of Local
Limited Partnerships - - (8,549) (8,549)
Cash distribution income included
in cash distributions from Local
Limited Partnerships (491,408) - - (491,408)
Increase in operating reserves - (2,303) - (2,303)
Gain on sale of marketable securities (2,691) - - (2,691)
Bad debt expense 26,416 - - 26,416
Depreciation and amortization 91,067 598,775 - 689,842
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Accounts receivable - 570 - 570
Tenant security deposits - (15,804) - (15,804)
Other assets (10,751) 17,818 - 7,067
Accounts payable to affiliates (407,851) 136,986 - (270,865)
Accounts payable and
accrued expenses (4,138) (97,377) - (101,515)
Accrued interest payable - 190,970 - 190,970
Security deposits payable - 6,076 - 6,076
-------------- ------------ ----------- -------------
Net cash provided by (used for)
operating activities (1,004,573) 231,368 - (773,205)
-------------- ------------ ----------- -------------
Cash flows from investing activities:
Purchases of marketable securities (3,419,369) - - (3,419,369)
Proceeds from sales and maturities
of marketable securities 2,431,299 - - 2,431,299
Cash distributions received from
Local Limited Partnerships 1,560,347 - - 1,560,347
Purchase of rental property - (180,871) - (180,871)
Advances to affiliates 19,874 - (46,290) (26,416)
Disbursements from
replacement reserves - (20,422) - (20,422)
-------------- ------------ ----------- -------------
Net cash provided by (used for)
investing activities 592,151 (201,293) (46,290) 344,568
-------------- ------------ ----------- -------------
</TABLE>
<PAGE>
BOSTON FINANCIAL QUALIFIED HOUSING TAX CREDITS L.P. II
(A Limited Partnership)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (continued)
13. Supplemental Combining Schedules (continued)
Statements of Cash Flows (Continued)
<TABLE>
Boston Financial
Qualified Housing
Tax Credits Combined
L.P. II (A) Entities (B) Eliminations Combined (A)
Cash flows from financing activities:
<S> <C> <C> <C> <C>
Repayment of mortgage notes payable - (14,888) - (14,888)
Proceeds from of note payable - 3,267 - 3,267
Mortgage escrow deposits - 37,061 - 37,061
Advances from affiliate - (46,290) 46,290 -
------------------ ------------- ------------ -------------
Net cash provided by (used for)
financing activities - (20,850) 46,290 25,440
------------------ ------------- ------------ -------------
Net increase (decrease) in cash and
cash equivalents (412,422) 9,225 - (403,197)
Cash and cash equivalents, beginning 685,918 36,819 - 722,737
------------------ ------------- ------------ -------------
Cash and cash equivalents, ending $ 273,496 $ 46,044 $ - $ 319,540
================== ============= ============ =============
</TABLE>
(A) For the year ended March 31, 1999.
(B) For the year ended December 31, 1998 - See Note 2.
<PAGE>
Boston Financial Qualified Housing Tax Credits, L.P. II
Schedule III - Real Estate and Accumulated
Depreciation
of Property owned by Local Limited Partnerships in
Which Registrant has Invested at March 31, 1999
<TABLE>
GROSS AMOUNT AT
WHICH CARRIED AT
DECEMBER 31, 1998
COST AT INTEREST AT
ACQUISITION DATE
------------------------------ ------------------
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 $2,687,505 $100,000 $2,629,117 $1,304,534 $105,864
Greenburg, PA
Reno/Birch 138 3,823,126 382,333 5,298,594 53,077 382,333
Reno, NV
Buckfield 20 1,079,741 50,000 559,836 718,164 50,000
Buckfield, ME
Newport Family Housing 24 1,255,075 66,950 637,538 839,012 66,950
Newport, ME
Willow Creek Apartments 25 842,992 71,982 1,261,654 18,571 71,982
Reno, NV
Linden Apartments 40 1,261,481 110,251 1,855,036 35,104 110,251
Reno, NV
Unity Family Housing 20 1,003,509 47,500 690,892 504,243 47,500
Unity, ME
Spring Hill 127 4,013,900 229,702 4,940,334 (106,647) 171,780
Casper, WY
B&C III Housing 162 4,220,586 377,292 5,462,420 27,403 377,292
Moore, OK
San Antonio 100 3,831,612 165,200 4,467,166 412,596 165,200
Aquadilla, PR
Atlantic Terrace 198 11,090,442 210,000 5,314,668 7,337,525 319,237
Washington, D.C.
Shadow Wood Housing 61 706,114 2,045 1,424,111 91,639 2,045
Chickasha, OK
B&C II Housing 56 1,522,904 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 13,268,999 265,817 9,443,627 20,710,013 265,817
Boston, MA
Chapparal Housing 124 3,270,644 381,880 1,290,206 2,654,242 381,880
Midland, TX
Durham Park 224 9,444,094 486,000 5,600,540 4,250,782 486,000
Tigard, OR
Willow Peg Lane 48 1,469,859 107,500 603,138 1,140,222 107,500
Rincon, GA
</TABLE>
<PAGE>
Boston Financial Qualified Housing Tax Credits, L.P. II
Schedule III - Real Estate and Accumulated
Depreciation
of Property owned by Local Limited Partnerships in
Which Registrant has Invested at March 31, 1999
<TABLE>
GROSS AMOUNT AT
WHICH CARRIED
AT DECEMBER 31,
COST AT INTEREST AT 1998
ACQUISITION DATE
------------------------------- -----------------
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
Meadowbrook Village 55 1,462,694 85,037 159,388 1,621,436 92,987
Americus, GA
Waynesboro Properties 36 946,112 40,700 31,020 1,137,361 44,100
Waynesboro, GA
Monroe Properties 55 1,453,699 115,905 55,882 1,699,518 115,905
Monroe, GA
Mulberry Associates 24 749,000 30,000 211,179 726,912 30,000
Mulberry, AR
Ward Manor 16 521,884 22,000 152,984 487,125 22,000
Ward, AR
Paragould Associates 14 463,811 18,500 212,874 356,221 20,000
Paragould, AR
Lamar Associates 20 621,790 23,100 259,086 509,866 23,100
Lamar, AR
Winona Apartments 12 278,581 4,000 212,719 136,931 4,000
Winona, MO
Blair Senior Housing 12 357,148 19,100 446,700 7,804 19,100
Blair, NE
McKinley-Walker 48 1,407,029 83,000 1,760,235 2,586 83,000
Fitzgerald, GA
Warrenton Apartments 16 373,628 23,000 445,188 0 23,000
Warrenton, MO
Strafford II Apartments 12 292,827 10,000 360,423 1,167 10,000
Strafford, MO
La Center Apartments 12 395,515 24,500 473,512 7,045 24,500
La Center, KY
DeSoto III Apartments 24 560,676 35,000 668,817 1,515 35,000
Webster Grove, MO
Garden Cove Apartments 200 5,300,307 647,924 3,899,850 2,785,773 1,383,864
Huntsville, AL
Shannon Creste Apartments 200 6,159,547 594,795 4,258,031 4,738,596 606,428
Union City, GA
Milo Senior Housing 24 1,254,920 66,950 660,837 822,736 66,950
Milo, ME
</TABLE>
<PAGE>
Boston Financial Qualified Housing Tax Credits, L.P. II
Schedule III - Real Estate and Accumulated
Depreciation
of Property owned by Local Limited Partnerships in
Which Registrant has Invested at March 31, 1999
<TABLE>
GROSS AMOUNT AT
WHICH CARRIED AT
DECEMBER 31, 1998
COST AT INTEREST AT
ACQUISITION DATE
------------------------------ ------------------
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
Brighton Manor Apartments 40 1,198,710 139,130 227,776 1,491,691 140,095
Douglasville, GA
Bamberg Garden Apartments 24 732,094 53,400 891,576 6,888 53,400
Bamberg, SC
SUBTOTAL 3,057 89,322,555 6,351,721 73,892,075 50,150,014 5,932,162
LESS: Combined Entities 400 11,459,854 1,242,719 8,157,881 7,524,369 1,990,292
------------------------------------------------------------------------------------------
TOTAL 2,657 $77,862,701 $5,109,002 $65,734,194 $42,625,645 $3,941,870
==========================================================================================
</TABLE>
(1) The aggregate cost for Federal Income Tax purposes is approximately $
129,870,000.
* 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 6.96% to 11.375%. 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>
Boston Financial Qualified Housing Tax Credits, L.P. II
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships in
Which Registrant has Invested at March 31, 1999
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
1998
-------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
LIFE ON
WHICH
BUILDINGS / DEPRECIATION
IMPROVEMENTS ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION & EQUIPMENT TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
----------- ----------- ----- ------------ ----- ------- --------
Low and Moderate
Income Apartment Complexes
Eastmont $3,927,787 $4,033,651 $1,002,657 1952 7-10, 40 12/01/88
Greenburg, PA
Reno/Birch 5,351,671 5,734,004 2,243,922 1988 5-7, 27.5 07/10/88
Reno, NV
Buckfield 1,278,000 1,328,000 308,850 1990 7, 27.5 08/01/88
Buckfield, ME
Newport Family Housing 1,476,550 1,543,500 356,834 1990 27.5 08/01/88
Newport, ME
Willow Creek Apartments 1,280,225 1,352,207 510,253 1988 7, 27.5 08/01/88
Reno, NV
Linden Apartments 1,890,140 2,000,391 748,544 1988 5-7, 27.5 08/01/88
Reno, NV
Unity Family Housing 1,195,135 1,242,635 293,843 1990 7, 27.5 08/01/88
Unity, ME
Spring Hill 4,891,609 5,063,389 1,811,769 1989 Useful Lives 10/01/88
Casper, WY
B&C III Housing 5,489,823 5,867,115 2,125,313 1962/1973 5-7, 27.5 10/01/88
Moore, OK
San Antonio 4,879,762 5,044,962 2,552,551 1988 Useful Lives 10/01/88
Aquadilla, PR
Atlantic Terrace 12,542,956 12,862,193 4,069,693 1990 5-12, 20, 27.5,40 12/01/88
Washington, D.C.
Shadow Wood Housing 1,515,750 1,517,795 556,963 1972 5, 7, 27.5 12/01/88
Chickasha, OK
B&C II Housing 1,881,611 1,904,713 789,710 1976 7, 27.5 12/01/88
Tulsa, OK
Grayton Pointe Associates (A) 0 0 0 1989 5, 28 12/27/88
Macon, GA
Snapfinger Creste (B) 0 0 0 1989 5, 28 12/30/88
Decatur, GA
Wayne Apartments 30,153,640 30,419,457 10,274,384 1990 7, 27.5 12/22/88
Boston, MA
Chapparal Housing 3,944,448 4,326,328 1,392,340 1989 7, 27.5 12/01/88
Midland, TX
Durham Park 9,851,322 10,337,322 3,764,815 1989 7, 27.5 12/29/88
Tigard, OR
Willow Peg Lane 1,743,360 1,850,860 660,285 1988 Useful Lives 10/01/88
Rincon, GA
</TABLE>
<PAGE>
Boston Financial Qualified Housing Tax Credits, L.P. II
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships in
Which Registrant has Invested at March 31, 1999
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
1998
-------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
LIFE ON
WHICH
BUILDINGS / DEPRECIATION
IMPROVEMENTS ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION & EQUIPMENT TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
----------- ----------- ----- ------------ ----- ------- --------
Low and Moderate
Income Apartment Complexes
Meadowbrook Village 1,772,874 1,865,861 664,285 1989 Useful Lives 10/01/88
Americus, GA
Waynesboro Properties 1,164,981 1,209,081 429,319 1989 Useful Lives 12/01/88
Waynesboro, GA
Monroe Properties 1,755,400 1,871,305 647,660 1989 Useful Lives 12/01/88
Monroe, GA
Mulberry Associates 938,091 968,091 334,106 1989 7, 27.5 12/01/88
Mulberry, AR
Ward Manor 640,109 662,109 227,098 1989 7, 27.5 12/01/88
Ward, AR
Paragould Associates 567,595 587,595 204,765 1989 7, 27.5 12/01/88
Paragould, AR
Lamar Associates 768,952 792,052 278,495 1989 7, 27.5 12/01/88
Lamar, AR
Winona Apartments 349,650 353,650 132,150 1989 7, 27.5 12/01/88
Winona, MO
Blair Senior Housing 454,504 473,604 155,832 1989 7, 27.5 01/03/89
Blair, NE
McKinley-Walker 1,762,821 1,845,821 649,465 1989 Useful Lives 02/08/89
Fitzgerald, GA
Warrenton Apartments 445,188 468,188 159,741 1989 Useful Lives 03/31/89
Warrenton, MO
Strafford II Apartments 361,590 371,590 129,959 1989 5, 7, 27.5 03/31/89
Strafford, MO
La Center Apartments 480,557 505,057 170,746 1989 7, 27.5, 40 03/31/89
La Center, KY
DeSoto III Apartments 670,332 705,332 231,012 1989 Useful Lives 03/31/89
Webster Grove, MO
Garden Cove Apartments 5,949,683 7,333,547 2,416,018 1990 Useful Lives 05/11/89
Huntsville, AL
Shannon Creste Apartments 8,984,994 9,591,422 2,759,402 1990 5, 27.5 07/10/89
Union City, GA
Milo Senior Housing 1,483,573 1,550,523 328,845 1990 7, 27.5 12/20/89
Milo, ME
</TABLE>
<PAGE>
Boston Financial Qualified Housing Tax Credits, L.P. II
Schedule III - Real Estate and Accumulated Depreciation
of Property owned by Local Limited Partnerships in
Which Registrant has Invested at March 31, 1999
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
1998
-------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
LIFE ON
WHICH
BUILDINGS / DEPRECIATION
IMPROVEMENTS ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION & EQUIPMENT TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
----------- ----------- ----- ------------ ----- ------- --------
Low and Moderate
Income Apartment Complexes
Brighton Manor Apartments 1,718,502 1,858,597 670,464 1990 10, 30 12/29/89
Douglasville, GA
Bamberg Garden Apartments 898,464 951,864 335,830 1989 Useful Lives 01/20/89
Bamberg, SC
SUBTOTAL 124,461,649 130,393,811 44,387,918
LESS: Combined Entities 14,934,677 16,924,969 5,175,420
-------------------------------------------------
TOTAL $109,526,972 $113,468,842 $39,212,498
=================================================
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1998 Accumulated Depreciation December 31, 1998
- -------------------------------------------------------------------- -----------------------------------------------
Balance at beginning of period $113,093,434 Balance at beginning of period $35,268,135
Additions during Additions during period:
period:
Add prior year Garden Cove $7,333,547 Add prior year Garden Cove 2,180,607
Add prior year Shannon Creste 9,410,551 Add prior year Shannon 2,421,682
Creste
Less current year Garden Cove (7,333,547) Less current year Garden (2,416,018)
Cove
Less current year Shannon Creste (9,591,422) Less current year Shannon (2,759,402)
Creste
Acquisitions through foreclosure 0 Write off of properties 0
transferred
Other acquisitions 304,078 4,517,494
Depreciation
--------------
Improvements etc. 252,201 Balance at close of period $39,212,498
==============
--------------
375,408
Deductions during
period:
Cost of real estate and fixed 0
assets sold
Write off of properties transferred 0
Reclassification to intangible 0
assets
--------------
0
--------------
Balance at close of $113,468,842
period
==============
Property Owned December 31, 1997 Accumulated Depreciation December 31, 1997
- -------------------------------------------------------------------- -----------------------------------------------
Balance at beginning of period $130,912,714 Balance at beginning of period $36,158,261
Additions during Additions during period:
period:
Add prior year Garden Cove $7,333,547 Add prior year Garden Cove 1,944,916
Add prior year Shannon Creste 9,004,635 Add prior year Shannon 2,099,528
Creste
Less current year Garden Cove (7,333,547) Less current year Garden (2,180,607)
Cove
Less current year Shannon Creste (9,410,551) Less current year Shannon (2,421,682)
Creste
Acquisitions through foreclosure 0 Write off of properties (4,798,250)
transferred
Other acquisitions 289,671 4,465,969
Depreciation
--------------
Improvements etc. 379,331 Balance at close of period $35,268,135
==============
--------------
263,086
Deductions during
period:
Cost of real estate and fixed (5,884)
assets sold
Write off of properties transferred (18,076,482)
Reclassification to intangible 0
assets
--------------
(18,082,366)
--------------
Balance at close of $113,093,434
period
==============
Property Owned December 31, 1996 Accumulated Depreciation December 31, 1996
- -------------------------------------------------------------------- -----------------------------------------------
Balance at beginning of period $139,702,097 Balance at beginning of period $33,408,280
Additions during Additions during period:
period:
Add prior year Garden Cove $7,309,677 Add prior year Garden Cove 1,664,005
Less current year Garden Cove (7,333,547) Less current year Garden (1,944,916)
Cove
Less current year Shannon Creste (9,004,635) Less current year Shannon (2,099,528)
Creste
Acquisitions through foreclosure 0 5,130,420
Depreciation
--------------
Other acquisitions 100,645 Balance at close of period $36,158,261
==============
Improvements etc. 155,868
--------------
(8,771,992)
Deductions during
period:
Cost of real estate and fixed (17,391)
assets sold
Reclassification to intangible 0
assets
--------------
(17,391)
--------------
Balance at close of $130,912,714
period
==============
</TABLE>
<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, 1999
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, 1998 and 1997, 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, 1998 and 1997, 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 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 5, 1999
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, 1998 and 1997, 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, 1998 and 1997, 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
<PAGE>
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>
Buckfield
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, 1999
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, 1998 and 1997, 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, 1998 and 1997, 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 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>
[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, 1998, 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 Linden Housing Associates, Ltd. dba Linden
Apartments, as of December 31, 1998, 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 4, 1999, on
our consideration of Linden Housing Associates, Ltd.dba Linden Apartments,
internal control and reports dated February 4, 1999, on its compliance
with specific requirements applicable to major HUD programs and specific
requirements applicable to Fair Housing and Non-Discrimination.
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 17 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 4 1999
<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>
Birch Assoc.
[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, 1998, 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, as of December 31, 1998, 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 4, 1999, on our
consideration of Birch Associates Limited Partnership, dba Reno Apartments I-IV,
internal control and reports dated February 4, 1999, on its compliance with
specific requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-Discrimination.
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 14 to 16 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 4, 1999
<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
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, 1998,
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, as of December 31, 1998,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 4, 1999, on our
consideration of Linden Housing Associates, Ltd., dba Linden Apartments,
internal control and reports dated February 4, 1999, on its compliance with
specific requirements applicable to major HUD programs and specific requirements
applicable to Fair Housing and Non-Discrimination.
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 15 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/Proctor & Gaub
PROCTOR & GAUB
Reno, Nevada
February 4, 1999
<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]
[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, 1998, 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, 1998, 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 issued a report dated February 9, 1999, on our
consideration of HUD Project No. 033-35194-PM-SR (The "Project") of Eastmont
Estates Associates internal control, and reports dated February 9, 1999, 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
February 9, 1999
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, 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>
Spring Hill
[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. 109-35062-EX, as of December
31, 1998, 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. 109-35062-EX, as of December 31, 1998, 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 29, 1999 on our consideration of Spring Hill Housing Associates,
I,LTD's, internal controls and reports dated January 29, 1999 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 29, 1999
<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 II, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates
II, Ltd. (a limited partnership), HUD Project No. 109-35063-EX as of December
31, 1998, 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. 109-35063-EX, as of December 31, 1998, 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 29, 1999 on our consideration of Spring Hill Housing Associates,
II, LTD's, internal control structure and reports dated January 29, 1999 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 29, 1999
<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 III, Ltd.
Englewood, Colorado
We have audited the accompanying balance sheet of Spring Hill Housing Associates
III, Ltd. (a limited partnership), HUD Project No. 109-35064-EX, as of December
31, 1998, 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. 109-35064-EX, as of December 31, 1998, 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 29, 1999 on our consideration of Spring Hill Housing Associates,
III,LTD's, internal controls and reports dated January 29, 1999 on its
compliance with specific requirements applicable to major HUD Programs and
specificrequirements applicable to Fair Housing ad Non-Discrimination.
/s/Stark Tinter & Associates
Englewood, Colorado
January 29, 1999
<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>
Willowpeg
[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, 1998 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, 1998 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/R. Doug Floyd
Floyd & Company, C.P.A.
Savannah, Georgia
February 28, 1999
<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.
/s/R. Doug Floyd
Floyd & Company, C.P.A.
Savannah, Georgia
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.
/s/R. Doug Floyd
Floyd & Company, C.P.A.
Savannah, Georgia
February 28, 1997
<PAGE>
[Letterhead]
[LOGO]
DAVID G. PELLICIONE, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Americus Properties Limited Partnership
We have audited the accompanying balance sheets of AMERICUS PROPERTIES LIMITED
PARTNERSHIP (a Limited Partnership), as of December 31, 1998 and 1997, 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, 1998 and 1997 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 11, 1999 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
supplemental information on pages 9 and 10 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/David G. Pellicione
Savannah, Georgia
February 11, 1999
<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>
Atlantic Terrace
PricewaterhouseCoopers
Report of Independent Accountants
To the Partners of
Atlantic Terrace Limited Partnership:
In our opinion, the accompanying balance sheet and the related statements of
profit and loss, partners' capital (deficiency), and cash flows present fairly,
in all material respects, the financial position of the Partnership at December
31, 1998 and the results of its operations and its cash flows for the year ended
December 31, 1998, in conformity with generally accepted accounting principles.
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 of these statements in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the Comptroller
General of the United States, which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In accordance with Government Auditing Standards, we have also issued a report
dated January 29, 1999 on our consideration of the Partnership's internal
control and a report dated January 29, 1999 on its compliance with laws and
regulations.
/s/ PricewaterhouseCoopers
Boston, Massachusetts
January 29, 1999
<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>
Garden Cove
[Letterhead]
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Reznick Fedder & Silverman
Independent Auditors' Report
To the Partners
Garden Cove Apartments, Ltd.
We have audited the accompanying balance sheet of Garden Cove Apartments, Ltd.
as of December 31, 1998, 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.
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, 1998, and the results of its operations, the changes in
partners' equity (deficit) and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.
/s/Reznick Fedder & Silverman
Boston, Massachusetts Federal Employer
January 22, 1999 Identification Number
52-1088612
Audit Principal: Philip A. Weitzel
<PAGE>
[Letterhead]
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Reznick Fedder & Silverman
Independent Auditors' Report
To the Partners
Garden Cove Apartments, Ltd.
We have audited the accompanying balance sheet of Garden Cove Apartments, Ltd.
as of December 31, 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.
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]
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Asher & Company, Ltd
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
T/A Nottingham Square Apartments (A Limited Partnership), HUD Project No.
117-94008, as of December 31, 1998 and the related statements of profit and loss
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. The financial statements of B & C Housing Associates, III T/A
Nottingham Square Apartments (A Limited Partnership), HUD Project No. 117-94008,
as of December 31, 1997, were audited by other auditors, whose Report dated
January 16, 1998 expressed an unqualified opinion on those statements.
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
T/A Nottingham Square Apartments (A Limited Partnership), HUD Project No.
117-94008,
as of December 31, 1998, and the results of its operations, changes in its
Partners' capital and 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 supplementary
information 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.
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 4, 1999 on our
consideration of B & C Housing Associates, III's T/A Nottingham Square
Apartments (A Limited Partnership), HUD Project No. 117-94008, internal control
and reports dated February 4, 1999 on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
fair housing and non-discrimination.
/s/Asher & Company
Philadelphia, PA
February 4, 1999
<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.
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]
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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, 1998 and 1997, 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, 1998 and 1997, 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.
January 25, 1999
Stamp number 1553569 was
affixed to the original of this report
<PAGE>
[Letterhead]
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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>
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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, 1998 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, 1998 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/R. Doug Floyd
Floyd & Company, CPA
Savannah, Georgia
February 28, 1999
<PAGE>
[Letterhead]
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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.
/s/R. Doug Floyd
Floyd & Company, CPA
Savannah, Georgia
February 28, 1998
<PAGE>
[Letterhead]
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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.
/s/R. Doug Floyd
Floyd & Company, CPA
Savannah, Georgia
February 28, 1997
<PAGE>
[Letterhead]
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DAVID G. PELLICIONE, C.P.A., P.C.
INDEPENDENT AUDITORS' REPORT
To the Partners
Monroe Properties Limited Partnership
We have audited the accompanying balance sheets of MONROE PROPERTIES LIMITED
PARTNERSHIP (A Limited Partnership), as of December 31, 1998 and 1997, 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, 1998 and 1997 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 11, 1999 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
supplemental information on pages 9 and 10 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 financial statements
taken as a whole.
/s/David G. Pellicione
Savannah, Georgia
February 11, 1999
<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>
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]
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Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners
Ward Manor Associates Limited Partnership
Ward, Arkansas
We have audited the accompanying balance sheet of Ward Manor Associates Limited
Partnership (a Missouri limited partnership) Rural Development Case No:
03-043-431482892 as of December 31, 1998, and the related statements of loss,
partners' equity and cash flows for the year ended December 31, 1998. 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, 1998 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, 1999
<PAGE>
[Letterhead]
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Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners
Ward Manor Associates Limited Partnership
Ward, Arkansas
We have audited the accompanying balance sheet of Ward Manor Associates Limited
Partnership (a Missouri limited partnership) Rural Development Case No:
03-043-431482892 as of December 31, 1996, and the related statements of loss,
partners' equity and cash flows for the year ended December 31, 1996. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ward Manor Associates Limited
Partnership as of December 31, 1996 and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
January 21, 1997
<PAGE>
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Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners
Paragould Associates I, Limited Partnership
Paragould, Arkansas
We have audited the accompanying balance sheet of Paragould Associates I,
Limited Partnership (a Missouri limited partnership) Rural Development Case No:
03-028-431481354 as of December 31, 1998, and the related statements of
operating, 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 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, 1998, 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, 1999
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[Letterhead]
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Braunsdorf, Carlson and Clinkinbeard
INDEPENDENT AUDITORS' REPORT
To the Partners
Paragould Associates I, Limited Partnership
Paragould, Arkansas
We have audited the accompanying balance sheet of Paragould Associates I,
Limited Partnership (a Missouri limited partnership) Rural Development Case No.:
as of December 31, 1996, and the related statements of loss, partners' equity
and cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Paragould Associates I, Limited
Partnership as of December 31, 1996, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
January 21, 1997
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[Letterhead]
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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
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[Letterhead]
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Braunsdorf, Carlson and Clinkinbeard
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners
Lamar Associates, Limited Partnership
Lamar, Arkansas
We have audited the accompanying balance sheet of Lamar Associates, Limited
Partnership (a Missouri limited partnership) RECD Case No.: 03-036-431424399 as
of December 31, 1995, and the related statements of loss, partners' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lamar Associates, Limited
Partnership as of December 31, 1995, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/ Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Braunsdorf, Carlson and Clinkinbeard, CPA's, P.A.
Topeka, Kansas
February 7, 1996
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Asher & Company, Ltd
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
T/A Patrick Henry Apartments (A Limited Partnership), HUD Project No. 118-94005,
as of December 31, 1998, and the related statements of profit and loss, changes
in partners' capital and cash flows for the year then ended December 31, 1998.
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 statements of B & C Housing
associates II, T/A Patrick Henry Apartments (A Limited Partnership), HUD Project
No. 118-94005, as of December 31, 1997, were audited by other auditors, whose
report dated January 16, 1998, expressed an unqualified opinion on those
statements.
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,
T/A Patrick Henry Apartment, (A Limited Apartment), HUD Project No. 118-94005 as
of December 31, 1998, and the results of its operations and the changes in
partners' capital and 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
supplementary information 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.
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 25, 1999, on our
consideration of B & C Housing Associates, II T/A Patrick Henry Apartments, (A
Limited Partnership), HUD Project No. 118-94005 internal control and reports
dated January 25, 1999, on its compliance with specific requirements applicable
to major HUD programs, specific requirements applicable to fair housing, and
non-discrimination.
/s/Asher & Company
Philadelphia, PA
January 25, 1999
<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.
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
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Asher & Company, Ltd.
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, T/A Country Park (A Limited Partnership), HUD Project No.
117-94009, as of December 31, 1998, and the related statements of profit and
loss, changes in partners' capital and cash flows for the year 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 statements of Shadow Wood
Housing Associates, Limited T/A, Country Park (A Limited Partnership), HUD
Project No. 117-94009, as of December 31, 1997, were audited by other auditors,
whose report dated January 16, 1998, expressed an unqualified opinion on those
statements.
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 T/A Country Park (A Limited Partnership), HUD Project No. 117-94009, as
of December 31, 1998, and the results of its operations and the changes in
partners' capital and 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 supplementary information 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.
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 25, 1999 on our
consideration of Shadow Wood Housing Associates, Limited T/A Country Park
(A Limited Partnership), HUD Project No. 117-94009 internal control
structure and reports dated January 25, 1999 on its compliance with specific
requirements applicable to major HUD programs, specific requirements applicable
to non-major HUD program transactions, and specific requirements applicable to
fair housing and non discrimination.
/s/Asher & Company
Philadelphia, PA
January 25, 1999
<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.
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
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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, 1998, and the related statements of changes in
partners' deficit, 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, 1998, 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 26, 1999 on our
consideration of Wayne Apartments Project Limited Partnership's internal control
and reports
dated January 26, 1999 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.
Boston, MA
January 26, 1999
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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
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Asher & Company, Ltd.
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., (A Limited Partnership), HUD Project No. 133-94005, as of December 31,
1998, and the related statements of profit and loss, 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. The financial statements of Chaparral Housing Associates, Ltd.
(A Limited Partnership), HUD Project No. 133-94005, as of December 31, 1997,
were audited by other auditors, whose report dated January 16, 1998, expressed
an unqualified opinion on those statements.
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,
(A Limited Partnership) HUD Project No. 133-94005., as of December 31, 1998, and
the results of its operations andthe changes in partners' capital and 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 supplementary information 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.
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 22, 1999, on our
consideration of Chaparral Housing Associates, (A Limited Partnership) HUD
Project No. 133-94005 internal control and reports dated January 22, 1999, on
its compliance with specific requirements applicable to major HUD programs,
specific requirements applicable to fair housing and non-discrimination.
/s/Asher & Company
Philadelphia, PA
January 22, 1999
<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]
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>
Grayton Pointe
[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]
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, 1998 and 1997,
and the related statements of operations, 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. The statements of operations, changes in
partners' capital and cash flows for the years ended December 31, 1996 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, 1998 and 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, 1999
<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>
Bamberg
[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, as of December 31, 1998 and 1997, 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, 1998 and 1997, 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 Bamberg Properties Limited Partnership taken as a whole. The
supplemental information on page 9 is presented for purpose 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 audits
of the basic financial statement and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statement taken as a whole.
/s/ David G. Pelliccione
Savannah, Georgia
February 23, 1999
<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]
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, 1998 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, 1998 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/R. Doug Floyd
Floyd & Company, CPA
Savannah, Georgia
February 28, 1999
<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.
/s/R. Doug Floyd
Floyd & Company, CPA
Savannah, Georgia
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.
/s/R. Doug Floyd
Floyd & Company, CPA
Savannah, Georgia
February 28, 1997
<PAGE>
De Soto
[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>
Warrenton
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 sheets of Warrenton Associates I, L.P.
(a limited partnership) as of December 31, 1998, 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 Warrenton Associates I, L.P. as
of December 31, 1998, 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 1997 financial statements were compiled by us and our report thereon, dated
February 11, 1998 stated that we did not audit or review those financial
statements and, accordingly, expressed no opinion or other form of assurance on
them.
/s/Mueller, Walla & Albertson, P.C.
Mueller, Walla & Albertson, P.C.
Certified Public Accountants
January 19, 1999
<PAGE>
Shannon Creste
[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, 1998, 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, 1998, 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, 1999
<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>
Milo Housing
[Letterhead]
[LOGO]
MACDONALD
Independent Auditor's Report
February 5, 1999
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, 1998 and 1997, 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, 1998 and 1997, 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
South Portland, ME
February 5, 1999
<PAGE>
[LOGO]
MACDONALD
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
South Portland, ME
February 5, 1998
<PAGE>
Brighton
[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, 1998 and 1997, 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 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, 1998 and 1997 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
Atlanta, Georgia
February 16, 1999
<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
Atlanta, Georgia
February 16, 1998
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
FINANCIAL STATEMENTS
DECEMBER 31, 1996
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
FINANCIAL STATEMENTS
DECEMBER 31, 1996
TABLE OF CONTENTS
PAGE
Independent auditors' report 1
Financial statements:
Balance sheet 2
Statement of changes in partners' equity 3
Statement of operations 4
Statement of cash flows 5 - 6
Notes to financial statements 7 - 11
Supplemental information 12 - 13
<PAGE>
[letterhead]
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 & Wayne, P.C.
Atlanta, Georgia
January 31, 1997
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
BALANCE SHEET
DECEMBER 31, 1996
<TABLE>
<CAPTION>
ASSETS
Current assets
<S> <C>
Cash $ 12,491
Tenant rent receivable 14,693
Prepaid insurance 10,000
Prepaid mortgage interest 44,031
Due from special limited partner 7,703
------------
Total current assets 88,918
Deposits held in trust
Tenant security deposits 2,278
Restricted deposits and funded reserves
Mortgage escrow deposits 87,008
Permanent operating reserve 337,353
424,361
Rental property and equipment, at cost
Land 594,795
Buildings 8,394,326
Furniture and fixtures 15,514
-----------
9,004,635
Accumulated depreciation [2,099,528]
6,905,107
Other assets
Utility deposits 2,160
Deferred financing fees, net of accumulated
amortization of $95,123 65,651
Compliance monitoring fee, net of
accumulated amortization of $4,899 14,701
-----------
82,512
$ 7,503,176
See auditors' report and accompanying notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SHANNON CRESTE APARTMENTS, L.P.
FINANCIAL STATEMENTS
DECEMBER 31, 1996
LIABILITIES AND PARTNERS' EQUITY
Current liabilities
<S> <C>
Accounts payable $ 163,575
Accrued expenses 18,282
Accrued management fees 13,713
Advances from affiliates 15,445
Current portion of note payable 3,267
------------
Total current liabilities 214,282
Deposits and prepayment liabilities
Tenant security deposits 23,899
Rent deferred credits 10,869
34,768
Long-term liabilities
Mortgage note payable, net of current portion 6,159,547
Note payable, net of current portion 6,533
6,166,080
Partners' equity 1,088,046
$ 7,503,176
</TABLE>
See auditors' report and accompanying notes
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Managing Special Investor
General Limited Limited
Partner Partners Partner Total
Beginning partners' equity
<S> <C> <C> <C> <C>
[deficit] $ -0- $[487,036] $ 1,378,555 $ 891,519
Contributions -0- 245,524 -0- 245,524
--------- ---------- --------------- -----------
-0- [241,512] 1,378,555
1,137,043
Net loss [ 490] [ 490] [ 48,017] [ 48,997]
---------- --------- --------------- ----------
Ending partners' equity
[deficit] $[ 490] $[242,002] $ 1,330,538 $ 1,088,046
========== ========== =============== ===========
</TABLE>
See auditors' report and accompanying notes
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Revenues
<S> <C>
Gross rent potential $ 1,300,754
Less vacancies, concessions and uncollected rent [ 326,829]
Rental revenues less vacancies 973,925
Other rental revenues 25,784
999,709
Expenses
Administrative 67,857
Management fees 13,713
Utilities 97,824
Operating and maintenance 142,598
Real estate taxes 106,337
Other taxes and insurance 43,527
Mortgage interest 552,920
Depreciation and amortization 330,145
-----------
1,354,921
[ 355,212]
Other income
Income from debt forgiveness 265,381
Property tax refund 28,414
Interest income 12,420
-----------
306,215
Net loss $ ( 48,997]
</TABLE>
See auditors' report and accompanying notes
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Cash flows from operating activities Revenues:
<S> <C>
Rental receipts $ 967,297
Other rental receipts 25,784
Interest receipts 12,419
Other receipts 28,414
-----------
1,033,914
Expenses:
Administrative 63,010
Utilities 88,142
Operating and maintenance 85,794
Real estate taxes, property insurance, and escrow deposits 174,376
Mortgage interest 650,592
----------
1,061,914
Net cash used by operating activities [ 28,000]
Cash flows from investing activities
Release from permanent operating reserve 12,647
Cash flows from financing activities
Principal payment on mortgage note payable [ 44,761]
Principal payment on note payable [ 3,267]
Advances from affiliates 15,445
Repayment of advances to prior management agent 63,870
Advances to special limited partner [ 7,703]
------------
Net cash provided by financing activities 23,584
------------
Net increase in cash 8,231
Cash, beginning of year 4,260
Cash, end of year $ 12,491
============
</TABLE>
See auditors' report and accompanying notes
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF CASH FLOWS [CONTINUED]
FOR THE YEAR ENDED DECEMBER 31, 1996
Increase [Decrease] in Cash
<TABLE>
<CAPTION>
Reconciliation of net loss to net cash used by operating activities:
<S> <C> <C>
Net loss $[ 48,997]
--------
Adjustments to reconcile net loss to net
cash used by operating activities:
Amortization 17,710
Depreciation 312,435
Income from debt forgiveness [265,381]
Increase in tenant rent receivable [ 7,010]
Decrease in tenant security deposits 6,437
Decrease in prepaid insurance 3,154
Increase in utility deposits [ 2,160]
Increase in prepaid mortgage interest [ 44,031]
Increase in mortgage escrow deposits [ 34,101]
Increase in accounts payable 55,206
Decrease in accrued mortgage interest [ 53,641]
Increase in accrued expenses 18,282
Increase in accrued management fees 13,715
Increase in rent deferred credits 382
----------
Total adjustments 20,997
Net cash used by operating activities $[ 28,000]
==========
</TABLE>
See auditors' report and accompanying notes
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:
As of August 20, 1996, the original general partners of the partnership agreed
to become special limited partners upon the admission of a new managing general
partner. As part of the agreement, the original general partners agreed to
convert $245,524 of project expense loans to a capital contribution.
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Partnership was organized as a limited partnership under the laws of
the state of Georgia on June 30, 1989. The partnership was formed to
develop, construct, own, maintain, and operate a rental housing project of
200 units located in Union City, Georgia. The Project is currently
operating under the name of Shannon Creste Apartments.
The following significant accounting policies have been followed in the
preparation of the financial statements:
a. Basis of Accounting:
The financial statements of the partnership are prepared on the
accrual basis of accounting and in accordance with generally
accepted accounting principles.
b. Tenant Rent Receivables:
Management considers tenant rent receivables to be fully
collectible; accordingly, no allowance for doubtful accounts is
required. Uncollectible rent receivables are charged to operations
upon management's determination that collection of the receivable is
unlikely.
c. Depreciation and Capitalization:
Rental property and equipment have been recorded at cost.
Depreciation is provided for in amounts sufficient to relate the
cost of depreciable assets to operations over their estimated
service lives of twenty-eight years for real property and five years
for personal property primarily by use of the straight-line method
for financial reporting. Improvements are capitalized, while
expenditures for maintenance and repairs are charged to expense as
incurred.
d. Amortization:
Permanent loan costs consist of fees incurred to obtain the
permanent mortgage and are amortized over the 10-year term of the
note using the straight-line method. Compliance monitoring fees
consist of a fee paid to the Georgia Housing and Finance Authority
to oversee compliance by the project with the requirements of the
low-income housing tax credit program and are amortized over the
remaining 12-year term of the tax credit compliance period.
e. Rental Income:
Rental income is recognized as rentals become due. Rental payments
received in advance are deferred until earned. All leases between
the partnership and the tenants of the property are short-term
operating leases.
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1996
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: [Continued]
f. Cash Equivalents:
For purposes of the statement of cash flows, all highly liquid debt
instruments purchased with initial maturities of three months or
less are considered to be cash equivalents.
g. 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.
h. Income Taxes:
Income or loss of the Partnership is allocated 1% to the general
partner, 1% to the special limited partners and 98% to the investor
limited partner. No income tax provision has been included in the
financial statements since income or loss of the Partnership is
required to be reported by the respective partners on their income
tax returns.
The adjustment of book basis loss to tax basis loss for the year
ended December 31, 1996 is summarized as follows:
<TABLE>
<CAPTION>
<S> <C>
Net loss as shown on financial statements $48,997
Items decreasing loss
Depreciation difference on real property 12,836
Net loss as shown by the tax return $36,161
======
</TABLE>
B. PERMANENT OPERATING RESERVE:
Pursuant to its operating deficit agreement, the Partnership deposited
$350,000 into a permanent operating reserve fund on December 19, 1995. The
funds are to be held in escrow on behalf of the investor limited partner
who holds a first security interest. The operating deficit agreement
restricts the release of these funds and requires specific authorization
of the investor limited partner prior to any release of funds from the
reserve. The activity in the reserve fund for the year ended December 31,
1996 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Balance, January 1, 1996 $ 350,000
Add: Interest earned 12,353
Less: Transfer to special reserve [ 25,000]
--------
Balance, December 31, 1996 $ 337,353
=======
</TABLE>
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1996
C. MORTGAGE NOTE PAYABLE:
The mortgage note payable in the original amount of $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 the partnership
in monthly installments of $57,946 based on an amortization period of 30
years.
Effective October 1, 1996, the mortgage note payable with Citicorp was
modified. Commencing on November 1, 1996 and continuing on the first day
of each and every month thereafter, up to and including April 1, 1999,
interest at the rate of seven percent (7%) per annum shall be due and
payable monthly. On April 1, 1999 the interest shall be adjusted and
increased to the rate of nine and three-quarters percent (9.75%) per
annum. Commencing 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 the Partnership under the mortgage note is limited to the
underlying value of the real estate collateral plus other amounts
deposited with the lender.
The aggregate of the mortgage note payable is as follows:
<TABLE>
<CAPTION>
Due Date Amount
<S> <C> <C> <C>
Current
1997 $ -0-
Long-Term
1998 $ -0-
1999 20,612
2000 38,171
2001 6,100,764
---------
6,159,547
$ 6,159,547
</TABLE>
D. NOTE PAYABLE:
The note payable in the original amount of $19,600 is payable to the
Georgia Housing and Finance Authority for payment of the compliance
monitoring fees charged by the authority. The note bears no interest and
is payable in annual installments of $3,267 until April 15, 1999.
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1996
D. NOTE PAYABLE: [Continued]
The note payable matures as follows:
<TABLE>
<CAPTION>
Due Dates Amount
<S> <C> <C>
Current
1997 $3,267
Long-term
1998 $3,267
1999 3,266
-----
6,533
$9,800
</TABLE>
E. CAPITAL TRANSACTIONS:
Effective August 20, 1996, the Partnership amended its partnership
agreement to admit a new managing general partner, Boston Financial GP-I,
LLC, for a 1% interest in the Partnership. The former general partners
became special class B limited partners and maintained their 1% interest
in the partnership with the investor limited partner holding the remaining
98% partnership interest.
F. LOW INCOME HOUSING TAX CREDITS:
The Partnership applied for and received an allocation of low-income
housing tax credits for the project of $7,363,460 from the Georgia Housing
and Finance Authority to be claimed over a ten year period beginning upon
initial rent-up of the units with eligible tenants. The partnership has
received the annual allocation of $736,345 pursuant to Internal Revenue
Code Section 42[a]. The annual credit amount is contingent upon the
project maintaining a qualified basis of $7,995,005 and complying with
certain requirements regarding tenant eligibility, rent charges and
operating methods. The partnership has claimed cumulative credits of
$5,048,052 as of December 31, 1996.
The Partnership agreement has special provisions that will apply, should
the Project fail to qualify for all or a portion of the credit allocation
or fail to comply with eligibility requirements during the compliance
period of fifteen years.
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1996
G. RELATED PARTY TRANSACTIONS:
The project was managed through August 19, 1996 by Pointe Properties, Inc.
d/b/a MPS, Inc., a wholly-owned subsidiary of Sanbury Corporation. Sanbury
Corporation along with its stockholder were the original general partners
of the partnership. Pointe Properties agreed not to charge management fees
for its services for the period ended August 19, 1996.
As of August 20, 1996, the Partnership contracted with Boston Financial
Property Management Group, an affiliate of the new general partner, to
provide property management service for a monthly fee of four percent (4%)
of gross rental receipts. For the period from August 20, 1996 through
December 31, 1996, the partnership incurred $13,713 for these services.
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
SUPPLEMENTAL INFORMATION
SCHEDULE OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Gross rent potential $1,300,754
Vacancies
Vacancy 245,471
Bad debts/uncollectible rent 27,101
Rent concessions 54,257
326,829
Rental revenue less vacancies 973,925
Other rental revenue
Laundry and vending 1,644
NSF and late charges 8,380
Damages and cleaning fees 905
Forfeited security deposits 355
Other revenue 14,500
25,784
Other income
Income from debt forgiveness 265,381
Property tax refund 28,414
Interest income 12,420
306,215
Total revenue 1,305,924
Administrative
Advertising 4,099
Other renting expenses 6,460
Office salaries 4,770
Office supplies 7,841
Management fee 13,713
Manager salaries 18,991
Legal expense 5,947
Auditing expense 11,497
Telephone 8,252
81,570
Utilities
Electricity 25,928
Water and sewer 71,896
-------
97,824
</TABLE>
See auditors' report
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
SUPPLEMENTAL INFORMATION [CONTINUED]
SCHEDULE OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Operating and maintenance
<S> <C> <C>
Exterminating 1,750
Garbage and trash removal 16,495
Grounds payroll 3,902
Grounds supplies 1,987
Grounds contract 9,876
Repairs payroll 27,309
Repairs material 20,892
Repairs contract 59,469
Miscellaneous 918
142,598
Taxes and insurance
Real estate taxes 106,337
Payroll taxes 6,409
Property and liability insurance 26,987
Worker's compensation 2,683
Group health insurance 7,448
---------
149,864
Financial expenses
Interest on mortgage 552,920
Depreciation and amortization
Depreciation 312,435
Amortization 17,710
330,145
Total expenses 1,354,921
Net loss $[48,997]
</TABLE>
See auditors' report
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
FINANCIAL STATEMENTS
DECEMBER 31, 1997
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
TABLE OF CONTENTS
PAGE
Independent auditors' report 1
Financial statements:
Balance sheet 2
Statement of changes in partners' equity [deficit] 3
Statement of operations 4
Statement of cash flows 5 - 6
Notes to financial statements 7 - 10
Supplemental information 11 - 12
<PAGE>
[letterhead]
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 &Wayne, P.C.
Atlanta, Georgia
January 30, 1998
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
ASSETS
Current assets
<S> <C>
Cash $ 19,917
Rent receivable 20,610
Prepaid insurance 5,775
Prepaid mortgage interest 18,881
Due from special limited partner 7,703
------------
Total current assets 72,886
Deposits held in trust
Tenant security deposits 17,198
Restricted deposits and funded reserves
Mortgage escrow deposits 82,094
Permanent operating reserve 35,926
118,020
Rental property and equipment, at cost
Land 594,795
Office equipment 1,607
Buildings and building improvements 8,708,550
Furniture and fixtures 103,514
Land improvements 2,085
------------
9,410,551
Accumulated depreciation [2,421,682]
6,988,869
Other assets
Utility deposits 2,160
Deferred financing fees, net of accumulated
amortization of $111,200 49,574
Compliance monitoring fee, net of
accumulated amortization of $6,532 13,068
-----------
64,802
$ 7,261,775
<PAGE>
LIABILITIES AND PARTNERS' EQUITY
Current liabilities
Accounts payable $ 36,936
Accrued expenses 40,094
Accrued management fees 57,736
Advances from affiliates 145,069
Current portion of note payable 3,267
------------
Total current liabilities 283,102
Deposits and prepayment liabilities
Tenant security deposits 26,818
Rent deferred credits 22,064
48,882
Long-term liabilities
Mortgage note payable, net of current portion 6,159,547
Note payable, net of current portion 3,266
6,162,813
Partners' equity 766,978
$ 7,261,775
</TABLE>
See auditors' report
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY [DEFICIT]
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Managing Special Investor
General Limited Limited
Partner Partners Partners Total
Beginning partners' equity
<S> <C> <C> <C> <C>
[deficit] $ [ 490] $[242,002] $ 1,330,538 $ 1,088,046
Net loss [3,211] [ 3,211] [ 314,646] [ 321,068]
--------- --------- ----------- ---------
Ending partners' equity
[deficit] $[3,701] $[245,213] $ 1,015,892 $ 766,978
======== ========== =========== ==========
</TABLE>
See auditors' report and accompanying notes
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Revenues
<S> <C>
Gross rent potential $ 1,483,460
Less vacancies, concessions and uncollected rent 404,441
----------
Rental revenues less vacancies 1,079,019
Other rental revenues 16,315
1,095,334
Expenses
Administrative 146,390
Management fees 44,023
Utilities 113,995
Operating and maintenance 224,466
Real estate taxes and property insurance 119,862
Other taxes and insurance 22,897
Mortgage interest 431,168
Depreciation and amortization 339,864
----------
1,442,665
[ 347,331]
Other income
Income from debt forgiveness 25,618
Interest income 645
26,263
Net loss $[ 321,068]
</TABLE>
See auditors' report and accompanying notes
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Cash flows from operating activities Revenues:
<S> <C>
Rental receipts $ 1,084,297
Other rental receipts 16,315
Interest receipts 645
-----------
1,101,257
Expenses:
Administrative 225,600
Utilities 113,995
Operating and maintenance 224,465
Real estate taxes, property insurance, and escrow deposits 122,724
Other taxes and insurance 22,897
Mortgage interest 406,018
-----------
1,115,699
Net cash used by operating activities [ 14,442]
Cash flows from investing activities
Release from permanent operating reserve 301,427
Acquisition of property [ 405,916]
Net cash used by investing activities [ 104,489]
Cash flows from financing activities
Principal payment on note payable [ 3,267]
Advances from affiliates 129,624
Net cash provided by financing activities 126,357
-----------
Net increase in cash 7,426
Cash, beginning of year 12,491
Cash, end of year $ 19,917
===========
</TABLE>
See auditors' report and accompanying notes
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF CASH FLOWS [CONTINUED]
FOR THE YEAR ENDED DECEMBER 31, 1997
Increase [Decrease] in Cash
<TABLE>
<CAPTION>
Reconciliation of net loss to net cash used by operating activities:
<S> <C> <C>
Net loss $[321,068]
-------
Adjustments to reconcile net loss to net
cash used by operating activities:
Amortization 17,710
Depreciation 322,154
Income from debt forgiveness [ 25,618]
Change in assets and liabilities
Increase in rent receivable [ 5,917]
Increase in tenant security deposits [ 12,001]
Decrease in prepaid insurance 4,225
Decrease in prepaid mortgage interest 25,150
Decrease in mortgage escrow deposits 4,914
Decrease in accounts payable [101,021]
Increase in accrued expenses 21,812
Increase in accrued management fees 44,023
Increase in rent deferred credits 11,195
--------
Total adjustments 306,626
Net cash used by operating activities $ [ 14,442]
========
</TABLE>
See auditors' report and accompanying notes
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Partnership was organized as a limited partnership under the laws of
the state of Georgia on June 30, 1989. The Partnership was formed to
develop, construct, own, maintain, and operate a rental housing Project of
200 units located in Union City, Georgia. The Project is currently
operating under the name of Shannon Creste Apartments.
The following significant accounting policies have been followed in the
preparation of the financial statements:
a. Basis of Accounting:
The financial statements of the Partnership are prepared on the
accrual basis of accounting and in accordance with generally
accepted accounting principles.
b. Rent Receivables:
Management considers rent receivables to be fully collectible;
accordingly, no allowance for doubtful accounts is required.
Uncollectible rent receivables are charged to operations upon
management's determination that collection of the receivable is
unlikely.
c. Depreciation and Capitalization:
Rental property and equipment have been recorded at cost.
Depreciation is provided for in amounts sufficient to relate the
cost of depreciable assets to operations over their estimated
service lives of 28 years for real property and five years for
personal property primarily by use of the straight-line method for
financial reporting. Improvements are capitalized, while
expenditures for maintenance and repairs are charged to expense as
incurred.
d. Amortization:
Deferred financing fees consist of fees incurred to obtain the
permanent mortgage and are amortized over the ten-year term of the
note using the straight-line method. Compliance monitoring fees
consist of a fee paid to the Georgia Department of Community Affairs
to oversee compliance by the Project with the requirements of the
low-income housing tax credit program and are amortized over the
remaining 12-year term of the tax credit compliance period.
e. Rental Income:
Rental income is recognized as rentals become due. Rental payments
received in advance are deferred until earned. All leases between
the Partnership and the tenants of the property are short-term
operating leases.
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1997
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: [Continued]
f. Cash Equivalents:
For purposes of the statement of cash flows, all highly liquid debt
instruments purchased with initial maturities of three months or
less are considered to be cash equivalents.
g. 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. Actual results could differ from those
estimates.
h. Income Taxes:
Income or loss of the Partnership is allocated 1% to the general
partner, 1% to the special limited partners and 98% to the investor
limited partner. No income tax provision has been included in the
financial statements since income or loss of the Partnership is
required to be reported by the respective partners on their income
tax returns.
The adjustment of book basis loss to tax basis loss for the year
ended December 31, 1997 is summarized as follows:
<TABLE>
<CAPTION>
<S> <C>
Net loss as shown on financial statements $[321,067]
Items decreasing loss
Depreciation difference on real property 15,972
Net loss as shown by the tax return $[305,095]
=======
</TABLE>
B. PERMANENT OPERATING RESERVE:
Pursuant to its operating deficit agreement, the Partnership deposited
$350,000 into a permanent operating reserve fund on December 19, 1995. The
funds are to be held in escrow on behalf of the investor limited partner
who holds a first security interest. The operating deficit agreement
restricts the release of these funds and requires specific authorization
of the investor limited partner prior to any release of funds from the
reserve. The activity in the reserve fund for the year ended December 31,
1997 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Balance, January 1, 1997 $ 337,353
Less: Transfer to special reserve [301,427]
Balance, December 31, 1997 $ 35,926
========
</TABLE>
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1997
C. MORTGAGE NOTE PAYABLE:
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 the Partnership
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 at the rate of seven percent (7%) per annum shall be due and
payable. 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 the Partnership under the mortgage note is limited to the
underlying value of the real estate collateral plus other amounts
deposited with the lender.
The aggregate of the mortgage note payable is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Due Date Amount
Current
1998 $ -0-
Long-Term
1999 $ 20,612
2000 38,171
2001 6,100,764
---------
6,159,547
$6,159,547
</TABLE>
D. NOTE PAYABLE:
The note payable in the original amount of $19,600 is payable to the
Georgia Department of Community Affairs for payment of the compliance
monitoring fees charged by the authority. The note bears no interest and
is payable in annual installments of $3,267 until April 15, 1999.
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1997
D. NOTE PAYABLE: [Continued]
The note payable matures as follows:
<TABLE>
<CAPTION>
<S> <C>
Due Dates Amount
Current
1998 $3,267
Long-term _
1999 3,266
-----
$6,533
</TABLE>
E. LOW INCOME HOUSING TAX CREDITS:
The Partnership applied for and received an allocation of low-income
housing tax credits for the Project of $7,363,460 from the Georgia
Department of Community Affairs to be claimed over a ten-year period
beginning upon initial rent-up of the units with eligible tenants. The
Partnership has received the annual allocation of $736,345 pursuant to
Internal Revenue Code Section 42[a]. The annual credit amount is
contingent upon the Project maintaining a qualified basis of $7,995,005
and complying with certain requirements regarding tenant eligibility, rent
charges and operating methods. The Partnership has claimed cumulative
credits of $5,784,397 as of December 31, 1997.
The partnership agreement has special provisions that will apply, should
the Project fail to qualify for all or a portion of the credit allocation
or fail to comply with eligibility requirements during the compliance
period of 15 years.
F. RELATED PARTY TRANSACTIONS:
The Partnership contracted with Boston Financial Property Management, an
affiliate of the general partner, to provide property management service
for a monthly fee of four percent (4%) of gross rental receipts. The
Partnership incurred $44,023 for these services in 1997. Included in
accrued expenses at December 31, 1997 is $57,736 of unpaid management fees
due to Boston Financial Property Management.
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
SUPPLEMENTAL INFORMATION
SCHEDULE OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Gross rent potential $ 1,483,460
- --------------------
Vacancies
Vacancies 289,692
Bad debts 33,615
Rent concessions 58,362
Rent - free units 22,772
-------
404,441
Rental revenue less vacancies 1,079,019
Other rental revenue
Laundry and vending 1,648
NSF and late charges 1,442
Damages and cleaning fees 4,836
Forfeited security deposits 3,211
Other revenue 5,178
16,315
Other income
Income from debt forgiveness 25,618
Interest income 645
26,263
Total revenue 1,121,597
Administrative
Advertising 22,530
Other renting expenses 8,792
Office salaries 32,532
Office supplies 5,596
Management fee 44,023
Manager salaries 43,251
Legal expense 12,158
Auditing expense 13,934
Telephone 7,597
190,413
Utilities
Electricity 25,315
Water and sewer 88,680
-------
113,995
</TABLE>
See auditors' report
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
SUPPLEMENTAL INFORMATION [CONTINUED]
SCHEDULE OF OPERATIONS [CONTINUED]
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Operating and maintenance
<S> <C> <C>
Exterminating 4,230
Garbage and trash removal 9,664
Grounds payroll 13,061
Grounds supplies 7,357
Grounds contract 19,870
Repairs payroll 39,588
Repairs material 57,587
Repairs contract 70,690
Miscellaneous 2,419
224,466
Taxes and insurance
Real estate taxes 102,403
Payroll taxes 12,274
Property and liability insurance 20,329
Worker's compensation 2,229
Group health insurance 5,524
---------
142,759
Financial expenses
Interest on mortgage 431,168
Depreciation and amortization
Depreciation 322,154
Amortization 17,710
339,864
Total expenses 1,442,665
Net loss $[321,068]
</TABLE>
See auditors' report
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
FINANCIAL STATEMENTS
DECEMBER 31, 1998
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
TABLE OF CONTENTS
PAGE
Independent auditors' report 1
Financial statements:
Balance sheet 2
Statement of changes in partners' equity [deficit] 3
Statement of operations 4
Statement of cash flows 5 - 6
Notes to financial statements 7 - 10
Supplemental information 11 - 12
<PAGE>
[letterhead]
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, 1998, 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, 1998, 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 & Waynne, P.C.
Atlanta, Georgia
January 29, 1999
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
BALANCE SHEET
DECEMBER 31, 1998
<TABLE>
<CAPTION>
ASSETS
Current assets
<S> <C>
Cash $ 25,265
Rent receivable 8,636
Prepaid insurance 6,469
Due from special limited partner 7,703
------------
Total current assets 48,073
Deposits held in trust
Tenant security deposits 37,429
Restricted deposits and funded reserves
Mortgage escrow deposits 51,945
Permanent operating reserve 38,229
90,174
Rental property and equipment, at cost
Land 594,795
Buildings and building improvements 8,844,677
Office equipment 5,024
Furniture and fixtures 135,293
Land improvements 11,633
-----------
9,591,422
Accumulated depreciation [2,759,402]
6,832,020
Other assets
Utility deposits 2,160
Permanent loan costs, net of accumulated
amortization of $127,604 33,170
Compliance monitoring fee, net of
accumulated amortization of $8,165 11,435
-----------
46,765
$ 7,054,461
</TABLE>
See auditors' report and accompanying notes
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND PARTNERS' EQUITY
Current liabilities
<S> <C>
Accounts payable $ 74,830
Accrued expenses 22,215
Accrued mortgage interest 35,931
Accrued management fees 54,820
Advances from affiliates 145,069
Current portion of mortgage note payable 20,612
Current portion of note payable 6,533
------------
Total current liabilities 360,010
Deposits and prepayment liabilities
Tenant security deposits 35,798
Rent received in advance 3,389
39,187
Long-term liabilities
Mortgage note payable, net of current portion 6,138,935
---------
Partners' equity 516,329
$ 7,054,461
See auditors' report and accompanying notes
</TABLE>
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY [DEFICIT]
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Managing Special Investor
General Limited Limited
Partner Partners Partner Total
<S> <C> <C> <C> <C>
Beginning partners' equity
[deficit] $[3,701] $[245,213] $ 1,015,892 $ 766,978
Net loss [2,506] [ 2,506] [ 245,637] [250,649]
-------- ---------- ---------- ---------
Ending partners' equity
[deficit] $[6,207] $[247,719] $ 770,255 $ 516,329
======== ========= ========== ==========
See auditors' report and accompanying notes
<PAGE>
</TABLE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Revenues
<S> <C>
Gross rent potential $ 1,514,382
Less vacancies, concessions and uncollected rent 252,789
----------
1,261,593
Other rental revenues 24,618
1,286,211
Expenses
Administrative 153,001
Management fees 51,138
Utilities 129,712
Operating and maintenance 272,152
Real estate taxes and property insurance 118,184
Other taxes and insurance 29,979
Mortgage interest 431,168
Depreciation and amortization 355,757
----------
1,541,091
[ 254,880]
Other income
Interest income 4,231
Net loss $[ 250,649]
See auditors' report and accompanying notes
</TABLE>
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Cash flows from operating activities
Revenues
<S> <C>
Rental receipts $ 1,254,892
Other rental receipts 24,618
Interest receipts 4,231
------------
1,283,741
Expenses
Administrative 204,004
Utilities 125,698
Operating and maintenance 260,819
Real estate taxes, property insurance, and escrow deposits 99,980
Other taxes and insurance 28,362
Mortgage interest 395,237
----------
1,114,100
Net cash provided by operating activities 169,641
----------
Cash flows from investing activities
Permanent operating reserve 16,578
Acquisition of property [ 180,871]
Net cash used by investing activities [ 164,293]
Net increase in cash 5,348
Cash, beginning of year 19,917
Cash, end of year $ 25,265
===========
See auditors' report and accompanying notes
</TABLE>
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
STATEMENT OF CASH FLOWS [CONTINUED]
FOR THE YEAR ENDED DECEMBER 31, 1998
Increase [Decrease] in Cash
<TABLE>
<CAPTION>
Reconciliation of net loss to net cash provided by operating activities:
<S> <C> <C>
Net loss $[250,649]
-------
Adjustments to reconcile net loss to net
cash provided by operating activities:
Amortization 18,037
Depreciation 337,720
Changes in assets and liabilities
Rent receivable 11,974
Tenant security deposits [ 11,251]
Prepaid insurance [ 694]
Mortgage escrow deposits 30,149
Accounts payable 37,894
Accrued mortgage interest 35,931
Accrued expenses [ 17,879]
Accrued management fees [ 2,916]
Rent received in advance [ 18,675]
--------
Total adjustments 420,290
Net cash provided by operating activities $ 169,641
=======
See auditors' report and accompanying notes
</TABLE>
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Partnership was organized as a limited partnership under the laws of
the state of Georgia on June 30, 1989. The Partnership was formed to
develop, construct, own, maintain, and operate a rental housing project of
200 units located in Union City, Georgia. The Project is currently
operating under the name of Shannon Creste Apartments.
The following significant accounting policies have been followed in the
preparation of the financial statements:
a. Basis of Accounting:
The financial statements of the Partnership are prepared on the
accrual basis of accounting and in accordance with generally
accepted accounting principles.
b. Rent Receivables:
Management considers rent receivables to be fully collectible;
accordingly, no allowance for doubtful accounts is required.
Uncollectible rent receivables are charged to operations upon
management's determination that collection of the receivable is
unlikely.
c. Depreciation and Capitalization:
Rental property and equipment have been recorded at cost.
Depreciation is provided for in amounts sufficient to relate the
cost of depreciable assets to operations over their estimated
service lives of 28 years for real property and five years for
personal property primarily by use of the straight-line method for
financial reporting. Improvements are capitalized, while
expenditures for maintenance and repairs are charged to expense as
incurred.
d. Amortization:
Deferred financing fees consist of fees incurred to obtain the
permanent mortgage and are amortized over the ten-year term of the
note using the straight-line method. Compliance monitoring fees
consist of a fee paid to the Georgia Department of Community Affairs
to oversee compliance by the Project with the requirements of the
low-income housing tax credit program and are amortized over the
remaining 12-year term of the tax credit compliance period.
e. Rental Income:
Rental income is recognized as rentals become due. Rental payments
received in advance are deferred until earned. All leases between
the Partnership and the tenants of the property are short-term
operating leases.
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1998
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: [Continued]
f. Cash Equivalents:
For purposes of the statement of cash flows, all highly liquid debt
instruments purchased with initial maturities of three months or
less are considered to be cash equivalents.
g. 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. Actual results could differ from those
estimates.
h. Income Taxes:
Income or loss of the Partnership is allocated 1% to the general
partner, 1% to the special limited partners and 98% to the investor
limited partner. No income tax provision has been included in the
financial statements since income or loss of the Partnership is
required to be reported by the partners on their respective income
tax returns. The Partnership uses the accrual method of accounting
and no significant differences existed between book basis and income
tax basis for the year ended December 31, 1998.
B. PERMANENT OPERATING RESERVE:
Pursuant to its operating deficit agreement, the Partnership deposited
$350,000 into a permanent operating reserve fund on December 19, 1995. The
funds are to be held in escrow on behalf of the investor limited partner
who holds a first security interest. The operating deficit agreement
restricts the release of these funds and requires specific authorization
of the investor limited partner prior to any release of funds from the
reserve.
C. MORTGAGE NOTE PAYABLE:
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 the Partnership
in monthly installments of $57,946 based on an amortization period of 30
years.
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1998
C. MORTGAGE NOTE PAYABLE: [CONTINUED]
Effective October 1, 1998, the mortgage note payable with Citicorp was
modified. Commencing on November 1, 1998 and continuing on the first day
of each and every month thereafter, up to and including April 1, 1999,
interest at the rate of seven percent (7%) per annum shall be due and
payable. On April 1, 1999, the interest shall be adjusted and increased to
the rate of 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 the Partnership under the mortgage note is limited to the
underlying value of the real estate collateral plus other amounts
deposited with the lender.
The aggregate of the mortgage note payable is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Due Date Amount
Current
1999 $ 20,612
Long-Term
2000 $ 38,171
2001 6,100,764
---------
6,138,935
$6,159,547
</TABLE>
D. NOTE PAYABLE:
The note payable in the original amount of $19,600 is payable to the
Georgia Department of Community Affairs for payment of the compliance
monitoring fees charged by the authority. The note bears no interest and
is payable in annual installments of $3,267 until April 15, 1999.
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
NOTES TO FINANCIAL STATEMENTS [CONTINUED]
DECEMBER 31, 1998
D. NOTE PAYABLE: [Continued]
The note payable matures as follows:
Amount
December 31,
1999 $6,533
======
E. LOW INCOME HOUSING TAX CREDITS:
The Partnership applied for and received an allocation of low-income
housing tax credits for the Project from the Georgia Department of
Community Affairs to be claimed over a ten-year period beginning upon
initial rent-up of the units with eligible tenants. The Partnership has
received the annual allocation pursuant to Internal Revenue Code Section
42[a]. The annual credit amount is contingent upon the Project maintaining
a qualified basis and complying with certain requirements regarding tenant
eligibility, rent charges and operating methods.
The partnership agreement has special provisions that will apply should
the Project fail to qualify for all or a portion of the credit allocation,
or fail to comply with eligibility requirements during the compliance
period of 15 years.
F. RELATED PARTY TRANSACTIONS:
The Partnership contracted with Boston Financial Property Management, an
affiliate of the general partner, to provide property management service
for a monthly fee of four percent (4%) of gross rental receipts. The
Partnership incurred $51,138 for these services in 1998. Included in
accrued expenses at December 31, 1998 is $54,820 of unpaid management fees
due to Boston Financial Property Management.
G. COMMITMENTS AND CONTINGENCIES:
The general partner has assessed the Partnership's exposure to
date-sensitive computer software programs that may not be operative
subsequent to 1999 and has implemented a requisite course of action to
minimize Year 2000 risk and ensure that neither significant costs nor
disruption of normal business operations are encountered. However, because
there is no guarantee that all systems of outside vendors or other
entities affecting the Partnership's operations will be Year 2000
compliant, the Partnership remains susceptible to consequences of the Year
2000 issue.
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
SUPPLEMENTAL INFORMATION
SCHEDULE OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Gross rent potential $ 1,514,382
Vacancies, concessions, and uncollected rent
Vacancies 115,309
Bad debts 48,593
Rent concessions 52,121
Rent - free units 36,766
--------
252,789
Rental revenue less vacancies 1,261,593
Other rental revenue
Laundry and vending 1,133
NSF and late charges 13,048
Damages and cleaning fees 2,464
Forfeited security deposits 733
Other revenue 7,240
24,618
Other income
Interest income 4,231
Total revenue 1,290,442
Administrative
Advertising 21,029
Other renting expenses 15,767
Office salaries 21,826
Office supplies 8,500
Management fee 51,138
Manager salaries 51,424
Legal expense 11,756
Auditing expense 6,500
Telephone 16,199
204,139
Utilities
Electricity 39,452
Water and sewer 90,260
--------
129,712
</TABLE>
See auditors' report
<PAGE>
SHANNON CRESTE APARTMENTS, L.P.
SUPPLEMENTAL INFORMATION [CONTINUED]
SCHEDULE OF OPERATIONS [CONTINUED]
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Operating and maintenance
<S> <C> <C>
Exterminating 5,327
Garbage and trash removal 5,548
Grounds - payroll 48,804
Grounds - supplies 1,341
Grounds - contract 22,948
Repairs - payroll 61,535
Repairs - material 76,918
Repairs - contract 48,180
Miscellaneous 1,551
272,152
Taxes and insurance
Real estate taxes 97,519
Payroll taxes 16,828
Property and liability insurance 23,151
Workers' compensation 1,493
Group health insurance 9,172
---------
148,163
Financial expenses
Interest on mortgage 431,168
Depreciation and amortization
Depreciation 337,720
Amortization 18,037
355,757
Total expenses 1,541,091
Net loss
See auditors' report
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 319,540
<SECURITIES> 1,959,842
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 12,359,393
<DEPRECIATION> 000
<TOTAL-ASSETS> 16,767,216<F1>
<CURRENT-LIABILITIES> 11,918,749<F2>
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 5,016,840
<TOTAL-LIABILITY-AND-EQUITY> 16,767,216<F3>
<SALES> 000
<TOTAL-REVENUES> 2,582,792<F4>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 2,507,016<F5>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 885,336
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (3,586,431)<F6>
<EPS-BASIC> (59.18)
<EPS-DILUTED> 000
<FN>
<F1>Included in Total Assets: Accounts receivable of $30,019, Tenant security
deposits of $62,027, Investments in Local Limited Partnerships of $1,430,095,
Mortgage escrow deposits of $99,226, Operating reserves of $38,229, Replacement
reserves of $126,181, Deferred fees, net of $286,259 and Other assets of
$56,405. <F2>Included in Other Liabilities: Mortgage notes payable of
$11,233,062, Note payable of $6,533, Accounts payable to affiliates of $295,487,
Accounts payable and accrued expenses of $60,557, Accrued interest payable of
$262,723 and Security deposits payable of $60,387. <F3>Included in Total
Liabilities and Equity: Minority interests in Local Limited Partnerships of
$168,373. <F4>Total Revenue includes: Rental of $2,144,067, Investment of
$148,359 and Other of $290,366. <F5>Included in Other Expenses: Asset management
fees of $276,766, General and administrative of $213,042, Rental operations,
exclusive of depreciation of $1,223,067, Property management fees of $92,438,
Bad debt expense of $11,861, Depreciation of $573,131 and Amortization of
$116,711. <F6>Net loss reflects: Equity in losses of Local Limited Partnerships
of $2,785,420 and Minority interests in losses of Local Limited Partnership of
$8,549.
</FN>
</TABLE>
