UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1996
Commission file number 33-24537
CENTURY PACIFIC TAX CREDIT HOUSING FUND II
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4178283
(State of other jurisdiction of (IRS Employer
incorporation of organization) Identification Number)
1925 Century Park East, Suite 1760
Los Angeles, CA 90067
(Address of principal executive offices)
Registrant's telephone number, including area code:
(800) 262-8242
NO CHANGE
(Former name, former address and former fiscal year if
changed since last report)
Indicate by a 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 [ ]
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> MAR-31-1996 MAR-31-1995
<PERIOD-END> MAR-31-1996 MAR-31-1995
<CASH> 2,178 1,196
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 2,948 2,966
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 1,398,015 1,555,203
<CURRENT-LIABILITIES> 970,458 796,561
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 1,398,015 1,555,203
<SALES> 2,200 1,500
<TOTAL-REVENUES> 2,200 1,500
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 175,115 194,948
<LOSS-PROVISION> (331,085) (419,531)
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (331,085) (419,531)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (331,085) (419,531)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
TABLE OF CONTENTS
PART 1
ITEM 1 BUSINESS 3
ITEM 2 PROPERTIES 4
ITEM 3 LEGAL PROCEEDINGS 5
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 5
PART II
ITEM 5 MARKET FOR THE REGISTRANT'S PARTNERSHIP
INTERESTS 6
ITEM 6 SELECTED FINANCIAL DATA 6
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS 7
ITEM 8 FINANCIAL STATEMENTS 12
ITEM 9 CHANGES AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND
FINANCIALDISCLOSURE 12
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT 13
ITEM 11 EXECUTIVE COMPENSATION 14
ITEM 12 PARTNERSHIP INTEREST OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT 15
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS 15
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT
SCHEDULES AND REPORTS ON FORM 8-K 16
SIGNATURES 17<PAGE>
PART I
ITEM 1. BUSINESS
Century Pacific Tax Credit Housing Fund-II (CPTCHF-II or the
Partnership) was formed on September 2, 1988 as a limited
partnership under the laws of the State of California to
invest in multifamily housing developments (the Properties).
The Partnership's business is to invest primarily in other
limited partnerships (Operating Partnerships) that are
organized for the purposes of either constructing or
acquiring and operating existing affordable multifamily
rental apartments (the Properties) that are eligible for
the Low Income Housing Tax Credit, or to a lesser extent,
the Rehabilitation Tax Credit, both enacted by the Tax Reform
Act of 1986 (sometimes referred to as Credits or Tax Credits).
The Partnership has invested in two Properties, each of which
qualifies for the Low Income Housing Tax Credit. Both of
these Properties receive one or more forms of assistance
from Federal, state or local governments. A summary of the
Partnership's objectives and a summary of the Tax Credits
are provided in the Prospectus under "Investment Objectives
and Policies" and "Federal Income Tax Aspects" on pages 45
and 79, respectively, and are incorporated herein by
reference.
The partnership does not employ any persons. Alternatively,
the partnership reimburses an affiliate for allocated
overhead, consisting primarily of payroll costs.
In order to stimulate private investment in low and moderate
income housing of the types in which CPTCHF-II has invested,
the federal government, through the Department of Housing
and Urban Development (HUD), has provided investors with
significant ownership incentives, such as interest subsidies,
rent supplements, mortgage insurance and other measures,
with the intent of reducing the risks and providing the
investors/owners with certain tax benefits, limited cash
distributions and the possibility of long-term capital gains.
However, there are significant risks inherent in this type
of housing. Long-term investments in real estate limit
the ability of CPTCHF-II to vary its portfolio in response
to changing economic, financial and investment conditions,
rising operating costs and vacancies, rent controls and
collection difficulties, costs and availability of energy,
as well as other factors which normally affect real estate
values. In addition, these Properties usually are rent
restricted and are subject to Government Agency programs
which may or may not require prior consent to transfer
ownership.
The Partnership acquired the Properties by investing as the
limited partner in Operating Partnerships which owns the
Properties. As a limited partner, CPTCHF-II's liability
for obligations of the Operating Partnerships is limited
to its investment. The Partnership made capital contributions
to the Operating Partnerships in amounts sufficient to pay
the Operating Partnerships' expenses and to reimburse the
General Partners for their costs incurred in forming the
Operating Partnerships, if any, and acquiring the Properties.
For each acquisition, this typically included a cash down
payment (in one or more installments), acceptance of the
Property's mortgage indebtedness, and execution of a Purchase
Money Note in favor of the seller of the Property.
The Partnership's primary objective is to provide Low-Income
Housing Tax Credits to its limited partners generally over
a 10-year period. Each of the Partnership's Operating Part-
nerships has been allocated, by the relevant state tax credit
agency, an annual amount of the Low-Income Housing Tax
Credits for 10 years from the date the Property was placed
in service. The required holding period of the Properties
is 15 years (the Compliance Period). The Properties must
satisfy rent restriction, tenant income limitations and
other requirements (the Low-Income Housing Tax Credit
Requirements) in order to maintain eligibility for
recognition of the Low-Income Housing Tax Credits at all
times during the Compliance Period. Once an Operating
Partnership has become eligible for the Low-Income Housing
Tax Credits, it may lose such eligibility and suffer an
event of recapture if its Property fails to remain in
compliance with the Low-Income Housing Tax Credit Require-
ments. To date, neither of the Operating Partnerships have
suffered an event of recapture of Low-Income Housing Tax
Credit.
ITEM 2. PROPERTIES
As of March 31, 1996, CPTCHF-II had acquired equity interests
in the Operating Partnerships set forth in the table below.
Each of the Properties acquired by the Operating Partnerships
receives benefits under government assistance programs
provided by HUD and the Illinois Housing Development
Authority (IHDA). The table below summarizes the Operating
Partnerships acquired and the government assistance programs
benefiting each Property. Further information concerning
these Properties may be found in Supplement No. 2 to the
Prospectus, pages 4 through 66, which information is
incorporated herein by reference and is summarized below.
Washington Courts Plumley Village
Chicago, Illinois Boston, MA
103 Resid units 430 Resid units
-----------------------------------
Average Occupancy 1995 98% 97%
Date of Acquisition of Interest 5/1/89 8/1/89
Percent Interest in Operating
Partnership 90% 60%
Capital Contribution Obligation:
Total at March 31, 1996 $2,743,413 $1,616,280
Paid through March 31, 1996 2,743,413 1,616,280
Mortgage Note, 12/31/95 5,076,014 8,342,889
Residual Note, 12/31/95 -- 4,047,488
Purchase Note, 12/31/95 -- 5,154,129
Other Note, 12/31/95 -- 405,895
Government Assisted Program HUD Insured/IHDA HUD/Sec 236
HAP Contract Sec 8
ITEM 3. LEGAL PROCEEDINGS
As of March 31, 1996, there were no pending legal proceedings
against CPTCHF-II or any Operating Partnership in which it
has invested.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
As of March 31, 1996, there were no submissions of matters
to a vote of security holders.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS
There is at present no public market for the units of limited
partnership interests (the Units), and it is unlikely that
any public market for the Units will develop. See the
Prospectus under "Transferability of Interests" on pages 24
and 52 of the Prospectus, which information is incorporated
herein by reference. The number of owners of Units as of
May 30, 1996 was approximately 508, holding 5,754 units.
As of May 30, 1996, there were no cash distributions.
ITEM 6. SELECTED FINANCIAL DATA
The following summary of selected financial data should be
read in conjunction with ITEM 14, herein, which also includes
a summary of CPTCHF-II's significant accounting policies.
Year Ended March 31,
- ------------------------------------------------------------
Operations 1996 1995 1994 1993 1992
________________ ______ ______ ______ _____ _____
Revenues $2,200 $1,500 $1,000 $1,500 $3,252
Operating
expenses (175,115)(194,948)(223,148)(241,544)(249,400)
Equity in Net
Losses of Operating
Partnerships(158,170)(226,083)(228,942)(408,668)(734,433)
Net Loss (331,085)(419,531)(451,090)(648,712)(980,581)
==============================================
Net Loss per Unit of
Limited Partnership
Interest $ (57) $ (72) $ (78) $ (112) $ (169)
Financial Position
__________________
Total
Assets $1,398,015 $1,555,203 $1,794,776 $2,074,737 $2,545,131
========== ========= ========= ========= =========
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership offered limited partnership interests to the
public during calendar year 1989, pursuant to a Registration
Statement filed under the Securities Act of 1933. The
Partnership raised $5,754,000 in equity capital and,
thereafter, invested in Operating Partnerships, which own
multifamily Properties located in Illinois and Massachusetts
representing approximately $25,000,000 of Property value.
These properties under Section 42 of the Internal Revenue
Code earn low-income housing tax credits which are passed
through to the individual partners of the Partnership. Low-
Income housing tax credits earned by the Partnership for
calendar years 1995, 1994 and 1993 were $859,233,
$859,232, and $856,945 respectively.
As of March 31, 1996 and 1995, the Partnership portfolio
consists of two Properties totalling 533 units. For a
summary of the combined financial status of the Operating
Partnerships and the Properties, see the financial
information contained under ITEM 14.
The market for multifamily residential properties throughout
the country continued to show signs of improvement in 1995,
as the ongoing absence of significant new construction
activity further improved the market's supply and demand
characteristics. Management believes that overall real
estate market conditions will improve further in 1996
along with the continued improvement in general economic
conditions. In addition, the recent increases in market
interest rate levels will make new construction more expensive
to finance, which should continue to limit the addition of
new multifamily units to the existing supply. However, the
effects of the gradually improving market conditions on the
Partnership's operating property investments, while positive,
are limited by the government restrictions on rental rate
increases. A substantial amount of the revenue generated
by these properties comes from rental subsidy payments made
by federal or state housing agencies. These features,
which are characteristic of all low-income housing properties,
limit the pool of potential buyers for these real estate
assets. As a limited partner of the Operating Partnerships,
the Partnership does not control property disposition
decisions, and management is not aware of any plans or
intentions of the general partners of these partnerships
to sell any of the investment properties in the near future.
The Partnership is currently experiencing a liquidity problem.
Under the Partnership Agreement, the Partnership is entitled
to receive distributions of surplus cash from the Operating
Partnerships which is to provide the funds necessary for the
Partnership to meet its administrative expenses and pay the
Partnerships management fee. At the present time, the
Operating Partnerships have not generated sufficient cash
distributions to fund the Partnership's expenses. As a
result of the foregoing, the Partnership has been dependent
upon its affiliates and the General Partners for continued
financial support to meet its expenses. Though there can
be no assurance, management believes that affiliates and/or
the General Partners, though not required to do so, will
continue to fund operations of the Partnership and defer
receipt of payment of allocated overhead, administrative
expenses and partnership management fees. Allocated
administrative expenses paid or accrued to affiliates and
the General Partners represent reimbursement of the actual
cost of goods and materials used for or by the Partnership,
salaries, related payroll costs and other administrative
items incurred or allocated, and direct expenses incurred
in rendering legal,accounting/bookkeeping, computer,
printing and public relations services. Items excluded
from the overhead allocation include overhead expenses of
the General Partners, including rent and salaries of
employees not specifically performing the services described
above. Unpaid allocated administrative expenses and partner-
ship management fees, an annual amount up to .5% of invested
assets, will accrue for payment in future operating years.
The Partnership is not expected to have access to any
significant sources of financing. Accordingly, if unforeseen
contingencies arise that cause an Operating Partnership to
require additional capital to sustain operations, in
addition to that previously contributed by the Partnership,
the source of the required capital needs may be from
(i) limited reserves from the Partnership (which may include
distributions received from Operating Partnerships that would
otherwise be available for distribution to partners),
(ii) debt financing at the Operating partnership level (which
may not be available), or (iii) additional equity contributions
from the general partner of the Operating Partnerships (which
may not be available). There can be no assurance that any
of these sources would be readily available to provide for
possible additional capital requirements which may be
necessary to sustain the operations of the Operating Part-
nerships.
Tax Reform Act of 1986, Omnibus Budget Reconciliation Act
of 1987, Technical and Miscellaneous Revenue Act of 1988,
Omnibus Budget Reconciliation Act of 1989 and Ominbus Budget
Reconciliation Act of 1990
The Partnership is organized as a limited partnership and
is "pass through" tax entity which does not, itself, pay
federal income tax. However, the partners of the Partner-
ship, who are subject to federal income tax, may be affected
by the Tax Reform Act of 1986, the Omnibus Budget Recon-
ciliation Act of 1987, the Technical and Miscellaneous
Revenue Act of 1988, the Ominbus Budget Reconciliation Act
of 1989 and the Ominbus Budget Reconciliation Act of 1990
(collectively the Tax Acts). The Partnership will consider
the effect of certain aspects of the Tax Acts on the partners
when making investment decisions. The Partnership does not
anticipate that the Tax Acts will have a material adverse
impact on the Partnership's business operations, capital
resources, plans or liquidity.
Results of Operations
The fiscal year of the Partnership ends on March 31 of
each year, however, the fiscal year of each Operating
Partnership ends on December 31. Therefore, the earnings
and losses of the Operating Partnerships reflected on the
equity method in the Partnership's financial statements for
its current fiscal year are for the calendar year ended
December 31, 1995.
1996 Compared to 1995
For the fiscal year ended March 31, 1996, the Partnership
recorded a net loss of approximately $331,000, as compared
to a net loss of approximately $420,000 for the prior fiscal
year. The decrease in net loss is the result of a decrease
in the Partnership's equity in net losses of the Operating
Partnerships of approximately $68,000 and a decrease in the
expenses of approximately $20,000 for the current fiscal year.
General and administrative expenses, namely allocated
administrative expenses and partnership management fees,
continue each fiscal year to comprise an increasing portion
of the Partnership's net loss. This trend results primarily
from a decrease in the Partnership's recognition of equity
losses from the Operating Partnerships in each subsequent
fiscal year.
In accordance with the equity method of accounting for
limited partnership interests, the Partnership does not
recognize losses from investment properties when losses
exceed the Partnership's equity method basis in these
properties.
One of the two investments has had an equity method basis
of zero since March 31, 1993. The Partnership's recorded
share of the Operating Partnerships' losses in the current
fiscal period consists of losses of approximately $158,000
from the Washington Courts Limited Partnership. In the
prior fiscal year, losses of approximately $226,000 from
the operations of Washington Courts was recorded. The
carrying value of the Partnership's investment in Laurel-
Clayton was reduced to zero during fiscal 1993.
In the aggregate, combined rental revenue of the Operating
Partnerships increased during the current calendar year.
The combined total rental revenue increased by approximately
$442,000 in the current calendar year, with the largest
increase occurring at Laurel-Clayton. The average occupancy
levels remained at or above 97% in both calendar years in
both properties. Such results reflect the generally improving
market conditions referred to above. Contrary to the
improvement in revenue, the combined total expenses
of the two operating properties increased by approximately
$227,000 in the current year primarily due to an increase
in repairs and maintenance, management fees, depreciation
and other operating expenses.
1995 Compared to 1994
For the fiscal year ended March 31, 1995, the Partnership
recorded a net loss of approximately $420,000, as compared
to a net loss of approximately $451,000 for the prior fiscal
year. The decrease in net loss is a result of a decrease
in the Partnership's equity in net losses of the Operating
Partnerships of approximately $3,000 and a decrease in the
expenses of approximately $28,000 for the 1995 fiscal year.
General and administrative expenses, namely allocated
administrative expenses and partnership management fees,
continue each fiscal year to comprise an increasing portion
of the Partnership's net loss. This trend results primarily
from a decrease in the Partnership's recognition of equity
losses from the Operating Partnership in each subsequent
fiscal year.
In accordance with the equity method of accounting for
limited partnership interests, the Partnership does not
recognize losses from investment properties when losses
exceed the Partnership's equity method basis in these
properties. One of the two investments has had an equity
method basis of zero since March 31, 1993. The Partnership's
recorded share of the Operating Partnerships' losses in the
1995 fiscal period consists of losses of approximately
$226,000 from the Washington Courts Limited Partnership.
In the prior fiscal year, losses of approximately $229,000
from the operation of Washington Courts was recorded. The
carrying value of the Partnership's investment in Laurel-
Clayton was reduced to zero during fiscal 1993.
In the aggregate, combined rental revenue of the Operating
Partnerships increased during the 1994 calendar year. The
combined total rental revenue increased by approximately
$253,000 in the 1994 calendar year, with the largest increase
occurring at Laurel-Clayton. The average occupancy levels
remained at or above 98% in both calendar years in both
properties. The increase in revenue is primarily attributable
to an annual adjustment of contract rents of approximately
7.5% at Laurel-Clayton and 3% at Washington Courts. Such
results reflect the generally improving market conditions
referred to above. Contrary to the improvement in revenue,
the combined total expenses of the two operating properties
increased by approximately $209,000 in the 1994 calendar
year primarily due to an increase in repairs and maintenance
and security contract expenses at one of the properties.
In addition to several nonrecurring maintenance projects
being completed at the property, a security contract was
entered into during the 1994 calendar year.
1994 Compared to 1993
For the fiscal year ended March 31, 1994, the Partnership
recorded a net loss of approximately $451,000, as compared
to a net loss of approximately $649,000 for the prior
fiscal year. The decrease in net loss is the result of a
decrease in the Partnership's equity in net losses of the
Operating Partnerships of approximately $180,000 and a
decrease in the expenses of approximately $18,000 for the
1994 fiscal year. General and administrative expenses,
namely allocated administrative expenses and partnership
management fees, continue each fiscal year to comprise an
increasing portion of the Partnership's net loss. This
trend results primarily from a decrease in the Partnership's
recognition of equity losses from the Operating Partnerships
in each subsequent fiscal year.
In accordance with the equity method of accounting for
limited partnership interests, the Partnership does not
recognize losses from investment properties when losses
exceed the Partnership's equity method basis in these
properties. One of the two investments had an equity
method basis of zero since March 31,1993. The Partnership's
recorded share of the Operating Partnerships' losses
in the 1994 fiscal period consists of losses of approximately
$229,000 from the Washington Courts Limited Partnership.
In the prior fiscal year, losses of approximately $234,000
from the operations of Washington Courts was recorded in
addition to a loss of approximately $175,000 from the
Laurel-Clayton Limited Partnership. The carrying value
of the Partnership's investment in Laurel-Clayton was reduced
to zero during fiscal 1993.
In the aggregate, combined rental revenue of the Operating
Partnerships increased during the 1993 calendar year by
approximately $73,000, with the largest increase occurring
at Washington Courts. The average occupancy levels
increased from 95% in calendar year 1992 to 98% in calendar
year 1993 in both properties. The increase in revenue at
Washington Courts is primarily attributable to an annual
adjustment of contract rents of approximately 2%. Such
results reflect the generally improving market conditions
referred to above. Contrary to the improvement in revenue,
the combined total expenses of the two operating properties
increased by approximately $173,000 during the calendar
year 1993, primarily due to an increase in repairs and
maintenance expenses at one of the properties. Several
nonrecurring maintenance projects were completed at the
properties during the calendar year 1993. In general,
repairs and maintenance expenses run high at these
properties due to a combination of their ages, applicable
regulatory requirements and management's operating philosophy.
Such expenses do, however, fluctuate from year-to-year.
Inflation
Inflation is not expected to have a material adverse impact
on the Partnership's operations during its period of
ownership of the Properties.
Recent Accounting Statements Net Yet Adopted
In March 1995, the FASB issued SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of". SFAS No. 121 is effective for
financial statements issued for fiscal years beginning
after December 15, 1995, with earlier application permitted.
SFAS No. 121 addresses the accounting for long-lived assets
and certain identifiable intangibles to be held and used
by an entity to be reviewed for impairment whenever events
or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable.
ITEM 8. FINANCIAL STATEMENTS
The financial statements together with the report of the
independent auditors thereon are set forth on the pages
indicated in ITEM 14.
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
On February 21, 1996, the prior auditors, Reznick, Fedder &
Silverman, were dismissed as auditors for the Partnership.
The decision to change accountants was approved by the
Partnership's Board of Directors. Reznick, Fedder &
Silverman's report on the Partnership's financial state-
ments for the years ended March 31, 1995 and 1994,
contained a modification as to uncertainty of the
Partnerships to continue as a going concern. Reznick,
Fedder & Silverman's report on the above mentioned financial
statements contained no adverse opinions or disclaimer of
opinions, and was not qualified as to uncertainty, audit
scope or accounting principles, other than those previously
discussed.
Effective February 21, 1996, the Partnership engaged Rubin,
Brown, Gornstein & Co., LLP to perform the audit of the
Partnership's financial statements as of and for the year
ending March 31, 1996.
There are no known disagreements on any matter of accounting
principles or practices or financial statement disclosure
with current or predecessor auditors.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership has no officers or directors. Management
of the Partnership is vested in Irwin Jay Deutch and Century
Pacific Capital II Corporation (CPII) (the General Partners).
The General Partners will involve themselves in the day-
to-day affairs of the Partnership as required to protect the
Limited Partners' investment and advance the Partnership's
investment objectives. Mr. Deutch, the Managing General
Partner, has the overall responsibility for the preparation
and transmittal of periodic reports to the Limited
Partners, preparation and filing of the Partnership's tax
returns with the IRS and the appropriate state tax
authorities, and the preparation and filing of reports to
HUD and other Government Agencies.
Following is biographical information on Mr. Deutch and the
Executive Officers of CPII:
Irwin Jay Deutch
Irwin Jay Deutch, age 55, is Chairman of the Board,President,
and Chief Executive Officer of Century Pacific Realty
Corporation (CPRC), a General Partner of the Operating
Partnerships that own the Properties in which CPTCHF-II
has invested, and its Affiliates. Mr. Deutch has been
involved with low-income housing investments since 1968.
He is the individual general partner in 62 private limited
partnerships and two public limited partnerships investing
in 209 properties, including 196 multifamily properties
with 33,700 apartment units, 10 commercial projects, and 3
hotel properties. Fifty-eight of the 62 private limited
partnerships have invested in affordable housing. In his
capacity as general partner and officer of CPRC, he oversees
the management of these partnerships and assumes overall
responsibility for the development, direction, and operation
of all affiliated CPRC companies. Mr. Deutch is recognized
as an expert in the field of affordable housing and
frequently addresses professional groups on topics of real
estate investment, syndication, tax law, and the Low-Income
Housing Tax Credit program.
Mr. Deutch received a B.B.A. with distinction from the
University of Michigan School of Business Administration
in 1962 and a Juris Doctor degree with honors from the
University of Michigan Law School in 1965. He is a member
of the Order of the Coif. Mr. Deutch served in the Honors
Program in the Office of the Chief Counsel of the Internal
Revenue Service from 1965 to 1967, where he was assigned
to the Interpretative Division in Washington, D.C.
He attended Georgetown Law Center and received his Master
of Laws degree in taxation in 1967. Mr. Deutch is a member
of the State Bars of Michigan and California, as well as
the American, Federal, Los Angeles, and Beverly Hills Bar
Associations.
Key Officers of CPII and Affiliates
Essie Safaie, age 47, is Chief Financial Officer and Chief
Operating Officer of CPRC. Prior to joining CPRC in 1988,
from 1985-88, he was Vice President and Chief Financial
Officer of Sunrise Investments, Inc., a real estate
syndication firm with $450 million of real estate under
management. During this period, Mr. Safaie was also
President of an affiliated property management firm, S&L
Property Management, Inc., with over 12,000 residential
units and 800,000 square feet of commercial office space
under direct management. From 1982 to 1985, Mr. Safaie was
assistant controller of Standard Management Company,
builders and managers of luxury hotels, commercial offices
and residential units. From 1980-1982, he served as
financial officer of Diamond "M" Drilling Company. Mr.
Safaie received a BA degree in Business Administration
from California State University with a major in accounting.
Charles L. Schwennesen, age 50, is Vice President of
Acquisition Finance for CPRC and is responsible for financial
analysis and "due diligence" reviews of all properties
acquired by CPRC. Prior to joining CPRC in 1987, he was
a consultant to companies which provided investment
opportunities through private placements. From 1984 to
1985, Mr. Schwennesen was vice President of Cranston
Securities Company and was responsible for the structuring
of more than $30 million of mortgage revenue bond financing
for affordable housing projects. From 1977 to 1984, Mr.
Schwennesen was a manager with the accounting firm of
Price Waterhouse where he specialized in providing auditing
and consulting services to publicly held California real
estate development companies involved in the affordable
housing industry. Mr. Schwennesen is a Certified Public
Accountant and holds a Masters degree in Business
Administration from the UCLA Graduate School of Management
and a B.A. degree in Mathematics from UCLA.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. However,
in connection with the operations of the partnership and
the Operating Partnerships, the General Partners and their
Affiliates will or may receive certain fees, compensation,
income and other payments which are described in the
Prospectus under "Compensation, Fees and Reimbursements"
on page 17, the terms of which are incorporated herein by
reference.
During the fiscal years ended March 31, 1996, 1995, and
1994, CPII, a General Partner of the Partnership, earned
$132,097 , $132,814, and $131,867, respectively, of
partnership management fees. During the fiscal years ended
March 31, 1996, 1995 and 1994, the Partnership accrued
$37,600, $37,600 and $37,600, respectively, for the
reimbursement of overhead allocation from Century Pacific
Investment Corporation (CPIC). During fiscal year 1996,
the General Partners received no payments from the Operating
Partnerships.
ITEM 12. PARTNERSHIP INTEREST OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
No partner in CPTCHF-II owns more than 5% of the total
number of partnership interests outstanding. Irwin J.
Deutch, the Managing General Partner, holds a one-half
percent General Partnership Interest.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Irwin J. Deutch is the Managing General Partner of CPTCHF-II,
and CPII is also a General Partner. Irwin J. Deutch is the
sole Director and President of CPII, and the stock of CPII
is solely owned by the Deutch Family Trust. Mr. Deutch
is also the President, sole Director and the Deutch Family
Trust is the sole stockholder of Century Pacific Realty
Corporation (CPRC), a General Partner of the Operating
Partnerships that own the Properties in which CPTCHF-II
has invested. CPII received a partnership management fee
for its services in managing and advising the Partnership
and its business. CPIC, an affiliate, provides all the
services and materials necessary for the operation of the
Partnership and is reimbursed for actual costs. These
transactions are more particularly set forth in the
financial statements found under ITEM 14.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements:
FDS
Notes to Financial Statements
(2) Financial Statement Schedules:
Schedule III - Real Estate and Accumulated
Depreciation of Operating
Partnerships in which CPTCHF-II has
Limited Partnership Interests
Notes to Schedule III - Real Estate and Accumulated
Depreciation of Operating Partnerships in
which CPTCHF-II has Limited Partnership
Interests
Schedule IV - Mortgage Loans on Real Estate of
Operating Partnerships in which CPTCHF-II
has Limited Partnership Interests
Notes to Schedule IV - Mortgage Loans on Real
Estate of Operating Partnerships in which
CPTCHF-II has Limited Partnership Interests
All other schedules are omitted because they are
not applicable, or the required information
is shown in the financial statements or
notes thereto.
(b) Reports on Form 8-K
Registrant did file with the Securities and Exchange
Commission a Current Report on Form 8-K during the
year ending March 31, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities and Exchange Act of 1934, the registrant has
duly caused this amendment to be signed on its behalf by
the undersigned, thereunto duly authorized.
CENTURY PACIFIC TAX CREDITHOUSING
FUND - II
By: Irwin Jay Deutch, as Managing
General Partner
Date:____________ _________________________________
and
Century Pacific Capital II
Corporation, as Corporate General
Partner and as attorney-in-fact
for all Investor Limited Partners
Date:____________ ___________________________________
-17-
INDEPENDENT AUDITORS' REPORT
Partners
Century Pacific Tax Credit Housing Fund II
St. Louis, Missouri
We have audited the accompanying balance sheet of Century
Pacific Tax Credit Housing Fund-II as of March 31, 1996 and
the related statements of operations, 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. The financial
statements of Century Pacific Tax Credit Housing Fund-II
as of March 31, 1995 and 1994, were audited by other auditors,
whose reports dated June 16, 1995 and June 17, 1994,
respectively, expressed an 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 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 the 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 faily, in all material respects, the financial
position of Century Pacific Tax Credit Fund-II as of March
31, 1996 and the results of its operation and its cash
flows for the year then ended, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared
assuming that the partnership will continue as a going
concern. As discussed in Notes 2, 3 and 4 to the financial
statements, the Partnership has suffered recurring losses
from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going
concern. Management's plans regarding these matters are
described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
May 30, 1996
CENTURY PACIFIC TAX CREDIT HOUSING FUND-II
STATEMENT OF PARTNERS' EQUITY
For the Years Ended March 31, 1996, 1995 and 1994
General Limited
Partners Partners Total
_________ ___________ ___________
Partners'Equity(Deficit)
-April 1,1993 $(32,761) $1,662,024 $1,629,263
Net Loss (4,511) (446,579) (451,090)
__________________________________
Partners'Equity(Deficit)
-March 31, 1994 (37,272) (1,215,445) $1,178,173
Net Loss (4,195) (415,336) (419,531)
__________________________________
Partners'Equity(Deficit)
-March 31, 1995 (41,467) 800,109 758,642
Net Loss (3,311) (327,774) (331,085)
__________________________________
Partners'Equity(Deficit)
-March 31, 1996 $(44,778) $472,335 $427,557
=============================================================
Percentage Interest
-March 31, 1996 1% 99% 100%
=============================================================
CENTURY PACIFIC TAX CREDIT HOUSING FUND-II
Statement of Cash Flows
For the Years Ended March 31,
_______________________________
1996 1995 1994
_________ _________ _________
Cash Flows From Operating
Activities
Net Loss $(331,085) $(419,531) $(451,090)
Adjustments to reconcile
net loss to net cash
provided by (used in)
operating activities:
Amortization of organ-
ization costs - 14,155 50,934
Equity in net losses
of Operating Part. 158,170 226,083 228,942
Change in Assets and
liabilities:
Incr(decr) in accounts
payable and acrued exp (5,718) 5,744 (16,232)
Incr in due to
affiliates 169,697 174,214 187,361
Incr in loan payable-
affiliate 9,918 - -
_____________________________________________________________
Net Cash Provided By (Used in)
Operating Activities 982 665 (85)
_____________________________________________________________
Net Increase(Decrease) in Cash 982 665 (85)
Cash, Beginning Of Year 1,196 531 616
_____________________________________________________________
Cash, End Of Year $2,178 $1,196 $531
=============================================================
CENTURY PACIFIC TAX CREDIT HOUSING FUND-II
NOTES TO FINANCIAL STATEMENTS
March 31, 1996, 1995 And 1994
1. Summary Of Significant Accounting Policies
Basis Of Accounting
The Partnership maintains its financial records on the
tax basis. Memorandum entries, while not recorded in
the records of the Partnership, have been made in
order to prepare the financial statements in
accordance with generally accepted accounting
principles.
On August 7, 1991, management of the Partnership changed from
a calendar year end to a fiscal year end of March 31 for
financial reporting purposes. Accordingly, the Partnership's
quarterly periods end June 30, September 30 and December 31.
The Operating Partnerships, for financial reporting purposes,
have a calendar year. The Partnership, as well as the
Operating Partnerships, have a calendar year for income tax
purposes.
Estimates And Assumptions
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 disclosure of contingent assets and liabilities
at the date of the financial statements and the
reported amounts of revenues and expenses during
the reported period. Actual results could differ
from those estimates.
Investments In Operating Partnerships
The Partnership uses the equity method to account
for its investment in the Operating Partnerships
in which it has invested (Note 4). Under the equity
method of accounting, the investment is carried
at cost and adjusted for the Partnership's
share of the Operating Partnerships' results
of operations and by cash distributions received.
Equity in the loss of each Operating Partnership
allocated to the Partnership is not recognized to
the extent that the investment balance would
become negative.
Syndication Costs
Public offering costs have been recorded as a
direct reduction to the capital accounts of the
Limited Partners.
Income Taxes
No provision has been made for income taxes in the
accompanying financial statements since such
taxes and/or the recapture of the Low-Income Housing
Tax Credit benefits received, if any, are the
liability of the individual partners. The
Partnership uses the accrual method of accounting for
tax purposes.
Net Loss Per Unit Of Limited Partnership Interest
Net loss per unit of limited partnership interest is
calculated based upon the weighted average number
of units of limited partnership interest (units)
outstanding, which is 5,754 for the years ending
March 31, 1996, 1995 and 1994.
2. Operations
Century Pacific Tax Credit Housing Fund-II, a California
limited partnership, (the Partnership or CPTCHF-II), was
formed on September 2, 1988 for the purpose of raising
capital by offering and selling limited partnership
interests and then acquiring limited partnership
interests in partnerships (the Operating Partnerships)
owning and operating existing residential apartment
rental properties (the Properties).
The general partners of the Partnership are Century Pacific
Capital II Corporation, a California corporation (CPII),
and Irwin Jay Deutch, an individual (collectively,
the general partners). The general partners and
affiliates of the general partners (the general partners
and affiliates) have interests in the Partnership and
receive compensation from the Partnership and the
Operating Partnerships (Note 3).
The Properties qualify for the Low-Income Housing Tax
Credit established by Section 42 of the Tax Reform Act
of 1986 (the Low-Income Housing Tax Credit). These
properties are leveraged low-income multifamily
residential complexes and receive one or more forms
of assistance from federal, state or local governments,
or agencies (the Government Agencies).
In September 1988, the Partnership began raising
capital from sales of limited partnership interests,
at $1,000 per unit, to limited partners. The Partner-
ship authorized the issuance of a maximum of 25,000
Partnership Units of which 5,754 were subscribed
and issued. The limited partnership interest offering
closed as of December 31, 1989.
As of March 31, 1996, the Partnership has acquired limited
partnership interests of 90% in Washington Courts Limited
Partnership and 60% in Laurel-Clayton Limited Partnership,
two existing Operating Partnerships which own apartment
rental properties.
The Partnership is currently experiencing a liquidity
problem as the Partnership's Operating Partnerships
have not achieved operating results required to provide
the Partnership with sufficient cash distributions to
fund the Partnership's administrative costs.
As a result of the foregoing, the Partnership has
been dependent upon its affiliates and the general
partners for continued financial support to meet
its expenses. Though there can be no assurance,
management believes that affiliates and or the
general partners, though not required to do so,
will continue to fund operations of the Partnership
and defer receipt of payment on management fees and
allocated overhead expenses. Unpaid management fees
and allocated overhead expenses will accrue for payment
in future operating years. Management believes that
these factors do not permanently impair the net carrying
value of the Partnership's investment in the Operating
Partnerships.
3. Transactions With The General Partners And Affiliates
Of The General Partners
The General Partners of the Partnership are CPII and
Irwin Jay Deutch. Century Pacific Placement
Corporation (CPPC), an affiliate of the general
partners, served as the broker-dealer-manager for
sales of the limited partnership interests in the
Partnership. Century Pacific Realty Corporation
(CPRC), an affiliate of CPII, is a general partner
in each of the Operating Partnerships.
The general partners have an aggregate one percent
interest in the Partnership. CPRC has a one-half
percent interest in each of the Operating Partnerships.
The general partners and affiliates receive
compensation and reimbursement of expenses from the
Partnership, as set forth in the limited partnership
agreement, for their services in managing the Partner-
ship and its business. Pursuant to the partnership
agreement, the Partnership is required to pay CPII
an annual management fee for its services in connection
with the management of the affairs of the Partnership.
The annual management fee is equal to .5% of invested
assets (as defined by the partnership agreement). The
general partners and affiliates also receive compensation
and reimbursement of expenses from the Operating
Partnerships. This compensation and reimbursement
includes services provided to the Partnership during
its offering stage, acquisition stage and operational
stage.
The general partners and affiliates earned the following
fees for services provided to the Partnership and
were entitled to reimbursement for costs incurred
by the general partners and affiliates on behalf of
the Partnership and the Operating Partnerships for
the years ended March 31, 1996, 1995 and 1994 as follows:
1996 1995 1994
_______ _______ ______
Fees and reimbursement from the
Partnership:
Reimbursement for overhead
allocated from Century
Pacific Investment Corp. $37,600 $37,600 $37,600
Partnership management
fee (CPII) 132,097 132,814 131,867
____________________________
169,697 170,414 169,467
===============================================================
At March 31, 1996 and 1995, amounts due to affiliates
consist of fees and certain general and administrative
costs payable by the Partnership to the general partners
and affiliates totalling $919,214 and $749,517, res-
pectively.
At March 31, 1996 and 1995, CPII owed the Partnership
for an unsecured, noninterest bearing advance of $770.
At March 31, 1996 and 1995, CPRC was owed $39,918 and
$30,000, respectively, for a noninterest bearing,
demand, cash advance to the Partnership.
The general partners may advance funds to the Part-
nership to fund operating deficits, but are not obligated
to do so. Such advances shall be evidenced by a
promissory note of a term no more than 12 months
in length and at a rate of interest no lower than the
prime rate. All such loans shall be repaid prior to
any distributions of net cash. At March 31, 1996 and
1995, the Partnership had no outstanding advances
due to the general partners.
4. Investments In Operating Partnerships
At March 31, 1996 and 1995, the Partnership owned
limited partnership interests in two Operating
Partnerships, each of which has invested in a Property.
Investments in Operating Partnerships consist of the
following:
1996 1995
________ ________
Cash contributions to Operating
Partnerships to fund purchase
of properties and acquisition
and organization costs 4,536,020 4,536,020
Equity in net losses of Operating
Partnerships (3,140,953) (2,982,783)
__________ __________
$1,395,067 $1,553,237
===========================================================
The names and locations of the Properties in which
the Operating Partnerships hold beneficial interests
are as follows:
Name of Name and
Operating Partnerships Location of Property
________________________ ___________________
Washington Courts Limited Washington Courts
Partnership Chicago, Illinois
Laurel-Clayton Limited Plumley Village
Partnership Boston, Massachusetts
A summary of the combined balance sheet as of December 31,
1995 and 1994 and statements of operations of the afore-
mentioned Operating Partnerships for the years then ended
follows:
Combined Balance Sheet
Assets
1995 1994
_________ ________
Cash $304,030 $594,933
Reserve for replacements 652,506 319,492
Land and buildings 19,352,591 20,570,605
Other Assets 1,214,799 1,221,155
_______________________
$21,523,926 $22,706,185
=======================
Liabilities and Stockholders' Equity (Deficit)
Notes Payable $23,026,415 $22,875,785
Other Liabilities 646,699 777,762
________________________
23,673,114 $23,653,547
Partners' Equity (Deficit) (2,149,188) (947,362)
_______________________
$21,523,926 $22,706,185
==============================================================
Combined Statement of Operations
1995 1994
_______________________
Revenues
Rental Income $5,146,633 $4,704,243
Other Income 755,470 837,604
________________________
Total Revenues $5,902,103 $5,541,847
Expenses
Utilities 792,073 826,249
Repairs & Maintenance 1,601,491 1,553,271
Management Fees 308,007 277,111
Other Operating Expenses 1,356,755 1,228,086
Interest 1,803,167 1,826,897
Depreciation and Amortization 1,074,633 997,195
_______________________
Total Expenses 6,967,580 6,708,809
_______________________
Net Loss $(1,034,023) $(1,166,962)
=======================
Allocation of Loss
General Partners and other limited $(342,014) $(392,216)
CPTCHF-II (692,009) (774,746)
_______________________
$(1,034,023) $(1,166,962)
==============================================================
Restrictive Covenants And Agreements Involving The Operating
Partnerships
The Federal Housing Administration (FHA) and the Housing
and Urban Development (HUD) exercise control over the
projects through provisions of Regulatory Agreements
(the Agreements). The Agreements restrict the Projects,
without prior written approval from HUD, from encumbering,
acquiring, altering or disposing of land, buildings
and equipment; using the Property for any purpose other
than the use originally intended; engaging in any other
business or activity; and paying distributions to
partners, compensation to officers or directors, or
for any purpose other than reasonable operating expenses.
The Agreements also stipulate that FHA and HUD shall
control the rental rates, rate of return on investment
and method of operation.
In addition, the Agreements require Properties to make
cash deposits on a monthly basis into a reserve fund
for replacements. The respective mortgagees are the
designated custodians of the reserve funds and withdrawals
can only be made with HUD approval.
5. Fair Value Of Financial Instruments
The following methods and assumptions were used to
estimate the fair value of each class of financial
instruments:
Cash
The carrying amount approximates fair value.
Accounts Payable And Accrued Expenses
The carrying amount approximates fair value.
Loan Payable - Affiliate
The carrying amount approximates the fair value due to
the short-term nature of the note.
Estimated fair values of the Company's financial
instruments, all of which are held for nontrading
purposes, are as follows:
1996
Carrying Fair
Amount Value
______ _______
Cash $2,178 $2,178
Accounts Payable and
accrued expenses (11,326) (11,326)
Loan Payable - affiliate (39,918) (39,918)
The estimated fair value amounts presented herein have
been determined using available market information
and appropriate valuation methodologies and are
not necessarily indicative of the amounts the Company
could realize in a current market exchange.
Schedule III
CENTURY PACIFIC TAX CREDIT HOUSING FUND-II
REAL ESTATE AND ACCUMULATED DEPRECIATION OF OPERATING
PARTNERSHIPS IN WHICH CPTCHF-II HAS LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1995
Washington Courts Apts. Plumley Village Apts.
Chicago, Illinois Boston, Massachus
103 Res. Units 430 Res. Units
___________________ _________________
Encumbrances $5,076,014 $17,950,401
Initial Cost to Operating
Partnership:
Land 75,300 1,100,000
Buildings & Improvements 1,720,666 17,383,785
Cost Capitalized Subsequent to
Acquisition:
Land --- ---
Buildings & Improvements 5,318,902 820,725
Gross Amount at Which Carried at
Close of Year:
Land 75,300 1,100,000
Buildings & Improvements 7,039,568 18,204,510
Total 7,114,868 19,304,510
Accumulated Depreciation:
Buildings and Improvem 1,570,414 5,496,373
Date of Construction 1991 1973
Date Acquired 1/89 9/89
Life Upon Which Depreciation
in Latest Income Statement
is Computed 27.5 years 27.5 years
CENTURY PACIFIC TAX CREDIT HOUSING FUND-II
NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
DEPRECIATION OF OPERATING PARTNERSHIPS IN WHICH
CPTCHF-II HAS LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1995
NOTE 1 - DESCRIPTION OF PROPERTIES
The Properties held by the Operating Partnerships in
which CPTCHF-II has invested are housing projects,
primarily for families and elderly or handicapped
individuals of low and moderate income.
NOTE 2 - SCHEDULE OF ENCUMBRANCES
Operating Partnership Name and Property Name
____________________________________________
Washington Courts L/P Laurel-Clayton L/P
Washington Courts Plumley Village Total
__________________ ______________ __________
Mortgage Notes $5,076,014 $8,342,889 $13,418,903
Residual Notes - 4,047,488 4,047,488
Purchase Note - 5,154,129 5,154,129
Other Notes - 405,895 405,895
________________ _____________ __________
Total $5,076,014 $17,950,401 $23,026,415
================ ============= ==========
NOTE 3 - RECONCILIATION OF REAL ESTATE AND ACCUMULATED
DEPRECIATION
Accumulated
Cost Depreciation
___________ ____________
Balance at December 31, 1992 $26,052,427 $4,045,552
Additions during year:
Depreciation - 967,366
Improvements 16,161 -
__________ _________
Balance at December 31, 1993 26,068,588 5,012,918
Additions during year:
Depreciation - 979,236
Improvements 189,446 -
__________ __________
Balance at December 31, 1994 26,258,034 5,992,154
Additions during year:
Depreciation - 1,074,633
Improvements 161,344 -
___________ __________
$26,419,378 $7,066,787
=========== ==========
Schedule IV
CENTURY PACIFIC TAX CREDIT HOUSING FUND-II
MORTGAGE LOANS ON REAL ESTATE OF OPERATING
PARTNERSHIPS IN WHICH CPTCHF-II HAS
LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1995
Washington Courts Laurel-Clayton
Limited Partnership Limited Partnership
(Washington Courts) (Plumley Village) TOTAL
________________ ______________ ______
Interest Rate 9.25% 8.5%
Final Maturity Date 2031 2012
Monthly Payments to Maturity
(Net of HUD Subsidy) $40,841 $23,015 63,856
Original Face Amount of 5,165,400 10,635,000 15,800,400
Mortgage
Carrying Amount of
Mortgage 5,076,014 8,342,889 13,418,903
CENTURY PACIFIC TAX CREDIT HOUSING FUND-II
NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL
ESTATE OF OPERATING PARTNERSHIPS IN WHICH
CPTCHF-II HAS LIMITED PARTNERSHIP INTERESTS
DECEMBER 31, 1995
NOTE 1 - DESCRIPTION
Each Operating Partnership has invested in a Property.
Laurel-Clayton Limited Partnership assumed a mortgage
loan obligation from the seller of the Property. The
mortgage loan obligation is insured by the United
States Department of Housing and Urban Development
and is secured by the land and buildings of the
Property.
Washington Courts Limited Partnership has obtained
permanent financing in the principal amount of
$5,165,400 which is insured by the Federal Housing
Administration. The loan bears interest at 9.25%
per annum. The note will be amortized over a period
of 40 years. Prepayment is prohibited during the
construction period and for ten years from the date
of completion of construction.
NOTE 2 - RECONCILIATION OF MORTGAGES
For the Year Ended
December 31, 1995
_______________________
Mortgage Residual
Loans Notes
__________ __________
Balance at beginning of year $13,656,358 $3,823,488
Additions during year:
Accrued Interest --- 224,000
Deductions during year:
Payments 237,455 ---
__________ _________
Balance at end of year $13,418,903 $4,047,488
========== ==========
