June 27, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Boston Financial Tax Credit Fund VII, A Limited Partnership
Annual Report on Form 10-K for the Year Ended March 31, 1997
File No. 0-24584
Gentlemen:
Pursuant to the requirements of Section 15(d) of the Securities Exchange Act
of 1934, there is filed herewith one copy of the subject report.
Very truly yours,
/s/ Veronica Curioso
Veronica Curioso
Assistant Controller
TC710K-K.95
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
March 31, 1997 0-24584
BOSTON FINANCIAL TAX CREDIT FUND VII, A
LIMITED PARTNERSHIP (Exact name of
registrant as specified in its charter)
Massachusetts 04-3166203
- -------------------------------- ---------------------
(State of organization) (I.R.S. Employer
Identification No.)
101 Arch Street, 16th Floor
Boston, Massachusetts 02110-1106
- -------------------------------- ---------------------------
(Address of Principal (Zip Code)
executive office)
Registrant's telephone number, including area code 617/439-3911
Securities registered pursuant to Section 12(b) of the Act:
Name on 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)
100,000
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 non-affiliates
of the registrant.
$50,930,000 as of March 31, 1997
<PAGE>
- -----------------------------------------------------------------------------
- ------------------------------------------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE
DOCUMENT IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS:
(2) ANY PROXY OR INFORMATION STATEMENT: AND (3) ANY PROSPECTUS FILED
PURSUANT TO RULE 424(b) OR (c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on
Form 10-K into
Which the Document
Documents incorporated by reference is Incorporated
Report on Form 8-K dated March 18, 1993 Part I, Item 1
Report on Form 8-K dated June 8, 1993 Part I, Item 1
Report on Form 8-K dated September 10, 1993 Part I, Item 1
Report on Form 8-K dated January 14, 1994 Part I, Item 1
Post-Effective Amendment No. 1-3 to the Form S-11
Registration Statement, File # 33-52468 Part I, Item 1
Post-Effective Amendment No. 4 to the Form S-11
Registration Statement, File # 33-52468 Part III, Item 12
Prospectus - Sections Entitled:
"Investment Objectives and Policies -
Principal Investment Objectives" Part I, Item 1
"Investment Risks" Part I, Item 1
"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 TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1997
TABLE OF CONTENTS
Page No.
PART I
Item 1 Business K-3
Item 2 Properties K-5
Item 3 Legal Proceedings K-11
Item 4 Submission of Matters to a Vote of
Security Holders K-11
PART II
Item 5 Market for the Registrant's Units and
Related Security Holder Matters K-12
Item 6 Selected Financial Data K-13
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of
Operations K-14
Item 8 Financial Statements and Supplementary
Data K-16
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial
Disclosure K-16
PART III
Item 10 Directors and Executive Officers
of the Registrant K-17
Item 11 Management Remuneration K-18
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-18
Item 13 Certain Relationships and Related
Transactions K-19
PART IV
Item 14 Exhibits, Financial Statement Schedule and
Reports on Form 8-K K-21
SIGNATURES K-22
<PAGE>
PART I
Item 1. Business
Boston Financial Tax Credit Fund VII, A Limited Partnership (the "Fund") is a
Massachusetts limited partnership formed on September 14, 1992 under the laws of
the Commonwealth of Massachusetts. The Fund's partnership agreement
("Partnership Agreement") authorizes the sale of up to 100,000 Units of limited
partnership interest at $1,000 per Unit. On November 30, 1993, the Fund held its
final investor closing. In total, the Fund received $50,930,000 of capital
contributions for 50,930 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 January 21, 1994.
The Fund is engaged solely in the business of real estate investment. A
presentation of information about industry segments is not applicable and would
not be material to an understanding of the Fund's business taken as a whole.
The Fund has invested and will invest as a limited partner in other limited
partnerships ("Local Limited Partnerships") which own and operate residential
apartment complexes ("Properties") some of which benefit from some form of
federal, state or local assistance programs and all of which qualify for
low-income housing tax credits ("Tax Credits") added to the Internal Revenue
Code (the "Code") by the Tax Reform Act of 1986. The investment
objectives of the Fund include the following: (i) to provide investors with
annual tax credits which they may use to reduce their federal income taxes; (ii)
to provide limited cash distributions from the operations of apartment
complexes; and (iii) to preserve and protect the Fund's capital with the
possibility of realizing a profit through the sale or refinancing of apartment
complexes. There cannot be any assurance that the Fund will attain any or all of
these investment objectives. A more detailed discussion of these investment
objectives, along with the risks in achieving them is contained in the sections
of the Prospectus entitled "Investment Objectives and Policies - Principal
Investment Objectives" and "Investment Risks", which are herein incorporated by
this reference.
Table A on the following page lists the properties owned by the Local Limited
Partnerships in which the Fund has invested. Item 7 of this Report contains
other significant information with respect to such Local Limited Partnerships.
The terms of the acquisition of each Local Limited Partnership interest have
been described in a supplement to the Prospectus and collected in the
post-effective amendment to the Registration Statement listed in Part IV of this
Report on Form 10-K; such descriptions are incorporated herein by this
reference.
<PAGE>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
<TABLE>
<CAPTION>
<S> <C> <C>
Properties owned by Date
Local Limited Interest
Partnerships Location Acquired
- ---------------------------- ------------------ ---------
Oak Ridge Macon, GA 12/31/92
Santa Fe Oaks II Gainesville, FL 12/31/92
Andrews Pointe Burnsville, MN 04/13/92
Palo Verde II Henderson, NV 05/19/93
Woods Lane Rogers, AR 07/30/93
Crafton Place Fayetteville, AR 07/30/93
Guardian Place Richmond, VA 10/07/93
Twin Oaks Meadows Lansing, MI 10/29/93
Sunrise Terrace Madera, CA 11/24/93
Wynmor Brooklyn Park, MN 12/22/93
Citrus Glen Orlando, FL 12/30/93
St. Andrews Pointe Columbia, SC 01/05/94
Des Moines St. Village Des Moines, IA 01/31/94
Fountain Lakes Benton, AR 02/02/94
Fairhaven Manor Burlington, WA 03/08/94
Grand Boulevard Chicago, IL 08/03/94
Los Claveles II Trujillio Alto, PR 08/31/94
Harford Commons Baltimore, MD 02/28/95
Springwood* Tallahassee, FL 12/15/94
</TABLE>
The Fund's interest in profits and losses of each Local Limited Partnership
arising from normal operations is 99%, with the exception of Springwood which is
19.80%. Profits and losses arising from sale or refinancing transactions are
allocated in accordance with the respective Local Limited Partnership
Agreements.
Although the Fund's investments in Local Limited Partnerships are not subject to
seasonal fluctuations, the Fund'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.
<PAGE>
Each Local Limited Partnership has, as its general partners ("Local General
Partners"), one or more individuals or entities not affiliated with the Fund or
its General Partners. In accordance with the partnership agreements under which
such entities are organized ("Local Limited Partnership Agreements"), the Fund
depends on the Local General Partners for the management of each Local Limited
Partnership. As of March 31, 1997, the following Local Limited Partnerships have
a common Local General Partner or affiliated group of Local General Partners
accounting for the specified percentage of the original investment in Local
Limited Partnerships: (i) Oak Ridge, Santa Fe Oaks Phase II, Springwood and St.
Andrew's Pointe representing 24.26% have Flournoy Development Company and John
Flournoy as Local General Partners; (ii) Woods Lane, Crafton Place and Fountain
Lakes representing 17.27% have Lindsey Management Company as Local General
Partner. The Local General Partners of the remaining Local Limited Partnerships
are identified in the Acquisition Reports, which are herein incorporated by
reference.
The Properties owned by Local Limited Partnerships in which the Fund has
invested are, and will continue to be, subject to competition from existing and
future apartment complexes in the same areas. The success of the Fund will
depend on many outside factors, most of which are beyond the control of the Fund
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 Fund, including (i)
possible reduction in rental income due to an inability to maintain high
occupancy levels or adequate rental levels, (ii) possible adverse changes in
general economic conditions and adverse local conditions, such as competitive
over-building, or a decrease in employment or adverse changes in real estate
laws, including building codes, and (iii) the 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 suppress the ability of the
Local Limited Partnerships to generate operating cash flow. Since some of the
Properties benefit from some form of government assistance, the Fund 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 Fund.
The Fund is managed by Arch Street VII, Inc., the Managing General Partner of
the Fund. The other General Partner of the Fund is Arch Street VII Limited
Partnership. To economize on direct and indirect payroll costs, the Fund, 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 Fund is set forth
in Item 10 of this Report.
Item 2. Properties
The Fund owns limited partnership interests in nineteen Local Limited
Partnerships which own and operate Properties, some of which benefit from some
form of federal, state, or local assistance programs and all of which qualify
for the Tax Credits added to the Code by the Tax Reform Act of 1986. The Fund's
ownership interest in each Local Limited Partnership is 99%, with the exception
of Springwood, which is 19.80%.
Each of the Local Limited Partnerships has received an allocation of Tax Credits
from the 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
<PAGE>
income limitations and other requirements, as promulgated by the Internal
Revenue Service, in order to maintain eligibility for the Tax Credit at all
times during the Compliance Period. Once a Local Limited Partnership has become
eligible for the Tax Credits, it may lose such eligibility and suffer an event
of recapture if its Property fails to remain in compliance with the
requirements. To date, none of the Local Limited Partnerships have suffered an
event of recapture of Tax Credits.
In addition, some of the Local Limited Partnerships have obtained one or a
combination of different types of loans such as: i) below market rate interest
loans; ii) loans provided by a redevelopment agency of the town or city in which
the property is located at favorable terms; or iii) loans that have repayment
terms that are based on a percentage of cash flow.
The schedules on the following pages provide certain key information on the
Local Limited Partnership interests acquired by the Fund.
<PAGE>
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- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Capital Contributions Mtge. loans Occupancy
Local Limited Partnership Number Total Committed Paid Through payable at at
Property Name of at March 31, March 31, December 31, Type of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- --------------------------- -------------- ------------------- ---------------- ------------- ------------ ---------
Oak Ridge Apartments,
a Limited Partnership
Oak Ridge
Macon, GA 152 $2,870,245 $2,870,245 $4,150,456 None 80%
Santa Fe Oaks Phase II,
a Limited Partnership
Santa Fe Oaks II
Gainesville, FL 129 2,698,586 2,698,586 3,754,237 None 89%
Andrew's Pointe Limited
Partnership
Andrew's Pointe
Burnsville, MN 57 1,333,800 1,333,800 2,370,604 None 100%
Palo Verde II, a Nevada
Limited Partnership
Palo Verde II
Henderson, NV 60 1,324,801 1,324,801 1,106,082 None 100%
Woods Lane, a Limited
Partnership
Woods Lane
Rogers, AR 156 2,574,180 2,574,180 3,384,986 None 88%
Crafton Place, a Limited
Partnership
Crafton Place
Fayetteville, AR 84 1,365,120 1,365,120 1,692,493 None 75%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Contributions
<S> <C> <C> <C> <C> <C> <C>
Mtge. loans Occupancy
Local Limited Partnership Number Total Committed Paid Through payable at at
Property Name of at March 31, March 31, December 31, Type of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- --------------------------- -------------- ------------------- --------------- ------------- ------------ ---------
Guardian Place
Limited Partnership
Guardian Place
Richmond, VA 120 2,174,390 2,174,390 2,988,767 None 98%
Twin Oaks Meadows Limited
Dividend Housing Association
Limited Partnership
Twin Oaks Meadows
Lansing, MI 63 1,436,401 1,436,401 1,927,258 None 98%
Madera Sunrise Terrace
Limited Partnership
Sunrise Terrace
Madera, CA 52 1,523,196 1,523,196 1,223,697 None 96%
Eden Park Limited
Partnership
Wynmor
Brooklyn Park, MN 324 5,527,758 5,527,758 5,916,767 None 95%
Affordable Citrus Glen
Limited Partnership
Citrus Glen
Orlando, FL 176 4,581,360 4,581,360 5,470,969 None 96%
St. Andrews Pointe Apartments,
A Limited Partnership
St. Andrews Pointe
Columbia, SC 150 3,414,528 3,414,528 4,703,499 None 97%
</TABLE>
<PAGE>
Capital Contributions
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Mtge. loans Occupancy
Local Limited Partnership Number Total Committed Paid Through payable at at
Property Name of at March 31, March 31, December 31, Type of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- ---------------------------- -------------- ------------------- --------------- ------------- ------------ -------
Des Moines Street Associates
Limited Partnership
Des Moines St. Village
Des Moines, IA 42 1,083,996 1,083,996 1,737,049 Section 8 98%
Fountain Lakes, A Limited
Partnership
Fountain Lakes
Benton, AR 180 2,854,593 2,854,593 4,255,148 None 100%
Fairhaven Manor Limited
Partnership
Fairhaven Manor
Burlington, WA 40 1,232,020 1,232,020 956,585 None 100%
Grand Boulevard Renaissance I
Limited Partnership
Grand Boulevard Renaissance
Chicago, IL 30 1,085,000 868,000 1,913,294 Section 8 97%
Los Claveles, S.E. Limited
Partnership
Los Claveles II
Trujilio, PR 180 1,272,000 698,373 6,553,050 Section 8 95%
BHP/Harford Commons
Limited Partnership
Harford Commons
Baltimore, MD 30 1,187,000 1,009,000 1,745,080 None 100%
</TABLE>
<PAGE>
Capital Contributions
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Mtge. loans Occupancy
Local Limited Partnership Number Total Committed Paid Through payable at at
Property Name of at March 31, March 31, December 31, Type of March 31,
Property Location Apt. Units 1997 1997 1996 Subsidy* 1997
- -------------------------- -------------- ------------------- ---------------- ------------- ------------ ---------
Springwood Apartments,
A Limited Partnership
Springwood (1)
Tallahassee, FL 113 619,614 619,614 3,966,075 None 97%
----- ------------ ------------ ------------
2,138 $40,158,588 $39,189,961 $59,816,096
===== =========== =========== ===========
</TABLE>
(1) Boston Financial Tax Credit Fund VII has a 19.8% interest in
Springwood Apartments, A Limited Partnership. The mortgage
payable represents 100% of the outstanding
balance.
Section 8 This subsidy, which is authorized under Section 8 of Title II
of the Housing and Community Development Act of 1974, allows
qualified low-income tenants to pay 30% of their monthly income
as rent with the balance paid by the federal government.
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Two Local Limited Partnerships invested in by the Fund each represent more than
10% of the total capital contributions to be made to Local Limited Partnerships
by the Fund. The first is Eden Park Limited Partnership which owns Wynmor, an
existing property located in Brooklyn Park, Minnesota. The property contains 324
apartments in eleven three-story buildings, and represents 12.62% of the total
original investment in the Local Limited Partnerships.
Eden Park Limited Partnership has obtained a $6,000,000 first mortgage loan. The
mortgage is payable in monthly installments of principal and interest in the
amount of $48,922, based on a 25 year amortization period and accrues interest
at a rate of 8.65%. The unpaid principal and interest is due in one balloon
payment in October of 2020.
The other Local Limited Partnership which represents more than 10% of the total
capital contributions to be made to Local Limited Partnerships is Affordable
Citrus Glen Limited Partnership which owns Citrus Glen Apartments. Citrus Glen
Apartments, which is located in Orlando, Florida, contains 176 apartments and
represents 11.58% of the total original investment in the Local Limited
Partnerships.
Affordable Citrus Glen Limited Partnership (the "Partnership") has obtained
permanent financing in the amount of $3,848,000 at an interest rate of 9.55%.
The note requires monthly principal and interest payments of $32,497, amortized
over a 30 year period, with the unpaid principal balance due in full on February
1, 2010. Additional financing has been obtained in the amount of $1,670,000,
with stated interest at 9%, from the Florida Housing Finance Agency. Due to
other claims against cash flows, the maximum effective rate will be 4.5%, the
rate at which interest is currently being accrued. Repayment is based on the
cash flow of the Partnership, beginning on January 10, 1995, with annual
payments due each January 10 through 2009, at which time all outstanding
principal and interest is due. The loan is non-recourse and is collateralized by
a second mortgage on the Partnership's rental property and an assignment of
leases, rents, and contract rights.
The duration of the leases for occupancy in the Properties described above is
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 Fund, is
contained in Items 1, 7 and 8 of this Report.
Item 3. Legal Proceedings
The Fund is not a party to any pending legal or administrative proceeding, and
to the best of its knowledge, no 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 Fund. 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 Fund.
The Partnership Agreement does not impose on the Fund or its General Partners
any obligation to obtain periodic appraisals of assets or to provide Limited
Partners with any estimates of the current value of Units.
As of March 31, 1997, there were 2,786 record holders of Units of the Fund.
Cash distributions, when made, are paid annually. No cash distributions were
paid during the years ended March 31, 1997, 1996 and 1995.
<PAGE>
Item 6. Selected Financial Data
The following table sets forth selected financial information regarding the
Fund's financial position and operating results. This information should be read
in conjunction with Management's Discussion and Analysis of Financial Condition
and Results of Operations and the Financial Statements and Notes thereto, which
are included in Items 7 and 8 of this Report.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
March 31, March 31, March 31, March 31, March 31,
1997 1996 1995 1994 1993
Revenue $ 400,349 $ 257,160 $ 333,523 $ 365,312 $ 488
Equity in losses of Local Limited
Partnerships (2,967,826) (2,570,732) (2,190,648) (536,848) -
Net Loss (3,131,087) (2,870,229) (2,465,750) (735,660) (23,957)
Per Limited Partnership Unit (A) (60.86) (55.79) (47.93) (21.34) (3.69)
Cash, cash equivalents and
marketable securities 3,614,673 4,190,187 7,456,668 19,938,766 4,661,492
Investments in Local Limited
Partnerships, at original cost 39,572,643 39,572,643 39,527,857 24,572,298 1,000,669
Total assets (B) 35,694,649 38,795,017 41,924,559 44,145,937 5,716,428
Cash Distribution - - - - -
Other data:
Passive loss (C) (3,697,126) (3,835,484) (3,604,962) (822,547) -
Per Limited Partnership Unit (C) (71.87) (74.56) (70.07) (39.28) -
Portfolio income (C) 359,903 477,042 1,026,953 415,206 -
Per Limited Partnership Unit (C) 7.00 9.27 19.96 19.83 -
Net short term capital losses (C) - (610) (510,142) - -
Per Limited Partnership Unit (C) - (.01) (9.92) - -
Low-Income Housing Tax Credit (C) 7,531,209 7,016,512 4,226,746 750,876 -
Per Limited Partnership Unit (C) 146.39 136.39 82.16 35.86 -
Local Limited Partnership interests
owned at end of period 19 19 19 15 2
</TABLE>
(A) Per Limited Partnership Unit data is based upon 50,930 Units for the
years ended March 31, 1997, 1996 and 1995 and a weighted average number
of units outstanding of 34,127 and 6,424 for the year ended March 31,
1994 and the period December 24, 1992 to March 31, 1993, respectively.
(B) Total assets include the net investments in Local Limited Partnerships.
(C) Income tax information is as of December 31, the year end of the Fund for
income tax purposes. Per Limited Partnership Unit data is based on the
initial investor closing on March 30, 1993. The per Limited Partnership
Unit data for Limited Partners admitted subsequent to March 30, 1993
varies depending on their admission date.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
At March 31, 1997, the Partnership had cash and cash equivalents of $373,729
compared with $334,845 at March 31, 1996. The increase is primarily attributable
to proceeds from sales and maturities of marketable securities in excess of
purchases of marketable securities and cash distributions received from Local
Limited Partnerships. These increases are partially offset by investments made
in Local Limited Partnership and cash used for operating activities.
As of March 31, 1997, approximately $2,538,000 of marketable securities has been
designated as Reserves by the Managing General Partner. The Reserves were
established to be used for working capital of the Fund and contingencies related
to the ownership of Local Limited Partnership interests. Management believes
that the interest income earned on Reserves, along with cash distributions
received from Local Limited Partnerships, to the extent available, will be
sufficient to fund the Fund's ongoing operations. Reserves may be used to fund
operating deficits, if the Managing General Partner deems funding appropriate.
At March 31, 1997, the Fund has committed to make future capital contributions
and pay future purchase price installments on its investments in Local Limited
Partnerships. These future payments are contingent upon the achievement of
certain criteria as set forth in the Local Limited Partnership Agreements and
total approximately $752,000. In addition, the Fund has set aside $217,000in
future capital contributions to one Local Limited Partnership.
Since the Fund invests as a limited partner, the Fund has no contractual duty to
provide additional funds to Local Limited Partnerships beyond its specified
investment. Thus, as of March 31, 1997, the Fund had no contractual or other
obligation to any Local Limited Partnership, which had not been paid or provided
for, except as described above.
In the event a Local Limited Partnership encounters operating difficulties
requiring additional funds, the Fund might deem it in its best interests to
provide such funds, voluntarily, in order to protect its investment. No such
event has occurred to date.
Cash Distributions
No cash distributions were made in the year ended March 31, 1997.
Results of Operations
1997 versus 1996
The Fund's results of operations for the year ended March 31, 1997 resulted in a
net loss of $3,131,087 as compared to a net loss of $2,870,229 for the same
period in 1996. The increase in net loss is primarily attributable to an
increase in equity in losses of Local Limited Partnerships partially offset by
an increase in other revenue. The increase in equity in losses of Local Limited
Partnerships is due to an increase in the number of Local Limited Partnership
interests which had a full year of operations. This resulted in increased
depreciation, interest and operating expenses over total revenue earned. The
increase in other revenue is primarily due to an increase in interest received
on funds held in escrow for Local Limited Partnerships for the year ended March
31, 1997.
<PAGE>
1996 versus 1995
The Fund's results of operations for the year ended March 31, 1996 resulted in a
net loss of $2,870,229 as compared to a net loss of $2,465,750 for the same
period in 1995. The increase is primarily attributable to greater equity in
losses of Local Limited Partnerships and a decrease in investment income.
Partially offsetting these amounts was a decrease in general and administrative
expenses. Equity in losses of Local Limited Partnerships increased for the year
ended December 31, 1995 as compared to December 31, 1994, due to an increase in
the number of Local Limited Partnership interests which are now in the
operational phase. The decrease in investment income is due to lower average
cash balances maintained by the Fund during the year ended March 31, 1996 as
compared to March 31, 1995. The decrease in general and administrative expenses
is due to a decrease in certain Partnership administrative expenses.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board has issued Statement of Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which is effective for fiscal years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability. Impairment losses are recognized when events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. The Fund adopted the new standard for its year ending March 31,
1997, however, it did not have a significant effect on the financial position or
results of operations.
Low-Income Housing Tax Credits
The 1997, 1996 and 1995 Tax Credits per unit were $146.39, $136.39 and $82.16,
respectively, for investor limited partners. Tax Credits are not available for a
property until the property is placed in service and its apartment units are
occupied by qualified tenants. In the first year the Tax Credits are claimed,
the allowable credit amount is determined using an averaging convention to
reflect the number of months that apartment units comprising the qualified basis
were occupied by qualified tenants during the year. To the extent that the full
amount of the annual credit is not allocated in the first year, an additional
credit equal to the difference is available in the 11th taxable year.
As of December 31, 1996, the tax year end of the Local Limited Partnerships,
all of the properties have been placed in service and all generated Tax Credits
in 1996.
The Tax Credits per Limited Partnership Unit have stabilized at approximately
$147 per unit, as properties have reached completion and have become fully
leased. Since the Tax Credits have stabilized, the annual amount allocated to
investors is expected to remain the same for about seven years. In years eight
through ten, the credits are expected to decrease as Properties reach the end of
the ten year credit period.
Property Discussions
Los Claveles II, located in Trujillio Alto, Puerto Rico, continues to
experience operating difficulties due to ongoing capital repair needs and
management issues. As previously reported, most of these difficulties stem from
widespread water infiltration that caused subsidy payments to be suspended
pending completion of required property repairs. The suspension of Section 8
payments caused large fluctuations in monthly revenue and a subsequent mortgage
default. The Partnership temporarily cured the default by advancing $208,000
from the developer's escrow. Recently, an affiliate of the Managing General
Partner of the Partnership successfully negotiated with the Local General
Partners, lender and local housing authority to replace the management agent for
Los Claveles II as well as its neighboring property, Los Claveles I. By
consolidating management, the Managing General Partner feels that it can achieve
greater control over both sites and attain certain operating efficiencies that
will benefit bothproperties. The new management agent assumed responsibility for
the property in December 1996 and has successfully obtained Section 8 subsidy
increases. In addition, the management agent will oversee the capital
improvements program which is under development and should be implemented this
year. The Local General Partners have agreed to step down voluntarily and will
be replaced by an affiliate of the Managing General Partner, once the workout
plan is approved by the lender. The lender continues to indicate its willingness
to work with the General Partners and management agent to improve operations and
cure defaults. Although there appears to be sufficient resources to turn the
project around, no agreement has been reached with the lender to date.
Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the
partnership for the years ended March 31, 1997, 1996 and 1995.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
On November 10, 1995, the firm of Arthur Andersen LLP was dismissed as the
principal accountant to audit the registrant's financial statements. The report
on the financial statements of the registrant by Arthur Andersen LLP for the
year ending March 31, 1995 did not contain any adverse opinion or disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope, or
accounting principles. The decision to change accountants was approved by the
Board of Directors of the General Partner of the registrant.
During the year ending March 31, 1995 and for the subsequent interim period,
April 1, 1995 through November 10, 1995, there were no disagreements with Arthur
Andersen LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.
The firm of Coopers & Lybrand L.L.P. has been engaged as principal accountant to
audit the registrant's financial statements.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The Managing General Partner of the Fund is Arch Street VII, Inc., a
Massachusetts corporation (the "Managing General Partner"), an affiliate of The
Boston Financial Group Limited Partnership ("Boston Financial"), a Massachusetts
limited partnership.
The Managing General Partner was incorporated in September 1992. William E.
Haynsworth is the Chief Operating Officer of the Managing General Partner and
has the primary responsibility for evaluating, selecting and negotiating
investments for the Fund. The Investment Committee of the Managing General
Partner approved all investments. The names and positions of the principal
officers and the directors of the Managing General Partner are set forth below.
Name Position
Georgia Murray President, Managing Director, Treasurer
and Chief Financial Officer
Fred N. Pratt, Jr. Managing Director
William E. Haynsworth Managing Director and Chief
Operating Officer
Paul F. Coughlan Vice President
Peter G. Fallon, Jr. Vice President
Randolph G. Hawthorne Vice President
A. Harold Howell Vice President
The other General Partner of the Fund is Arch Street VII Limited Partnership,
a Massachusetts limited partnership ("Arch Street VII L.P.") that was organized
in September 1992. The managing general partner of Arch Street VII L.P.
is Arch Street VII, Inc.. The limited partner of Arch Street VII L.P. is
Boston Financial.
The Managing General Partner provides day-to-day management of the Fund.
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.
Georgia Murray, age 46, is a graduate of Newton College of the Sacred Heart
(B.A., 1972). She joined Boston Financial Management Company in 1973 and is
currently a Senior Vice President of Boston Financial. Ms. Murray is a member of
the Senior Leadership Team and Board of Directors, and leads the Property
Management division. Previously, she led the company's Institutional Tax Credit
Team and managed Boston Financial's Investment Real Estate and Asset Management
divisions. Ms. Murray currently serves as a director of Atlantic Bank and Trust
Company, President of the Institute for Multi-Family Housing, Director of the
Investment Program Association and member of the Direct Investment Committee of
the Securities Industry Association. Previously, she served as the Industry
Advisor to the Management Policy Review Committee of the Massachusetts Housing
Finance Agency and as a commissioner of the Boston Public Facilities Department.
Fred N. Pratt, Jr., age 52, graduated from Tufts University and the Amos Tuck
School of Business Administration at Dartmouth College. Mr. Pratt was one of
the original employees of Boston Financial when it was founded in late 1969.He
currently serves as Boston Financial's Chief Executive Officer and Chairman
of the Board of the General Partner of Boston Financial.
William E. Haynsworth, age 57, graduated from Dartmouth College and Harvard Law
School. Mr. Haynsworth was Acting Executive Director of the Massachusetts
Housing Finance Agency, where he was also General Counsel, prior to becoming a
Vice President of Boston Financial in 1977 and a Senior Vice President in 1986.
He has also served as Director of Non-Residential Development of the Boston
Redevelopment Authority and as an associate of the law firm of Goodwin, Procter
& Hoar in Boston. Mr. Haynsworth is a member of the firm's Senior Leadership
Team and participates in the structuring of real estate investments and the
development of new business opportunities.
Paul F. Coughlan, age 53, is a graduate of Brown University (A.B., 1965) and
served in the United States Navy before entering the securities business in
1969. He was employed as an Account Executive by Bache & Company until 1972, and
then by Reynolds Securities Inc. He joined Boston Financial in 1975 and is
currently a Senior Vice President on the Institutional Tax Credit Team.
Peter G. Fallon, Jr., age 58, graduated from the College of The Holy Cross
(B.S., 1960) and Babson College (M.B.A., 1965). He joined Boston Financial in
1970, shortly after its formation, and is currently a Senior Vice President and
a member of the Investment Real Estate Division with responsibility for the
marketing of the firm's Institutional Tax Credit product.
Randolph G. Hawthorne, age 47, is a graduate of the Massachusetts Institute of
Technology (B.S., 1971) and Harvard Graduate School of Business (M.B.A., 1973).
He joined Boston Financial in 1973 and has served as Treasurer and managed the
firm's Investment Real Estate division. He is a Senior Vice President serving on
the Investment Acquisitions Team with 22 years of experience in property
acquisitions. Mr. Hawthorne has primary responsibility for structuring real
estate investments and developing new business opportunities. He is a member of
the Investment Committee. He is Chairman of the National Multi -Housing Council,
a past president of the National Housing and Rehabilitation Association, a
member of the Residential Development Council of the Urban Land Institute as
well as a member of the Advisory Board of the Berkeley Real Estate Center at the
University of California. A speaker at industry conferences, he is also on the
Editorial Advisory Board of the Tax Credit Advisor.
A. Harold Howell, age 56, graduated from Harvard College and the Amos Tuck
School of Business Administration at Dartmouth College. He has been employed by
Boston Financial since 1970. For most of this time, he has been active in the
overall administration of Boston Financial and its affiliates but has also been
involved in other areas of its business. Mr. Howell has served as head of Boston
Financial's Property Management Division and also as its Chief Financial Officer
and Chief Executive Officer. He currently is a Senior Vice President and is in
charge of a program being developed for properties managed by Boston Financial
whereby heads-of-households who want to further their education can enroll in a
program on-site which teaches economic self sufficiency, computer and internet
skills, problem solving skills and related real-world skills. Mr. Howell
recently spent a two year sabbatical from Boston Financial as a Visiting
Professor at the Instituto de Estudios Superiores de la Empresa, a highly
regarded International M.B.A. Program in Barcelona, Spain. While there, he
taught courses in business strategy and real estate finance.
Item 11. Management Remuneration
Neither the directors or officers of Arch Street VII, Inc., nor the partners of
Arch Street VII L.P., nor any other individual with significant involvement in
the business of the Fund receives any current or proposed remuneration from the
Fund.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person is known to the Fund to be the beneficial owner of more than 5% of the
outstanding Units.
The equity securities registered by the Fund under Section 12(g) of the Act
consist of 100,000 Units, 50,930 of which had been sold to the public. The
remaining Units were deregistered in Post-Effective Amendment No. 4 dated
January 20, 1995 which is herein incorporated by reference.
Holders of Units are permitted to vote on matters affecting the Fund only in
certain unusual circumstances and do not generally have the right to vote on the
operation or management of the Fund.
Arch Street VII, L.P. owns five (unregistered) Units not included in the Units
sold to the public.
Except as described in the preceding paragraph, neither Arch Street VII, Inc.,
Arch Street VII 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 Fund does not know of any existing arrangement that might at a later date
result in a change in control of the Fund.
Item 13. Certain Relationships and Related Transaction
The Fund is 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 Fund and the offering of Units. The Fund
is also required to pay certain fees to and reimburse certain expenses of the
Managing General Partner to its affiliates (including Boston Financial) in
connection with the administration of the Fund and its acquisition and
disposition of investments in Local Limited Partnerships. In addition, the
General Partners are entitled to certain Fund 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 during the years
ended March 31, 1997, 1996, and 1995 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 Fund is permitted to enter into transactions involving affiliates of the
Managing General Partner, subject to certain limitations established in the
Partnership Agreement.
Information required under this Item is contained in Note 5 to the Financial
Statements presented as a separate section of this Report. The affiliates of the
Managing General Partner which have received fee payments and expense
reimbursements from the Fund are as follows:
Organizational fees and expenses and selling expenses
In accordance with the Partnership Agreement, the Fund is required to pay
certain fees to and reimburse expenses of the Managing General Partner and
others in connection with the organization of the Fund and the offering of its
Limited Partnership Units. Commissions, fees and accountable expenses related to
the sale of the Units totaling $6,304,898 have been charged directly to Limited
Partners' equity. In connection therewith, $4,329,050 of selling expenses and
$1,975,848 of offering expenses incurred on behalf of the Fund have been paid to
an affiliate of the Managing General Partner. The Fund is required to pay a
non-accountable expense allowance for marketing expense equal to a maximum of 1%
of Gross Proceeds. This allowance has not yet been charged to the Fund. In
addition, The Fund has paid $50,000 in organization costs to an affiliate of the
Managing General Partner. This cost has been included in the balance sheet.
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.
Payments made and expenses reimbursed during the years ended March 31, 1997,
1996, and 1995 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997 1996 1995
------------- ------------ -------------
Organizational fees and expenses $ - $ 3,583 $7,927
</TABLE>
<PAGE>
Acquisition fees and expenses
In accordance with the Partnership Agreement, the Fund is 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 6% of the gross offering proceeds. Acquisition
expenses, which include legal fees and expenses, travel and communications
expenses, costs of appraisals, and accounting fees and expenses, totaled 1.5% of
the gross offering proceeds. Acquisition fees totaling $3,055,800 for the
closing of the Fund's Local Limited Partnership Investments have been paid to an
affiliate of the Managing General Partner. Of this amount, approximately
$2,567,000 is included as capital contributions to Local Limited Partnerships.
Acquisition expenses totaling $763,950 were incurred and have been reimbursed to
an affiliate of the Managing General Partner. Payments made (refunds received)
and expenses reimbursed during the years ended March 31, 1997, 1996 and 1995 are
as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997 1996 1995
------------- ------------ -------------
Acquisition fees and expenses $ (3,017) $ 57,598 $ 554,269
</TABLE>
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 Fund. The affiliate currently receives the
base amount of .558% (as adjusted by the CPI factor) of Gross Proceeds annually
as the Asset Management Fee. Fees earned during the years ended March 31, 1997,
1996 and 1995 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997 1996 1995
------------- ------------ -------------
Asset Management Fees $277,575 $270,264 $263,289
</TABLE>
Salaries and benefits expense reimbursements
An affiliate of the Managing General Partner is reimbursed for the cost of the
Fund's salaries and benefits expenses. The reimbursements are based upon the
size and complexity of the Fund's operations. Reimbursements paid or accrued
during the years ended March 31, 1997, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997 1996 1995
------------- ------------ -------------
Salaries and benefits
expense reimbursements $115,310 $123,712 $123,669
</TABLE>
Property Management Fees
Upon construction completion, in August of 1994, Lansing Management Company
("LMC"), an affiliate of the Managing General Partner, became the management
agent for Twin Oaks Meadows. The management fee charged to the property is equal
to 5% of the property gross revenues. Fees charged for the three years ended
March 31, 1997, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997 1996 1995
-------------- -------------- ---------
Property Management Fees $ 19,215 $ 17,388 $ 7,245
</TABLE>
<PAGE>
Cash distributions paid to the General Partners
In accordance with the Partnership Agreement, the General Partners of the Fund,
Arch Street VII, Inc. and Arch Street VII Limited Partnership, receive 1% of
cash distributions made to partners. To date, the Fund has not paid any cash
distributions to partners.
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 the
years ended March 31, 1997, 1996 and 1995 is presented in Note 5 to the
Financial Statements.
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' report 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)
(a)(3)(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter ended
March 31, 1997.
(a)(3)(c) Exhibits
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
(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 TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
By: Arch Street VII, Inc.
its Managing General Partner
By: /s/ William E. Haynsworth Date:
William E. Haynsworth,
Managing Director 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 Fund and in the capacities and on the dates indicated:
By: /s/ William E. Haynsworth Date:
William E. Haynsworth,
Managing Director and
Chief Operating Officer
By: /s/ Fred N.Pratt Jr. Date:
Fred N Pratt, Jr.,
A Managing Director
Item 8. Financial Statements and Supplementary Data
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 1997
INDEX
Page No.
Report of Independent Accountants
For the years ended March 31, 1997 and 1996 F-2
For the year ended March 31, 1995 F-3
Financial Statements
Balance Sheets - March 31, 1997 and 1996 F-4
Statements of Operations - Years ended
March 31, 1997, 1996, and 1995 F-5
Statements of Changes in Partners' Equity (Deficiency) -
Years ended March 31, 1997, 1996, and 1995 F-6
Statements of Cash Flows - Years ended
March 31, 1997, 1996, and 1995 F-7
Notes to Financial Statements F-9
Financial Statement Schedule
Schedule III - Real Estate and Accumulated
Depreciation F-17
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 Tax Credit Fund VII, A Limited Partnership:
We have audited the accompanying balance sheets of Boston Financial Tax Credit
Fund VII, A Limited Partnership ("the Fund") as of March 31, 1997 and 1996 and
the related statements of operations, changes in partners' equity (deficiency)
and cash flows and the financial statement schedule listed in Item 14(a) of this
Report on Form 10-K, for the years ended March 31, 1997 and 1996. These
financial statements and the financial statement schedule are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial statement schedule based on our audits.
As of March 31, 1997 and 1996, 86% and 85%, respectively, of total assets, and
for the years ended March 31, 1997 and 1996, 100% of the equity in losses of
Local Limited Partnerships, reflected in the financial statements of the Fund,
relate to Local Limited Partnerships for which we did not audit the financial
statements. The financial statements of these Local Limited Partnerships were
audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to those investments in Local Limited
Partnerships, is based solely on the reports of other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Boston Financial Tax Credit Fund VII, A Limited
Partnership, as of March 31, 1997 and 1996, and the results of its operations
and its cash flows for the years ended March 31, 1997 and 1996, in conformity
with generally accepted accounting principles. In addition, in our opinion, the
financial statement schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, presents fairly, in all
material respects, the information required to be included therein.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 19, 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Boston Financial Tax Credit Fund VII, A Limited Partnership:
We have audited the accompanying statements of operations, changes in partners'
equity (deficiency) and cash flows of Boston Financial Tax Credit Fund VII, A
Limited Partnership ("the Fund") for the year ended March 31, 1995. These
financial statements are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of the Local Limited
Partnerships for the year ended March 31, 1995, the investments in which are
recorded using the equity method of accounting (see Note 3). The equity in
losses of these partnerships represent 100% of the equity in loss of the Local
Limited Partnerships for the year ended March 31, 1995. Those financial
statements were audited by other auditors whose reports have been furnished to
us, and our opinion, insofar as it relates to those investments in Local Limited
Partnerships, is based solely on the reports of other auditors.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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, and the reports of other auditors, provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the results of its operations and its cash flows of Boston Financial Tax Credit
Fund VII, A Limited Partnership, as of March 31, 1995, in conformity with
generally accepted accounting principles.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
June 16, 1995
<PAGE>
- ----------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- -----------------------------------------------------------------------------
BALANCE SHEETS
March 31, 1997 and 1996
<TABLE>
<CAPTION>
<S> <C> <C>
1997 1996
------------- ----------
Assets
Cash and cash equivalents $ 373,729 $ 334,845
Marketable securities, at fair value (Notes 1 and 3) 3,240,944 3,855,342
Restricted cash (Note 2) 239,155 227,320
Investments in Local Limited Partnerships (Note 4) 31,792,098 34,328,400
Organization costs, net of accumulated
amortization of $40,833 in 1997 and
$30,833 in 1996 (Note 2) 9,167 19,167
Other assets 39,556 29,943
------------- --------------
Total Assets $ 35,694,649 $ 38,795,017
============= ==============
Liabilities and Partners' Equity
Accounts payable to affiliates (Notes 2 and 5) $ 304,382 $ 212,975
Accrued expenses 34,940 66,417
------------- ------------
Total Liabilities 339,322 279,392
------------- ------------
Commitments (Note 7)
General, Initial and Investor Limited Partners' Equity 35,405,419 38,536,506
Net unrealized losses on marketable securities (50,092) (20,881)
-------------- ------------
Total Partners' Equity 35,355,327 38,515,625
------------- ------------
Total Liabilities and Partners' Equity $ 35,694,649 $ 38,795,017
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
- ----------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- -----------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997 1996 1995
----------- ----------- ------
Revenue:
Investment (Note 3) $ 223,158 $ 219,674 $ 287,872
Other 177,191 37,486 45,651
------------ ------------ ------------
[GRAPHIC OMITTED] Total Revenue 400,349 257,160 333,523
------------ ------------ ------------
Expenses:
General and administrative expenses (includes
reimbursements to an affiliate in the amounts of
$115,310, $123,712 and $123,669
in 1997, 1996 and 1995, respectively (Note 5) 240,204 245,641 298,586
Asset management fees, related party (Note 5) 277,575 270,264 263,289
Amortization 45,831 40,752 32,275
Interest (Note 6) - - 14,475
------------- ------------ ------------
Total Expenses 563,610 556,657 608,625
------------- ------------ ------------
Loss before equity in losses of
Local Limited Partnerships (163,261) (299,497) (275,102)
Equity in losses of
Local Limited Partnerships (Note 4) (2,967,826) (2,570,732) (2,190,648)
------------- ------------ ------------
Net Loss $ (3,131,087) $(2,870,229)$ (2,465,750)
============= =========== ================
Net Loss allocated
To General Partners $ (31,311) $ (28,702) $ (24,657)
To Limited Partners (3,099,776) (2,841,527) (2,441,093)
-------------- ------------- ------------
$ (3,131,087) $ (2,870,229) $ (2,465,750)
============== ============ ============
Net Loss per Limited Partnership Unit
(50,930 Units) $ (60.86) $ (55.79) $ (47.93)
============= ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
- ----------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- -----------------------------------------------------------------------------
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partners Partners (Losses) Total
Balance at March 31, 1994 $ (5,597) $ 5,000 $ 43,884,592 $(163,678) $ 43,720,317
Less:
Other issuance expenses - - (7,927) - (7,927)
Net change in net unrealized losses
on marketable securities
available for sale - - - 25,587 25,587
Net Loss (24,657) - (2,441,093) - (2,465,750)
--------- -------- ------------ --------- ------------
Balance at March 31, 1995 (30,254) 5,000 41,435,572 (138,091) 41,272,227
Less:
Other issuance expenses - - (3,583) - (3,583)
Net change in net unrealized losses
on marketable securities
available for sale (Note 3) - - - 117,210 117,210
Net Loss (28,702) - (2,841,527) - (2,870,229)
-------- -------- ----------- --------- ------------
Balance at March 31, 1996 (58,956) 5,000 38,590,462 (20,881) 38,515,625
Net change in net unrealized losses
on marketable securities
available for sale (Note 3) - - - (29,211) (29,211)
Net Loss (31,311) - (3,099,776) - (3,131,087)
--------- -------- ------------ --------- ------------
Balance at March 31, 1997 $ (90,267) $ 5,000 $ 35,490,686 $ (50,092) $(35,355,327)
========= ======== ============ ========= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
- ----------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- -----------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
For the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997 1996 1995
-------------- -------------- --------
Cash flows from operating activities:
Net Loss $ (3,131,087) $ (2,870,229) $ (2,465,750)
Adjustments to reconcile net loss
to net cash provided by (used for)
operating activities:
Equity in losses of Local Limited Partnerships 2,967,826 2,570,732 2,190,648
Amortization 45,831 40,752 32,275
Loss on sale of marketable securities 6,034 47,442 251,095
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Other assets (9,613) 97,910 6,987
Accounts payable to affiliates 91,407 (46,611) 106,539
Accounts payable and accrued expenses (31,477) (18,250) 21,453
--------------- ------------- ------------
Net cash provided by (used for) operating activities (61,079) (178,254) 143,247
-------------- ------------- ------------
Cash flows from investing activities:
Purchases of marketable securities (1,194,741) (9,964,941) (27,229,730)
Proceeds from sales and maturities
of marketable securities 1,773,894 11,867,431 39,617,868
Investments in Local Limited Partnerships (663,227) (2,907,333) (11,690,591)
Restricted cash (11,835) (227,320) -
Cash distributions received from Local
Limited Partnerships 192,855 85,078 15,070
Reimbursement of acquisition expenses 3,017 - -
Payment of acquisition fees and expenses - (104,056) (684,868)
-------------- ------------- ------------
Net cash provided by (used for) investing activities 99,963 (1,251,141) 27,749
-------------- ------------- ------------
Cash flows from financing activities:
Payment of issuance expenses - (4,364) (39,448)
Advances from line of credit - - 3,893,948
Repayment of line of credit - - (3,893,948)
-------------- ------------- ------------
Net cash used for financing activities - (4,364) (39,448)
-------------- ------------- ------------
Net increase (decrease) in cash and cash equivalents 38,884 (1,433,759) 131,548
Cash and cash equivalents, beginning of period 334,845 1,768,604 1,637,056
-------------- ------------- ------------
Cash and cash equivalents, end of period $ 373,729 $ 334,845 $ 1,768,604
============== ============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
- ----------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- -----------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS (continued)
For the Years Ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997 1996 1995
-------------- -------------- --------
Supplemental disclosure of cash flow activity:
Cash paid for interest $ - $ - $ 14,475
============== ============== ============
</TABLE>
Non-cash investing activity:
In 1995, the Partnership issued a note payable in the amount of $260,840 in
connection with the acquisition of a partial interest in a Local Limited
Partnership. This note was repaid during the year ended March 31, 1996.
The accompanying notes are an integral part of these financial statements.
<PAGE>
- ------------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. Organization
Boston Financial Tax Credit Fund VII, A Limited Partnership (the "Fund") is a
Massachusetts limited partnership organized to invest in other limited
partnerships ("Local Limited Partnerships") which own and operate apartment
complexes which are expected to be eligible for low income housing tax credits
which may be applied against the federal income tax liability of an investor.
Arch Street VII, Inc., a Massachusetts corporation ("Arch Street, Inc."), is the
Managing General Partner of the Fund. Arch Street VII Limited Partnership ("Arch
Street L.P."), a Massachusetts limited partnership whose general partners
consist of Arch Street, Inc. and an affiliate of Arch Street, Inc., is also a
General Partner. Both the Managing General Partner and Arch Street L.P. are
affiliates of The Boston Financial Group Limited Partnership, a Massachusetts
limited partnership ("Boston Financial"). An affiliate of the General Partners
("SLP Affiliate") will be a special limited partner in each Local Limited
Partnership in which the Fund invests, with the right to become a general
partner under certain circumstances. The fiscal year of the Fund ends on March
31.
The Partnership Agreement authorized the sale of up to 100,000 Units of limited
partnership interests ("Units") at $1,000 per Unit. Boston Financial Securities,
Inc., an affiliate of the General Partners, received selling commissions and
underwriting advisory fees which did not exceed 7.0% and 1.5%, respectively, of
Gross Proceeds for Units sold by the entity as a soliciting dealer. On November
30, 1993, the Fund held its final investor closing. In total, the Fund received
$50,930,000 of capital contributions from investors admitted as Limited Partners
for 50,930 Units.
The Partnership Agreement provides that all cash available for distribution will
be allocated 99% to the Limited Partners and 1% to the General Partners. Sale or
refinancing proceeds generally will be distributed first to the Limited Partners
in an amount equal to their adjusted capital contributions, second to the
General Partners in an amount equal to their capital contributions, third to the
General Partners (after payment of the 6% return as set forth in Section 4.2.3
of the Partnership Agreement, and of any accrued but unpaid Subordinated
Disposition Fee, a fee equal to 1% of the sales price of a property owned by a
Local Limited Partnership) in such amount as is necessary to cause the General
Partners to have received 5% of all distributions to the Partners, and lastly,
95% to the Limited Partners and 5% to the General Partners.
Profits and losses for tax purposes arising from general operations and tax
credits generally will be allocated 99% to the Limited Partners and 1% to the
General Partners. However, as set forth in the Partnership Agreement, profits
and losses for tax purposes arising from a sale or refinancing generally will be
allocated among the Partners in such manner as is necessary to cause their
respective capital accounts to reflect the amount that would be distributable to
them in accordance with the priorities set forth in the preceding paragraph, if
all of the Fund's assets were sold for their federal adjusted basis and the Fund
were then liquidated.
All distributions of cash available for distribution or distributions of sale or
refinancing proceeds, and all allocations of profits and losses for tax purposes
from normal operations and from a sale or refinancing or of tax credits, which
are distributed or allocated to the General Partners, will be allocated 1% to
Arch Street, Inc. and 99% to Arch Street L.P.
Under the terms of the Partnership Agreement, the Fund initially designated 5%
of the Gross Proceeds from the sale of Units as a Reserve for working capital of
the Fund and contingencies related to ownership of Local Limited Partnership
interests. The Managing General Partner may increase or decrease such amounts
from time to time, as it deems appropriate. At March 31, 1997, the Managing
General Partner has designated $2,538,000 of marketable securities as such
Reserve.
<PAGE>
- ------------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- ------------------------------------------------------------------------------
2. Significant Accounting Policies
Basis of Presentation
The Fund accounts for its investments in Local Limited Partnerships using the
equity method of accounting because the Fund does not have a majority control of
the major operating and financial policies of the Local Limited Partnerships in
which it invests. Under the equity method, the investment is carried at cost,
adjusted for the Fund's share of income or loss of the Local Limited
Partnerships, additional investments and for cash distributions from the Local
Limited Partnerships. Equity in income or loss of the Local Limited Partnerships
is included currently in the Fund's operations. The Fund has no obligation to
fund liabilities of the Local Limited Partnerships beyond its investment,
therefore, a Limited Partnership Investment will not be carried below zero. To
the extent that equity in losses are incurred when a Local Limited Partnership's
respective investment balance has been reduced to zero, losses will be suspended
to be used against future income.
Excess investment costs over the underlying net assets acquired have arisen from
acquisition fees paid and expenses reimbursed to an affiliate of the Fund. These
fees and expenses are included in the Fund's Investments in Local Limited
Partnerships and will be amortized on a straight-line basis over 35 years once
construction of the properties is completed.
The Fund recognizes a decline in the carrying value of its investment in
Local Limited Partnerships when there is evidence of a non-temporary decline in
the recoverable amount of the investment.There is a possibility that the
estimates relating to reserves for non-temporary declines in carrying value of
investments in Local Limited Partnerships may be subject to material near term
adjustments.
The Partnership, as a limited partner in the Local Limited Partnerships, is
subject to risks inherent in the ownership of property which are beyond its
control, such as fluctuations in occupancy rates and operating expenses,
variations in rental schedules, proper maintenance and continued eligibility of
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 General Partners have decided 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
about the Local Limited Partnerships that is included in the accompanying
financial statements is as of December 31, 1996, 1995, and 1994.
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.
Cash and Cash Equivalents
Cash and cash equivalents consist of short-term money market instruments with
original maturities of 90 days or less at acquisition and approximate fair
value.
Restricted Cash
The Fund has set aside in an escrow account future capital contributions related
to its investment in one Local Limited Partnership. Interest earned on this
deposit is payable to the local general partner. At March 31, 1997 and 1996,
$13,897 and $2,008, respectively, of interest is included in accounts payable to
an affiliate.
<PAGE>
- ------------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Significant Accounting Policies (continued)
Marketable Securities
The Fund's investments in securities are classified as "Available for Sale"
securities and reported at fair value as reported by the brokerage firm at which
the securities are held. Realized gains or 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.
Deferred Fees
Costs incurred in connection with the organization of the Fund, amounting to
$50,000, have been deferred and are being amortized on a straight-line basis
over 60 months.
Income Taxes
No provision for income taxes has been made as the liability for such taxes is
an obligation of the partners of the Fund.
Reclassifications
Certain amounts in prior years financial statements have been reclassified
herein to conform to current year presentation.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board has issued Statement of Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which is effective for fiscal years
beginning after December 15, 1995. This standard requires that long-lived assets
be reviewed for recoverability. Impairment losses are recognized when events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. The Fund has adopted the new standard for its year ended March
31, 1997, however, it has not had a significant effect on the financial position
or results of operations.
<PAGE>
- ------------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
3. Marketable Securities
A summary of the marketable securities is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Gross Gross
Unrealized Unrealized
Cost Gains Losses Fair Value
Debt securities issued by
the US Treasury and other
US government corporations
and agencies $ 2,125,647 $ 164 $ (19,591) $ 2,106,220
Mortgage backed securities 1,165,389 - (30,665) 1,134,724
------------ -------- ---------- -----------
Marketable securities at
March 31, 1997 $ 3,291,036 $ 164 $ (50,256) $ 3,240,944
============ ======== ========== ===========
Debt securities issued by
the US Treasury and other
US government corporations
and agencies $ 2,563,670 $ - $ (10,111) $ 2,553,559
Mortgage backed securities 1,312,553 - (10,770) 1,301,783
------------ -------- ---------- -----------
Marketable securities at
March 31, 1996 $ 3,876,223 $ - $ (20,881) $ 3,855,342
============ ======== ========== ===========
</TABLE>
The contractual maturities at March 31, 1997 are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Fair
Cost Value
Due in one year or less $ 812,828 $ 808,544
Due in one to five years 1,312,819 1,297,676
Mortgage backed securities 1,165,389 1,134,724
------------ ---------------
$ 3,291,036 $ 3,240,944
============ ===============
</TABLE>
Actual maturities may differ from contractual maturities because some borrowers
have the right to call or prepay obligations. Proceeds from sales and maturities
of securities were approximately $1,774,000, $11,867,000 and $39,618,000 for the
years ended March 31, 1997, 1996 and 1995, respectively. Included in investment
income are gross gains of $1,110, $46,425 and $54,186 and gross losses of
$7,144, $93,867 and $305,281 which were realized on these sales during the years
ended March 31, 1997, 1996 and 1995, respectively.
4. Investments in Local Limited Partnerships
The Fund has acquired interests in nineteen Local Limited Partnerships which own
and operate multi-family housing complexes. The Fund, as Investor Limited
Partner, pursuant to the various Local Limited Partnership Agreements, has
generally acquired a 99%, with the exception of Springwood which is 19.8%,
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.
<PAGE>
- ------------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Investments in Local Limited Partnerships (continued)
The following is a summary of Investments in Local Limited Partnerships at March
31:
<TABLE>
<CAPTION>
<S> <C> <C>
1997 1996
-------------- ----------
Capital Contributions paid to Local Limited
Partnerships and purchase price paid to
withdrawing partners of Local Limited
Partnerships $ 39,189,961 $ 38,526,734
Cumulative equity in losses of Local Limited Partnerships (8,266,054) (5,298,228)
Cash distributions received from Local Limited Partnerships (293,003) (100,148)
------------- -------------
Investments in Local Limited Partnerships before adjustments 30,630,904 33,128,358
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 1,252,338 1,255,355
Accumulated amortization of acquisition fees and expenses (91,144) (55,313)
------------- -------------
Investments in Local Limited Partnerships $ 31,792,098 $ 34,328,400
============= =============
</TABLE>
Summarized financial information as of December 31, 1996, 1995 and 1994, (due to
the Fund's policy of reporting the financial information of its Local Limited
Partnership interests on a 90 day lag basis) of the nineteen Local Limited
Partnerships in which the Fund was invested as of that date is as follows:
Summarized Balance Sheets - as of December 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1996 1995 1994
------------- ------------- ---------
Assets:
Investment property, net $ 98,519,189 $103,534,360$ 97,417,406
Current assets 3,275,453 3,318,534 3,377,141
Other assets 4,260,927 3,433,261 4,275,247
------------- ------------- ----------
Total Assets $ 106,055,569 $110,286,155$ 105,069,794
============= ============ =============
Liabilities and Partners' Equity:
Current liabilities (includes current portion of
long term debt) $ 3,554,946 $ 3,181,041 $ 5,831,462
Long-term debt 59,302,789 59,422,079 51,450,477
Other debt 3,475,208 5,152,338 3,577,454
------------- ------------- -------------
Total Liabilities 66,332,943 67,755,458 60,859,393
Fund's Equity 30,144,694 32,391,978 30,432,391
Other Partners' Equity 9,577,932 10,138,719 13,778,010
------------- ------------- -------------
Total Liabilities and Partners' Equity $ 106,055,569 $ 110,286,155 $105,069,794
============= ============= ============
</TABLE>
<PAGE>
- ------------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Investments in Local Limited Partnerships (continued)
Summarized Statements of Operations-
for the years ended December 31,:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1996 1995 1994
------------- ------------- --------
Rental and other revenue $ 12,310,800 $ 11,088,736 $ 6,379,944
------------- ------------- ------------
Expenses:
Operating 6,189,975 5,393,417 3,523,408
Interest 5,112,085 4,730,658 2,573,295
Depreciation and amortization 4,404,662 3,979,209 2,496,016
------------- ------------- ------------
Total Expenses 15,706,722 14,103,284 8,592,719
------------- ------------- ------------
Net loss $ (3,395,922) $ (3,014,548) $ (2,212,775)
============= ============= ============
Fund's share of net loss $ (2,967,826) $ (2,570,732) $ (2,190,648)
============= ============= ============
Other Partners' share of net loss $ (428,096) $ (443,816) $ (22,127)
============= ============= ============
</TABLE>
Several of the Local Limited Partnerships in which the Fund has invested had
either no operations or less than a full period of operations for the years
ended December 31, 1995 and 1994. Accordingly, the combined results of
operations are not indicative of the expected results in the future.
The Partnership's equity as reflected by the Local Limited Partnerships of
$30,144,694 differs from the Partnership's Investments in Local Limited
Partnerships before adjustment of $30,630,904 principally because: a) capital
contributions made by the Partnership and held in escrow by the Local Limited
Partnerships are not currently reflected in the equity of the Local Limited
Partnerships and b) capital contributions made by the Partnership during the
quarter ended March 31, 1997 are not reflected in the equity of the Local
Limited Partnerships at December 31, 1996.
5. Transactions with Affiliates
In accordance with the Partnership Agreement, the Fund is required to pay
certain fees to and reimburse expenses of the Managing General Partner and
others in connection with the organization of the Fund and the offering of its
Limited Partnership Units. As of March 31, 1997, commissions, fees and
accountable expenses related to the sale of the Units totaling $6,304,898 have
been charged directly to Limited Partners' equity. In connection therewith,
$4,329,050 of selling expenses and $1,975,848 of offering expenses incurred on
behalf of the Fund have been paid to an affiliate of the Managing General
Partner. The Fund is required to pay a non-accountable expense allowance for
marketing expense equal to a maximum of 1% of Gross Proceeds; this allowance has
not yet been charged to the Fund. In addition, the Fund has paid $50,000 in
organization costs to an affiliate of the Managing General Partner. This cost
has been included in the balance sheet. 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.
In accordance with the Partnership Agreement, the Fund is 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 Fund's investments in Local Limited Partnerships. Acquisition
fees totaled 6.0% of Gross Proceeds. Acquisition expenses totaled 1.5% of Gross
Proceeds. Acquisition fees totaling $3,055,800 have been paid to an affiliate of
the Managing General Partner for the closing of the Fund's Local Limited
Partnership Investments.
<PAGE>
- ------------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
5. Transactions with Affiliates (continued)
Approximately $2,567,000 of these fees are classified as capital contributions
to Local Limited Partnerships in Note 4 to the Financial Statements. Acquisition
expenses totaling $763,950 have been reimbursed to an affiliate of the Managing
General Partner.
An affiliate of the Managing General Partner receives the base amount of .558%
(as adjusted by the CPI factor) of Gross Proceeds annually as an Asset
Management Fee for administering the affairs of the Fund. Asset Management Fees
of $277,575, $270,264 and $263,289 have been included in expenses for the years
ended March 31, 1997, 1996, and 1995, respectively. Included in accounts payable
to affiliates at March 31, 1997 and 1996 is $264,542 and $193,584.
An affiliate of the Managing General Partner is reimbursed for the actual cost
of the Fund's operating expenses. Included in general and administrative
expenses for the years ended March 31, 1997, 1996 and 1995 is $115,310, $123,712
and $123,669, respectively, that the Fund has paid or accrued for reimbursement
for salaries and benefits. The amounts payable at March 31, 1997 and 1996
totaled $25,943 and $14,366, respectively.
Upon construction completion, in August of 1994, Lansing Management Company
("LMC"), an affiliate of the Managing General Partner, became the management
agent for Twin Oaks Meadows. The management fee charged to the property is equal
to 5% of the property gross revenues. Included in operating expenses of the
summarized income statements in Note 4 to the financial statements is $19,215,
$17,388 and $7,245 at December 31, 1996, 1995 and 1994, respectively.
6. Line of Credit
In September of 1994, the Partnership entered into a line of credit agreement
with a brokerage firm. The line of credit may have a balance up to $11,000,000.
Under the terms of the agreement, the line is collateralized by the marketable
securities held by the brokerage firm. Interest is calculated at the London
InterBank Offering Rate (LIBOR) for the period that the credit has been
extended. During the year ended March 31, 1995, the Fund borrowed and repaid
$3,893,948 on the line of credit. Interest paid for the year ended March 31,
1995 totaled $14,475. There were no borrowings during the year ended March 31,
1996. The line of credit expired on December 31, 1995.
7. Commitments
At March 31, 1997, the Fund has committed to make future capital contributions
and pay future purchase price installments on its investments in Local Limited
Partnerships. These future payments are contingent upon the achievement of
certain criteria as set forth in the Local Limited Partnership Agreements and
total approximately $752,000. In addition, the Fund has set aside $217,000in
future capital contributions to one Local Limited Partnership.
<PAGE>
------------------------------------------------------------------------------
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
8. Federal Income Taxes
A reconciliation of the loss reported in the Statements of Operations for the
fiscal years ended March 31, 1997, 1996 and 1995 to the loss reported for
federal income tax purposes for the years ended December 31, 1996, 1995 and 1994
are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997 1996 1995
-------------- ------------- --------
Net Loss per Statements of Operations $ (3,131,087) $ (2,870,229) $ (2,465,750)
Adjustment to reflect March 31, fiscal year-end
to December 31 tax year-end (121,888) 71,877 (172,924)
Adjustment for equity in losses of Local Limited
Partnerships for (tax) financial reporting
purposes over equity in losses for
(financial reporting) tax purposes 839,370 (601,658) (352,615)
Adjustment of amortization for financial reporting
purposes over (under) amortization for tax purposes (9,709) (2,016) 1,614
Related party expenses not paid at December 31,
not deductible for tax purposes 262,410 199,758 156,174
Related party expenses paid in current year
but expensed for financial reporting purposes
in prior year (199,758) (156,174) (254,650)
Income not recognized for financial
reporting purposes - (610) -
-------------- ------------ ------------
Net Loss for federal income tax purposes $ (2,360,662) $(3,359,052) $(3,088,151)
============== ============ ===========
</TABLE>
The carrying value of the Partnership's Investments in Local Limited
Partnerships is approximately $232,000 greater for financial reporting purposes
than for tax return purposes because, the equity in losses of the Local Limited
Partnerships is approximately $210,000 greater for tax purposes due to
accelerated tax depreciation methods, offset by cancellation of indebtedness
income recorded by one Local Limited Partnership for tax purposes but recorded
as a reduction of property basis for financial reporting purposes. The carrying
values of the Partnership's other assets and liabilities is the same for
financial reporting and tax return purposes.
Boston Financial Tax Credit Fund VII, A Limited Partnership
Schedule III - Real Estate and Accumulated Depreciation
of Property Owned by Local Limited Partnerships
Which Registrant has Invested at March 31, 1997
COST OF INTEREST AT ACQU'N DATE
--------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
NET
IMPROVEMENTS
NUMBER TOTAL BUILDINGS / CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO
DESCRIPTION UNITS BRANCES * LAND & EQUIPMENT ACQUISITION
Low and Moderate
Income Apartment
Complexes
Oak Ridge Apartments 152 $4,150,456 $727,440 $583,725 $5,703,137
Macon, GA
Santa Fe Oaks Phase 129 3,754,237 382,394 642,179 5,979,956
II
Gainesville, FL
Andrew's Pointe 57 2,370,604 95,000 3,430,523 48,537
Burnsville, MN
Palo Verde II 60 1,106,082 148,858 2,537,261 10,313
Henderson, NY
Woods Lane 156 3,384,986 312,000 5,817,580 32,148
Rogers, AR
Crafton Place 84 1,692,493 126,001 3,083,929 0
Fayetteville, AR
Guardian Place 120 2,988,767 677,786 1,838,034 2,972,628
Richmond, VA
Twin Oaks Meadows 63 1,927,258 0 720,394 2,529,371
Lansing, MI
Sunrise Terrace 52 1,223,697 149,959 2,719,607 0
Madera,CA
Wynmor 324 5,916,767 324,000 6,553,123 9,067,995
Brooklyn Park, MN
Citrus Glen 176 5,470,969 500,000 759,632 9,220,251
Orlando, FL
St. Andrews Pointe 150 4,703,499 491,634 7,349,439 790,326
Columbia, SC
Des Moines Street 42 1,737,049 300,000 2,223,447 498,317
Village
Des Moines, IA
Fountain Lakes 180 4,255,148 357,800 4,057,935 2,898,341
Benton, AR
Fairhaven Manor 40 956,585 176,182 2,043,351 1,168
Burlington, WA
Grand Boulevard 30 1,913,294 25,580 1,570,044 1,346,267
Chicago, IL
Los Claveles II 180 6,553,050 335,000 6,842,254 21,516
Trujilio Alto, PR
Harford Commons 30 1,745,080 28,000 2,680,017 31,387
Baltimore, MD
Springwood (2) 113 3,966,075 296,280 2,937,028 4,248,155
Tallahassee, FL
--------------------------------------------------------------
Totals 2,138 $59,816,096 $5,453,914 $58,389,502 $45,399,813
==============================================================
</TABLE>
<PAGE>
GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
1996
--------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
LIFE ON
WHICH
BUILDINGS DEPREC
IATION
AND ACCUMULATED DATE IS DATE
COMPUTED
DESCRIPTION LAND IMPROVEMENTS TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
Low and Moderate
Income Apartment
Complexes
Oak Ridge $727,440 $6,286,862 $7,014,302 $916,166 8/93 10 & 30 12/31/92
Apartments
Macon, GA
Santa Fe Oaks 382,394 6,622,135 7,004,529 926,405 5/93 10 & 30 12/31/92
Phase II
Gainesville, FL
Andrew's Pointe 95,000 3,479,060 3,574,060 418,237 12/93 7 & 27.5 04/13/92
Burnsville, MN
Palo Verde II 148,858 2,547,574 2,696,432 292,919 10/93 5 - 27.5 05/19/93
Henderson, NY
Woods Lane 312,000 5,849,728 6,161,728 762,856 7/93 7 & 27.5 07/30/93
Rogers, AR
Crafton Place 126,001 3,083,929 3,209,930 412,534 7/93 7 & 27.5 07/30/93
Fayetteville, AR
Guardian Place 677,786 4,810,662 5,488,448 401,667 8/94 5 - 40 10/07/93
Richmond, VA
Twin Oaks Meadows 307,264 2,942,501 3,249,765 396,315 8/94 useful 10/29/93
lives
Lansing, MI
Sunrise Terrace 149,959 2,719,607 2,869,566 313,725 11/93 useful 11/24/93
lives
Madera,CA
Wynmor 1,224,989 14,720,129 15,945,118 1,521,932 9/94 7, 15, 12/22/93
& 30
Brooklyn Park, MN
Citrus Glen 10 10,479,873 10,479,883 1,012,279 9/94 5 - 27.5 12/30/93
Orlando, FL
St. Andrews Pointe 491,634 8,139,765 8,631,399 733,603 8/94 10 & 30 01/05/94
Columbia, SC
Des Moines Street 303,451 2,718,313 3,021,764 143,516 4/95 useful 01/31/94
Village lives
Des Moines, IA
Fountain Lakes 357,800 6,956,276 7,314,076 801,082 1/94 7 - 27.5 02/02/94
Benton, AR
Fairhaven Manor 176,182 2,044,519 2,220,701 180,664 2/94 5 - 7 & 03/08/94
40
Burlington, WA
Grand Boulevard 31,580 2,910,311 2,941,891 156,479 7/95 useful 08/03/94
lives
Chicago, IL
Los Claveles II 335,000 6,863,770 7,198,770 491,978 8/94 8 & 40 08/31/94
Trujilio Alto, PR
Harford Commons 28,000 2,711,404 2,739,404 94,492 12/95 useful 2/28/95
lives
Baltimore, MD
Springwood (2) 296,280 7,185,183 7,481,463 747,191 8/95 useful 12/31/94
lives
Tallahassee, FL
--------------------------------------------------
6171628 103071601 109243229 10724040
==================================================
</TABLE>
<PAGE>
(1) Total aggregate cost for Federal Income Tax purposes is $ 110,230,661.
(2) Boston Financial Tax Credit Fund VII has a 20% ownership
interest
in Springwood Apartments, A Limited
Partnership.
* Mortgage notes payable generally represent non-recourse
financing of low-income housing projects payable with
terms of up to 40 years with interest payable at rates
ranging from 9.75% to 12%. The Partnership has not
guaranteed any of these mortgage notes payable.
Summary of property owned and accumulated depreciation:
<TABLE>
<CAPTION>
<S> <C>
Property Owned December 31, 1996 Accumulated Depreciation December 31,
1996
- ------------------------------------------------------------ ---------------------------------------
Balance at beginning of period $110,075,465 Balance at beginning of $6,540,475
period
Additions during period: Additions during
period:
Depreciation 4,183,565
-------------
Acquisitions 0 Balance at close of $10,724,040
period
=============
Improvements 155,579
etc.
------------
155,579
Deductions during period:
Reduction of building basis due to developer
fee write off (987,430)
Disposition of real estate (385)
------------
(987,815)
-------------
Balance at close of period $109,243,229
=============
Property Owned December 31, 1995 Accumulated Depreciation December 31,
1995
- ------------------------------------------------------------ ---------------------------------------
Balance at beginning of period $100,659,642 Balance at beginning of $2,742,246
period
Additions during period: Additions during
period:
Depreciation 3,798,229
-------------
Acquisitions 8,778,830 Balance at close of $6,540,475
period
=============
Improvements 1,937,926
etc.
------------
10,716,756
Deductions during period:
(1,300,933)
------------
Disposition of real estate (1,300,933)
-------------
Balance at close of period $110,075,465
=============
Property Owned December 31, 1994 Accumulated Depreciation December 31,
1994
- ------------------------------------------------------------ ---------------------------------------
Balance at beginning of period $43,998,728 Balance at beginning of $462,061
period
Additions during period: Additions during
period:
Depreciation 2,280,185
-------------
Acquisitions 55,723,485 Balance at close of $2,742,246
period
=============
Improvements 937,429
etc.
------------
56,660,914
Deductions during period:
Disposition of real estate 0
------------
0
-------------
Balance at close of period $100,659,642
=============
</TABLE>
==============================================================================
==============================================================================
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII
(A Limited Partnership)
Annual Report on form 10-K
For The Year Ended March 31, 1997
Reports of Independent Auditors
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors Report
The Partners
Springwood Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of Springwood Apartments, A
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of loss, partners' capital, and cash flows for the year ended December 31, 1995.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our 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
misstatements. 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 statements 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 Springwood Apartments, A
Limited Partnership as of December 31, 1995 and 1994 and the results of its
operations and its cash flows for the year ended December 31, 1995 in conformity
with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 16, 1996
<PAGE>
[Letterhead]
[LOGO]
WOLPOFF & COMPANY, LLP
To the Partners
BHP/Harford Commons Limited Partnership
Baltimore, Maryland
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS
We have audited the accompanying balance sheet of BHP/Harford Commons Limited
Partnership (a development stage company) as of December 31, 1995, and the
related statements of partners' capital and cash flows from February 1, 1995
(inception) through December 31, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. 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 statements 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 BHP/Harford Commons Limited
Partnership (a development stage company) as of December 31, 1995, and its cash
flows from February 1, 1995 (inception) through December 31, 1995, in conformity
with generally accepted accounting principles.
/s/ Walpoff & Company, LLP
WOLPOFF & COMPANY, LLP
Baltimore, Maryland
March 29, 1996
<PAGE>
[Letterhead]
[LOGO]
Reznick Fedder & Silverman
To the Partners
BHP/Harford Commons Limited Partnership
Baltimore, Maryland
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheet of BHP/Harford Commons
Limited Partnership 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 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 statements
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 BHP/Harford Commons Limited
Partnership as of December 31, 1996, and the results of its operations, changes
in partners' equity and its cash flows, in conformity with generally accepted
accounting principles.
Our aduit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 19
through 31 is presented for the purposes of additional analysis and is not a
required part 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, we have also issued a report
dated February 28,1997, on our consideration of BHP/Harford Commons Limited
Partnership's internal control structure and on its compliance with specific
requirements applicable to CDA programs, affirmative fair housing, and laws and
regulations applicable to the financial statements.
/s/Reznick Fedder & Silverman
Federal Employer
Identification Number:
52-1088612
Baltimore, Maryland
February 28, 1997
Audit principal: William T. Riley, Jr.
<PAGE>
[Letterhead]
[LOGO]
KEVANE, PETERSON SOTO & PASARELL
INDEPENDENT AUDITORS' REPORT
To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP HUD Field Office Director
San Juan, Puerto Rico San Juan, Puerto Rico
We have audited the accompanying statement of financial position of LOS
CLAVELES, S.E. LIMITED PARTNERSHIP, FHA Project No. RQ-46-E-005-019 (a Limited
Partnership) as of December 31, 1996 and 1995, and the related statements of
loss, 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
statements 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 LOS CLAVELES, S.E. Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations,
changes in partners' equity and its cash flows for the year then ended, in
conformity with generally accepted accounting principles.
Our audit were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in this
report (shown as Exhibits A though H) are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements of HUD Project No. RQ46-E-005-19. Such information has been subjected
to the auditing procedures applied in the audit of the basic financial
statements, and in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
<PAGE>
In accordance with Government Auditing Standards, we have also issued a report
dated February 5,1997, on our consideration of the projects' internal control
structure and a report dated February 5, 1997, on its compliance with laws and
regulations.
/s/ Kevane, Peterson, Soto & Pasarell
San Juan, Puerto Rico
February 5, 1997,
<PAGE>
[Letterhead]
[LOGO]
KEVANE, PETERSON SOTO & PASARELL
INDEPENDENT AUDITORS' REPORT
To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP HUD Field Office Director
San Juan, Puerto Rico San Juan, Puerto Rico
We have audited the accompanying statement of financial position of LOS
CLAVELES, S.E. LIMITED PARTNERSHIP, FHA Project No. RQ-46-E-005-019 (a Limited
Partnership) as of December 31, 1995, and the related statements of loss,
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and 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 statements
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 LOS CLAVELES, S.E. Limited
Partnership as of December 31, 1995, and the results of its operations, changes
in partners' equity and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included in this
report (shown as Exhibits A though H) are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements of HUD Project No. RQ46-E-005-19. 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, we have also issued a report
dated February 9, 1996, on our consideration of the projects' internal control
structure and a report dated February 9, 1996, on its compliance with laws and
regulations.
/s/ Kevane, Peterson, Soto & Pasarell
San Juan, Puerto Rico February 9, 1996, except for note 13 which is dated April
8, 1996
<PAGE>
[Letterhead]
[LOGO]
KEVANE, PETERSON SOTO & PASARELL
INDEPENDENT AUDITORS' REPORT
To the Partners of
LOS CLAVELES, S.E. LIMITED PARTNERSHIP
We have audited the accompanying balance sheet of LOS CLAVELES, S.E. LIMITED
PARTNERSHIP, (a Delaware Limited Partnership) as of December 31, 1994, and the
related statements of loss, changes in partners' equity and cash flows for the
four month period 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 statements 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 Los Claveles, S.E. Limited
Partnership as of December 31, 1994, and the results of its operations,
partners' equity and its cash flows for the four month period then ended, in
conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of expense categories
included as an Exhibit, is presented for the 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 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/ Kevane, Peterson, Soto & Pasarell
San Juan, Puerto Rico
February 2, 1996
<PAGE>
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying balance sheet of GRAND BOULEVARD RENAISSANCE I
LIMITED PARTNERSHIP, (a Limited Partnership) as of December 31, 1996, and the
related statements of profit and loss, changes in partners' equity and statement
of 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.
These 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 statements presentation.
We believe that our audit provided 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 GRAND BOULEVARD RENAISSANCE I
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.
The accompanying supplementary information shown on Page 15 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/ Haran & Associates LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
January 21, 1997
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying balance sheet of GRAND BOULEVARD RENAISSANCE I
LIMITED PARTNERSHIP, (a Limited Partnership) as of December 31, 1995, and the
related statements of profit and loss, changes in partners' equity and statement
of 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.
These 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 statements presentation.
We believe that our audit provided 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 GRAND BOULEVARD RENAISSANCE I
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.
The accompanying supplementary information shown on Page 15 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/ Haran & Associates LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
February 2, 1996
<PAGE>
[Letterhead]
[LOGO]
Haran & Associates Ltd
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Partners
GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP
Chicago, Illinois
We have audited the accompanying statement of assets, liabilities, and partners'
equity-income tax basis, of GRAND BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP,
as of December 31, 1994, and the related statements of operations-income tax
basis, changes in partners' equity-income tax basis and statement of cash
flows-income tax basis for the year then ended. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
These 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 statements presentation.
We believe that our audit provided a reasonable basis for our opinion.
As described in the notes to the financial statements, the Partnership's policy
is to prepare its financial statements on the basis of accounting used for
income tax purposes and are not intended to be presented in conformity with
generally accepted accounting principals.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities, and partners' equity of GRAND
BOULEVARD RENAISSANCE I LIMITED PARTNERSHIP as of December 31, 1994, and its
operations, changes in partners' equity and its cash flows for the year then
ended, on the basis of accounting described in the notes to the financial
statements.
/s/ Haran & Associates LTD
HARAN & ASSOCIATES LTD
Certified Public Accountants
Wilmette, Illinois
Illinois Certificate No. 060-002892
Employer Identification No. 36-3097692
February 1, 1995
<PAGE>
[Letterhead]
[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants
To the Partners of
Fairhaven Manor Limited Partnership
We have audited the accompanying balance sheet of Fairhaven Manor Limited
Partnership as of December 31, 1995, and the related statements of income,
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Organization'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.
These 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 statements 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 Fairhaven Manor Limited
Partnership as of December 31, 1995, and the results of its operations for the
year then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of supplementary information
on page 14 is presented for the 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 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/ Hoekstra & Hoekstra
Mount Vernon, Washington Hoekstra & Hoekstra
February 1, 1996 Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants
To the Partners of
Fairhaven Manor Limited Partnership
We have audited the accompanying balance sheet of Fairhaven Manor Limited
Partnership as of December 31, 1996, and the related statements of income,
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Organization'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.
These 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 statements 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 Fairhaven Manor Limited
Partnership as of December 31, 1996, and the results of its operations for the
year then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of supplementary information
on page 14 is presented for the 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 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/ Hoekstra & Hoekstra
Mount Vernon, Washington Hoekstra & Hoekstra
February 2, 1997 Certified Public Accountants
<PAGE>
[Letterhead]
[LOGO]
Hoekstra & Hoekstra
Certified Public Accountants
To the Partners of
Fairhaven Manor Limited Partnership
We have audited the accompanying balance sheet of Fairhaven Manor Limited
Partnership as of December 31, 1994, and the related statements of income,
changes in partners' equity and cash flows for the year then ended. These
financial statements are the responsibility of the Organization'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.
These 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 statements 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 Fairhaven Manor Limited
Partnership as of December 31, 1994, and the results of its operations for the
year then ended in conformity with generally accepted accounting principles.
/s/ Hoekstra & Hoekstra
Mount Vernon, Washington Hoekstra & Hoekstra
February 1, 1996 Certified Public Accountants
<PAGE>
<PAGE>
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Fountain Lakes, A Limited Partnership
We have audited the accompanying balance sheets of Fountain Lakes, A Limited
Partnership, as of December 31, 1996 and 1995, and the related statements of
income, 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. These 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 statements 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 Fountain Lakes, A Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on page 11
is presented for the 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 13, 1997
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Fountain Lakes, A Limited Partnership
We have audited the accompanying balance sheets of Fountain Lakes, A Limited
Partnership, as of December 31, 1995, and the related statements of income,
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. These 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 statements 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 Fountain Lakes, A Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on page 11
is presented for the 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 12, 1996
<PAGE>
<PAGE>
[Letterhead]
[LOGO]
VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
Des Moines Street Associates, L.P.
Des Moines, Iowa
We have audited the accompanying balance sheets of Des Moines Street Associates,
L.P., (a limited partnership), as of December 31, 1996 and 1995, 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 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 statements 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 Des Moines Street Associates,
L.P., as of December 31, 1996 and 1995, and the results of its operations,
changes in its partners' capital and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
/S/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
January 31, 1997
[Letterhead]
[LOGO]
VMcHC&S Vroman, McGowen, Hurst, Clark & Smith, P.C.
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
To the Partners
Des Moines Street Associates, L.P.
Des Moines, Iowa
We have audited the accompanying balance sheets of Des Moines Street Associates,
L.P., (a limited partnership), as of December 31, 1995 and 1994, 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 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 statements 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 Des Moines Street Associates,
L.P., as of December 31, 1995 and 1994, and the results of its operations,
changes in its partners' capital and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
/S/ Vroman, McGowen, Hurst, Clark & Smith, P.C.
Des Moines, Iowa
January 31, 1996
<PAGE>
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditor's Report
The Partners
St. Andrews Pointe Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of St. Andrews Pointe
Apartments, A Limited Partnership, as of December 31, 1996 and 1995, and the
related statements of loss, 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 statements 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 St. Andrews Pointe Apartments,
A Limited Partnership as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 7, 1997
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditor's Report
The Partners
St. Andrews Pointe Apartments,
A Limited Partnership:
We have audited the accompanying balance sheets of St. Andrews Pointe
Apartments, A Limited Partnership, as of December 31, 1995 and 1994, and the
related statements of loss, 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 statements 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 St. Andrews Pointe Apartments,
A Limited Partnership as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 9, 1996
<PAGE>
[Letterhead]
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Deloitte & Touche LLP
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:
We have audited the accompanying balance sheet of Affordable/Citrus Glen, Ltd.
(a Florida Limited Partnership) as of December 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.
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 statements 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 Affordable/Citrus Glen, Ltd. (a
Florida 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/ Deloitte & Touche LLP
January 24, 1997
<PAGE>
[Letterhead]
[LOGO]
Deloitte & Touche LLP
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:
We have audited the accompanying balance sheet of Affordable/Citrus Glen, Ltd.
(a Florida Limited Partnership) as of December 31, 1995, 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.
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 statements 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 Affordable/Citrus Glen, Ltd. (a
Florida 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/ Deloitte & Touche LLP
February 2, 1996
<PAGE>
[Letterhead]
[LOGO]
Deloitte & Touche LLP
INDEPENDENT AUDITORS' REPORT
To the General Partner and Limited Partners of
Affordable/Citrus Glen, Ltd.:
We have audited the accompanying balance sheet of Affordable/Citrus Glen, Ltd.
(a Florida Limited Partnership) as of December 31, 1994, 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.
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 statements 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 Affordable/Citrus Glen, Ltd. (a
Florida Limited Partnership) as of December 31, 1994, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
/s/ Deloitte & Touche LLP
February 10, 1995
<PAGE>
[Letterhead]
[LOGO]
MAHONEY
ULBRICH
CHRISTIANSEN
RUSS P.A.
To the Partners
Eden Park Limited Partnership
Saint Paul, Minnesota
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Eden Park Limited Partnership
as of December 31, 1996 and 1995, 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 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 statements 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 Eden Park Limited Partnership
as of December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/Mahoney Ulbrich
Christiansen Russ P.A.
Saint Paul, Minnesota
January 24, 1997
[Letterhead]
[LOGO]
MAHONEY
ULBRICH
CHRISTIANSEN
RUSS P.A.
To the Partners
Eden Park Limited Partnership
Saint Paul, Minnesota
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Eden Park Limited Partnership
as of December 31, 1995 and 1994, 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 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 statements 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 Eden Park Limited Partnership
as of December 31, 1995 and 1994, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/Mahoney Ulbrich
Christiansen Russ P.A.
Saint Paul, Minnesota
February 8, 1996
<PAGE>
[Letterhead]
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NOVOGRADAC
& COMPANY
REPORT OF INDEPENDENT AUDITORS
To the Partners of
Madera Sunrise Terrace Limited Partnership
We have audited the accompanying balance sheets of Madera Sunrise Terrace
Limited Partnership as of December 31, 1996 and 1995, and the related statements
of operations, 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 statements 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 Madera Sunrise Terrace Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Novogradac & Company LLP
January 25, 1997
<PAGE>
[Letterhead]
[LOGO]
NOVOGRADAC
& COMPANY
To the General Partner of
Madera Sunrise Terrace Limited Partnership
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Madera Sunrise Terrace
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of operations, 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
misstatements. 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 statements 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 Madera Sunrise Terrace Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Novogradac & Company LLP
January 29, 1996
<PAGE>
<PAGE>
[Letterhead]
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Kirschner Hutton Perlin, P.C.
Certified Public Accountants
Independent Auditors Report
January 30, 1996
Partners
Twin Oaks Meadows Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheet of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership, MSHDA Project No. 915, as of
December 31, 1996 and 1995, and the related statements of profit and loss,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Organization's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statements
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 Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership as of December 31, 1996 and
1995, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 22, 1997, on our consideration of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership's internal control structure
and a report dated January 22, 1997, on its compliance with laws and
regulations.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying additional information
on (pages 15 to 18) 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.
/s/Kirschner Hutton Perlin, P.C.
[Letterhead]
[LOGO]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
Independent Auditors Report
January 30, 1996
Partners
Twin Oaks Meadows Limited Dividend Housing
Association Limited Partnership
We have audited the accompanying balance sheet of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership, MSHDA Project No. 915, as of
December 31, 1995 and 1994, and the related statements of profit and loss,
partners' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Organization's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statements
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 Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership as of December 31, 1995 and
1994, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 30, 1996, on our consideration of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership's internal control structure
and a report dated January 30, 1996, on its compliance with laws and
regulations.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying additional information
on (pages 14 to 17) 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.
/s/Kirschner Hutton Perlin, P.C.
<PAGE>
[Letterhead]
[LOGO]
ERNST & YOUNG LLP
Report of Independent Auditors
The Partners
Guardian Place Limited Partnership
We have audited the accompanying balance sheets of Guardian Place Limited
Partnership as of December 31, 1996 and 1995, and the related statements of
operations, 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 statements 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 Guardian Place Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Ernst & Young LLP
January 27, 1997
<PAGE>
[Letterhead]
[LOGO]
ERNST & YOUNG LLP
Report of Independent Auditors
The Partners
Guardian Place Limited Partnership
We have audited the accompanying balance sheets of Guardian Place Limited
Partnership as of December 31, 1995 and 1994, and the related statements of
operations, 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 statements 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 Guardian Place Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Ernst & Young LLP
January 31, 1996
<PAGE>
<PAGE>
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Woods Lane, A Limited Partnership
We have audited the accompanying balance sheets of Woods Lane, A Limited
Partnership, as of December 31, 1996 and 1995, and the related statements of
income, 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. These 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 statements 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 Woods Lane, A Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on page 11
is presented for the 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
January 27, 1997
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Woods Lane, A Limited Partnership
We have audited the accompanying balance sheets of Woods Lane, A Limited
Partnership, as of December 31, 1995 and 1994, and the related statements of
income, 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. These 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 statements 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 Woods Lane, A Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on page 11
is presented for the 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 12, 1996
<PAGE>
<PAGE>
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Crafton Place, A Limited Partnership
We have audited the accompanying balance sheets of Crafton Place, A Limited
Partnership, as of December 31, 1996 and 1995, and the related statements of
income, 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. These 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 statements 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 Crafton Place, A Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on page 11
is presented for the 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 5, 1997
[Letterhead]
[LOGO]
Rick J. Tanneberger
Certified Public Accountant
Independent Auditor's Report
The Partners
Crafton Place, A Limited Partnership
We have audited the accompanying balance sheets of Crafton Place, A Limited
Partnership, as of December 31, 1995 and 1994, and the related statements of
income, 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. These 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 statements 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 Crafton Place, A Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on page 11
is presented for the 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
February 10, 1996
<PAGE>
[Letterhead]
[LOGO]
Brotemarkle & Sadd
Certified Public Accountants
February 19, 1997
Palo Verde II
A Nevada Limited Partnership
Bakersfield, California
We have audited the accompanying balance sheets of Palo Verde II, A Nevada
Limited Partnership (Palo Verde II or the Partnership) as of December 31, 1996
and the related statements of operations, partners' capital (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. The financial
statements of Palo Verde II as of December 31, 1995, were audited by other
auditors whose report dated February 8, 1996, expressed an unqualified opinion
on those statements.
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 statements 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 Palo Verde II 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/Brotemarkle & Sadd
<PAGE>
[Letterhead]
[LOGO]
ERNST & YOUNG LLP
Report of Independent Auditors
To the Partners
Palo Verde II, A Nevada Limited Partnership
We have audited the accompanying balance sheets of Palo Verde II, A Nevada
Limited Partnership (Palo Verde II or the Partnership) as of December 31, 1995
and 1994, and the related statements of operations, partners' capital
(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 statements 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 Palo Verde II as of December
31, 1995 and 1994, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/Ernst & Young LLP
February 8, 1996
<PAGE>
<PAGE>
[Letterhead]
[LOGO]
BERC
& FOX LIMITED
Certified Public Accountants
Independent Auditors' Report
To the Partners,
Andrew's Pointe Limited Partnership
We have audited the accompanying balance sheets of ANDREW'S POINTE LIMITED
PARTNERSHIP (a Minnesota Limited Partnership) as of December 31, 1996 and 1995,
and the related statements of operations, 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 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 statements 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 Andrew's Pointe Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Berc & Fox Limited
MINNEAPOLIS, MINNESOTA
January 23, 1997
[Letterhead]
[LOGO]
BERC
& FOX LIMITED
Certified Public Accountants
Independent Auditors' Report
To the Partners,
Andrew's Pointe Limited Partnership
We have audited the accompanying balance sheets of ANDREW'S POINTE LIMITED
PARTNERSHIP (a Minnesota Limited Partnership) as of December 31, 1995 and 1994,
and the related statements of operations, 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 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 statements 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 Andrew's Pointe Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Berc & Fox Limited
MINNEAPOLIS, MINNESOTA
FEBRUARY 8, 1996
<PAGE>
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors' Report
The Partners
Santa Fe Oaks Phase II, A Limited Partnership:
We have audited the accompanying balance sheets of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1996 and 1995, and the related statements
of loss, 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 statements 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 Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
FEBRUARY 14, 1997
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors' Report
The Partners
Santa Fe Oaks Phase II, A Limited Partnership:
We have audited the accompanying balance sheets of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1995 and 1994, and the related statements
of loss, 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 statements 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 Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
FEBRUARY 9, 1996
<PAGE>
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors' Report
The Partners
Oak Ridge Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Oak Ridge Apartments, A
Limited Partnership, as of December 31, 1996 and 1995, and the related
statements of loss, 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 statements 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 Oak Ridge Apartments, A Limited
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
FEBRUARY 3, 1997
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Independent Auditors' Report
The Partners
Oak Ridge Apartments, A Limited Partnership:
We have audited the accompanying balance sheets of Oak Ridge Apartments, A
Limited Partnership, as of December 31, 1995 and 1994, and the related
statements of loss, 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 statements 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 Oak Ridge Apartments, A Limited
Partnership as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
FEBRUARY 9, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 373,729
<SECURITIES> 3,240,944
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 35,694,649<F1>
<CURRENT-LIABILITIES> 000
<BONDS> 000
000
000
<COMMON> 000
<OTHER-SE> 35,355,327
<TOTAL-LIABILITY-AND-EQUITY> 35,694,649<F2>
<SALES> 000
<TOTAL-REVENUES> 400,349<F3>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 563,610<F4>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (3,131,087)<F5>
<EPS-PRIMARY> (60.86)
<EPS-DILUTED> 000
<FN>
<F1>Included in total assets are Investments in Local Limited Partnerships of
$31,792,098, Restricted cash of $239,155, Organizational costs, net of $9,167
and Other assets of $39,556. <F2>Included in total liabilities and equity are
Accounts payable to affiliates of $304,382 and Accounts payable and accrued
expenses of $34,940.
<F3>Total revenue includes Investment of $223,158 and Other of $177,191.
<F4>Included in Other Expenses are Asset Management fees of $277,575, General
and Administrative of $240,204, and Amortization of $45,831. <F5>Net loss
reflects Equity in losses of Local Limited Partnerships of $2,967,826.
</FN>
</TABLE>
