June 26, 1998
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Boston Financial Tax Credit Fund VII, A Limited Partnership
Annual Report on Form 10-K for the Year Ended March 31, 1998
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\Dianne Groark
Dianne Groark
Assistant Controller
TC710K-K.98
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended Commission file number
March 31, 1998 0-24584
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.
$45,581,000 as of March 31, 1998
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS: (2) ANY PROXY OR
INFORMATION STATEMENT: AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OR
(c) UNDER THE SECURITIES ACT OF 1933.
Part of Report on
Form 10-K into
Which the Document
Documents incorporated by reference is Incorporated
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, 1998
TABLE OF CONTENTS
Page No.
PART I
Item 1 Business K-3
Item 2 Properties K-5
Item 3 Legal Proceedings K-10
Item 4 Submission of Matters to a Vote of
Security Holders K-10
PART II
Item 5 Market for the Registrant's Units and
Related Security Holder Matters K-11
Item 6 Selected Financial Data K-12
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations K-13
Item 8 Financial Statements and Supplementary Data K-15
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure K-15
PART III
Item 10 Directors and Executive Officers
of the Registrant K-16
Item 11 Management Remuneration K-17
Item 12 Security Ownership of Certain Beneficial
Owners and Management K-17
Item 13 Certain Relationships and Related Transactions K-18
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 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; such descriptions are
incorporated herein by this reference.
<PAGE>
TABLE A
SELECTED LOCAL LIMITED
PARTNERSHIP DATA
<TABLE>
<CAPTION>
Properties owned by Date
Local Limited Interest
Partnerships Location Acquired
- ---------------------------- ------------------ ---------------
<S> <C> <C>
Oak Ridge Macon, GA 12/31/92
Santa Fe Oaks II Gainesville, FL 12/31/92
Andrew's 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 Renaissance Chicago, IL 08/03/94
Los Claveles II Trujillio Alto, PR 08/31/94
Springwood Tallahassee, FL 12/15/94
Harford Commons Baltimore, MD 02/28/95
</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.
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, 1998, the following Local Limited Partnerships have
a common Local General Partner or affiliated group of Local General Partners
accounting for the specified percentage of the total capital contributions to
Local Limited Partnerships: (i) Oak Ridge, Santa Fe Oaks Phase II, Springwood
and St. Andrews Pointe, representing 23.92%, have Flournoy Development Company
and John Flournoy as Local General Partners; (ii) Woods Lane, Crafton Place and
Fountain Lakes, representing 16.92%, have Lindsey Management Company as Local
General Partner. The Local General Partners of the remaining Local Limited
Partnerships are identified in the Acquisition Reports reported on Forms 8-K,
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
governmental 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) 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 governmental 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
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>
<TABLE>
<CAPTION>
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 1998 1998 1997 Subsidy* 1998
- ------------------------- ----------- --------------- -------------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Oak Ridge Apartments,
a Limited Partnership
Oak Ridge
Macon, GA 152 $2,870,245 $2,870,245 $4,119,060 None 65%
Santa Fe Oaks Phase II,
a Limited Partnership
Santa Fe Oaks II
Gainesville, FL 129 2,698,586 2,698,586 3,725,839 None 99%
Andrew's Pointe Limited
Partnership
Andrew's Pointe
Burnsville, MN 57 1,333,800 1,333,800 2,344,035 None 100%
Palo Verde II, a Nevada
Limited Partnership
Palo Verde II
Henderson, NV 60 1,324,801 1,324,801 1,096,357 None 100%
Woods Lane, a Limited
Partnership
Woods Lane
Rogers, AR 156 2,574,180 2,574,180 3,354,692 None 59%
Crafton Place, a Limited
Partnership
Crafton Place
Fayetteville, AR 84 1,365,120 1,365,120 1,677,356 None 91%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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 1998 1998 1997 Subsidy* 1998
- -------------------------- ------------ ---------------- ------------- -------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Guardian Place
Limited Partnership
Guardian Place
Richmond, VA 120 2,174,390 2,174,390 2,975,651 None 99%
Twin Oaks Meadows Limited
Dividend Housing Association
Limited Partnership
Twin Oaks Meadows
Lansing, MI 63 1,436,401 1,436,401 1,915,540 None 93%
Madera Sunrise Terrace
Limited Partnership
Sunrise Terrace
Madera, CA 52 1,523,196 1,523,196 1,184,337 None 100%
Eden Park Limited
Partnership
Wynmor
Brooklyn Park, MN 324 5,527,758 5,527,758 5,838,452 None 94%
Affordable Citrus Glen
Limited Partnership
Citrus Glen
Orlando, FL 176 4,581,360 4,581,360 5,442,788 None 96%
St. Andrews Pointe Apartments,
A Limited Partnership
St. Andrews Pointe
Columbia, SC 150 3,414,528 3,414,528 4,668,512 None 96%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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 1998 1998 1997 Subsidy* 1998
- ------------------------ ----------- --------------- ----------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Des Moines Street Associates
Limited Partnership
Des Moines St. Village
Des Moines, IA 42 1,083,996 1,083,996 1,721,515 Section 8 98%
Fountain Lakes, A Limited
Partnership
Fountain Lakes
Benton, AR 180 2,854,593 2,854,593 4,218,066 None 100%
Fairhaven Manor Limited
Partnership
Fairhaven Manor
Burlington, WA 40 1,232,020 1,232,020 948,248 None 100%
Grand Boulevard Renaissance I
Limited Partnership
Grand Boulevard Renaissance
Chicago, IL 30 1,085,000 868,000 1,906,598 Section 8 97%
Los Claveles, S.E. Limited
Partnership
Los Claveles II
Trujilio Alto, PR 180 1,272,000 698,373 6,553,050 Section 8 85%
BHP/Harford Commons
Limited Partnership
Harford Commons
Baltimore, MD 30 1,187,000 1,103,000 1,736,092 None 100%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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 1998 1998 1997 Subsidy* 1998
- ------------------------ ------------- --------------- -------------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Springwood Apartments,
A Limited Partnership
Springwood (1)
Tallahassee, FL 113 624,805 624,805 3,931,815 None 86%
----- ----------- ---------- ----------
2,138 $40,163,779 $39,289,152 $59,358,003
===== =========== =========== ===========
</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 13.76% of the total
capital contributions to be made to 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 11.41% of the total capital contributions to be made to 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 June 15, 1998, there were 2,512 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, 1998, 1997 and 1996.
<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>
March 31, March 31, March 31, March 31, March 31,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Revenue $ 254,185 $ 400,349 $ 257,160 $ 333,523 $ 365,312
Equity in losses of Local Limited
Partnerships (3,325,494) (2,967,826) (2,570,732) (2,190,648) (536,848)
Net Loss (3,626,340) (3,131,087) (2,870,229) (2,465,750) (735,660)
Per Limited Partnership Unit (A) (70.49) (60.86) (55.79) (47.93) (21.34)
Cash and cash equivalents 375,168 373,729 334,845 1,768,604 1,637,056
Marketable securities 3,106,645 3,240,944 3,855,342 5,688,064 18,301,710
Investments in Local Limited
Partnerships 28,387,876 31,792,098 34,328,400 34,310,871 24,033,164
Long-term debt - - - - -
Total assets (B) 32,158,308 35,694,649 38,795,017 41,924,559 44,145,937
Cash Distribution - - - - -
Other data:
Passive loss (C) (4,473,368) (3,697,126) (3,835,484) (3,604,962) (822,547)
Per Limited Partnership Unit (C) (86.95) (71.87) (74.56) (70.07) (39.28)
Portfolio income (C) 301,029 359,903 477,042 1,026,953 415,206
Per Limited Partnership Unit (C) 5.85 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) 7,547,206 7,531,209 7,016,512 4,226,746 750,876
Per Limited Partnership Unit (C) 148.19 146.39 136.39 82.16 35.86
Local Limited Partnership interests
owned at end of period 19 19 19 19 15
</TABLE>
(A) Per Limited Partnership Unit data is based upon 50,930 Units for the
years ended March 31, 1998, 1997, 1996 and 1995 and a weighted average
number of units outstanding of 34,127 for the year ended March 31, 1994.
(B) Total assets include the investments in Local Limited Partnerships.
(C) Income tax information is as of December 31, the year end of the Fund
for income tax purposes.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
At March 31, 1998, the Fund had cash and cash equivalents of $375,168 compared
with $373,729 at March 31, 1997. 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. This increase is partially offset by investments made in
Local Limited Partnership and cash used for operating activities.
As of March 31, 1998, approximately $2,478,000 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, 1998, 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 $658,000. In addition, the Fund has set aside $217,000 for
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, 1998, 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, 1998.
Results of Operations
1998 versus 1997
The Fund's results of operations for the year ended March 31, 1998 resulted in a
net loss of $3,626,340 as compared to a net loss of $3,131,087 for the same
period in 1997. The increase in net loss is primary attributable to an increase
in equity in losses of Local Limited Partnerships and a decrease in other
revenue. Equity in losses of Local Limited Partnership increased due to an
increase in general operating expenses of the Local Limited Partnerships, offset
by an increase in rental revenues due to an improvement in local rental markets.
Other revenue decreased as a result of a decrease in escrow interest paid to the
Fund from Local Limited Partnerships.
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
<PAGE>
increase in other revenue is primarily due to an increase in interest paid to
the Fund from Local Limited Partnerships.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. The standard
requires that changes in comprehensive income be shown in a financial statement
that is displayed with the same prominence as other financial statements. The
standard will become effective for fiscal years beginning after December 15,
1997. The Fund will adopt the new standard beginning in the first quarter of the
fiscal year ending March 31, 1999, but is not expected to have a significant
effect on financial position or results of operations.
Low-Income Housing Tax Credits
The 1998, 1997 and 1996 Tax Credits per unit were $148.19, $146.39 and $136.39,
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, 1997, the tax year end of the Local Limited Partnerships,
all of the properties have been placed in service and all generated Tax Credits
in 1997.
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
The Fund is invested in nineteen Local Limited Partnerships which own nineteen
properties located in twelve states and Puerto Rico. Fifteen of the properties,
consisting of 1,574 units, are new construction and four of the properties,
consisting of 564 units, were rehabilitated. All properties have completed
construction or rehabilitation and initial lease-up.
Even though occupancy for Grand Boulevard Renaissance, located in Chicago,
Illinois, has been ranging between 97% and 100%, the property has been
experiencing operating difficulties, in particular difficulty maintaining debt
service coverage. These issues are mainly due to poor collections from tenants.
On April 1, 1998, a new management agent was brought in to monitor property
operations and increase tenant collections. The Managing General Partner will be
working closely with the Local General Partner and the new management agent to
monitor operations.
As previously reported, Los Claveles II, located in Trujillio Alto, Puerto Rico,
continues to experience operating difficulties due to ongoing capital repair
needs and management issues. In 1996, an affiliate of the Managing General
Partner of the Fund 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 both properties. The new management agent assumed responsibility
for the property in December 1996 and has successfully obtained Section 8
subsidy increases. The Local General Partners agreed to step down voluntarily
and will be replaced by an unaffiliated general partner, once the workout plan
is approved by the lender. In addition, the Local General Partners executed a
delegation agreement which grants authority to an affiliate of the Managing
General Partner to implement the capital improvement plan and complete
negotiations with the lender. The lender continues to indicate its willingness
to work with the Managing General Partner 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.
Woods Lane, located in Rogers, Arkansas, has been suffering from poor occupancy
due to local competition. Occupancy as of December 31, 1997 was 57%. A new
management team was recently hired to step-up the marketing efforts, review rent
concessions, install a resident referral plan and monitor competing rent levels.
In addition, capital improvements have recently been completed which include
exterior painting, carpet replacement and landscaping and grounds improvement.
The Managing General Partner will closely monitor the new management agent and
also review possible debt restructuring. The Managing General Partner is
currently funding operating deficits.
In accordance with Financial Accounting Standard No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
which is effective for fiscal years beginning after December 15, 1995, the Fund
has implemented policies and practices for assessing impairment of its real
estate assets and investments in local limited partnerships. Each asset is
analyzed by real estate experts to determine if an impairment indicator exists.
If so, the current value is compared to the fair value and if there is a
significant impairment in value, a provision to write down the asset to fair
value will be charged against income.
Inflation and Other Economic Factors
Inflation had no material impact on the operations or financial condition of the
Fund for the years ended March 31, 1998, 1997 and 1996.
Item 8. Financial Statements and Supplementary Data
Information required under this Item is submitted as a separate section of this
Report. See Index on page F-1 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
<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. George Fantini, Jr., a Vice President of the Managing
General Partner, resigned his position effective June 30, 1995. Donna Gibson, a
Vice President of the Managing General Partner, resigned from her position on
September 13, 1996. Georgia Murray resigned as Managing Director, Treasurer and
Chief Financial Officer of the Managing General Partner on May 25, 1997. Fred N.
Pratt, Jr. resigned as Managing Director of the Managing General Partner on May
28, 1997. William E. Haynsworth resigned as a Managing Director and Chief
Operating Officer of the Managing General Partner on March 23, 1998.
The Managing General Partner was incorporated in September 1992. Randolph G.
Hawthorne is the Chief Operating Officer of the Managing General Partner and had
the primary responsibility for evaluating, selecting and negotiating investments
for the 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
Jenny Netzer Managing Director and President
Michael H. Gladstone Managing Director, Vice President and Clerk
Randolph G. Hawthorne Managing Director, Vice President and
Chief Operating Officer
James D. Hart Chief Financial Officer and Treasurer
Paul F. Coughlan Vice President
Peter G. Fallon, Jr. Vice President
William E. Haynsworth Vice President
The other General Partner of the 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.
Jenny Netzer, age 42, graduated from Harvard University (B.A., 1976) and
received a Master's in Public Policy from Harvard's Kennedy School of Government
in 1982. She joined Boston Financial in 1987 and is a Senior Vice President
leading the Institutional Tax Credit Team. She is also a member of the Senior
Leadership Team. Previously, Ms. Netzer led Boston Financial's new business
initiatives and managed the firm's Asset Management division, which is
responsible for the performance of 750 properties and providing service to
35,000 investors. Before joining Boston Financial, she was Deputy Budget
Director for the Commonwealth of Massachusetts, where she was responsible for
the Commonwealth's health care and public pension programs' budgets. Ms. Netzer
was also Assistant Controller at Yale University and has been a member of the
Watertown Zoning Board of Appeals.
Michael H. Gladstone, age 41, graduated from Emory University (B.A. 1978) and
Cornell University (J.D., MBA 1982). He joined Boston Financial in 1985, and
currently serves as Vice President and as the company's General Counsel. Prior
to joining Boston Financial, Mr. Gladstone was associated with the law firm of
Herrick & Smith. Mr. Gladstone is a member of the National Realty Committee and
has served on the advisory board to the Housing and Development Reporter, a
national publication on housing issues.
Randolph G. Hawthorne, age 48, is a graduate of Massachusetts Institute of
Technology (B.S., 1971) and Harvard Graduate School of Business (M.B.A., 1973).
He has been associated with Boston Financial since 1973 and has served as the
Treasurer of Boston Financial. Currently a Senior Vice President of the firm,
Mr. Hawthorne's primary responsibility is structuring and acquiring real estate
investments. Mr. Hawthorne is Past Chairman of the Board of the National Multi
Housing Council, having served on the board since 1989. He is a past president
of the National Housing and Rehabilitation Association, is a member of the
Residential Development Council of the Urban Land Institute, as well as a member
of the Advisory Board of the Berkeley Real Estate Center at the University of
California. In addition to speaking at industry conferences, he is on the
Editorial Advisory Boards of the Tax Credit Advisor and Multi-Housing News.
James D. Hart, age 40, earned his Bachelor of Arts degree from Trinity College
and his Masters of Business Administration from the Amos Tuck School at
Dartmouth College. Mr. Hart serves as Chief Financial Officer and is a member of
the Senior Leadership Team. Prior to joining Boston Financial, Mr. Hart was
engaged in venture capital management on behalf of institutional investors,
including the negotiation and structuring of private equity and mezzanine
transactions as a Vice President of Interfid Ltd., and later in the operational
management of a venture-backed software company, as Managing Director and Chief
Financial Officer of Bitstream Inc. Mr. Hart has also served on the Board of
Directors of several investee companies, including those that went on to
complete initial public offerings.
Paul F. Coughlan, age 54, is a graduate of Brown University (B.A., 1965) and
served in the United States Navy before entering the securities business in
1969. He was employed as an Account Executive by Bache & Company until 1972, and
then by Reynolds Securities Inc. He joined Boston Financial in 1975 and is
currently a Senior Vice President on the Institutional Tax Credit Team.
Peter G. Fallon, Jr., age 59, graduated from the College of the Holy Cross
(B.S., 1960) and Babson College (M.B.A., 1965). He joined Boston Financial in
1970, shortly after its formation, to raise capital for the firm's investments.
He is currently a Senior Vice President and a member of the Institutional Tax
Credits Team with responsibility for marketing institutional investments.
Previously, he has served as president of BFG Securities, as a director of
Boston Financial, and as marketing director for public and corporate funds. Mr.
Fallon has also served as Chairman of the Board of Directors for Boston College
High School as well as a director of a local bank.
William E. Haynsworth, age 58, is a graduate of Dartmouth College (B.A., 1961)
and Harvard Law School (L.L.B., 1964; L.L.M., 1969). Prior to joining Boston
Financial in 1977, Mr. Haynsworth was Acting Executive Director and General
Counsel of the Massachusetts Housing Finance Agency. He was also the Director of
Non-Residential Development of the Boston Redevelopment Authority and an
associate of the law firm of Goodwin, Procter & Hoar. Appointed Senior Vice
President in 1986, Mr. Haynsworth brings over 25 years of experience structuring
real estate investments. Mr. Haynsworth is a member of the Executive Committee
and the Board of Directors of the Affordable Housing Tax Credit Coalition. He is
a member of the Senior Leadership Team, the firm's Executive Committee and the
Board of Directors of Boston Financial.
Item 11. Management Remuneration
Neither the directors or officers of Arch Street 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
As of March 31, 1998, the following is the only entity known to the Fund to be
the beneficial owner of more than 5% of the Units outstanding:
<TABLE>
<CAPTION>
Amount
Title of Name and Address of Beneficially Percent
Class Beneficial Owner Owned of Class
<S> <C> <C> <C>
Limited Partner Oldham Institutional Tax Credits LLC 5,349 units 10.5%
101 Arch Street
Boston, MA
</TABLE>
Oldham Institutional Tax Credits LLC is an affiliate of Arch Street VII, Inc.,
the Managing General Partner.
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 paragraphs, 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 Transactions
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 or 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, 1998, 1997, and 1996 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, 1998, 1997, and
1996 are as follows:
1998 1997 1996
------------- ------------ ----------
Organizational fees and expenses $ - $ - $4,364
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 Fund's investments in Local Limited Partnerships. Acquisition
fees totaled 6% of the Gross 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 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, 1998, 1997 and 1996 are as follows:
1998 1997 1996
------------- ------------ -------------
Acquisition fees and expenses $ - $ (3,017) $ 57,598
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 .571% (as adjusted by the CPI factor) of Gross Proceeds annually
as the Asset Management Fee. Fees earned during the years ended March 31, 1998,
1997 and 1996 are as follows:
1998 1997 1996
------------- ------------ -------------
Asset Management Fees $ 286,044 $ 277,575 $ 270,264
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, 1998, 1997 and 1996 are as follows:
1998 1997 1996
------------- ------------ -------------
Salaries and benefits
expense reimbursements $ 108,845 $ 115,310 $ 123,712
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, 1998, 1997 and 1996 are as follows:
1998 1997 1996
-------------- -------------- ---------
Property Management Fees $ 19,530 $ 19,215 $ 17,388
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, 1998, 1997 and 1996 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 schedule 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,
1998.
(a)(3)(c) Exhibits
Number and Description in Accordance with
Item 601 of Regulation S-K
27. Financial Data Schedule
28. Additional Exhibits
(a) 28.1 Reports of Other Independent Auditors
(a)(3)(d) None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
By: Arch Street VII, Inc.
its Managing General Partner
By: /s/Randolph G. Hawthorne Date:06/26/98
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Managing General
Partner of the Fund and in the capacities and on the dates indicated:
By: /s/ Randolph G. Hawthorne Date:06/26/98
Randolph G. Hawthorne,
Managing Director, Vice President and
Chief Operating Officer
By: /s/Michael H. Gladstone Date:06/26/98
Michael H. Gladstone,
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, 1998
INDEX
Page No.
Report of Independent Accountants
For the years ended March 31, 1998, 1997 and 1996 F-2
Financial Statements
Balance Sheets - March 31, 1998 and 1997 F-3
Statements of Operations - Years ended
March 31, 1998, 1997, and 1996 F-4
Statements of Changes in Partners' Equity (Deficiency) -
Years ended March 31, 1998, 1997, and 1996 F-5
Statements of Cash Flows - Years ended
March 31, 1998, 1997, and 1996 F-6
Notes to Financial Statements F-7
Financial Statement Schedule
Schedule III - Real Estate and Accumulated
Depreciation F-16
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>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
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, 1998 and 1997 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 each of the three years in the period ended March 31,
1998. 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, 1998 and 1997, 85% and 86%, respectively,
of total assets, and for the years ended March 31, 1998, 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 and the reports of other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements 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, 1998 and 1997, and the results of its operations
and its cash flows for each of the three years in the period ended March 31,
1998, in conformity with generally accepted accounting principles. In addition,
in our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 11, 1998
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
BALANCE SHEETS
March 31, 1998 and 1997
1998 1997
------------ ----------
<S> <C> <C>
Cash and cash equivalents $ 375,168 $ 373,729
Marketable securities, at fair value (Note 3) 3,106,645 3,240,944
Restricted cash (Note 4) 252,555 239,155
Investments in Local Limited Partnerships (Note 4) 28,387,876 31,792,098
Organization costs, net of accumulated
amortization of $50,000 in 1998 and
$40,833 in 1997 (Note 2) - 9,167
Other assets 36,064 39,556
------------ --------------
Total Assets $32,158,308 $ 35,694,649
============ ================
Liabilities and Partners' Equity
Accounts payable to affiliates (Notes 4 and 5) $ 309,172 $ 304,382
Accounts payable and accrued expenses 63,932 34,940
------------ ------------
Total Liabilities 373,104 339,322
------------ ------------
Commitments (Note 6)
General, Initial and Investor Limited Partners' Equity 31,779,079 35,405,419
Net unrealized gains (losses) on marketable securities 6,125 (50,092)
------------ ------------
Total Partners' Equity 31,785,204 35,355,327
------------ ------------
Total Liabilities and Partners' Equity $ 32,158,308 $ 35,694,649
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the Years Ended March 31, 1998, 1997 and 1996
1998 1997 1996
------------ ------------ --------
<S> <C> <C> <C>
Revenue:
Investment (Note 3) $ 202,202 $ 223,158 $ 219,674
Other 51,983 177,191 37,486
------------ ------------ ------------
Total Revenue 254,185 400,349 257,160
------------ ------------ ------------
Expenses:
General and administrative expenses (includes
reimbursements to an affiliate in the amounts of
$108,845, $115,310 and $123,712 in 1998,
1997 and 1996, respectively (Note 5)) 227,685 240,204 245,641
Asset management fees, related party (Note 5) 286,044 277,575 270,264
Amortization 41,302 45,831 40,752
------------ ------------ ------------
Total Expenses 555,031 563,610 556,657
------------ ------------ ------------
Loss before equity in losses of
Local Limited Partnerships (300,846) (163,261) (299,497)
Equity in losses of
Local Limited Partnerships (Note 4) (3,325,494) (2,967,826) (2,570,732)
------------ ------------ ------------
Net Loss $ (3,626,340) $(3,131,087) $ (2,870,229)
============ =========== =============
Net Loss allocated:
To General Partners $ (36,263) $ (31,311) $ (28,702)
To Limited Partners (3,590,077) (3,099,776) (2,841,527)
------------ ------------ ------------
$ (3,626,340) $ (3,131,087) $ (2,870,229)
============ ============ ============
Net Loss per Limited Partnership Unit
(50,930 Units) $ (70.49) $ (60.86) $ (55.79)
=========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIENCY)
For the Years Ended March 31, 1998, 1997 and 1996
Net
Initial Investor Unrealized
General Limited Limited Gains
Partners Partner Partners (Losses) Total
<S> <C> <C> <C> <C> <C>
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
Net change in net unrealized losses
on marketable securities
available for sale (Note 3) - - - 56,217 56,217
Net Loss (36,263) - (3,590,077) - (3,626,340)
--------- -------- ------------ --------- ------------
Balance at March 31, 1998 $(126,530) $ 5,000 $ 31,900,609 $ 6,125 $ 31,785,204
========= ======== ============ ========= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the Years Ended March 31, 1998, 1997 and 1996
1998 1997 1996
-------------- -------------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net Loss $ (3,626,340) $ (3,131,087) $ (2,870,229)
Adjustments to reconcile net loss
to net cash used for operating activities:
Equity in losses of Local Limited Partnerships 3,325,494 2,967,826 2,570,732
Amortization 41,302 45,831 40,752
Loss on sale of marketable securities 1,778 6,034 47,442
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Restricted cash (13,400) (11,835) (10,320)
Other assets 3,492 (9,613) 97,910
Accounts payable to affiliates 4,790 91,407 (46,611)
Accounts payable and accrued expenses 28,992 (31,477) (18,250)
-------------- ------------- ------------
Net cash used for operating activities (233,892) (72,914) (188,574)
-------------- ------------- ------------
Cash flows from investing activities:
Purchases of marketable securities (2,295,469) (1,194,741) (9,964,941)
Proceeds from sales and maturities
of marketable securities 2,484,207 1,773,894 11,867,431
Investments in Local Limited Partnerships (99,191) (663,227) (2,907,333)
Restricted cash - - (217,000)
Cash distributions received from Local
Limited Partnerships 145,784 192,855 85,078
Reimbursement of acquisition expenses - 3,017 -
Payment of acquisition fees and expenses - - (104,056)
-------------- ------------- ------------
Net cash provided by (used for) investing activities 235,331 111,798 (1,240,821)
-------------- ------------- -------------
Cash flows from financing activities:
Payment of issuance expenses - - (4,364)
-------------- ------------- ------------
Net cash used for financing activities - - (4,364)
-------------- ------------- ------------
Net increase (decrease) in cash and cash equivalents 1,439 38,884 (1,433,759)
Cash and cash equivalents, beginning of period 373,729 334,845 1,768,604
-------------- ------------- ------------
Cash and cash equivalents, end of period $ 375,168 $ 373,729 $ 334,845
============== ============= ============
</TABLE>
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 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, a
Massachusetts limited partnership ("Arch Street L.P.") whose general partner
consists 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") is 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, 1998, the Managing
General Partner has designated approximately $2,478,000 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, for 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 Local 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 Fund, 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, 1997, 1996 and 1995.
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.
<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, were deferred and were amortized on a straight-line basis over 60
months. As of March 31, 1998 these costs have been fully amortized.
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 the prior years' financial statements have been reclassified
herein to conform to the current year presentation.
Effect of recently issued Accounting Standard
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income. The standard
requires that changes in comprehensive income be shown in a financial statement
that is displayed with the same prominence as other financial statements. The
standard is effective for fiscal years beginning after December 15, 1997. The
Fund will adopt the new standard beginning in the first quarter of the fiscal
year ending March 31, 1999, but it is not expected to have a significant effect
on the Fund's 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>
Gross Gross
Unrealized Unrealized
Cost Gains Losses Fair Value
<S> <C> <C> <C> <C>
Debt securities issued by
the US Treasury and other
US government corporations
and agencies $ 2,134,048 $ 3,693 $ (2,328) $2,135,413
Mortgage backed securities 966,472 4,760 - 971,232
----------- -------- ---------- -----------
Marketable securities at
March 31, 1998 $ 3,100,520 $ 8,453 $ (2,328) $ 3,106,645
=========== ======== ========== ===========
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
=========== ======== ========== ===========
</TABLE>
The contractual maturities at March 31, 1998 are as follows:
Fair
Cost Value
Due in one year or less $ 933,845 $ 933,147
Due in one to five years 1,200,203 1,202,266
Mortgage backed securities 966,472 971,232
----------- -----------
$ 3,100,520 $ 3,106,645
=========== ===========
Actual maturities may differ from contractual maturities because some borrowers
have the right to call or prepay obligations. Proceeds from sales and maturities
of marketable securities were approximately $2,484,000, $1,774,000 and
$11,867,000 for the years ended March 31, 1998, 1997 and 1996, respectively.
Included in investment income are gross gains of $5,672, $1,110 and $46,425 and
gross losses of $7,450, $7,144 and $93,867 which were realized on these sales
during the years ended March 31, 1998, 1997 and 1996, 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% interest, with the exception of Springwood which is a
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>
1998 1997
-------------- ----------
<S> <C> <C>
Capital Contributions paid to Local Limited
Partnerships and purchase price paid to
withdrawing partners of Local Limited
Partnerships $ 39,289,152 $ 39,189,961
Cumulative equity in losses of Local Limited Partnerships
(excluding unrecognized losses of $138,300 in 1998) (11,591,548) (8,266,054)
Cash distributions received from Local Limited Partnerships (438,787) (293,003)
------------- -------------
Investments in Local Limited Partnerships before adjustments 27,258,817 30,630,904
Excess of investment cost over the underlying net assets acquired:
Acquisition fees and expenses 1,252,338 1,252,338
Accumulated amortization of acquisition fees and expenses (123,279) (91,144)
------------- -------------
Investments in Local Limited Partnerships $ 28,387,876 $ 31,792,098
============= =============
</TABLE>
Summarized financial information as of December 31, 1997, 1996 and 1995 (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>
1997 1996 1995
-------------- ---------------- -----------
<S> <C> <C> <C>
Assets:
Investment property, net $ 94,703,692 $ 98,519,189 $ 103,534,360
Current assets 2,798,228 3,275,453 3,318,534
Other assets 4,068,904 4,260,927 3,433,261
--------------- ---------------- ---------------
Total Assets $ 101,570,824 $ 106,055,569 $ 110,286,155
=============== ================ ===============
Liabilities and Partners' Equity:
Current liabilities (includes current
portion of long term debt) $ 4,083,692 $ 3,554,946 $ 3,181,041
Long-term debt 58,686,199 59,302,789 59,422,079
Other debt 2,876,908 3,475,208 5,152,338
--------------- ---------------- ---------------
Total Liabilities 65,646,799 66,332,943 67,755,458
Fund's Equity 27,000,331 30,144,694 32,391,978
Other Partners' Equity 8,923,694 9,577,932 10,138,719
--------------- ---------------- ---------------
Total Liabilities and Partners' Equity $ 101,570,824 $ 106,055,569 $ 110,286,155
=============== ================ ===============
</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>
1997 1996 1995
------------- ------------- --------
<S> <C> <C> <C>
Rental and other revenue $ 12,245,232 $ 12,310,800 $ 11,088,736
------------- ------------- ------------
Expenses:
Operating 6,745,745 6,189,975 5,393,417
Interest 5,030,571 5,112,085 4,730,658
Depreciation and amortization 4,282,140 4,404,662 3,979,209
------------- ------------- ------------
Total Expenses 16,058,456 15,706,722 14,103,284
------------- ------------- ------------
Net loss $ (3,813,224) $ (3,395,922) $ (3,014,548)
============= ============= ============
Fund's share of net loss $ (3,463,794) $ (2,967,826) $ (2,570,732)
============= ============= ============
Other Partners' share of net loss $ (349,430) $ (428,096) $ (443,816)
============= ============= ============
</TABLE>
For the year ended March 31, 1998, the Fund has not recognized $138,300 of
equity in losses relating to one Local Limited Partnership where cumulative
equity in losses and cumulative distributions exceeded its total investment in
this Local Limited Partnership.
The Fund's equity as reflected by the Local Limited Partnerships of $27,000,331
differs from the Fund's Investments in Local Limited Partnerships before
adjustment of $27,258,817 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) the
Fund has not recognized $138,300 of equity in losses of one Local Limited
Partnership whose equity in losses exceeded its total investment.
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, 1998 and 1997,
$27,297 and $13,897, respectively, of interest is included in accounts payable
to an affiliate.
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, 1998, 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 .571%
(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 $286,044, $277,575 and $270,264 have been included in expenses for the years
ended March 31, 1998, 1997, and 1996 respectively. Included in accounts payable
to affiliates is $266,198 and $264,542 for Asset Management Fees for March 31,
1998 and 1997, respectively.
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, 1998, 1997 and 1996 is $108,845, $115,310
and $123,712, respectively, that the Fund has paid or accrued for reimbursement
for salaries and benefits. The amounts payable for salaries and benefits at
March 31, 1998 and 1997 totaled $15,677 and $25,943, 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 $19,530,
$19,215 and $17,388 of property management fees at December 31, 1997, 1996 and
1995, respectively.
6. Commitments
At March 31, 1998, 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 $658,000. In addition, the Fund has set aside $217,000 for
future capital contributions to one Local Limited Partnership.
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (Continued)
7. Federal Income Taxes
A reconciliation of the loss reported in the Statements of Operations for
the fiscal years ended March 31, 1998, 1997 and 1996 to the loss reported for
federal income tax purposes for the years ended December 31, 1997, 1996 and 1995
are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------------ ------------ --------
<S> <C> <C> <C>
Net Loss per Statements of Operations $ (3,626,340) $ (3,131,087) $ (2,870,229)
Adjustment to reflect March 31, fiscal year-end
to December 31, tax year end 112,520 (121,888) 71,877
Adjustment for equity in losses of Local Limited
Partnerships for financial reporting purposes
over (under) equity in losses for tax purposes (1,768,498) 839,370 (601,658)
Adjustment for amortization for financial reporting
purposes under amortization for tax purposes (13,405) (9,709) (2,016)
Related party expenses not paid at December 31,
not deductible for tax purposes 193,445 262,410 199,758
Related party expenses paid in current year
but expensed for financial reporting purposes
in prior year (262,410) (199,758) (156,174)
Income not recognized for financial
reporting purposes - - (610)
------------ ------------ ------------
Net Loss for federal income tax purposes $ (5,364,688) $(2,360,662) $(3,359,052)
============ ============ ===========
</TABLE>
The differences of the assets and liabilities of the Fund for financial
reporting purposes and tax reporting purposes as of March 31, 1998 are as
follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 28,387,876 $ 26,329,967 $ 2,057,903
============= ============= =============
Other assets $ 3,770,432 $ 10,039,583 $ (6,269,151)
============= ============= =============
Liabilities $ 373,104 $ 78,560 $ 294,544
============= ============= =============
</TABLE>
The differences in assets and liabilities of the Fund for financial reporting
purposes are primarily attributable to: (i) the cumulative equity in loss from
Local Limited Partnerships for tax reporting purposes is approximately
$2,044,000 greater than for financial reporting purposes, including
approximately $138,000 of losses the Fund has not recognized relating to one
Local Limited Partnership whose cumulative equity in losses exceeded its total
investment; (ii) the amortization of acquisition fees for tax return purposes
exceeds financial reporting purposes by approximately $24,000; (iii)
approximately $10,000 of cash distributions received from Local Limited
Partnerships during the quarter ended March 31, 1998 are not included in the
Fund's Investments in Local Limited Partnerships for tax return purposes at
December 31, 1997; (iv) organizational and offering costs of approximately
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII, A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (Continued)
7. Federal Income Taxes (continued)
$6,305,000 that have been capitalized for tax reporting purposes are charged to
Limited Partners' equity for financial reporting purposes and (v) related party
expenses which are deductible for financial reporting purposes of approximately
$67,000 are not deductible for tax reporting purposes.
The differences of the assets and liabilities of the Fund for financial
reporting purposes and tax purposes as of March 31, 1997 are as follows:
<TABLE>
<CAPTION>
Financial Tax
Reporting Reporting
Purposes Purposes Differences
<S> <C> <C> <C>
Investments in Local Limited Partnerships $ 31,792,098 $ 31,561,199 $ 230,899
============= ============= =============
Other Assets $ 3,902,551 $ 10,145,981 $ (6,243,430)
============= ============= =============
Liabilities $ 339,322 $ 60,823 $ 278,499
============= ============= =============
</TABLE>
The difference in assets and liabilities of the Fund for financial reporting
purposes are primary attributable to: (i) the cumulative equity in loss from
Local Limited Partnerships for tax reporting purposes is approximately $210,000
greater than for financial reporting purposes; (ii) the amortization of
acquisition fees for tax return purposes exceeds financial reporting purposes by
approximately $11,000; (iii) approximately $66,000 of cash distributions
received from Local Limited Partnerships during the quarter ended March 31, 1997
are not included in the Fund's Investments in Local Limited Partnerships for tax
return purposes at December 31, 1996; (iv) organizational and offering costs if
approximately $6,305,000 that have been capitalized for tax reporting purposes
are charged to Limited Partners' equity for financial reporting purposes and (v)
related party expenses which are deductible for financial reporting purposes of
approximately $65,000, but which are not deductible for tax reporting purposes.
<PAGE>
<TABLE>
<CAPTION>
COST OF INTEREST AT ACQU'N DATE GROSS AMOUNT
AT WHICH
CARRIED AT
DECEMBER 31,
1997
------------------------------------ ---------------
NET IMPROVEMENTS
NUMBER TOTAL BUILDINGS / CAPITALIZED
OF ENCUM- IMPROVEMENTS SUBSEQUENT TO
DESCRIPTION UNITS BRANCES * LAND & EQUIPMENT ACQUISITION LAND
- ----------- ----- --------- ---- ----------- ----------- ----
Low and Moderate
Income Apartment
Complexes
<S> <C> <C> <C> <C> <C> <C>
Oak Ridge Apartments 152 $4,119,060 $727,440 $ 583,725 $5,703,137 $ 727,440
Macon, GA
Santa Fe Oaks Phase II 129 3,725,839 382,394 642,179 5,982,140 382,394
Gainesville, FL
Andrew's Pointe 57 2,344,035 95,000 3,430,523 64,506 98,994
Burnsville, MN
Palo Verde II 60 1,096,357 148,858 2,537,261 11,579 148,858
Henderson, NY
Woods Lane 156 3,354,692 312,000 5,817,580 39,600 312,000
Rogers, AR
Crafton Place 84 1,677,356 126,001 3,083,929 1,600 126,001
Fayetteville, AR
Guardian Place 120 2,975,651 677,786 1,838,034 2,972,628 677,786
Richmond, VA
Twin Oaks Meadows 63 1,915,540 0 720,394 2,529,371 307,264
Lansing, MI
Sunrise Terrace 52 1,184,337 149,959 2,719,607 0 149,959
Madera,CA
Wynmor 324 5,838,452 324,000 6,553,123 9,134,399 1,247,952
Brooklyn Park, MN
Citrus Glen 176 5,442,788 500,000 759,632 9,226,242 10
Orlando, FL
St. Andrews Pointe 150 4,668,512 491,634 7,349,439 790,926 491,634
Columbia, SC
Des Moines Street Village 42 1,721,515 300,000 2,223,447 499,047 303,451
Des Moines, IA
Fountain Lakes 180 4,218,066 357,800 4,057,935 2,901,615 357,800
Benton, AR
Fairhaven Manor 40 948,248 176,182 2,043,351 3,271 176,182
Burlington, WA
Grand Boulevard 30 1,906,598 25,580 1,570,044 1,346,267 31,580
Chicago, IL
Los Claveles II 180 6,553,050 335,000 6,842,254 142,725 335,000
Trujilio Alto, PR
Harford Commons 30 1,736,092 28,000 2,680,017 31,702 28,000
Baltimore, MD
Springwood (2) 113 3,931,815 296,280 2,937,028 4,248,155 296,280
Tallahassee, FL
------------------------------------------------------------------------------------------------
Totals 2,138 $59,358,003 $5,453,914 $58,389,502 $45,628,910 $6,198,585
================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIFE ON
WHICH
BUILDINGS DEPRECIATION
AND ACCUMULATED DATE IS COMPUTED DATE
DESCRIPTION IMPROVEMENTS TOTAL DEPRECIATION BUILT (YEARS) ACQUIRED
- ----------- ------------ ----- ------------ ----- ------- --------
Low and Moderate
Income Apartment Complexes
<S> <C> <C> <C> <C> <C> <C>
Oak Ridge Apartments $6,286,862 $7,014,302 $1,152,443 8/93 10 & 30 12/31/92
Macon, GA
Santa Fe Oaks Phase II 6,624,319 7,006,713 1,185,252 5/93 10 & 30 12/31/92
Gainesville, FL
Andrew's Pointe 3,491,035 3,590,029 548,897 12/93 7 & 27.5 04/13/92
Burnsville, MN
Palo Verde II 2,548,840 2,697,698 386,544 10/93 5 - 27.5 05/19/93
Henderson, NY
Woods Lane 5,857,180 6,169,180 980,845 7/93 7 & 27.5 07/30/93
Rogers, AR
Crafton Place 3,085,529 3,211,530 527,565 7/93 7 & 27.5 07/30/93
Fayetteville, AR
Guardian Place 4,810,662 5,488,448 567,786 8/94 5 - 40 10/07/93
Richmond, VA
Twin Oaks Meadows 2,942,501 3,249,765 538,618 8/94 useful lives 10/29/93
Lansing, MI
Sunrise Terrace 2,719,607 2,869,566 414,117 11/93 useful lives 11/24/93
Madera,CA
Wynmor 14,763,570 16,011,522 2,135,141 9/94 7, 15, & 30 12/22/93
Brooklyn Park, MN
Citrus Glen 10,485,864 10,485,874 1,427,962 9/94 5 - 27.5 12/30/93
Orlando, FL
St. Andrews Pointe 8,140,365 8,631,999 1,041,907 8/94 10 & 30 01/05/94
Columbia, SC
Des Moines Street Village 2,719,043 3,022,494 219,779 4/95 useful lives 01/31/94
Des Moines, IA
Fountain Lakes 6,959,550 7,317,350 1,066,159 1/94 7 - 27.5 02/02/94
Benton, AR
Fairhaven Manor 2,046,622 2,222,804 236,669 2/94 5 - 7 & 40 03/08/94
Burlington, WA
Grand Boulevard 2,910,311 2,941,891 250,743 7/95 useful lives 08/03/94
Chicago, IL
Los Claveles II 6,984,979 7,319,979 708,901 8/94 8 & 40 08/31/94
Trujilio Alto, PR
Harford Commons 2,711,719 2,739,719 193,100 12/95 useful lives 2/28/95
Baltimore, MD
Springwood (2) 7,185,183 7,481,463 1,186,206 8/95 useful lives 12/31/94
Tallahassee, FL
-------------------------------------------------
Totals $103,273,741 $109,472,326 $14,768,634
=================================================
</TABLE>
<PAGE>
(1) Total aggregate cost for Federal Income Tax purposes is approximately
$110,460,000.
(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 6.25% to 10.5%. The Fund has not
guaranteed any of these mortgage notes payable.
<PAGE>
Summary of property owned and accumulated depreciation:
Property Owned December 31, 1997
- -------------------------------------------------------------------------------
Balance at beginning of period $109,243,229
Additions during period:
Acquisitions 175,171
Improvements etc. 53,926
-----------------
229,097
Deductions during period:
Disposition of real estate 0
-----------------
0
------------------
Balance at close of period $109,472,326
==================
Property Owned December 31, 1996
- --------------------------------------------------------------------------------
Balance at beginning of period $110,075,465
Additions during period:
Acquisitions 0
Improvements etc. 155,579
-----------------
155,579
Deductions during period:
Reduction of building 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
- --------------------------------------------------------------------------------
Balance at beginning of period $100,659,642
Additions during period:
Acquisitions 8,778,830
Improvements etc. 1,937,926
-----------------
10,716,756
Deductions during period
Disposition of real estate (1,300,933)
-----------------
(1,300,933)
------------------
Balance at close of period $110,075,465
==================
<PAGE>
Accumulated Depreciation December 31, 1997
- -----------------------------------------------------------
Balance at beginning of period $10,724,040
Additions during period:
Depreciation 4,044,594
--------------
Balance at close of period $14,768,634
==============
Accumulated Depreciation December 31, 1996
- -----------------------------------------------------------
Balance at beginning of period $ 6,540,475
Additions during period:
Depreciation 4,183,565
--------------
Balance at close of period $10,724,040
==============
Accumulated Depreciation December 31, 1995
- -----------------------------------------------------------
Balance at beginning of period $ 2,742,246
Additions during period:
Depreciation 3,798,229
--------------
Balance at close of period $ 6,540,475
==============
<PAGE>
BOSTON FINANCIAL TAX CREDIT FUND VII
(A Limited Partnership)
Annual Report on form 10-K
For The Year Ended March 31, 1998
Reports of Independent Auditors
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
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, 1997 and 1996, 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
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, 1997 and 1996 and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 16, 1998
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
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, 1996 and 1995, 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, 1996 and 1995 and the results of its
operations and its cash flows for the year ended December 31, 1996 in conformity
with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 7, 1997
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
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]
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, 1997, and the related statements of profit and
loss (on HUD Form No. 92410), partners' equity and cash flows for the year then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller 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, 1997, 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 made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 20
through 32 is presented for purposes of additional analysis and is not a
required part of the basic financial statements Such information, except for
that portion marked "unaudited", on which we express no opinion, has been
subjected to the audit procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Guide for
Audits of HUD Programs, we have also issued reports dated February 5, 1998, on
our consideration of BHP/Harford Commons Limited Partnership's internal control
structure and on its compliance with specific requirements applicable to CDA
programs, fair housing and nondiscrimination, laws and regulations applicable to
the financial statements.
/s/Reznick Fedder & Silverman
Federal Employer
Identification Number:
52-1088612
Baltimore, Maryland
February 5, 1998
Audit Principal: William T. Riley, Jr.
<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 for the year then ended, in conformity
with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 19
through 31 is presented for purposes of additional analysis and is not a
required part of the basic financial statements Such information, except for
that portion marked "unaudited", on which we express no opinion, has been
subjected to the audit procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards and the Consolidated Guide for
Audits of HUD Programs, we have also issued reports 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]
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>
<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 statements 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, 1997 and 1996, 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 statement
presentation. We believe that our audits provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of LOS CLAVELES, S.E. Limited
Partnership as of December 31, 1997 and 1996, 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 audits 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-005-019. 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 10,1998, on our consideration of the projects' internal control
structure and a report dated February 10, 1998, on its compliance with laws and
regulations.
/s/ Kevane, Peterson, Soto & Pasarell
San Juan, Puerto Rico
February 10, 1998,
<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 statements 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 statement
presentation. We believe that our audits provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of 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 statements 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 years then ended. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of 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. <PAGE> 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]
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, 1997, 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 statement 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, 1997, 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, 1998
<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 statement 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 statement 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]
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, 1997, 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.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fairhaven Manor Limited
Partnership as of December 31, 1997, 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 purposes of additional information and is not a
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 6, 1998 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.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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 purposes of additional information and is not a
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, 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.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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 purposes of additional information and is not a
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]
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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, 1997 and 1996, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fountain Lakes, A Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presented
on page 11 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
January 26, 1998
<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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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 presented
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
Fayetteville, AR
February 13, 1997
<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, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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 presented
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
Fayetteville, AR
February 12, 1996
<PAGE>
[Letterhead]
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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, 1997 and 1996, and the related
statements of operations, partners' capital and cash flows for the years then
ended. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Des Moines Street Associates,
L.P., as of December 31, 1997 and 1996, 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, 1998
<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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
<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, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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>
[Letterhead]
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KPMG Peat Marwick LLP
Atlanta, GA
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, 1997 and 1996, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of St. Andrews Pointe Apartments,
A Limited Partnership as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 16, 1998
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
<PAGE>
[Letterhead]
[LOGO]
KPMG Peat Marwick LLP
Atlanta, GA
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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Orlando, FL
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, 1997, 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 statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Affordable/Citrus Glen, Ltd. (a
Florida Limited Partnership) as of December 31, 1997, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Deloitte & Touche LLP
January 6, 1998
<PAGE>
[Letterhead]
[LOGO]
Deloitte & Touche LLP
Orlando, FL
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 statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Orlando, FL
INDEPENDENT AUDITOR'S 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
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 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]
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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, 1997 and 1996, and the related statements of operations,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our 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 also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Eden Park Limited Partnership
as of December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/Mahoney Ulbrich
Christiansen Russ P.A.
Saint Paul, Minnesota
February 3, 1998
<PAGE>
[Letterhead]
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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 also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
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[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 also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
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Reznick Fedder & Silverman
Boston, MA
To the Partners 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, 1997, and the related statements of
operations, changes in partners' capital and cash flows for the year then ended.
The 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 Madera Sunrise Terrace Limited
Partnership for the year ended December 31, 1996 were audited by other auditors
whose report, dated January 25, 1997 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the 1997 financial statements referred to above present fairly,
in all material respects, the financial position of Madera Sunrise Terrace
Limited Partnership as of December 31, 1997, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
/s/Reznick Fedder & Silverman
January 15, 1998
<PAGE>
[Letterhead]
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NOVOGRADAC
& COMPANY
To the Partners 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, 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 thePartnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Madera, CA
January 25, 1997
<PAGE>
[Letterhead]
[LOGO]
NOVOGRADAC
& COMPANY
To the Partners 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
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Madera, CA
January 29, 1996
<PAGE>
[Letterhead]
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Kirschner Hutton Perlin, P.C.
Certified Public Accountants
Southfield, Michigan
Independent Auditors Report
January 26, 1998
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, 1997 and 1996, 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 Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership as of December 31, 1997 and
1996, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
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.
In accordance with Government Auditing Standards, we have also issued a report
dated January 26, 1998, on our consideration of Twin Oaks Meadows Limited
Dividend Housing Association Limited Partnership's internal control structure
and a report dated January 26, 1998, on its compliance with laws and
regulations.
/s/Kirschner Hutton Perlin, P.C.
<PAGE>
[Letterhead]
[LOGO]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
Southfield, Michigan
Independent Auditors Report
January 30, 1997
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 Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material 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 statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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.
<PAGE>
[Letterhead]
[LOGO]
Kirschner Hutton Perlin, P.C.
Certified Public Accountants
Southfield, Michigan
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 statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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, 1997 and 1996, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Guardian Place Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Ernst & Young LLP
Birmingham , Alabama
January 20, 1998
<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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Birmingham, Alabama
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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Birmingham, Alabama
January 31, 1996
<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, 1997 and 1996, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Woods Lane, A Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
January 28, 1998
<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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
January 27, 1997
<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, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
January 27, 1996
<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, 1997 and 1996, 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 audits.
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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Crafton Place, A Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information presentedon
page 11 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 21, 1998
<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 audits.
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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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 presentedon
page 11 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 5, 1997
<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, 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 audits.
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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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 presentedon
page 11 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/Rick J. Tanneberger
Rick J. Tanneberger
Certified Public Accountant
Fayetteville, AR
February 10, 1996
<PAGE>
[Letterhead]
[LOGO]
Brotemarkle & Sadd
Glendale, CA
February 12,1998
Palo Verde II
A Nevada Limited Partnership
Bakersfield, California
We have audited the accompanying balance sheet of Palo Verde II, A Nevada
Limited Partnership (Palo Verde II or the Partnership) as of December 31, 1997
and 1996, 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Palo Verde II as of December
31, 1997 and 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
Glendale, CA
<PAGE>
[Letterhead]
[LOGO]
Brotemarkle & Sadd
Glendale, CA
February 19,1997
Palo Verde II
A Nevada Limited Partnership
Bakersfield, California
We have audited the accompanying balance sheet of Palo Verde II, A Nevada
Limited Partnership (Palo Verde II or the Partnership) as of December 31, 1996,
and the related statement 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 audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Glendale, CA
<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
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 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
Glendale, CA
February 8, 1996
<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, 1997 and 1996,
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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Andrew's Pointe Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/Berc & Fox Limited
MINNEAPOLIS, MINNESOTA
February 2, 1998
<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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
<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, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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>
[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, 1997 and 1996, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Santa Fe Oaks Phase II, A
Limited Partnership as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
Atlanta, GA
FEBRUARY 16, 1998
<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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Atlanta, GA
FEBRUARY 14, 1997
<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, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Atlanta, GA
FEBRUARY 9, 1996
<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, 1997 and 1996, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oak Ridge Apartments, A Limited
Partnership as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/KPMG PEAT MARWICK LLP
Atlanta, GA
FEBRUARY 16, 1998
<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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Atlanta, GA
FEBRUARY 3, 1997
<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, 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 statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 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
Atlanta, GA
FEBRUARY 9, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 375,168
<SECURITIES> 3,106,645
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 32,158,308<F1>
<CURRENT-LIABILITIES> 000
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 31,785,204
<TOTAL-LIABILITY-AND-EQUITY> 32,158,308<F2>
<SALES> 000
<TOTAL-REVENUES> 254,185<F3>
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 555,031<F4>
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 000
<INCOME-TAX> 000
<INCOME-CONTINUING> 000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (3,626,340)<F5>
<EPS-PRIMARY> (70.49)
<EPS-DILUTED> 000
<FN>
<F1>Included in total assets are Investments in Local Limited Partnerships of
$28,387,876, Restricted cash of $252,555 and Other assets of $36,064.
<F2>Included in total liabilities and equity are Accounts payable to affiliates
of $309,172 and Accounts payable and accrued expenses of $63,932.
<F3>Total revenue includes Investment of $202,202 and Other of $51,983.
<F4>Included in Other Expenses are Asset Management fees of $286,044, General
and Administrative of $227,685, and Amortization of $41,302.
<F5>Net loss reflects Equity in losses of Local Limited Partnerships of
$3,325,494.
</FN>
</TABLE>
